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58–246 2010

OIL SHOCK: POTENTIAL FOR CRISIS 

HEARING 

BEFORE THE

SELECT COMMITTEE ON 

ENERGY INDEPENDENCE 

AND GLOBAL WARMING 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

NOVEMBER 7, 2007 

Serial No. 110–19 

( 

Printed for the use of the Select Committee on 

Energy Independence and Global Warming 

globalwarming.house.gov 


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SELECT COMMITTEE ON ENERGY INDEPENDENCE 

AND GLOBAL WARMING 

EDWARD J. MARKEY, Massachusetts, Chairman 

EARL BLUMENAUER, Oregon 

JAY INSLEE, Washington 

JOHN B. LARSON, Connecticut 

HILDA L. SOLIS, California 

STEPHANIE HERSETH SANDLIN, 

South Dakota 

EMANUEL CLEAVER, Missouri 

JOHN J. HALL, New York 

JERRY MCNERNEY, California 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

Ranking Member 

JOHN B. SHADEGG, Arizona 

GREG WALDEN, Oregon 

CANDICE S. MILLER, Michigan 

JOHN SULLIVAN, Oklahoma 

MARSHA BLACKBURN, Tennessee 

PROFESSIONAL STAFF

DAVID MOULTON, Staff Director 

ALIYA BRODSKY, Chief Clerk 

THOMAS WEIMER, Minority Staff Director 


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C O N T E N T S 

Page 

Hon. Edward J. Markey, a Representative in Congress from the Commonwealth of Massachusetts, opening statement .................................................... 1 

Prepared statement .......................................................................................... 3 

Hon. F. James Sensenbrenner, Jr., a Representative in Congress from the 

State of Wisconsin, opening statement .............................................................. 6 

Hon. Earl Blumenauer, a Representative in Congress from the State of Oregon, opening statement ...................................................................................... 6 

Hon. Emanuel Cleaver II, a Representative in Congress from the State of 

Missouri, opening statement ............................................................................... 7 

WITNESSES

Ms. Carol P. Browner, former Administrator of the Environmental Protection 

Agency and current Principal of the Albright Group, LLC .............................. 9 

Prepared Statement ......................................................................................... 12 

Answers to submitted questions ...................................................................... 38 

Admiral Dennis Blair, United States Navy (Ret.), former Commander in 

Chief, U.S. Pacific Command .............................................................................. 14 

Prepared Statement ......................................................................................... 17 

Answers to submitted questions ...................................................................... 42 


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OIL SHOCK POTENTIAL FOR CRISIS 

WEDNESDAY, NOVEMBER 7, 2007 

HOUSE OF REPRESENTATIVES, 

SELECT COMMITTEE ON ENERGY INDEPENDENCE

AND GLOBAL WARMING, 

Washington, DC. 

The committee met, pursuant to call, at 9:05 a.m. in room 2172, 

Rayburn House Office Building, Hon. Edward J. Markey (chairman 

of the committee) presiding. 

Present: Representatives Markey, Blumenauer, Larson, Solis, 

Cleaver, Hall, Sensenbrenner, Shadegg and Blackburn. 

Staff present: Michal Freedhoff. 

The CHAIRMAN. Good morning. This hearing is called to order. 

Forty-five percent of the world’s oil is located in Iraq, Iran, and 

Saudi Arabia; and almost two-thirds of known oil reserves are in 

the Middle East. Events in that part of the world have a dramatic 

impact on oil prices and on our national security. 

In the late 1970s, the oil embargo, Iranian revolution, and Iran/ 

Iraq war sent the price of oil skyrocketing. Yesterday oil surged to 

a new record of $97 a barrel, amid government predictions of tightening domestic inventories, bombings in Afghanistan and an attack 

on a Yemeni pipeline that took 155,000 barrels of oil off the markets. And with al Qaeda threatening to attack Saudi Arabia’s oil, 

with our continuing struggles in Iraq, and with yesterday’s announcement that Iran now has 3,000 operating centrifuges for enriching uranium, each day carries with it the possibility of major 

oil supply disruptions, leading to economic recession and political 

or military unrest. 

The United States currently imports more than 60 percent of its oil. Oil has gone up more than $70 a barrel in the last 6 years, 

from $26 a barrel in 2001. Each minute, the United States sends 

$500,000 abroad to pay for foreign oil imports. That is $30 million 

per hour, $5 billion per week. 

This analysis only considers oil prices through August. With the 

record prices of late, these figures will surely grow by year’s end. 

Much of these funds end up in the pockets of Arab princes and 

potentates who then funnel the money to al Qaeda, Hezbollah, 

Hamas and other terrorist groups. With that kind of money at 

stake, it is no coincidence that we have 165,000 young men and 

women in Iraq right now, and it is no surprise that much of our 

foreign policy capital also happens to be spent in the Middle East. 

Our energy policy has compromised our economic freedom, and 

the American people want action because they know that the price 

has become much too high. 


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Last week, a group of energy and military experts converged in 

Washington to conduct an energy security war game. But the truth 

is the scenario that unfolded didn’t really seem at all fictitious. 

Like today, the scenario began when oil prices had gone up to trade 

consistently in the $95 per barrel range. Like yesterday’s attack on 

the Yemeni pipeline, the first event leading to crisis involved an attack on the Baku pipeline. And also like today, Iran’s nuclear ambitions and U.S. efforts to contain them prove to be a complicated endeavor that requires us to maximize all of our diplomatic military 

and economic leverage. 

The problem is, with oil, we have almost no leverage. The United 

States is home to less than 3 percent of the world’s oil reserves. 

Sixty percent of the oil that we use each day comes from overseas. 

Global oil production levels are at about 85 million barrels per day, 

with excess production capacity at only about 1.65 million barrels 

per day. Hurricane Katrina alone removed as much as 1.4 million 

barrels per day from supplies. 

The Strategic Petroleum Reserve has just over a month’s worth 

of oil in it. The reality is is that there are no good short-term options to help us deal with oil addiction. 

We have, however, at the same time, a piece of legislation which 

is now pending between the House and the Senate which has the 

potential to raise the fuel economy standard to 35 miles per gallon, 

would have 15 percent of our electricity produced from renewable 

electricity sources, and it would also use cellulosic fuels to substitute for oil which we could import. That bill should be finished 

if we can work hard on it between the House and the Senate over 

the next 4 weeks. 

I look forward to learning more about Oil Shockwave from our 

witnesses as well as their views about what Congress can do to address our energy security challenges. 

I now turn to recognize the ranking member of the select committee, the gentleman from Wisconsin, Mr. Sensenbrenner. 

[The prepared statement of Mr. Markey follows:] 


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Mr. SENSENBRENNER. Thank you very much, Mr. Chairman. 

Everyone who stops to fill up at the pump, and that is most people in this country, know firsthand how the United States’ dependence on foreign oil affects them. They feel it in their wallet, pennies 

at a time, as the price of gas creeps up. 

And most Americans understand that the price of oil is often influenced by events around the world. I doubt the results of the Oil 

Shockwave simulations would surprise many Americans. But I bet 

many Americans don’t realize just how vast the energy supplies are 

in the United States. 

Beneath this great Nation there are enough energy reserves to 

propel us towards energy security; and surely we have the intellectual and scientific capacity to give us the energy security that all 

of us, Democrats and Republicans, desire. 

According to the Interior Department, there are potentially 120 

billion—that is with a ‘‘b’’—barrels of untapped oil in the United 

States, including offshore reserves in Alaska, the Pacific and Gulf 

of Mexico. Add to that the potential of 635 trillion—with a ‘‘t’’— 

cubic feet of natural gas remains untapped, and we have got what 

we need to start weaning ourselves off the oil supplies from foreign 

countries that are hostile to the United States. 

But that is just the start. It is estimated that there are 250 billion tons of recoverable coal reserves, which is nearly six times the 

combined U.S. oil and natural gas reserves. In fact, it is believed 

that our coal supplies are larger than any single energy source of 

any single nation, including Saudi Arabia oil. The U.S. coal supply 

is equivalent to nearly 800 billion barrels of oil, more than three 

times the energy equivalent of Saudi Arabia’s oil. 

I will bet many Americans don’t know that coal can be converted 

into a fuel that is comparable to gasoline and can power any automobile. If we use coal to its fullest potential, we can turn our back 

on the Middle East and never look back. 

Right now, the type of scenario laid out in the Oil Shockwave 

simulation is possible, and this scenario could cause major disruptions to our economy. But there are some indications that it might 

not have the same impact as that of the 1970s oil crises. For every 

unit of economic output, the U.S. now uses half the energy it did 

in 1980. Let me repeat. That for every unit of economic output, the 

U.S. now uses half the energy it did in 1980. Energy costs are a 

smaller percentage of household budgets now than they were then, 

even though some people would find that hard to believe. 

Assessing our own natural energy reserves probably couldn’t 

happen as quickly as an Oil Shockwave. We should work to change 

that. Through research and development of new technologies, we 

can prepare for the worst. 

We have the energy supplies. All we really need is the intellectual energy and the political will to put them to work. And I thank 

the chairman. 

The CHAIRMAN. Now we turn and recognize the gentleman from 

Oregon, Mr. Blumenauer. 

Mr. BLUMENAUER. Thank you. 

I, too, appreciate our witnesses spending time with us this morning and sharing their experience. 


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I have been following the exercises for some time and have been 

intrigued by the power to be able to demonstrate how perilous we 

are balanced today on our petroleum dependence. In my community, we had, over a year ago, the city government forming a task 

force to explore these other entities, and 12 distinguished citizens 

came back with things that wouldn’t surprise our participants, but 

I think it was an important part in sort of driving where we are 

going. 

I appreciate the comments of the distinguished ranking member, 

but one of the downsides of what he is describing is that there are 

no technologies now available that don’t make the other part of our 

charge as a committee fighting against global warming and greenhouse gasses, it will that make it worse. 

The simple fact is that we are the largest consumer of petroleum. 

We have—we are consuming it at a rate 10 times what our share 

of the world’s proven supplies are, and we are depleting our own 

reserves right now at a very rapid rate. And given our security concerns for the future, those ought to be the last areas that we try 

and pump as fast as we can, rather than the first or, in the case 

of the Arctic, the next. 

Mr. Chairman, one of the things that I would hope that you 

would consider, the work that we have done has encouraged us to 

look far afield, and we all have good ideas about where we should 

go for a committee hearing and who we turn to next. I know it is 

a very wide and rich field, and I think you have done a great job 

of balancing it. But one of the things that might be interesting 

would be for our committee to spend the better part of a day experiencing the simulation. 

Having dealt with the people who’ve designed it, having watch 

it from afar, I think that it might shake some of us out of our lethargy if we actually stopped pontificating and actually go through 

a simulation where we have to make some of these real-life decisions that we, as a Congress, have failed to mitigate. 

And if our committee might set the tone, Mr. Chairman, I think 

it might be—there might be other people on both sides of the aisle 

who would go through it. And if we could get even 10 percent of 

the Members of Congress to have to go through this, devoting only 

half a day, I think it would be a sort of a homework that might 

put some realism into what too often around here is, I think, rather 

hallow rhetoric. Because I think all of us ought to have the sense 

of urgency for the very reasons you said in our opening statement, 

and I would hope we might consider it because it is too good a 

model for us to at least not test. 

Thank you. 

The CHAIRMAN. That is a great idea. I think we will try to do 

that. We will try to set something up that can give each one of the 

Members that experience. 

The Chair recognizes the gentleman from Missouri, Mr. Cleaver. 

Mr. CLEAVER. Thank you, Mr. Chairman. 

It is difficult to follow up a powerful sermon like the one that 

was just delivered by Mr. Blumenauer, which I would say ‘‘amen’’ 

to what he just said. 

As I read this morning a number of newspapers, including Financial Times, about what is going on in Pakistan, I became 


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alarmed. Not because Pakistan is a supplier of oil but because, if 

things go further awry, it could completely destabilize the Middle 

East in ways that Iraq never could. And thinking about what is 

going on in Iran and hopefully dealing with this concern internally, 

I could not help to think that conflict in Pakistan, if it ends up in 

some kind of civil war and if the tribal areas get weapons, there 

is no telling—or get more weapons, U.S. weapons, there is no telling what could happen. 

But it occurred to me that, even in the midst of all of these developments in the Middle East, that we are not, even after the Al 

Gore film and all of the discussions, we are not retreating from our 

appetite for oil. 

In 1980, the United States imported 27 percent of the oil it uses 

each day; and today we are importing 60 percent of the oil we use 

each day. So it is not like all of the awareness is creating some reaction. 

It is what Mr. Blumenauer said. You know, we talk about it, and 

then we just continue to go ahead. We continue to splurge. This is 

chilling. 

And so I am looking forward to hearing your comments and then 

engaging dialogically, because I am also frustrated that we are not 

moving, and maybe something will happen after November from 

next year. 

Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. 

The Chair recognizes the gentlelady from California, Ms. Solis. 

Ms. SOLIS. Thank you, Mr. Chairman. I want to welcome our witnesses and look forward to your testimony. I will submit my statement for the record. 

The CHAIRMAN. Great. 

The CHAIRMAN. The gentlelady’s time has expired, and we will 

move to our witnesses. 

Our first witness is Admiral Dennis Blair, who served as Commander in Chief of the U.S. Pacific Command, the largest of the 

combatant commands. Admiral Blair is a Rhodes scholar; and he 

currently is a member of the Energy Security Leadership Council, 

a group of U.S. military and business leaders united to address 

America’s energy and national security crisis. 

Whenever you are ready, please begin. 

Admiral BLAIR. Ms. Browner was an actual participant in the 

shockwave process. As a member of the Energy Security Council, 

I will follow up. 

The CHAIRMAN. I would be glad to follow your lead. 

Carol Browner, we will begin with you. She was the head of the 

Environmental Protection Agency. She previously had served as 

the Secretary of State of Florida’s Department of Environmental 

Regulations. Before that, she was Legislative Director for U.S. Senator Al Gore. She is, without question, one of the leading experts 

in the world on environmental and energy issues. 

We welcome you. Ms. Browner, whenever you are ready, please 

begin. 


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STATEMENT OF CAROL P. BROWNER, FORMER ADMINISTRATOR OF THE ENVIRONMENTAL PROTECTION AGENCY 

AND CURRENT PRINCIPAL OF THE ALBRIGHT GROUP 

Ms. BROWNER. Thank you, Mr. Chairman. 

You would think I would remember how to do that. I did spend 

a few years testifying before Congress. 

It is a pleasure to be here with all of you today and to share with 

you the experience we had in Oil Shockwave 2007. 

But let me first congratulate you, Mr. Chairman, and all members of the committee for all of the work you are doing on this committee. It is incredibly important, as you all know, to the people of 

this country. There are very tough issues to be addressed, and I 

personally appreciate the time and energy you are bringing to bear. 

As you heard from the Admiral, I appear today as a participant 

in the recent Oil Shockwave—Executive Oil Crisis Simulation. It is 

the second time I have done this. There was one several years earlier that I also participated in, and I think—let me just set the 

stage for how this scenario unfolds. 

First of all, the event was sponsored by Securing America’s Future Energy, SAFE, and the Bipartisan Policy Center; and it was 

designed to show the possible consequences of U.S. oil dependency 

and the ability of government officials to respond in the event of 

a global oil crisis. 

It is extremely important that you understand this was not a 

partisan effort. It was bipartisan in every way. The participants 

were divided between Democrats and Republicans, and the whole 

point is just, to the best of our ability, to demonstrate to the American people how a problem unfolds and how members of the President’s Council and senior staff might respond to that problem. 

It provides, I think, a number of important lessons for the Congress as you look at the issues in front of you. 

In the scenario that we did most recently last week, three different things happened over a 3-month period. The year is 2009. 

It is post the election. There is no assumption in the scenario 

whether a Democrat or a Republican has won the election for 

President. It is unclear in the conversations, but over a 3-month 

period, from May to August of 2009, the first thing that happens 

is that a pipeline in Azerbaijan is temporarily put out of service. 

The result of that is a loss of one million barrels of oil to the 

world’s market per day, and very quickly there is an upturn in 

prices. 

While this crisis is resolved in the course of the scenario, over 

the next 3 months, Nigeria takes 400,000 barrels a day off the market; and, in August, Iran and Venezuela cut their combined oil production by 700,000 barrels per day. So by the end of the simulation, the 3-month period, 1.1 million barrels of oil have been taken 

off the world market; and the price per barrel has shot up to over 

$160. 

Again, it was a simulation, but I don’t think any of this is farfetched. Maybe not these precise things but certainly things like 

this could happen virtually any day. 

As is common in scenarios, each of us play a role. The role that 

I was assigned was Secretary of Energy, and in this position I was 


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supposed to suggest a series of short-term steps that could be taken 

by the American public to reduce oil use. 

For example, I raised with my Cabinet in the simulation, which 

was chaired by Bob Rubin, that we could impose a 55-mile per hour 

speed limit, which would save 134,000 to approximately 250,000 

barrels of oil a day. We could implement year-round daylight savings time, which would save approximately 3,000 barrels per day. 

We could institute a Sunday driving ban, which would save about 

475,000 barrels of oil per day. 

Suffice it to say, my colleagues in this event, other Cabinet members, rejected these ideas. They did not think they would be acceptable to the American people. 

That turned the discussion to whether or not we should access 

the Strategic Petroleum Reserve, which, as you know, is under the 

auspices of the Secretary of Energy; and very quickly a debate ensued over two issues with respect to the SPRO. 

The first was, what is the appropriate use of the SPRO? Can you 

use it to manage price spikes or can you only use it for security 

matters? And, as Mr. Sensenbrenner pointed out, there are significant barrels there, but the truth of the matter not so significant 

that if this crisis had played out over a longer term that you could 

really answer the problem. 

The second debate that unfolded under the SPRO went to whose 

oil is it. And several of the individuals participating in the scenario 

representing various—I think the Department of State, the Department of Defense raised the issue as to whether or not does the military get first call, as opposed to the American people. And the concern they were focused on was, with growing unrest in the world 

in this scenario, would they have to deploy additional troops and 

therefore be in need of additional oil and should they get a first call 

on it? 

I think the real lesson of oil shock and one that we seem, unfortunately, hard-pressed to learn is the need to think ahead, to make 

real and lasting commitments to a new approach, rather than wait 

to respond once we are in the thick of it. 

Short-term energy conservation is frequently difficult, painful, 

and I think that was in part why the other participants in the scenario did not want to recommend to the fictional President that we 

take some of these steps. 

As I look at the scenario and move into the issues that confront 

you as a committee today and the House and the Senate at large, 

I think the single most important thing would be to embrace 

CAFE. If there had been a CAFE standards such as being considered and passed by the Senate in effect during this scenario we 

would not have experienced the kind of problems, potentially 

could—would not have experienced the kind of problems that were 

unfolding in the scenario. 

The Senate CAFE proposal, if adopted this year, would result in 

an oil savings of 1.2 million barrels per day by 2020. If you take 

into account the Senate renewable fuel mandates, the estimated 

number of barrels of oil saved each day from the Senate passed 

biofuel expansions would be 1 million. It brings you to a total of 

2.2 million. That would be more than twice of the reduction that 

was needed by the end of Oil Shockwave. 


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In closing, let me again note this is the second time I have participated in this scenario. I think I was the only person that participated both times, and the lesson was the same. We need to get 

going. There are things we can be doing today to try and reduce 

our dependence. CAFE is certainly not the only thing, but I personally think it is an incredibly important thing. 

The other thing I would just note to Mr. Blumenauer’s point, the 

scenario did not take into account global warming. As the Secretary of Energy, I tried to insert it into the discussion, but the 

focus, because it was such an immediate concern, always turned 

back to where do we get more oil quickly, what do we need to do 

to solve the problem? 

I think certainly as we think about these issues it is absolutely 

essential that we think about what some of the alternatives may 

mean in terms of greenhouse gas emissions, in terms of our carbon 

footprint, in terms of how much more difficult do we make the task 

of reducing greenhouse gas emissions and carbon emissions. 

So I thank you for the opportunity to share with you what I 

thought was a really tremendous scenario and I think a very enlightening one. 

Thank you very much. 

The CHAIRMAN. Thank you, Ms. Browner. 

[The statement of Ms. Browner follows:] 


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The CHAIRMAN. Admiral Blair, whenever you are ready, please 

begin. 

STATEMENT OF ADMIRAL DENNIS BLAIR, USN (RET.), FORMER 

COMMANDER IN CHIEF, U.S. PACIFIC COMMAND 

Admiral BLAIR. Yes, sir, Mr. Chairman. 

First, let me, on behalf of the Securing America’s Future Energy 

Project, accept what I think was a request that we conduct an oil 

shock simulation, making it available to members of the committee. 

I think that is wonderful. We will do it. We will bring it here. We 

can do it somewhere else. 

And I think it is just a wonderful thing. Because when you talk 

to people like Carol Browner who have been in it, they are not the 

same after they have done it from what they were before. It just 

brings in an immediacy to this rather theoretical discussion that I 

think gives you the burn to do something about it. And we will 

gladly set that up in any way that is convenient for you. 

And I see from the opening statements what I am doing is just 

pouring gasoline on a flame that already exists in terms of the understanding of the issue and the immediacy for it. But let me do 

that. Because I spent more than three decades in the Armed Forces 

in the Navy and in joint commands, and I think back over my career, so many times when we sent our young men and women into 

combat, it was because we hadn’t taken prudent smaller action earlier, and we paid later with our treasure and their blood for things 

that should have been done long before. 

And I think this is really what impels those of us who are retired 

senior military officers who serve on this Energy Security Leadership Council, is that we want to advocate actions which are—they 

are not easy, but they are doable now in order not to be reduced 

to the sorts of desperate measures that we saw in the Oil 

Shockwave. 

In fact, the steady militarizing of many volatile and underdeveloped areas of the world that has gone on over the time that 

I have been in the Armed Forces from the days that we used to 

handle the Middle East with a couple of ships and a one-star Admiral to now we have an entire unified command, a Central Command. We have hundreds of thousands of troops that are there all 

the time in an area that is halfway round the world that takes 

three ships to support every ship that is over there, that take three 

Marines to support every Marine that is over there—one who is 

there, one who is traveling, one who is back home cleaning up getting ready to go back again. 

So the burn that those of us who are on the Council who served 

on the Armed Forces is, let us do the smart things now to avoid 

having to do the dangerous, bloody, expensive things later. 

Ms. Browner reviewed the essence of the shockwave simulation 

that we did last week. Let me just review some of the lessons that 

I observed from watching it and having been involved in the week 

of the Council. 

As you saw there, we could have oil that is a hundred barrels 

today, in the simulation that was over 160, with just—with a couple of relatively small things affecting 1 percent of the world oil 

supply, and these were the lessons I drew from it. 


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The first is there is really no such thing as foreign oil. Oil is fungible. A change in supply or demand anywhere will affect prices everywhere. So distant places mean real things to Americans. 

I sometimes think the Good Lord is laughing looking down at us 

in the places that he put them in the world. He put them in these 

faraway places with these very unstable and difficult, volatile situations; and a little tremor there affects all of us at the pump. 

And the second is that, because of the tight supply situation now, 

the oil markets are precariously balanced. Even small disruptions 

have dramatic effects because of the lack of the buffer. I think we 

talked about it earlier, that what used to be a $4 million a day 

Saudi buffer is down. It might be 1.65 million, as you say, Mr. 

Chairman. It could be less. Hard to tell with the lack of transparency there. But we are just on a—we are on a hair trigger here. 

Second, when we have gotten to the point that the supply disruption occurs, there just aren’t many short-term options. When I 

watched Ms. Browner and people like Secretary Rubin, Secretary 

Armitage, General Abizaid wrestling with questions, there weren’t 

any good short-term options. It was all really ugly, and all of them 

thought if we had just done something 10 years ago or 5 years ago, 

we wouldn’t have to be doing it. And don’t we owe our successors 

5, 10 years down the road some efforts now so that they are not 

put in this terrible position? 

The next one is that this Strategic Petroleum Reserve is not the 

final answer. It doesn’t solve the problems. As you saw, real decision—experienced decisionmakers are wrestling with it. Ms. 

Browner was certainly an advocate for using it. The kind of objections around the table with various people with a series of responsibilities made you realize that this is not a magic wand that we 

can wave. So we have got to do—we have got to do more. 

And, finally, although we didn’t explore quite as much as we 

should have, this is an international problem. We have got to be 

talking with the Saudi Arabias, the Chinas, the Indias, the suppliers on the one hand, the great consumers on the other hand. 

And China and India now are not members of the IEA. They are 

not part of a team that coordinates strategic petroleum and reserve 

action. They would be affected by it, as would everyone. 

And we have—this just drives us to get international groupings 

together, thinking now, taking prudent American actions so that 

we are not put in this position. 

And it really brings us back to what all of us have thought in 

this area, is that we need both greater conservation and increased 

production, both of the petroleum substitutes like coal, of more 

drilling of the petroleum that we do have, also development of 

smart synthetic alternatives. 

There is not a magic bullet for this thing. We can’t have a technological breakthrough out of it through the next term that is going 

to solve it. We have to do something that is going to affect everything, supply/demand alternatives. 

And so there are a lot of lessons from 9/11. One of them is, unless we take action early to put national security on our terms 

rather than allowing vulnerabilities that other people can do it to 

us, we really fail in our duties and we really have to have a longterm strategy for reducing America’s oil dependence. 


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It is a grave national and economic security. It demands a bipartisan approach, and it goes beyond the Congress to the administration to the American people who I think are ready to support action 

on this as long as it is done in a way that has everybody taking 

the action, that spreads the sacrifices and is clearly directed towards the national interests. 

As Ms. Browner said, there is a bill out of the Senate—I testified 

before the Senate Congress committee earlier this year that works 

on an important part of the problem—setting the auto efficiency 

standards goals to increase every year. 

I would emphasize that it is a—because it is an attribute-based 

system, it is a big improvement over the system we put in the 

1970s, the one that was in part responsible for the gains that Mr. 

Sensenbrenner mentioned in which we have our oil intensity of the 

economy, but this is—this compares like model to like models. So 

it does not put the Detroit Big Three at a disadvantage. 

I am absolutely convinced that smart American engineering and 

ingenuity and good American workers can, under this proposal, 

knock the socks off any foreign competitors, sell cars, lots of good 

cars that will not only be safe and the right performance but will 

be much less thirsty for oil. 

And in addition to that, we need to go on to the other parts of 

program, smart alternatives, the results of R&D investments in 

order to bring them on, whether it is cellulosic methanol to complement the ethanol that we are getting from corn, whether it is 

an energy efficient and environmentally safe use of the coal conversion or the oil sands that already exist. 

We have got to continue with this three-part program if we are 

to avoid the sorts of things that we saw in this shockwave and if 

we are to do the right thing by our children, our grandchildren and 

by the men in uniform, men and women in uniform who will have 

to pay the price someday unless we act now. 

Thank you. 

The CHAIRMAN. Thank you, Admiral, very much. 

[The statement of Admiral Blair follows:] 


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The CHAIRMAN. Let me turn and recognize for an opening round 

of questions, the gentleman from Oregon, Mr. Blumenauer. 

Mr. BLUMENAUER. Thank you very much, Mr. Chairman. 

Admiral, I appreciate your willingness to inflict the simulation 

on us, and I appreciate the chairman’s interest in perhaps exploring that as a committee hearing. 

We actually did one of these versions in my community a year 

ago involving campus-based activities. We actually fell short in trying to structure for our governor and some of our community leaders. But, for the committee, could you outline what it would entail? 

We didn’t really get the details in terms of the number, the duration, the roles that were played. Just how would that work for the 

committee if we were to follow up on your generous offer? 

Ms. BROWNER. Maybe we can do it together. 

In both of the national simulations that have been done, it is approximately 10 people who participate. You have usually the President’s Chief of Staff, who sort of runs the conversation. You have 

everybody from the Secretary of the Energy Department, Secretary 

of State, Secretary of Defense, National Security Advisor, sort of a 

Joints Chiefs of Staff. So there are roles that are assigned and you 

are, to the best of your ability, asked to play the role and so you 

are given facts that might be particular to the role that you are 

playing. You can bring in, you know, sort of personal information 

or experiences, but you do have to stay within your role. 

Bob Rubin, who was sort of the master of ceremonies, if you will, 

the Chief of Staff for this particular exercise, was very, very good 

at making sure all of the points—as he was when he served in the 

last administration—making sure all of the points were put on the 

table. 

You then have briefers who come into the Cabinet room, the simulated Cabinet room or situation room, and start changing the scenario on you. And sometimes they use reports. There is like a 

CNN-style TV show that has been manufactured that is providing 

new information or there are simply briefers who are considered to 

be experts who are adding new facts. 

It took us about two and a half hours to do it, and then we had 

sort of 30 minutes of reflection. We stepped out of our individual 

roles and sort of reflected from our experiences either in that role 

or previous. 

When I was in the prior administration, this is something that 

Cabinet members do. In fact, the last simulation that I participated 

in as a member of President Clinton’s Cabinet was in an anthrax 

scare. I think it was shortly before the 2000 election. Most of us 

couldn’t pronounce the word ‘‘anthrax’’ when we showed up for the 

simulation. Most of the Americans are now too familiar with it. 

But whether it was in the government or in this one, the value 

of these is really quite significant because, as the Admiral said, 

what you quickly figure out is, even with all of this power behind 

you, I mean, the Secretary of Energy had huge amounts of power 

in this simulation, your choices in terms of immediate action are 

very, very narrow and even those choices immediately bump up 

with somebody else’s view of the world. 

For example, I said, yes, we should access the SPRO. That got 

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fense said, well, you know, that is the Navy’s. And I actually didn’t 

know this about the history of the SPRO. It actually originates 

back to the Navy. So suddenly we couldn’t find common ground on 

whether or not to take advantage of this Strategic Petroleum Reserve. 

I think for that reason it is worth doing. Things that you think 

may be sort of automatic and easily done you find out are not so 

automatic and easily done. 

Mr. BLUMENAUER. So in terms of—with the technical help that 

you folks have developed over the years, there would be a role potentially for every member of the committee and could be conducted in the framework essentially of what a significant hearing 

would be? 

Ms. BROWNER. It would be a large Cabinet. 

Admiral BLAIR. Exactly. The time commitment, Mr. Blumenauer, 

is probably 2 hours, sometimes a day or 2 ahead of time just to be 

given some basic data and be told how the game works; and we 

start at 10 o’clock in the morning. You know, Mr. Markey might 

be playing the National Security Advisor, you might be playing 

Secretary of Defense, Mr. Sensenbrenner might be playing the Secretary of Energy; and in comes a card that says the President 

wants a recommendation in 2 hours as to what he is supposed to 

do because these things have happened. 

And then the National Security Advisor and maybe the chairman 

of the National Economic Committee, as they are, says, okay, what 

do we think? What are we going to tell the President? 

And so you bat that around. It drives you. The time element 

drives you to have to sharpen your thinking. You can’t just do 

nothing, because time is ticking away. And then you make that recommendation and then say fast forward a week. Now these other 

things happen. Now what are you going to do, big guy? And the 

President wants some better options. 

And we also had the President’s press secretary, and he was 

wonderful because he said, you are going to have the President do 

what? 

So it is part of that immediacy and responsible people doing 

tough jobs that live with you, and we would have you all in the 

role. It would take, as I say, 2 hours ahead of time to be ready and 

4 hours on the day. 

The CHAIRMAN. The gentleman’s time has expired. 

The Chair recognizes the gentleman from Wisconsin, the Secretary of Energy, Mr. Sensenbrenner. 

Mr. SENSENBRENNER. First of all, I shiver to think of the Chair 

as National Security Advisor. Put him in another role, please, and 

I think we will all be happier, in looking at, you know, how we war 

game the strategy and what we can do ahead of time. 

The one question I have is, what is the role of Canadian oil resources and oil shale in the West? I know that you can’t turn that 

spigot on as quickly as we would like, but if we are looking at ways 

to prevent an oil shock from being extremely severe, that seems to 

be the most convenient and secure way to get increased oil or replacement oil. 

Admiral BLAIR. The position that the Council took in the report 

that we released almost a year ago was that the Canadian tar sand 


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resources would be a big part of the problem as soon as they could 

be done in an energy efficient and environmentally acceptable way. 

So we saw that as part of the solution, but our understanding 

was the technology was not quite there on those two criteria. So 

we couldn’t count on that and that—but that the R&D should be 

put in to see if it is a viable alternative as an alternative source. 

Similarly, R&D should be put into other synthetic fuels in order 

to make them part of the solution. 

So it didn’t seem to us, looking across that alternative, as well 

as ours, that there was one that you say had all of the right attributes to solve the problem. More work was needed. 

Ms. BROWNER. An oil shock scenario did not deal with could you 

explore and find other resources. Because it was a real time. You 

had to solve the problem that day, that week. 

I think SAFE has taken a position on whether or not some of the 

thoughts you have are viable in the short term, and I share their 

concerns that in the short term they are probably not. 

They may also bring with them some other challenges. For example, we need to understand—this is me personally speaking, as 

someone who is very concerned about greenhouse gas and global 

warming—what are the repercussions? Are we adding to our global 

warming footprint? Are we diminishing it? That is still something 

that still needs to be better understood. 

I think part of the issue is what and where are the technologies 

that we may end up using, because that may have some bearing 

on what are the emissions. 

Mr. SENSENBRENNER. I yield back the balance of my time. 

The CHAIRMAN. The gentleman’s time has expired. 

The Chair recognizes the gentleman from Missouri, Mr. Cleaver. 

Mr. CLEAVER. Thank you, Mr. Chairman. 

One of the problems we have, I think, is that we live in a time 

in our country where everything is politicized. I am frustrated over 

how we have politicized global warming, how we politicized even 

the oil crisis. And so it is difficult for us to coalesce and move towards a solution. Because what we say and think reverberates 

across the land, and if you listen to radio and television talk shows, 

you can see what has happened. It is ugly out there. And rather 

than turn down the volume, we continue to turn it up. So this issue 

has already become muddy because of the way we have—because 

of the way it is politicized. 

Do you have any suggestions on how we might be able to 

depoliticize the oil dependence issue or independence? Is there 

something you—some way you can suggest, say, can we write a 

song? Could we get Mr. Hall to write a hit song? I mean, what do 

we need to do? 

Admiral BLAIR. An Admiral giving advice on politics is like a politician giving advice on maneuvering ships. 

Mr. BLUMENAUER. What is your point? 

Admiral BLAIR. But what those of us in the Council thought was 

that what is required here is a compromise between those who 

have opposed fuel efficiency standards on the grounds that it is 

interfering with business and those who have opposed further exploration and development of alternatives on the grounds that it 


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runs environmental risks and it is not pretty to have an oil rig out 

the back door. 

What we strongly recommended a year ago was that in order to 

provide the political cover for everybody to do what everybody recognizes is in the national interest, is both sides have to give, and 

it has got to be a comprehensive package so that it is recognized 

that all participants are doing the right thing for the country. And 

even though they can be accused of making a compromise with 

something that they pushed in the past, it is in the common good. 

And that is really—it is naive. It is kind of civics 101. I am not 

a politician, but I think it is sort of a time that we have to give 

a little to do the right thing for everybody. 

So my answer to your question would be to, you know, both sides 

of that center chair need to give a little bit and let us do more conservation, let us do more domestic production, let us do more alternatives. 

We have taken polling data within the country, and the people 

recognize it. But it is getting that popular support shredded 

through the filter of individual interests into a bill, which you all 

know better than I do, is a hard part of this. 

But it seems at the end of the day, if it is comprehensive and 

the people will have felt that their elected representatives, whether 

they are in the executive branch or on the legislative side, have 

done the right things for the country—so that is kind of a naive 

answer, Mr. Cleaver, but that is one I would give. 

Ms. BROWNER. I think the simulation actually would be a way in 

which you might find some common ground. 

In the simulation we did, there were—three of us were noted 

Democrats. Everyone knew we were Democrats. There were three 

that were well-known Republicans. You would recognize them immediately as Republicans. And then there were some former military brass, and we are never sure what they are. They are very 

good about that. 

But what happened is we were unanimous in our takeaway from 

the experience. So it didn’t matter what our political persuasion 

was when we came to the scenario. Our experience of the scenario 

was a shared one, and what we thought needed to be done was remarkably similar across the party lines when we stepped out at the 

end and resumed our regular identities. 

So I think it could go a long ways to perhaps bridging some of 

the gaps that inevitably exist as you all wrestle with important legislation. 

And if that doesn’t work, I agree, Mr. Hall should write a song. 

The CHAIRMAN. The gentleman’s time has expired. 

The Chair recognizes the gentleman from Arizona, Mr. Shadegg. 

Mr. SHADEGG. I want to thank our witnesses. 

I want to apologize for being late. I want to thank you for holding this hearing. 

I appreciate the work you are doing in this area; and I share 

your comments, Ms. Browner, about, you know, you set aside the 

policy, the partisanship, and we need to be working on the problem. 


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In that regard, I noticed in your testimony that you applaud the 

renewable electricity standard in the House energy bill. I do as 

well, except I have some concern. 

Both of you, Admiral Blair and yourself, have talked about the 

importance of conserving, using less; and, obviously, the more we 

can rely on renewable fuels, the better off we are. 

One of the concerns that I have is that there is this ongoing 

struggle, unfortunately, I believe, somewhat partisan in nature, 

over what to value achievements in efficiency. In my State of Arizona, we have some renewables we can use. My friends from the 

Deep South look at me and say, don’t impose renewable standards 

on us. We can’t do it. 

In both instances, I hear from the industry that efficiency gains, 

at least in the short term, hold great potential. I know, for example, that I pay the Shadegg family electricity bill, and I found myself out on the stepladder pulling out the incandescent bulbs and 

putting in the fluorescent ones everywhere I can, and I am happy 

to save myself money. 

Do you think that legislation strikes the right balance, or do you 

think we should go further in rewarding, at least in the short 

term—and maybe it is just in the short term—to educate Americans and incentivize them to use more efficient appliances, lighting, consumption of energy in every way? 

You talked about CAFE standards. Obviously, that is a big and 

a critical one, particularly in the fuel and in the oil area where, for 

transportation purposes, oil is where we are excessively dependent 

now. 

But just my question is how about, I guess, do you think we have 

struck the right balance on rewarding efficiency saving in the renewable legislation that we passed? 

Ms. BROWNER. I think it is absolutely essential that the country 

gets on to making a commitment to a national standard. The 

States are doing it. They are figuring out how to make it happen. 

We have got 20 States now that have embraced some sort of renewable electricity standards. Obviously, electricity is different than 

oil. 

One thing, in terms of the right balance, I will just be pragmatic. 

It is the right balance if you can pass it. We are down to sort of 

it is time to get this passed. I mean, it is unfortunate that we 

haven’t been able to do it thus far, and I understand everyone is 

working hard, but it is time to get it done. 

One thing that I have become increasingly interested in is how 

do you reward utilities for efficiency. You know, right now, if I am 

running a utility, I make money when I sell electricity. It is that 

simple. Now a few States—California has looked at something 

called decoupling, but people like Jim Rogers, who runs one of the 

biggest east coast utilities, is talking to the North Carolina PUC 

about allowing him to make money when his utility conserves, rewarding conservation by the utility. 

And that may be a way of getting at what you are suggesting. 

How you get at it on an individual consumer, obviously, there are 

tax credits that could be brought to bear. 

But, you know, I am not wedded to one particular answer. What 

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sage to the marketplace that people who make appliances, the people who use large amounts of utility are going to have to start 

thinking differently about what they are doing. 

One of the things I learned in 8 years as a regulator is that once 

you set that standard, whatever it is, whether it is a pollution 

standard, air, water, allowing some flexibility so that businesses 

can find the most common-sense, cost-effective way to get there inevitably gets you a better answer than government sort of trying 

to dictate each sort of tiny piece of the puzzle. Sometimes we need 

to dictate some of those, because not everyone is going to follow the 

path. 

But in most instances, if you were to figure out a way, I think, 

reward utilities for efficiency, you would be very, very pleased with 

the response you would get. 

Mr. SHADEGG. There are two major public utilities in the Phoenix 

metropolitan area. One is an investor owned, and one is public 

owned. The public ones have come to see me, and they have very 

innovative programs. And they are arguing, yeah, we have renewable resources we can use here in Arizona, but we would also like 

to get rewarded for efficiency. Because they understand the system 

incentivizes them to sell. 

Admiral Blair, your comments on that point. 

Admiral BLAIR. Yes, sir. I haven’t looked at the entire interconnected energy picture. I am really most concerned about the 

amount of petroleum from unstable places, which brings me to the 

transportation sector, which brings me to production of the petroleum and petroleum substitutes and imports. 

Mr. SHADEGG. I just ran out of time. 

The CHAIRMAN. The gentleman’s time has expired. 

The Chair recognizes the gentlelady from California, Ms. Solis. 

Ms. SOLIS. Thank you. And, again, welcome to our witnesses. 

In your scenario, Shockwave, I know you mentioned that you 

really didn’t have time to do long-term planning. But given diplomatic or lack of diplomatic efforts, could you shed some light on 

that? Because you mentioned in the scenario that Iran and Venezuela could cut off supplies. What, in your opinion, can we do to 

help maybe prepare for these kinds of disasters that may occur and 

what steps can we take? Was there anyone talking about that at 

all in this role playing? 

Ms. BROWNER. Yeah. At the end—remember, we are doing ‘‘presented with facts’’. We don’t necessarily have an explanation for 

why the particular fact has unfolded. It is just presented as a fact. 

We are given the fact that Iran and Venezuela were doing X, and 

we had to then quickly respond so the President could respond to 

the American people. 

When we stepped out of our roles, I think a number of people 

from sort of the military side talked about the fact that how we 

build relationships, how we maintain relationships with various regions of the world with various leaders is absolutely essential. 

There is no—again, not a single problem we confronted in this scenario had a perfect answer or a single answer. All of it was about 

things you do over a period of time—in some instances, a very long 

period of time. 


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Admiral BLAIR. I think, Ms. Solis, I draw a contrast between the 

way we deal with countries that really don’t have our economic interests in their hand and those who do. And when I was a commander in the Pacific, we could deal with countries in southeast 

Asia, Indonesia, Malaysia, some other problem countries, and we 

weren’t completely dependent on them for oil supplies, so we could 

be a little sophisticated in our dealing with them. We didn’t have 

to turn to big, expensive, hair-trigger military options right off the 

bat. 

By way of contrast, when we are dealing with countries who are 

controlling important parts of the world oil supply, we are—we 

militarize our policy almost by default. 

What we feel, if we can drop the oil intensity of the United 

States economy, that is the amount of oil to produce every dollar 

of GDP and, as Mr. Sensenbrenner said, we dropped that between—after the first oil problems in the 1970s and the 1980s, but 

then it leveled out, and we are as dependent, as we all know, now. 

If we can do a combination of conservation and domestic alternatives, get that down again, then we are not as subject to being 

jacked around by these events and by these countries. 

So it really is a case of lowering our dependence on this as an 

economy to give these people who are in these shockwave events 

a little more flexibility so that they can have time to round up 

international support, so that they can use other maneuvers. 

It is just getting them on that hair trigger by the increased demand and the increased dependence that makes it so brutal when 

you come to one of these crisis situations like a pipeline that pops. 

So it is really that dependence that we need to work on. 

Ms. SOLIS. I raise that issue because we see a lot of climatic 

changes in Latin America, and I want to talk specifically about 

Mexico because we do import a lot of petroleum from Mexico. 

There was a very bad flood that occurred in Tabasco where they 

have a really large refinery. And I am wondering, things like that 

that occur we may not feel immediately, but they will have an impact a couple of months down the line. And I just would hope that 

our leaders, our policymakers would start thinking about how we 

can start providing assistance to our friends, democratically elected 

governments, that we should be helping to nurture and doing 

things in a manner that conserves, is energy efficient, that has a 

less negative footprint on the environment. And I want to throw 

that out there. 

CAFE standards. I had a meeting with some folks from the Automobile Alliance, and they were trying to explain to me that really 

it is about the demand out there, the consumers’ thirst for these 

pickup trucks. And I just wanted to ask if you could comment on 

that, Ms. Browner. 

Ms. BROWNER. I just wanted to remind everybody that the EPA, 

which I had the opportunity to run for 8 years, does not handle 

CAFE. So I am not familiar about the program from a regulator 

perspective but obviously have studied it. It is handled by the Department of Transportation. 

I think the Admiral, as he said earlier, what is important about 

a CAFE proposal is that it is car to car. It is not manufacturer to 


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manufacturer. And so the opportunity for the American public to 

continue to look at the vehicles they want is preserved. 

Having said that, again, my experience as a regulator does tell 

me that you set the standard, and you know what, good old American innovation and ingenuity rises to the challenge. 

When Congress in 1990 banned chlorofluorocarbons, CFCs, widely used in refrigeration, people in this body and in the Senate said, 

oh, my God. What are we going to do? We are going to have to 

drive our cars without air-conditioning. We are not going to have 

sort of life as we know it. 

Well, guess what? Once Congress said on a date certain, a company saw an opportunity, brought a technology to the market for 

less money, faster than anyone envisioned. 

When I set the tailpipe emission standards for diesel engines— 

it was one of the last things I did when I was in office—one of the 

things we could require was not just clean sulfur fuel but also 

there be a catalytic converter put on big diesel trucks and diesel 

cars. 

Ms. BROWNER. It did not exist. The scientists and engineers were 

still figuring it out. Once they knew there was a guaranteed market on a date certain, they figured it out pretty darn quickly. So 

I never, ever want to underestimate American innovation and ingenuity. We have a long history of rising to the challenge. 

Ms. SOLIS. Good point. Thank you very much. 

The CHAIRMAN. Would you like to add to that, Admiral Blair? 

Admiral BLAIR. Yes, just one thing. 

I agree completely with Ms. Browner. I have heard these—I have 

talked to the same car companies, and they are saying that American people do not want more efficient cars; they want more powerful cars with more cup holders. Therefore, we have to give it to 

them. I think, as Ms. Browner says, they are underestimating what 

they can produce. I think they are way underestimating the American public, who understands that we all need to have cars that are 

more fuel efficient, even if we have to sacrifice that top-end performance that we have, but they need to be told let’s all do it together. Let us set a standard that applies to everybody rather than 

to one that is uneven. 

I also, frankly, I do not have a lot of sympathy for these car companies, because the price of that oil that we are using does not reflect the full price of the American troops who are doing all of this 

business around the world. If you factored in the real price of that 

oil, it would be huge, and frankly, I am sorry. It is not up to the 

car companies to make that judgment. It is up to the leaders of the 

American people to make that judgment. 

The CHAIRMAN. Thank you. 

The gentlelady’s time has expired. 

The Chair recognizes the gentlelady from Tennessee, Mrs. 

Blackburn. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. 

I thank both of you for being here, and I am listening with interest to your comments about automobiles and the engineers who are 

bringing those forward. As you know, in my district in Tennessee, 

the 7th District of Tennessee, we have a good bit of auto manufacturing both within the district and on the fringes of the district. I 


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have done a little car shopping lately, and I have been amazed at 

how safe cars have become and the safety features that are included in those cars. I agree with both of you, and I think that, 

when our auto engineers in this country, who are the best in the 

world, put their minds to it, they will be able to solve some of these 

efficiency problems. 

Admiral Blair, as you were saying, the market needs to tell—the 

American people need to say this is something that we are looking 

for and that we want. I remember the gas crisis of the 1970s and 

what we went through there. I was a new mom with a new baby, 

and I remember what we were dealing with with those gas lines. 

So let me ask each of you: 

How do you think the American public would respond to rationing if we were to go through an oil crisis? We are looking at back 

to the first of the year where we had $2.29 a gallon, and now the 

average price in the country, I think, was at $3.01 this morning. 

We have watched a barrel of oil since the first of the year go from 

$55 to this morning when, I think, the Asian markets opened at 

$98 a barrel. So you are looking at a 75 percent increase in the cost 

of a barrel. You are looking at a 34 percent increase at the pump. 

So, if we were to move to rationing, in your opinion, how do you 

think the American people would respond to that? Likewise, what 

do you think would happen with our domestic supplies if we only 

used our supplies and those of our close allies like Mexico and Canada, who are our two largest oil trading partners? 

Ms. BROWNER. Well, if you only use our supplies and Mexico’s 

and Canada’s, you would be in oil rationing. You would not have 

a choice. You would be there. 

Mrs. BLACKBURN. How do you think the American people would 

respond? 

Ms. BROWNER. I will be honest with you. I do not think, at this 

point in time, particularly well, and I think that is because, while 

individual families and Americans, in my experience, are always 

prepared to do their part to solve a problem, they want to know 

that the companies that make the products are also doing their 

part. You know, I think there is a frustration that the American 

people have that they cannot get more fuel-efficient cars. 

Having said that, several manufacturers are now bringing to 

market the clean diesel engines which can get in a mid to—I do 

not know how you size cars—but in a sedan, I mean, a sedan that 

seats comfortably four and five people. You can get 32 to 38 miles 

per gallon in a sedan with a clean diesel fuel, and those are becoming more and more attractive to people. So, when offered a more 

efficient car within a class, people are looking at them and are 

starting—you know, they are expensive right now. They will come 

down. They are only in certain high-end cars, but I think Ford is 

going to bring one to market in the not too distant future. 

So, you know, my experience is that, as people become better 

educated and as there are more options, they will gravitate toward 

things that they think are good for their families, are good for their 

families’ pocketbooks and for the environment of their communities. 

Mrs. BLACKBURN. Admiral Blair. 

Admiral BLAIR. Yes. 


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I think the American people have two reactions to that scenario 

that you have sketched out. 

Number 1, they would be angry, frustrated and looking for what 

got them into that fix. Number 2, they would roll up their sleeves, 

and they would do what had to be done to make it better, to work 

their way out of it. 

I guess my feeling is, since we know that now, why don’t we take 

the actions now to avoid that crisis because we know it would be 

so much harder on us if we brought it to that point. 

Mrs. BLACKBURN. You are right, and changed habits is a big part 

of that and looking at changed habits. Let me ask you something 

in regard to that changing of habits. 

You know, right now, we do a lot of transport by truck across our 

Nation’s highways, and I was reading something the other day 

about the efficiencies of rail. 

Do you all see any—and I am about out of time, but I would love 

to hear what your thoughts are about moving more of our movement of goods and commodities to rail and taking it off the highways. Any thoughts there? 

Ms. BROWNER. I, certainly, think it is something that needs to be 

considered, and the rail industry has been out there promoting 

what they can do. 

The one note I would just add to it is, you know, again, we are 

thinking here today about sort of a short-term oil shock, but we 

should always be thinking about what else could happen. So, for 

example, in a shift from one form of transportation to another, 

what does that do in terms of greenhouse gas emissions? What 

does that do in terms of conventional pollutants? I am not suggesting that rail creates a problem. I do not know the answer. It 

would be something worth understanding. 

Admiral BLAIR. Part of our proposals were that fuel-efficiency 

standards should be applied to trucks as well as to cars, and we 

should make the trucks that we have more efficient also by applying the same sort of technology to them as we do to cars, and we 

should raise the fuel efficiency standard of our trucks as well as 

to our cars. 

Mrs. BLACKBURN. Rail, do you see that as an option? 

Admiral BLAIR. I think then that the market would make the 

right adjustments, but I think we should work on the truck sector 

as well. 

Mrs. BLACKBURN. Thank you. 

I yield back. 

The CHAIRMAN. The gentlelady’s time has expired. 

The Chair recognizes the gentleman from New York, Mr. Hall. 

Mr. HALL. Thank you, Mr. Chairman, and thank you for holding 

this hearing. 

Thank you to both of our excellent witnesses. 

I did, actually, write that song in 1978 that started out ‘‘just give 

me the warm power of the sun; give me the restless power of the 

wind,’’ et cetera. 

I also wish that we, as a country, had started doing those things, 

including conservation and all the renewables that were available 

then, and we would be in a much different position today. 


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Admiral, you talked about being ‘‘jacked around’’ by countries 

that we used to have a freer hand to deal with. You know, it seems 

to me that our options diplomatically or economically had been limited in terms of how we deal, for instance, with Saudi Arabia on 

one hand and China on the other hand. 

Is that what you would call a ‘‘loss of sovereignty’’? 

Admiral BLAIR. Absolutely. The more you are constrained because of your dependence on another country, the more sovereignty 

you have lost. 

Mr. HALL. Yes. It seems to me like we are going down a road 

where residents of this country, where citizens of the United 

States, have never understood what it is like to be in a position 

like Brazil was in in the 1970s, for instance, where the world financial markets dictated to them certain things they had to do or else 

they would not get their next round of debt floated. So I think we 

need to be aware of that, that oil and our consumption of oil, is 

putting us in that position. 

Admiral BLAIR. I think that is absolutely right. 

Some of that came up in these simulations when the Secretary 

of State said in the simulation, ‘‘Well, I went to country X, and 

asked them if they would increase their amount of oil, and country 

X said, ‘Yes, I can do that, but there are a couple of things I want 

from you, United States. I want you to lay off hitting me on this 

policy that I am doing. I want you to make this concession.’ ’’ So 

it puts us in the position of having to spend some of our blue chips 

to get some of theirs, and we would just as soon not be there. 

Mr. HALL. Sir, my point is—and I think you are agreeing with 

me, and I am agreeing with both of you here—that what your simulation showed is, in fact, happening already, tangibly, that we are 

in a national security and sovereignty emergency, that we are only 

recognizing, unfortunately, the public end, you know, and that perhaps our political leaders are only starting to get a handle on how 

fragile our situation is. 

Admiral, you talked about oil being a fungible commodity. Would 

you agree that, to a large extent, conservation is also fungible but 

that saving energy anywhere frees up other energy somewhere 

else, I mean, understanding that liquid fuels are different from 

electricity to the extent that hybrids or plug-in hybrids or biofuels 

or the conservation of any of the above will free up more oil? 

Admiral BLAIR. It is not completely fungible. Turning down your 

thermostat does not mean you import less oil automatically. 

Mr. HALL. Unless you are burning oil at home. 

Admiral BLAIR. What we are mainly concerned about, as I say, 

is the oil sector, but it is headed in the same direction. 

Mr. HALL. Okay. Good. 

Regarding demand, my colleague from Tennessee was talking 

about demand, and her point is good. I just wanted to add to that 

my observations, from watching what little hours of television I 

have time to watch, that the advertising—and I have experience in 

the advertising industry as well. I have had songs used for advertisements, and I have always watched them, you know, with that 

sort of professional eye. 

It seems to me that Detroit is advertising power and speed and 

style and is not advertising efficiency. Take notes, and just make 


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it a project one night to sit in front of the TV, and every time a 

car ad comes on, make a note of what kind of car is being advertised and whether they are touting efficiency and reliability or 

whether they are touting sexiness and speed and 340 horsepower 

to leap out at the stop sign or at the merge ramp. 

I am driving by choice. Although I could have gone with an import and could have gotten 20 more miles per gallon, I am driving 

a—my own personal car is a Detroit-made, union-built hybrid, fulltime, four-wheel drive SUV, which is rated at 33 miles per gallon 

and would get better than that if you would drive it at 55 miles 

per gallon and stay in the right lane and let people whiz by you 

and take it easy going out from the stop signs or from the stoplights. If you step on it and drive angrily, you are getting into the 

20’s. 

So I just wanted to throw that in and say your suggestion of a 

possible national speed limit again is something that I believe, you 

know, we should be considering, but it is going to take—basically 

what you are talking about is leadership, I mean as I hear it, that 

everybody needs to feel that the sacrifice is shared, and the only 

way that that is likely to happen is to have it come from a strong 

statement of the leadership of our country that we are now all approaching this together and are sharing the burden. 

I am sorry to talk so much and ask so few questions. 

My time has expired. Mr. Chairman, I yield. 

The CHAIRMAN. The gentleman’s time has expired. 

The Chair recognizes the gentleman from Connecticut, Mr. 

Larson. 

Mr. LARSON. Thank you, Mr. Chairman. 

I want to thank both the Admiral and Ms. Browner for being 

here. 

Let me go on record as saying that I think that the scenarios can 

be very useful and instructive, but I want to acknowledge right 

from the outset that, because of his Martin Sheen-like qualities, I 

think Ed Markey should be cast as President of the United States 

as a role befitting the chairman of the committee. Now, some may 

say isn’t that a patently suckup move? Yes, it is, and so I hope that 

my legislation will be considered in order when the day arrives. 

Admiral, you mentioned something very interesting in the scenarios as it was laid out and, as I understand it, with the consequences confronting you with the potential shutoff of supplies 

from Iran and Venezuela. Here is my question. 

In a situation such as that, you said that, by virtue of the fact 

that we are dealing with unfriendly States, that it almost becomes 

a de facto military situation. So the question is: In the scenario, 

where would the military deem to strike, if necessary, to recapture 

supplies—in this hemisphere or in the Middle East? 

Then bringing it to reality because, I think, that is what makes 

these useful, should Americans be concerned when we have, yet, 

another battle group doing maneuvers in the Persian Gulf? 

Admiral BLAIR. I think the connection between the military force 

and oil supplies is a little more subtle than that. We do not go in 

and take over oil fields and sort of run them with soldiers and with 

contractors. That is not really the point. I do not think we invaded 

Iraq to get their oil. 


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What I am saying is the fact that that region supplies a commodity, which is so fundamentally important to the United States, 

means that the United States is intellectively involved in the affairs of that region and will have to have a much deeper involvement in them so that, when one State threatens another or invades 

another as Iraq invaded Kuwait back in 1991, an issue in which 

military force clearly has an application, we will do it; we will use 

military force there. 

The military situations that clearly call for a military response 

in that part of the world are threatening to and closing the Strait 

of Hormuz, the scenario that we had in the tanker wars in the mid1980s when both Iraq and Iran were attacking oil tankers, and we 

ended up reflagging and escorting them. 

So it is not so much that, militarily, we go in and take over oil 

fields, which is not a very useful alternative. It is that we are in 

the region, and when military force is used, the United States has 

got to consider what we do with our forces, and we kind of get 

sucked into it the way that we have over time. 

What I think is going on here is that, if the United States has 

a very great vulnerability of short-term interruptions in countries 

like Venezuela and Iran, who are no friends of this country, they 

can sort of throttle back for a while. It does not hurt them very 

badly. It hurts us. It gives them advantages across the board in 

dealing with their interests as opposed to ours, which result in 

change. 

Mr. LARSON. So these maneuvers in the Persian Gulf should be 

viewed as saber rattling to assist in diplomacy or are they concerns 

that Members of Congress in any scenario should be very much 

aware of? 

Admiral BLAIR. I took the uniform off 5 years ago. It was not my 

area, and we have got good people who took our places there, and 

I think you need to talk to them. 

Mr. LARSON. And you said you were not a good politician. 

Ms. BROWNER. If I might just note, in this scenario, one of the 

things that did unfold from, I think it was, the Secretary of Defense was a question for the President. 

Should we change the Selective Service registration requirements 

to capture women? Secondly, should we begin thinking about some 

form of a draft? Because the concern in the scenario that he was 

bringing to the table is that the military is stretched very, very 

thin. 

I might also note that, in this scenario, the President is not in 

the room. There is sort of an Oz-esque figure behind a curtain, so 

Mr. Markey would have to peek in occasionally, but you would be 

a great Secretary of Treasury. 

The CHAIRMAN. Well, I was thinking of letting him, Mr. Larson, 

be Vice President so then it could reflect the real power in the 

United States anyway. 

The gentleman’s time has expired. 

So the Chair recognizes himself for a round of questions. 

Under your scenario, only 1 percent of the world’s oil supply is 

taken off the market. It leads to $160-a-barrel oil. It leads to the 

collapse of the economy. 


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What is it that has led to having the oil markets become so tight 

that they can have such a profound impact in such a short period 

of time? 

Ms. BROWNER. Well, I think, in that scenario, it is a combination 

of factors, but certainly, the failure of efficiency, the failure to drive 

down the amount of oil we use on a daily basis becomes pretty important because while the actual number—it ends up at about 1 

billion barrels a day. That is not an amount that cannot be addressed through some prudent steps taken, you know, sooner rather than later. 

Admiral BLAIR. On that, I agree with you, Mr. Chairman. That 

was sort of a surprising effect. You would think, on a percentage 

basis, it would not be that big. The gameplay for that result was 

done by a highly-respected, Canadian energy consulting company 

that we fed the information to and then asked them ‘‘Okay. What 

did that do to the price of barrels?’’ They ran their quantitative 

models, in their judgment. 

What I think was at play there was that, with the oil market so 

tight in the future primarily because of the increases in non-U.S. 

production, India and China are leading it. You find that non-U.S. 

oil demand goes up 38 percent over, maybe, the next 5 years; 

whereas, U.S. demand goes up about 24 percent. That is just making the oil market so tight that the power of expectations comes to 

play, and even relatively small tremors make people worry about 

the future. Therefore, they want to ensure their own supplies, and 

they bid up prices. So you are just in this trigger in which a relatively small rock in the pond has pretty big ripples. 

The CHAIRMAN. So you talk in your testimony, Admiral, about 

our ever-growing military presence in the Middle East. 

Could you give us some sense of how you feel, for example, as 

to how this growing dependence upon oil affects our relationship 

with Saudi Arabia? 

Admiral BLAIR. I think it gives Saudi Arabia much greater leverage in its dealings with us, and it is no secret that there are a lot 

of aspects of Saudi Arabia in the future that we have real concerns 

about, and when you are that much—when a country with those 

sorts of challenges has that much of a thumb on you, it causes concern. So it is not a whole lot more complicated than that, Mr. 

Chairman. 

The CHAIRMAN. So the language that you both made reference to, 

the 35 miles per gallon by 2020, actually backs out the equivalent 

of all of the oil that we import from the Persian Gulf on a daily 

basis by 2020. 

How important is that, Admiral? 

Admiral BLAIR. I think that would just put us in a lot better position to be able to deal in a more balanced manner with Saudi 

Arabia. I think it would have made the position of those people in 

the shockwave much, much easier. 

The CHAIRMAN. Ms. Browner, can you talk to this issue of the 35- 

mile-per-gallon standard by 2020 and how important you think it 

is for the Congress to pass that this year? 

Ms. BROWNER. It is absolutely essential. We have got to get on 

with doing this. As I said in my opening statement, this is the second time I have participated in one of these. The last was several 


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years ago. The message from both of them was identical, that taking steps sooner rather than later is key to these problems. 

In the case of CAFE and the proposal that the Senate has 

passed, it would have solved the problem that we were confronting. 

It was not as if this scenario was designed to then conclude, well, 

you should have passed CAFE. It was just the fact of, when you 

go back and look at how it unfolded, that is one of the easiest ways, 

actually, to have solved the problem. 

The CHAIRMAN. Admiral, are you convinced that we can improve 

the efficiency without compromising the safety of the American 

people in terms of the vehicles which they drive? 

Admiral BLAIR. Yes, sir, I am. 

I tell you the strongest technical support for that judgment was 

our updating of a study done back in 2002 by the National Academy of Sciences, which looked at existing—we, the Securing America’s Future Energy Project asked the office to update it to about 

2000, 2005. 

Are there available technologies which can influence and which 

can improve sufficiency without sacrificing safety? The answer from 

these technical experts was, unambiguously, yes, it could. That was 

even without considering hybrids and some other, more recent 

technologies. So I think the technical answer is, yes, it can be done, 

and it should be done. 

Another part of our proposal was that what if we are wrong? 

What if this is resulting in unsafe vehicles? We provided in our recommendations that the National Highway Traffic Safety Administration have the authority to be able to waive standards based on 

sound technical arguments having to do with safety and with the 

economy, but we think the burden of proof ought to be put on people saying why they cannot do it rather than why they can, which 

is sort of where it is now. What you hear from the auto companies, 

you know, is American consumers do not want it, you know, blah, 

blah, blah. So we think we ought to shift the burden in the other 

direction. 

The CHAIRMAN. Ms. Browner. 

Ms. BROWNER. You know, at the EPA, I, obviously, got the 

chance to regulate the automotive industry, and they always said 

no, no, no, no, no. Then they always turned around and did it. I 

think, you know, Mr. Chairman, with your leadership on CAFE 

and with your proposal on CAFE and with the Senate proposal, 

there is no doubt in my mind that they can do it. They will complain loudly, but they will end up being able to do it. 

The CHAIRMAN. So my time has expired. 

Let us do this. I apologize to you. President Sarkozy of France 

is about to address the House, and that is why the Members have 

been leaving, because he is going to come out onto the House floor 

in the next 15 to 20 minutes, so the Members have been leaving 

for that purpose, and we had to move the hearing up in order to 

accommodate that as well. 

So what I would like from each of you is if you could give us your 

take-away message, what it is that you want us to remember over 

these next 4 weeks, especially as we consider this energy bill, 

which is pending before the House and the Senate, as we have this 

opportunity to pass the largest and the most important energy bill 


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in the last 30 years in the United States Congress and as the world 

convenes in Bali in 1 month to talk about the relationship between 

energy and climate, and as Al Gore also goes to receive the Nobel 

Peace Prize. The world is speaking to the United States in a lot of 

ways through that prize. 

Could you each give us your take-away message for the Congress 

as we reach this final 4 weeks? 

Admiral Blair. 

Admiral BLAIR. Yes, sir. 

My take-away message would be to pass this bill with conservation members, to pop your champagne, but please do not stop 

there. Go on to the other aspects of a comprehensive solution having to do with supply, having to do with alternatives, and keep on 

with steady pressure to have a comprehensive strategy, but nail 

down that first step, which is passing this bill which the Senate 

has passed. 

The CHAIRMAN. Okay. Ms. Browner. 

Ms. BROWNER. Please, I ask you to please pass the bill. You 

know, this is a great, important moment, I think, in our history. 

I agree with the Admiral. It is a first step. There will be other 

steps we need to take, but it is an absolutely essential step. We 

need to get started. We need to get started on more fuel-efficient 

cars. We need to get started on renewable electricity standards. 

Mr. Chairman, the leadership that you and the members of this 

committee have brought to this debate is remarkable, and I feel 

like we are just sort of sitting on the edge of something really great 

that is beginning. There will be a lot more to do. Obviously, greenhouse gas emissions and carbon are going to be important, but if 

we could get this done and if we could say to the American people, 

you know, our leaders want to do something and they want to work 

with you for a better future, it would be wonderful. 

The CHAIRMAN. Thank you, Ms. Browner. 

This issue really is reaching the point of decision. Speaker Pelosi, 

in January of this year, created this Select Committee on Energy 

Independence and Global Warming as her only select committee 

during the 2 years that she will be in her first term as Speaker. 

So, clearly, this is something that is very important to her. It is 

now, as each day goes by, becoming increasingly important to the 

American economy as well in addition to the security of our country 

and of the climate. 

On Monday of this week, we had 5,500 young people—young 

leaders—from across the country come to Washington. They were 

presidents of their senior class, the heads of their environmental 

movements on campus. We had that hearing in the Ways and 

Means main committee room. 700 young people were packing that 

room with thousands of others surrounding the Longworth Building as they were testifying about the responsibility that this generation has to their generation, the green generation, to solve this 

problem. So we need to play our part in passing this first step and 

in beginning the process of reversing this dependence upon imported oil and fossil fuels. 

We thank you both for your leadership on this issue. 

With that, this hearing is adjourned. 

[Whereupon, at 10:35 a.m., the committee was adjourned.] 


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