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75–111 PDF 2012

RHETORIC VS. REALITY: DOES PRESIDENT OBAMA 

REALLY SUPPORT AN ‘‘ALL–OF–THE–ABOVE’’ 

ENERGY STRATEGY? 

HEARING 

BEFORE THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

MAY 31, 2012 

Serial No. 112–153 

Printed for the use of the Committee on Oversight and Government Reform 

( 

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

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

DAN BURTON, Indiana 

JOHN L. MICA, Florida 

TODD RUSSELL PLATTS, Pennsylvania 

MICHAEL R. TURNER, Ohio 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

CONNIE MACK, Florida 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

ANN MARIE BUERKLE, New York 

PAUL A. GOSAR, Arizona 

RAU ́ L R. LABRADOR, Idaho 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

JOE WALSH, Illinois 

TREY GOWDY, South Carolina 

DENNIS A. ROSS, Florida 

FRANK C. GUINTA, New Hampshire 

BLAKE FARENTHOLD, Texas 

MIKE KELLY, Pennsylvania 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

EDOLPHUS TOWNS, New York 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

DENNIS J. KUCINICH, Ohio 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

MIKE QUIGLEY, Illinois 

DANNY K. DAVIS, Illinois 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

JOHN A. YARMUTH, Kentucky 

CHRISTOPHER S. MURPHY, Connecticut 

JACKIE SPEIER, California 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

ROBERT BORDEN, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

(III) 

C O N T E N T S 

Page 

Hearing held on May 31, 2012 ............................................................................... 1 

WITNESSES 

Mr. Michael Krancer, Secretary, Pennsylvania Department of Environmental 

Protection 

Oral Statement ................................................................................................. 5 

Written Statement ............................................................................................ 7 

Ms. Kathleen Sgamma, Vice-President of Government and Public Affairs, 

Western Energy Alliance 

Oral Statement ................................................................................................. 10 

Written Statement ............................................................................................ 12 

Mr. Mark J. Perry, Scholar, American Enterprise Institute 

Oral Statement ................................................................................................. 15 

Written Statement ............................................................................................ 17 

Mr. Daniel J. Weiss, Senior Fellow and Director of Climate Strategy, Center 

for American Progress Action Fund 

Oral Statement ................................................................................................. 28 

Written Statement ............................................................................................ 30 

Mr. Charles T. Drevna, President, American Fuel & Petrochemical Manufacturers 

Oral Statement ................................................................................................. 47 

Written Statement ............................................................................................ 49 

Mr. Peter S. Glaser, Partner, Troutman Sanders LLP 

Oral Statement ................................................................................................. 64 

Written Statement ............................................................................................ 66 

APPENDIX 

The Honorable Elijah E. Cummings, a Member of Congress from the State 

of Maryland, Opening Statement ....................................................................... 118 

The Honorable Mike Quigley, a Member of Congress from the State of Illinois, 

Opening Statement .............................................................................................. 120 

Committee on Oversight and Government Reform Staff Report, Rising Energy 

Costs: An Intentional Result of Government Action ......................................... 124 

(1) 

RHETORIC VS. REALITY: DOES PRESIDENT 

OBAMA REALLY SUPPORT AN ‘‘ALL–OF–THE– 

ABOVE’’ ENERGY STRATEGY? 

Thursday, May 31, 2012, 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The committee met, pursuant to call, at 9:30 a.m., in Room 2154, 

Rayburn House Office Building, Hon. Darrell E. Issa [chairman of 

the committee] presiding. 

Present: Representatives Issa, Platts, McHenry, Jordan, Walberg, 

Lankford, DesJarlais, Ross, Farenthold, Kelly, Cummings, Tierney, 

Quigley, Davis, Welch, Murphy, and Speier. 

Staff Present: Kurt Bardella, Majority Senior Policy Advisor; 

Robert Borden, Majority General Counsel; Will L. Boyington, Majority Staff Assistant; Molly Boyl, Majority Parliamentarian; Lawrence J. Brady, Majority Staff Director; Joseph A. Brazauskas, Majority Counsel; Sharon Casey, Majority Senior Assistant Clerk; 

Steve Castor, Majority Chief Counsel, Investigations; John 

Cuaderes, Majority Deputy Staff Director; Adam P. Fromm, Majority Director of Member Services and Committee Operations; Linda 

Good, Majority Chief Clerk; Ryan M. Hambleton, Majority Professional Staff Member; Mark D. Marin, Majority Director of Oversight; Kristina M. Moore, Majority Senior Counsel; Laura L. Rush, 

Majority Deputy Chief Clerk; Cheyenne Steel, Majority Press Assistant; Rebecca Watkins, Majority Press Secretary; Lisa Cody, Minority Investigator; Kevin Corbin, Minority Deputy Clerk; Ashley 

Etienne, Minority Director of Communications; Jennifer Hoffman, 

Minority Press Secretary; Carla Hultberg, Minority Chief Clerk; 

Chris Knauer, Minority Senior Investigator; Dave Rapallo, Minority Staff Director. 

Chairman ISSA. This hearing of the Government Oversight Reform Committee will come to order. 

The Oversight Committee exists to secure two fundamental principles: first, Americans have a right to know that the money Washington takes from them is well spent and, second, Americans deserve an efficient, effective government that works for them. Our 

duty on the Oversight and Government Reform Committee is to 

protect these rights. Our solemn responsibility is to hold government accountable to taxpayers, because taxpayers have a right to 

know what they get from their government. We will work tirelessly 

in partnership with citizen watchdogs to deliver the facts to the 

American people and bring genuine reform to the Federal bureaucVerDate Aug 31 2005 13:57 Jul 27, 2012 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\75111.TXT APRIL
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racy. This is the mission of the Oversight and Government Reform 

Committee. 

In his 2012 State of the Union, President Obama declared this 

Country needs an all out, all-of-the-above strategy that develops 

every available source of American energy. Unfortunately, the actions of the Obama Administration reflects a much narrower approach. The reality is the Obama Administration has taken several 

actions that would limit the production and use of oil, natural gas, 

and coal energy sources. I might add they have also shut down 

Yucca, effectively dooming nuclear. 

These actions are justified by the advancement of rhetoric and 

reliant on distortion of the actual facts. For example, the President 

frequently states that the U.S. only has two percent of the world’s 

oil reserves. Nothing could be further from the truth. The statement of proven reserves has been disproven for my entire life. 

The fact is that America ignores potential a multi-trillion dollar 

barrels of oil that we know exist that have not yet been proven. 

Saudi Arabia, on the other hand, talks of proven reserves counting 

virtually every drop of oil, while America talks only about an 

amount roughly equal to the amount that we said we had in the 

1950s, when I was born. 

According to the Institute of Energy Research, the U.S. has 1.4 

trillion barrels of technically recoverable oil, enough to meet the demand for at least the next 200 years. The President likes to take 

credit for increased oil production, but in reality the dramatic increase in production that has happened has happened on private 

lands in spite of the Administration’s policy of obstructing all use 

of Federal lands. Today we enjoy a 36 percent reduction in new 

drilling on Federal lands as a result of these policies. 

The Congressional Research Service reports that 96 percent of 

U.S. oil production increases in 2007 have occurred on non-Federal 

lands. This as the Obama Administration has closed off public 

lands to exploration and drilling that would have been available 

just a few years ago. 

While many Americans believe that construction of the Keystone 

pipeline is key to relieving escalating gas prices, the President has 

stood in the way and even had the audacity to claim that an executive order that specifically does nothing new, advances nothing 

new, expedites nothing new, and only fails to stop that which 

would occur without any effort at the same time line in fact was 

his initiative. 

It is ironic that the President stood in front of empty green oil 

pipeline for his photo shot, because the empty green promise of this 

Administration should be in fact the key to understanding Obama’s 

all-of-the-above strategy: any energy made above ground counts; 

any energy found below ground is off limits. 

We should harken back to the period of time in which the Democrats controlled the House, the Senate, and the White House. During that period of time, on the President’s insistence, cap-and-trade 

was passed out of the House, which would have curtailed virtually 

all coal production in this Country and severely limited other 

sources. It failed in the Senate, but not for a lack of leadership 

from the President. Today, by regulatory fiat, the President is effecVerDate Aug 31 2005 13:57 Jul 27, 2012 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\75111.TXT APRIL
3 

tively shutting down 26 gigawatts of electric power produced from 

coal as we speak. 

The bottom line is virtually all of the success and security of our 

Nation to develop avenues of oil and natural gas have either come 

from the previous administration and simply are a legacy that continues in spite of this one, or in fact have occurred on private lands 

in spite of the best efforts by the Federal Government to stop it. 

We cannot exist as a modern day superpower unless we have 

means to fuel a 21st century economy. President Obama has to 

make a choice. He can either be part of the problem or he can be 

part of the solution. All-of-the-above is only half of the solution. We 

have to have an all-of-the-above and all-of-the-below mentality if 

we are in fact going to deliver affordable energy for the American 

people. 

It is often said, but needs to be said as often as possible, the 

Stone Age did not end because we ran out of stones; it ended because we harnessed energy. 

With that, I recognize the distinguished Ranking Member for his 

opening statement. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman. I want to 

thank you for calling today’s hearing. 

The title of today’s hearing poses the following question: Does 

President Obama really support and all-of-the-above energy strategy? In my opinion, the answer is clearly yes, resounding and obvious. 

Under President Obama, total domestic oil production in the 

United States has increased by 14 percent since the final year of 

the Bush Administration. Every year since Mr. Obama became 

President total U.S. crude oil production has increased. In 2011, 

over 2 billion barrels of oil were produced in the United States. 

This is the highest rate of domestic oil production since 2003. In 

2011, onshore oil production on Federal lands was the most productive since 2003, with 112 million barrels produced; offshore oil production at its most productive year, in 2010, with 618 million barrels produced. 

As part of this all-of-the-above strategy, natural gas production 

is also now at record levels. In fact, it is at its highest level in 30 

years, with more than 28 trillion cubic feet produced in 2011. 

The Administration has also pursued nuclear power. It approved 

an $8.3 billion conditional loan guarantee for nuclear reactors in 

Burke County, Georgia, which is the first nuclear plant to receive 

a construction license in more than three decades. After touring the 

facility, Energy Secretary Steven Chu stated, ‘‘Nuclear energy is a 

critical part of the President’s all-of-the-above energy strategy.’’ 

The President has also requested an additional $770 million for nuclear programs in his budget for 2013. 

In a stark difference from the previous administration, the 

Obama Administration has also invested significantly in clean energy technologies of the future that promote our global competitiveness and enhance our energy independence. 

Because of investments in solar, biofuel, wind, geothermal, and 

electric vehicle technologies that were included in the Recovery Act, 

the United States is now home to the world’s largest photovoltaic 

4 

generation facility, one of the world’s largest wind farms, and the 

world’s largest concentrated solar power plants. 

In addition to taking these steps, the Administration’s new fuel 

economy standards will reduce oil consumption by 2.2 million barrels a day, saving American families an average of $8,000 at the 

pump. 

I understand that many of the witnesses invited by the Chairman today will express their desire to drill for even more oil and 

to remove existing health and safety protections to allow them to 

do so. They will also argue that the Administration is somehow 

blocking their efforts. 

To the contrary. Arguments that the Administration has been refusing to approve drilling permits in the Gulf are a complete myth. 

Following the monumental BP disaster, the Administration worked 

quickly with industry to develop and implement new offshore drilling rules to reduce the chances that such a catastrophe would ever 

happen again. Since enacting these rules, the Administration has 

issued more than 400 deepwater drilling permits and Gulf operations have resumed more safely as a result. 

In addition, in 2011, the Administration offered 21 million acres 

for new offshore oil and gas development, and next month an additional 38 million acres will be offered as part of a lease sale in the 

Gulf of Mexico, an area estimated to hold close to 31 billion barrels 

of oil and 134 trillion cubic feet of natural gas. 

The record is abundantly clear. President Obama has pursued an 

aggressive strategy to significantly boost domestic energy production from all sources—oil, natural gas, nuclear, clean energy—and 

he deserves an enormous amount of credit for his accomplishments. 

With that, Mr. Chairman, I yield back. 

Chairman ISSA. I thank the gentleman. 

All members will have seven days to submit opening statements 

for the record. 

We now recognize our opening panel. 

Mr. Michael Krancer is the Secretary of Pennsylvania’s Department of Environmental Protection; Ms. Kathleen Sgamma is the 

Vice-President of Government and Public Affairs at the Western 

Energy Alliance. Welcome. Mr. Mark Perry is a scholar at the 

American Enterprise Institute for Public Policy Research; Mr. Daniel J. Weiss is Senior Fellow and Director of Climate Strategy at 

the Center for American Progress Action Fund; Mr. Charles T. 

Drevna is President of American Fuel & Petrochemical Manufacturers; and, lastly, Mr. Peter Glaser is a partner at Troutman 

Sanders LLP. 

Pursuant to our Committee rules, just like on television, would 

you please rise to take the oath and raise your right hands? 

Do you solemnly swear or affirm that the testimony you are 

about to give will be the truth, the whole truth, and nothing but 

the truth? 

[Witnesses respond in the affirmative.] 

Chairman ISSA. Let the record indicate that all witnesses answered in the affirmative. 

Please be seated. 

This is a large panel today and each of your full opening statements will be placed in the record, so I would ask you to observe 

5 

the timer light in front of you. Try to stay as close to your five minutes, or under, as you can so that we can get to a sufficient amount 

of questions. 

Contrary to opening statements, we do not know whether what 

you are going to say today is accurate or inaccurate, regardless of 

presumption, so we would like to have a healthy dialogue so that 

we can get to a full and hopefully bipartisan understanding. 

Mr. Krancer. 

WITNESS STATEMENTS 

STATEMENT OF MICHAEL KRANCER 

Mr. KRANCER. Thank you very much. It is an honor and a privilege to be here. I am from Pennsylvania. We are in the middle, as 

you all know, of a natural gas exploration and extraction revolution 

in Pennsylvania. 

I want to just react to Representative Cummings’ statement. Nobody on this panel, certainly me above all, the DEP Secretary of 

Pennsylvania, has any desire to remove any health and safety protections. As a matter of fact, that is one of the points that we are 

here today on, and that is the States are already doing a very fine 

job regulating, for example, natural gas extraction. It is being done 

in Pennsylvania. 

I would also say that the point that natural gas production has 

increased, that is true, but it is true in spite of the Federal Government. It is true in Pennsylvania. Our production has quadrupled 

since 2009, and it is because the Federal Government is not intervening and interposing; it is because Pennsylvania is getting it 

right. 

What I see in Pennsylvania as DEP Secretary is—of course, we 

have a coal State. We are not totally a coal State, we are very diverse; we have nuclear, we have a very healthy nuclear industry, 

we have coal, natural gas, we have oil, we have wind and solar. 

But what I see is a Federal Government that seems to be picking 

winners and losers, attempting to be picking winners and losers, 

and promulgating a regulatory agenda that does not have an allof-the-above flavor to it, it picks winners and losers. And I will just 

use a couple of examples. 

In my own State, with respect to the hydraulic fracturing, I think 

the Federal Government has created somewhat of a hostility. There 

is a hostile attitude towards the science of hydraulic fracturing, 

which has been ongoing in this Country for many years, 60 years, 

probably, and the Federal Government has never, until now, expressed any interest whatsoever to be involved in it, and I cover 

that in my testimony. And there seems to be some fear churning, 

going on as well. 

One of the matters in my State was in Dimock, Pennsylvania, 

where, after the State had taken control, had control of the matter, 

the Federal Government came in and started doing water testing 

this year. After four rounds of water testing, there are no problems 

indicated and now I think the Federal Government is looking for 

an exit strategy from Dimock, and I am not sure how they are 

going to do that or if they are going to do that before the election. 

6 

In terms of air regulations, what I see is a severe hostility towards coal, absolutely. The air regulations are hostile to coal. I am 

talking about Utility MACT, I am talking about the transport rule, 

and I am talking about an incredible over-activity with respect to 

the NAAQS, the National Ambient Air Quality Standards. 

This Administration, in three and a half years, has done more 

with respect to NAAQS than has been done in history. Under Clinton, under Bush more. They have already announced four of the six 

that they are going to change, and for some very shaky technical 

reasons. And I will tell you with respect to my State, on the air 

regulations, EPA has refused to consider that those air regulations 

are going to kill waste coal-burning plants in my State, which provide an important environmental benefit. 

Another matter is the coal ash residuals regulation. Here is EPA 

headed towards, with the help of a friendly piece of litigation now, 

regulating coal ash residuals as hazardous waste. That would be 

devastating in my State, and other States, too. And I have written 

to Congress on that on several occasions. There is no scientific justification for it; there is no legal justification for it. It would cause 

the loss of between 180,000 jobs and 316,000 jobs and cost between 

$78 billion and $110 billion over 20 years. 

Another area where my State has seen this is in the coal mining 

permits, the water aspects of coal mining permits. EPA has interposed more than they ever have in history and we think for a technically very questionable basis. 

I think the Chairman hit the nail on the head with respect to 

nuclear. We see the Federal Government not stepping to the plate 

to fulfill its promise to deal with the nuclear waste disposal issue 

and, in fact, reneged on its promise, and that is costing billions of 

dollars, or will cost billions of dollars, and really the Federal Government needs to deal with that. 

I did hear a quip the other day, and it follows on the Chairman’s 

comment, that the all-of-the-above moniker, if you will, really 

means only the above, meaning only wind, only solar, only those 

things. We have assets here in our Country under the ground in 

my State and in other States that can be safely extracted in an environmentally manner, and all economies need available abundant 

domestic energy, and our potential in that regard, my State and in 

our Nation, is off the charts. 

With that, I will leave it to the next testifier and look forward 

to questions. 

[Prepared statement of Mr. Krancer follows:] 

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Chairman ISSA. Thank you. I will note that as someone born and 

raised in Ohio, you were as close as I could get to somebody from 

our region with the same abundance. 

Mr. KRANCER. Well, I have good news for you. I was born in 

Cleveland. 

Chairman ISSA. East or West side? 

Mr. KRANCER. Shaker Heights, is that it? 

Chairman ISSA. Yes. 

Mr. KRANCER. Shaker Heights. That was a long time ago and I 

don’t remember very much, but I was born there, so I am told. 

Chairman ISSA. You should come back. My family is in Cleveland 

Heights and Shaker Heights. 

Mr. KRANCER. I will do that. 

Chairman ISSA. I will give you that time back later from that 

round of questioning. 

Ms. Sgamma? 

STATEMENT OF KATHLEEN SGAMMA 

Ms. SGAMMA. Thank you, Mr. Chairman, Ranking Member 

Cummings, and members of the Committee. 

Western Energy Alliance represents about 400 companies engaged in all aspects of environmentally responsible oil and natural 

gas development in the West. Our members are proud to produce 

27 percent of the Nation’s natural gas and 14 percent of oil production, while disturbing 0.07 percent of public lands. 

It seems that my industry has figured into the Administration’s 

strategy as an annoyance to be avoided in favor of its preferred energy sources. The attitude has translated into budgets intended to 

reduce so-called overproduction of oil and natural gas through increased taxes. 

One thing that particularly rings hollow with Western producers 

is the Administration taking credit for increased oil and natural 

gas production. Despite all the obstacles put in place by this Administration, oil and gas companies responding to market forces 

have dramatically increased productions on private lands and reduced foreign imports. 

But it is not just a matter of who should take credit for increased 

U.S. production. It is important that we recognize the role of policies and regulations that stifle economic growth. Where the Administration has the most controls, the Interior Department has put in 

place more obstacles to producers. On onshore public lands, oil production has declined by nearly 15 percent and natural gas increased by a scant half of a percent from 2010 to 2011. However, 

natural gas production on all Federal lands declined by 27 percent 

from 2009 levels, while natural gas production on State and private 

lands increased 28 percent. 

To deflect criticism, we continue to hear accusations and misleading statistics that industry is letting millions of acres sit idle. 

Yet, this tired rhetoric fails to take into account the fact that not 

every lease has recoverable oil and gas and the huge obstacles the 

Federal Government places in the way of producers. 

Western Energy Alliance recently released a study of the enormous economic potential of just 20 projects on public lands. These 

20 projects, of about 3100 wells per year, would generate nearly 

11 

121,000 sustained jobs, $8 billion in wages, and $27.5 billion in annual economic impact, all from just about 3100 wells. 

However, once a project is proposed by a company, the Interior 

Department’s Bureau of Land Management must complete environmental analysis under the National Environmental Policy Act. We 

are seeing even small 9-well projects take over four years and large 

projects take over seven years. 

In fact, if we look at projects waiting over three years, we see 

that government delays are preventing the creation of nearly 

65,000 jobs and $15 billion in economic activity annually. These 

NEPA delays are the direct result of government inaction that prevents companies from operating on their leases. 

Other obstacles abound. Interior Secretary Salazar started his 

tenure by cancelling leases in Utah. He followed that up with policies that added three new layers of analysis to the leasing process, 

which has resulted in an 80 percent decline in leases offered in the 

Rocky Mountain States. If there was any doubt about his intention 

to slow oil and gas production, Secretary Salazar allayed those 

doubts when he introduced new policies by saying his agency would 

no longer be a candy store for the petroleum industry. The attitude 

that there was a new sheriff in town who needed to stop unfettered 

development, as if a responsible industry providing over a quarter 

of our Nation’s natural gas production, while disturbing less than 

a tenth of a percent of acreage, was an industry gone wild. 

Secretary Salazar recently admitted that it takes the Government 298 days, on average, to process drilling permits and promised to reduce the time to 60 days. Since every proposed budget for 

the last four years has attempted to zero out funding for improving 

permit processing, again, the rhetoric doesn’t match the reality. 

Interior has also decided to regulate hydraulic fracturing despite 

the lack of a single incident on Federal lands and successful State 

regulation. We estimate that will add another 100 days on to permitting times. 

For the last three years we have been part of an anything-butoil-and-gas energy strategy. We are heartened that the Administration has changed the rhetoric. Now we are just waiting for reality 

to catch up. 

While I have only had time for a few instances of policies that 

are preventing development, I look forward to some more examples 

as questions come up. 

[Prepared statement of Ms. Sgamma follows:] 

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Chairman ISSA. Thank you. 

Mr. Perry. 

STATEMENT OF MARK J. PERRY 

Mr. PERRY. Chairman Issa, Ranking Member Cummings, and 

other members of the Committee, thank you for the opportunity to 

appear today. In my written testimony I have provided 10 pages 

of analysis on the topic you are considering and here is an oral 

summary of that testimony. 

My main point today I think is that, as the Chairman has indicated, it would be more accurate to describe President Obama’s energy strategy as some-of-the-above, rather than all-of-the-above, for 

the following reasons: 

President Obama has shown certain favoritism towards alternative energies, which he has described publicly as energy sources 

of the future, while he has publicly dismissed oil as an energy of 

the past; that some of the above favoritism has been demonstrated 

in several ways. 

Domestic production of fossil fuels on Federal lands fell to a 9- 

year low in fiscal year 2011, as crude oil production fell by 14 percent, the largest annual decrease in at least a decade, and natural 

gas production fell by more than 9 percent. 

The Administration’s fiscal year 2013 budget targets oil and natural gas companies with eight proposals for higher taxes, which it 

is estimated would burden the oil and gas industry with almost $86 

billion in higher taxes over the next 10 years. 

There are drilling restrictions or limited permitting for oil and 

natural gas that continue off the mid-Atlantic coast and much of 

the Gulf of Mexico, in the Arctic National Wildlife Refuge, on Federal lands in the Rockies, where leases are down 70 percent since 

2009. 

Other actions taken by the Administration, including rejecting 

the Keystone XL pipeline, cancelling millions of acres in offshore 

lease sales, and closing the majority of the Outer Continental Shelf 

to new energy production for the next five years demonstrate an 

Administration that does not support an all-of-the-above energy 

strategy that includes increasing domestic production of fossil fuels 

that will remain critical to America’s energy and economic future 

for many decades. 

In contrast, the President’s proposed budget for fiscal year 2013 

includes preferences for the politically favored green energy sector 

in the form of numerous tax subsidies, tax credits, public expenditures, procurement preferences, and grants for alternative energy. 

In my written testimony, I have identified nine specific budget provisions that favor alternative energy. 

Based on the Obama Administration’s demonstrated preference 

for alternative energies that are supposed to be the energy sources 

of a future that is no longer dependent on traditional hydrocarbon 

energies of the past, a misleading message is being conveyed to the 

American people that our Country’s need for substantial levels of 

oil, natural gas, and coal will soon be a distant memory. The reality, however, is much different. 

In its most recent forecast, in January of 2012, the U.S. Department of Energy estimated that the importance of fossil fuels for 

16 

meeting the energy demands of the U.S. economy will decline only 

modestly over the next several decades, from 83 percent of total 

U.S. energy consumption in 2010 to 77 percent in 2035. In contrast, 

despite all of the attention, preferences from the Obama Administration, loan guarantees and taxpayer subsidies for renewable energy, their contribution to U.S. energy consumption of 7.3 percent 

in 2012 was barely higher than the 7.1 percent share back in 1997. 

Current estimates from the Department of Energy predicted even 

by the year 2035 the renewable energy share of U.S. energy consumption would be less than 11 percent. 

Even the Government’s own forecasts predict that renewable energy will continue to play a relatively minor role as an energy 

source over the next several decades out to the year 2035, and traditional energy sources like oil, gas, and coal will continue to provide the overwhelming share, more than three-quarters of the fuel 

required to meet U.S. energy demand for the next three decades, 

at least. 

By favoring new, costly, subsidy-dependent alternative energy 

sources over traditional sources, and by not fully supporting the 

proven, job-creating, low-cost fossil fuels, it would be more accurate 

to describe President Obama’s costly energy strategy as some of the 

most costly above instead of all-of-the-above. What we really want 

is an energy policy that is not based on all-of-the-above or someof-the-above regardless of cost, reliability, and economic and scientific merits, but, rather, an energy policy as grounded in the logic 

of all of the energy sources that are actually cost-competitive. 

President Obama might wish for an energy future of alternative 

energy, but the scientific and economic realities suggest that the 

fuels of the future will mostly do the same as the fuels of the past: 

dependable, reliable, low-cost oil, natural gas, coal, and nuclear. 

Thank you. 

[Prepared statement of Mr. Perry follows:] 

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Chairman ISSA. Mr. Weiss. 

STATEMENT OF DANIEL J. WEISS 

Mr. WEISS. Chairman Issa, Ranking Member Cummings, and 

members of the Committee, thank you very much for the opportunity to testify today. I am a Senior Fellow at the Center for 

American Progress Action Fund, a tax-exempt organization dedicated to progressive values and ideas. 

First, I would like to address the assumption that producing 

more oil will lower gasoline prices. In fact, the Associated Press examined 30 years of monthly production and gassing price data and 

found ‘‘no statistical correlation between how much oil comes out 

of U.S. wells and the price at the pump.’’ In other words, the idea 

that we can drill our way to lower oil prices is rhetoric, not a 

record. If so, then Canada would have had very low gasoline prices 

this year because they produce nearly all their own oil. In fact, 

Canada also had high gasoline prices this year, according to The 

Wall Street Journal. 

Now, let’s address the question posed for this hearing: Does 

President Obama really support an all-of-the-above energy strategy? What is an all-of-the-above energy strategy? To most Americans it means we must do three things: first, develop the energy 

resources of today while using them more efficiently; second, invest 

in the new cleaner technologies of tomorrow; third, reduce public 

health threats from pollution generated by producing and burning 

coal, oil, and other fossil fuels. 

We have just heard all the rhetoric. Now let’s review the Obama 

record on the all-of-the-above energy strategy checklist. 

First, develop energy resources. U.S. oil production is at its highest since 1998. The Energy Information Administration just demonstrated that annual oil production for Federal lands and waters 

was higher under the first three years of President Obama than 

under the last three years of his predecessor. In all, this was 646 

million barrels, 12 percent higher than 2008. 

Let’s look at oil imports and are we using oil efficiently. In 2011, 

the United States imported only 45 percent of its oil, the lowest 

since 1997. When the modernization of fuel economy standards is 

complete in 2025, we will use 2 million fewer barrels of oil per day 

and drivers will save $8,000 per car in lower gasoline purchases. 

And I say this as the son-in-law and brother-in-law of car dealers. 

Nuclear power. The first two nuclear reactors in a generation 

were just approved in February for a plant in Waynesboro, Georgia. 

Coal employment. U.S. Mine Safety and Health Administration 

reports that there were more coal miners employed in the United 

States in 2011 than in any year since 1997. 

So it looks like we are producing more of the resources we have 

and using them wisely. 

Are we investing clean energy in jobs? In 2011, U.S. clean energy 

investments moved ahead of China for the first time in 2008, according to Bloomberg. The non-hydro renewable electricity generation will nearly double between 2008 to 2012, according to Energy 

Information Administration. And the Bureau of Labor Statistics reVerDate Aug 31 2005 13:57 Jul 27, 2012 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 C:\DOCS\75111.TXT APRIL
29 

cently reported that ‘‘In 2010, 3.1 million jobs in the United States 

were associated with the production of green goods and services. 

Last question: Are we protecting public health from pollution? 

The Cross-State Air Pollution Rule and mercury air toxic standards 

will reduce smog, acid rain, mercury, and cancer-causing pollution 

from power plants. These rules will protect children, seniors, and 

the infirm from air pollution, and will save up to 45,000 lives annually. 

The record demonstrates that President Obama passes the all-ofthe-above test. What about the House of Representatives? We know 

that it supports expanded oil and gas production. What about the 

other essential elements of all-of-the-above? Is the House of Representatives supporting clean energy investments in jobs? Will the 

House pass fiscal year 2013 budget, which slashes these investments, according to the Office of Management and Budget? ‘‘Clean 

energy programs will be cut by 19 percent.’’ 

Instead, the House budget would retain $40 billion in tax breaks 

for big oil, even though the five largest companies earned $137 billion in profits in 2011. And the House has not extended the production tax credit for wind and other renewable energy sources, even 

though it expires at the end of this year. There is a bipartisan extension bill that has languished since last November. 

Would the House protect public health from pollution? Last year 

the House held 209 votes to weaken public health safeguards or environmental protection, including blocking protections from mercury. 

So President Obama has successfully pursued an all-of-the-above 

energy strategy by increasing oil production, reducing imports, and 

using oil more efficiently and protecting public health from pollution. The House of Representatives has ignored oil use production, 

slashed investments for new clean energy technologies, and would 

eviscerate public health protection from hazardous pollutants. This 

is an oil-above-all strategy that would benefit big oil companies at 

the expense of everyone else. Hopefully, the House of Representatives will join President Obama in supporting his all-of-the-above 

energy strategy. 

Thank you very much. 

[Prepared statement of Mr. Weiss follows:] 

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Chairman ISSA. Thank you. 

Before I go to the next witness, just so you are prepared when 

we go to questioning, I heard the Ranking Member use the exact 

same term you used, the $8,000 per family, so your source is probably the same. If I do my calculation on gasoline correctly, at $4.00 

a gallon, $8,000 is 2,000 gallons. Two thousand gallons at 20 miles 

per gallon would take a family, for free, 40,000 miles. Be prepared 

to answer how you are going to get that much savings and have 

your sources ready. 

No, no. I just want to make sure you were fully informed because 

both of you used a term that we have never seen on this side of 

the dais before. 

Mr. Drevna. 

STATEMENT OF CHARLES T. DREVNA 

Mr. DREVNA. Chairman Issa, Ranking Member Cummings, and 

members of the Committee, thank you for giving me the opportunity to testify today. I am Charlie Drevna and I am President of 

AFPM, the American Fuel & Petrochemical Manufacturers. 

We are a trade association that was formerly known as the National Petrochemical & Refiners Association until earlier this year. 

We represent high tech American manufacturers who use oil and 

gas to make almost all the fuels, heating oil, and petrochemicals 

used in our Nation. 

Let me first echo the statements of Secretary Krancer. We are 

not here, sir, to dismantle health and safety provisions, and any 

suggestion to the contrary is totally inaccurate. Quite honestly, I 

think that is part of the problem that we see as we have categorized the war on fossil fuels. 

In response, on the global markets and increasing domestic supply and it will not lower prices, I only have to reference President 

Obama when he suggested that we can release oil from the strategic petroleum reserve to lower prices. I can also look to President 

Obama when he went to Brazil and asked the Saudis to increase 

production so we can lower prices. 

Markets react to a stimulus, and if the United States can send 

that stimulus, that message to the world markets that we are dead 

serious about our energy and national security, it could go a long 

way to moderating prices throughout the globe. 

The entire oil and natural gas sector supports more than 9 million American jobs and pays more than $31 billion in taxes to the 

Government, making it the largest taxpayer to the Federal Government, plus additional funds to State and local governments, and 

the tax provisions that American oil and natural gas refiners get 

are the same provisions that every manufacturer gets; they are not 

subsidies, they are not anything special than anyone else gets. And 

even though these companies make big profits, it is better than losing money and going bankrupt like other companies that the Federal Government has tried to prop up. 

Contrary to popular opinion about an energy crisis and our longterm dependence on foreign oil, the fact is the United States is an 

energy giant and we can meet all our needs domestically by 2025 

without the need for taxpayer money. 

48 

The Shell gas revolution currently underway in States like Pennsylvania, Ohio, Oklahoma, the Dakotas, Colorado underscores the 

vast potential of U.S. resources. Just four years ago, proved reserves of natural gas were estimated to be 10 to 15 years. Today 

those estimates are 40 to 100 years, a staggering change in a very 

small time frame. 

These vast new resources have driven down natural gas prices 

and have led to a manufacturing renaissance in industries that use 

natural gas as electricity or as a feed stock, such as petrochemical 

manufacturing, which is actually building new plants and infrastructure in Pennsylvania, Oklahoma, Texas, and Louisiana; and, 

ladies and gentlemen, that is just the beginning. This renaissance 

happened because of continuous innovation and ingenuity of the industry. There were no government plans or policies, or blue ribbon 

panels involved. There were no subsidies and no government-favored winners or losers. Rather, the drastic turnaround came about 

through free market incentives to find and produce more supply. 

The same could be said for crude oil. 

However, government actions are threatening the future of this 

renaissance. In debating energy policy, it is important that we do 

not lose sight of the regulatory environment that fuel and petrochemical manufacturers face currently. The recent resignation of 

EPA Region 6 Administrator, Mr. Armendariz, shined a bright public light on an issue we already knew and confront daily: the EPA 

and this Administration are hostile to fossil fuels. 

Fuel manufacturers are being hit with costly and, in many cases, 

conflicting regulations that threaten refinery operations in our Nation. These include Tier 3 regulations to reduce sulfur in gasoline, 

greenhouse gas regulations, lengthy permitting delays. You have to 

really think about how a permitting delay impacts investment, impacts future operations and, therefore, jobs in this Country. 

Finally, we can’t go without mentioning the unachievable requirements under the renewable fuels standard involving biofuels. 

Our recommendations are simple: the Administration should allow 

the oil and gas industry to fully develop domestic resources and immediately approve the Keystone XL pipeline; they should consider 

the cumulative impact of new regulations prior to imposing them 

and eliminate costly, contradictory, or ineffective regulations. 

Last week The Wall Street Journal ran an excerpt from a November 16, 1980 memo to President-elect Ronald Reagan from his 

coordinating committee entitled Economic Strategy for the Reagan 

Administration. One quote is particularly beneficial: ‘‘The battle between government regulation and the private market is nowhere 

more apparent than in energy. Where the market has a decisive 

comparative advantage, government intrusion into energy production and use provides a glaring example of how regulation costs us 

all dearly.’’ 

Thank you, and I look forward to your questions. 

[Prepared statement of Mr. Drevna follows:] 

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Chairman ISSA. Thank you. 

Mr. Glaser. 

STATEMENT OF PETER S. GLASER 

Mr. GLASER. Mr. Chairman, Ranking Member Cummings, members of the Committee, my name is Peter Glaser. I am a partner 

in the Washington, D.C. office of the law firm of Troutman Sanders. I greatly appreciate the opportunity to give this testimony 

today concerning the effect of the Administration’s policies on coal. 

Let me say at the outset that although I represent clients in the 

coal industry, my testimony today is my own and does not necessarily represent the views of any of my clients, and neither I nor 

my firm is being compensated by any client for this testimony. 

Based on a review of this Administration’s policies towards coal, 

it can only be concluded that coal does not represent a portion of 

the Administration’s all-of-the-above energy policy. This conclusion 

is plain from a review of the policies the Environmental Protection 

Agency is implementing that affect the use of coal in new and existing coal field electric generating stations and in industrial boilers, and it is also clear from the policies of EPA and the Office of 

Surface Mining for the permitting of coal mines. 

EPA’s policies are having their intended effect. The Agency now 

has one rule, the so-called MATS rule, or UMACT rule, that effectively prohibits the construction of new coal-fueled electric generation, and it has another proposed rule, the greenhouse gas New 

Source Performance Standards rule, that will accomplish the same 

result. It is also in the process of implementing a suite of power 

sector regulations that is leading to a larger number of retirements 

of existing coal-fueled electric generation and it is making it extremely difficult to permit coal mines in Appalachia and other 

places, threatening the ability to continue mining in those regions 

and creating the possibility of the loss of hundreds of thousands of 

mining and related jobs. 

EPA’s anti-coal policies are motivated by what appears to be the 

misplaced conclusion that such policies are needed to protect the 

public health and welfare, but EPA’s own statistics show that over 

the last several decades, even as the use of coal increased, emissions of traditional pollution from coal-fueled electric generation 

has steadily declined. Coal and environmental protection are compatible. 

Moreover, EPA has far, far, far overstated the health and welfare 

benefits its rules will supposedly create for reasons that I go to in 

my written testimony. Indeed, EPA’s anti-coal regulations will actually harm public health and welfare. Studies show that the rules 

will cause very large increases in cost to electric ratepayers, will 

eliminate jobs, even net of so-called green jobs created, and will 

harm the economy. These costs will fall on those least able to afford them, disproportionately fall on those least able to afford 

them, and it is a truism that wealth equals health, and the corollary is that reducing disposable income through increased energy 

costs will create negative health outcomes as people are forced to 

cut off their air-conditioning in the summer, reduce expenditures 

for health services, or lose their health insurance because of lost 

jobs. 

65 

EPA’s policies are also impairing the reliability of the electric 

grid, threatening blackouts which tend to occur when the weather 

is the hottest and air-conditioning is needed the most. EPA’s estimates of the number of retirements, electric generation retirements 

its rules will cause are dramatically understated, far below even 

the number of retirements that have already been announced as a 

result of EPA’s regulations. Yet EPA has never produced a valid 

study of how its regulations will affect the reliability of the grid 

and, indeed, it has disregarded recommendations from the Federal 

Energy Regulatory Commission that it cumulatively assessed the 

effect of all of its regulations on grid reliability. Indeed, the business community has been asking EPA from the beginning of this 

Administration to cumulatively assess how all of its regulations together will affect the electric, mining, and other sectors. Yet, despite the fact of Executive Orders of Presidents Obama and Clinton 

require cumulative analysis, EPA has refused to produce such a 

study. 

In the end, EPA appears to fail to grasp that coal is good for the 

economy and good for Americans. As global economic conditions become increasingly competitive, America must look to where it has 

competitive advantage as compared with other countries. Coal is 

one of our competitive strengths. There is more heating value in 

coal in America than there is in Saudi oil reserves. Coal is comparatively low cost to produce and transport, its price has been low 

and stable over time, it is easy to stockpile, and it has been the 

bedrock of the American electric system for a very long time. It 

would be a serious mistake to think that America can be competitive without coal. Certainly, some of our main international competitors, such as India and China, are increasing their use of coal. 

In sum, this Administration, and particularly EPA, has been actively adverse to coal and that policy hurts America. 

Thank you again for this opportunity to testify. 

[Prepared statement of Mr. Glaser follows:] 

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Chairman ISSA. Thank you all for your testimony. 

I will now recognize myself for a round of questioning and I will 

start with Mr. Drevna. There is a map they are going to put up 

on the screen here. Just happens to show the Keystone pipeline. 

Now, when you work with refiners and you get North Dakota, 

American. We will ignore the part—I don’t want to attach any jobs 

to Canada. I do look at the $100,000 per employee, including bonuses, that currently are being paid for North Dakota jobs, $70,000 

plus bonuses. And, by the way, I understand that they are paying 

a couple thousand dollars in bonuses just to go to work for McDonald’s because they have less than 1 percent up there. But when you 

look at that, when you get oil from those refineries today, my understanding is because there is no pipeline, you get the oil from 

North Dakota, you would get it by truck or train, is that correct? 

Mr. DREVNA. If it were to come from the Bakken Reserves. That 

is the only way to get it. 

Chairman ISSA. Okay. Which means that they would have a 

higher carbon footprint by transporting a less efficient way. Literally, by not building the pipeline, we are burning more carbon to 

inefficiently deliver oil that we are going to ultimately use from 

somewhere in the world, isn’t that right? 

Mr. DREVNA. Mr. Chairman, the most inefficient way to transport oil is either by rail or by truck. 

Chairman ISSA. So not building the pipeline is in fact environmentally hazardous because, if you care about the carbon footprint, 

you are increasing it through that inefficiency. 

Mr. DREVNA. Chairman, absolutely right, especially when you 

consider our good friends and neighbors to the north, Canada, that 

oil is going to go somewhere; it is not going to stay in the ground 

up there. 

Chairman ISSA. No, it is not. 

Mr. Weiss, I am going to ask unanimous consent that the President’s March 2012 plan in which the—or actually propaganda 

piece—what was it actually called? This is hot off the presses, pretty much. A Secure Energy Future Progress Report that cites that 

$8,000. I will note that is cites it over an undescribed period of 

time, not per year. In fact, it appears to cite between now and 

2025. But we will leave that alone because ultimately the American 

family doesn’t spend $8,000 per year today on gasoline—— 

Mr. WEISS. Can I address that? 

Chairman ISSA. No, you can’t. 

In order to get that savings, you must necessarily quadruple 

prices and then get your 54 miles per gallon. But we will put that 

entire thing in the record and I will ask my staff to file a counter 

report. 

Unidentified SPEAKER. Would you let him answer that? 

Chairman ISSA. No. I didn’t ask him a question. 

But I do have a question for Mr. Glaser. 

If we will put up the chart that the President came out with for 

his all-of-the-above strategy. It was on his campaign website. 

[Slide.] 

Chairman ISSA. Mr. Glaser, I know it is hard to see, but will you 

note there that nuclear is included, biofuels, but coal is omitted? 

Mr. GLASER. Yes. And I don’t think that is a mistake, either. 

94 

Chairman ISSA. Well, he must have considered it a mistake because he corrected it when being pointed out that he had no coal. 

Would you put up the next slide? 

[Slide.] 

Chairman ISSA. The next slide says clean coal. So is that to 

imply that the coal of today is unacceptable and, thus, he has no 

plan for coal, only a plan for coal when it is somehow different than 

it is here today? 

Mr. GLASER. Yes. I actually don’t know what that means. Coal, 

as I indicated in my testimony, is being burned in an increasingly 

clean fashion. There is no reason that we need to dial coal out of 

the American energy equation. 

Chairman ISSA. But isn’t the Administration currently, by new 

standards that are shutting down at least 26 gigawatts of electric 

power because these coal plants are shutting down, essentially taking the 46 percent of our energy that comes from coal and 

ratcheting it down as we speak? 

Mr. GLASER. Yes. Right. And that 26 gigawatts figure, of course, 

is only currently announced retirements; the projections are much 

higher than that. 

Chairman ISSA. Okay, Mr. Weiss, I do have a question for you. 

Now, you stated that more oil would not reduce the cost. You 

wouldn’t make the same statement about natural gas, would you? 

Mr. WEISS. [Remarks made off microphone.] 

Chairman ISSA. No, that is a yes or no. Would you or wouldn’t 

you make the same statement about natural gas? 

Mr. WEISS. No, I would not because that is not priced on the 

global market in the way that oil is—— 

Chairman ISSA. Very good. So when you put more into a market, 

you reduce price. In other words, even progressives believe that 

supply and demand actually works, that more supply with a given 

demand will in fact reduce cost. 

Mr. WEISS. I do not agree with that when the price is set by a 

cartel—— 

Chairman ISSA. Let’s go through that. Isn’t it—— 

Mr. WEISS.—percent of our reserves—— 

Chairman ISSA. Mr. Weiss, that wasn’t a question. And, by the 

way, a fraction, a fraction of the world’s oil comes from cartels. The 

fact is that natural gas is proof. We have the lowest cost of natural 

gas of anyone in the world. We deliver clean, natural gas throughout the world. As a matter of fact, if Mr. Markey wasn’t blocking 

it from going to New England, they would be taking out fuel oil 

and putting in natural gas. But let me just get to the main point. 

The assumption that the world does not have enough oil, and that 

if the world had an abundance of oil and other fuels that, in fact, 

the world price would go down, you would have to agree with us, 

wouldn’t you, that ultimately if non-cartel states like Canada and 

the United States were producing an abundance of oil, we would 

in fact break the back of the cartels, bring down the price on a 

global basis, wouldn’t we? 

Mr. WEISS. I do not agree. The price is set by a cartel—— 

Chairman ISSA. But why don’t we go through—— 

Mr. WEISS. Excuse me, Mr. Chairman—— 

95 

Chairman ISSA. No, no, no. Mr. Weiss, you answered the question—— 

Mr. WEISS.—and they have the same high gasoline prices that 

we have here. 

Chairman ISSA. Well, thank you very much for deciding that you 

are going to be an economist here after you agreed that it worked 

in natural gas. 

Mr. Drevna, perhaps you are a little bit more reasonable. If in 

fact the world supply reaches a glut, as it periodically does, as it 

did in the early part, I believe, of the Bush Administration when 

we got down to, like $9 or $10 a barrel for a short time, ultimately, 

with supply and demand, on a global basis, it is a world market 

because it is so transportable, don’t we in fact reduce the cost per 

barrel? Weren’t your refiners paying dramatically less when, for a 

period of time, there was an excess? 

Mr. DREVNA. Absolutely, Mr. Chairman. 

Chairman ISSA. Isn’t it also true that the difference between a 

shortage that drives up the price to $100 a barrel and more and 

an excess that can drive the price down into the teens at times can 

be a very small amount relative to the world demand? 

Mr. DREVNA. That is absolutely correct, Mr. Chairman. When 

you look at the cost of production of various wells throughout the 

world, it is the last burrow in that makes the difference. But if we 

are serious about our own energy and natural security, and if you 

will permit me some statistics—— 

Chairman ISSA. Of course. 

Mr. DREVNA. Four years ago natural gas was $11.70 per million btu; today it is—a couple days ago it was $2.43. Four years ago 

West Texas Intermediate was $127 a barrel; today, a couple days 

ago, it was $87.57. And why is that? Because natural gas production is up dramatically, and even on State lands, I must admit 

again, on State lands crude oil production is up dramatically in this 

Country. If we want to send a message, if we want to take care of 

the American economy, if we want to let the rest of the world know 

that we are dead serious about our energy and national security, 

let’s open up our own God given reserves. 

Chairman ISSA. I will give the Ranking Member equal time, but, 

Mr. Krancer, the natural gas that you have in abundance in Pennsylvania and our common birthplace, Ohio, isn’t it a highly substitutable fuel over the intermediate stage 4 oil and gas? In other 

words, can’t your natural gas in greater numbers—and we had the 

Secretary of Energy here telling us about the advancements—be 

substituted? And, if so, isn’t it true that you are talking about less 

than $1.50 a gallon for the equivalent amount of natural gas in today’s prices? 

Mr. KRANCER. Absolutely correct. It is substitutable on a number 

of fronts. I used to be in the electricity generation business. I work 

for a company. There is what is going on a dash-to-gas going on 

right now, gas-fueled power plants. Gas-fueled liquid and compressed natural gas transportation vehicles could prove the key to 

clean air in urban areas like the area where I live near Philadelphia and in Pittsburgh and so forth. So you are absolutely right. 

Chairman ISSA. So, in fact, our natural gas is just as much part 

of breaking the back of the world cartels as our oil production. 

96 

Mr. KRANCER. Absolutely correct. 

Chairman ISSA. Thank you. 

I would ask the gentleman have nine minutes, please. 

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

Mr. Weiss, so that the record will be clear, the Chairman asked 

you about the $8,000 figure, you never said annually, I never said 

annually. Would you clear that up? I will clear mine up, but you 

clear yours up. 

Mr. WEISS. Thank you, Mr. Cummings. 

Mr. CUMMINGS. Because it was never said. 

Mr. WEISS. That $8,000 figure is over the lifetime of the vehicle, 

and it compares gasoline purchases by a 2025 average model, 

which will be 54.5 miles per gallon, compared to a 2010 model, 

which was averaging at 27.5 miles per gallon. It is an $8,000 difference over the life of the vehicle. It was generated by the White 

House, I believe. Since I am under oath, I don’t want to swear to 

it, but I believe it was generated by the White House using Department of Transportation data and it assumes a relatively low price 

for gasoline of $2.50 per gallon. 

So that is where that figure comes from. 

Mr. CUMMINGS. Let me ask you this, Mr. Weiss. In 2001, under 

the Bush Administration, 2.12 billion barrels of crude oil were produced from U.S. fields and total oil production fell every single year 

since 2001. According to the Energy Information Administration, 

since 2001 through 2008, oil production of United States fields fell 

by more than 14 percent. Mr. Weiss, have you seen this data and 

isn’t it true, according to EIA data, that U.S. production of crude 

oil fell each year under the Bush Administration? Is that correct? 

Mr. WEISS. I would have to go back and look at that data, Mr. 

Ranking Member, but it is clearly up since President Obama took 

office. We were at about 4.7 million barrels per day, I believe, in 

2008. This year, Energy Information Administration predicts we 

will be at 6.2 million barrels per day, which is about a 30 percent 

increase, if I did the math correctly, over what the last years of the 

Bush Administration. 

Mr. CUMMINGS. Well, let me clarify that a little bit more. During 

the last year of the Bush Administration, 1.811 billion barrels were 

produced from United States fields. In 2009, the first year of the 

Obama Administration, this figure went up to 1.956 billion barrels 

produced. In 2010, the figure continued to climb—folks want to talk 

about in spite of, but the fact is the numbers are going up—continued to climb to 1.998 billion barrels. This upward trend continued 

in 2011, when 2.066 billion barrels were produced. 

Mr. Weiss, comparing the last year of the Obama Administration 

to the last year of the Bush Administration, oil production increased by 14 percent. This is based on data from the Energy Information Administration. 

Now, Mr. Weiss, what does this suggest to you in terms of the 

Obama Administration’s record and its commitment to domestic oil 

production? 

Mr. WEISS. There is no question that we are producing more domestic oil now than we did under the previous administration. In 

fact, Energy Information Administration released a report in 

March of 2012 that looked at the production from public lands of 

97 

oil, and 2011 was 646 million barrels; 2008, 575 million barrels. 

The 2011 production was bigger than any of the last three years 

under the previous administration, and that is from a March 2012 

EIA report. 

Mr. CUMMINGS. Mr. Krancer, you were talking about enforcement generally, I guess with regard to EPA, and I just want to 

refer an article to you. It is the Mercury News and it is dated yesterday, entitled, Oil Stats Belie Tough Enforcement Talk. Let me 

just read the first two paragraphs, but I just want you to take a 

look at this when you get a chance. 

It says in the three years since President Barack Obama took office, Republicans have made the Environmental Protection Agency 

a lightning rod for complaints that this Administration has been 

too tough on oil and gas producers. But an Associated Press analysis of enforcement data over the past decade finds that is not the 

case. In fact, the EPA went after producers more often in the years 

of Republican president George W. Bush, a former Texas oil man, 

than under Obama, and it gives a lot of details. I just refer that 

article to you and I understand what you said. 

Mr. KRANCER. Well, I appreciate that, Ranking Member. I have 

not read that article and, of course, enforcement is perhaps a different issue than what we are talking about, and to some extent 

maybe statistics about what was produced when versus now, they 

may be a little bit of a red herring. What we are looking at is what 

we need to do in the future. 

Mr. CUMMINGS. Mr. Krancer, I promise you I am not trying to 

create red herrings. I swear to God I am not. I am trying to make 

sure that credit is given where credit is due. The fact is that it 

seems like all the stats are going up, and I think the thing that 

upsets me more than anything else is how this President seems to 

be given credit for nothing. No matter what he does, he is given 

credit for nothing. Nothing. And when there are things that are 

happening positive, they say stuff like it is happening in spite of, 

you know, in spite of him, in spite of this. When they go bad they 

say, uh-oh, the President did that, he did something wrong. I hear 

that in almost every single committee I sit in, and at some point 

the question has to be asked. Oil production going up, oil companies making record profits, and everybody saying Obama, Obama, 

he has screwed up again. And when I see the numbers over and 

over again, I have to tell you it gets on my nerves. 

But, anyway, let me go back to you, Mr. Weiss. I didn’t mean to 

get upset, but I have seen this all over. When the jobless rate 

comes down, they say, oh, it would have happened without him, or 

they will say, oh, it is going too slow. Nobody roots for the Country; 

they say stuff like this wouldn’t have happened. Then sometimes 

the folks take credit for things that they didn’t even do. So, anyway, the data shows that this is not just one year increase, but a 

sustained multi-year 14 percent increase in overall domestic crude 

oil production. 

Mr. Weiss, what is your response to the argument that the 

Obama Administration does not deserve credit for those four years 

because it was reaping the benefit of the previous administration’s 

policies? 

98 

Mr. WEISS. Well, first, in response to earlier comments, it reminds me of the story that some people are like this, that when 

they see Jesus walking on water, the headline in the newspaper 

would be Jesus can’t swim. So I think that is sort of the treatment 

that the President is getting. 

In terms of the—yes, a lot of this production began under the 

previous administration, but those people who claim that the President is not pursuing an all-of-the-above strategy or is launching a 

war on oil or a war on coal, when oil production is up, coal mining 

employment is up compared to the previous administration, it is 

hard to understand where is the record behind that. Not the rhetoric, but where is the record behind those charges? 

Mr. CUMMINGS. In March of this year—this is my last question— 

the Energy Information Agency issued a report entitled Sales of 

Fossil Fuels Produced on Federal and Indian Lands FY 2003–2011. 

According to the report, the two best years for oil production, both 

offshore and onshore, occurred under the Obama Administration. 

In 2011, 112 million barrels were produced onshore on Federal 

lands, and in 2010 618 million barrels were produced offshore on 

Federal land. 

Mr. Weiss, are you aware of that report? 

Mr. WEISS. Yes, Mr. Cummings. That was the report that I referred to earlier that demonstrates conclusively that we are producing more oil from our Federal lands and waters in the last three 

years of this Administration than in the last three years of the previous administration. 

Mr. CUMMINGS. Thank you, Mr. Chairman. 

Chairman ISSA. Of course. Thank you all. 

We now go to the gentleman from Pennsylvania, Mr. Kelly, who 

was here at the start. 

Mr. KELLY. Thank you, Mr. Chairman. 

I am certainly not going to compare anybody to the Lord and 

their ability to walk on water, but, Secretary Krancer, as you 

know, I am from Pennsylvania and you are too, and I have been 

in your presence before. Pennsylvania has done an awful lot as far 

as the natural gas exploration. Could you just walk us through a 

little bit the opportunities? I know right now Pennsylvania is called 

the Saudi Arabia of natural gas. We are talking about at least two 

centuries of supply; we are talking about coal, two centuries’ supply 

of coal; and we are talking about also our ability to sever our reliance on imported energy. And I wonder about fossils that are so 

greatly abundant and accessible and affordable, and why, when you 

look at the current Administration’s record, as much as we would 

like to say that there is a lot more being found, a lot more being 

produced, a lot of that is coming from the private sector, people 

who have their own skin in the game, who are actually taking that 

step forward. 

If you could, tell us a little bit about what Pennsylvania has 

done. And I am trying to understand why anybody inside this Beltway would think that they are more concerned about air and water 

in Pennsylvania than you are. 

Mr. KRANCER. Well, thank you for that. You are exactly right 

and I mentioned that early on. My job is to protect the environment. That is what we do and that is what my agency does. Your 

99 

question is a good one, and let me follow up to what the Chairman 

said, Chairman Issa. He said that our natural gas production in 

Pennsylvania, and elsewhere, could provide the key to unlocking 

the cartels, the oil cartels. It is much broader than that. 

Right in our State now we are seeing a renaissance, and it was 

spoken about earlier in the testimony, of petrochemical industry in 

America, right here in Pennsylvania. For the first time in my lifetime, maybe in all of your lifetimes as well, the United States of 

America could potentially enjoy a cost advantage overseas in petrochemical, ethane to ethylene. We are seeing what has happened 

right now with respect to Shell and possibly Shell—and I mean 

possibly because we are only in the first inning of that situation— 

building a cracker facility in Beaver County. We are seeing the 

same thing in Southeastern PA, which is my backyard. We are seeing the potential petrochemical renaissance in one of our oil refineries that had been shut down. We are seeking the Bakken crude, 

for example, providing the economic turnaround for another one of 

our oil refineries in the southeast. 

So the potential here is gargantuan on my side of the ledger. And 

I can talk about the economics all day because I have an economics 

degree. I am an amateur compared to Mr. Perry, but I do know economics. The clean air potential, which I discussed earlier, in cities 

like mine, Philadelphia, cities like the governor’s, Pittsburgh, and 

when you have clean air you have healthier people, you have more 

business opportunities and so forth. So the immense possibility for 

economic revival, environmental cleanup, environmental improvement and health improvement, they are all there and they are all 

there right under our footprints in Pennsylvania, in Ohio, in Oklahoma, and in many other States. 

Mr. KELLY. If you could, what advice would you give Federal regulators right now? When I am back home in Northwest Pennsylvania, I get a chance to talk to all these folks who are involved in 

this industry. They tell me how difficult it is to navigate the permitting process and the length of time that it takes to get these 

online. If you could, what kind of advice could we give the Feds? 

Mr. KRANCER. Well, my prime advice would be to back off, because the States, including mine, including Oklahoma, including 

West Virginia, including Texas, Louisiana, you name it—and I 

don’t mean to leave anybody out—are doing a good job regulating 

hydraulic fracturing—I will point to that—in their States where it 

takes place. The Federal Government, all of a sudden, out of the 

blue, despite the history—and I can go through the legal history 

about this—all of a sudden is showing an interest in hydraulic fracturing and regulating hydraulic fracturing. Never before had the 

Federal Government at any level, regardless of the administration, 

shown any such interest in doing so. 

I would also encourage the other branches of the Federal Government. It is not just about the EPA. The Army Corps, for example, 

with respect to developing infrastructure, is overstepping its review 

of projects and treating projects today differently, pipelines, than 

they ever had in the past. 

So my advice would be trust the States. The States in which this 

is happening know exactly what they are doing; they have been at 

it for generations and we are on top of it. 

100 

Mr. KELLY. The length of the permitting is the thing that bothers 

me because, with the exception of something that the Federal Government would do, time is of the essence for those in the private 

sector, and it is the waiting and the not knowing and the uncertainty if you are even going to get your permit. And to think that 

you can keep crews on the sideline, you can keep equipment on the 

sideline and just keep it warm until they are ready to get in the 

game once they get a permit, it is absolutely stifling these folks; 

it is causing them great losses of income; and it is also keeping this 

Country from reaching the energy independence that we have been 

seeking since the early 1970s. 

Length of time. Just real quick, what is the length of time, do 

you think, for a permit, a guy who is going to do coal? 

Mr. KRANCER. It varies, but let me just say this to sum it up. 

What I see is Federal overlay, which is adding no environmental 

protection on the ground, which is causing delay. Just look at the 

Environmental Protection Agency, the Federal Environmental Protection Agency. They have an unbelievable fast track on regulations. They produce more regulations in air, in NAAQS, in three 

and a half years than I think the total of 16 years of prior two administrations. When you get to permitting, that is the snail track. 

Chairman ISSA. I ask unanimous consent the gentleman have an 

additional minute. Without objection. 

Would the gentleman yield? 

Mr. KELLY. Because I think the critical aspect of this we are not 

seeing, and I was—earlier in the spring we were talking about 

there was no relationship between supply and demand, that no 

matter what there was no way we could control the price of gas because it was just going to go off the charts because of all these people that gamed the situation. But is a basic economic belief that 

supply and demand are the drivers of the cost of energy. 

Chairman ISSA. I agree with the gentleman. Would the gentleman yield? 

Mr. KELLY. Yes, I will. 

Chairman ISSA. Following up on the gentleman’s question, Mr. 

Perry, since it is widely considered accurate on both sides of the 

aisle that it takes as much as 10 years from the beginning of a 

drilling process to a productive well, when the folks on the dais 

keep talking about the last three years of President Bush and the 

first three years of President Obama, how would that 10 years 

work from the standpoint of when product would come online, thus 

giving that increase? When would you have to begin in order to get 

a benefit, let’s say, this year? What administration, what year? 

Mr. PERRY. Mr. Chairman, I am not really an expert on the permitting process, but I do know that—— 

Chairman ISSA. The chart is up on the board showing the lease/ 

sale ratio. Oh, I am sorry. Why don’t you explain your chart? And 

that will end the questioning on it. 

Ms. SGAMMA. Great. I appreciate that. Right now we are seeing 

permitting times taking, on average, 298 days. But before you even 

get to where you can drill a well and where you can permit that 

well, you have to go through the environmental analysis process. 

We are right now seeing environmental analysis taking over 7 

years, and that is the study I cited in my testimony, where we have 

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just 20 projects in the West, 3100 wells a year. The projects are 

over 10 to 15 years. Those 20 projects could generate 21,000 jobs 

and $27.5 billion in economic activity every year, except that they 

are now sitting in the environmental analysis phase. 

So what we are seeing—one of the long points on that time line 

is the environmental analysis. So you start with you get your lease, 

there is some exploratory work done, you drill an exploratory well 

that might take you three years to get that environmental analysis 

done; and that is not the operating doing that, that is the Federal 

Government. So even a small project, even a 9-well project can take 

4 years to get that environmental analysis done. So let’s say your 

well is successful. Then you need to go and maybe do a larger 

project, maybe it is 100 or 1,000 wells. That environmental analysis is now taking over 7 years in many cases. So that is the long 

pole in the tent, so to speak, where it can take you over 10 years 

until you are actually fully producing on the lease; not because it 

can’t be done by the operator, but because of government delays. 

We see on corresponding State and private lands where it can 

take a matter of months to a year to start producing. 

Chairman ISSA. So it is fair to say that President Clinton, his oil 

production was—in fact, the Reagan-Bush years. President Bush, 

the son, his oil production was the Bill Clinton years; and, in fact, 

Obama’s are the W. Bush years. Essentially every president in four 

or, preferably, eight years for most, they are in fact the period of 

time that the next enjoys in that roughly 8 to 10 years. 

Ms. SGAMMA. Exactly. It is a minimum 3 to 5 years before you 

can start operating on Federal lands, compared to a year for private or State lands. 

Chairman ISSA. Thank you. 

We now go to the gentleman from Massachusetts, Mr. Tierney. 

Mr. TIERNEY. Thank you, Mr. Chairman. You know, I don’t want 

to spend a lot of time going back and forth on this political stuff. 

I just note that the facts are somewhat clear. Since 2008, total U.S. 

crude oil productions climbed 14 percent. In 2010, the United 

States natural gas production reached a record of 26.9 trillion cubic 

feet, which was a 5 percent increase from 2008 and the highest 

level in more than 30 years. The two best years since 2003 for the 

production of natural gas on onshore Federal lands occurred in 

2009 and 2010. In 2011, the Department of the Interior offered approximately 21 million additional acres for offshore oil and gas development. In 2012, an additional 38 million acres will be offered 

as part of a lease sale in the central Gulf of Mexico and in the area 

estimated to hold close to 31 billion barrels of oil and 134 trillion 

cubic feet of natural gas. So on and so forth on the public lands. 

So I think this debate or trying to make the President look bad 

or something like that is a little silly, but I want to go to another 

aspect of this. 

Mr. Weiss, the oil and gas industry has been around for about 

100 years, would you agree? Been in operation? 

Mr. WEISS. [Remarks made off microphone.] 

Mr. TIERNEY. And oil and gas, I don’t think you could call them 

an emerging technology any longer. Do you think so? 

Mr. WEISS. No, sir. I believe the first oil was produced in Pennsylvania in the 1850s. I would defer to Mr. Krancer on that one. 

102 

Mr. TIERNEY. So the first quarter of 2012, the top five oil companies, earned $30 billion. 

Mr. WEISS. Actually, $33.5 billion, that is correct. 

Mr. TIERNEY. And over the last 10 years, the top five oil companies garnered more than $850 billion in profits, is that about right? 

Mr. WEISS. Yes. And we estimate it is over a trillion dollars if 

you use 2011 dollars, just for inflation. 

Mr. TIERNEY. So Exxon alone made $80 billion last year, which 

is about $5 million an hour. 

Mr. WEISS. Yes, about that. 

Mr. TIERNEY. So my point on all of this is that the Congressional 

Research Service tells us that in the fiscal year 2013 budget, they 

will be getting $39 billion in taxpayer subsidies. And if subsidies 

are for helping emerging technologies, would you agree with me it 

seems we are beyond that point and this is taxpayer money just 

thrown out the window? 

Mr. WEISS. Yes. In fact, one of the tax breaks that applies only 

to the oil industry dates back to 1916. Meanwhile, the tax incentives that go for wind, power, expires at the end of this year. 

Mr. TIERNEY. Since 1918 to 2009, the oil and gas average subsidy 

is $4.86 billion a year, taxpayer money to an incredibly profitable 

industry on that basis. From 1994 to 2009, renewable energies got 

about $370 million a year. So it was quite a disparity. So we have 

the emerging industry, which is the renewables, getting a fraction 

of what this mature, extremely profitable industry is getting. Can 

you explain any public policy rationale behind that? 

Mr. WEISS. Well, I couldn’t explain it on a policy rationale. My 

guess is you could guess the political rationale for that. And I think 

it is important to note that although some from the oil industry 

will say don’t take away these tax breaks because that is like a tax 

increase on it. In fact, a number of Republican leaders, including 

a chief economist for Ronald Reagan, have all said that these tax 

breaks are just the same as government spending, just done 

through the tax code rather than a direct grant. And it is important to remember that when we are looking at these huge tax expenditures. 

Mr. TIERNEY. Well, I also know, look, between 2004 and 2008, 

the top five oil companies spent an average of 42 percent of their 

profits on stock repurchases. So they are just buying back their 

own stock and making themselves more valuable on that. So I 

guess the policy question would be why, Mr. Weiss, should the 

United States taxpayers be forced to subsidize stock repurchases 

from oil and gas companies. 

Mr. WEISS. To me, there is no apparent policy goal that is being 

served by that, particularly when the amount of money is trivial 

compared to the amount of profits that this industry is making. 

The big five oil companies will get about $2.4 billion in tax breaks 

for this year and they are on track to make around $120 billion in 

profits. They buy back their own stock with about a third of that 

money and they are sitting on about $60 billion in cash reserves. 

They don’t need the $2.5 billion a year in tax breaks, especially 

when we are cutting money for wind, for Pell grants, for other very 

important needs. It seems to me not a good—— 

103 

Mr. TIERNEY. Or, I might note for keeping the need-based interest on student loans at 3.4 percent instead of 6.8 percent. That is 

just a personal interest. My bill would pay for it by taking away 

just one of those subsidies. 

Let me ask you a little bit about the nuclear industry. That is 

also a mature industry, would you agree? 

Mr. WEISS. Yes. It first began in 1947 is when we first began 

subsidizing the nuclear industry. 

Mr. TIERNEY. And yet the American taxpayer continues to absorb 

the risk for that because they can’t find private insurers, is that 

correct? 

Mr. WEISS. Well, that is under the Price Anderson Act. But in 

addition we are giving them a loan guarantee to build the two new 

reactors in Georgia that were the first approved in 30 years, and 

it was approved by this President. 

Mr. TIERNEY. So it seems to me, Mr. Chairman, rather than sitting around here playing politics with the President did this or 

didn’t do that, maybe we ought to be talking about the policy going 

forward for the American taxpayer, spending their money on the 

things that are going to build this Country and build our foundation for future jobs, as opposed to loading up on the oil and gas industry—— 

Chairman ISSA. I don’t have any question that that could be valuable. I would also suggest that perhaps your witness could tell us 

all how much taxes those oil companies paid. 

Mr. TIERNEY. Well, I would suggest that is sort of irrelevant. I 

hope they are paying their fair share of taxes. But I also hope they 

are not getting our tax money to buy back their own stock when 

they are making tremendous profits. That would be a good hearing 

to have here today, instead of loading up five to one. 

Mr. Weiss, what do you think? 

Mr. WEISS. Well, in fact, Reuters just did an analysis of this and 

found that Exxon Mobil paid 13 percent of its U.S. income in Federal taxes after deductions and benefits in 2011, and that compares 

to the typical business rate of 35 percent. ConocoPhillips and Chevron were at about 18 and 19 percent last year, according to Reuters 

News Service. 

Mr. TIERNEY. So, Mr. Chairman, let’s have that hearing. 

Chairman ISSA. Mr. Drevna, you want to elaborate on that to fill 

out the answer? 

Mr. DREVNA. Well, at the risk, at the severe risk, when in this 

Country has it become wrong to employ 9.2 million people—— 

Mr. TIERNEY. Let me—— 

Mr. DREVNA. No—— 

Mr. TIERNEY. I reclaim my time. 

Chairman ISSA. The gentleman’s time has expired. 

Mr. TIERNEY. The issue is whether or not they are paying their 

fair share of taxes, whether they are getting subsidized by taxpayers when they needn’t be subsidized—— 

Mr. DREVNA. There are no subsidies—— 

Mr. TIERNEY. Of course they are hiring people. They are in business; they have to get people to extract their product and produce 

it so they can make their product. Every company does that. But 

a lot of companies pay their fair share and a lot of companies don’t 

104 

get subsidized to buy back their own stock when they are extremely profitable. So that was the issue and that was the question, not whether they are employing X amount of people. 

Chairman ISSA. The gentleman may complete his answer. 

Mr. DREVNA. And the answer is no, sir, they are not getting subsidies. There are no subsidies. If your desire is to change the tax 

code, fine, change the tax code; make it fair. Make it fair for everyone. But don’t pick on oil companies and natural gas companies 

and refiners, who pay their fair share to the tune of $86 million 

a day in taxes. We are the most heavily taxed industry in this 

Country, and we do provide those jobs and you can’t snuff off the 

jobs. You can’t snuff off the jobs, the taxes that those 9.2 million 

people pay. And I would suggest, Congressman, that I think we 

would do better in this Country with a lot more Exxon Mobils, 

Chevrons, and ConocoPhillips, and a few less Solyndras, and 

maybe this Country would be moving forward in a better way. 

Thank you. 

Chairman ISSA. I thank the gentleman. 

We now go to the gentleman from Oklahoma, a place in which 

we receive a lot of tax revenue, for five minutes, Mr. Lankford. 

Mr. LANKFORD. There are a lot of companies in Oklahoma that 

do provide a lot of revenue to the Federal Government. 

Let me just mention a couple things that I find ironic in this conversation. One is to talk about Chevron only pays 18 percent tax 

after everything else, when GE pays zero. And if you look at the 

top five energy companies in America on the new Fortune 500 list 

and compare them to the top five technology companies, guess who 

makes more profit? That would be the technology companies, not 

the energy companies. But I hear scant from anyone saying we 

need to go after that Apple, we need to go after Microsoft, we need 

to go after Intel; they make too much money. Instead, it is a pet 

project to try to diminish fossil fuels in traditional energy and to 

go after them. This is not about tax dollars; this is about a political 

process to say we want to try to wipe out traditional energies to 

try to benefit solar and wind and such. 

Now, if we are going to have all of the above, let’s do all of the 

above. Let’s stop trying to pick on one industry and to say the way 

we will benefit solar and wind is by trying to destroy another industry. 

Let me hit on just a couple things. 

Mr. Perry, economically, what would happen if the United States 

became energy independent? What would happen to our economy 

if we really were truly energy independent? 

Mr. PERRY. Well, I think we could look to what some people call 

the economic miracle state of North Dakota and see what happens 

when we have abundant energy that is actually produced. North 

Dakota has an unemployment rate of 3 percent. In the heart of the 

Bakken, Williston, North Dakota, Williams County have unemployment rates less than 1 percent. The State has a budget surplus. In 

terms of State income growth, personal income growth, they lead 

the Country in terms of prosperity. So I think in addition to being 

energy independent, I think producing energy within the United 

States, using the treasures beneath the lands that we have, I think 

we can look to what is happening in North Dakota and in PennsylVerDate Aug 31 2005 13:57 Jul 27, 2012 Jkt 000000 PO 00000 Frm 00108 Fmt 6633 Sfmt 6633 C:\DOCS\75111.TXT APRIL
105 

vania, and now in Oklahoma and Eagle Ford in Texas, and places 

like that, to see the economic stimulus that it would have in addition to helping in terms of energy independence. 

Mr. LANKFORD. We are currently on a model that the Federal 

Government has to fund new energy sources versus what can we 

do to unleash the energy that we have and unleash our economy. 

So I am astounded by the fact that if we were to really become energy independent, to really go after the energy that we have, to 

produce that and to use it ourselves, the job creation, the tax revenue that would be the least money that we would acquire from 

Federal lands, the royalties and such, it is unbelievable the amount 

of money that is sitting on the sidelines, literally under our feet, 

that we are restrained from being able to go after on that. 

Ms. Sgamma, I want to ask you about this private versus public 

lands. You mentioned that a couple times. We understand now current production that is happening on public lands was permitted in 

previous administrations and is now occurring. What is the permitting process right now? How many permits are going out? How 

many new projects are starting or being permitted on public lands 

right now? 

Ms. SGAMMA. Well, if you look at the NEPA, which is really the 

long period of time that it takes to get a project through, we are 

seeing NEPA taking over 7 years. So this Interior Department has 

approved just two large projects in—— 

Mr. LANKFORD. Two? 

Ms. SGAMMA. Just two, right. And there are 20 projects that have 

been proposed that could create 121,000 jobs. 

Mr. LANKFORD. So out of 20 projects proposed, two have been approved. So talking 10 years from now, what happens in production 

on Federal lands? 

Ms. SGAMMA. Well, exactly. That is pushing out into the future. 

That means we are going to have much less production in the future because of the long lead times on Federal lands. 

Mr. LANKFORD. The President and the Administration talk often 

about production and how production has increased. Can anyone 

identify an element that this Administration has done to increase 

production; that they can point to and say because the Administration did that, this Administration, because this Administration did 

that action, we have increased production? 

Ms. SGAMMA. I can only see a lot of obstacles that have been put 

in place by producers on Federal lands, both from the EPA, from 

the Interior Department, regulations that are making it more difficult, time-consuming, costly. The Interior Department admits to 

298 days to process a permit—— 

Mr. LANKFORD. That is a long time to do a permit. 

Ms. SGAMMA. It is, considering that States get it done in about 

30 days. 

Mr. LANKFORD. Okay. 

Mr. Weiss, it sounds like you want to be able to jump in. 

Mr. WEISS. Yes. I believe that Shell is going to be exploring in 

the Arctic Ocean, in the Chukchi Sea off the Northern Coast of 

Alaska this summer, which was approved under this Administration. 

106 

Mr. LANKFORD. Okay, but that is something that will actually be 

done years from now. I was talking about current production. You 

mentioned often that this Administration has more production than 

the previous administration. What has this Administration done 

proactively to create that? Can anyone name anything? 

[No response.] 

Mr. LANKFORD. See, this is a product of the actions of the previous administration and of the free market and of drilling on private lands. This Administration is taking credit for increased production, when this Administration proactively has done nothing to 

do that. It is as if the train is moving and they ran and jumped 

in the engineer’s position and said, hey, look, I’m at the front of the 

train. And I have to tell you I am glad that we are increasing production, but it is always tough for me when someone in politics 

takes credit for something they didn’t do. 

With that, I yield back. 

Chairman ISSA. Would the gentleman yield? I’m sorry, the gentleman’s has expired. 

We now go to the gentleman from Illinois, Mr. Davis, for five 

minutes. 

Mr. DAVIS. Thank you very much, Mr. Chairman. I must note 

that unfortunately for much too long my State has been sending 

more revenue to Washington than it has been getting back. I also 

have to note that we have one county that has more people than 

half the States in America in it. So those are interesting comparisons relative to employment statistics and opportunities that do in 

fact exist. 

But it seems to me that the premise of this hearing appears to 

be that the Obama Administration is not doing enough to encourage development of all sectors of the energy economy, and I would 

like to understand how natural gas production has faired under the 

Administration as compared to the previous administration. 

According to the Energy Information Administration, in 2008, 

President Bush’s last year in office, about 25.6 trillion cubic feet of 

natural gas was produced. In 2009, the first year of the Obama Administration, this figure increased to 26 trillion cubic feet produced. 

This trend has continued and in 2011 almost 29 trillion cubic feet 

were produced. 

Mr. Weiss, let me ask you. Based on this data from the Energy 

Information Administration, it appears that natural gas production 

has hit record levels during the Obama Administration. Is that accurate? 

Mr. WEISS. I believe so, that it is, sir, yes. 

Mr. DAVIS. Well, critics have argued that President Obama wanted to curtail natural gas production, but these statistics suggest 

otherwise. These figures suggest that President Obama has continued many of the same policies as his predecessor in terms of natural gas production. Is that right? 

Mr. WEISS. When it comes to onshore, yes. With offshore, they 

are making sure, like with the oil rigs, that the natural gas rigs 

are produced in a much more safe manner so that way it protects 

the workers on the rigs and reduces the prospects of another oil 

disaster. In fact, even though they put in tighter rules, we expect, 

by the end of the year, I think Bloomberg reported that there will 

107 

be as many rigs operating in deepwater in the Gulf of Mexico, but 

more safely than before the BP deepwater disaster; and those rigs, 

most of them, will produce both oil and gas. 

Mr. DAVIS. Well, let me ask you are there any significant differences between the policies of President Obama and the policies 

of President Bush as it relates to natural gas production? 

Mr. WEISS. There is one, which is that under the Clean Air Act 

the Administration was required by law to produce standards for 

the release of air pollution from oil and natural gas production, and 

so the President has implemented those laws and proposed final 

standards that would protect humans from some of those emissions 

from those facilities. 

Mr. DAVIS. Well, Mr. Drevna, let me ask you doesn’t this relatively steady trend of production suggest that there are minimal 

differences between how the two administrations have managed 

natural gas production? 

Mr. DREVNA. I am sorry, Mr. Davis, the difference being, as has 

been said before, it has been innovation and ingenuity by entrepreneurs on State and private lands and on Federal lands that 

have increased dramatically the numbers that you so rightfully 

suggested. If you look at the percent of natural gas developed on 

Federal lands, it is down 14 percent over that time frame. So let’s 

not sit and say this versus that; let’s say what are we going to do 

going forward. What are we going to do to make this Country energy secure and nationally secure? The best way to do it is, again, 

the all-of-the-above approach, which includes all the above and all 

the below, as we said before. Going forward, that is what we need 

to do. 

Mr. DAVIS. And I can agree with that, but I also can agree that 

in order to determine how you need to go and where you need to 

go, it is good to look at where you have been and to look at where 

you are. 

Mr. DREVNA. You are absolutely right, Mr. Davis. And the question is, then, did all this production start on January 20th of 2009? 

No. It was in the pipeline, going forward. When we developed the 

horizontal drilling with a combination of hydraulic fracturing, it 

opened up vast new reserves throughout the Country, as Secretary 

Krancer has said. Let’s go forward. Let’s see how we are going to 

do it. Let’s open up these lands and let’s give the American people 

and the consumer what they deserve. 

Mr. DAVIS. Well, thank you very much. I just simply have to 

agree with Mr. Cummings that it seems as though President 

Obama gets no credit for the massive increases in oil and gas production during his administration and President Bush gets no 

blame for the oil and gas reductions during his administration. 

Thank you very much, Mr. Chairman. 

Chairman ISSA. I thank the gentleman. 

We now recognize the gentleman from Texas, Mr. Farenthold. 

And I would ask if you would yield just for one quick point. 

Mr. FARENTHOLD. I would be happy to yield, Mr. Chairman. 

Chairman ISSA. Mr. Drevna, is there any appreciable—I will put 

it that way to make sure we don’t leave a little what if—any likelihood that there is any Federal lands producing new oil or natural 

gas that was begun during the last three and a half years? 

108 

Mr. DREVNA. I can’t see how. 

Chairman ISSA. So with zero coming online during the Obama 

Administration, it is reasonable to say 100 percent of the gain 

comes from the previous administration. 

Mr. DREVNA. Or previous administrations. 

Chairman ISSA. Or even previous administrations. Thank you. 

I thank the gentleman. Yield back. 

Mr. FARENTHOLD. Following up on that same line of questions, 

Ms. Sgamma, my family has been in the oil and gas business since 

my great-grandfather was an independent producer, and even back 

when I was practicing law 20 or so years ago, we would give leases 

with 90-day primary terms; drill a well within 90 days or it is gone. 

Even today my friend, Michael Bergsama, just leased some property that we owned about a year ago; we gave him a two year 

lease. And on private lands we are able to get that done in two 

years with no significant environmental—can you just go down a 

laundry list—I mean, it has taken 7 plus 10 years on Federal. How 

can we fix that? 

Ms. SGAMMA. Well, I think just having the government do its job. 

Right now we are seeing—we don’t even get our leases issued within 90 days; sometimes we are waiting years. In fact, Western Energy Alliance had to sue the government because it was holding 

leases for two to five years. We are still appealing that because we 

didn’t get a full victory on that one. 

We are seeing, then, environmental analysis for even small 

projects taking three, four years. You can’t even go and submit 

your permit to drill until you have gotten through that environmental analysis; and for larger projects that is taking seven years 

to eight years. 

So once you get through that, then you have to submit for a permit to drill, and that averages 298 days, but it is not uncommon 

for a permit to take two to three years. 

Mr. FARENTHOLD. Let’s talk about unemployment rates now. We 

were talking about North Dakota, where we are down to one percent unemployment. I know in Victoria, which is in the Eagle Ford, 

I was told by an economic development folks, though nominally in 

the six percents, they are at full employment. If you can pass a 

drug test and are willing to work, there is a job for you. We are 

hearing they are having to import people into the Dakotas to work. 

I know in Corpus Christi, our hotels are full of workers that are 

working in the Eagle Ford shale in Victoria, a Best Western Hotel, 

$230 a night housing oilfield workers. I mean, this is a huge, huge 

economic boom. 

I guess, Mr. Drevna, can you talk about some of the jobs that are 

coming out of that, what type of jobs and what kind of salary levels 

we are looking at? To me, these are good, high-paying, middle to 

upper middle class jobs. 

Mr. DREVNA. Absolutely, Congressman. These are jobs that you 

don’t really need a college education for. You need some skills, and 

we can train; that is what we do. You can have a great middle 

class life, get paid very well, send your kids to school, take vacations. These are the kinds of opportunities the U.S. oil and natural 

gas and refining businesses provide. 

109 

And going back to my old hometown, with all deference to Philadelphia and Cleveland, back in Pittsburgh, you go back to my old 

hometown, where Shell is proposing to build that ethylene cracker 

up the Ohio Valley there, it is unbelievable—— 

Mr. FARENTHOLD. Do you think they are going to actually build 

that? I am hearing a lot about decreased refining capacity in the 

United Stats and the inability to permit new refineries or large increases in capacity in refining. And that also, our refining capacity, 

has a direct impact on gasoline prices, does it not? 

Mr. DREVNA. Oh, it does. And not only the refining capacity, but 

the regulations, including the renewable fuel standard that year 

after year after year takes away more and more of the market of 

refiners, and little or absolutely no benefit to the economy and no 

benefit to the environment. 

But you are right, and I think the secretary mentioned it briefly 

before. We are in step one of many, many steps—— 

Mr. FARENTHOLD. All right, I am running out of time. It looks 

like we have a war on additional refining capacities, or at least a 

very difficult. 

And it looks like, Mr. Glaser, we have an issue with a war on 

coal. I know there was a county just south of Houston that was 

talking about building a coal plant, which escapes me with the 

price of gas what it is, but they believe in diversity of fuels, and 

the EPA basically descended on that town, threatening to put them 

in noncompliance in air quality, despite the fact they were basically 

upwind from Houston. Are we seeing that all over? 

Mr. GLASER. Yes. As I mentioned in my testimony, the Administration has one rule in place, the MATS or UMACT rule; another 

rule proposed, the greenhouse and New Source Performance Standards rule, under which you can’t build a coal plant. You just can’t 

build a coal plant. That is a policy that is inconsistent with the notion of an all-of-the-above energy policy; it is reflective of what we 

are seeing throughout the Administration’s, and particularly EPA’s, 

policies; and they are having an effect. 

Contrary to what Mr. Weiss said, that implies that coal employment is at an all-time high, I would simply suggest that looking at 

2011 figures is a little disingenuous because all of these policies are 

just coming into effect right now. The pollution rules that the Administration has adopted have begun this year, and if you look at 

what is going on in the marketplace right now, you would be hard 

pressed to say that coal employment was up. 

Mr. FARENTHOLD. Thank you very much. 

I see my time has expired. 

Chairman ISSA. I thank the gentleman. 

I now ask unanimous consent that the Committee report of May 

23rd, 2011, be inserted at this time. Without objection, so ordered. 

And particularly take note of the portion of this report that related 

to the $2.1 billion that Shell had spent from 2008 on the very 

project that Mr. Weiss now takes credit for in an election year, 

three and a half years in, for the permit being granted, a permit 

that was delayed for those three and a half years. 

With that, we recognize the gentleman from Vermont for his five 

minutes. 

Mr. WELCH. Thank you, Mr. Chairman. 

110 

Mr. Krancer, you are from Pennsylvania. Mr. Kelly, I listened to 

his questions. My understanding is that there is this explosion in 

energy development because of gas. That is a real competitive advantage for us and you are leading the way in Pennsylvania, is 

that your view? 

Mr. KRANCER. Well, that is certainly part of the story. Natural 

gas is now accessible, it wasn’t accessible before, and, as I said, the 

production in Pennsylvania has quadrupled since 2009. 

And by the way, referring to, I think it was Representative 

Davis, the Federal Government has absolutely nothing to do with 

the fact that production in Pennsylvania of natural gas quadrupled. 

As a matter of fact, by definition, because the Federal Government 

was not involved, that is what happened. 

Mr. WELCH. Well, there has been discoveries across the Country 

of this huge reservoir of natural gas and that fracking is a device 

by which that can be extracted. 

Mr. KRANCER. Well, more accurately, there have been discoveries 

of ways to access and obtain the gas in a much more efficient manner, by the way—— 

Mr. WELCH. Right. And you have a lot of responsibility to make 

sure that that is done in a way that doesn’t degrade the environment, particularly water quality, correct? 

Mr. KRANCER. Water quality, air quality—— 

Mr. WELCH. Right. 

Mr. KRANCER. The whole—— 

Mr. WELCH. And my understanding of what you were recommending was not that there be no regulatory oversight, but you believe that that regulatory oversight is better done at the State, 

rather than the Federal level. Is that more or less—— 

Mr. KRANCER. Oh, I not only believe it; I see it every single day. 

Mr. WELCH. Right. So you don’t have an opposition, in fact, you 

believe in appropriate regulatory behavior to protect air and water 

quality, is that right? 

Mr. KRANCER. I am the Secretary of the Department of Environmental Protection. 

Mr. WELCH. Right. 

Mr. KRANCER. I believe in adherence to rules—— 

Mr. WELCH. So we are not having a debate about whether there 

has to be some degree of regulation. There is always room for improvement and you get to an answer sooner rather than later. 

Would the members of the panel more or less agree with that? 

Mr. Drevna, how about you? 

Mr. DREVNA. I agree with the secretary that we take these things 

seriously—— 

Mr. WELCH. Okay, let me go to Mr. Glaser. How about you? Coal 

obviously has some side effects, or is that not anything you agree 

with? 

Mr. GLASER. No, we absolutely believe that coal is compatible 

with good environmental protection. No doubt about it. 

Mr. WELCH. Is there any mercury contamination that is affected 

by the downwind on places from the coal plants? 

Mr. GLASER. There is no question that power plants in the 

United States emit relatively minute amounts of mercury, particuVerDate Aug 31 2005 13:57 Jul 27, 2012 Jkt 000000 PO 00000 Frm 00114 Fmt 6633 Sfmt 6633 C:\DOCS\75111.TXT APRIL
111 

larly compared with the amount of mercury blowing in from overseas. There is also no question that mercury can be controlled. 

Mr. WELCH. So—— 

Mr. GLASER. There is, finally, no question that the rule that the 

Administration adopted to control mercury in fact doesn’t really do 

that. 

Mr. WELCH. Hold on. Let’s stay—let me ask the questions, all 

right? So you are acknowledging that there is some mercury pollution from coal plants, correct? 

Mr. GLASER. There is, as I said, relatively—— 

Mr. WELCH. Is that a yes? 

Mr. GLASER.—relatively minute—— 

Mr. WELCH. Wow. 

Mr. GLASER. Yes, but there are relatively minute amounts. And 

the coal industry—and, again, I am speaking for myself now. But 

there is no doubt that reasonable regulation is a good thing 

throughout American energy production, and I would include coal. 

There is no dispute with that whatsoever. 

Mr. WELCH. And you would acknowledge that mercury contamination, as it gets into the food chain, as it gets into soil, is hazardous to the health, hazardous to air quality? 

Mr. GLASER. I would point to the regulatory impact analysis that 

EPA did in support of the rule and conclude that those benefits are 

vanishingly small. 

Mr. WELCH. So you won’t answer my question. 

Mr. GLASER. I think I just did. 

Mr. WELCH. Okay. 

How about you, Ms. Sgamma. Do you believe that there has to 

be some appropriate level of regulation to look out for the interest 

of air and water quality? 

Ms. SGAMMA. Absolutely. The oil and gas industry is one of the 

most heavily regulated industries. It is when that new regulation 

is not in balance with economic and job growth, and when it is not 

well thought out, it is too much, too fast, excessive, and that is killing jobs in my industry. 

Mr. WELCH. Well, see, I am actually sympathetic to the concern 

of the regulated community that the regulatory process be straightforward, clear, that you can get an answer and you get a reasonable turnaround. I think that is a reasonable thing. What is not 

reasonable is to believe that we can waive away the necessity to 

protect air and water quality when there are processes that have 

an impact on it. 

Ms. SGAMMA. I don’t know anyone in my industry who is calling 

for waiving regulation. We are calling for it to be done more at the 

State level, though. 

Mr. WELCH. Well, here would be my suggestion. This is something we did in Vermont. We asked—and, actually, you did this, 

Mr. Chairman, and I thought it was okay. You get specific examples of what you think can be improvements, where it is about the 

process working better as opposed to trying to do away with the 

underlying obligation, my view that the government has to protect 

the air and water quality. That is something I would be interested 

in, and I think you asked some of those questions and I thought 

that was a fair question in the beginning. But this back and forth 

112 

about who is the better is the better president and whose policy, 

my view is it doesn’t really get us anywhere. 

I want to go on to another topic. We are having huge debates 

here about whether those of us, and I am one of them, that thinks 

that we should be trying to give a boost to alternative energies. It 

is local; it is renewable; it is jobs. This is my view. That does not 

mean that we have to tear apart other traditional sources of fuel. 

You are not going to be able to turn the lights off by going to solar 

overnight, let’s say. 

So the other thing is that a lot of us believe that whatever fuel 

source you believe in, whether it is gas or oil or coal, energy efficiency should be a major component of American energy policy, and 

it is an area where, presumably, there could be some agreement. 

We had a bipartisan bill last year that was going to give a boost 

to homeowners and, to some extent, building owners if they put 

some of their own money into retrofitting their buildings, and they 

would get some taxpayer money to help out. No big bureaucracy, 

because if you own a home and you can save some money, and you 

put some of your money in, get some government money, you are 

going to want to get the best deal on that. 

I am curious to know whether all of you would favor an approach 

that would allow for retrofitting of our residential and commercial 

buildings with some taxpayer help. 

Mr. KRANCER. Representative, could I take a shot at that? 

Mr. WELCH. Yes, go ahead. 

Mr. KRANCER. Because the electricity business used to be a business I had been in. Energy efficiency is already a part of the way 

we are implementing energy policy, and commercially. It is not 

from the government, by the way; it is by the way of the competitive markets. And energy efficiency is something that clears a market in what we call PJM. PJM is the grid operator that spans from 

I think it is New Jersey all the way over to Illinois, Michigan; 50 

million people. It is the biggest grid operator in the Country. So energy efficiency is already a part of the way competitive markets are 

thinking. 

And let me just say one thing, and I know Representative 

Tierney mentioned it with wind and solar, so on and so forth. Wind 

has been something that has been part of the power mix since 

1870, so I am not sure that that is a brand new technology either. 

And I don’t want to get into the PTC, because I know that is not 

what this is about, but if we are getting into subsidies of one, it, 

by definition, impacts the other, because when you have other resources that generate power, nuclear, coal, gas, whatever it is, but 

you have a subsidized wind component, and especially at certain 

hours of the day, that wind farm can actually bid into the market 

at less than zero. 

Mr. WELCH. Right. I am over my time, but the question I did 

ask—— 

Chairman ISSA. Just a wee bit. 

Mr. WELCH. Well, it was the answer more than the question, all 

right? But answer the question I didn’t ask. What I was curious 

about, Mr. Chairman, was whether there would be general support 

for an efficiency program that doesn’t require us to pick winners 

and lowers; where, if you are a homeowner and using coal or you 

113 

are a homeowner and using gas, you get some opportunity to make 

your home or your commercial building more energy efficient, so 

you use less fuel, save money, and the people who do the retrofit 

are local, out-of-work contractors. 

Chairman ISSA. I certainly would agree with the gentleman that 

we need to figure out ways to do it. My State, unlike your State, 

is fairly not terribly hot or cold for most of it, but we actually have 

done that for a generation. All of our electric providers have annual 

programs, sometimes supplemented by State money for just that; 

a little more pink, a fan, better sealing of windows, and so on. I 

certainly agree with the gentleman that that is a component. I 

think today a lot of our hearing was on the time to market, the 

idea that on private lands you can get a permit in Texas in 90 days 

on an existing site, while it can take you 10 years if you want to 

go to Federal lands; and, of course, you pay for a lease for that 

whole 10 years. 

But I do think the gentleman’s point is good and I would love to 

explore it further. 

Mr. WELCH. Thank you. 

Chairman ISSA. And with that we go to an important and patient 

witness, the gentleman from Michigan, Mr. Walberg, for five minutes. 

Mr. WALBERG. Thank you, Mr. Chairman. Before I ask Mr. 

Glaser to expand on the answer you started when Congressman 

Farenthold offered you the chance to talk about the regulations 

from the Federal Government, especially Utility MACT. 

Let me preface it by saying I had the opportunity as part of my 

responsibility of chairing the Subcommittee on Workforce Protections, looking at MSHA, the mine industry and the coal mine operations, to go out to North Dakota this past August and to see the 

surface mining operations taking place there. Revolutionary in my 

mind to see what was being done; the reclamation of land, the enhancement of land, the opportunities for agriculture expanded as a 

result of that, the clean coal technologies that were taking place, 

the expansion of coal-fired plants that provided necessary energy 

not only for North Dakota, but for Minnesota as well. Amazing job 

opportunities for people, stable employment. People coming from 

other States to work there. And then having a chance to look at 

the Bakken Reserve and the oil exploration going on there as well 

was amazing. The unemployment level that was there, that is the 

right direction for unemployment, as opposed to what I experienced 

for too long back in Michigan. 

And then just recently to hold a town hall meeting in Coldwater, 

Michigan, and to have a lady pop up and say, you know, Congressman, I have a husband that is working out there in the Bakken 

Reserve. He is out there because he can’t have a job here in Michigan. He doesn’t want us to move out there because he wants to ultimately come back to Michigan to work, but he is doing what is 

necessary and he has a good paying job out there and there is an 

opportunity for us. 

And then to find out—and I don’t know if we have this chart 

available—that the EPA regulations have already forced 25 

gigawatts of generating capacity off the grid. In my State alone, 

over 1200 megawatts have been forced off through energy regulaVerDate Aug 31 2005 13:57 Jul 27, 2012 Jkt 000000 PO 00000 Frm 00117 Fmt 6633 Sfmt 6633 C:\DOCS\75111.TXT APRIL
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tion, excessive regulation, unreal regulation that is going on. In my 

own district, 345 gigawatts alone that makes it more difficult when 

we see a turnaround taking place in Michigan in the auto industry 

that requires energy, that requires fuel sources. And this lady, who 

wants her husband back in Michigan working, when we see now 

a capacity necessary to deal with the increased job opportunities 

that are taking place in manufacturing finally again in the auto industry and supplier industries, the need for more energy to have 

things like we are going to talk about and I want you to expand 

upon, isn’t it true that new coal-fired electric generating units, 

which are able to install the newest technologies, are unable to 

comply with Utility MACT rule? 

Mr. GLASER. Yes, that is exactly the case. And you don’t have to 

take my word for it; the major association of pollution equipment 

vendors went to EPA and they told EPA that they, frankly, could 

not guarantee that their equipment would meet the level of EPA 

standards; it was so low as to be beyond the ability of the equipment to actually measure that level of emissions. And we have the 

same thing with the greenhouse gas New Source Performance 

Standard. EPA has said, well, in order to build a new coal plant 

in the United States, you have to meet a level of CO2 emissions 

that EPA says coal plants, frankly, can’t meet. 

So that, to me, is something that I don’t understand, again, how 

you can say that you have an all-of-the-above energy policy that includes coal and at the same time say—— 

Mr. WALBERG. So there is a Catch-22 going on here that says 

commence construction and cease construction. 

Mr. GLASER. Yes. The Catch-22 that EPA has put out there is 

they have said, well, under our greenhouse gas rule we recognize 

that there are about 15 plants out there that have spent a great 

deal of money and a great deal of time trying to get—and have received permits and they are just about ready to go with construction. So what we will do in recognition of that huge investment, we 

will say you all have a year, and if you can get built, if you can 

start construction in a year, then you won’t be subject to this requirement that you can’t meet as to your CO2 emissions. 

Yet at the same time they have finalized a rule, the MATS rule 

or MACT rule, that these companies can’t meet because the emissions are so low because the pollution control vendors won’t guarantee performance of the equipment. So these 15 contracts are effectively being strangled because, on the one hand, EPA says you 

have a year to get into construction, but on the other hand they 

have a rule that prevents them from getting it to construction, and 

that is the concern. 

Mr. WALBERG. Well, I appreciate that testimony. 

Mr. Chairman, just this past week I had the opportunity to fly 

over and be in China, India, South Korea, and I saw stacks, I saw 

emissions taking place there. Nothing like I have seen in Monroe, 

Michigan or Jackson, Michigan with Consumers Energy, Detroit 

Energy, coal-fired plants that are being put in this Catch-22 situation right now, if they have not already been put out of production, 

because of the untenable regulatory climate that goes beyond the 

necessity and goes beyond reality and rationality of what is necVerDate Aug 31 2005 13:57 Jul 27, 2012 Jkt 000000 PO 00000 Frm 00118 Fmt 6633 Sfmt 6633 C:\DOCS\75111.TXT APRIL
115 

essary to move our economy forward, and do it in a sustainable and 

quality environmental fashion as well. 

Thank you. I yield back my time. 

Mr. ROSS. [Presiding.] Forgive me for just walking in; I have 

been going back and to from other hearings. But I want to make 

sure I understand that probably one of the biggest obstacles has 

been the permitting process for environmental impact studies. Is 

that correct, Mr. Krancer? 

Mr. KRANCER. Well, I think it has been discussed before that certainly at the Federal level the NEPA process takes a very, very 

long time. 

Mr. ROSS. And actually you say process, but there is no procedure in NEPA, is there? In other words, what one agency may 

start, another agency may ignore, and it could last forever. 

Mr. KRANCER. My experience in the private sector is that it could 

last a very long time and the outcome was often unpredictable. 

Mr. ROSS. Mr. Drevna, would you agree that a procedure should 

be in place in order for the process under NEPA to be followed in 

a timely manner? 

Mr. DREVNA. Absolutely, Mr. Ross. Not only the process under 

NEPA, but the entire process, where at every turn there is another 

lawsuit or litigation that tries to stop—and they are not concurrent 

or consecutive. 

Mr. ROSS. And so would standing also be an issue that something 

should be addressed? 

Mr. DREVNA. Absolutely. I think everybody wants to do it right. 

No one is saying not to do it right. It is just when you create the 

uncertainty, when you have these interminable time delays, what 

are you going to do with your profits? You can’t put them back in; 

you have to take them somewhere else. 

Mr. ROSS. And, Mr. Weiss, are you familiar with the fact that 

there has been a delay even in the permitting of green energy programs? 

Mr. WEISS. Yes, I am, and I think that one way to address that 

would make sure that the people who are responsible for reviewing 

these analyses and issuing the permits have adequate resources 

and adequate staff to do that, particularly at a time when we are 

expanding the number of permit requests. We need to make sure 

that we provide them with the resources they need. 

Mr. ROSS. I agree with you, and I think that what you hit on 

there is when you have sequential evaluation, when you have sequential review of the permitting process, you have what I consider 

to be a disparate allocation of resources. So would you not agree 

that it would be more in line with having a concurrent review process, as opposed to a sequential review process with agencies? 

Mr. WEISS. Certainly we have proposed, when it comes to the citing of transmission lines, that the process be telescoped down in 

the way that you suggest, which is to make it sort of get everyone 

together and do it all together; local, Federal, and State. 

Mr. ROSS. Correct. 

Mr. WEISS. You speed up the time that it takes to permit transmission lines. 

116 

Mr. ROSS. And, further, would you not say that that is a fault 

in NEPA, is that there is no procedure in place for concurrent review in the permitting process? 

Mr. WEISS. I am not qualified to answer that. 

Mr. ROSS. Mr. Krancer? 

Mr. KRANCER. NEPA—it is a great question, and if there is one 

thing I could leave with this Committee, and this is at the Federal 

level, of course, not the State level, is take another look at NEPA 

and redo it. 

Mr. ROSS. Would it also be advantageous to have a procedure in 

place that would allow for a time period by which those agencies 

who feel they are affected or have a need to be involved, get involved, concurrent review of the permitting process, and let’s say 

in four and a half years the permit must either be issued or not? 

Mr. KRANCER. I would say four and a half years is a very long 

time. I would also say that some of these—and these folks on the 

panel might have a better sense for this, but to the extent there 

have been increased in production, I bet you donuts to dollars those 

must have come from private lands, not public lands. 

Ms. SGAMMA. Right. I represent producers on public lands in the 

West, so, because the West is so predominated by public lands, we 

are affected by those NEPA delays more than anything else. We 

are seeing 20 projects held up that could create 121,000 jobs, but 

the NEPA is taking seven years or more. 

Mr. ROSS. Correct. 

Ms. SGAMMA. NEPA should be taking two years. And we would 

love to see something where the government gets so much time and 

then the project is presumed complete. 

Mr. ROSS. Even this President has suggested that we do some 

sort of expediting of the process under NEPA. 

Ms. SGAMMA. And our producers pay for contractors to do the 

NEPA, and government still can’t get it done. 

Mr. ROSS. Mr. Weiss? 

Mr. WEISS. It is important to note that the lands that Ms. 

Sgamma is talking about are owned by all Americans and, under 

the law, they are there for multiple use; not just for oil production, 

not just for coal production or whatever. 

Ms. SGAMMA. And taxpayers own the energy under those lands. 

Mr. WEISS. Therefore, we need to make sure that we know what 

the impacts are—— 

Mr. ROSS. I agree. 

Mr. WEISS.—for all Americans, not just on their companies. 

Mr. ROSS. And would it not be better to have an economy of 

scale, a centralization of review, and an expedited process by which 

those who are involved in these, whether they be on private lands 

or public lands, know that the investment of their dollars is going 

to have an outcome where they are going to have—and a time certain. I mean, we all agree that that is good. 

Yes, sir, Mr. Drevna. 

Mr. DREVNA. I think it would be an interesting exercise to look 

at what would happen, interpose NEPA and all the other requirements that you have to do on Federal lands, interpose those on the 

development with what we have seen in Pennsylvania, Ohio, West 

117 

Virginia, and see if that production would be there today as it is 

now. I would suggest absolutely not. 

Mr. ROSS. Okay. I see my time has expired and I am the last 

questioner, so we will stand adjourned. 

Thank you all for your time. I appreciate you being here. 

[Whereupon, at 11:30 a.m., the committee was adjourned.] 

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Æ 


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