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97–282 2016

QUADRENNIAL ENERGY REVIEW AND RELATED 

DISCUSSION DRAFTS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND POWER 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

JUNE 2, 2015 

Serial No. 114–47 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

(III) 

SUBCOMMITTEE ON ENERGY AND POWER

ED WHITFIELD, Kentucky 

Chairman 

PETE OLSON, Texas 

Vice Chairman 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

ROBERT E. LATTA, Ohio 

GREGG HARPER, Vice Chairman 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

BILL FLORES, Texas 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

BOBBY L. RUSH, Illinois 

Ranking Member 

JERRY MCNERNEY, California 

PAUL TONKO, New York 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

PETER WELCH, Vermont 

JOHN A. YARMUTH, Kentucky 

DAVID LOEBSACK, Iowa 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(V) 

C O N T E N T S 

Page 

Hon. Ed Whitfield, a Representative in Congress from the Commonwealth 

of Kentucky, opening statement ......................................................................... 1 

Prepared statement .......................................................................................... 2 

Hon. Bobby L. Rush, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 3 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 4 

Prepared statement .......................................................................................... 6 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 7 

WITNESSES

Ernest Moniz, Secretary, Department of Energy .................................................. 8 

Prepared statement .......................................................................................... 11 

Answers to submitted questions ...................................................................... 139 

Rudolf Dolzer, Advisory Board Member, Association of International Petroleum Negotiators, and Professor of International Law, University of Bonn ... 59 

Prepared statement .......................................................................................... 61 

Jason Grumet, President, Bipartisan Policy Center ............................................. 66 

Prepared statement .......................................................................................... 68 

Scott Martin, Commissioner, Lancaster County, Pennsylvania .......................... 77 

Prepared statement .......................................................................................... 80 

Gerald Kepes, Vice President, Upstream Research and Consulting, IHS .......... 88 

Prepared statement .......................................................................................... 90 

Answers to submitted questions ...................................................................... 162 

Alison Cassady, Director of Domestic Energy Policy, Center for American 

Progress ................................................................................................................ 97 

Prepared statement .......................................................................................... 99 

Answers to submitted questions ...................................................................... 167 

Emily Hammond, Professor of Law, George Washington University Law 

School .................................................................................................................... 112 

Prepared statement .......................................................................................... 114 

SUBMITTED MATERIAL

Statement of The Canadian Electricity Association ............................................. 127 

(1) 

QUADRENNIAL ENERGY REVIEW AND 

RELATED DISCUSSION DRAFTS 

TUESDAY, JUNE 2, 2015 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ENERGY AND POWER, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:04 a.m., in room 

2123 of the Rayburn House Office Building, Hon. Ed Whitfield 

(chairman of the subcommittee) presiding. 

Members present: Representatives Whitfield, Olson, Barton, 

Shimkus, Pitts, Latta, Harper, McKinley, Pompeo, Kinzinger, Griffith, Johnson, Long, Ellmers, Flores, Mullin, Upton (ex officio), 

Rush, McNerney, Engel, Green, Capps, Castor, Welch, Loebsack, 

and Pallone (ex officio). 

Also present: Representative Cramer. 

Staff present: Nick Abraham, Legislative Associate, Energy and 

Power; Gary Andres, Staff Director; Will Batson, Legislative Clerk; 

Sean Bonyun, Communications Director; Leighton Brown, Press 

Assistant; Allison Busbee, Policy Coordinator, Energy and Power; 

Karen Christian, General Counsel; Patrick Currier, Counsel, Energy and Power; Graham Dufault, Counsel, Commerce, Manufacturing, and Trade; Tom Hassenboehler, Chief Counsel, Energy and 

Power; Peter Spencer, Professional Staff Member, Oversight; Dan 

Schrieder, Press Secretary; Jeff Carroll, Democratic Staff Director; 

Caitlin Haberman, Democratic Professional Staff Member; Ashley 

Jones, Democratic Director, Outreach and Member Services; Rick 

Kessler, Democratic Senior Advisor and Staff Director, Energy and 

Environment; John Marshall, Democratic Policy Coordinator; and 

Tim Robinson, Democratic Chief Counsel. 

OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF KENTUCKY 

Mr. WHITFIELD. I would like to call the hearing to order this 

morning. The title today is the hearing on the Quadrennial Energy 

Review and Related Discussion Drafts, including Title III, Energy 

Diplomacy. We will have two panels of witnesses this morning. 

And, of course, on the first panel we have our Secretary of Energy, 

Mr. Moniz, who is no stranger to this committee or to Congress. So 

we appreciate him being with us very much, and look forward to 

his opening statement. And then we will have some questions relating to his testimony, as well as other issues. 

2 

And at this time, I would like to recognize myself for 5 minutes 

for an opening statement. 

Everyone is very much aware that this subcommittee and the 

Congress has been working on a bipartisan energy bill for several 

months now. Many people are even asking, not surprisingly, is 

there enough common ground between our efforts and the Obama 

Administration to enact meaningful energy legislation. And I do believe that this question was answered with a clear yes when the 

Department of Energy’s first installment of its Quadrennial Energy 

Review was released last April. This detailed study focuses on the 

infrastructure implications of America’s new energy boom, and 

many of its recommendations overlap with provisions of our draft 

energy bill. 

And so we are excited that Mr. Moniz is here today, so that we 

can explore the perspective of the Department of Energy as the 

country makes dramatic changes in its energy distribution, production, transmission system. We have a lot of infrastructure needs. 

We are focusing on the diplomatic diplomacy aspects of energy, 

which is becoming more and more important to our friends in the 

European Union, who find themselves reliant on natural gas coming from Russia. And so we have many opportunities in the United 

States to come forth with a good energy policy. And I think that 

most of the provisions that we are focused on in this energy bill, 

democrats and republicans agree that they need to be addressed, 

and one of the biggest is infrastructure needs, and trying to improve the permitting process, for an example. 

So I look forward to the testimony of all of our witnesses today. 

And we have a real opportunity here and we don’t want to drop 

this ball, so we are getting close to the end of drafting this legislation, coming up with a final product, and we look forward to move 

it in a meaningful way. 

[The prepared statement of Mr. Whitfield follows:] 

PREPARED STATEMENT OF HON. ED WHITFIELD

This subcommittee has been working on our bipartisan energy bill for several 

months now, and many have asked whether there’s enough common ground between 

our efforts and the Obama administration to enact meaningful energy legislation. 

I believe that this question was answered with a clear yes when the Department 

of Energy’s first installment of its Quadrennial Energy Review (QER) was released 

last April. This detailed study focuses on the infrastructure implications of America’s new energy boom, and many of its recommendations overlap with provisions 

in our draft energy bill. I welcome Secretary Moniz this morning to discuss the QER 

and look forward to his input which is always valued by this subcommittee. 

Since the 1970s, Congress has developed an energy policy based on assumptions 

of declining American energy output and increasing import dependence. But that 

came before the dramatic turnaround in oil and natural gas production over the 

past decade, and now we are beginning the task of adjusting our energy policy to 

reflect this new reality. Both the QER and our energy bill are largely based on the 

need to update Washington’s outdated approach. 

First and foremost, America’s energy boom is necessitating an infrastructure 

boom. We need more pipelines and storage facilities and all the other elements of 

the infrastructure for oil and natural gas. We also need more electric transmission 

lines and upgrades to the existing infrastructure to ensure that our electricity supply is sufficient, reliable, and secure against outside attacks. 

Unfortunately, energy infrastructure faces a host of permitting delays and other 

red tape. These impediments may have been tolerable in the past when relatively 

little new infrastructure was needed, but now they are holding back the full benefits 

of the energy boom. Both the QER and energy bill contain a number of measures 

3 

addressing infrastructure permitting, and both are careful to do so while maintaining existing environmental and safety standards. 

The energy boom and the resulting need for infrastructure is a good kind of problem to have, because solving it creates jobs. However, DOE’s existing job training 

programs don’t fully reflect the consequences of our changing energy sector, and 

don’t focus on the skills currently in demand. The QER contains recommendations 

for updating these programs that are similar to the workforce training title in our 

energy bill authored by Mr. Rush. 

The energy growth in the U.S. and across North America also necessitates a new 

approach towards energy geopolitics. The QER emphasizes the need for integration 

of energy infrastructure and increased cooperation with Canada and Mexico. We 

concur that a fully integrated North American energy system would benefit the U.S. 

as well as its neighbors. Our recently-released energy diplomacy discussion draft 

contains several provisions to advance this continent-wide approach and to ensure 

that energy policy decisions take energy security considerations into account. 

Beyond North America, we also see the U.S. playing a more prominent role in 

global energy markets. Doing so can help our allies and trading partners around the 

world, weaken the position of our energy-exporting adversaries, and add more jobs 

by expanding the market for American energy. The discussion draft contains several 

ideas to enhance America’s energy standing in the world. This includes the firstever provisions to coordinate with our allies on energy security issues as well as provisions to eliminate needless delays in the approval of LNG export facilities. 

I would also add that both the QER and the energy bill consider ways to update 

the Strategic Petroleum Reserve to more closely fit the energy security challenges 

of 2015 and beyond. 

Certainly there are also areas of disagreement, and I am sure Dr. Moniz will let 

us know about them. Nonetheless, I believe we can put our differences aside and 

agree on a range of energy reforms that will benefit the American people for decades 

to come. 

Mr. WHITFIELD. And at this time, I would like to recognize the 

gentleman from Illinois, Mr. Rush, for his opening statement. 

OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. RUSH. I want to thank you, Mr. Chairman, for holding this 

important hearing today on the QER, and—as well as on a variety 

of other energy issues covered in the discussion draft. 

Mr. Chairman, let me first begin by welcoming the Honorable 

and distinguished Secretary of Energy, Mr. Moniz, here to the subcommittee today. Welcome, Mr. Secretary. Mr. Secretary, let me 

commend you for the outstanding work you have been involved in 

on a myriad of different issues, all important to the American people. Mr. Chairman—Mr. Secretary, you might not accept this, you 

might not—you might think that this is a—not something that you 

see, but in my mind and in the mind of a number of my constituents, you are indeed a superstar Secretary. We are proud of your 

work on behalf of our Nation. Mr. Secretary, from your leadership 

in the historic nuclear talks with Iran, to establishing the muchneeded Minorities and Energy Initiative at DOE, to overseeing the 

development of the comprehensive QER, are among your more important accomplishments. And I have no doubt that you will go 

down as one of the most significant and effective Energy Secretaries of modern time. You see, I am a fan, Mr. Secretary. 

Mr. Secretary, as you may be aware, I have a bill that I will soon 

be introducing that will amend the Department of Energy Organization Act to replace the current requirement for a biannual energy 

policy plan with a quadrennial energy review. It is my hope that 

this bill, like its Senate counterpart that was recently introduced 

by Secretary Coons of Delaware and Senator Alexander of TenVerDate Nov 24 2008 11:39 Feb 29, 2016 Jkt 037690 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-47 CHRIS
4 

nessee, will attract bipartisan support. In fact, Mr. Secretary, I 

have held off on introducing the bill as of yet so that my office can 

continue to hold talks with the majority side in order to find language that both sides can agree on. And, Mr. Chairman, I will continue to reach across the aisle for support on this nonpartisan issue 

of codifying a quadrennial energy review, and I hope that we can 

find common ground. 

Mr. Chairman, the QER addresses many areas that are also covered in the discussion draft of the Comprehensive Energy Bill we 

have all been working on. Issues such as increasing the resilience, 

reliability, and safety of the grid are discussed in both packages. 

Additionally, there are many similarities in both the QER and in 

the discussion draft regarding integrating North American energy 

markets, modernizing the grid, and enhancing employment and 

workforce training. However, Mr. Chairman, there is still much 

work to be done in bridging the gap in areas where there are some 

disagreements, such as in signing and permitting and addressing 

the environmental aspect of transportation—or transmission rather, storage, and distribution infrastructure. Specifically, in the discussion draft before us today, I have some concerns regarding the 

cross-border approval process described in Section 3104. In this section, the burden is shifted away from farming companies and onto 

agency officials to issue so-called certificates of crossing, unless the 

official finds the project, and I quote, ‘‘is not in the public interests 

of the United States.’’ 

Another concern that I have, Mr. Chairman, is in Section 3102, 

which sets up an interagency taskforce to evaluate North American 

energy flows. However, the task is noticeably missing representatives from either the Council of Environmental Quality, the Environmental Protection Agency, as well as the Departments of Interior or Transportation, among others who may weigh in on environmental issues. 

Mr. Chairman, as we move forward with the goal of putting forth 

a truly bipartisan energy bill, it is my hope that the majority side 

will work with us to find common ground on most of these issues, 

and put precedence in doing the right thing above doing it quickly. 

Mr. Chairman, I thank you, and I yield back the balance of my 

time. 

Mr. WHITFIELD. Thank you, Mr. Rush, for that opening statement. 

At this time, I would like to recognize the chairman of the full 

committee, Mr. Upton, for 5 minutes. 

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. UPTON. Well, thank you, Mr. Chairman. I just want to say 

in response to Mr. Rush’s comments, I look forward to working 

with him and Mr. Pallone, and all of our members on both sides 

of the aisle, to do this right. And appreciate those kind words. 

We are delighted to welcome back Secretary Moniz to the committee to discuss the first installment of the Quadrennial Energy 

Review that focused on energy transport and infrastructure; something we need to do. America’s energy picture is rapidly changing, 

and our laws and regulations need to change with it. Longstanding 

5 

concerns about declining domestic energy output have been erased 

by rapidly rising oil and natural gas production. 2013 alone, according to the QER, the U.S. added 1.2 million barrels per day of 

production, a record increase by one country in 1 year. Domestic 

production of natural gas and related liquids has experienced 

equally dramatic increases. 2014, the U.S. became the world’s number 1 energy-producing nation, and it is time we start acting like 

it. 

Unfortunately, the scarcity mindset is still embedded in our national energy policy. Rising energy production requires more energy 

infrastructure; what I have called the architecture of abundance. 

Both the energy legislation and the QER include a number of ideas 

for upgrading and expanding the Nation’s energy infrastructure. 

And in light of the recent pipeline spill in California, I would add 

that both aim to ensure that this new infrastructure is built with 

state-of-the-art technologies that reduce the environmental and 

safety risks. But our energy abundance can be more than just an 

economic success story; it can be—it, indeed, can be a foreign policy 

success story as well. And that is why recently released discussion 

draft of our energy diplomacy title is so important. 

This—the discussion draft builds on the extensive work done by 

this subcommittee on LNG exports. At numerous hearings over the 

last couple of years, we heard from many of our allies around the 

globe who said they would rather get their natural gas from us 

than the likes of Russia or Iran. That message was underscored 

last month when I led a high-level delegation to several of our European allies, including Ukraine, and we came away with a profound new understanding of just how vital these partnerships can 

be. In established parts of the EU, leaders are coming together to 

promote a unified energy market because of its potential for security, affordability, and innovation. In Ukraine, where the commitment to freedom and democracy is hard-fought each and every day, 

their energy aspirations are fundamental to their dreams for a 

peaceful future. 

While our discussion draft encourages North American energy cooperation and cross-border infrastructure, opportunities for energy 

diplomacy extend well beyond our own continent. For example, 

there is broad recognition that U.S. LNG exports will benefit the 

U.S. economy, our consumers, and yes, our allies. While the same 

could be said for oil exports, a statutory ban has prevented us from 

pursuing these benefits for the last 4 decades. And it is time that 

Congress considers revising the ban on crude oil exports. 

As with natural gas, America now has enough oil production to 

make increased exports feasible, especially the lighter grades of 

crude that the QER notes have experienced the most rapid supply 

increases. Economic and foreign policy experts across the political 

spectrum believe that expanding the markets for American oil 

would be a net jobs creator at home, while enhancing our geopolitical influence abroad. And at the same time, reports from the 

GAO, CBO, and Energy Information Administration all point to reductions in the price of gas as a result of increased oil exports. In 

other words, oil exports can be a win for the American people and 

a win for our allies. 

6 

The energy sector has been the Nation’s most significant job creator in recent years, but with the drop in oil prices, as many as 

100,000 energy industry positions have been lost. The case for creating more jobs by expanding the market for American oil is a key 

reason why oil exports should be on this committee’s agenda this 

year. And while we are not currently considering any such provisions in this pending legislation, I do look forward to working with 

my good friend, Mr. Barton, and others on both sides of the aisle 

to ensure that we get the policy right. 

I yield back the balance of my time. 

[The prepared statement of Mr. Upton follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

We are delighted to welcome back Secretary Moniz to the committee to discuss 

the first installment of the Quadrennial Energy Review that focused on energy 

transport and infrastructure. America’s energy picture is rapidly changing, and our 

laws and regulations need to change with it. 

Longstanding concerns about declining domestic energy output have been erased 

by rapidly rising oil and natural gas production. In 2013 alone, according to the 

QER, the U.S. added 1.23 million barrels per day of production, a record increase 

by one country in one year. Domestic production of natural gas and related liquids 

has experienced equally dramatic increases. In 2014, the U.S. became the world’s 

number one energy-producing Nation—and it’s time we start acting like it. 

Unfortunately, the scarcity mindset is still embedded in our national energy policy. Rising energy production requires more energy infrastructure—what I have 

called the Architecture of Abundance. Both the energy legislation and the QER include a number of ideas for upgrading and expanding the nation’s energy infrastructure. And in light of the recent pipeline spill in California, I would add that both 

aim to ensure that this new infrastructure is built with state-of-the-art technologies 

that reduce the environmental and safety risks. But our energy abundance can be 

more than just an economic success story; it can be a foreign policy success story 

as well. That is why the recently released discussion draft of our energy diplomacy 

title is so important. 

The discussion draft builds on the extensive work done by this subcommittee on 

LNG exports. At numerous hearings over the last two years, we heard from many 

of our allies around the globe who said they would much rather get their natural 

gas from us than the likes of Russia or Iran. That message was underscored last 

month when I led a high-level delegation to several of our European allies, including 

Ukraine, and we came away with a profound new understanding of just how vital 

these partnerships can be. In established parts of the EU, leaders are coming together to promote a unified energy market because of its potential for security, affordability, and innovation. In Ukraine, where the commitment to freedom and democracy is hard-fought each and every day, their energy aspirations are fundamental to their dreams for a peaceful future. 

While our discussion draft encourages North American energy cooperation and 

cross-border infrastructure, opportunities for energy diplomacy extend well beyond 

our own continent. For example, there is broad recognition that U.S. LNG exports 

will benefit the U.S. economy, our consumers, and our allies. While the same could 

be said for oil exports, a statutory ban has prevented us from pursuing these benefits for the last four decades. It’s time that Congress considers revising the ban on 

crude oil exports. 

As with natural gas, America now has enough oil production to make increased 

exports feasible, especially the lighter grades of crude that the QER notes have experienced the most rapid supply increases. 

Economic and foreign policy experts across the political spectrum believe that expanding the markets for American oil would be a net jobs creator at home while 

enhancing our geopolitical influence abroad. At the same time, reports from the 

GAO, CBO, and Energy Information Administration all point to reductions in the 

price of gasoline as a result of increased oil exports. In other words, oil exports can 

be a win for the American people and a win for our allies. 

The energy sector has been the nation’s most significant jobs creator in recent 

years, but with the drop in oil prices as many as 100,000 energy industry positions 

have been lost. The case for creating more jobs by expanding the market for American oil is a key reason why oil exports should be on this Committee’s agenda this 

7 

year. And while we are not currently considering any such provisions in this pending legislation, I look forward to working with Mr. Barton and my colleagues on 

both sides of the aisle to ensure that we get the policy right. Thank you. 

Mr. WHITFIELD. Gentleman yields back. 

At this time, recognize the gentleman from New Jersey, Mr. 

Pallone, for 5 minutes. 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you, Chairman Whitfield and Ranking 

Member Rush. 

Let me begin by welcoming Secretary Moniz back to the committee, and congratulating you on completing the first installment 

of the Quadrennial Energy Review. It is a truly comprehensive look 

at our Nation’s energy infrastructure, and its recommendations will 

help us chart a path forward in the rapidly changing energy sector. 

This installment relates to the transportation, storage, and distribution of energy. These TS&D connections between suppliers 

and users can impact our energy reliability and security, and affect 

our ability to meet environmental and economic goals. TS&D infrastructure is vulnerable to a wide and expanding array of threats 

from natural disasters to physical and cyberattacks, so it is important we thoroughly understand these vulnerabilities and how to 

mitigate their impacts. At the same time, its modernization can 

help achieve meaningful greenhouse gas reductions and other environmental goals, while enhancing safety, security, and reliability. 

Ultimately, the OER represents the forward-thinking we need to 

ensure a smarter, more resilient, cost-effective, and environmentally sound energy system for the future. And I look forward 

to working with you, Mr. Secretary, to translate these important 

ideas into legislation and law. 

I wish I could be as upbeat in discussing the majority’s Energy 

Diplomacy Discussion Draft. Rather than building on the strong relationships with our North American neighbors, the majority has 

chosen to resurrect controversial legislative proposals that have already drawn democratic concerns and presidential veto threats. For 

example, the bill would eliminate the current presidential permitting process for liquid and gas pipelines, and electric transmission 

lines that cross the U.S. border with Mexico and Canada, and it replaces the process with one that effectively rubberstamps permit 

applications and eliminates any meaningful environmental review. 

While it now would only take effect after President Obama leaves 

office, and specifically excludes the Keystone Pipeline, it still appears to allow TransCanada to avail itself of the new process by 

reapplying with a revised route. The provision also limits federal 

approval and environmental review to the small segment of the 

project that physically crosses the national border. It also creates 

a rebuttal presumption that these projects are in the public interest; shifting the burden of proof to project opponents. This all but 

guarantees permit approval, and virtually eliminates the opportunity for protective permit conditions. 

The draft bill also recycles LNG export language designed to address nonexistent delays at the Department of Energy. In fact, 

8 

DOE recently testified, that ‘‘Right now, there are zero applicants 

sitting in front of us for a decision. The last application that came 

out of FERC, we turned that around in 1 day.’’ Nonetheless, the 

bill would make changes to an otherwise successful process. 

And finally, another provision would create a taskforce, burdening federal energy regulatory actions with additional red tape, 

and undermining environmental considerations. In fact, it speaks 

volumes that the very agencies tasked with natural resource and 

environmental management, like EPA and DOI, are excluded from 

the taskforce. 

So I hope this committee can start to work towards consensus 

legislation instead of resurrecting problematic issues of the past. 

But thank you, Mr. Chairman. I yield back. 

Mr. WHITFIELD. Gentleman yields back. 

That concludes the opening statements for today. And, Mr. Secretary, once again, thank you for joining us. We do look forward to 

your insights on these important issues. And I would like to recognize you for 5 minutes for your opening statement. 

STATEMENT OF HON. ERNEST MONIZ, SECRETARY, 

DEPARTMENT OF ENERGY 

Secretary MONIZ. Well, thank you, Chairman Upton and 

Whitfield, and Ranking Members Pallone and Rush. 

Mr. WHITFIELD. I am not sure the microphone is on, but—— 

Secretary MONIZ. The light is—yes. OK. Start again. 

OK. Well, again, Chairman Upton and Whitfield, and Ranking 

Members Pallone and Rush, distinguished members of this subcommittee, thank you for the opportunity to be with you again 

today. And I really appreciate the leadership that this committee 

has shown in working towards comprehensive and bipartisan energy legislation that includes many of the topics in the QER first 

installment. I look forward to working with you to move these ideas 

forward, and really appreciate in the opening remarks the statements about common ground and the opportunities we have to 

work together. 

As was already stated, the U.S. has reaped enormous benefits 

from our energy revolution the last several years which, I point 

out, includes, of course, hydrocarbon production, but also dramatically increased renewables deployment to energy productivity 

gains. This revolution, however, has produced changes that are 

challenging our energy infrastructure. And to be direct, we need to 

modernize and transform our energy infrastructures and our 

shared commodity infrastructures. This will require major new investments, and we have to get it right. 

We should acknowledge that, while the choices we make and the 

decisions we take today and in the near future are critical, we also 

have to acknowledge that the choices and decisions that we fail to 

take in a timely way are very important for generating our infrastructure for the 21st century. 

To help guide these investment choices, the QER provides recommendations based on a 15-month, multiagency process that included 14 public meetings across the country, and consultations 

with Canada and Mexico. The QER focuses on TS&D, including the 

9 

network of pipelines, wires, storage, waterways, railroads, and 

other facilities that form the backbone of our energy system. 

I ask the chairman’s permission to submit the summary version 

of the QER into the record. 

The full QER is available online, and you have my written testimony, so let me just take the opportunity to highlight five crucial 

tasks that we need to take. 

First, our infrastructure and investments can and must serve energy security in a broader sense than the oil-centric focus of the 

last several decades. An example is found in the definition of energy security that the U.S. and our G7 allies developed after the 

Russian aggression in Ukraine that includes seven critical elements in a modern view of energy infrastructure. Supply diversification, for sure, but also transparent markets, greenhouse gas 

emissions reductions, enhanced efficiency, clean energy, infrastructure modernization, and emergency response. This doesn’t mean 

that global oil disruptions are not a concern. Indeed, in the context 

of the QER and its recommendations, modernizing the SPRO both 

from a physical distribution standpoint, as well as the authorities 

for its use, is a major area of focus. Through its analysis of resilience and infrastructure modernization, the QER goes beyond global oil supply disruptions as the single focus of energy security policy, leading, for example, to recommendations related to regional 

fuel disruptions, as we have seen across the country. More coordinated state planning is also essential. And most notably, we feel 

that state planning grants to help states update and expand their 

emergency preparedness and security strategies and exercises to 

enhance electricity reliability, to accommodate several changing 

factors, are all critical. Other ways to improve energy security include programs to make our energy infrastructures more resilient 

to a range of hazards and vulnerabilities. These are addressed in 

part through the QER’s recommendation for a pre-disaster hardening grant program, options for transformer reserves, and a systematic program to replace aging unsafe natural gas distribution 

pipes. 

Second, QER and its recommendations underscore the indispensable role of states. These really are test beds. We need to advance 

studies such as a new framework for evaluating energy services to 

help things like rate structure development. 

Third, the QER analysis showcases the importance and complexity of how our energy revolution challenges our shared transport infrastructures. Frankly, when we started the QER, we did 

not anticipate that we would end up with this as a major area of 

focus. However, the dramatic oil production increases in unconventional locations, coupled with things like the RFS and pending exports of natural gas, have placed strains on those transport infrastructures; rail, barge, locks, port facilities, and the like. The QER 

includes recommendations focused on innovative funding mechanisms for these infrastructures and, for example, recommends a 

program for port connectors being stressed by new energy supplies. 

Fourth, the QER recommends coordinated efforts for skills training, and recruitment of works to build and staff our modernized energy infrastructure system, and support jobs for working families. 

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10 

ricular and standards that includes a special emphasis on training 

for veterans, on minorities and energy, is critical to our energy future. I might note that yesterday, 85 minority interns started working at DOE for the summer. I also created the Job Strategy Council 

to look at how we can capture the energy sector opportunities that 

we have for new jobs. 

And finally, fifth, we need to acknowledge the critical federal role 

in incentivizing our energy infrastructure investments. While the 

bulk of the QER recommendations fall under this committee’s jurisdiction, the Congress has other committees with equities in energy 

infrastructure, especially in shared infrastructure and North American energy integration. 

I would just note in closing that the Administration’s most recent 

budget request includes a down payment for funding some of the 

QER’s key recommendations at about half a billion dollars, however, in the current budget environment where sequestration has 

placed artificial caps on spending, DOE’s programs and the shared 

infrastructure programs for the Corps of Engineers and others, 

frankly, placed these critical programs in competition with very restricted budget allocations. And so, for example, the House Appropriations mark does not meet our needs for energy infrastructure. 

In closing, Department of Energy and all the agencies that developed this report and its recommendations see great potential for 

benefit, and we look forward to working with this committee again 

to find bipartisan ways of advancing our TS&D infrastructure. 

Thank you, and I would be pleased to answer questions. 

[The prepared statement of Secretary Moniz follows:] 

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Mr. WHITFIELD. Well, thank you, Secretary Moniz. 

And at this time, I will recognize myself for 5 minutes of statements and questions. 

We all recognize that the Clean Energy Plan has been at the 

very center of President Obama’s initiatives, and I think everyone 

recognizes that the tension between the Obama Administration and 

republicans in the House and Senate, as well as elsewhere, has 

been—many of us feel that the President is moving so quickly 

through regulations without adequate communication with the legislative body, and while we all recognize the need for an all-of-theabove policy emphasizing clean energy, we look at Europe and we 

see how some policies over there in which countries like Germany 

have made decisions to eliminate nuclear energy, has created low 

wholesale prices, extremely high retail prices, and as a result, Europe has some real economic problems. So what we want to be sure 

about in America is, we made this mad rush for change, that we 

do so in a way that we can protect the reliability, the affordability, 

so that America can continue to be competitive in the global marketplace. 

Mr. McKinley, who left, was just telling me that in West Virginia, they have lost 45 percent of their coal jobs. And so this economic impact affects all of us, and that is why we are trying to 

move this energy bill. That is why the Quadrennial Energy Review 

is so important to look at all aspects of everything because everyone knows that we are fortunate, we have an abundant energy supply, natural gas particularly, and oil as well, but we have infrastructure needs. And it is very difficult to get permits, it takes 

years, and so as we are shutting down coal plants through regulatory orders, we don’t always have the capability to get the energy 

product to where it needs to go. And so that is what this is all 

about. 

So one of the things I just wanted to ask you, you were talking 

about the development of this first installment was a colossal undertaking with at least 22 agencies involved and more than a year 

of work. And if this is the first installment of the QER, will there 

be a new installment each year for the next 3 years, and then the 

process will begin all over again? Is that what your understanding 

is? Yes, there you go. 

Secretary MONIZ. I apologize. So this first installment, frankly, 

did take us a few more months than we had hoped. We are now 

in the process of working across the government to settle on the 

next installment. We would like to get something into your hands 

early next year again, and then again at the end of 2016. 

Mr. WHITFIELD. Yes. Now—— 

Secretary MONIZ. And clearly, this will be now expanding into 

the supply and demand ends of the energy sector. 

Mr. WHITFIELD. Yes. My time is already running out here. I want 

to focus on one issue—maybe because I was in the railroad industry, but railroads provide a vital transportation network for all 

sorts of commodities in America, and historically railroads have 

generated lots of income from moving coal. And the coal shipments 

have dropped dramatically, even though our coal exports are up, 

despite problems with trying to open up coal export facilities in 

Washington State. But many people are genuinely concerned about 

21 

the financial viability of the railroad industry with this extreme reduction in coal transportation. Was that discussed in the quadrennial review process from your personal knowledge? Was there any 

discussion about that at all? 

Secretary MONIZ. Yes, Mr. Chairman. Of course, the Department 

of Transportation would have prime responsibility in that area, but 

there were discussions because we did see in some cases, especially 

in the upper Midwest, some coal shortages for a while, but it was 

not because the trains weren’t operating, they were just carrying 

other commodities which, my understanding, may have had a higher margin for them. 

So one of the initiatives that we have taken, and the DOE EIA 

is working with the Surface Transportation Board at DOT, first of 

all, to try to get more data and understanding of how commodities, 

including energy commodities are moving on the railroads, because 

it is coal, it is obviously oil, and ethanol competing, in a certain 

sense, with a whole variety of other commodities. 

Mr. WHITFIELD. Yes. 

Secretary MONIZ. But I think more data and data transparency 

will be very important—— 

Mr. WHITFIELD. Yes. 

Secretary MONIZ [continuing]. For federal and state planning. 

Mr. WHITFIELD. Yes. Because we do have to have a strong financial railroad sector just because of the impact it has on our entire 

economy. 

So my time has expired. At this time, I would like to recognize 

Mr. Rush for 5 minutes. 

Mr. RUSH. Thank you, Mr. Chairman. 

Mr. Secretary, as I asserted in my opening statement, I believe 

that you will go down as one of the most consequential Energy Secretaries of our time. And again, I want to commend you on your 

fine work and the initiatives that you have established during your 

tenure. And as you know, Mr. Secretary, when one attempts to 

change the culture and the practices of institutions that have been 

doing things a certain way for a long time, then inevitably there 

will be resistance and apprehension when those entities are asked 

to change. And it is with this in mind, Mr. Secretary, that I ask 

you to follow up with me to gage where we are with some of the 

initiatives that you and I have discussed before in the past. Specifically, I would like to discuss with you the issue of inclusiveness 

and outreach at the publicly funded national labs including, but 

not limited to, Argonne and Fermi in my state. And my office will 

be in touch with you to schedule a meeting for some time in the 

very near future between you and I. It is my opinion, Mr. Secretary, that they are—Argonne and Fermi specifically, are faking 

and fumbling on the issues of inclusiveness and outreach. It seems 

to me that they are trying to run out the clock on you and I. They 

are not seriously taking our requests and our initiatives and our 

discussion to heart. 

Mr. Secretary, on another issue, I would like to get your thoughts 

and feedback on the QER legislation that was introduced in the 

Senate. And I—as I said before, I will be offering a companion bill 

in the House soon. As you know, Mr. Secretary, this bill will simply 

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22 

ment for biannual energy processing plan with a quadrennial energy review. And can you give the subcommittee some feedback on 

this bill? From your understanding, would DOE take the lead in 

addressing a QER, and is there a need for legislation such as what 

I previously discussed? 

Secretary MONIZ. Thank you, Mr. Rush. Yes, by the way, on the 

consequential issue, I hope they are positive consequences. And I 

might also at this point say that I think our energy policy and Systems Analysis Office did a heroic job in marshaling this huge QER 

forward. 

On your first question, and culture, et cetera, I might add that 

there is a wonderful expression by Peter Drucker, the famous management consultant, that culture eats strategy for breakfast. We 

can change rules but it is harder to change culture. But I think we 

are certainly making advances, certainly on the issue of minorities 

and energy, and if you know otherwise, I would like to discuss it 

with you because I do see enthusiasm going forward. Argonne, for 

example, one of their initiatives is in terms of making sure that minority businesses are quite aware of the opportunities for procurement. We also have, and Dot Harris has been a leader in our placebased initiative. So a good example is working, in this case, in 

southwest Louisiana with the enormous construction going on driven by natural gas, for training minorities to get some of those jobs. 

In terms of research collaborations, another example would be our 

Jefferson Lab, working closely with Hampton University. I mentioned the interns already. So we are going to keep pushing on all 

these fronts, and I want to work with you on that, and if you find 

problems, let me know because I will be sure to—— 

Mr. RUSH. I certainly will—— 

Secretary MONIZ. OK. 

Mr. RUSH [continuing]. Mr. Secretary. 

Secretary MONIZ. Thank you. Secondly, on the QER and the possibility of legislation, let me say that I certainly share the driver 

of this, which is that I think—and by the way, the initial reaction 

to the QER, including in this hearing, I think is—suggests that institutionalizing this could really be very important for continuing 

a bipartisan Administration-Congress discussion, so I am happy to 

work with both chambers in terms of how that might go forward. 

I would say that Department of Energy, in this first installment, 

clearly did provide kind of the analytical horsepower for it, but I 

do want to note that the Executive Office of the President also 

played a crucial role in being able to convene 22 agencies to come 

together to work on it. So anyway, we would be happy to discuss 

that further. 

Mr. RUSH. Thank you. 

Mr. WHITFIELD. Gentleman’s time has expired. 

At this time, recognize the gentleman from Michigan, Mr. Upton, 

for 5 minutes. 

Mr. UPTON. Thanks again, Mr. Chairman. 

Mr. Secretary, in my opening I reaffirmed the desire of this committee to work with you and the Administration to find areas of 

mutual agreement on some QER legislative recommendations, and 

we look forward to that, and receiving technical assistance on some 

of the other sections of the bill as well. 

23 

One of the areas that I wanted to zero-in on is SPRO this morning. As I note in your response to the committee yesterday, the 

SPRO was established in 1975 and it is the largest government petroleum reserve in the world. It has been used successfully on multiple occasions to respond to different types of energy supply disruptions. But it is now 2015 and global and domestic oil markets 

have changed significantly, we would all recognize that, and SPRO 

needs to be modernized. 

So as you know, the committee recently voted a—to drawn down 

a limited amount of SPRO oil to pay for our 21st Century Cures 

package beginning in 2018. And as you conduct the ongoing study 

to recommend the new size and role of SPRO going forward, would 

you support an additional change that would allow the President 

to draw down and sell surplus SPRO crude oil in order to use the 

funds to pay for operations and maintenance in line with the DOE 

budget request and potential modernization plans? In other words, 

using what we call mandatory savings to provide for the modernization and need improvements that really have to take place 

in the next number of years. And I would imagine that would be 

a pretty small draw down. 

Secretary MONIZ. Mr. Chairman, well, first of all, as you know, 

I have some considerable concern about using the SPRO for anything other than energy security and resilience issues, for which it 

is intended. Now, first of all, I have to say, the issue of what is or 

might be called surplus, I think, is really part of the study going 

on because we understand that there are certain IEA requirements, but that may or may not be the metric for us to use. That 

is the first thing. Secondly, we did identify, of course, in the QER, 

excuse me, needs right now for modernizing the SPRO for—well, 

there are issues of maintenance, there are issues of modernization, 

and the particular issues of addressing distribution systems for getting SPRO oil onto water, in particular, in an emergency. We estimated that as $1 1⁄2 to $2 billion. That is part of the discussion 

with Congress, how to address that. Clearly, what you propose 

would be a case in which, if one were to do that, it would be being 

used, I would argue, for the energy security intent of the petroleum 

reserve. 

Mr. UPTON. So as you know, the QER recommends more flexibility and anticipatory authority to initiate a SPRO drawdown. Do 

you envision a greater role for SPRO to moderate global prices? 

Secretary MONIZ. The motivation for recommending somewhat 

greater anticipatory authority is not motivated by a desire to use 

the SPRO to manipulate oil prices. The issue is that the current 

anticipatory authorities are highly restrictive. Up to 30 million barrels, and only if that keeps you above 500 million barrels. So there 

are issues there, and we feel that should a larger drawdown be required, or if the SPRO were at 500 million barrels, one shouldn’t 

have to wait to see the consequences on consumers of a spike in 

global oil prices before one can act. So I think that is the spirit, 

as opposed to manipulating oil prices. 

Mr. UPTON. So I would note, as the QER discusses, the last time 

SPRO had a major release in reaction to Libya was back in 2011. 

Seems like yesterday, but it was 2011. Since then, the supply situation has greatly changed for sure, as demonstrated in the test sale 

24 

this last year. If there is an interruption somewhere in the world 

that doesn’t impact the supply to U.S. refiners, would it make any 

sense at all to export SPRO crude? 

Secretary MONIZ. Well, once again, I would say that that should 

be part of the studies really, that are going on, but I might say that 

it is hard to see how a major global disruption would avoid impacting our imports, because again, we still import 7 million barrels a 

day, only because with a major disruption, even if that, let’s say, 

country is not directly importing to us right now, there would probably be a redistribution of the market that would impact our imports. But nevertheless, hypothetically, if that were the case, I 

think there would still be an issue of putting SPRO out would have 

the effect of backing our imports that would then equilibrate in the 

global market. So we could discuss that further. 

Mr. UPTON. My time has expired. Thank you very much for your 

appearance again today. 

Secretary MONIZ. Yes. 

Mr. WHITFIELD. At this time, recognize the gentleman from New 

Jersey, Mr. Pallone, for 5 minutes. 

Mr. PALLONE. Thank you, Mr. Chairman. 

Secretary, climate change, as you know, is real and we are already feeling its effects across the country. The damaging impacts 

range from heatwaves and droughts, to reduced crop yields and increased wildfires. Every region in the country and every part of the 

globe is affected. I am concerned about impacts of extreme weather 

events and sea level rise that are already problems that we have 

with our energy infrastructure. So my question is, the QER outlines a number of findings in this area, how is your energy transmission, storage, and distribution, or ETS&D infrastructure, vulnerable to the impacts of climate change? 

Secretary MONIZ. Thank you Chairman Pallone. First of all, as 

the data in the QER show, we have been seeing increasing impacts, 

probably impacting the economy, at the order of $25 billion a year 

on average over the last decade. And with rising sea level, the effects of storms, major tropical storms, for example, are amplified. 

So we feel it is very important now to address the hardening of 

these infrastructures, not only coastal, but coastal is one major 

issue, and that is why we recommend a joint set of initiatives. One 

is to provide energy assurance grants for states to do planning, and 

to provide a basis for the states to then compete for what we recommend as a several billion dollar opportunity for these hardening 

kinds of activities. I will give one example. It happens to be in New 

Jersey. It was not part of the recommendations here, but in New 

Jersey, there was the case where we cost-shared with the state, a 

study on implementation of a very significant micro grid to protect 

electrified transportation corridors. The state then used that study 

to compete for Sandy recovery money, and in fact, got several hundred million dollars to implement that. That is the kind of thing. 

Do these studies get technical assistance, and then have the opportunity to move forward with cost sharing major resiliency projects. 

Mr. PALLONE. Well, I appreciate your mentioning our New Jersey 

grant because, obviously, we did have a lot of vulnerabilities during 

Super Storm Sandy. We saw a breakdown of the infrastructure and 

services, both electricity and water supply. 

25 

But in terms of this competitive grant program that is going to 

promote innovative solutions for infrastructure resilience, reliability, security, just give me a little more information about how 

that program would work. I know you mentioned the New Jersey 

program, but what other kinds of projects would be eligible for 

those grants? 

Secretary MONIZ. Well, it could be, again, any kind of project 

that hardens infrastructure. The electric grid has clearly shown 

vulnerability to storms. So it could be things like I mentioned with 

micro grids. It could be the use of advanced technologies. I could 

mention some things like synchrophasors that would allow system 

operators to respond much more quickly to something that is happening, to protect spreading of a blackout, for example. It could be 

in terms of fuels requirements. One of the recommendations that 

we have in there is to expand analyses of what different kinds of 

regional product reserves might do. Now, this is a case where, 

again, in the northeast and New Jersey—— 

Mr. PALLONE. Right. 

Secretary MONIZ [continuing]. We have already moved there, but 

there are issues in California, there are issues in the southeast, 

there could be issues in the upper Midwest. And so we recommend 

that. And there could be opportunities there for new resiliency 

projects. 

Mr. PALLONE. All right. Thanks a lot. I do want to applaud you 

for your efforts to strengthen these vulnerable and critical energy 

infrastructures, especially in the face of global climate change. So 

thanks again. 

Thank you, Mr. Chairman. 

Secretary MONIZ. If I—— 

Mr. WHITFIELD. At this time—— 

Secretary MONIZ. If I may, I might just add that this is an example of the importance of the broader view of energy security, including resilience of our infrastructure. 

Mr. PALLONE. Yes, exactly. Thank you. 

Mr. WHITFIELD. Thank you. At this time, I will recognize the 

gentleman from Texas, Mr. Barton, for 5 minutes. 

Mr. BARTON. Well, thank you, Mr. Chairman. And, Mr. Secretary, welcome back. 

Mr. Rush and you seem to have a mutual admiration society 

going. Superstar Energy Secretary. I wouldn’t go—— 

Mr. RUSH. Don’t get jealous. 

Mr. BARTON. Say what? 

Mr. RUSH. Do not get jealous. 

Mr. BARTON. Do not get jealous? Well, I wouldn’t go quite so far 

as superstar, but my daughter has a saying that she learned in college, when something is really cool, it is money. And it is money. 

When you say it is money, it means that, man, that is hot and it 

is cool and it is right on the bean. Well, I would say Moniz is 

money. So not superstar but money. 

Now, you know what I am going to—— 

Secretary MONIZ. I asked for this. 

Mr. BARTON. I am going to give you a chance to show just how 

money you are. What do you think I am going to ask you right 

now? 

26 

Secretary MONIZ. I don’t know but I am covering my wallet. 

Mr. BARTON. You heard the chairman’s opening statement. He 

talked about oil exports and, as you well know, Mr. Secretary, back 

in the ’70s we had the Arab OPEC Embargo, and this committee 

and the Congress passed a lot of legislation to deal with that, most 

of which has been repealed. We had price controls on the wellhead 

natural gas prices, we had price controls on crude oil, we had even 

retail price controls on gasoline. We limited what natural gas could 

be used for. That has all been repealed. The only thing that hasn’t 

been repealed is the ban on crude oil exports. 

Now, the U.S. is number one in the world in oil production; over 

10 million barrels a day. World use is somewhere around 94, 95 

million barrels a day. Would you agree that if we were to let our 

domestic oil potentially be exported, that it would, at a minimum, 

keep prices from going up on world markets, and it is a possibility 

that the world oil price might go down? Would you agree with that? 

Secretary MONIZ. I think the key issue, Mr. Barton, is whether 

or not in a country like ours, that still imports 7 million barrels 

a day, the question would be whether that did or did not stimulate 

any appreciable additional production. And that would be the issue 

in terms of global price. Internally, there would be an issue as to 

how rents are shared between, say, refiners and producers, but in 

terms of the economy-wide, the real issue was whether there is 

more production, and certainly in today’s market, it is hard to 

imagine that happening. Now, in a future market—— 

Mr. BARTON. I am not a Harvard economics professor—— 

Secretary MONIZ. Nor am I. 

Mr. BARTON [continuing]. But I did go to graduate school, and if 

we want to talk about sharing of rents, our refiners are taking 

those rents and putting them in their pockets today. They are not 

sharing those with the retail consumers. If we let the producers 

have the option of putting that oil on the world market, the consumer in the United States could potentially benefit from the world 

price going down, and I think you will agree with me that retail 

gasoline prices are basically set based on the world price for crude. 

You will agree with that. 

Secretary MONIZ. Absolutely, yes. 

Mr. BARTON. So—— 

Secretary MONIZ. EIA has confirmed that. 

Mr. BARTON. So I have a list here of studies where they have 

looked at what would happen to the price in the United States at 

retail for gasoline, and the Brookings Institute, NERA, Resource 

for the Future, Council on Foreign Relations, Bipartisan Policy 

Center, Baker Institute, Center for Global Energy Policy at Columbia University, Energy Policy Research Institute, Aspen Institute, 

Progressive Policy Institute, IHS Energy, ICF International Heritage Foundation, American Council for Capital Formation, Congressional Budget Office, Energy Information Administration, General 

Accounting Office, Federal Reserve Bank, have all concluded that 

if we allowed our oil to be exported, there would be no increase in 

the domestic price of—for gasoline, and in most cases it might go 

down. Now, those aren’t oil company hacks; those are bipartisan 

usually, I would say, objective institutes. You have to be aware of 

some of those studies. 

27 

Secretary MONIZ. Well, yes. And again, I think they are all in 

agreement with the fundamentals that, again, the issue is whether 

or not such a move would lead to an increase of production of any 

appreciable magnitude. If it doesn’t, then there is essentially no impact on price. 

Mr. BARTON. Yes. My time has expired—— 

Secretary MONIZ. Yes. 

Mr. BARTON [continuing]. But if you will send one of your crack 

aids to the Republican Study Committee Taskforce on Energy Seminar this afternoon, you will hear 4 or 5 experts all say that if we 

allow our oil to be exported, U.S. production will stabilize and probably go up. 

Secretary MONIZ. Again, that is the key issue. We—— 

Mr. BARTON. Yes. 

Secretary MONIZ. I think we all agree on the facts. 

Mr. BARTON. OK. Thank you, Mr. Secretary. Thank you, Mr. 

Chairman. 

Mr. WHITFIELD. At this time, the chair recognizes the gentleman 

from California, Mr. McNerney, for 5 minutes. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

Mr. Secretary, I do appreciate the big effort that went into producing this QER document. Nice work. The document does recommend legislation actions. Would you elaborate on 1 or 2 of the 

most urgent actions that would be required? 

Secretary MONIZ. Well, certainly, I think one of the very important ones, as I already mentioned, is this issue of providing funding, particularly for states, to compete for good projects that will 

provide resiliency of infrastructure. I think that is a very important 

one. Another one is we recommend a fund that again would allow 

for competition for accelerating the modernization of natural gas 

distribution infrastructure for both environmental and safety reasons. Clearly, the Federal Government should not and cannot pay 

for what may be a quarter trillion dollar bill, but what we recommend is acceleration in which the Federal Government could 

help absorb any great increase for low income families. Those are 

two examples of the number. 

Mr. MCNERNEY. Very good. One of the things that is discussed 

is the potential for energy storage and grid modernization, grid resilience. Do you think that there is a short-term potential for that 

energy storage to be useful in grid resilience and in lowering the 

cost and improving access for renewables and so on? 

Secretary MONIZ. Yes. Well, in fact, we all know California is in 

the lead, as if often the case—— 

Mr. MCNERNEY. Right. 

Secretary MONIZ [continuing]. In terms of storage. And clearly, 

except for the places geographically where pumped storage is available, we still need to bring down the costs of storage, but they are 

coming down. They could be a game changer in terms of largescale, variable renewables, but also distributed storage at the 

household or commercial enterprise level could be another game 

changer, particularly in terms of distributed generation 

enablement. 

Mr. MCNERNEY. Are we pretty close to having the technology 

available? 

28 

Secretary MONIZ. Well, the technology is available. It is the cost. 

And we probably need another factor of two to three reduction in 

the cost to make it wide-spread available. 

Mr. MCNERNEY. Well, thank you. Do you feel that the regional 

grid reliability would be put at risk by the Clean Power Plan? 

Secretary MONIZ. Well, we don’t see any evidence in our analyses 

yet that this could not be managed in a pretty normal way. For example, we did a specific analysis in terms of the natural gas transmission infrastructure because of the issues raised in terms of dramatically expanding gas use in the power sector, and that found 

that while one would probably have some regional issues to develop, it was not like we needed a massive program because we actually have been building out that infrastructure pretty substantially for the last 15 years, and frankly, there is overcapacity. So 

we don’t see that as, you know, as a particularly difficult issue. 

Mr. MCNERNEY. What would be the best way to deal with the regional question then that you just referred to of grid reliability? 

Secretary MONIZ. I think it would be just in the normal process. 

As the supply distribution is understood in that region, the companies would go through the usual FERC process for, let’s say, interstate gas transmission pipes. 

Mr. MCNERNEY. Well, there seems to be a patchwork of transmissions citing initiatives across federal agencies. The QER highlights a need to improve coordination between all the stakeholders 

for transmission-permitting processes. Do you believe that the 

Rapid Response Transmission Team has been effective, and should 

its role be expanded? 

Secretary MONIZ. I believe that it is—what I would say is I think 

it has really gained traction. It has been—in my view, I will be 

honest, I think it is a little bit slow getting going, but I think now 

the whole pre-application standardization has kind of come into 

play, and I think that we do need to, in fact, keep up the pace and, 

if anything, strengthen it, yes. 

Mr. MCNERNEY. OK, thank you. 

Mr. Chairman, I yield back. 

Mr. WHITFIELD. Gentleman yields back. 

At this time, recognize the gentleman from Texas, Mr. Olson, for 

5 minutes. 

Mr. OLSON. I thank the chair. And welcome, Secretary Moniz. 

My first question is about the Federal Power Act. Under Section 

202(c), DOE, you, can order a power plant to stay running during 

a grid crisis. In following your order, the plant might squeak past 

their clean air permits. Unfairly, that plant can be fined and sued 

by others for doing so. One regulator says go, another says stop. 

That plant has to decide whether they want to acquiesce in a 

power shortage, maybe a brownout or blackout, or cut a check, 

breaking the permit for just a few days, maybe a few hours. I have 

a bipartisan bill with Representative Doyle and Green to fix this 

in the energy package we are working on. This is not about a company riding roughshod over environmental laws; we are talking 

about days or hours in a crisis. 

The other week, FERC and NERC endorsed our bill. Your predecessor, Secretary Chu, told me in this committee that he is ‘‘very 

supportive’’ of the idea. The bill has passed this committee three 

29 

times now, and the whole House twice, in the 112th and 113th 

Congress. 

And so my question to you is, can I count on your support in the 

114th Congress, will you be very supportive of the bill like your 

predecessor? 

Secretary MONIZ. And, Mr. Olson, thank you. You have asked me 

this question before, and let me say that the answer is basically 

yes. I know our DOE staff has worked with both sides on this, and 

I think we are quite comfortable with it. Thank you. 

Mr. OLSON. Great, thank you for that clarification. As you know, 

my home State of Texas has half our southern border, over 1,200 

miles with our neighbor to the south, Mexico, and we know how 

important that relationship with Mexico is for our trade. Your QER 

points out that we trade tens of billions of dollars in energy each 

year with Mexico. 

Secretary MONIZ. Sixty-five. 

Mr. OLSON. Sixty-five. I like that even better. In fact, some of 

Texas’ only power line connections outside of ERCOT come from 

our neighbor to the south, Mexico. You might recall that those lines 

prevented rolling blackouts and brownouts with crises in the fall— 

I am in sorry, in the early winter of 2011 and August of that same 

year. My question is, we know this oil plays—we know that oil and 

gas—shale plays don’t stop at the southern border. The new Administration in Mexico is reforming its energy economy, and I 

think those opportunities will expand in the future. Your QER on 

our energy package will address the topic North American energy. 

I believe better coordination and trade will be critical in the years 

ahead. My question is, can you please tell me what you see as the 

next major opportunities for North American energy and where 

that relationship is headed? 

Secretary MONIZ. In particular, I would say actually last week, 

I spent four, I want to emphasize, workdays in Mexico with Western Hemisphere and other energy ministers. The energy reform in 

Mexico, I think, offers tremendous opportunities for us. Clearly, in 

the hydrocarbon sector. We know that. Our companies are going to 

Mexico in the current auctions, and are prepared to offer lots of 

technical assistance to get engaged in the shale plays as well. However, in discussions with Minister Joaquin, the Energy Minister of 

Mexico, he has emphasized something that I agree with, and that 

is that the reform of the electricity sector may actually offer qualitatively new opportunities because the reform, I think, will bring 

our systems of regulation, et cetera, and standards much more into 

alignment, as we have with Canada, where we have a completely 

integrated electricity system. 

So we are looking forward to that. It is going to be a major focus. 

We have both a bilateral working group that I chair on the American side with the—it is a multiagency group, with the Minister of 

Environment in Mexico, Minister Guerra. And then I also am one 

of the three chairs of Canada, U.S. Mexico trilateral energy ministers, and we are already well along into a trilateral data cooperation. And just last week, we have a release that went out, I would 

be happy to get it to you—— 

Mr. OLSON. Yes, thank you. 

30 

Secretary MONIZ [continuing]. Where the three of us announced 

that we are now going to expand the cooperation—— 

Mr. OLSON. Right. 

Secretary MONIZ [continuing]. With a full agenda laid out, which 

will include things like emissions and hydrocarbon production, and 

energy infrastructure issues. So it is a very, very active—— 

Mr. OLSON. Thank you, sir. I am out of time. I want to extend 

an invitation to come down and see the work at MIT in your current position, the Petra Nova Project in Thompsons, Texas, the 

only viable carbon capture and ancillary recovery project in the 

whole world. Come down and see it. You will love it. 

I yield back. 

Mr. WHITFIELD. At this time, recognize the gentleman from 

Texas, Mr. Green, for 5 minutes. 

Mr. GREEN. Thank you, Mr. Chairman. Mr. Secretary, you will 

get an overdose of Texas. 

I see my colleague, Joe Barton, is not here, but I don’t know if 

our members heard that his mom passed away last week, and—— 

Secretary MONIZ. Sorry. 

Mr. GREEN [continuing]. I just wanted to express regret to Joe. 

Mr. Secretary, welcome back. According to the DOE Web site, for 

projects that cross the U.S. international border, DOE must comply 

with NEPA requirements to consider environmental consequences 

of a proposed project. Mr. Secretary, are you familiar with that requirement? 

Secretary MONIZ. Yes, yes. 

Mr. GREEN. When making cross-border decisions, does DOE adhere to NEPA regulations and guidelines set forth by the Council 

on Environmental Quality? 

Secretary MONIZ. Yes. 

Mr. GREEN. Does this include cumulative indirect impacts? 

Secretary MONIZ. I am sorry, Mr. Green—— 

Mr. GREEN. Does that—— 

Secretary MONIZ [continuing]. Can you modify the question? 

Mr. GREEN. When making these decisions, does DOE adhere to 

NEPA regulations and guidelines set forth by CEQ, and you said 

yes, but does that analysis include cumulative and indirect impacts? Does the NEPA process include that? 

Secretary MONIZ. I guess I am not quite sure if that is actually 

part of the NEPA process or not. 

Clearly, there are, in general, when we make public interest determinations, cumulative impacts are part of that. 

Mr. GREEN. OK. CEQ requires an environmental impact for 

major federal actions significantly affecting the quality of human 

environment. It is reasonable to conclude that DOE would require 

an environmental impact for a cross-border project, an EIS? 

Secretary MONIZ. Absolutely. We always require an EIS, yes. 

Mr. GREEN. Would DOE consider approval of a cross-border 

project a major federal action? I am getting down to the whole—— 

Secretary MONIZ. Yes. Yes, all right. 

Mr. GREEN. CEQ has determined that NEPA applies to significant federal actions and can’t be avoided by segmenting a project. 

So that means that a project coming across from Texas to Mexico, 

not just a cross-border crossing but the project itself, would DOE 

31 

decision-making on cross-border segments of a cross-border project 

require compliance with NEPA? 

Secretary MONIZ. Certainly. We always require, yes, NEPA compliance. 

Mr. GREEN. The discussion draft in the bill would eliminate the 

presidential permit process and grant cross-border decision-making 

to DOE for electric transmission facilities. If this draft would become law, the DOE will be charged with promulgating a rule to implement the granted decision-making. Is it reasonable to conclude 

that any DOE issues, new regulations, these regulations, would include NEPA requirements about a cross-border project? 

Secretary MONIZ. Well, if I might take a step back. I think there 

are two principles that we would always insist upon. One is proper 

environmental review—— 

Mr. GREEN. Yes. 

Secretary MONIZ [continuing]. And secondly would be a judgment 

that this is in the public interest. I think those are the two basic 

principles. 

Mr. GREEN. OK. There is language in Section 3104 of the bill 

that would limit the department’s ability to fully comply with 

NEPA requirements. Do you believe that that language is needed? 

Secretary MONIZ. Well, again, clearly, I think we need to make 

sure that the environmental requirements are met. So if the proposal would curtail that, then obviously I would not support it. 

Mr. GREEN. OK. Are you familiar with what is called the federal 

NEPA small handle issues? 

Secretary MONIZ. No, I am not. 

Mr. GREEN. OK. If federal small handle issues relate to how 

much federal control should be exercised over a private project, 

specifically whether a full NEPA review is required, when the federal agencies control only a small segment in an otherwise private 

project. Courts have determined if an otherwise private project cannot proceed without federal permits, then federal agencies are required to satisfy NEPA requirements. 

Mr. Secretary, is it possible for a cross-border project to proceed 

without a presidential permit under current law now? 

Secretary MONIZ. I really had better check that with my general 

counsel. 

Mr. GREEN. OK. 

Secretary MONIZ. I would have thought not, but I am—— 

Mr. GREEN. Well, my concern is that we have been trying to set 

a standard in this bill and previous legislation on cross-border electric transmission, natural gas pipelines, and of course, crude oil 

pipelines. And in this case, the Department of Energy would have 

the authority over electric transmission—— 

Secretary MONIZ. Wires. 

Mr. GREEN [continuing]. And whether Department of Energy 

would use the NEPA process to approve those cross-border—— 

Secretary MONIZ. Yes. Well, again, my assumption is that, again, 

the two principles are there. The environmental impact, which is 

the NEPA process, certainly for the part in the United States, and 

the determination of public interest. Those are the two requirements and the two principles that I would uphold. 

32 

Mr. GREEN. Well, I am out of time, but I know DOE, if we pass 

this bill with this particular section in it—— 

Secretary MONIZ. Yes. 

Mr. GREEN [continuing]. Would have that authority, and I just 

wanted to see what the regulatory process would be with DOE. 

And I yield back, Mr. Chairman. 

Secretary MONIZ. OK, and I would be happy to discuss that. 

Mr. WHITFIELD. The gentleman’s time has expired, but are you 

saying that under 3104, our legislation would not require a NEPA 

review? 

Mr. GREEN. It does require a NEPA review. 

Mr. WHITFIELD. OK, because I—— 

Mr. GREEN. And that is what I was wondering, because there has 

been some confusion on our legislation that we have done separately that NEPA review is not required—— 

Mr. WHITFIELD. Yes. 

Mr. GREEN [continuing]. And I want to make sure folks understand that it is in this bill—— 

Mr. WHITFIELD. It is required. 

Mr. GREEN [continuing]. It was in the previous bill we passed out 

of the House last session—— 

Mr. WHITFIELD. Right. 

Mr. GREEN [continuing]. And on cross-border issues, not just for 

DOE. 

Secretary MONIZ. OK. 

Mr. GREEN. Thank you, Mr. Chairman for clarifying. 

Mr. WHITFIELD. Thank you. 

At this time, I will recognize the gentleman from Illinois, Mr. 

Shimkus, for 5 minutes. 

Mr. SHIMKUS. Thank you, Mr. Chairman. Mr. Secretary, welcome. 

Your department really was developed and instituted based upon 

our nuclear heritage, as you know, and also is focused on our nuclear future, and then you have to deal with a lot of legacy issues. 

That is not really part of the hearing, but the introduction is just 

to let you know I appreciate the support I receive from your professionals down at Savannah River, which I visited yesterday, and the 

contractors there, and they took good care of me—— 

Secretary MONIZ. Great. 

Mr. SHIMKUS [continuing]. And I just want to put that on the 

record. 

Now to the QER. The QER devotes an entire chapter to improving North American energy integration, but makes no mention of 

issues belying cross-border presidential permitting in general, or 

the Keystone XL Pipeline in particular. It is kind of some of the 

questions I think Mr. Green was alluding to. Do you agree that the, 

and I quote, ‘‘ad hoc or siloed permitting process’’, as the QER puts 

it, creates significant uncertainty? 

Secretary MONIZ. Yes, it certainly can in many cases, yes. 

Mr. SHIMKUS. Has the inability to render a decision on Keystone 

Pipeline impacted other energy projects in Canada? Do you know 

of—— 

Secretary MONIZ. I am not aware of it, but—yes. 

33 

Mr. SHIMKUS. Yes. And can you check back with us? Obviously, 

there might be, otherwise I wouldn’t be asking this question. 

Secretary MONIZ. Well, only in the sense that, obviously, I have 

seen discussions about other pipelines to take out things east or 

west, for example, but—— 

Mr. SHIMKUS. Right. I think the public as a whole, I don’t think 

they really—sometimes I put up the transmission system on a map 

just to identify how many cross-border pipelines and transmission 

lines we already have, both north and south, and—— 

Secretary MONIZ. Yes, I think it is like 74 pipelines or something. 

Mr. SHIMKUS. Right. And obviously, just curious, we have problems with one, and the debate is will we have problems with the 

future or has this uncertainty kind of slowed down the process. 

And so part of the legislation which the chairman is pointing to 

talks about this cross-border energy infrastructure language, in the 

committee’s energy diplomacy discussion draft, would attempt to 

address unnecessary delays in the permitting of cross-border pipelines and transmission lines. Have you looked at this, and is there 

room for improvement when we are talking about pipelines or 

wires? 

Secretary MONIZ. Well, obviously, as was already stated, the 

pipelines, as you know, are not in our jurisdiction, the wires are, 

and I think it is going pretty straightforwardly. I might add that 

just the projects discussed over the last 5 years for new transmission lines would total about 5 gigawatts of additional capacity 

coming into the northeast. 

Mr. SHIMKUS. Yes, and we had a hearing just a week ago, I 

think, on really the natural gas desert of the New England States, 

we had the Governor of Maine here, which would address, obviously, pipeline infrastructure and probably cross-border also with 

them. I think a lot of people would kind of shake their head understanding that we still heat with fuel oil in some major states in our 

union, where access to natural gas pipelines might help them transition—— 

Secretary MONIZ. Yes. 

Mr. SHIMKUS [continuing]. Especially with the abundance that 

we seem to be having now with our production. 

Secretary MONIZ. If I may just—— 

Mr. SHIMKUS. You may. 

Secretary MONIZ. About a week and a half ago, we did approve 

for potential FTA re-export a natural gas project to Canada. 

Mr. SHIMKUS. The energy diplomacy discussion draft also talks 

about improving the process for permitting major energy projects. 

Do you agree that it would bring greater clarity and predictability 

to the process, and help in this energy diplomacy part? 

Secretary MONIZ. Could you clarify? If we did what exactly? 

Mr. SHIMKUS. Well, the formulation of coordinated procedures 

and criteria balance energy security impacts with environmental 

consideration. So you have to—especially in energy diplomacy, 

Shimkus is ethnically Lithuanian, a lot of people here have heard 

that before. I have toured the LNG Terminal. This energy diplomacy for our friends around the world, whether it is Japan or 

whether it is the eastern European countries, is really critical to 

give them choices of energy. And so the question is cost benefit 

34 

analysis, and how can you expedite it, and I think your quadrennial review addresses this a little bit. 

Secretary MONIZ. Well, again, as I said earlier, the whole issue 

of energy security is we are looking at it in a broader sense than 

the traditional way. And by the way, maybe not here, but if you 

would like we would be happy to come to your office and discuss 

the work on Ukraine specifically, since that seems to be an interest 

potentially. 

Mr. SHIMKUS. That would be of great interest to many many 

members of the—— 

Secretary MONIZ. We would be happy to do that—— 

Mr. SHIMKUS. Thank you. 

Secretary MONIZ [continuing]. But anyway, we are trying to expedite these issues. 

Mr. WHITFIELD. At this time, the chair recognizes the gentlelady 

from Florida, Ms. Castor, for 5 minutes. 

Ms. CASTOR. Thank you, Mr. Chairman. Good morning, Mr. Secretary. 

I would like you to elaborate a little bit more on the transmission, storage, and distribution, beyond what you have already 

testified to, because America’s energy infrastructure is aging, it is 

not well-matched with the new sources of supply, it is exposed to 

increasingly dangerous extreme weather events associated with climate change, such as sea level rise. In my neck of the woods, we 

are concerned about more intense electrical storms, and then 

drought and wildfires. And I know you are sensitive to the potential for cyber and physical attacks as well. And part of America’s 

policy right now is to encourage these new clean energy supplies, 

and greater energy efficiency such as the availability of rooftop 

solar that holds great promise for powering households and businesses across the country, and our growing energy efficiency sector 

that will rely on smart meters, a smart grid distributed generation, 

but these run completely counter to the traditional electric utility 

model. Now, you have testified already today about, well, energy 

assurance grants for states. Maybe you need to go into greater detail on the micro grids. I have never heard of a synchrophasor. 

What else really must we be looking for to modernize America’s 

grid and infrastructure going forward? 

Secretary MONIZ. Well, in terms of the grid, including both the 

transmission and distribution systems, I think one major theme is 

that we need to really push forward on what we have just barely 

started, and that is real integration of information technology into 

the grid and all of the associated requirements to take the data to 

be analyzed, of course. Synchrophasors are a part of that. We can 

discuss that some other time. 

Ms. CASTOR. OK. 

Secretary MONIZ. But sensors, control systems, coupling information technology into distributed decision-making so that the grid 

can respond quickly if there is something developing on the reliability side, for example. So that really is, I would say, the overarching theme, more and more information technology integration 

into that system. That does, of course, potentially exacerbate another thing you mentioned which is the cyber risk that we have to 

stay ahead of. And I would say there, I just might add that under 

35 

the leadership of our deputy secretary, we head something called 

the Energy Sector Coordinating Council which has EEI and a number of CEOs that meet three times a year to discuss these kinds 

of risks to the infrastructure, to the grids especially. On the grid, 

there are some other issues besides those I mentioned, such as the 

role of potentially long-distance DC transmission where that is 

much more prevalent in other parts of the world right now, but 

again, IT, I would say, number 1 in terms of where we have to go. 

Ms. CASTOR. And back on your energy assurance grants, would 

they be open only to states, or would local communities and businesses be able to tap into those grants? 

Secretary MONIZ. There is still really a lot of program design to 

do, and we would be happy to talk with the members about that. 

I think the way we have been envisioning it is principally through 

the states, but hoping that the states, to be competitive, would be 

working with localities and tribes in the appropriate states, for example. But that is all a detailed program design that—— 

Ms. CASTOR. I would hope you would open it up to local 

collaboratives or regional collaboratives. Sometimes you have recalcitrant states—there is an unwritten state policy in Florida right 

now, you can’t even say climate change, so that doesn’t bode well 

for our ability to compete for those grants. And I have—— 

Secretary MONIZ. OK, we will take that under consideration. 

Ms. CASTOR. Great. 

Secretary MONIZ. Yes, it has been raised before in terms of cities 

wanting to be able to have—be direct applicants. 

Ms. CASTOR. Absolutely. There has been some discussion today 

about exports of oil and gas. You have used a number today, how 

much right now is America importing in petroleum and gas? 

Secretary MONIZ. I think we are still importing close to 7 million 

barrels a day of crude oil—— 

Ms. CASTOR. OK. 

Secretary MONIZ [continuing]. Although we are net exporters of 

about 2 1⁄2 million barrels of oil products. So our net imports are 

maybe 4 1⁄2 million barrels. 

Ms. CASTOR. Doesn’t the export heavy focus run counter to America’s policy imperative to reduce carbon pollution? 

Secretary MONIZ. Well, as I said, frankly, I think in our current 

situation where we are still major importers, relaxation of export 

is probably likely to more or less just swap around different oil 

qualities in different places, as opposed to lead to tremendously increased production or demand. That is my view. 

Ms. CASTOR. So you do not think that exporting additional carbon fuels would exacerbate the problem of carbon pollution—— 

Secretary MONIZ. I think the—— 

Ms. CASTOR [continuing]. Across—— 

Secretary MONIZ. I think the key is that even as we are producing more, and this debate is going on in terms of exports, I 

think the important thing is, and we satisfy this, is keep your eye 

on the ball for reducing oil dependence. And that means we are aggressive on efficient vehicles, we are aggressive in terms of developing low carbon fuel alternatives, like next generation biofuels, 

and we are aggressive in supporting the move towards electrificaVerDate Nov 24 2008 11:39 Feb 29, 2016 Jkt 037690 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-47 CHRIS
36 

tion of vehicles with clean electricity supplying those vehicles. 

So—— 

Mr. WHITFIELD. Gentlelady’s time—no, go ahead. 

Secretary MONIZ. No, I was just going to say, and if you look at 

it, we are, I think, succeeding. For example, in the last—I think it 

is 5—I forget, some number of years, maybe a decade, even as our 

population has increased, as our GDP has increased 13 percent, we 

have actually decreased petroleum fuel use. 

Mr. WHITFIELD. OK. Gentlelady’s time has expired. 

At this time, recognize the gentleman from Pennsylvania, Mr. 

Pitts, for 5 minutes. 

Mr. PITTS. Thank you, Mr. Chairman. Thank you, Mr. Secretary, 

for coming today. 

Chairman Upton mentioned his interest in Ukraine and the 

meetings over there with the Ukrainian Parliament, the EU, getting resources over there. You said something that you are doing 

a lot with Ukraine. Would you care to elaborate please? 

Secretary MONIZ. I would be pleased to. Starting in the middle 

of 2014, the G7 energy ministers together with the EU met to discuss energy security issues, and that included specifically the Russia-Ukraine situation. Out of that came a commitment to work 

with Ukraine for that winter. And so DOE led a team of several 

U.S. agencies, plus Canadian experts, that went to Ukraine several 

times and guided them to a winter contingency plan for energy. So 

that occurred. Including, by the way, a tabletop exercise at the 

level of the deputy prime minister. Then we are back there helping 

them again look forward to next winter, but other things as well. 

For example, we pointed out the dependence not only on natural 

gas, but on Russian nuclear fuel. And you may have seen now that 

has led to Westinghouse now has a contract to be a fuel supplier 

for the Russian reactors in Ukraine. This has caught the attention 

of some, breaking a monopoly again. So we are working in a number of ways to help Ukraine on the energy situation. 

Mr. PITTS. Thank you. The Department of Energy has made 

progress on a few LNG export applications, but the fact of the matter is that more than 30 applications still await final decision from 

DOE. And I realize that you decided to reconfigure the process to 

allow FERC to go first with its environmental review, but the process as a whole remains complicated, unpredictable, especially for 

U.S. allies who are unfamiliar with the bureaucratic process between DOE and FERC. My question is, when will DOE finalize its 

follow-on economic study of exports in the 12 to 20 billion cubic feet 

per day range? 

Secretary MONIZ. I can’t give you an exact date, but I expect it 

quite soon. So I don’t think it is going to be an impediment because 

today, we are—8 1⁄2 I think BCF per day. Approved for non-FTA 

countries. 

Mr. PITTS. Would the transpacific partnership or the transatlantic trade and investment partnership clear the way for automatic LNG export approvals? 

Secretary MONIZ. I think that will depend on the specifics of how 

it is negotiated, but it may very well provide FTA status to more 

countries, in which case the approval is, you know, more or less 

automatic. Although I would caution, because this statement is also 

37 

often raised with regard to TTIP and Europe, that the reality is 

that the market prices probably have a bigger impact than whether 

you are labeled FTA or non-FTA. 

Mr. PITTS. Do you support the provisions within the discussion 

draft which would effectively give DOE 60 days to act on an application following the FERC environmental review? 

Secretary MONIZ. Well, we have made our statements very clear 

on that, in particular, in a hearing in the Senate, that we, frankly, 

find it unnecessary. We have been acting quite quickly. It is workable. We have said it is workable. We can work with it, but we 

don’t think it is necessary. 

Mr. PITTS. U.S. oil production has risen rapidly in the last several years, and imports are falling. In fact, only about 1⁄4 of the petroleum consumed in the U.S. is imported from foreign countries, 

which is the lowest level in 30 years. When asked about lifting the 

ban on oil exports, you have made the point that the U.S. still imports oil, which is a fact, but given our role in the global market, 

would it make sense to both import and export oil? 

Secretary MONIZ. Well, again, I imagine we are going to meet our 

needs, and so right now, if we export a barrel, we are going to import a barrel to replace it. So as I said earlier, the only real issue 

in terms of the exports is whether that would lead to any material 

increase of production as opposed to just, in effect, swapping oil. 

There could be some issues there in terms of oil quality. For example, the Mexicans have specifically petitioned for a swap in which 

we would send light oil to Mexico in return for heavier oil coming 

back. That is an example of a swap. But I have to say it is not as 

though we have not been able to absorb all of the oil production 

today in the United States. It has been—so anyway—— 

Mr. PITTS. Thank you. My time has expired. 

Mr. WHITFIELD. Gentleman’s time has expired. 

At this time, recognize the gentlelady from California, Mrs. 

Capps, for 5 minutes. 

Mrs. CAPPS. Thank you, Mr. Chairman, for holding this hearing. 

And I thank you, Mr. Secretary, for your testimony. 

The discussion of our Nation’s energy infrastructure is very important, and as is the Administration’s work on the Quadrennial 

Energy Review. I am particularly interested in the pipeline safety 

aspect of it. Over my years on this committee, I have referenced 

very many times the Santa Barbara oil spill of 1969. That oil spill 

had tremendous local and national ramifications, giving birth to 

our modern environmental movement, in many ways, and changing 

much of the way our Nation as a whole has viewed the environment and oil development. Sadly, the Santa Barbara community 

was recently hit with another terrible oil spill along the coast. On 

May 19, more than 100,000 gallons of crude oil spilled from the 

ruptured Plains All American Pipeline along the treasured Gaviota 

Coast just north of Santa Barbara. The oil quickly flowed under the 

highway, onto the beach, and into the ocean, where the oil slick 

spread south for miles along the coastline. While the exact causes 

of this spill are still being investigated, it is already clear that woefully inadequate federal pipeline safety standards have played a 

significant role. It turns out that the Plains All American Pipeline 

is the only federally regulated pipeline in Santa Barbara County. 

38 

It is also the only transmission pipeline in the county that does not 

have an automatic shutoff valve built into its system, and this is 

not a coincidence. Every other comparable oil pipeline in Santa 

Barbara County has an automatic shutoff valve because the county 

has required it, but the federal Pipeline and Hazardous Material 

Safety Administration, or PHMSA as it is called, does not make 

this requirement of pipeline operators. While an automatic shutoff 

valve may not have prevented this spill, it certainly could have 

minimized it. Plains was actually allowed to squirrel away tens of 

millions of dollars into what they called a contingency fund for 

when their pipeline would inevitably fail, yet they weren’t even required to spend a fraction of that amount on installing basic spill 

prevention technologies. This, to me, defies commonsense, and it 

cannot be allowed to continue. And this is just one example of lax 

safety standards. My constituents are understandably angry, and 

I share their anger. With all due respect for my seatmate, Mr. 

Green, who appropriately isn’t here right now, oil and gas development at its core is dangerous and dirty business. The mere fact 

that Plains and other companies have oil spill contingency funds 

shows that there is no such thing as a safe pipeline. Spills do happen, and they will continue to happen as long as we depend on fossil fuel for our energy needs. We obviously cannot end this dependence overnight, but we clearly need to take bigger and bolder actions to achieve the clean energy future that we all know is needed. 

Secretary Moniz, I appreciate the President’s and your strong 

commitment to pursuing renewable energy. The objectives of QER 

are important. We cannot build a clean energy future without modernizing our infrastructure and preparing for new challenges, but 

we must also do everything in our power to ensure that this infrastructure is as safe as possible. Congress has repeatedly directed 

PHMSA to strengthen its standards, and yet PHMSA has done 

very little. The QER specifically mentions a draft PHMSA rule in 

development that would help strengthen some of these standards, 

but PHMSA first began taking comment on this rule nearly 5 years 

ago, and nothing has been published so far. And in 2011, Congress 

enacted legislation explicitly directing PHMSA to issue a rule requiring automatic shutoff valves on new pipelines by January of 

last year. Still not even a proposal let alone a final rule. I find this 

really inexcusable. I know DOE does not have direct control over 

this agency, Transportation does, or rulemaking, but what is the 

point of replacing aging pipelines and building new ones if they are 

all built using ineffective and outdated safety standards? The pipeline that burst in my district was not even 30 years old, so age is 

clearly not the only factor here. 

So, Mr. Secretary, my question for you, and I would appreciate 

if you can get back to me because I have taken most of this time, 

but what is the Administration going to do now to ensure—there 

is a lot of attention focused on this topic, to ensure that a new pipeline infrastructure is as safe as possible? 

Secretary MONIZ. Well, again, as you said, PHMSA obviously is 

in the Department of Transportation, and I would certainly be 

happy to talk with Secretary Fox and get back to you, but obviously, the QER focus is, we have to rebuild infrastructure in a way 

that is reliable and resilient, and I would say this is an example 

39 

of resilience by having the kinds of safety systems in place that 

maybe cannot avoid but can dramatically limit the impacts. So this 

is just part of why we need this discussion, I think. 

Mrs. CAPPS. Thank you very much. 

Secretary MONIZ. Thank you. 

Mr. WHITFIELD. At this time, recognize the gentleman from Ohio, 

Mr. Latta, for 5 minutes. 

Mr. LATTA. Thank you, Mr. Chairman. And, Mr. Secretary, welcome back to the committee. It is always good to have you here. 

If I could just follow up what the gentleman from Pennsylvania, 

Mr. Pitts, was asking, and you mentioned about the swap—the 

light versus heavy with Mexico. Maybe some folks might not understand why you would have to have a swap. Why is that? That you 

would have to swap light for heavy crude. Is—— 

Secretary MONIZ. I just mentioned that that is what the Mexicans have petitioned for because, I think in the—currently, we do 

not have authorities for exporting oil directly to Mexico, my understanding is it isn’t at DOE, of course, but my understanding is they 

asked for this kind of idea of a swap. 

Mr. LATTA. Thank you. 

Secretary MONIZ. Which is under consideration, I believe, at the 

Department of Commerce, I believe. 

Mr. LATTA. OK, thanks very much. Another issue not only has 

this subcommittee taken up but also especially the Telecom Subcommittee, in regards to cyberattacks and physical attacks that 

could occur to our infrastructure in this country. And so it is not 

only a growing concern but a great concern that we all have as to 

what could happen. The committee’s discussion draft on energy reliability and security provides the Secretary of Energy the authority to take emergency measures to protect the bulk power system 

from grid security emergencies. Are you generally supportive of the 

DOE having grid security emergency authority? 

Secretary MONIZ. Well, I believe we have the authorities, but 

only under emergency conditions. 

Mr. LATTA. Well, let me ask, what other grid security recommendations you would make to this committee that we should 

consider at this time? 

Secretary MONIZ. Well, I don’t know what is appropriate for statutory direction, but I think utilities, for example, on physical security. Many of them have taken significant steps since the California 

incident. They are not always advertised for obvious reasons, but 

they have been doing that. Similarly by the way, many of the utilities—but the reason we need to complete a study on the transformer issues, whether it is because of a physical attack or just 

wear and tear, a number of utilities have really moved in terms of 

their backup there, but it is not uniform. And, of course, we have 

very, very different utility structures, organizational structures, so 

it is very different for IOUs versus co-ops, et cetera. So I think that 

is an example where, maybe after a study, some statutory action 

could be called for in terms of how do we provide appropriate resilience to the low probability but very high consequence of not having access to big transformers. 

Mr. LATTA. Let me ask this. How concerned are you about electromagnetic pulses against the grid system? 

40 

Secretary MONIZ. Well, that is another risk that we identified. 

There are studies on that. The National Academy has studied that. 

I would say it is, once again, an example of a probably low probability but significant consequence possibility. 

There has been—— 

Mr. LATTA. When you say low probability, how—what percent 

probability would you put that at? 

Secretary MONIZ. Well, I am not going to give a number, but it 

is just—it is low. 

Mr. LATTA. OK. Well, because—— 

Secretary MONIZ. But again, there has been hardening done by 

many to keep transformers, et cetera. 

Mr. LATTA. OK, thank you. Could you explain the importance of 

information sharing and public-private partnerships as it relates to 

security the electric grid? 

Secretary MONIZ. I am sorry, could you—— 

Mr. LATTA. Yes. Could you explain the importance of information 

sharing and public-private partnerships as it relates to securing 

the electric grid? 

Secretary MONIZ. I think that is very important. Once again, the 

Energy Sector Coordinating Council that our deputy secretary 

heads is part of that public-private partnership. And by the way, 

I have to say groups like EEI have been just excellent partners in 

that. And in terms of information-sharing, just one particular example, there is a lot of information-sharing in terms of reliable operations, et cetera, but one area I would highlight that this council 

does is including through providing selective security clearances 

sharing cyber threat data with the private sector. 

Mr. LATTA. OK. And finally, in the very short period of time I 

have, in analyzing recent power plant retirements, the QER mentions market factors, low cost of natural gas, and changing coal 

prices as the driving factors behind the retirements. Would you 

agree that environmental regulations like the Mercury Air Toxics 

Standard and the proposed Clean Air Power Plan also played a role 

in the retirement of some of our electric generator units? 

Secretary MONIZ. Well, certainly, things like mercury restrictions 

obviously raise costs, and that is always the cost calculation. But 

again, I think by far the dominant issue over these last years has 

been gas prices of $2.50. And for certainly inefficient coal plants, 

even the variable cost is beat by natural gas combined cycle. 

Mr. LATTA. Thank you. Mr. Chairman, my time has expired. I 

yield back. 

Mr. WHITFIELD. At this time, the chair recognizes the gentleman 

from Vermont, Mr. Welch. 

Mr. WELCH. OK, thank you very much. 

I have one comment and four questions, so I will go lickety-split. 

And I think I will ask them all four so you can answer them. 

The comment, you have been getting praised for being a great 

Secretary of Energy, and sideline as a nuclear negotiator, but I 

don’t think people know that you do the best imitation of Luis 

Tiant, his windup, delivery, and pitch. And I think all members 

should ask for a demonstration. But—— 

Secretary MONIZ. Including the look to God. 

Mr. WELCH. The look to God. The whole thing. 

41 

But the questions, one, this committee has been doing great work 

on energy efficiency. And energy efficiency in Vermont has been 

fully embraced, and it has led to our transmission company, 

VELCO, being able to avoid about $400 million in expenses associated with transmission lines. So I want your comment on what we 

can do as a committee and the Federal Government can do to help 

get the benefits of avoided cost. 

Second, we have been trying to get real-time information on electricity rates in New England, in significant part because our rates 

are very high, and your department has been helpful trying to get 

real-time information in all the states, and Canada and Mexico, but 

has been having real challenges in actually getting that information. And I am curious to know what you find is the reason why 

it is so tough to get that, and what the department and FERC can 

do to help reduce the electricity bills for New Englanders. 

Third, this is a smaller issue but quite important. We have some 

biomass stove manufacturers, and the standards evolve. One of 

those stove companies is Hearthstone, and they are having a real 

hard time getting basically an answer on what the standards are 

so that they can comply. So we need—— 

Secretary MONIZ. For efficiency? 

Mr. WELCH [continuing]. Some help on that. Yes, that is right. 

So they have a great product, but if they don’t get a real definition 

of what the standard is then it makes it tough for them to stay out 

there on the market, and he has been having an awful hard time 

with that. Small company, but important company, and real jobs 

to Vermonters. 

And then finally, net metering. That is tough because you have 

to have net metering if you really want to deploy energy efficiency. 

On the other hand, it obviously has an impact on the economic 

model. Vermont has gone in a different direction than most states, 

led by Green Mountain Power, our biggest utility, to embrace and 

promote expansion in net metering. What could we do at the Federal Government to help that process that is going to help deploy 

energy efficiency, but also deal with the economic realities of 

many—— 

Secretary MONIZ. Yes. 

Mr. WELCH [continuing]. Of our big power producers? Thank you. 

Secretary MONIZ. Great. Well, thank you, Mr. Welch. So the four 

questions—well, actually, the third question on the emission standards of biomass stoves I think is something that we will get back 

to you on because I just don’t know the answer right now, but that 

is one we can take care of. 

On the energy efficiency in Vermont, well, again, we are—and as 

you know, I was in Vermont with the delegation, and Vermont has 

done a fabulous job in terms of efficiency, with novel, novel business models for supplying energy. But I would say there, the main 

thing, the recommendation in the QER of relevance to that, and to 

a certain extent to the net metering discussion as well, is that we 

need to develop, at at DOE we will start really delving into this 

much more, we need to devise a much better way of valuing all the 

services that can be provided in the electricity system. Efficiency, 

storage, diversity, capacity, power quality, there are all of these 

issues, and when we had the traditional business model and it was 

42 

basically one way from a central plant to a house, well, it kind of 

all got lumped together. But now with much more diversity, with 

storage coming in in some cases, distributed generation, we know 

that energy efficiency, this involves another hot issue right now 

that is in the courts, is to what extent does end-use efficiency come 

back all the way to the wholesale market, which FERC is engaged 

in. So I think this issue of valuing all the services is really core, 

and that is something that we want to, over the next months, really work hard on, and that is something that needs dialog with the 

members. So that is, I think, an absolute critical recommendation. 

And on terms of electricity prices and real-time prices, I would 

just note that the EIA has, in fact, not so long ago, launched a new 

product which has much more real-time data being collected from 

the ISOs and the RTOs and combined together so that one can research it and one can understand how prices are moving. 

Mr. WHITFIELD. Gentleman’s time has expired. 

At this time, recognize the gentleman from West Virginia, Mr. 

McKinley, for five. 

Mr. MCKINLEY. Thank you, Mr. Chairman. And thank you again 

for coming before us. 

In the last week, during the break, I returned to West Virginia 

and was on overload of negative information coming at us in West 

Virginia. The first newspaper I got when I got back there was, dark 

day for miners. They just announced that 2,268 coalmining jobs 

were lost. 2,268 families now are looking for jobs as a result of this 

mining—then soon thereafter we got another power plant closed 

down, the Kammer Power Plant. Even though FERC has said 

that—and they have testified before us—the concern that they 

have is that we are going to have rolling blackouts in the Midwest 

if we don’t start replacing these power plants, but we are continuing to shut these power plants down. And then there was another one that went on to say, just in one community, one small 

community, they are going to lose $61 million in wages as a result 

of this. 

So I am dealing with all of this crisis. When you add the additional losses, these 2,268, now we are up to—and I believe the 

chairman mentioned it earlier today, that we have now lost in West 

Virginia 45 percent of our coalminers are unemployed since 2012. 

Just in 3 years. Three years 45 percent of our coalminers are looking for work. 

Now, last Friday I met with the Coal Association and I could see 

there, they said there is going to be further contraction as a result 

of what policies that are happening nationally. So they are very 

concerned about what is going on with it. This loss of the Kammer 

and other power plants, it challenges, you well know, the grid stability that we have, this dependability. It also goes beyond that, 

and that is what about property taxes, what about the local income 

tax that people are going to pay? You can take away the power 

plant but now you are affecting the schools, you are affecting how 

a community operates with this happening. 

So my first question of two questions would be to the coal industry to reverse this decline? 

Secretary MONIZ. Well, Mr. McKinley, first of all, of course, we 

all feel, for whatever reason, when there are these major disrupVerDate Nov 24 2008 11:39 Feb 29, 2016 Jkt 037690 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-47 CHRIS
43 

tions in communities, it is obviously something that we need to pay 

attention to. And the Administration does have some programs to 

look at some retraining, particularly in the overlap areas with natural gas production, the Power Plus Plan that has been put forward, but I recognize that these don’t address 45 percent of a workforce. So they help in the right direction, but they certainly do not 

‘‘solve the problem.’’ 

Mr. MCKINLEY. Well, but keep in mind too, Mr. Secretary, you 

know that coalminers average age is going to be in their 50s. What 

are we going to retrain them—my second question, since I didn’t— 

and, unfortunately, you don’t have a quick answer either—— 

Secretary MONIZ. No. 

Mr. MCKINLEY [continuing]. On this as to how to stop the—— 

Secretary MONIZ. We—— 

Mr. MCKINLEY [continuing]. Hemorrhaging. But the second question, so if you are sitting in the kitchen with this 55-year-old that 

just lost his job, he has been working 30 years in a coalmine, what 

do you tell him? 

Secretary MONIZ. Well, look, again, I am completely with you. 

This is a very, very difficult. I think in the end, it is about having 

to try to produce some other economic opportunities. Revitalization, 

some retraining, and—— 

Secretary MONIZ. But these are real—you understand, these are 

real people that have—— 

Secretary MONIZ. Yes, and I—— 

Mr. MCKINLEY [continuing]. Really lost their job—— 

Secretary MONIZ. I understand. 

SAnd the following is not on the right timescale for you, but I 

have said previously, I think in front of this committee as well, 

that we do have many programs, many different kinds of programs, 

that are addressing the issue of a future of coal, even in a low-carbon world, but that is not going to solve that gentleman’s problem 

tomorrow. I completely agree with that. 

Mr. MCKINLEY. So in the 2 what do we tell him? 

Secretary MONIZ. I think the key—— 

Mr. MCKINLEY. He has a mortgage payment—— 

Secretary MONIZ. He has to be—— 

Mr. MCKINLEY [continuing]. He has a healthcare bill, what are 

we doing for him? 

Secretary MONIZ. The key has to be economic development and 

providing other opportunities. And I might just mention, Mr. 

McKinley, that—and I am happy to say it here, that recently Senator Manchin has asked me to come to West Virginia, and I would 

be happy to join him and you and come to West Virginia and try 

to understand the situation and what we can do. 

Mr. MCKINLEY. Thank you, Mr. Secretary. 

Secretary MONIZ. Yes. 

Mr. WHITFIELD. At this time, recognize the gentleman from New 

York, Mr. Engel, for 5 minutes. 

Mr. ENGEL. Thank you very much, Mr. Chairman. Secretary 

Moniz, than you for your testimony today, and thank you for all 

your good work in so many things. We really appreciate it. 

I would like to join everyone in applauding your efforts—— 

Secretary MONIZ. I am having a hard time hearing you. 

44 

Mr. ENGEL. I will do this. This is better. 

Secretary MONIZ. Thank you. Thank you, that is better. 

Mr. ENGEL. OK. Generally not so hard to hear New Yorkers talk. 

I will just try to talk a little louder and not slur my words. 

I want to applaud your efforts and the efforts of everybody involved in producing the first report of the QER Taskforce. I believe 

it really establishes a very sensible blueprint, making our electric 

grid more resilient, and to identify and improve vulnerabilities in 

our current energy transmission and distribution system. 

As you know, Super Storm Sandy swept through my district and 

the surrounding region in October 2012, knocking out power to 

over 8 million people, and causing several fuel supply and distribution problems. Some New Yorkers in my district waited more than 

2 weeks for their lights to turn back on, and struggled the whole 

time to keep their families safe and warm. So as a result, I am particularly focused on the ability of our grid and our entire energy 

transmission and distribution system to withstand future shocks, 

and also to recover quickly from any outage that might occur. 

So could you please discuss how we are better prepared today 

than we were in 2012 for a storm like Sandy, and how the suggestions in the QER would build upon the improvements we have 

made? In particular, please touch on the establishment of the 

northeast reserve and the potential expansion of distributed generation through the REV Initiative in New York. 

Secretary MONIZ. Thank you. Well, first on the regional gasoline 

reserve. As you know, that has been established with a million barrels, distributed in three locations from the New York Harbor area, 

up to Portland, Maine, and that complement to the heating oil reserve that was established some years back. I might point out that 

one of the recommendations, by the way—which I would put in 

front of the committee is that it would be very useful if the authorities for using those reserves could be harmonized because they are 

quite different, and this would not help in terms of a coordinated 

response in terms of an issue. So that is successfully put in place. 

It is paid for as well for 4 1⁄2 years of operation. And I might add, 

we are currently now about 1⁄3 of the way through to using the remainder of the money to repurchase 4.2 million barrels of crude oil 

to go back into the reserve, because we took out 5 million, so it will 

be 4.2 crude, 1 million gasoline, and 4 1⁄2 years of operations of the 

reserve. 

Secondly, with regard to the grid and resiliency, again, I would 

like to highlight what we consider to be one of the most important 

recommendations, actually, two recommendations, one is to support, in our fiscal year 2016 budget request, state assurance grants 

to allow planning for hardening infrastructure. And then, and this 

is a case we have to find out working with you, how to raise the 

revenue, how to raise the resources, but to establish several billion 

dollars for competitive resiliency projects. That could include things 

like micro grids, but designed for resiliency of the energy system. 

Mr. ENGEL. Thank you. Let me ask one more question. The QER 

report also recommends ways to further integrate the energy infrastructures of the U.S., Canada, and Mexico, and the idea is to enhance market opportunities, energy security, and sustainability. 

Some transmission lines already send hydropower from Quebec to 

45 

the northeast United States, and the potential exists, obviously, for 

more capacity on more transmission lines in the region. Could you 

please talk about what role, if any, these transmission lines should 

play in our energy future? 

Secretary MONIZ. Well, I think these are very important. Of 

course, one that was approved recently was the Champlain Hudson 

line that would take power to New York from—hydropower. And 

there are a variety of projects for 4 to 5 gigawatts of additional hydropower that could be available to the northeast and upper Midwest. This, obviously, would be clean energy to meet our needs. 

Mr. ENGEL. Thank you. Thank you, Mr. Secretary. 

Thank you, Mr. Chairman. 

Mr. WHITFIELD. Chair now recognizes the gentleman from Virginia, Mr. Griffith, for 5 minutes. 

Mr. GRIFFITH. Thank you very much, Mr. Chairman. I do appreciate that. 

Let me reference the comments made by Mr. McKinley of West 

Virginia. We have had hundreds of layoffs in my district alone. Of 

course, in my neighboring State of West Virginia and Kentucky, 

there have been thousands, and it has been devastating. 

You referenced natural gas in relationship to the closing of some 

of the coal-fired power plants as one of the factors. Of course, it is 

one of the factors, but the regulations coming in also, yesterday we 

closed down the Glen Lyn facility in my district. It was paid for by 

the ratepayers. Wouldn’t cost them any additional. It was only 

being used at this point for the peak periods. That is now gone. 

The Clinch River facility in my district had three EGUs, three electric generation power plants. They are converting two of the three 

over to natural gas, however, the third one is not going to be converted, and the 2⁄3 that used to be there will produce about 1⁄2 of 

the electricity. 

I am just concerned that in the peak periods of use, now that 

they are gone, how are they going to be replaced in southwest Virginia and in other parts of the AEP footprint? 

Secretary MONIZ. Well, of course, I don’t know well enough the 

exact geography and the distribution of power plants. If I talk more 

broadly, one of the issues, clearly, is the continuing build-out of the 

transmission system to move power around effectively. And I might 

say that I was a little bit surprised, frankly, with the data that 

came out in the QER that the spending on transmission in the 

country has actually reached $14, $15 billion per year with a continuous increase, basically, over the last 10 to 15 years. So we actually don’t think that any significant increase in resources will be 

required. The issue will be to make sure that the lines are configured, of course, to make sure that energy gets to all the various 

places. 

Mr. GRIFFITH. And I get that, and that brings up natural gas 

pipelines. And talking about all of this, and they are building them 

in my district, with great opposition from many people who don’t 

like the pipeline concept. They are also building them in a district 

just north of mine. Pipelines are going everywhere. But I noticed 

in the QER you note the need for pipeline replacements for existing 

pipelines, and that you suggest a DOE-run grant program designed 

to allow states to receive funds to aid in improvements to pipeline 

46 

infrastructure. I support improving our current system for existing 

pipelines, and I am interested in learning more about the details. 

What new authorities do you all think you need at DOE, or do you 

want at DOE in order to create this program, and will you be providing language to the committee so that we can see about putting 

that into the appropriate bill? How do you envision the DOE replacement program working? How would the funding get to the existing states? Would it be the existing funding or are you going to 

come up with new funding? Where is the money going to come 

from? What is the timeline, and how would the states apply, et 

cetera? I throw all those out at you at once. I will be glad to go 

back and review them but I don’t want my time to run out. 

Secretary MONIZ. I think we will have to get back to you with 

a lot of the detail, but let me make several points. First of all on 

the resources issue, we were very clear that we had about half a 

billion dollars proposed in the fiscal year 2016 budget to address 

various QER recommendations, but there were another $15 billion 

of need identified, which we were very clear we have to have a discussion in terms of where can those resources come from. That is 

over many years, but still. So specifically, the funding for the acceleration of natural gas distribution infrastructure replacement is 

not in our budget. So that is one those cases. And we have in the 

past, of course, had many examples of raising resources in various 

ways for major infrastructure projects. I think that is the discussion we need to have with the Congress, are we prepared to find 

these mechanisms for a significant push on energy infrastructure. 

Mr. GRIFFITH. And as we transition then and we use more natural gas, then it would seem that at some point that funding is 

going to have to come forward, which means it is going to be 

passed on to the ratepayer, and yet another expense added on to 

one of their energy bills. 

Secretary MONIZ. Right, and what we are seeing today, by the 

way, at least for these years, I have a place in D.C., and on my 

bill there is a specific surcharge on there for replacement of the 

natural gas distribution pipe. What we are saying is we think this 

needs to be accelerated. I will be clear, I guess it is Washington 

Gas, I don’t know, whoever it is, the surcharge is for a 40-year replacement program. That seems like an awfully long time. So what 

we are arguing is we need to shorten these—utilities are typically 

doing this many, many decades to keep the rate low. We are saying, geez, we need to accelerate this. And what we are proposing 

is funding that would go to help low-income households absorb the 

rate hit. 

Mr. WHITFIELD. Yes. Gentleman’s time has expired. 

At this time, recognize the gentleman from Ohio, Mr. Johnson, 

for 5 minutes. 

Mr. JOHNSON. Thank you, Mr. Chairman. And thank you, Mr. 

Secretary, for being here with us again today. 

At the risk of piling on, I want to associate myself also with the 

concerns already mentioned regarding the coal industry. My district is a district and a state heavily dependent upon the coal industry, not only for reliable energy, affordable energy, but also the 

jobs that it represents. 

47 

I was on a trip to Europe just a couple of weeks ago, and one 

of the statements that one of our European colleagues in the energy sector made was that, over the last 20 years or so, they have 

led America in shutting down much of their coal industry in an effort to reduce their carbon emissions, but some of those European 

countries, when we ask them what their energy profile looked like, 

they are returning to a higher percentage of a use of coal. And 

when I questioned them about that, I said why is that the case and 

how do you think you are going to be able to reach this 40 percent 

reduction by 2030, and this official said, look, we have learned, our 

ratepayers, our businesses and our residential customers, have said 

they are no longer willing to pay the exorbitant high prices for energy. The idea is you make coal so expensive by taxing the carbon 

emissions that renewables and other alternative forms of energy 

are more economically attractive. They are going back to coal. I 

don’t know why America, Mr. Secretary, why we have to learn this 

lesson the hard way; that coal still provides the most reliable, affordable energy on the planet. 

And so let me get off of this subject because I have some others 

I want to talk to you about. You expressed a willingness to come 

to West Virginia with Senator Manchin and Representative McKinley. Can you swing through Ohio at the same time—— 

Secretary MONIZ. We can try to do that. 

Mr. JOHNSON [continuing]. That you are in the region, and I 

would love to take you to talk to some of our coalmining cooperators and some of the manufacturers who are being asked to idle 

their plants because there is not enough energy on the grid to meet 

the peak demand. And that is today. That doesn’t even count for 

what is coming. 

Secretary MONIZ. If I may make a suggestion that might be useful. We have a very, very excellent person named Dave Foster who 

is really the creator of our Job Strategy Council. Perhaps a meeting 

with those of you with kind of Appalachian connections in coal, just 

to brainstorm around what might be other ways of going. I would 

be happy to do that. 

Mr. JOHNSON. Can you help facilitate that? 

Secretary MONIZ. Yes, I would—— 

Mr. JOHNSON. Good. 

Secretary MONIZ [continuing]. Be happy to do that. 

Mr. JOHNSON. Well, my office will be in touch and we will—— 

Secretary MONIZ. Certainly, the two of you and Mr. McKinley 

would be among those. 

Mr. JOHNSON. All right. We would like to do that. 

Let me move quickly to these other questions. In March, William 

O’Keefe, the CEO of Marshall Institute, penned an editorial in the 

Washington Times where he notes that the Council of Economic 

Advisors’ annual economic report for 2015 details the beneficial effects that LNG exports would bring for domestic employment, geopolitical security in the energy industry and the environment. He 

also makes the point that unless we act soon, we are going to lose 

many of these benefits. He says, while the American policymakers 

procrastinate, other countries are stepping up to meet these needs. 

The United States has an incentive not to wait. Our window of opportunity is closing. 

48 

So with that in mind, what are your thoughts not only on LNG 

exports, but are there any specific steps and policies we should be 

putting in place today to realize this opportunity before it is lost? 

Secretary MONIZ. Well, I have to say first of all that we are not 

procrastinating. Now, we have approved—and by—this is separate 

from the conditional approval that we made last week for the Alaska project, because that is a separate gas source, but for the lower 

48 we have approved roughly 8 1⁄2 billion cubic feet per day to nonFree Trade Agreement countries. We have no other applications to 

work on at the moment. And just to give a scale, I mean the largest 

LNG exporter in the world is Qatar, and they are at about 10 billion cubic feet per day. Now, the first cargos—— 

Mr. JOHNSON. I hear you, Mr. Secretary. Then why does the rest 

of the world, why are they still urging America to get into the LNG 

export market on a global basis? Why does the rest of the 

world—— 

Secretary MONIZ. Well—— 

Mr. JOHNSON [continuing]. And the oil and gas industry thing 

that we are not participating in the global export? 

Secretary MONIZ. I think that, first of all, there is a lot of misunderstanding, to be honest, number one. Number two, clearly, 

they are sitting there with $12, $15 gas, and they see us at $2.50, 

and they think that looks pretty good. Now, of course, by the time 

it reaches them, when you add $6 or $7 for the supply chain, it is 

not going to be our prices, but it still beats their prices. So clearly, 

they have an interest. They want to see that. Well, the fact is that 

if you look at the economic studies that have been done, not by 

DOE, by others, in terms of what they expect to be our real export 

market, very few of them come in above, say, 10 BCF per day, 

given competition in various parts of the world. So all I know is 

that is for the private sector to sort out. 

We have studies that take us up to a potential 12 BCF per day. 

Earlier it was pointed out we have commissioned another study 

that would even look at 20 BCF per day, but in the meantime, we 

have approved 8 1⁄2. The projects are being built. The first cargos 

will get on the water probably the beginning of 2016, and then we 

are going to start exporting. 

Another issue is, and a lot of our European friends say, they 

want the gas, I might just point out as an aside, no value judgments, there are a lot of places in the world that don’t want to develop their own indigenous resources but would like ours. OK, well, 

that is fine, but we do not direct where cargos go. We approve export licenses to non-FTA countries, and those are commercial contracts. Frankly, it is a constitutional issue in terms of our not doing 

that. 

Mr. JOHNSON. Mr. Chairman, my time has expired. 

Mr. WHITFIELD. Gentleman—— 

Mr. JOHNSON. I would submit to our committee and to the Secretary, there is a big disconnect somewhere because the experts tell 

us that our price is going to rise when we get into the global export 

market. We haven’t seen that. We have heard that the global market price is going to come down. We haven’t seen that. So I don’t 

know where the disconnect is, but there is a big disconnect somewhere. 

49 

Mr. WHITFIELD. Yes. Thank you. 

At this time, I am going to recognize the gentleman from Missouri, Mr. Long, for 5 minutes. 

Mr. LONG. Thank you, Mr. Chairman. 

And, Mr. Secretary, the discussion draft provides the Department of Energy with some new responsibilities beyond your current 

mission. For example, we direct the department to study the feasibility of establishing a federal strategic transformer reserve, and 

arm the Department of Energy with new authority to address certain grid security emergencies, which I think is foremost in everyone’s mind as far as grid security. Do you believe the Department 

of Energy has the expertise and capability to meet these new duties? 

Secretary MONIZ. Well, yes, sir. First of all, on the transformer 

reserve, we are moving forward to study that. We have one study 

already from WAPA, our western organization, but we are moving 

forward on that and will, depending on the study, engage then in 

the appropriate public-private partnership to make sure that we 

are secure. 

With regard to grid security emergencies, again, we already do 

a lot of this. We work under the FEMA umbrella. We are the lead 

agency for energy infrastructure. And so, for example, you may 

have read about the typhoon going through Guam a couple of 

weeks ago I think it was, well, we had a person in Guam as part 

of the FEMA response for energy infrastructure. So we are already 

doing this. Now, additional authorities could be helpful. 

Mr. LONG. OK. In your testimony, you mention that one of the 

key energy objectives is enhancing energy reliability. What impact 

do you think that the proposed Clean Power Plan will have on energy reliability and transmission issues? 

Secretary MONIZ. Well, again, first of all, we analyze these 

issues, but of course, we don’t have a final rule yet to know how 

to analyze it. But what we have done to date and what we have 

done in terms of technical analysis around the proposal of last 

year, again, suggests that reliability will be quite manageable, but 

we have to wait to get the final rule before we can really do 

the—— 

Mr. LONG. So you don’t think the proposed plan will have a big 

effect? 

Secretary MONIZ. Well, as I mentioned earlier, one example of 

something that we did, there was an issue around the projected 

significant increase of natural gas for the power sector versus coal, 

and when we looked at the infrastructure issues of the gas delivery, we just did not find that there was likely to be any significant 

challenge. There would be some work to do, but not a significant 

challenge. 

Mr. LONG. With Mr. Griffith from Virginia a while ago, you had 

a discussion about money to the states and things, and with this 

Quadrennial Energy Review recommend providing state financial 

assistance, which I think you all spoke about a few minutes ago, 

and grants and investment plans for electric reliability and efficiency. Can you discuss a little bit of some of the criteria, regardless of where the money is coming from, because we know there is 

a shortage of money, but can you discuss some of the criteria the 

50 

Department of Energy will require for the states to receive this financial assistance? 

Secretary MONIZ. Well—— 

Mr. LONG. Assuming, again, there would be money there. 

Secretary MONIZ. Yes, well, the money issue is relevant, and I 

must say I was very, very disappointed in the appropriations mark, 

which did not provide any funding for either the reliability or the 

assurance grants, which I think is shortsighted, to be perfectly honest, because I think the states need to have this kind of planning 

capability. We would provide technical assistance. Now, in terms of 

program design, that remains to be done, but what we envision will 

be ultimately proposals around things like micro grids, for example, 

for reliability and resilience. We would see, again, the integration 

of IT and smart grids as providing those services. And as I said, 

we hope in the reliability and assurance arenas to then have funding for competitive cost-share grants. 

Mr. LONG. Would the criteria be the same from state to state or 

would it change across the country? 

Secretary MONIZ. I think the criteria—well, that still remains to 

be worked out completely, but the criteria, no, would be around enhanced reliability and resilience. That is the criteria. 

Mr. LONG. I understand that but I am just—my question was 

whether it would be the same from state to state across the country 

or whether different—— 

Secretary MONIZ. I think—— 

Mr. LONG [continuing]. Different states would—— 

Secretary MONIZ. No, I think—— 

Mr. LONG [continuing]. Face different criteria. 

Secretary MONIZ. I think the same criteria, but the way the 

projects would be structured would look very different depending 

upon the regional and state resources. 

Mr. LONG. OK. I am past my time so if I had any time I would 

yield back. But thank you again for your testimony. Mr. Chairman—— 

Mr. WHITFIELD. Yes, at this time, I am going to recognize the 

gentleman from Texas, Mr. Flores, but I also just want to make a 

comment that we really appreciate your taking the leadership with 

the Republican Study Group on the forum on oil exports, and have 

an opportunity to examine that more thoroughly today, so—— 

Mr. FLORES. Well, thank you. 

Mr. WHITFIELD [continuing]. You are recognized for 5 minutes. 

Mr. FLORES. Thank you, Mr. Chairman. I hope Secretary Moniz 

will send someone to the discussion this afternoon. 

Of course, I want to talk about exports like my friend, Mr. Barton, did. One of the things you talked about is that there—one of 

the good reasons for the ability to have oil exports is because you 

have a better matching of the qualities of grades that are needed 

by the refineries in different geographical areas around the world. 

And you didn’t go quite far enough, I don’t think, because one of 

the things that happens when you have that better matching is you 

have economic efficiency, and economic efficiency releases additional capital, and that additional capital, based on my experience 

is—with 30 years in the business, would go back into reinvestment, 

which stimulates the production. So next time you are answering 

51 

that question, if you would go all the way through that economic 

cycle I think that it would be helpful. 

The next thing has to do with, I guess I would call it a safety 

valve question. As you know, there are multiple versions of—or 

proposals for oil exports out there, and some of them include giving 

the President the ability to suspend oil exports in the situation 

where we had some sort of an energy crisis, or if it is deemed in 

the national interest, or to be able to use the strategic petroleum 

reserve under those same circumstances. And so with those two 

safety valve features in place, doesn’t that make it more compelling 

to allow oil exports? 

Secretary MONIZ. Well, again, obviously, more flexibilities are always welcome, but I think the fundamentals of the oil export question are those that we discussed earlier, I think. And I agree with 

you, of course, in terms of your economic argument. 

Mr. FLORES. OK. One of the things that was interesting about 

timing is, while your agency and others were working on the QER, 

the Administration was also involved in negotiations with Iran, 

and in early April your agency estimated that with a deal in place 

and the sanctions lifted, Iran might start selling us a stockpile of 

30 million barrels or more later this year, and raise its output by 

$700,000—700,000 barrels a day by the end of 2016. This would 

come at a time when we would already have a global gut of crude 

oil. 

And so my first question is this. What analysis, if any, has DOE 

performed to better understand the implications of the entry of Iranian oil into the global markets on global supply and demand— 

global supply and prices, rather? 

Secretary MONIZ. Well, I think, first of all, you have stated the 

basic conclusion: that one would see over some year to 2 years, certainly, several hundred thousand barrels per day, probably of increased production. That would go into the 95 million barrel per 

day or so pool. There are so many uncertainties in that timescale; 

in particular, on the demand side. For example, a recovering European economy would put substantial then pressure on the supply 

side. Clearly, the nuclear negotiation is quite independent of that 

dynamic. That is about nuclear weapons issues that we think are 

important to block. 

Mr. FLORES. Well, no, I do understand the independent nature 

of the two discussions, however—— 

Secretary MONIZ. Yes. 

Mr. FLORES [continuing]. The impact is the same. So I mean the 

outcomes are the same. 

Secretary MONIZ. Well, it is all supply and demand and, you 

know—— 

Mr. FLORES. Exactly. 

Secretary MONIZ. Right. 

Mr. FLORES. Exactly. And so I guess under these circumstances, 

doesn’t it seem like the President would have an increasingly difficult time justifying lifting the sanctions on Iranian oil, and at the 

same time keeping the sanctions on domestic oil in place, where domestic oil can’t be sold abroad? 

52 

Secretary MONIZ. Well, I think the big difference is that we import 700 million barrels a day of crude oil. We are not a net exporter. We are an importer. 

Mr. FLORES. Right, but we are on track to be in a position to export, so it makes sense to lift the sanctions. 

Secretary MONIZ. Well, that is quite a few years away. We are 

still—even if you add in oil products, we are still at 4 1⁄2 million 

products a day. 

Mr. FLORES. OK. 

Secretary MONIZ. So—— 

Mr. FLORES. I have no additional questions. Thank you. I yield 

back. 

Mr. WHITFIELD. At this time, recognize the gentleman from Oklahoma, Mr. Mullin, for 5 minutes. 

Mr. MULLIN. Thank you, Mr. Chairman. And, Secretary, thank 

you for being with us again today. I believe this is the second time 

you have been in front of this panel. 

Secretary MONIZ. More than that. 

Mr. MULLIN. Well, but this year, if I am not mistaken. At least 

this is the second time you and I have had an opportunity to visit. 

And the last time we spoke, we talked about the lack of infrastructure with the power plants as far as the coal-fired plants that are 

coming down. We have a report from Southwest Power Pool there 

is going to be 12,900 megawatts lost just in their area. And just 

a while ago while you were being questioned, I believe by Mr. 

Long, you said that you didn’t see any significant challenges to 

meet those needs, but yet where is the power going to come from? 

Secretary MONIZ. Well—— 

Mr. MULLIN. If we are going to lose 12,000 just in my region, 

then where is the extra power going to be made, or where it is 

going to be produced? The gas lines aren’t there. We are seeing 4 

years to take a permit, to just simply get a permit to install a gas 

line. Unless there are power plants that are being built that I am 

not aware of in my region, then I believe there is going to be a significant challenge to meet the power needs. 

Secretary MONIZ. But first of all, let me emphasize that I did 

state that what we have seen to date, but we, of course, await a 

final rule. Secondly, of course, demand—now, I am talking nationally, not in any particular specific region—— 

Mr. MULLIN. Well, specifically speaking, the coal-fired plants are 

in a specific region. 

Secretary MONIZ. No, no, sure. Well, every plant—— 

Mr. MULLIN. I understand that, but we have 12,900 megawatts 

being lost in one region, and you said that there was—you didn’t 

see any significant challenges in meeting those needs. Where is 

that extra power going to come from? 

Secretary MONIZ. Well, I mean, first of all, I made it very clear 

that I—the same when I discussed the natural gas transmission 

pipes, there will be local issues that have to be resolved in some 

places with new infrastructure, all I can do is look at the broad picture nationally and note that, first of all, electricity demand nationally is not going up, it is essentially flat. We are building a significant amount of natural gas and wind, in particular, capacity—— 

Mr. MULLIN. So it is OK because—— 

53 

Secretary MONIZ [continuing]. Annually—— 

Mr. MULLIN [continuing]. The numbers aren’t going up—— 

Secretary MONIZ. And Oklahoma, by the way—— 

Mr. MULLIN [continuing]. It is OK—— 

Secretary MONIZ [continuing]. Has plenty of wind. 

Mr. MULLIN. Yes, but it is OK to bring the power down because 

we don’t need it right now? I mean—— 

Secretary MONIZ. I—— 

Mr. MULLIN [continuing]. That is like saying—— 

Secretary MONIZ. I did not—— 

Mr. MULLIN [continuing]. Let’s—— 

Secretary MONIZ. I did not say that. All I said was that we are 

building substantial capacity even as out demand is flat, and secondly—— 

Mr. MULLIN. Where is the building—— 

Secretary MONIZ [continuing]. We have substantial—— 

Mr. MULLIN [continuing]. We are losing power, you are saying we 

are building significant capacity. What are we building it in? Because power cannot replace—or wind cannot replace what we have 

here. You can have miles and miles and miles of windfarms, which 

we have in Oklahoma, which I, frankly, don’t think is very pretty, 

I think it leaves a lot bigger footprint than we do in anything else, 

but that is another topic, but we are losing 12,900 megawatts in 

one area. I am going back to what you said—— 

Secretary MONIZ. Right. 

Mr. MULLIN [continuing]. With the gentleman from Missouri—— 

Secretary MONIZ. Yes. 

Mr. MULLIN [continuing]. When you said you don’t see significant 

challenges meeting those needs. So what I think I hear you saying, 

now, correct me if I am wrong, that it is OK that we lose it because 

our increase for electricity isn’t—the need isn’t there so it is OK 

that we lose it. Is that what I am understanding? 

Secretary MONIZ. No, what I am saying is that, first of all, we 

have about 68,000 megawatts of wind, but what I am saying is that 

there will, obviously, all the local planning authorities will have to 

be planning, but at the macro level, we are not seeing the likelihood of enormous challenges. We are being cautious. We have to 

wait for the final rule to come into place. 

Mr. MULLIN. But you guys are already moving forward with it. 

And, Mr. Secretary, you are over the Department of Energy, and 

you are saying that the local communities, local areas, need to get 

together. What is DOE’s specific plan to meet this need? Is there 

not a need—— 

Secretary MONIZ. Well—— 

Mr. MULLIN [continuing]. It is just saying we are going to let 

them go down—— 

Secretary MONIZ. I mean—— 

Mr. MULLIN [continuing]. And let everybody else figure it out, it 

is not our problem? 

Secretary MONIZ. Look, first of all, in our system, the private sector obviously builds the power plants, builds—— 

Mr. MULLIN. But you guys are the ones that pick winners and 

losers. 

Secretary MONIZ. No. 

54 

Mr. MULLIN. Yes, it is, because—— 

Secretary MONIZ. The—— 

Mr. MULLIN [continuing]. You have said coal is going out, wind 

is the new thing. 

Secretary MONIZ. Obviously, there is a responsibility of government, whether statutory or regulatory, to set certain rules of the 

road in terms of environmental protection, et cetera, et cetera. The 

private sector and typically state regulatory bodies then respond to 

that. So—— 

Mr. MULLIN. So if I am hearing correctly—— 

Secretary MONIZ [continuing]. That is the way it works. 

Mr. MULLIN [continuing]. There is no plan. We are just going to 

drop the power and let everybody else figure it out. 

Secretary MONIZ. There—— 

Mr. WHITFIELD. Gentleman’s time has expired. 

Secretary MONIZ. They are no more—— 

Mr. MULLIN. I yield back. Thank you. 

Secretary MONIZ [continuing]. Or no less plan than there always 

has been. 

Mr. WHITFIELD. Yes. Mr. Pompeo of Kansas is now recognized for 

5 minutes. 

Mr. POMPEO. Great, thank you, Mr. Chairman. And thank you 

for your patience today. You have been with us a long time. We are 

getting toward the end and so a lot of the questions have been 

asked. And so maybe I will open the aperture just a little bit, starting with this. Do you believe that the American taxpayer has received good value for the tens of billions of federal dollars that have 

been spent on carbon capture technologies to date, yes or no? 

Secretary MONIZ. Well, first of all, I don’t think it is tens of billions of dollars, so it is quite a bit less than that. 

Mr. POMPEO. OK, whatever the number is, sir—— 

Secretary MONIZ. But the—— 

Mr. POMPEO [continuing]. Do you think we have gotten good 

value for—— 

Secretary MONIZ. Yes. 

Mr. POMPEO [continuing]. That? 

Secretary MONIZ. But I think the answer is that, yes, it will 

prove to have been very, very well spent. 

Mr. POMPEO. Great, thank you. I think they look more like slender than success, so we disagree. Yes or no, do you agree with 

French Foreign Minister who has said that the global climate 

change agreement that is being negotiated this year should be 

worded in a way that does not require congressional approval? Yes 

or no. 

Secretary MONIZ. I am not aware of that statement. 

Mr. POMPEO. So—— 

Secretary MONIZ. The—— 

Mr. POMPEO [continuing]. Do you think—I will ask it more—— 

Secretary MONIZ. The—— 

Mr. POMPEO [continuing]. Directly—— 

Secretary MONIZ. If I may say, the—currently, obviously, the Climate Action Plan that we are executing is based upon administrative authorities to get an economy-wide approach eventually, but it 

will require legislation. 

55 

Mr. POMPEO. The government that you are a part of is negotiating an agreement this year, at the end of the year, it intends to 

enter into an agreement, they have made that very clear. Do you 

believe that the agreement that the United States enters into 

ought to be submitted for congressional approval? 

Secretary MONIZ. I think we need to see what the nature of this 

agreement is. There are many agreements—— 

Mr. POMPEO. So I can’t get you to say—— 

Secretary MONIZ [continuing]. That are political agreements. 

Mr. POMPEO [continuing]. Yes, that you think that a climate 

agreement should be approved by Congress. 

Secretary MONIZ. I think it very much depends upon what the 

nature of the agreement is. 

Mr. POMPEO. I will take that as a no. Today, we have had a lot 

of questions about crude exports. It seems to me that the only 

country that you are currently advocating to export crude oil is 

Iran. Is that right? 

Secretary MONIZ. Excuse me? 

Mr. POMPEO. Well, you are sitting in a set of negotiations where 

we are going to free-up the Iranians to export their crude products, 

but you won’t advocate for Americans to be able to export their 

crude products. Is that—— 

Secretary MONIZ. As I said earlier, the situations are completely 

different, and we are a large importer of oil. 

Mr. POMPEO. The situations are identical. It would benefit each 

country greatly to be able to access foreign markets and sell their 

products at market prices around the globe, and both consumers 

and exporters would benefit from those in both countries if they are 

opened up. Do you agree with that or disagree? 

Secretary MONIZ. Obviously, for Iran—— 

Mr. POMPEO. I mean it is a simple question—— 

Secretary MONIZ. Obviously—— 

Mr. POMPEO [continuing]. Mr. Secretary. 

Secretary MONIZ [continuing]. If Iran—— 

Mr. POMPEO. It is not a trick question. 

Secretary MONIZ [continuing]. Had sanctions lifted, it helps their 

economy. 

Mr. POMPEO. And if we lifted ours—— 

Secretary MONIZ. And it indeed helps us—— 

Mr. POMPEO [continuing]. It would help ours too. 

Secretary MONIZ [continuing]. On the nuclear weapons side. As 

I said earlier, the only issue on oil exports in the United States of 

large-scale relevance is whether or not there is a significant increase in production as a result, and I have said, in the current oil 

market, that may be a difficult case to make. 

Mr. POMPEO. Right. You don’t believe in supply and demand 

when it comes to crude—which you think no more supply will be 

lodged. So we have been through that. In 18 months there will be 

a new President, although maybe not a new Secretary of Energy. 

One never knows. Your QER was prepared based on this President’s vision of greenhouse gases, their impact around the world, 

and America’s role in diminishing them. If the next President 

comes in and has a different view with respect to that, tell me 

what remains of the value of the QER work that you all did. 

56 

Secretary MONIZ. Essentially, all of it. The QER is really aimed 

clearly at facilitating more clean energy, but it is about energy security, resilience of our infrastructure, it is about North American 

energy, it has huge, huge implications for our energy infrastructure, independent of the climate issues. 

Mr. POMPEO. Yes, I just have a different view of what is in the 

QER. When I stare at it, I see the analysis and I appreciate that. 

I agree with your analysis of the requirements for increased infrastructure. We don’t disagree there. But it seems to me most of 

what is in the QER was aimed at federal intervention in the marketplace. You have several references to classic market failure with 

respect to public goods and negative externalities. I think much of 

the conclusions in the QER about how that infrastructure will be 

ultimately built out, and who will decide which infrastructure will 

be built out, is heavily dependent on this President’s vision for climate change and how the United States can impact that. And I 

just think it was a wonderful exercise, I am glad we did the work 

with respect to infrastructure, but I think the conclusions drawn on 

the QER will need to be revisited immediately by the next Administration. 

With that, I yield back, Mr. Chairman. 

Mr. WHITFIELD. Gentleman yields back. 

And that concludes our questions. We have one additional member though, Mr. Cramer of North Dakota, who is a member of the 

Energy and Commerce Committee, he is not in this particular subcommittee, but he has been so focused on these issues that he sat 

here for 2 1⁄2 hours with us, and we are going to give him the opportunity to ask 5 minutes of questions. 

Mr. CRAMER. Yes, well, thank you, Mr. Chairman. And thanks to 

my colleagues for the indulgence. 

You know what, it doesn’t only take one good North Dakotan to 

represent the entire state, so I spread myself fairly thin, Mr. Secretary. So I thank the members. And I also, Mr. Secretary, want 

to thank you not only for being here, but for at least agreeing to, 

if not joyfully, although I think you are a joyful person, to holding 

one of the listening sessions in North Dakota. I know it was a late 

request, and it was a late addition to the agenda for you and Secretary Fox and others, but I thoroughly enjoyed the time that you 

were out there. 

And I notice in the QER, there is a lot of reference to things that 

you learned last August in North Dakota, especially as it pertains 

to the transportation infrastructure, and some of the challenges 

particularly reflected are the challenges for the railroads that move 

multiple commodities, as you know. And you heard quite clearly, 

and I think, again, indicated in the report quite clearly, that there 

were challenges, but at the same time, one of the things I want to 

do, I think, is to bring the record up-to-date. Last August, we were 

following on two record winters and two bumper crops, we had two 

seasons in a row that strained the infrastructure for sure for agricultural commodities. I think one of the bigger challenges was the 

fact that not only was it a record crop or a bumper crop, but it was 

a late harvest, due to weather, it was also a late and a very wet 

harvest. And so there was a consolidation of all of those commodities. And the additional moisture creating other transportation 

57 

problems like the movement of propane, for example, for grain drying. That perfect storm created incredible stress on the infrastructure, along with, of course, 700,000 or so barrels per day of oil 

being moved by rail. So there was a lot of criticism last August. 

There is a fair bit of that reflected in the report, but just in the 

last 10 months, the storm has sort of shifted, and I want to stress 

some of those points, but also encourage you and the team to continue to monitor it on a very regular basis, because some of the 

things that were identified have worked. The STB’s weekly—the 

requirement for the weekly reports, for example, by the class 1 railroads has been very helpful in transparency, allowed better planning. A warmer winter with a more traditional harvest season, 

and, frankly, lower commodity prices have created more normalcy. 

And during which time, and I can be the railroad’s worst nightmare, but I also want to acknowledge when they have done their 

part, and I have to say for BNSF, which is obviously, our largest 

railroad by far, they have invested mightily in personnel, locomotive, energy, cars, and certainly double-tracking much of the 

Bakken region and much of the Upper Midwest. And I want to be 

sure that the record is clear, but I also want to, again, encourage 

you to remain flexible and update the report regularly to acknowledge that this robust infrastructure does exist. And it is my hope 

and my expectation that that additional and more robust rail infrastructure actually enhances all commodities. 

I also think it is worth noting that because of the STB reports, 

we have noticed that they are pretty well caught. Not just pretty 

well caught up, but caught up to the point where there is extra capacity. And much like the electrical grid, it doesn’t hurt to have a 

little extra capacity, but it also creates opportunity for growth. 

So, I would only probably ask that, for you to comment on my 

comments if you would like to, but again, express my appreciation 

for your attention to the issues. 

Secretary MONIZ. Well, thank you. And we certainly appreciated, 

by the way, your participation in the QER field hearing in North 

Dakota, along with your Senate colleagues. 

First of all, I think you have put your finger on really what was 

the main driver of our discussion on this subject in the QER, and 

that was the need for more data. To be perfectly honest, the railroads have not always been the most transparent in terms of data 

availability. And I think that has certainly been improved, and certainly, the issues around coal, for example, have been certainly relieved. There are other issues, as we know, in terms of oil by rail 

that are being addressed, and I might say that with the Department of Transportation we have now launched the next phase of 

the study of relevance to crude properties and rail. 

Mr. CRAMER. Yes. 

Secretary MONIZ. It will take about 18 months before we are 

ready with that. But I think you are absolutely right. We have had 

some progress on the data front and EIA, by the way, is playing 

a role in there as well. 

Mr. CRAMER. Yes, they are. Yes. 

Secretary MONIZ. So it is great. 

Mr. CRAMER. Well, thank you. And thank you again, Mr. Chairman. 

58 

Mr. WHITFIELD. Well, thank you. 

And that concludes the first panel. Secretary Moniz, thank you 

very much for your testimony and answers to our questions, and 

we look forward to continuing to work with you on many pressing 

issues as we move forward. And thanks again for your leadership. 

And Mr. Rush will be notifying you of the formation of the fan club, 

and we will be getting together soon with that. 

Mr. RUSH. Yes. 

Secretary MONIZ. Well, thank you, Mr. Chairman. Thank you, 

gentlemen. 

Mr. RUSH. Mr. Chairman, we will have our first meeting relatively soon. 

Secretary MONIZ. OK. 

Mr. WHITFIELD. And there will be a huge crowd there, so. 

I would like to call up the second panel of witnesses at this time. 

And I want to thank them for their patience. I know many of them 

came from long distances. 

On our second panel today we have Mr. Rudolf Dolzer, who flew 

all the way to the U.S. from Bonn, Germany, to testify. And we appreciate him being here. We have Mr. Jason Grumet, who is the 

President of the Bipartisan Policy Center. And we have Mr. Gerald 

Kepes, who is Vice President, Upstream Research and Consulting. 

We have Ms. Alison Cassady, who is the Director of the Domestic 

Energy Policy for the Center for American Progress. We have Ms. 

Emily Hammond, who is Professor of Law at George Washington 

University Law School. And I am going to call on my colleague, Mr. 

Pitts of Pennsylvania, to introduce one of our witnesses as well. 

Mr. PITTS. Thank you, Mr. Chairman. I am very pleased to introduce Mr. Scott Martin, a County Commissioner from Lancaster 

County, Pennsylvania, formerly chairman of that commission, and 

also active in the statewide Association of County Commissioners. 

An outstanding commissioner who I am very pleased could travel 

down from Pennsylvania to be with us today. 

Thank you, Mr. Chairman. 

Mr. WHITFIELD. Thank you. And, Mr. Martin, thank you for 

being with us. 

Once again, I want to thank all of you. We really look forward 

to your testimony. And I am sorry that there was such a delay in 

your testifying. We had to reschedule a little bit. But, Mr. Dolzer, 

I think you came the longest distance—from Bonn, Germany, and 

I think you were in the German Parliament at the time, and you 

are a professor also at the University of Bonn, and so we genuinely 

appreciate your making this effort. And I am going to recognize you 

to start off with for 5 minutes. And then after everyone has concluded, we will have some questions for some of you. So, Mr. 

Dolzer, you are recognized for 5 minutes. 

59 

STATEMENTS OF RUDOLF DOLZER, ADVISORY BOARD MEMBER, ASSOCIATION OF INTERNATIONAL PETROLEUM NEGOTIATORS, AND PROFESSOR OF INTERNATIONAL LAW, UNIVERSITY OF BONN; JASON GRUMET, PRESIDENT, BIPARTISAN POLICY CENTER; SCOTT MARTIN, COMMISSIONER, 

LANCASTER COUNTY, PENNSYLVANIA; GERALD KEPES, VICE 

PRESIDENT, UPSTREAM RESEARCH AND CONSULTING, IHS; 

ALISON CASSADY, DIRECTOR OF DOMESTIC ENERGY POLICY, CENTER FOR AMERICAN PROGRESS; AND EMILY HAMMOND, PROFESSOR OF LAW, GEORGE WASHINGTON UNIVERSITY LAW SCHOOL 

STATEMENT OF RUDOLF DOLZER 

Mr. DOLZER. Thank you, Chairman Whitfield, Ranking Member 

Rush, members of the committee. My name is Rudolf Dolzer, I am 

a German national who, all together, has lived about 8 years in the 

United States. In Germany, I became a law professor. Subsequently, I was director general of the Federal Office of the Chancellor and the Chancellor Kohl. This is where my gray hair come 

from. And then I was appointed three times to the German Parliament’s Commission of Inquiry. We have that in Germany, you 

can be appointed to Parliament without the right to vote. 

In the U.S., I studied in Spokane, Washington, at Gonzaga University. Then I studied for a longer period at the Harvard Law 

School. I later taught at five U.S. universities; the last time in Dallas in Texas. In Houston, I am a member of the Advisory Board of 

the Association of Independent Petroleum Negotiators. A month 

ago, I published a larger study of international cooperation in global energy affairs. 

Mr. Chairman, the era of abundance, as you say, opens up new 

opportunities of leadership for the United States, and the world is 

looking at the United States. This reminds us also, at least me, 

that energy is not just about energy, it is about foreign affairs, it 

is about national security, it is about finances. But ultimately, energy has its own characteristics and dynamics and, this is my first 

major point, foreign affairs, national security, and also issues such 

as trade must be folded into the fabrics of energy politics and not 

the other way around. This is also my view as regards climate 

change. 

Energy politics, Mr. Chairman, and when I look at your draft on 

energy diplomacy, energy politics also calls for arrangements of its 

own when it comes to international cooperation. Title III of the 

present bill represents an innovative modern approach, also from 

an international point of view. This Title may even be strengthened 

by a transatlantic trade and investment partnership. Again, trade 

is not just one aspect of energy. Recent events, and this has been 

addressed this morning, in Russia and Ukraine, and Europe in 

general, have underlined that energy independence will require 

safe energy supplies, and will require political foresight and a robust long-term strategy. Together, we must understand the nature 

of that issue. 

This is not well known, Europe as a whole will, in the coming 

decade become more vulnerable as our resources dwindle, in particular in Norway. So this is Europe as a whole. The forums as proVerDate Nov 24 2008 11:39 Feb 29, 2016 Jkt 037690 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-47 CHRIS
60 

posed in your bill will serve to provide a common basis, but I propose that we go further and establish a more advanced concept 

which I call the Transatlantic Energy Agenda. We need to update 

and broaden existing arrangements with the new involvement, I 

think of parliaments and of the private sector. We have longstanding arrangements for cooperation in foreign affairs, in national security, in agriculture, for example. For energy, arrangements of this kinds are lacking at the moment, and I think that 

ought to change. We need more exchange, we need better exchange, 

we need to know what we are doing, and we need exchange about 

best practice. 

America’s abundance also lends itself to strengthening of regional partnerships. In Europe, we have particular experience in 

this respect. Since 2009, the European Union has the competence 

to deal with the establishment of a single market, but the member 

states have retained their sovereign powers to determine the energy mix. The French made sure that no one touches their right to 

work with atomic power. This is a very complex jurisdictional situation which we have in Europe. We now have a set of rules promoting competition in Europe with liberalization with unbundling. 

We have less progress, and I think this is of interest here so far 

with regard to internal and cross-border connections to overcome 

isolated domestic markets. 

The key concept which has been worked out in the last 24 

months has been the idea of project of common interests, as it is 

called. The new rules call, and I think this is of interest here, for 

a much more rapid process of approving permits. So far, that time, 

don’t be astonished, took about 10 years or more to have a permit 

for a trans-border arrangement. This is now going down to 3 1⁄2

years at a maximum, according to the new law. Also member states 

now must introduce one-step authorities instead of the multitude 

of institutional arrangements we have had so far. 

Now, the funds needed for a single energy market will be considerable, but I think the advantage will justify the cost. Costs in 

terms of secure supply, new infrastructure urgently needed, more 

options for the customers, better negotiating position on the international level. When you negotiate with Russia or the OPEC or 

Venezuela, I think the larger your market, the better it is. In 

North America, I think a new taskforce by the NAFTA countries, 

similar to the European Commission, might help to elaborate a 

unified energy strategy. 

Mr. Chairman, I conclude. In the past, energy issues have at 

times been a bone of contention between the United States and Europe; sometimes a bitter contention. I think your bill with Title III 

has the promise and the hallmarks of a new era of cooperation, 

with tangible benefits on both sides of the Atlantic. 

Thank you very much for your attention. I very much appreciate 

this opportunity to express my views before your important committee. Thank you very much. 

[The prepared statement of Mr. Dolzer follows:] 

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Mr. WHITFIELD. Well, thank you, Dr. Dolzer. 

And our next witness, as I said, is Mr. Jason Grumet, who is the 

President of the Bipartisan Policy Center. And thank you very 

much for being with us. You are recognized for 5 minutes. 

STATEMENT OF JASON GRUMET 

Mr. GRUMET. Well, thank you very much, Chairman Whitfield, 

Mr. Rush, and the resilient members of the committee. On behalf 

of the Bipartisan Policy Center, it is a pleasure to join you in this 

important discussion on the economic and policy architecture governing our Nation’s energy abundance. 

My testimony can be summarized into 3 main points. First, I 

want to applaud the committee for focusing on significant opportunities to strengthen North American energy integration and collaboration. North American energy security and self-sufficiency are, 

in fact, realistic goals that must be vigorously pursued, and not 

taken for granted. 

My second point, Mr. Chairman, is that increased North American cooperation is a critical component of a larger effort to promote economic growth through efficient markets, to enhance North 

America’s role in global energy trade, and to project U.S. power 

and global interests. 

And my third point is that we must seize the opportunity to 

translate this strength of abundance into a long-term and sustainable energy strategy, and not allow this strength to result in unintended complacency. 

In short, Mr. Chairman, this committee and Congress has the 

disorienting challenge of managing success, which is a new problem 

for our Nation when it comes to energy policy, and I think it creates real opportunities that we need to discuss. 

So let me begin by saying a little bit about the energy integration 

and collaboration. I believe the provisions in this legislation that 

promote data quality and sharing, that coordinate planning and 

improve permitting and siting, are all essential to achieving the 

promise of North American energy security. 

The opportunities are particularly pronounced in the case of 

Mexico. While U.S. companies have much to gain in increased 

trade with Mexico, it is hard to overstate the importance of energy 

production to the Mexican economy, and the broader U.S.-Mexican 

relationship. Even after years of decline, energy production remains a key source of high-paying jobs, and is responsible for actually 1⁄3 of the Mexican Government’s overall activities. If modernization efforts succeed, energy production could be a significant 

driver of Mexican economic development and individual opportunity. And the implications here are quite broad. The Bipartisan 

Policy Center believes that we must reform our Nation’s broken immigration system. And while this hearing is not the place to discuss the challenges and intricacies of protecting the southern border or enhancing our legal immigration, there is no question that 

improved economic opportunity in Mexico is an essential component of successful and lasting immigration reform. 

Let me turn now to the issue of siting. While our technology for 

producing energy has evolved dramatically over the last decades, 

our permitting policies date back to the 1950s and 1960s, and are 

67 

poorly matched to our rapidly evolving needs. We commend the 

committee’s substantive efforts to make the cross-border permitting 

process more transparent and predictable. BPC also commends the 

committee’s political judgment in crafting this provision to exempt 

the still-pending Keystone decision. It is time to have a broadbased bipartisan energy debate that is explicitly beyond Keystone, 

and it is encouraging to see the committee working diligently to 

avoid a focus on symbolic disagreements in favor of producing an 

agenda that can secure broad bipartisan support and become law. 

I would like to now move to the second point, which is a focus 

on the component that North America plays in the larger global 

picture. Our Nation has made, I think some very good progress of 

late supporting LNG exports, but as was discussed earlier, current 

restrictions on crude oil are undermining out commitment to efficient markets, they diminish our ability to promote free trade and 

fair trade, and they empower our adversaries who seek to use energy as a weapon. I cannot build upon Mr. Barton’s string site of 

studies except to agree that there has been a spate of recent analyses that all conclude that adding a reliable supply of crude to the 

global market will continue to exert downward pressure and actually protect U.S. consumers. 

My final point is on the challenge of how we use this abundance 

to promote our long-term sustainability and security needs. There 

is a broad critique of the abundance agenda that must be grappled 

with if we are going to secure the broad-based support for an effective national energy policy. The concern is that stable, low-cost supplies of oil and gas are undermining investment in the diverse 

array of technologies our Nation and the world will require over 

the next century to meet global demand, to protect our security interests, and to confront the risks of climate change. This legitimate 

concern, however, leads to very different policy pathways. The Bipartisan Policy Center believes that additional action must be 

taken to confront climate change, but we reject the idea that we 

should pursue a low-carbon future by erecting and undermining 

barriers to the resurgence of oil and gas production. Perpetuating 

inefficient markets and creating transportation and infrastructure 

bottlenecks in the hope of somehow reducing global reliance on fossil fuels is not an effective climate change strategy, and if anything, it will result in increased emissions. Instead, as we vigorously pursue the benefits of abundance, we must be equally determined in conducting the research and creating the incentives to develop and commercialize the next generation of energy breakthroughs. From carbon capture and storage, to utility-scale solar, 

to next generation biofuels, advanced nuclear energy storage, and 

an array of energy-saving technologies, we must find ways to encourage greater investment, despite the current low price environment. 

America’s hydrocarbon renaissance has given us the gift of time. 

The question before the committee and Congress is what do we do 

with this time. 

In closing, the Bipartisan Policy Center looks forward to continuing to work with the committee as you build an architecture for 

abundance that grows our economy, enhances our security, and 

confronts domestic and global environmental threats. 

68 

Thank you. 

[The prepared statement of Mr. Grumet follows:] 


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Mr. WHITFIELD. Thank you. 

And our next witness, who has already been introduced, but is 

Mr. Scott Martin, who is a County Commissioner, Lancaster County, Pennsylvania. Thanks for being with us, and you are recognized 

for 5 minutes. 

Mr. MARTIN. Thank you, Mr. Chairman. Just for the record, it is 

Lancaster, not Lancaster. 

Mr. WHITFIELD. What did I say? 

Mr. MARTIN. Lancaster, that is what—you said like Burt Lancaster. 

Mr. WHITFIELD. OK. 

Mr. MARTIN. That is in Lancaster County, so—— 

Mr. WHITFIELD. Well, I am going to—— 

Mr. MARTIN [continuing]. We will have Mr. Pitts work with you 

on that one. 

Mr. WHITFIELD. I am going to let you and Mr. Pitts work that 

out. 

Mr. MARTIN. All right, well, thank you, Mr. Chairman. 

Mr. WHITFIELD. But thanks for letting me know. 

STATEMENT OF SCOTT MARTIN 

Mr. MARTIN. You are welcome. Thank you, Mr. Chairman, and 

members of the subcommittee. It is an honor to be here. Again, I 

serve on the Lancaster County Board of Commissioners. 

The United States must work to develop a coherent, logical, and 

clear national energy strategy. I applaud Chairman Upton for his 

architecture of abundance legislative framework that will hopefully 

stimulate a wide-ranging and bipartisan debate on the need for a 

long-term national energy agenda based upon economic development, commonsense regulations, a modern and safe energy infrastructure, greater efficiencies, increased exports, especially with 

LNG, to support our foreign policy goals, environmental sensitivity, 

minimal government involvement, and utilization of free market 

economic principles. 

There are certainly many positive developments and trends in 

energy, however, there are also numerous challenges and issues 

that urgently need to be addressed. The longer we wait to address 

and solve these issues will only make them more difficult, expensive, complicated, and controversial. 

One of the most pressing priorities is energy independence. Of 

course, energy independence can only be achieved through new and 

recoverable sources. The required infrastructure exists, the regulatory environment is not hostile, excuse me, capital is available to 

finance the expansion in both domestic and international markets 

are functioning properly. Thankfully, due to horizontal hydraulic 

fracturing, known as fracking, and the discovery of vast new oil 

and gas reserves, America is now the world’s largest oil and natural gas producer. As they should, energy prices have been decreasing. The United States is increasingly able to export large amounts 

of LNG around the world, and especially to European countries. 

The volatile and tense situation in Ukraine demonstrates very 

clearly why we need to build the Keystone XL Pipeline, greatly accelerate the permitting of LNG export facilities, and work to expedite the building of pipelines and compressor stations. 

78 

As noted above, a significant technological improvement has been 

the use of fracking and extracting natural gas from shale. The use 

of fracking in Pennsylvania, and the construction of necessary infrastructure, has had widespread and significant economic development impacts. Some of these include 96 percent of new energy 

hires were from the Appalachian area, 45,000 new building trade 

jobs in that same region, 243,000 new energy jobs in Pennsylvania, 

over $1 billion invested by the shale industry in road and infrastructure improvements, and including energy industry grants to 

community college and trade schools to train the workers needed 

by extraction companies in the Marcellus Shale region, with an average core wage of $68,000 a year. 

This increased shale gas production in Pennsylvania has also saved the average Pennsylvania family between $1,200 to $2,000 

annually in energy savings costs. Businesses and other institutional energy users have also benefitting from the greatly increased 

availability of cheap natural gas. The Pennsylvania National 

Guard and Army Reserve components of Fort Indiantown Gap, the 

Garden Spot Public School District, and the Shady Maple Companies, all in our area, have experienced significant savings in their 

energy bills after switching to natural gas. 

Cheaper energy will further a developing industrial and manufacturing renaissance in America. In brief, lower energy costs create more disposable income, and hence, greater aggregate demand. 

Decreased transportation costs lead to lower prices, and American 

products are more globally competitive. The domestic oil and gas 

revolution can only be successful long-term if the necessary pipelines are quickly built and brought online. The Williams Company 

has proposed to build 180 mile interstate pipeline, known as the 

Atlantic Sunrise Project, from northern Pennsylvania and connect 

it to their main U.S. gas pipeline that travels from Texas to the 

northeast. The actual connection point would be in southern Lancaster County. Thirty-seven miles of the proposed pipeline would go 

through my county, and we are talking about a $2.6 billion economic impact throughout the construction of this project. Williams 

has been very cooperative and easy to work with as various concerns have come up. Over 100 route changes, which is more than 

1⁄2 of the original route, have been made based on stakeholder 

input. Williams is also committed to making the pipeline open access so that potential customers in Lancaster County could directly 

access the pipeline. 

As you can imagine, a project of this size does generate controversy and opposition. One early controversy was the proposed 

routing of the pipeline through a protected and environmentally 

sensitive area parallel to the Susquehanna River. The Board of 

Commissioners, working with several local organizations, went to 

Williams and expresses strong concerns regarding this route. Williams quickly found a new route and completely moved away from 

the sensitive areas, and did so with Native American sites and 

water source areas. 

Lancaster County has five significant pipelines running through 

our county. Many property owners are not even aware of the pipelines that cross their land. Based upon discussions with local farmers having existing pipelines on their property, Williams, including 

79 

with their major U.S. pipeline, has been very responsive to their 

needs. 

Lancaster County is one of the leaders in agricultural production, 

not only in Pennsylvania but across the county, but we also preserve more farmland than any other county in the United States, 

with over 100,000 acres preserved. Needless to say, the county ordinances that govern our farmland preservation program have allowed pipelines since inception. Since November of 2014, there 

have been two elections where the proposed pipeline was in a de 

facto manner on the ballot, and the voters were very clear in rejecting efforts to stop the proposed pipeline, including an effort to have 

two townships adopt a community-based ordinance that would essentially declare that federal and state laws do not apply in these 

municipalities. I believe that many of these voters clearly recognize 

that this pipeline represents the concept of a greater good being 

served. 

In closing, I want to again emphasize how incredibly important 

the ongoing energy revolution is to the future of the United States, 

and indeed, the world. While renewables, greater efficiencies, clean 

coal, next-generation nuclear, and a secure and smart grid are vitally important, it is really the virtually unlimited supply of clean, 

recoverable natural gas from shale that will lead America into the 

future. 

Thank you. 

[The prepared statement of Mr. Martin follows:] 

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Mr. WHITFIELD. Thank you, Mr. Martin. 

And our next witness is Mr. Gerald Kepes, who is Vice President 

of Upstream Research and Consulting. And, Mr. Kepes, thanks for 

being with us, and you are recognized for 5 minutes. 

STATEMENT OF GERALD KEPES 

Mr. KEPES. Thank you, Mr. Chairman. Members, thank you for 

having me here. 

Mr. WHITFIELD. Did you turn your microphone on? 

Mr. KEPES. I will do that. How about that? Does that come 

across? OK. Apologize for that. 

Mr. Chairman, members, thank you very much. I am actually 

very pleased to be in front of you today because in my world, which 

is—— 

Mr. WHITFIELD. Mr. Kepes, forgive me for interrupting. Would 

you mind taking Ms. Cassady’s microphone and try that one? 

Mr. KEPES. Push that again. Thank you very much. Again, my 

apologies. I hope this doesn’t eat into my 5 minutes here. 

Mr. Chairman, members, thank you. I am very pleased to be 

here today because the world that I usually am in is the business 

world, in the exploration and production business. I am a geologist. 

I have been in and around the oil and gas industry for 30 years, 

so you can decide whether that makes me objective or not on this 

business, but I think I am fairly knowledgeable. And I am also representing the work and analysis and experience of my colleagues 

at my company. 

What I really want to talk today about is competitiveness of the 

E&P sector, and more than the volumes that have been produced, 

the new supplies from shale, just as important for you to think 

about is the incredible competitiveness of the energy industry right 

here. And the reason is that competitive basically means cost and 

efficiency, and reaction to market conditions. So, for example, as we 

look at this low oil price period, which has many benefits for the 

economy, consumers, et cetera, at one point clearly, perhaps the 

Saudis and others thought that the U.S. oil industry was just a 

phenomenon of high oil prices. That is not the case. In other words, 

many thought that this industry, the shale oil and gas industry, 

could survive only with high oil and gas prices. That is not the 

case. So that is actually one of my first points today. This is not 

a high oil price phenomenon. But we have had low natural gas 

prices for about 6 years right now, and shale gas production has 

sustained and, in fact, grown. That is critically important. And why 

is that so important? Because when it comes to thinking about energy diplomacy and the idea that we can export the volumes that 

we have, because we will match or meet the internal requirements, 

it is not just about volumes. What we are really exporting is competitiveness. And I want to make that point, is that anything that 

you might consider in terms of these energy diplomacy objectives 

or goals, which are actually quite admirable, they will be sustainable and viable as long as this competitiveness exists because it is 

not just offering to send supplies somewhere, the marketplace is 

what is pulling them. Whether it is the Ukraine or parts of Europe 

or Mexico, as I will talk about next here, which is a great example, 

they wouldn’t be doing this if these supplies exported from U.S. 

89 

shores were not competitive and a lower-priced alternative to other 

factors. This is particularly important because if we define very 

simply what energy security is, which is really, we would argue, reliable supply at affordable prices. 

So let’s take Mexico. Right now, there is a lot of interest in Mexico because of the opening of the E&P sector, that is exploration 

and production, because of the fact that we have had over 70 years 

of a monopoly of the state oil company, PEMEX, going to be reversed. But that is actually not the biggest issue going on. The bigger issue is the fact that Mexico is going to be importing a lot more 

natural gas from the United States. I am sure the committee 

knows that right now, they import about 2 billion cubic feet a day. 

That number could go up to 5 or 6 billion cubic feet a day within 

the next 10 years. It is a bigger impact because, two things. One, 

all this will draw more much gas-fired power generation if the reforms work in the midstream and downstream in Mexico, and we 

hope that they will. That should result in lower energy prices for 

the entire economy. We don’t know yet if it is 10 percent lower or 

if it is 30 percent lower, but the impact of that on the Mexican 

economy competitiveness, this is actually the big picture. It is not 

so much the oil side, what I am trying to say, it is the gas side 

and what we are about to do right there. That is a very important 

factor. 

Now, it is said, and it is quite true, that Mexico has substantial 

natural gas resources, but in this case, the decision that they made 

was, if they tried to develop their own natural gas resources right 

now, it is so expensive that it made far more sense to import less 

expensive U.S. natural gas. That is a choice for competition, it is 

a choice for competitiveness, and again, if you want to look at it 

from an energy policy program for the U.S., a tremendous success, 

because as this goes forward, that competitiveness, that lower price 

and efficiency is what is going to have a larger impact on the Mexican economy, and a huge contributor to what has already been 

troubled at times, but a very successful U.S.-Mexican relationship. 

So those are the arguments I want to put in front of you. That, 

one, shale production is not a high-priced phenomenon. Also intrinsic to the supply volumes that we have, which is important, is the 

competitiveness of that. One, that if it is going to be part of U.S. 

energy diplomacy initiatives, then that competitiveness needs to 

continue. That is going to undergird all of that in order for it to 

be successful. And finally, U.S. infrastructure processes and regulations, naturally, have to be equally competitive in order to allow 

this to be sustained. 

Thank you very much for giving me the time. 

[The prepared statement of Mr. Kepes follows:] 

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Mr. WHITFIELD. Well, thank you, Mr. Kepes. 

And our next witness is Alison Cassady, who is the Director of 

Domestic Energy Policy for the Center for American Progress. And 

thank you very much for being with us, and you are recognized for 

5 minutes. 

STATEMENT OF ALISON CASSADY 

Ms. CASSADY. Thank you, Chairman Whitfield, Ranking Member 

Rush, and members of the subcommittee, thank you for the opportunity to testify today. My name is Alison Cassady, and I am Director of Domestic Energy Policy for the Center for American 

Progress. CAP is a nonprofit organization dedicated to improving 

the lives of Americans through progressive ideas and action. 

Before I jump into my more specific comments on the energy diplomacy discussion draft, I would like to highlight a topic that is 

not a subject of today’s hearing, but I think should be, and that is 

climate change which, to me, is the most urgent and challenging 

energy diplomacy issue of our time. 

Climate change has become a priority in international relations 

because the climate science is so clear. A failure to act on climate 

change risks severe, irreversible impacts on a global scale. As the 

committee considers the Nation’s energy policy and its interaction 

with the rest of the world, CAP urges you to put climate change 

front and center of any policy that you develop. We can no longer 

afford to separate energy policy from climate policy. 

So with that introductory context in mind, I am going to jump 

into a few thoughts on Section 3104 of the discussion draft about 

cross-border energy projects. 

As you all know, under current law, entities wanting to construct 

or operate a cross-border pipeline or transmission line are required 

to obtain a presidential permit. This section of the bill eliminates 

that requirement, and instead requires the relevant federal agency 

to issue a certificate of crossing; that is, unless the agency finds 

that the cross-border segment of the project is not in the public interest of the United States. 

And I have a few concerns about this approach. First, the new 

process presumes that the project is in the public interest, placing 

the burden of proof on concerned stakeholders to demonstrate that 

it is not, instead of asking the applicant to make the affirmative 

case that it is. Second, under the new process, the applicant only 

needs to obtain federal approval for the portion of the project that 

physically crosses the U.S. border, even if the project itself spans 

hundreds of miles. And finally, the new process limits environmental review under NEPA to just the cross-border section of the 

project. To me, this makes little sense since we all know that these 

types of projects can have environmental impacts well beyond the 

border. For a truly transcontinental project, such as a pipeline that 

runs through numerous states down to the Gulf Coast, the current 

presidential permitting process is the only venue for the public and 

stakeholders to examine and understand the potential impacts of 

the whole project that is under consideration. Under the process established by this bill, the review would be fragmented, it would be 

state-by-state, and no one except the project applicant would ever 

examine the project as a whole. 

98 

I also have a few concerns about Section 3106, which is the LNG 

export section. This section sets a 30-day deadline upon the completion of an environmental review for the DOE to issue a final decision on any application to export natural gas to a non-free trade 

county. The United States is well on track to becoming a new exporter of natural gas. To date, the DOE has issued final authorizations to 6 facilities to export up to 8.6 billion cubic feet per day of 

LNG. That is more than 10 percent of daily U.S. natural gas consumption, and that is on top of what we already export to free 

trade countries like Mexico. 

The existing DOE permitting system appears to be working. It 

puzzles me, therefore, why we need a bill that would seek to fasttrack new DOE permit approvals. To be clear, CAP does not oppose 

LNG exports in principle, but we have concerns about placing an 

artificial deadline on agency review of permit applications. Congress should not preclude DOE from taking the time it needs to 

make a considered and well-informed decision, particularly on the 

most difficult projects. The stakes are simply too high for natural 

gas consumers here in the United States. Last year, the Energy Information Administration concluded that increased LNG exports 

lead to increased natural gas prices. And these higher natural gas 

prices create economic winners and losers. Certainly, natural gas 

producers and employees of natural gas producers would be the 

clear winners, but, for example, manufacturers that use natural 

gas as a feedstock would face much higher energy costs. 

In short, the decision to export significant volumes of natural 

gas, even to our allies, is a complex one that should not be made 

lightly given the potential consumer impacts here in the United 

States. This decision is made even more complicated given the 

growing demand here at home for natural gas in both the electricity sector and the transportation sector. So if the United States 

overcommits to natural gas exports via long-term 20-year contracts, 

consumers here could pay the price, and that is why a deliberative 

process is so important. 

With that, I will end my testimony, and be happy to answer any 

questions. 

[The prepared statement of Ms. Cassady follows:] 

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Mr. WHITFIELD. Thank you, Ms. Cassady. 

And our next witness is Ms. Emily Hammond, who is Professor 

of Law at George Washington University Law School. And thank 

you for joining us, and you are recognized for 5 minutes. 

STATEMENT OF EMILY HAMMOND 

Ms. HAMMOND. Thank you, Chairman Whitfield, Ranking Member Rush, and the distinguished members of the subcommittee. I 

appreciate the opportunity to testify today. 

In my testimony, I would like to highlight several concerns that 

undermine the discussion draft’s important goal of a unified energy 

policy. These concerns relate specifically to Sections 3102, 3104, 

and 3106. In short, those provisions fail to properly account for the 

reliability, fuel diversity, and environmental implications of energy 

policy, and they also fail to adequately permit the energy agencies 

to undertake their work in a participatory, deliberative, and wellreasoned manner. 

Let me start with the Interagency Taskforce. Despite that the 

lines between energy and the environment no longer truly exist— 

excuse me, the composition of the taskforce has significant gaps 

that will hinder rather than help the development of a comprehensive energy policy. Most critical is the absence of agencies with environmental expertise. But other key agencies like those whose 

missions relate to jobs, to the economy, and to transportation, are 

also omitted from the taskforce. As demonstrated by the QER, 

which we heard about this morning, all of these agencies can successfully work together toward unified energy policies, and administrative law will show that when agencies collaborate in this way, 

they are more successful, and that they tend to have broader stakeholder support, and they have reduced vulnerability to judicial 

challenges. 

For the same reasons, the criteria for the Interagency Taskforce 

as planned should include environmental issues, and especially climate change. Failing to do so will only deepen the current dysfunctions in our energy regulatory system and in the energy markets. 

Second, the authorization for cross-border infrastructure projects 

does not make clear how DOE would implement its authority differently from how it currently does under the presidential permit 

framework. Currently procedures do account for environmental 

issues, and those should be retained. I note as well that the provisions striking portions of the Federal Power Act, and in particular 

Section 202(f), threaten to undermine important backstop authority 

that the Federal Power Act retains for FERC that allow it to ensure grid reliability for intrastate projects that cross international 

boundaries. I urge the subcommittee to carefully reexamine the 

striking provisions of this section. 

Finally, the 30-day deadline for DOE action on LNG applications 

is of concern. Even if DOE is able to act quickly in some circumstances, it needs more flexibility, given the very complex issues 

at stake. Imposing a rigid deadline actually threatens more delay. 

First, deadline suits, which are contemplated by the discussion 

draft, tend to impose additional delays even if those suits are successful. And second, with stakes so high and such engaged stakeholders, judicial challenges are inevitable. All right, we can easily 

113 

predict lawsuits no matter DOE’s decision, and if DOE is rushed 

in making its determination, the record is less likely to be carefully 

developed, the agency’s reasoning may not be clear, and once again, 

it is likely to be more vulnerable to judicial remand and imposition 

of even further delays. 

To summarize, the relationship between energy and the environment must be considered as the United States seeks a uniform energy policy. Careful attention to administrative procedure and its 

role in promoting good government must also accompany any new 

energy statutes. If we move forward with U.S. energy policy with 

these principles in mind, we can make substantial improvements 

for the future. 

Thank you again for the opportunity to testify today, and I look 

forward to your questions. 

[The prepared statement of Ms. Hammond follows:] 

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Mr. WHITFIELD. Well, thank you, Ms. Hammond. 

And that concludes the opening statements. I just want to make 

an announcement that we are expecting some votes around 1:30 or 

so. There are only six members here, so we each get 5 minutes. 

That will be 30 minutes. I think that we can make it through and 

give you all an opportunity to respond if we go efficiently and 

quickly. 

So I am going to recognize myself for 5 minutes, make sure I get 

mine in, Bobby, and then we will go from there. 

Ms. Cassady and Ms. Hammond both made comments about climate change, and certainly, that is something we are very much 

concerned about, but I would like to remind everyone that within 

the Federal Government, just the U.S. Federal Government, there 

are 68 different initiatives on climate change. There has been a 

total of about $36, $37 billion spent by the U.S. Government alone 

each year just on climate change. So the differences that we are 

having with President Obama, truthfully, is that he views it as the 

most important issue facing mankind, and some of us have different views that a job, access to healthcare, clean water, affordable 

energy, economic growth are very important also. So I appreciate 

your comments—and now Mr. Pallone is coming in so that is another person, so I am going to have to hurry. OK. I wanted to make 

that comment. 

Now, Dr. Dolzer, in France, they have a large percentage of their 

electricity produced from nuclear. Germany made the decision, I 

guess, to stop all production of energy by nuclear. Is that still the 

policy in Germany? 

Mr. DOLZER. That is the policy. We decided 3 days after the 

Fukushima events in 2010 to phase-out. We had an earlier change 

in 2000, then we had another change in 2009, and Fukushima is 

still the key event in Germany. At the moment, my prediction is— 

the current situation is that 1⁄2 of the nuclear plants have already 

been phased out after 2011, and the rest, eight of them are still in 

operation. They will be phased out by 2021. 

Mr. WHITFIELD. And, of course, you all have been—in Germany, 

they have been moving very quickly to renewable energy: wind, 

solar, whatever. So what has the result been? I mean has it affected your reliability? Has it affected the retail prices of electricity 

or not? 

Mr. DOLZER. It has affected the price of the consumer considerably. I think the price went up by about 30 percent for electricity 

for the private households. 

Perhaps one conclusion is, and I am not here taking any particular position, if you change policies to it in a pragmatic manner 

without too much momentary intervention, I think the change in 

Germany has forced us to react very quickly. It had some rather 

unintended consequences. At the moment, we are the main importer of U.S. coal. Now, of course, this is a little bit odd and awkward to have more coal—— 

Mr. WHITFIELD. I was told that last year—— 

Mr. DOLZER [continuing]. As a consequence—— 

Mr. WHITFIELD [continuing]. Two-thirds of U.S. coal exports went 

to Europe. 

120 

Mr. DOLZER. Correct. So we are supporting West Virginia. A consequence of our decision to phase-out nuclear was de facto to promote coal. For the moment, my prediction is this policy will not 

change. None of the major political parties, including the one to 

which I belong, intends to change. However, I think if I listen to— 

correct to what my wife tells me, opposition among the people is 

growing to this policy. The question is, is that affordable, what we 

are doing at the moment in the long-run. Germany has many 

issues, as most other states. We need more schools, we need better 

universities, we need more streets, and the question is can we focus 

our budget in the way we did on one issue alone, which is—— 

Mr. WHITFIELD. Yes. When you—in your testimony, when you 

were talking about Europe being more vulnerable, is that what you 

were referring to? 

Mr. DOLZER. That is correct. The—— 

Mr. WHITFIELD. The policy about the renewables and the push 

for—— 

Mr. DOLZER. The policy about renewables, together with the policy of phasing out nuclear power means that we need more energy 

in the future as regards gas. We have a very special situation; we 

can get more gas from Russia, from Iran, from Algeria, or at the 

moment from Norway, but Norway is about to peak. In other 

words, our choices are not considerable. And here I would like to 

come back for a moment to U.S. policy. The U.S. has criticized us, 

of course, for being dependent too much on Russian gas. Correct. 

Almost 40 percent. At the same time now, of course, in an era of 

abundance, the Europeans would hope that the United States allows for more gas to be exported to Europe in a situation where 

we need stronger support with our alternatives. And I think even 

small additional imports from the United States would help on a 

symbolic manner. In other words, the position in Europe that you 

hear quite often is, on the one hand the U.S. criticizes that we are 

too dependent on Russia or Iraq or—— 

Mr. WHITFIELD. Yes, OK. 

Mr. DOLZER [continuing]. Whoever, on the other hand, the U.S. 

does not allow and facilitate—— 

Mr. WHITFIELD. Yes. 

Mr. DOLZER [continuing]. Exports to Europe. I think this is a position that may be reconsidered. 

Mr. WHITFIELD. OK. At this time, I am going to recognize Mr. 

Rush for 5 minutes. 

Mr. RUSH. I want to thank you, Mr. Chairman. Mr. Chairman, 

I just want to take a moment to welcome back to the committee 

Ms. Cassady. She served for many, many years as an expert staffer 

under our former chairman, Henry Waxman, and she was on this 

side of the table, and now she is on that side of the table. But I 

just wanted to welcome her back. So good to see you again, and you 

are continuing your outstanding work. So thank you so very much. 

I want to ask you a question, and also Ms. Hammond. It is in 

response to some of the comments of the chairman. In your opinion, 

and both of your—if you will respond, are energy and environmental issues inherently related, and why is it so very, very important that any kind of comprehensive energy policy also integrate 

121 

environmental concerns in that policy? And do either of you have 

any specific—— 

Ms. CASSADY. I would just add to that, the energy infrastructure 

decisions we make today will last decades. So we decide to build 

a pipeline today or build a new energy production facility, we are 

locking in decades of new emissions or not, and that is why it is 

very important to consider, whenever we are considering energy 

policy, we should consider climate policy as well, and think through 

how will this energy project affect our transition negatively or positively toward a zero carbon future. 

Mr. RUSH. I yield back. 

Mr. WHITFIELD. Gentleman yields back. 

Because we now have called votes, I am going to reduce the 

amount of time to 3 minutes for everyone so that, hopefully, we can 

give everybody a chance. 

So, Mr. Olson, you are recognized for 3 minutes. 

Mr. OLSON. Thank you, Chairman. I am with you. 

Welcome to our witnesses. I apologize you got behind an energy 

superstar, and now votes in a hearing coming in this hearing room 

about 2 o’clock, so I have one question for you, Mr. Grumet. It is 

about Mexico. 

As you mentioned in your testimony, Mexico is on the verge of 

a revolution for energy. Changes, changes, changes. I moved to 

Texas in 1972. I saw the stronghold OPEC had on America firsthand. 1979, I had just gotten my license. I was sent down to get 

in line for gasoline. Gasoline dependent upon, you have a long line, 

get gas depending upon the last digit of your license plate. If it was 

an even date, go on an even day, even number. Long lines. Gas 

prices doubled. They had a stronghold on us. Now, with all the 

street production in America, our neighbor to the north, Canada, 

and Mexico, I see a vision of OPEC going away, replaced by 

NAPEC. North American Petroleum Exporting Countries. 

My question is, sir, what is the one thing Congress can do to help 

make that reality, make NAPEC head of OPEC? 

Mr. GRUMET. Thank you for that question, and I will note that 

usually you put the warm-up band before the rock star, so you 

might want to do that—all right, I am back. I think you make a 

very important point. We used to look at our headlines, and OPEC 

was having a meeting and there would be a chill through the land. 

Now, they can meet or not meet, it doesn’t matter much to us if, 

in fact, we seize the opportunity of abundance. And I think our opportunities with Mexico are profound. We have to give a lot of credit to President Nieto for trying to reverse 60 years of an investment 

policy that basically discouraged first world technology. I think the 

opportunities to spend a lot of time working with Mexico on something that is pedestrian but incredibly important, and that is data 

quality. The ability to have North American energy security depends on having good data, shared analysis, shared understandings, and a transparency across our analytical platforms. 

That is a very boring but incredibly difficult and important thing 

to do. Our energy administration here is the gold standard, and I 

think we really should spend a lot of time, it is going to require 

some resources if we want Mexico to join us. If we had that shared 

data foundation and we have thoughtful laws that, as our colVerDate Nov 24 2008 11:39 Feb 29, 2016 Jkt 037690 PO 00000 Frm 00127 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-47 CHRIS
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leagues have suggested, provide time for environmental deliberation, but then actually require a decision, I think we can have an 

integrated energy system that will raise both—— 

Mr. OLSON. So shared data, number one. We need to have that 

in Congress. That is the best we can do right now? 

Mr. GRUMET. I think that is something you could actually get 

done right now, that would be very true. 

Mr. OLSON. That is even better. I like that. 

Yield back, sir. 

Mr. WHITFIELD. Gentleman yields back. 

At this time, recognize the gentleman from New Jersey for 3 

minutes, Mr. Pallone. 

Mr. PALLONE. Thank you, Mr. Chairman. 

I just wanted to follow up on a few statements made earlier 

today about Section 3104. This provision makes an end run around 

the National Environmental Policy Act, and would eliminate meaningful review of the environmental impacts of proposed cross-border 

energy projects. And this section dramatically narrows the scope of 

environmental review to only the cross-border segment of the energy project, the tiny portion that physically crosses a national 

boundary. 

So, Ms. Cassady, does limiting NEPA review to just a small sliver of a cross-border energy project make any sense to you, and 

what are some of the drawbacks of looking at just the cross-border 

segment of a pipeline or transmission line? 

Ms. CASSADY. Thank you for the question. No, it doesn’t make 

much sense to me simply because if you look at the more controversial pipeline and other projects that we have examined over the 

last few years, the controversy has never been around the impacts 

at the border. We all know, even the best-constructed, highest technology pipeline, an accident can happen. And those pipelines span 

hundreds of miles, they pass through sensitive ecosystems, over 

aquafers, over private and public lands. The purpose of an environmental review is to make sure that policymakers have all of the 

facts about the potential impacts of the project over the entire 

course of the project, not just the small part at the border, in order 

to better understand how to mitigate those potential impacts. So in 

order to understand the potential consequences of a project, we 

need to look at it in its entirety and not just at the border. 

Mr. PALLONE. How about the legislation’s presumption that 

cross-border projects are in the public interest, how would looking 

at just the cross-border segment impact an agency’s ability to determine whether or not a project is in the public interest? 

Ms. CASSADY. The presumption of approval stacks the deck 

against a stakeholder who has legitimate concerns about whether 

or not a project is in the public interest. It forces the concerned 

stakeholder to make the case that it is not in the public interest, 

rather than forcing the applicant to make the case that it is. And 

that is just a higher burden of proof. And the way the bill is written, since it is so focused on a very narrow part of the proposal and 

doesn’t look at all of the potential impacts, it is going to be much 

harder for a concerned stakeholder to make the case that this tiny 

little part of the project is not in the public interest. 

123 

Mr. PALLONE. Well, thank you. I think these energy infrastructure projects are a lot more than just a border crossing: they are 

going to last for decades, and fundamentally NEPA requires us to 

look before we leap, and that is just basic common sense. So we 

should not be carelessly narrowing or creating loopholes in the law, 

and I think we need to understand the impact of these projects before they are constructed so that we can protect public health and 

safety and the environment, and I think ignoring the impacts is not 

going to make them disappear. So thank you again. 

Thank you, Mr. Chairman. 

Mr. WHITFIELD. At this time, recognize the gentleman from 

Pennsylvania, Mr. Pitts, for 3 minutes. 

Mr. PITTS. Thank you, Mr. Chairman. 

Mr. Martin, Lancaster County doesn’t have any wells of 

Marcellus Shale being drilled in it. Probably the nearest well is 100 

miles away. But how is Lancaster County benefitting from 

Marcellus Shale, the boom that you mentioned, even if there are 

no wells being drilled in the county? 

Mr. MARTIN. Well, first and foremost, what we have seen is, one, 

Pennsylvania putting forth an impact fee with monies that were 

distributed back not only to well counties, but also to counties who 

end up having pipelines. Those kinds of funds that are coming back 

are used to conserve open space, preserve ag preservation easements, and also really replace structurally deficient bridges. But 

we are also seeing the economic impact as well here. We have IT 

companies that do data mappings of pipelines and wells that have 

grown dramatically. Engineering firms. One of the larger engineering firms in the Marcellus Shale region, Virtue Engineering, more 

than doubled in size. Over a 2-year period, they bought an additional 75 vehicles. 

I used in my testimony examples of the Pennsylvania National 

Guard or Shady Maple. Shady Maple saving over 170—it is a smorgasbord, if anyone has ever been to one, I highly recommend it. 

$175,000 a year in energy costs, which then Garden Spot School 

District saw, which is in the same area, and said we are going to 

tape in, and they are going to realize those savings. 

Now, we would like to see more of it. Unfortunately, about 1⁄2 of 

Pennsylvanians do not have access to that natural gas, but given 

the premise of the open access nature of pipelines, you will start 

to see more of these entities like the Pennsylvania National Guard 

at Fort Indiantown Gap, and others, who are able to tap in and be 

able to realize that savings. And where we expect to see most of 

it, and where we hear from a lot of our constituents, is especially 

in the area of manufacturing, especially those who are heavily reliant on energy to do that. We have companies that spend over $3 

million a year in energy costs, but they are nowhere near the nearest pipeline. So I think we will see further opportunities coming 

forth. 

But I just want to add, Congressman, two of the great things I 

see is, you are now able to get an education in Pennsylvania in the 

petroleum and gas industry that you had to go to like Texas Tech 

to used to be able to get. They are investing in areas—I think $2 1⁄2

million dollar grant from the industry to Lackawanna Community 

College. Two-year program, cost for that 2 years about $22,000. 

124 

And when they are coming out of that program, the starting rate 

is like $68,000. So those are the types of things that you are seeing. 

These are good middle-class jobs that not only use your head but 

also use your hands. And we are seeing that grow, and that is 

something we hopefully continue to see grow not only through Lancaster County, but throughout Pennsylvania. 

Mr. PITTS. Thank you very much, my time has expired. 

Mr. WHITFIELD. At this time, recognize the gentleman from 

Texas, Mr. Green, for 3 minutes. 

Mr. GREEN. Thank you, Mr. Chairman. I appreciate hearing from 

the county commissioner. My accent gives me away, but obviously, 

every school in Texas has energy courses, from our community colleges all the way up to not only Texas Tech and Lubbock, but UT 

and A&M and University of Houston, and everywhere else. 

Ms. Cassady, I want to welcome you back to the committee. I 

know you are familiar with the NEPA regulations promulgated by 

the Council on Environmental Quality, not only from your work on 

the committee, but with the center. Under NEPA, an agency is specifically prohibited from segmenting projects, known as 

piecemealing. The Code of Federal Regulations states proposals or 

parts of proposals which are related to each other closely enough 

to be, in effect, a single course of action are evaluated. The discussion draft requires the State Department to promulgate rules on 

cross-border pipelines, and you heard Secretary Moniz say that the 

agencies are required to do it. 

Ms. Cassady, wouldn’t the federal agency in charge of the environmental review be charged with the NEPA review that satisfies 

these CEQ regulations, and looking at the whole project? 

Ms. CASSADY. My understanding of the bill is that the NEPA review only applies to the cross-border segment of the pipeline 

project or the transmission line, and so the federal approval only 

applies to that portion as well. Therefore, NEPA would only apply 

to that portion. There would be state-by-state reviews if it was 

passing through a state. In terms of federal review, it just applies 

to the cross-border segment. 

Mr. GREEN. Well—— 

Ms. CASSADY. That is my understanding of the legislation. 

Mr. GREEN. Shouldn’t the cross-border review—so much of our 

NEPA process is also done by other federal agencies and a party 

to it. For example, if you have a pipeline coming from Texas in 

Eagle Ford to Mexico, that cross-border pipeline, state law covers 

it on the property that is not federal, but it may be crossing federal 

lands, and so the NEPA process would come into play on that. But 

granted, the cross-border, which is international, and of course, as 

taxpayers we own our part of the border, then they would do it. 

But you don’t think that the bill calls for them to look at the whole 

project? And it may not be one agency doing it, but there will be 

other agencies doing a NEPA process on what they are required to 

do in that pipeline, from whether it be at Eagle Ford, of course, 

into Mexico. That is what worries me because I know, and my colleague from New Jersey said that the NEPA process is not covered. 

I think it is, because if it is not the Department of Energy, for example, for electricity transmission, it would be another federal 

125 

agency if they had the authority in there, or in some cases, state 

agencies. So the NEPA process would be included. 

And, Mr. Chairman, I know I am almost out of time, and we are 

almost out of time for—— 

Mr. WHITFIELD. Well, Mr. Green, that is our view as well, and 

we would love for our staff to sit down with Ms. Cassady in more 

detail, but it is our understanding that this does not change the 

NEPA process. 

Mr. GREEN. Yes. Now, I have to admit, in my few seconds, I have 

a problem with the State Department. We have a company in 

Texas who was—a Canada pipeline that was dormant, they wanted 

to change the name because they bought it, and their goal was to 

not only bring crude oil from Canada, but it was also to attach into 

the United States from Bakken, and the State Department decided 

they needed to review what was on the U.S. property. 

Now, I want a federal agency looking at it, but the State Department shouldn’t be deciding whether a pipeline out of Bakken is 

good or not because, granted, we are getting crude oil in trains into 

Houston, Texas, because our refiners do that. It is so much safer 

and easier to put a pipeline in there than it is bring those 100-car 

trains full of crude oil from Canada. 

Mr. WHITFIELD. Gentleman’s time has expired. 

Recognize the gentlemen from Virginia, Mr. Griffith, for 3 minutes. 

Mr. GRIFFITH. Thank you very much. I appreciate it. 

All right, I will take anybody who can answer this, and I suspect 

it will be Mr. Grumet or Ms. Cassady, or Ms. Hammond. 

Are you all familiar with the regulations relating to production 

of electricity in Mexico by coal? And no is a fine answer. If you 

don’t know, you don’t know. Nobody knows. Because the reason I 

ask that question is it is part of our proposal here, and one that 

I am interested in, has electric transmission facilities, it is not just 

pipelines. And one of my concerns is that we are putting 

coalminers out of work in Appalachia. Like Lancaster, down our 

way it is not Appalachia, it is Appalachia, and we are putting 

coalminers out of work in Appalachia, but if we allow electric 

transmission lines to cross over from Mexico using not-as-good a 

coal, with not-as-good a process, in not-as-clean plants, what gain 

have we made environmentally? And I think this is a case where, 

while Ms. Cassady and I are not going to agree on much, we might 

actually agree on that, that that ought to be a concern. 

Mr. Grumet, do you have any thoughts on that at all? 

Mr. GRUMET. I mean you make a very important point, and Dr. 

Dolzer’s testimony referred to it as well, right. Electrons and molecules don’t have a lot of concern about arbitrary political boundaries, and that is why we actually have to have a shared solution 

that brings the technology of the United States to bear on the 

issues in Mexico. We have to have shared agreements. And I am 

not going to try to get into a lengthy conversation about regional 

climate action in 60 seconds, but—— 

Mr. GRIFFITH. Well—— 

Mr. GRUMET [continuing]. I think there is a real opportunity to 

actually lift the Mexican system so that it actually has parity with 

the U.S. 

126 

Mr. GRIFFITH. And I certainly don’t mind lifting up the Mexican 

system, but I am reminded of the old NASA study that shows it 

takes 10 days for the air to get from the middle of the Gobi Desert 

to the eastern shore of Virginia, so if we are going to eliminate 

coal, waiting another 30 or 40 years on Asia just really means we 

are putting our people out of work and we are not really doing that 

much for the overall northern hemisphere—— 

Mr. GRUMET. All I will say is—— 

Mr. GRIFFITH [continuing]. Air. 

Mr. GRUMET [continuing]. That we fundamentally have to find a 

way to burn coal in a way that meets our security interests and 

our environmental interests, and there is one way we can do that 

if we invest the resources to get it done. We are not doing that 

right now, so—— 

Mr. GRIFFITH. And I agree with you completely. We can do more 

and we should do more. I look forward to working with you on 

clean coal technologies. 

I yield back. 

Mr. WHITFIELD. And there are no other questions. So thank all 

of you once again for your patience, and we look forward to maintaining contact with you and continuing to work with you as we try 

to bring this legislation to the committee. 

I am also asking unanimous consent that a statement from the 

Canadian Electricity Association be submitted for the record. And 

without—— 

Mr. RUSH. No objection. 

Mr. WHITFIELD. Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. WHITFIELD. Is this it? OK. And we are going to keep the 

record open for 10 days for any additional material that may need 

to be submitted. 

And once again, that will conclude today’s hearing. Thank you all 

for your interest. And, Mr. Dolzer, thanks for coming all the way 

from Germany. 

[Whereupon, at 1:42 p.m., the subcommittee was adjourned.] 

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