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61–729 2010

THE FUTURE OF OIL 

HEARING 

BEFORE THE

SELECT COMMITTEE ON 

ENERGY INDEPENDENCE 

AND GLOBAL WARMING 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

JUNE 11, 2008 

Serial No. 110–39 

( 

Printed for the use of the Select Committee on 

Energy Independence and Global Warming 

globalwarming.house.gov 


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SELECT COMMITTEE ON ENERGY INDEPENDENCE 

AND GLOBAL WARMING 

EDWARD J. MARKEY, Massachusetts, Chairman 

EARL BLUMENAUER, Oregon 

JAY INSLEE, Washington 

JOHN B. LARSON, Connecticut 

HILDA L. SOLIS, California 

STEPHANIE HERSETH SANDLIN, 

South Dakota 

EMANUEL CLEAVER, Missouri 

JOHN J. HALL, New York 

JERRY MCNERNEY, California 

F. JAMES SENSENBRENNER, JR., 

Wisconsin, Ranking Member 

JOHN B. SHADEGG, Arizona 

GREG WALDEN, Oregon 

CANDICE S. MILLER, Michigan 

JOHN SULLIVAN, Oklahoma 

MARSHA BLACKBURN, Tennessee 

PROFESSIONAL STAFF

DAVID MOULTON, Staff Director 

ALIYA BRODSKY, Chief Clerk 

THOMAS WEIMER, Minority Staff Director 


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C O N T E N T S 

Page 

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

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

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

State of Wisconsin, opening statement .............................................................. 5 

Hon. John B. Larson, a Representative in Congress from the State of Connecticut, opening statement ................................................................................ 6 

Hon. John Shadegg, a Representative in Congress from the State of Arizona, 

opening statement ................................................................................................ 6 

Hon. Hilda Solis, a Representative in Congress from the State of California, 

opening statement ................................................................................................ 7 

Hon. Marsha Blackburn, a Representative in Congress from the State of 

Tennessee, opening statement ............................................................................ 8 

Hon. John Hall, a Representative in Congress from the State of New York, 

opening statement ................................................................................................ 8 

Hon. Candice Miller, a Representative in Congress from the State of Michigan, opening statement ....................................................................................... 9 

Hon. Jerry McNerney, a Representative in Congress from the State of California, opening statement .................................................................................... 9 

Hon. Jay R. Inslee, a Representative in Congress from the State of Washington, opening statement ................................................................................... 10 

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

Missouri, prepared statement ............................................................................. 12 

WITNESSES

Mr. Guy Caruso, Administrator, Energy Information Administration ............... 13 

Prepared statement .......................................................................................... 15 

Answers to submitted questions ...................................................................... 147 

Mr. Adam Sieminski, Chief Energy Economist, Deutsche Bank ......................... 25 

Prepared statement .......................................................................................... 27 

Answers to submitted questions ...................................................................... 163 

Ms. Amy Myers Jaffe, Energy Studies Fellow, James Baker Institute for 

Public Policy ......................................................................................................... 34 

Prepared statement .......................................................................................... 36 

Mr. Athan Manuel, Director of Land Protection Programs, Sierra Club ............ 47 

Prepared statement .......................................................................................... 50 

Answers to submitted questions ...................................................................... 166 

Ms. Karen A. Harbert, Managing Director and Executive Vice President, 

Institute for 1st Century Energy ........................................................................ 62 

Prepared statement .......................................................................................... 65 

Answers to submitted questions ...................................................................... 169 

SUBMITTED MATERIALS

Testimony of Carl Michael Smith, Executive Director, Interstate Oil and 

Gas Compact Commission ................................................................................... 101 

Deutsche Bank Commodities Research ‘‘Crude Oil: Downside Risk from Demand’’ of September 29, 2008 ............................................................................. 182 

Report to the Alaska Wilderness League by Richard Fineberg entitled ‘‘Existing Conservation and Alternative Technology Gains Far Outweigh Arctic 

National Wildlife Refuge Potential: Oil Imports Have Declined Significantly 

Since 2005,’’ June 4, 2008 .................................................................................... 189 


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THE FUTURE OF OIL 

WEDNESDAY, JUNE 11, 2008 

HOUSE OF REPRESENTATIVES, 

SELECT COMMITTEE ON ENERGY INDEPENDENCE

AND GLOBAL WARMING, 

Washington, DC. 

The committee met, pursuant to call, at 10:05 a.m. in Room 

1300, Longworth House Office Building, Hon. Edward J. Markey 

[chairman of the committee] presiding. 

Present: Representatives Markey, Inslee, Larson, Solis, Herseth 

Sandlin, Cleaver, Hall, McNerney, Sensenbrenner, Shadegg, Walden, Sullivan, Blackburn, and Miller. 

Staff present: Jonathan Phillips. 

The CHAIRMAN. This hearing is called to order, and we welcome 

everyone to the Select Committee on Energy Independence and 

Global Warming for this very important and timely hearing dealing 

with the energy crisis that is affecting our country. And that raises 

a question, and the question is when does a daily supply of higher 

oil prices become a third energy crisis? That is the question we are 

reviewing at today’s hearing. 

I think it is obvious to all Americans, at least those outside the 

presidential bubble, that America faces a huge energy problem and 

it is not going away soon. Since President Bush took office, oil has 

embarked on one of the greatest price run-ups in history. This energy spike is different. It was not brought on by an oil embargo, 

nor by a surprise revolution in the Middle East. That is what we 

saw in the 1970s. This time it is different. This long, painful runup is the direct result of an oil President and a Republican Congress executing an oil-centered energy policy. 

Today we will hear that without fundamental changes oil demand will rise 30 percent worldwide over the next 2 decades. 

Where will all that additional supply come from? Our Republican 

friends say go drill in pristine areas like the Arctic Refuge and 

deep waters off the Outer Continental Shelf. It sounds like a simple answer. But like so many other simple answers, it is misleading 

and it is wrong. 

The United States sits on less than 2 percent of the world’s oil 

reserves. And we consume one-quarter, 25 percent, of the world’s 

oil. Our own proven oil supply without foreign imports would last 

just 3 years. We simply cannot drill our way out of this crisis because we don’t have the reserves. 

Who does have the oil to meet this rising demand? The answer 

is easy: As always, follow the money. Follow the tanker ships of 

American dollars that we have been shipping month after month 


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to the Middle East. According to the International Energy Agency, 

OPEC countries would need to ratchet up production by 57 percent 

over the next 2 decades to meet projected demands. 

Does our President have a problem with this scenario? His visit 

to Saudi Arabia last month indicates not. In exchange for nothing 

more than a gentlemen’s agreement that Saudi spigots will stay 

open, the President agreed to provide assistance to Saudi Arabia in 

developing their nuclear power capacity. While American consumers gives Saudi Arabia $135 for each barrel of oil, President 

Bush is giving the Saudis the priceless and dangerous gift of nuclear technology. 

Even if we are able to drill every last drop of domestic reserves 

and are able to prod OPEC into further feeding our addiction by 

increasing capacity, we are left with a much greater problem. Our 

planet will choke on all of that CO2. If a frog is placed in boiling water, it will jump out. If it is placed 

in cold water that is slowly heated, it will never jump out. The heat 

has slowly been turned up on the American consumer. Now they 

are being boiled alive. The same thing could be said for our planet. 

A fundamental change is needed in the way America uses energy. Plug-in hybrid cars that get 100 miles to the gallon, advanced 

cellulosic biofuels that power the fleet on grasses and crop waste, 

public transportation and more livable cities that reduce the necessity for people to drive everywhere. 

Today we will hear that the consensus view is that oil above $100 a barrel is going to be with us for some time. So we have two 

choices. One, continue exporting our wealth overseas, which drives 

down the value of the dollar, and hope that American consumers 

can outbid the Chinese and Indians in the world oil market. 

Or two, we can commit to blazing a new path, one that frees our 

country from the shackles of oil and unleashes the renewable energy revolution that will save the planet and drive our economy in 

the 21st century. The choice is simple. This hearing is very important. 

Let me turn now and recognize the ranking member of the committee, the gentleman from Wisconsin, Mr. Sensenbrenner. 

[The prepared statement of Mr. Markey follows:] 


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Mr. SENSENBRENNER. When a Member of Congress starts out by 

calling his colleague distinguished, that means he disagrees with 

everything he said. So I thank the distinguished chairman for giving me this time. 

Today’s hearing gives the select committee a chance to explore 

what could be the biggest energy issue facing the planet over the 

coming decades, oil powers, our allies, and the economy making it 

a vital part of our future. It is not hard to imagine how some of 

the reckless policies of the Democratic majority will create a future 

where energy is scarce and expensive in our country. And by expensive I mean far more expensive than the Pelosi premium driven 

$4 a gallon gas that is already causing great problems across the 

country and stretching everybody’s budget. 

While we are hearing calls for energy independence from my 

friends, we are seeing little action particularly in the area of gas 

prices. While prices are skyrocketing, foreign countries like Saudi 

Arabia and Venezuela are raking in the profits, thanks to the aching pocketbooks of millions of Americans. 

The United States has many energy resources, so many that I 

think most Americans would be surprised to know exactly how 

much energy is available right here in our own country. I am sure 

they would also be surprised to learn how diligently my distinguished colleagues are fighting any expansion of America’s capacity 

to explore for and produce oil and gas. 

On Monday Investor’s Business Daily laid out exactly how much 

energy there is out there. In the western U.S. it is estimated that 

there is the equivalent of 1 trillion barrels of oil and shale rock. 

The Democratic majorities in both the House and Senate voted 

within the last year to keep shale rock off limits to exploration despite the fact that these reserves could be as much as three times 

as large as Saudi Arabia’s. 

While China and India are drilling 60 miles off Florida’s shores, 

Investor’s Business Daily noticed that Congress continues to keep 

85 percent of America’s offshore oil and gas off limits. I don’t think 

that Congress should be picking winners and losers. I believe that 

all energy options should be open for consideration. That includes 

renewable resources, like wind and solar. That also includes nuclear power and improve energy efficiency. Certainly expanding our 

oil and natural gas exploration in production should be a top priority because we know it is there. 

While technology will help produce demand for gasoline, the only 

other thing that can reasonably bring down gasoline prices is an 

increase in domestic supplies. America needs relief now from high 

gas prices, and increased production is the best way to get there. 

After taking control of Congress, the Democrats created this select committee partly to address the issue of energy independence. 

Yet it seems that the Democrats are throwing up roadblocks to any 

reasonable proposal that would help free the United States from its 

reliance on foreign oil. With so much potential oil available, the 

U.S. should have a bright energy future. However, unless my distinguished friends over here begin to drop some of the roadblocks, 

I can see a future where gas prices rise higher and higher while 

Americans suffer more and more. 


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That is not the kind of future I want to imagine, and I hope that 

my distinguished friends in Congress will work with Republicans 

in coming months to help create a brighter future for all of us. I 

thank the Chair and yield back the balance of my time. 

The CHAIRMAN. I thank the gentleman. We now turn and recognize the gentleman from Connecticut, Mr. Larson. 

Mr. LARSON. Thank you, Mr. Chairman. 

The CHAIRMAN. Your microphone. 

Mr. LARSON. Thank you very much, Mr. Chairman, and all the 

distinguished members of this panel. I am glad that our esteemed 

colleague was discussing, I think you said, the Pelosi premium. 

Does that come from the Bush barrelhead of oil? I think it is pretty 

clear especially in recent testimony when we see that on our own 

continent where this administration has already granted in excess 

of 10,000 permits on millions of acres that companies could be drilling on, that 67 million acres already permitted aren’t being drilled 

on today. One has to wonder why that is the case. 

Secondly, the policy of this administration, best described by 

Thomas Friedman, leave no moolah behind, where we see the 

United States going hat in hand to Saudi Arabia to try to get from 

the Saudis some help and esteem and receive basically a slap in 

the face. 

Clearly when we have the opportunity to invest in alternative energy and we see the Senate time after time block the funding, block 

the funding necessary to make sure there is an appropriate investment in fuel cell technology, in solar, wind, these are important aspects that need to be followed through as part of any integrated 

policy. And I hope to be able to ask the distinguished panelists also 

how they feel about speculators and whether or not speculators are 

artificially driving the price up. Are the laws of supply and demand 

suspended during this time because of speculation? 

And I will wait to hear and yield back my time. 

The CHAIRMAN. The gentleman’s time has expired. The Chair 

recognizes the gentleman from Arizona, Mr. Shadegg. 

Mr. SHADEGG. I thank the gentleman for yielding and appreciate 

him holding this hearing. I think everyone recognizes it is time to 

do what we can and to be as aggressive as humanly possible at 

moving off of a fossil fuel-based economy. But no expert has come 

before this testimony and no expert has come before this committee 

and no expert has come before the Subcommittee on Energy of the 

Commerce Committee on which I serve and said that we can move 

off of these oil-based fuels overnight, certainly not for a period of 

years, some as long as beyond 2030. 

In the meantime the question is what do we do as Americans face gas prices? They say the average in the country today is $4.04 

a gallon. In my State of Arizona it is over $4.15 a gallon for regular. And I would suggest for the sake of this Nation this Congress 

needs to act and it needs to act now. 

America is the third largest producer of oil in the world and 

could be doing far better. We have enacted policies that lock up billions of barrels of oil and natural gas, and we are choosing not to 

pursue those. Those policies may have made sense when we could 

buy oil or buy gasoline at 2.50 or $3.00 a gallon. But when we are 

forcing on the economy gas prices of over $4.00 a gallon, quickly 


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moving to $5 a gallon and perhaps moving to $6 a gallon, those 

policies simply makes no sense. 

I would echo the comments of the ranking member on issue after 

issue. Whether it is Outer Continental Shelf, whether it is the 

Intermountain West, whether it is oil shale where the U.S. House 

recently imposed a moratorium, or whether it is ANWR, we have 

made a decision as a nation to lock up our current supply, and virtually 90 percent of the Democrats in this Congress have voted 

against supply vote after vote after vote for the last 15 years, and 

virtually 90 percent of Republicans have voted to increase supply 

on vote after vote after vote over the last 15 years. 

I don’t think you can look backward at those votes and criticize 

them now. It is important to look forward because we have to do 

something about this problem for the sake of the working men and 

women of America and for the sake of our Nation’s economy. 

And with that, I yield back. 

The CHAIRMAN. The gentleman’s time has expired. 

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

Ms. SOLIS. Thank you, Mr, Chairman. And I want to again thank 

you and our witnesses for being here to hold this very important 

hearing on the future of oil. 

The price of oil hit a record high of 138 per barrel in June of this 

year, an increase of over 600 percent since 2002. In the district 

that I represent in East Los Angeles in California, the price of gasoline is over 4.60 and that is not even premium. Our economy and 

our national security, as you know, is very vulnerable as a result 

of our Nation’s dependence on oil. 

Government owned and operated companies such as the National 

Iranian Oil Company in Iran represent the top 10 holders of oil reserves internationally. While domestic demand is expected to grow 

from 21 million barrels per day to about 25 million barrels per day 

in 2030, our domestic supply of oil as we know is limited. This includes reserves which are already accessible to oil companies for 

production yet are not being developed. Why? 

Domestically companies have stockpiled nearly 10,000 drilling 

permits, as was stated earlier, which they are not developing. 

Again, why? One-quarter of the public lands and water available 

for energy development are actually in production. Why? Why can’t 

we drill—well, in my opinion we can’t drill our way out of this 

problem. 

If the United States was to rely on domestic resources to meet 

all of our current consumption, all proven reserves would be exhausted in 3 years. The only long-term, sustainable, secure solution 

is to reduce our demand on oil. And I do believe that the Pelosi solution is and was the Energy Independence and Security Act which 

became law last December, which increased the fuel economy 

standards to 35 miles per gallon at a 40 percent increase over current levels. Those are the kinds of activities that this Congress is 

undertaking. I am proud to be a part of that plan that Speaker 

Pelosi has put forward. We need more revitalization, renewable energies and other sources of fuel to get our security independence in 

order. 

I yield back the balance of my time. 

The CHAIRMAN. The gentlelady’s time has expired. 


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The Chair recognizes the gentlelady from Tennessee, Mrs. 

Blackburn. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. Thank you for the 

hearing and to our witnesses we appreciate very much that you are 

here. 

I don’t think there is anyone that denies that the current global 

market is enduring a period of record prices and tight supplies and 

increasing demand. That is where I think we need to focus, is on 

that supply and demand issue. As we hear the platitudes and the 

prognostication we know that what we have done in this country 

is we have kept our ability to get to our supply. 

Quite frankly, I am one of those Members that I think the smartest thing that we could do would be to repeal the provisions from 

last year’s Energy Independence and Security Act because we are 

making it impossible to explore for American oil on American soil. 

And the American people are really quite offended that the most 

creative thing that has come out of this 110th Congress to address 

energy issues is to repeal the light bulb. That does not help them 

when they are paying over $4 a gallon at the pump. We know that 

there are worldwide reserves that would take care of the next 30 

years. At the current rate of consumption we know that there are 

American reserves that are off limits and it would handle, it would 

give us a sufficient supply for 100 years. So yes, we need to be 

looking at what we are going to do as Americans to find an American solution to this problem, short-term, mid-range and long-term 

answers that will address the needs of our Nation. 

And I am looking forward to hearing from each of you how you 

think we should best address it, in the short term, right now, mid 

range with the next 20 years, and in the long term. Where is 

thoughtful innovation heading? 

Thank you, Mr. Chairman. Yield back the balance of my time. 

The CHAIRMAN. The gentlelady’s time has expired. 

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

Mr. HALL. Thank you, Mr. Chairman. The reality is as we sit 

here today discussing our future and oil’s future, we are really taking a look at whether our country’s future will be prosperous or 

painful. We are at a clear fork in the road and must choose which 

path to take. 

In one direction there is the path that leads in the direction of 

business as usual, based on oil as the prime mover of our vehicles 

and our economy. With gas prices at record highs, all we hear from 

the oil companies, their allies in Congress is we need to drill, drill, 

drill, drill for more oil here at home. I would ask you with all deference to my distinguished colleagues on the other side of the aisle, 

who is stopping you? About 75 percent of the oil in the United 

States is on land that is already open for production, but less than 

one-third of that land is actually being used by the oil companies. 

They are literally sitting on 10,000 permits and millions of acres 

of leased land that they have already paid for that would let them 

start pulling more oil out of the ground. 

Our President George W. Bush said when oil was only $50 a barrel there should be no need for more incentive for oil companies to 

drill for oil. Now at 135, I can’t imagine that there is more incentive. So I am wondering why are they sitting on millions of acres 


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of already leased land here in the United States? It is ready to 

drill. Drill away. 

But at the same time if we are going to move further toward the 

drilling and burning of oil, we must be also ready for more extreme 

weather events, more tornadoes, more floods, more 11 inches of 

rain one day in Indiana or Kansas, three record 50-year floods in 

my district in the space of 5 years, more drought in the Southeast, 

et cetera. These are the computer projections of climate change 

that the consumption of oil and other carbon-based fuels lead to. 

So I just say we can and we may wind up drilling for and using 

a lot more oil, but we should be moving for the economy and for 

the environment’s sake toward a renewable future. I yield back. 

The CHAIRMAN. The gentleman’s time has expired. 

The Chair recognize the gentlelady from Michigan, Mrs. Miller. 

Mrs. MILLER. Thank you very much, Mr. Chairman. And I appreciate you calling this very important hearing. I think the American 

citizenry is looking toward this Congress to work in a bipartisan 

fashion to effect some change and some hope for what is happening 

with these gasoline prices, with the oil prices. 

I think the cost of gas has got the ability actually to cripple our 

economy probably more than any other single factor, and it is 

manifesting itself in so many various ways. I mean, we see the airlines merging, with Northwest and Delta merging for a number of 

reasons but probably foremost because of the price of fuel. 

From Michigan, coming from Michigan I see what is happening 

with our auto industry. Certainly just in the last couple of weeks 

we have had General Motors announcing they are closing a number 

of plants that are producing SUVs and trucks and various things. 

And you hear the folks at GM saying that almost overnight the 

buying patterns of the American public is changing and they think 

it will be a permanent thing. 

We see it impacting the rail, every mode of transportation, and 

because of the way we structured our society with so many people 

commuting long distances, et cetera. As I say, it has the ability to 

impact more than anything. As we go into a tourism season it is 

impacting in Michigan and every State I think in the agricultural 

industry in every way. I think there are a number of proposals that 

are out there and I am very interested to hearing the panel today. 

And again, I think the American public is looking to this Congress 

to effect some meaningful, comprehensive energy policy that will 

have an impact on their ability to fill up their gasoline tanks. And 

I look forward to hearing the witnesses’ testimony. 

The CHAIRMAN. The gentlelady’s time has expired. 

The Chair recognizes the gentleman from California, Mr. 

McNerney. 

Mr. MCNERNEY. Thank you, Mr. Chairman, for calling this timely hearing. The high price of gas is hurting businesses in communities throughout our country. In fact, the most recent Lundberg 

survey which compares average fuel prices nationwide was Stockton, California in my district as having the highest average gas 

prices anywhere. At more than $4.50 a gallon, people are struggling. And with these high prices people are inevitably asking why 

are the prices of gas so high and what are we doing about it? 


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Thankfully, we can tell them that the Congress has taken some 

badly needed steps, both in the near term and the long term. 

It is essential that we pursue policies that will lower prices now 

and we double our efforts to increase efficiency, investing in new 

technology, and ultimately work to wean our country from foreign 

oil. 

Today’s hearing should answer some of the questions of why oil 

prices and gas prices are so high. Clearly the world demand is up 

while production has stagnated, rampant speculation drives the 

price of oil higher. We remain at the mercy of government controls, 

oil companies, and international cartels. We have taken action by 

stopping Strategic Petroleum Reserve deposits, by mandating new 

efficiency standards, and by providing explicit authority to the administration to investigate gas gouging. 

While oil companies are demanding additional drilling rights 

which they claim will lower the price of gas, they are only using 

26 percent of the area they already have for drilling. If we encourage innovation to increase efficiency and find new forms of energy, 

we can keep ahead of the oil price increases and maintain our high 

standard of living. 

This is America’s great historic challenge and our opportunity. I 

yield back. 

The CHAIRMAN. I thank the gentleman. 

And now we will recognize the gentleman from Washington 

State, Mr. Inslee, for an opening statement. 

Mr. INSLEE. I thank you. We know one thing for sure, as long 

as we remain dependent on dead dinosaurs for our transportation, 

we are doomed to price hikes, global warming and the security concerns associated with the fact that the dinosaurs went to die under 

the Mideast sands. We don’t know how it happened, but it did. We 

have got to replace an old resource of oil with a new resource of 

intellectual capital. That is happening across America today. 

Our fundamental challenge is to get on with the business of hastening this giant clean energy revolution that is now happening 

across the country. It is happening at the Sapphire Energy Company. California is developing a gasoline made from algae. It is 

happening at the A–123 Battery Company in Boston that is making the lithium powered batteries that are going to power the GM 

Volt, a plug-in hybrid car. It is happening at the Phoenix Motor 

Car Company, a company I am meeting with this afternoon. They 

are going to have an electric car that runs 100 miles just on a 

charge. It is happening at the Bright Source Solar Thermal Company that is developing solar thermal energy with zero CO2 input. 

What do all of those companies have in common? They are not 

based on dead dinosaurs, they are based on living geniuses, and 

those are living American geniuses. 

One of the things Mr. Shadegg, my friend, said that this revolution is not going to take place overnight, none of us can promise 

the American people the congressional snap of the finger to create 

the new technologies over night. They are going to take years, if 

not decades. That is a reason to start today, not to wait another 

3 years. The fact that this may take a year or two means it is more 

important to start today rather than less important. And that is 

why the debates we are having, the debates between the optimists 


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on this side of the aisle who believe in the power of this intellectual 

capital and some pessimists who want to remain addicted to dead 

dinosaurs, that is what the debate is. Let’s move forward on clean 

energy revolution. 

The CHAIRMAN. The gentleman’s time has expired. All time for 

opening statements for the members of the select committee has 

been completed. 

[The prepared statement of Mr. Cleaver follows:] 


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Now we will turn to our very distinguished panel. And our first 

witness, who is Mr. Paul Caruso, he has been the Administrator 

of the Energy Information Administration for the past 6 years. And 

obviously there can’t be a more important job in the United States 

Government today than Mr. Caruso and the recommendations 

which he makes to Congress and to the American people. 

So we welcome you, sir. Whenever you are ready, please begin. 

STATEMENTS OF GUY CARUSO, ADMINISTRATOR, ENERGY INFORMATION ADMINISTRATION; ADAM SIEMINSKI, CHIEF ENERGY ECONOMIST, DEUTSCHE BANK; AMY MYERS JAFFE, 

ENERGY STUDIES FELLOW AT THE JAMES BAKER INSTITUTE FOR PUBLIC POLICY; ATHAN MANUEL, DIRECTOR OF 

LAND PROTECTION PROGRAMS, SIERRA CLUB; AND KAREN 

A. HARBERT, MANAGING DIRECTOR AND EXECUTIVE VICE 

PRESIDENT, INSTITUTE FOR 1ST CENTURY ENERGY 

STATEMENT OF GUY CARUSO 

Mr. CARUSO. Thank you very much, Mr. Chairman. I appreciate 

the opportunity to appear today to discuss the long-term outlook 

for oil in the United States and globally. 

The Energy Information Administration, EIA, is the independent 

statistical and analytical agency within the Department of Energy. 

As such we do not promote, formulate or take positions on policy 

matters, and our views should not be construed as representing 

those of the Department of Energy or the administration. 

In your invitation letter you asked about our current forecast for 

gasoline prices. Our June short-term energy outlook yesterday 

projects that regular grade motor gasoline retail prices will average 

$3.78 per gallon this year. That is 97 cents per gallon above the 

2007 average, with the monthly average prices projected to peak at 

4.15 in August nationwide. Crude oil prices for low sulfur light 

grade are projected to average $122 per barrel in ’08 and $126 per 

barrel in 2009 compared with $72 last year. 

I think it is important when you are discussing the long-term 

outlook for oil and liquid fuels to start with a clear set of definitions. First table in my written testimony shows the estimated 

global quantities for six categories of liquid fuels. We use the term 

‘‘oil’’ to refer to the first four, which are conventional crude oil, 

lease condensate, natural gas liquids, refinery gain, and unconventional crude oil, including Canadian oil sands, shale oil and very 

heavy crude oil. We use the term ‘‘liquids’’ to refer to oil plus 

biofuels and liquid fuels manufactured using coal and natural gas. 

These distinctions are important because the conventional crude 

oil share of total liquid fuel supply, which was 84 percent in 2006, 

is projected to decline to between 62 and 72 percent of total global 

liquid supply in 2030 in the reference and high price cases as discussed in the written testimony. 

Last December, as several members have noted, the Energy 

Independence and Security Act was passed and signed by Congress 

and signed by the President. The specific provisions that have the 

most significant implications for future oil markets are the updates 

to the corporate average fuel economy, CAFE, standards, for new 

light duty vehicles and the renewable fuel standard. Taken toVerDate Mar 15 2010 23:55 Nov 12, 2010 Jkt 061729 PO 00000 Frm 00017 Fmt 6633 Sfmt 6602 E:\HR\OC\A729.XXX A729

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gether the updates to these two standards in EISA produce a substantial reduction in oil use and oil imports in our long-term outlook. EIA estimates that the combined affects of the CAFE and 

RFS update are to reduce U.S. oil use by about 2 million barrels 

per day by 2030. 

EIA’s annual energy outlook illustrates the importance, the impacts of high oil prices by developing and reporting projected projections for several alternative oil price paths. Higher oil prices can 

be expected to reduce U.S. liquids consumption, increase domestic 

production and reduce the Nation’s reliance on imported oil. 

Generally the responsiveness of both supply and demand to higher prices grows over time. Reflecting consumers’ response to high 

prices, oil use in the transportation sector in 2030 is nearly 6 percent lower in the high price case than in the reference case. Higher 

prices also result in fuel switching between liquids and other energy in the industrial sector. 

Turning to supply, projected domestic crude oil production in the 

high oil price case, as shown in figure 4 of the written testimony, 

is 6.4 million barrels per day compared to the 2006 level of 5.1. By 

dampening the demand for liquid fuels and increasing the domestic 

production of crude oil and biofuels, higher oil prices together with 

the CAFE and RFS provisions in EISA substantially reduce projected U.S. oil imports. 

In 2006, U.S. oil imports were 12.4 million barrels per day accounting for 60 percent of our total liquid fuel use, and in the AEO 

2008 high price case, oil imports are expected to provide 44 percent 

of our total projected liquid fuel use in 2030. 

Higher oil prices will also effect global liquid fuels in oil markets. 

In the AEO 2008 high price case global liquid consumption grows 

from 85 million barrels a day in 2006 to 98 million barrels per day 

in 2030, significantly below the reference case consumption level of 

113 million barrels per day in 2030. 

Higher oil prices also affect the projected mix of global liquids 

production. Liquids production from sources other than conventional oil in the AEO high price case is 19 million barrels per day 

higher in 2030 than in 2006, compared to an increase of only 11 

million a day in the reference case. 

In conclusion, Mr. Chairman, both the reference and high price 

case in the AEO 2008 suggests that liquid will continue as a primary global fuel through 2030, although they are expected to represent a declining share of the total energy mix. The share of oil 

and especially conventional oil in the overall liquids mix is also expected to decline. In the high oil price case overall liquids to 2030 

use grows by about 15 percent while conventional crude oil production declines by more than 15 percent. 

Policy decisions taken by this body and others will make is expected to be a key driver in changing this business as usual outlook. And we certainly look forward to working with you Mr. Chairman, members of committee and other committees in this Congress 

to provide the best data and analysis to help you make your 

choices. 

[The statement of Mr. Caruso follows:] 


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The CHAIRMAN. Thank you, Mr. Caruso, very much. 

Our next witness is Adam Sieminski, who is the Chief Energy 

Economist for Deutsche Bank. He has spent his life analyzing energy markets and climate change, commodity prices and energy economics, and we welcome you, sir. Whenever you are ready, please 

begin. 

STATEMENT OF ADAM SIEMINSKI 

Mr. SIEMINSKI. Mr. Chairman, thank you very much for inviting 

me. And in the spirit of the discussions I had when I was asked 

to come today, I was talking with both the majority and the minority staff and listening to some of the discussions going back and 

forth here this morning, what I would like to offer as a suggestion 

is that the ideas that have been proposed on both sides of the aisle 

are not mutually exclusive. In fact, the National Petroleum Council 

did a report about a year ago, came to the same conclusion, saying 

that we are having supply problems but we are not running out of 

resources. And to mitigate the risks on the supply side we need to 

expand just about everything that we can do. All economic energy 

sources are going to be required to solve the problems that we are 

having, coal, nuclear, renewable, unconventional, oil and gas. 

Getting acreage opened up or worrying about the low proportion 

of acreage that is being drilled on doesn’t seem to me to be the 

heart of the issue. The heart of the issue is what is the resource 

that is on those acres? And where are the resources? And can you 

get at those resources? If the oil is in Alaska or offshore, then those 

are the acres that need to be opened up, not the other ones. 

The other thing was that the Natural Petroleum Council said 

was that we really do need to look at demand management on the 

energy side. Policies designed to moderate a growing demand for 

energy and increasing efficiency in transportation or residential 

and commercial and industrial uses should really be encouraged. 

So I applaud the ideas and I think we should move on all of 

these, not some of them. There is no silver bullet to solving the 

problems that we have in the energy area. We have got to do it all, 

and we needed to do it yesterday. So the sooner we get on with it, 

the happier I believe the American consumers and voters are going 

to be. 

I tried to answer the questions that were submitted to me by the 

staff and they are in my testimony and they will be in the record, 

but rather than to go into all that, what I would like to offer is another suggestion about what has changed. 

Everybody is looking at the price of oil and saying, well, nothing 

has changed in the last year. Why is the price of oil up so much? 

There must be some underlying conspiracy or problem. Let me offer 

two things that have changed very dramatically in the last year 

and that I think have given us the situation that we are in. 

First, the U.S. economy has slowed down, but it has not spilled 

over into the rest of the world where energy demand and especially 

oil demand are still growing very strongly. And in fact if you look 

at the projections, we may be on an overall global basis be at 110 

million barrels a day of demand by the year 2030, some 95, 96, or 

97 million barrels a day by 2015. 


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The second thing that has changed is that there is an accumulating amount of evidence suggesting that we may actually run into 

a problem of being able to deliver more than 95 or 100 million barrels a day of oil, not because of a resource issue but because of access issues, getting access to the places that have the oil. 

If we can’t do that, then there is going to be a problem, because 

demand is going to be a lot higher than supply. That situation or 

potential situation I think is what is informing the markets that 

are lifting prices to try to find some way to rebalance in 

everybody’s models for where the future of the oil market lies, to 

rebalance those models and it is probably going to require a higher 

price. 

Well, since we are looking for what are these reasons, let me just 

mention some of them. Underlying drivers for prices in my view 

are very diverse and involve a lot of fundamental supply and demand issues: One, OPEC production and capacity issues; two, demand in China, the Middle East, where consumption is subsidized 

and economic growth has been fast; three, the normal lags in capital spending in the oil industry and the erosion of that spending 

by cost inflation; four, central bank policies, very low interest rates 

fostering high economic growth, cheap money, and a very weak dollar; five, geopolitical issues in places like Russia, Venezuela, Iran, 

Iraq, Nigeria and elsewhere that are keeping supplies off the market. 

Mr. Chairman, we haven’t had a huge energy crisis appear, but 

a series of mini crises. It is sort of we are having the after quakes 

without having the big one ahead of time. 

Sixth, political decisions themselves. Corn ethanol is a good example of unintended consequences, and the ability to get other legislation passed on both conservation efficiency and supply is an 

issue. 

And finally, Mr. Chairman, since I think I am probably going to 

be asked about this, I have excluded speculation in the sense of rising funds flow into the futures markets from index funds and 

hedge funds as a reason for the price increase. Volumes in futures 

really don’t matter as much as sentiment. The sentiment is that 

supply isn’t growing fast enough to meet demand, and that is causing prices to rise. 

If we can do things in the United States with the help of our 

elected representatives to get demand to slow down and to get the 

supply of all of our energy sources to begin to rise, I am not allowed to give guarantees as a financial analyst but as close as I 

can come to giving a guarantee, I believe that you will see oil prices 

going back down if we can get supplies growing and demand slowing down. 

Thank you, Mr. Chairman. 

[The statement of Mr. Sieminski follows:] 


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The CHAIRMAN. Thank you, Mr. Sieminski, very much. 

Our next witness is Amy Myers Jaffe. She is the Wallace Wilson 

Fellow for Energy Studies at the Baker Institute for Public Policy 

at Rice University. We welcome you to the select committee. Whenever you feel comfortable, please begin. Could you turn on your 

microphone, please? 

STATEMENT OF AMY MYERS JAFFE 

Ms. JAFFE. I really appreciate the opportunity to be here today 

and am honored to be able to address this committee that has done 

excellent work over the past year. I want to give you the visual 

image of two things. If you remember the cartoon Road Runner, so 

imagine that America is Wile E. Coyote and he is running off the 

cliff and he is still spinning his legs. The gravity hasn’t hit. That 

is where we are on the energy crisis right now. We are still on the 

level land and we don’t understand how deep the problem is. 

If you will excuse me for saying this, in thinking about the Congress you are like deer with your eyes in the headlights, right? People understand the magnitude of the problem, but they haven’t understood how large the magnitude is in terms of the need to get 

beyond partisan ideas, right? So I second Adam in his suggestion 

that the body needs to get beyond its current thinking, because we 

are in a serious problem that over time could become a catastrophic 

problem, but it could become a manageable problem if we would 

have smart and sound public policy. 

Let me just say that ethanol was not a sound and smart public 

policy. And so therefore, in thinking about what we need to do, we 

need to think comprehensively, because we are importing between 

12 and 13 million barrels a day of oil. Our imports last month were 

13.5 million barrels a day of oil. And ultimately that volume is so 

large and it is going to grow so much more that coming up with 

these little solutions that help somebody’s district is not going to 

solve the problem. 

So we need to move away from false choices, right? We need to 

come up with concrete policies. We need to both curb demand 

growth, we need to increase what I call the substitutability. One 

of the reasons why you are having a hearing on oil and gasoline 

and not on electricity is because we have many different fuels we 

use to generate electricity in this country and none of them are oil, 

right? That was something that was a positive future of the 1970s. 

Most Americans no longer heat their homes with heating oil, right? 

So there is a whole range of problems that have been sort of eased 

since the seventies because we have enhanced our substitutability 

in certain areas. 

We need to do that in transportation. Transportation is now 100 

percent or 99 percent oil based. We now see the emerging technology where we could diversify that, right? And if we look at the 

wonderful projections that the DOE and others have done, we know 

that something like 75 percent of the increase in world demand for 

oil is going to come from the transportation sector. 

Now getting at this issue between drilling versus demand, the reality is and Rice University spent 2 years going into the SEC filings of all the American oil companies, and I welcome you to have 

your staffers to come to the Web and look at that study. The reality 


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is that between 2006 and 2007 the five largest oil companies only 

increased their exploration spending by 10 percent. I mean that is 

pretty shocking. I could understand that in 2000 or 2002 when we 

all said, geez, they should be spending more, they felt cautious 

about how much of their cash flow to spend. Over the last year it 

seems kind of amazing. I think all of you are important people in 

your own right, in your own areas. 

If you were the chairman of a company and saw the commodity 

price for your entity rising the way it has, I would think that you 

would have increased spending a little bit more, right? 

The second thing that has happened in the last year is not only 

did the majors not increase their exploration spending dramatically, though in fairness to them they did make some big boosts in 

2006, but remember costs have gone up 100 percent, so even if they 

are increasing under 50 or 100 percent, they are not increasing at 

all, right? That we also see in 2007 that OPEC has announced virtually no new projects for expanding oil fields. And in fact Saudi 

Arabia announced within the last few months that they are freezing their expansion plans and that they are happy with their plans 

to go to 12.5 million barrels a day by 2009. But their previous 

plans to add new fields to go to 15 million barrels a day seem unnecessary so they are not going to continue with those plans. 

In addition, if you look at the research and development spending of our five largest oil companies that are collecting $160 billion 

in operating cash flow in 2007, they spent together, all five companies, $3.3 billion on R&D. That is half the annual R&D budget for 

General Motors or Microsoft. 

So again in an age where we need new technologies and a new 

investment, we are not getting the momentum. 

Now, just a couple of quick facts. We have done simulations. If 

the offshore continental shelf was open to drilling without restrictions, we could expect a 7 or 8 percent rise in natural gas production. So that is about 1.5 trillion cubic feet higher. And then after 

about by 2015 and then after that we could expect a 10 percent increase each year. 

The CHAIRMAN. If you could please summarize. 

Ms. JAFFE. Sure. And then in oil we could expect another million 

to 2 million barrels a day. If we could get our cars in America to 

average 50 miles to the gallon that would mean we could shave 6 

to 7 million barrels a day off demand by 2025. 

The CHAIRMAN. If you could summarize, please. 

Ms. JAFFE. Okay. So in summary we have seen other countries 

have more effective energy policy. Japan is a leader now in automotive technology. Instead of closing factories, they regulated their 

industry and also gave them R&D tax breaks to make sure that the 

cars that they would be selling now would get 30 to 50 miles to the 

gallon. 

Thank you very much. 

[The statement of Ms. Jaffe follows:] 


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The CHAIRMAN. We appreciate it very much, Ms. Jaffe, and you’ll 

have plenty of opportunity in the question and answer period to expound upon your points. 

Let’s turn to our next witness, who is Athan Manuel. He is the 

Director of the Lands Protection Programs for the Sierra Club. We 

welcome you, sir. Whenever you are ready, please begin. 

STATEMENT OF ATHAN MANUEL 

Mr. MANUEL. Thank you, Mr. Chairman and ranking minority 

member and members of the committee. Good morning, my name 

is Athan Manuel, and I direct the Lands Program for the Sierra 

Club. And I am here representing over 750,000 Sierra Club members who belong to more than 65 chapters and 45 groups around 

the country. That makes us the largest grassroots environmental 

organization in the country. 

Before I start, I am a little confused as to how I should begin. 

I have come to some of these hearings before, and I know a lot of 

times witnesses open by hailing the Red Sox, but now with the 

Celtics in the finals I am not sure what is the correct way to pander to the chairman on that. 

The CHAIRMAN. You are doing a good job. 

Mr. MANUEL. Turning to the future of oil, I want to mainly discuss two issues. One is gas prices and the second one is access to 

resources here in the United States. A lot of the members have 

mentioned this and some of the panelists have mentioned it, too, 

that we all know Americans are paying a record amount of prices 

for a gallon of gas, over $4.00 a gallon. It is disappointing when 

you consider that we were first put on notice about gas prices almost 40 years ago in the first Arab oil shock. And it is disappointing from our perspective to see that 35, 40 years later we 

are still dependent on fossil fuels, oil, natural gas and coal. 

And in addition to pandering about the Red Sox, I have got to 

talk about myself a little bit more. I am a Greek American and my 

parents love quoting the ancient Greeks, like Homer, but in this 

case I have to quote Homer Simpson. So I am not making the first 

cartoon reference, but Homer Simpson said, stupidity got us into 

this mess and stupidity will get us out. And that is the disappointing part about some of the energy policies being promoted, 

that it calls for more drilling when drilling is really the problem. 

All we have got to show for a pretty aggressive drilling for the last 

35 years is again $4 for a gallon of gas. 

If we are truly addicted to oil and gas, as President Bush said 

in a recent State of the Union Address, we clearly think the answer 

is not to seek a bigger fix by drilling in special places like the Arctic Refuge or off of our coasts and off of our beaches. 

In looking at the Arctic Refuge, in particular the Energy Information Administration admitted or released a report last week that 

mentioned that peak production, which wouldn’t be until 2027, the 

effect on prices at the pump, if any, would be a few pennies from 

drilling in the Arctic Refuge. So we don’t think drilling there is the 

solution or would reduce prices. By contrast, the EIA research indicates that clean energy and energy efficiency technologies could do 

ten times more to help reduce our dangerous dependence on foreign 

oil and fossil fuels. 


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The same example holds true for the Outer Continental Shelf. If 

you look at the eastern Gulf of Mexico in particular, which is kind 

of an area of highest industry interest, only about 930 million barrels of oil are thought to be in that area. Again against current 

rates of consumption that is just not much oil, certainly not enough 

oil to again reduce the price of gas that consumers pay at the 

pump. 

Again looking at the OCS, a vast majority, 80 percent of the Nation’s undiscovered, technically recoverable oil and gas is located in 

areas that are already open for drilling, according to the Department of the Interior. 

Ms. Solis mentioned that in her opening statement, that even if 

we drilled everywhere in the United States we wouldn’t have 

enough supply to impact prices or to help consumers at the pump. 

Finally on access, again many of the opening statements mentioned how the oil companies have access to quite a few areas, both 

on and offshore. A new report by the Natural Resources Committee 

here in the House mentioned that the permitting of drilling permits has exploded in recent years going from 3,800 5 years ago to 

more than 7,500 in 2007. The same is true with onshore and offshore, whether we are looking at our public lands, BLM lands, or 

offshore. 

Clearly we think that more drilling and leasing in the United 

States will not lower gas prices. We simply don’t have that much 

oil and gas left in the United States. Other panelists have said this 

morning the price of oil is influenced in the world market largely 

by OPEC. It is also influenced by speculation, increases in demand 

in Asia, and China, and India and by a weak dollar. And again, we 

don’t think leasing and drilling is going to solve that problem. 

This year there have been two huge leases held in the Chukchi 

Sea and in the Gulf of Mexico, and obviously prices have still gone 

up. Again these large leases indicate, underscore the issue that 

there is no lack of access to areas here in the United States. And 

if you look back 30 years since the first era of oil shock in the early 

70s, the U.S. has produced almost 90 billion barrels of oil since 

then. So we have tried drilling our way out of the problem, and it 

just hasn’t worked. 

We think now this new Congress is going to take steps to solve 

the problem. Last year under the leadership of Mr. Markey and 

other Members, Congress did pass increases in fuel economy standards for the first time. There are many innovative programs being 

offered this year by Members of Congress to get us off fossil fuel 

and use more renewables, and we think that is clearly the best way 

to go when looking at the energy policies. 

So when we look at the future of oil we hope that we really see 

a future of clean renewable energy and energy efficiency programs. 

We really are optimistic that America can innovate our way out of 

this problem and instead of doing the failed policy of the past, 

which is again more and more drilling everywhere here in the 

United States, we should look forward to energy efficiency solutions, clean energy programs and renewables that would get us off 

of fossil fuels, reduce global warming pollution, greenhouse emissions, and put Americans to work on a clean energy future, not a 

future of oil. 


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Thank you for the time, Mr. Chairman, and for the invitation. 

[The statement of Mr. Manuel follows:] 


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The CHAIRMAN. Thank you, Mr. Manuel, very much. 

And our final witness is Karen Harbert, the President and Managing Director of the Institute for 21st Century Energy. She has 

been an Assistant Secretary for Policy and International Affairs at 

the U.S. Department of Energy. We welcome you, Ms. Harbert. 

Whenever you are ready, please begin. 

STATEMENT OF KAREN HARBERT 

Ms. HARBERT. Thank you, Mr. Chairman and the Ranking Member and members of the committee. 

At the Institute for 21st Century Energy, we believe an affordable, diverse and secure energy supply is fundamental to our future 

national security and the expansion of American economic opportunity and prosperity. America needs a comprehensive, commonsense energy policy with a long-term view and durable policy and 

fiscal commitments. It is no surprise to tell you all that we do not 

have that now. 

It will take unprecedented political commitment from the Congress and the executive branch, better partnerships with local and 

State governments and much-improved relationships with the private sector. We need to be honest about what it is going to take. 

We need to stop penalizing, demonizing, regulating, and picking 

winners. We need to instead stimulate investment, incentivize and 

innovate solutions to address the greatest threat to the 21st century. 

I am not going to talk about demand growth, because that has 

been covered. I am going to talk a little bit of what is happening 

in the oil market and then what we need to do about it. 

Resources are located in places that are geologically difficult to 

get to, geographically very difficult. They are in places that are politically unstable, and they are unfriendly to new investment. National oil companies own 50 to 80 percent of the world’s proven oil 

reserves. Energy-sector exploration and development costs have 

risen, and yet the share devoted to exploration has fallen. We are 

seeing growing resource nationalism around the world. We don’t 

have enough energy professionals. We don’t have enough equipment. And NIMBY is a thing of the past; we are now on to BANANA, build absolutely nothing anywhere near anything, and even 

NOPE, not on planet earth, not on planet earth. That is an 

unsustainable path to sustain our economic competitiveness, if we 

want to do that. 

We are not running out of resources. That is simply untrue. We 

are running out of access to the resources. The International Energy Agency estimates we have 6 trillion to 7 trillion barrels of conventional oil in place around the world. Our U.S. Geological Survey 

estimates that we have 3.345 trillion recoverable barrels around 

the world. And if you take out what has already been produced, 

that leaves anywhere between 1.5 trillion to 3.5 trillion barrels of 

oil still available. 

But we have to be able to open markets. We have to be able to 

have transparent trade. And we have to have fair market pricing 

of energy. And we need to capitalize on our resources here at home. 

The U.S. is still the largest producer of energy, but we still have 

significant resources that the Congress and the executive branch 


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have put off limits for exploration. Our Minerals Management 

Service estimates we have 139 billion barrels of undiscovered oil 

here in the United States. Eighty percent of the Outer Continental 

Shelf is off limits. That part alone, if we would just use that part 

of the oil, we would have actually a 35-year supply of gasoline for 

our cars. We would have heating oil for the millions of homes in 

the next hundred of years. We are depriving the American consumer of choice and opportunity. 

May, there was a Gallup poll that demonstrated huge change in 

public opinion. 41 percent used to believe that drilling off our coast 

and in wilderness areas should be off limits. 57 percent now support it. 

We need to listen to the American people and their pocketbooks. 

We need to develop a comprehensive plan, and we need the comprehensive plan to embrace the following concepts: We need to increase and diversify supply. We need to increase our suppliers. We 

need to improve energy efficiency. That is the next best source of 

energy, is the one we currently waste. We have to accelerate technology, development and deployment and invest in it with regularity and predictability. We have to increase the use of alternatives and renewable sources of energy. Yes, we need to improve 

our environmental stewardship. We have to modernize our infrastructure. It is not enough to get the hydrocarbons if we can’t get 

them to where they need to be. And we have to exert international 

leadership. 

We need it all. We must allow for increased domestic oil and gas 

supplies. We have to recognize the role of nuclear power, an emissions-free source of power. We need clean coal. We need to use the 

250 years of coal we have here. We have to emphasize energy efficiency and renewables. We have to update our aging energy infrastructure. We have to be better environmental stewards. And we 

have to develop and deploy those clean technologies that will improve our trade imbalances and accelerate American competitiveness. 

If we unleash that entrepreneurial power that has helped us in 

many crises in the past, we can make widespread use of technology 

to use our coal. We can create a second generation of biofuels that 

will not conflict with fuel demands. We can build safe, emissionsfree nuclear power plants. And we can drill responsibly on and off 

of our shores. 

But we have to inform the public and policymakers with due respect about the huge challenge we are in, the choices we have and 

the urgency of this matter. We have to consider the tradeoffs, the 

costs and the feasibility and viability of what we are proposing. We 

need less rhetoric. We need more facts. There is no single solution, 

no single fuel. We must embrace all sources. 

I would like to leave you with the thought that the decisions we 

make, this Congress makes, the next Congress and the next President, those decisions we make in the next few years, we will be 

with those decisions for generations to come. We need to take it responsibly, seriously. The stakes are enormous for our competitiveness and for our national security. And we at the Institute for 21st 

Century Energy look forward to being a constructive and integral 

part of the deliberation this country desperately needs. 


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Thank you. 

[The statement of Ms. Harbert follows:] 


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The CHAIRMAN. Thank you, Ms. Harbert, very much. 

And now we will turn to questions from the select committee 

members. And the Chair recognizes himself. 

Mr. Caruso, I am wondering why it is that your agency is pre- dicting that the price of oil is going to go below $57 a barrel in 

2016 and then, even further out, you are predicting that the price 

of a barrel of oil is going down to $70 a barrel by 2030. So, on the 

one hand, America believes that we are in an energy crisis, and I 

think that all of us really feel that, but your projections are, in 

your agency, is that by 2016 the price will be pretty much cut in 

half and by 2030 it really gets even better, because these are constant dollars. 

How can you explain that? It doesn’t make any sense to people 

that the price of oil is going to be going down. 

Mr. CARUSO. Well, just to start off with a point of clarification, 

those prices you quoted are the assumptions for the world oil price 

in our annual energy outlook that was released several months 

ago. And they are only one of a number of scenarios that we look 

at. 

The CHAIRMAN. But the problem with that is that NHTSA, the 

Department of Transportation uses those projections to then determine what the cost-benefit analysis is for increasing the fuel-economy standards for the vehicles that we have to drive in 2016 and 

2020 and 2030. So if you give them that number, then the cost benefit of course is much lower in terms of the benefit to America. The 

higher the prices—if you were projecting $4 a gallon or $5 a gallon, 

well, then NHTSA is free to increase by five or six or seven miles 

per gallon the efficiency of the vehicles by 2030. 

So your number is very relevant, because it goes right to the 

question of the pressure which is going to be applied to the wilderness areas in the United States. The more efficient the vehicles— 

we put 70 percent of all oil we consume in vehicles—the less pressure there is to drill in pristine wilderness areas. 

So your projection is, I think, way off. I don’t think it is even remotely close to where the price of oil is going to be. And it has a 

profound impact then on all the other decisions which are made. 

Mr. CARUSO. Well, the point is well taken that NHTSA does use 

the reference case. We do give them the high price case, which in 

nominal dollars goes to $180 in 2030. 

The CHAIRMAN. Would you recommend, Mr. Caruso, that the Department of Transportation used the high case scenario in planning 

for what the efficiency of the vehicles that Americans drive in 2020 

and 2030 should be? Or do you think that they should use $2.26 

a gallon in 2016 and $2.51 in 2030 as the basis for their planning 

as to what the efficiency of the vehicles that we drive should be? 

Mr. CARUSO. Well, of course, that is obviously the prerogative of 

NHTSA. But we are on the higher price path right now. If you 

would ask me today what I would use, I would use the higher 

price. 

The CHAIRMAN. You would use the higher price, but NHTSA 

doesn’t. NHTSA has to use your lower price. So I would recommend 

to the Bush administration that they change this formula and that 

they not use this low cost per gallon of gasoline as the basis for 

the fuel-economy incentive for the vehicles which we drive. 


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Let me just go down, yes or no. Mr. Sieminski, should they use 

the high cost? Do you think $2.26 per gallon in 2016 is a good way 

for America to plan the efficiency of our vehicles? 

Mr. SIEMINSKI. Mr. Chairman, my experience with forecasting is 

that it hasn’t worked out all that well. So I would suggest—— 

The CHAIRMAN. As a Nation, what would you plan for? 

Mr. SIEMINSKI. I would think looking at a range would make a 

lot of sense. 

The CHAIRMAN. No, what would you plan for if you were the Government? Would you plan for $2.26 a gallon in current dollars in 

2016 and $2.51 in 2030, or would you plan for $4 a gallon in terms 

of what our automotive fleet should average? 

Mr. SIEMINSKI. If I were making this as a policy decision, I would 

plan for the worst, which is higher. 

The CHAIRMAN. Okay, thank you. 

Ms. Jaffe, what would you plan for? 

Ms. JAFFE. I think that we should plan for the worst and that 

we shouldn’t have a fixed price for planning. We should just have 

a standard that ought to be optimal technology ability. 

The CHAIRMAN. I appreciate it. 

Mr. Manuel, what would you plan for? 

Mr. MANUEL. Well, like everyone, you plan for the worst and 

hope for the best. 

The CHAIRMAN. Thank you. 

And, Ms. Harbert, what would you plan for, if you were the Bush 

administration right now, using what the projected price for gasoline for consumers would be in 2016 and 2030? 

Ms. HARBERT. As you know, it is a little more complicated than 

that because you have to affix the mandates that you are going to 

impose with technology availability. You have to introduce, when 

is the technology going to be available—— 

The CHAIRMAN. I understand that. What would you plan for? You 

are the Chamber of Commerce. You are planning, the Chamber of 

Commerce is planning for what the price for all of its members are 

going to be in 2016 and 2030, Ms. Harbert. Would you plan for 

$2.26 a gallon for all of your members by 2016, $2.51 in 2030? Or 

would you recommend that the Government plan that there be a 

much higher price and therefore adjust what the expectations are 

from the transportation sector? 

Ms. HARBERT. I will note that the BP statistical outlook, which 

just came out, noted that they thought $105 was a fair price. That 

was according to BP. 

The CHAIRMAN. $105 a barrel. So, in other words, you don’t think 

that planning for $2.26 makes any sense at all? 

Ms. HARBERT. I think we have to be realistic about the prices 

going forward. And I don’t know exactly how everybody does the 

different forecasting, but clearly the trend is up. 

The CHAIRMAN. Well, your original testimony was very frightening. And now I am asking you, do you think it makes sense for 

them to be projecting $2.26 a gallon? 

Ms. HARBERT. I don’t think we need to make our policy decisions 

based purely on forecasts. We need to make common-sense, comprehensive solutions available that are not just based on forecasts. 


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The CHAIRMAN. I agree with you. I am asking you a specific 

question. We put 70 percent of the oil into gasoline tanks. That is 

70 percent of all oil. Do you think that this is realistic? 

Ms. HARBERT. No forecast can adequately predict why last Fri- day the price of oil went up $11. So forecasts are useful guideposts, 

but you cannot make concrete policy decisions based solely on forecasts. 

The CHAIRMAN. Well, if we are not going to be basically learning 

from what is going on right now in our economy with these high 

prices, the testimony about India, about China, about all the other 

pressures, and turn to the transportation sector and solve the problem, then I am afraid that the Chamber of Commerce in 2016 and 

2030 is going to be ravaged by prices that will be $6 and $7 and 

$8 a gallon. Because it is surely not going back down to $2.26 a 

gallon in 2016 in current dollars, okay? That is just not going to 

happen. 

Ms. HARBERT. I think we are all in violent agreement that—— 

The CHAIRMAN. I know, but I wish that we could get some agreement in terms of how high then the fuel-economy standard should 

go in order to get that result. 

And, by the way, your price projection per barrel of oil is higher than EIA is projecting, $105 a barrel. They have it lower than that 

in the out-years, okay? 

So, again, this is a big problem that we have in terms of what 

the Bush administration continues to propose in the long run for 

what we have to do as a society in order to protect ourselves. 

My time has expired. Let me turn and recognize the gentleman 

from Arizona. And I will be generous to him in his time. 

Mr. SHADEGG. Thank you, Mr. Chairman. 

Mr. Sieminski, I want to begin with you. I have listened carefully 

to your testimony, and you stated that we are not running out of 

oil. You said that we need to look at what is out there and where 

the resource is on the acres that are available. And then you talked 

about the importance of being able to get to those resources. And 

you said that if the resources are on lands that are essentially 

locked up, those are the lands that need to be released. 

I take it, then, that you believe that there are lands where we 

have locked up the supply and cannot get to them at the current 

time, is that correct? 

Mr. SIEMINSKI. That’s correct. 

Mr. SHADEGG. You also said, and I thought it was important, 

that we may be reaching a point where we have a problem getting 

to the acres where the supplies are. Are there some that you can 

identify? 

Mr. SIEMINSKI. Yes, sir. We know that there is natural gas off 

of the coast of Florida. It has already been discovered. And it is not 

being produced because of environmental concerns that seem to me 

to be overreacting. 

Mr. SHADEGG. The last legislation that failed in that issue, if I 

am correct, proposed that we would not allow a natural gas well 

to be closer than 50 miles from the shore. And that was found to 

be objectionable because of sight pollution. 

Do you happen to believe that you can see 50 miles out into the 

ocean and see an oil rig? 


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Mr. SIEMINSKI. It actually gets worse than that. The Cuban Government will be drilling closer to the shore of Florida than the 

United States will be drilling. 

Mr. SHADEGG. So that is not an urban myth, that is a fact? 

Mr. SIEMINSKI. That is a fact. 

Mr. SHADEGG. There is concern about environmental concerns, 

and I think every witness acknowledged those; I would certainly 

acknowledge those. 

Do you know what happens at a natural gas rig where there is 

a leak? And have there been any leaks at natural gas rigs recently? 

Mr. SIEMINSKI. Well, this is one of the factors that pains me 

when I think about this, is, in talking with a county representative, 

elected county representative that I have been friends with for 

years in the Tallahassee area, I said, ‘‘Can you convince your constituents to think about looking at this gas field? You are going to 

need it in Florida.’’ We have a power problem, as Amy mentioned. 

We could very easily have electricity shortages 3, 4, 5 years from 

now. Natural gas is going to be the only way to do that. Natural 

gas is clean. If you do have a spill, it is not going to foul the beaches in Florida. The pipelines could come in underground, so nobody 

would see them. And yet the reaction of his constituents seems to 

be that they are afraid that it is going to hurt the tourism industry. And I am, frankly, more concerned that the tourism industry 

will be hurt by brownouts in Florida than it is going to be hurt by 

drilling the gas that we know is already there. 

Mr. SHADEGG. Absolutely. 

Ms. Harbert said that she thought that if we explored the Outer 

Continental Shelf, went after the oil and natural gas there, we 

would have a supply of 35 additional years, I believe, just in natural gas. I will ask her in just a moment. Do you agree that the 

supplies are in that neighborhood? 

Mr. SIEMINSKI. That we need to get from—— 

Mr. SHADEGG. That we could get from the Outer Continental 

Shelf. 

Mr. SIEMINSKI. You know, those numbers, Guy Caruso will have 

those, or the people at EIA. But it is substantial. 

And let me just make one quick comment on that. The idea that 

it is only a small proportion of our energy needs when you look at 

it over an annual basis or over a period of time I think is really 

missing the whole point. 

I get paid every 2 weeks. And, frankly, I don’t—and one of my 

paychecks is a small proportion of my annual income, but I don’t 

want to give up one of those paychecks, and I don’t think other people do. 

Mr. SHADEGG. I am running out of time. I want to get to Ms. 

Harbert. 

Ms. Harbert, give me the statistic again, because I would like to 

know it. 

Ms. HARBERT. And I will ask your other question. The human 

eye can see 16 miles. So that is how far you can see. 

Mr. SHADEGG. Less than a third of what we are talking about. 

Ms. HARBERT. Right. 

According to the Minerals Management Service, we have 139 billion barrels of undiscovered oil reserves in this country. Of that 


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139, 86 are in the Outer Continental Shelf, which means that 62 

percent of the Nation’s resources for oil are in the Outer Continental Shelf. 

Mr. SHADEGG. And they are currently prohibited from—— 

Ms. HARBERT. Eighty percent of that is off-limits for exploration 

and production. And I am just talking about oil. The other ones 

that you were talking about were gas, but that is just oil. 

Mr. SHADEGG. That is just oil. That does not include natural gas. 

Do you have figures on natural gas? 

Ms. HARBERT. I can get those for the record. 

Mr. SHADEGG. Okay. 

So, obviously, we have a huge supply in the Outer Continental 

Shelf, which we could be going after and increase our supply for 

a substantial period of time, but we have politically decided not to 

do that. Is that correct? 

Ms. HARBERT. That is correct. And our friendly neighbors to the 

north and the south also have significant supplies to increase our 

North American energy security. 

Mr. SHADEGG. And we are just talking about oil. There is natural 

gas on top of that? 

Ms. HARBERT. Yes. 

Mr. SHADEGG. The numbers I have on natural gas show 287.82 

trillion cubic feet of natural gas. That is just in the lower 48 in the 

Outer Continental Shelf. 

I want to switch to oil shale. The United States Congress, the 

House, just less than a year ago, put a moratorium on oil shale. 

The chairman mentioned that he thought the predicted supply of 

oil shale was in the neighborhood of 1 trillion barrels of oil shale 

in place. I have heard a figure as high as 1.8 trillion. 

Can you tell us about the available oil we could get from oil 

shale? 

Ms. HARBERT. There is a tremendous potential in the Midwest, 

but unless we actually have an incentive out there for the companies that are out there to develop the technology to actually be able 

to produce this even more cleanly and better, without an opportunity to explore, there is no opportunity to develop the technology. 

There are several companies, including Shell, that are out there 

that have developed the technology to extract three times the size 

of Saudi Arabia’s resources out of that area. But if you can’t open 

it up, who is going to develop the technology, which is hugely expensive to do this in an environmentally sustainable way? We have 

got to incentivize our way out of this crisis, not penalize and put 

things off-limits. 

Mr. SHADEGG. And currently that is a political decision again. 

We put a political moratorium on the production of oil shale? 

Ms. HARBERT. Correct. 

Mr. SHADEGG. Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. 

The Chair recognizes the gentleman from Connecticut, Mr. 

Larson. 

Mr. LARSON. Thank you, Mr. Chairman. 

Mr. Caruso, would you advise the next administration then, as 

they set out to put together their energy policy, whether it be SenVerDate Mar 15 2010 23:55 Nov 12, 2010 Jkt 061729 PO 00000 Frm 00078 Fmt 6633 Sfmt 6602 E:\HR\OC\A729.XXX A729

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ator McCain or Senator Obama, would you recommend that they 

do that behind closed doors, in secret, or do you think it should be 

a transparent, open policy? 

Mr. CARUSO. Well, I am head of a statistical agency, and we believe in transparency and openness, so I certainly think that works 

best. 

Mr. LARSON. Do you think that that in part and parcel is a problem with the American public, when they, as everyone is working 

toward solutions, that when you do things behind closed doors in 

the dark of night, that it seems to the American people, especially 

when you come from a background of oil yourself, that somehow— 

not you personally, but the Vice President—that somehow these 

things aren’t transparent? 

Mr. CARUSO. I am obviously not familiar with—— 

Mr. LARSON. Is there anyone on the panel who doesn’t believe 

that we shouldn’t have a more open and transparent policy with respect to our energy policy? 

Ms. JAFFE. I would just like to add to that, that there is a tremendous amount of disinformation that goes out to the public on 

the factual, indisputable technicalities of oil and gas. And to the extent that people feel the need to fulfill what they think their constituencies want to hear and they go on CNN and tell the public 

something that is factually incorrect, that makes the work of everybody on this panel 10 times harder, because we have to spend a 

tremendous amount of time publishing documents that put out factual things about what car technology is available, about how many 

lands are available for drilling. And it makes it very uphill. 

Mr. LARSON. Well, we just received some very good testimony. I 

thank the panelists, et cetera. 

And one of them, in talking about this, was going through the notion that you can’t explain why oil went up $11 a barrel; I think 

it was Harbert who said that. 

Are the laws of supply and demand suspended? And isn’t it the 

fact that the dark markets have taken over, in terms of speculation? Is speculation part and parcel of what is driving the cost of 

oil up artificially so that we can’t, from a policy perspective, get our 

arms around this? 

Mr. SIEMINSKI. If I could try a quick answer to that, the $11 

move that we had last week, two of the factors that played into 

that were, one, an outage on a significant natural gas pipeline in 

Australia that has raised the demand for distillate fuels in that 

country to keep their mines open, so the metals mine—— 

Mr. LARSON. The funny thing is my constituents, when I go back 

home and talk to them, they say, how is it that something happens 

and then immediately the next day the prices go up in gasoline, or 

in any kind, and yet when things happen where they say demand 

is less, the prices stay the same, they don’t come down? 

Are the laws of supply and demand suspended, and is the industry at the whim of speculators, especially those that are unregulated and unseen with the capability of driving the marketplace up 

artificially? Yes or no, do you think that that is the case? Is that 

a problem or not? 

Ms. JAFFE. Yes, I think it is a problem. We are in a bubble—— 

Mr. LARSON. Good. Yes. 


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So what about you, Mr. Manuel? 

Mr. MANUEL. Well, I don’t think it is one thing. I think speculation is part of the problem, increased demand is part of the problem, the weak dollar. 

Mr. LARSON. Ms. Harbert, does speculation have any role in this? 

Ms. HARBERT. We have a very, very tight market between supply 

and demand. And to the extent that our economy, the receding dollar, et cetera, are exacerbating that—— 

Mr. LARSON. Should we regulate the dark market? 

Ms. HARBERT. If you look at speculation, it is adding volatility 

into the market, but it would do nothing to turn around and reduce 

and reverse the price increase. 

Mr. LARSON. We want the transparency that everybody—— 

Ms. JAFFE. We want the markets to clear and to function, because otherwise it will be even less orderly. And we had that in the 

1970s. 

Mr. LARSON. Should we look at the dark markets? 

Ms. JAFFE. Well, what we need to do—— 

Mr. LARSON. Should they be regulated? 

Ms. JAFFE. No. Well, they are regulated. 

Mr. LARSON. Who? Who regulates the over-the-counter market? 

Ms. JAFFE. The Commodities Futures Exchange. 

Mr. LARSON. No, it doesn’t. 

Ms. JAFFE. What we really need to do is think about how much 

speculation and what kind of speculation it is and what are the solutions. 

Mr. LARSON. How can you determine that if they are unregulated? 

What do you think about that, Mr. Caruso? 

Ms. JAFFE. One solution might be—— 

Mr. LARSON. Excuse me, Ms. Jaffe. Thank you. 

Mr. Caruso, what do you think about that? Should we be regulating these unregulated dark markets? 

Mr. CARUSO. I think we need more information from those markets to be able to understand what is going on. 

Mr. LARSON. How do you get it if they are not regulated? 

Mr. CARUSO. Well, they may need to be. And the CFTC, FTC and 

Department of Justice are meeting tomorrow in their first task 

force meeting to look at that issue. 

Mr. LARSON. After more than 21⁄2 years of our pleading that they 

do so. But it still doesn’t answer the question of the dark markets 

and their ability to be unregulated and to speculate on what is 

happening and drive these costs up. People in my district call that 

economic terrorism. That is something we ought to be making sure 

that the Justice Department is involved in. 

Mr. MANUEL. Mr. Larson, if I may, all of this stuff is just another 

reminder that we need to get off of oil. I mean, this stuff is—you 

know, it is not sustainable, the way the markets are working and 

where it is located. We just need to wean ourselves off of fossil 

fuels. 

Mr. LARSON. I agree wholeheartedly. But in the meantime, as my 

grandfather would say, trust everyone but cut the cards. We not 

only need to cut the cards, we need a new deal here. 


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Ms. JAFFE. We also need to think more flexibly about how and 

when we use these strategic petroleum reserves and the IEA stockpiling system. This administration, unlike previous administrations, has said that the SPR is off the books except for national war 

emergencies. And we are not using a tool that we have that was 

used successfully by the Clinton administration to cap speculators 

out of the market. So we haven’t looked at that, we haven’t debated 

it. 

I would guess from my long experience in watching the way, as 

Adam put it, market sentiment has determined that if the markets 

felt that some player with strategic stocks was going to come in 

and possibly make a release, they would be a little less confident 

about buying the market long. 

The CHAIRMAN. The gentleman’s time has expired. 

The Chair recognizes the gentleman from Oregon. 

Mr. WALDEN. Thank you, Mr. Chairman. I appreciate the hearing, and I think there has been some good information come out 

of it. 

Ms. Harbert, I especially appreciated your testimony. And I keep 

hearing from Mr. Manuel that we need to stop using oil, natural 

gas and coal, I think he said, or sort of the evil energy sources of 

the United States, and that we need to wean ourselves off of those 

sources. 

My question for you and for Mr. Caruso is, what is the practicality of that? What do you replace them with? And how soon could 

you do that? 

Ms. HARBERT. For the benefit of our economy and our national 

security, we want to reduce our dependence on any single fuel. In 

this case, it happens to be oil. We do need a diverse supply. 

However, it is unrealistic to think that we will not have hydrocarbons as a very large part of our future for the foreseeable future. And we need to figure out how to make that a stable, secure 

supply. We need to find new places where that exists. We want to 

have control over those so they exist right here at home. And so 

we have to be able to use our oil, our gas, our coal responsibly. We 

have the technology to do that. 

Mr. WALDEN. All right. 

Mr. Sieminski, we have heard a lot about the dark markets and 

the effect of speculators on price. About 3 years ago or so, I actually 

led an effort asking the Government Accountability Office to investigate those markets, and they produced a rather lengthy report 

and recommended some changes in those markets. And I think 

there is a certain element of speculation that drives up price. 

But I thought you made a pretty good point about why the speculators are in those markets. Is what you were saying is that has 

a lot to do with the fact that we lock up most of our new resource 

or available resource in this country, not just the global market 

with increasing demand? 

Mr. SIEMINSKI. Well, I think it is a concern that supplies are 

looking more and more limited, and demand, at least outside the 

United States, so far hasn’t been reacting all that much to prices. 

So I think that we are involved in a very painful economic experiment to try to find out what price is required to get supplies to rise 

and demand to go down. 


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As far as the dark markets are concerned, let me make three 

comments. Guy attended a meeting at the Commodities Futures 

Trading Commission yesterday. I listened very carefully to the testimony there. 

The CFTC is very concerned about three major areas: the overthe-counter trading, which doesn’t have the same reporting requirements; swaps dealers, where who is defined as speculators versus 

nonspeculators are at issue; and foreign exchanges, where some of 

the contracts traded on the NYMEX here in America are also traded overseas. 

The staff at the CFTC has actually looked into a number of these 

things. And so far, from the data that they have, they don’t think 

that there are big issues there. 

I am all in favor of switching the light on the dark markets. 

Mr. WALDEN. You bet. 

Mr. SIEMINSKI. The people I work with on the trading desk are 

all in favor of transparency. I don’t think there will be a monster 

in the room when the light goes on. 

Mr. WALDEN. All right. Then, if that is the case, then it really 

does get back to a supply and demand curve. 

Now, I don’t know about anybody else. I drive a hybrid here, and 

I drive a hybrid back in Oregon. I have increased my mileage by 

60 percent in Oregon and doubled it here. Not everybody has the 

luxury of investing in a hybrid. 

I don’t know how many of you shop at Wal-Mart. I get in there 

about once a week back in my hometown. There are a lot of WalMart moms and a lot of diesel-truck-driving dads that are having 

a hell of a time making ends meet. And that is the case. 

And, Mr. Manuel, I have heard from the Sierra Club on this 

issue of no new drilling anywhere, it won’t help us anyhow. And 

I have to tell you, I am coming down more on the side that says 

access to proven reserves in America creates American jobs, American energy, and it will have an effect on price over time. So I am 

going to have to respectfully disagree with you, but it wouldn’t be 

the first time, because I know your group doesn’t want us to cut 

any trees in the national forest either, so we let them burn. But 

that is another subject for another day. 

But I want to get back to this issue. Mr. Sieminski, if Congress 

were to act to open up the OCS or ANWR or shales or tar sands, 

if we were just to pass a law, knowing that we wouldn’t actually 

extract those resources for 10 or 20 years, do you think the simple 

act of Congress saying we changed America’s energy policy would 

have an effect on markets and speculators? 

Mr. SIEMINSKI. Yes, sir, I do. I think that, as I said during the 

course of my first remarks, it is the sentiment that matters. Right 

now, everybody in the oil markets is making this assumption that 

demand isn’t going to go down and supply is going to be fixed. If 

we can change that thinking—and changing that thinking would 

be, look, we are going to open up the Outer Continental Shelf, we 

are going to start building nuclear power plants 5 years for the 

next 20 years, and we are going to pass even stricter fuel—efficiency standards on automobiles than we did before, and even do 

things like the light bulbs—I mean, that is not the wrong thing to 

do. That is, like, one of the small steps you have to take. We have 


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to take all of these small steps, and we have to do it all at the 

same time. 

Mr. WALDEN. Yeah, it seems to me that the data show that 

Americans need to conserve, but even when we conserve at a rate 

greater than any time since World War II, reducing our consumption of oil in our driving, according to the statistics, I believe that 

is correct, it is not having the effect it used to have. 

Mr. SIEMINSKI. Well, it is beginning to work here. I mean—— 

Mr. WALDEN. Oh, it is killing us here. 

Mr. SIEMINSKI. The statistics are that demand is down 4 percent 

on a year-over-year basis. Americans are buying smaller cars; they 

are driving fewer miles. 

Mr. WALDEN. They are not going to their kids’ away games anymore because they can’t afford the gas. They are showing up at 

work 2 hours early so they can carpool with their spouse. You 

know, they are making tough decisions in their lives. You know, I 

want people to conserve, but I don’t—Mr. Chairman, everybody has 

gone at least a minute and a half over, so—— 

The CHAIRMAN. You are at a minute and 6 right now. 

Mr. WALDEN. You were 2:23. 

The CHAIRMAN. I did not say a word. I just tapped lightly to give 

you a notice that you are way over time. 

Mr. WALDEN. I am worried about that other hand of yours, 

though, with that club thing on it. 

The CHAIRMAN. Well, I would give my right arm to be able to say 

what I really want to say right now. But you are over, and I am 

just tapping lightly. 

Mr. WALDEN. I will give up. 

Well, I was just—I don’t know where I was going with it. I will 

quit at that. 

Ms. JAFFE. If everyone in the country telecommuted one day a 

week starting tomorrow, we would save 20 percent of our oil use. 

Mr. WALDEN. And that is great, except I represent a district that 

is 70,000 square miles where you don’t pull a horse trailer with a 

Prius. I own a Prius. You can’t drive a horse—— 

Ms. JAFFE. You telecommute. In other words, you work from 

home 1 day. 

Mr. WALDEN. Ma’am, have you ever been on a cattle ranch? A 

lot of them work from home. You still got to haul the hay out to 

the field; you got to bring it back. If you are on a wheat ranch, you 

still got to run the tractor. Fertilizer costs a buck—— 

Ms. JAFFE. I am just talking about commuters. I am just talking 

about commuters. 

Mr. WALDEN. We are all representing the people we represent. 

And I don’t disagree, and I have supported telecommuting efforts 

and funding in my district. I think it is wonderful. But I am saying 

there are a lot of other folks out there in real America that can’t 

do that, that can’t do that. Their costs of commuting now are higher than their mortgage costs. And they lived in a different town because the housing costs were cheaper. These are real people going 

upside-down in this country, and we don’t want to do anything 

about it here, and that is wrong. 

The CHAIRMAN. The gentleman’s time has expired. 

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


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Mr. HALL. Thank you. 

And my friend, Mr. Walden, I think we do want to do something 

about it. I certainly do, and I think all of us do here. And there 

are certainly areas, as the witnesses have reminded us, of agreement and areas of overlap, and I think we should work as fast and 

as hard as we can on those. 

So the EIA has run a lot of assessments about oil prices based 

on projected supply and demand on a base case. And I would just 

like to ask Mr. Caruso, has EIA run any estimates incorporating 

an assumption that America’s auto fleet will be significantly more 

efficient than 2030? 

Mr. CARUSO. We have in the latest outlook incorporated the new 

law, so we have about a 40 percent increase in miles per gallon in 

this 2008 outlook. 

And we haven’t specifically run a scenario where we took a much 

larger increase, but we have done improved technology cases which 

try to simulate that. So there are about 30 different cases in our 

long-term outlook that try to simulate different policy changes and 

economic conditions. 

Mr. HALL. Thank you very much. That is good. And I have noticed that every State that has had, for instance, a renewable energy standard, including Texas where our President signed one for 

10 percent RES, when as President of the United States—as Governor, I should say, Governor of Texas, he signed one; as President, 

he has been unwilling to sign one for the whole country. But the 

State of Texas exceeded their 10 percent and has eclipsed California now as the largest installed wind capacity State in the country. 

So there is some evidence that when you put a goal out there, 

Americans exceed it, be it with electricity or with transportation 

fuels or vehicles. 

Indeed, the Chevy Volt, I was just reading, which will be coming 

out next year or the year after that, will basically have a—it is an 

electric car that will have an internal combustion engine for the 

purpose only of charging the batteries, the lithium ion battery 

bank, which will drive the vehicle. And they say on long-distance 

travel it is a commuter vehicle which will run on electric for commuter distances of 100 miles or less. On intercity or long-distance 

travel, it will average 150 miles per gallon based on technology 

they have that they are bringing to market in the next couple of 

years. 

Toyota just announced, I think yesterday or the day before, a car 

that they are planning to release that will get 500 miles to the gallon. 

So I think we are going to see an exponential growth in efficiency, as well as in substitute power for transportation, which is 

a good thing, because we need the liquid fuels for air travel for a 

considerably longer time, I think, as we figure out how else we 

might be able to fly. 

If the overall market was made up, say, 50 percent hybrids, can 

you theorize what that might do to consumption? 

[Insert for the record by Mr. Caruso follows:] 


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Mr. CARUSO. Not off the top of my head. I know our base case 

has 45 percent new car sales of alternatively fueled vehicles in 

2030. But that is a ramp-up, so it takes a long time, as you alluded 

to. 

Mr. HALL. People wear out their cars, and it takes a while before 

they buy a new car. 

Mr. CARUSO. But certainly that calculation could be made. I 

could supply that for the record. 

Ms. JAFFE. We have done the calculation that if, starting in 2015, 

all new cars got 50 miles to the gallon, it would save 6.7 million 

barrels a day at the current rate of car turnover. 

Mr. HALL. Did you see the article, I think it was in the New York 

Times, about the impact on different areas of the country of fuel 

prices, for instance, the southern and more rural districts where 

trucks are in heavier use and they tend to be old and very inefficient? It had a map with different colors. It was really interesting. 

And it made me think that perhaps we should be trying to help 

those States and those districts where people have historically driven trucks for work and for transportation and are driving ones that 

get less than 10 miles per gallon and older models and can’t afford 

to upgrade to a new hybrid truck that shuts down half of the eight 

cylinders when it is on a straight-away at constant speed, which 

are being made currently by GM and Ford in this country. 

Anyway, I just want to make a comment about substitutability, 

which I think you mentioned, Ms. Jaffe. When I was in Israel, I 

was pleased to learn about a company there that is making electric 

vehicles and interchangeable batteries. And their concept is you 

pull into a service station, and rather than charging your battery, 

they just take one out and put another newly charged one in, hook 

up the wires, and you drive away in a few seconds, as opposed to 

taking a few minutes to fill your tank with fuel. 

And I am wondering if anybody has considered this sort of thing, 

at least in commuter areas of the United States? 

Ms. JAFFE. One of the things I think the Israeli Government said 

when they announced that program was that they really feel that 

they are, sort of, meeting global needs, that they have a small 

country and it is easy for Israeli commuters to do that because they 

don’t drive more than 2 hours, you know, from one end of the country to the other, 3 hours. 

But that would have applications in large cities. It would have 

a great application in Manhattan, a great application in a place 

like Singapore, or even in some other larger U.S. cities where you 

have a very dense population that has a limited geographic area 

that they drive. 

We actually did the calculation, back when gasoline prices were 

$3, that if today I could plug in my car—because in Houston I live 

what we call inside the loop, and I really never go more than 10 

or 15 miles a day—I could have spent 2 cents a mile if I could have 

plugged my car into my house and not bought gasoline versus, say, 

17 cents a mile at that time. 

So there really is an advantage. And there is this advantage for 

us in terms of national security, if you can imagine, our either getting cut off by the Middle East or having a major hurricane in the 

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porary hiatus in the ability to have enough gasoline. If some Americans could plug in, I mean, then some people would be able to 

drive without recourse to gasoline, then the need for rationing or 

the kinds of things we saw in 1973 would be greatly eased. 

Mr. HALL. Thank you very much. 

Thank you, Mr. Chairman. I yield back. 

The CHAIRMAN. The gentleman’s time has expired. 

The Chair recognizes the gentleman from Oklahoma, Mr. Sullivan. 

Mr. SULLIVAN. Thank you, Mr. Chairman. 

I appreciate the panelists for being here today. 

And when I look at the energy issues, I talked to people on this 

panel, other Members of Congress on both sides, I think we all 

agree that when we look at some way, some comprehensive energy 

plan to reduce prices, to lessen the emissions in the world, we have 

to look at it from a multi-pronged approach, many different approaches. It is not just one thing. 

And, you know, one of the things, we need to lessen our dependence on foreign oil, we need to maybe use less oil and gas, that is 

true. We need to look at alternative energy sources—wind, solar, 

nuclear. All those things are very, very important. I think a lot of 

people—Ms. Harbert even talked about that. Others have talked 

about that on this panel. 

But right now we are getting a lot of our—and the technological 

advances aren’t in place right now where we can just shoot the 

horse on gas and oil right now and jump on another horse right 

now. 

And so I guess I will ask Mr. Manuel, you know, one of the 

things you said that really disturbed me that I think was less than 

truthful is that we don’t have any gas and oil here to explore here 

in the United States. You said that. And I can tell you right now, 

I got a thing here and I will give it to you, but we have, just in 

the offshore, in the Pacific offshore, we have 10 billion barrels of 

oil we could get here in our own backyard. We also have 18 trillion 

cubic feet of gas. That is in the Pacific. Offshore Alaska, we have 

27 billion barrels of oil that we could get, and we have 132 trillion 

cubic feet of gas. On the Atlantic offshore, we have 4 billion barrels 

of oil and 37 trillion cubic feet of gas. Offshore Gulf, we have, deep 

water, 45 barrels of oil, 233 trillion cubic feet of gas. In the lower 

48 inaccessible—and these are inaccessible; the Government says it 

is against the law to do—we have 20 billion barrels of oil in the 

lower 48 onshore and 162 trillion cubic feet of gas. 

And what I am saying is, until we develop the technologies that 

we can do other things, why do you think it is so wrong to get some 

in our own backyard? Do you prefer that we go to the Mideast to 

get it or outside this country? Why is it so wrong to get it here 

while we are developing those technologies so we can get prices 

down? 

Mr. MANUEL. Well, just to point out, I said that the U.S. has 

about 2 to 3 percent of the world’s proven oil reserves. I didn’t say 

we had none. On the contrary, I pointed out that we have opened 

up thousands and thousands, millions of acres to new oil and gas 

drilling in the last 30, 35 years. 


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And if you look at just this past year, the Minerals Management 

Service has had two very large lease sales, one in the Chukchi Sea, 

one in the central Gulf of Mexico. So it is not a question of access. 

We have all these leases that have been sold to oil and gas companies that aren’t being used, but—— 

Mr. SULLIVAN. These are off-limits, what I just said, they are offlimits. 

Mr. MANUEL. I know, but the point is the stuff that is open now 

is not being utilized. And, again, if you look at the MMS figures, 

we think that 80 percent of the resources that are available offshore are in areas that already opened. Most of the oil and gas 

found in the United States is in the central and western Gulf of 

Mexico. That is where the companies want to go. That area has 

been open for 20, 30 years. 

Mr. SULLIVAN. Do you see anything wrong with going in these 

areas that I mentioned? 

Mr. MANUEL. Well, I do. I don’t think we should open up any 

new areas for new offshore drilling. 

Mr. SULLIVAN. So you don’t think it is a good idea to get more 

at home, in our own backyard? You think we should get it elsewhere? 

Mr. MANUEL. We don’t think it will make any difference on the 

price of a gallon of gas. Because, again, we have tried that. The 

lease sale that happened in the Chukchi, that didn’t drop the price 

of a gallon of gas. When we opened the trans-Alaska pipeline system in 1975, 3 years later the Shah of Iran fell and Iranian oil became off the market. Our prices went sky-high, even though we 

had opened up the largest oil field in the United States. 

There is no historical data to show that opening up individual 

fields in the United States has had any impact on the price of gas 

in the United States. 

Mr. SULLIVAN. You wouldn’t agree that this is part of the puzzle, 

though? When we look at multiple issues that we have to look at 

to address our energy issue, you don’t think this is part of the puzzle to address that? As we develop the technologies where we can 

move to other types of energy, you don’t think that we should do 

that? 

Mr. MANUEL. Well, we acknowledge that it is going to take us 

a while to wean ourselves off of fossil fuels, but there is plenty of 

areas that are opened right now that will allow us to do that. 

Mr. SULLIVAN. That is not adequate. 

Mr. MANUEL. Well, we think that is the way to go for a variety 

of reasons: environmental damage to these areas, but also global 

warming, greenhouse gas emissions. We think the better path for 

our country is a future of clean energy sources, renewables, energy 

efficiency, fuel economy. That would save more oil and gas than are 

thought to be off of these areas that are currently off-limits. 

Mr. SULLIVAN. Is that the mission of the Sierra Club, to lessen 

our dependence on oil and then also to reduce greenhouse gas emissions? Is that your primary purpose? 

Mr. MANUEL. Our goal is to reduce greenhouse gas emissions and 

wean ourselves off of fossil fuels. 

Mr. SULLIVAN. Okay. Do you support nuclear power? 

Mr. MANUEL. No, we don’t right now because of the—— 


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Mr. SULLIVAN. That has no emissions, do you know that? 

Mr. MANUEL. Well, it has a lot of nuclear waste, which I am sure 

you are familiar with. 

Mr. SULLIVAN. So you don’t support nuclear power at all? 

Mr. MANUEL. No, we don’t. 

Mr. SULLIVAN. Does a former member of your group, I read, now 

supports the use of nuclear power? 

Mr. MANUEL. Pardon me? 

Mr. SULLIVAN. Did someone in your organization that was in 

your organization that is not in your organization now support nuclear power? 

Mr. MANUEL. Well, I can’t comment for former members of the 

Sierra Club. 

Mr. SULLIVAN. Well, he does. 

Ms. Harbert, could you tell us again just very quickly, what do 

you think we should do—I mean, we need to look at this from multiple approaches. We are going to try to wean ourselves off gas and 

oil. We probably will move toward that direction as technology develops. But what do you think we should do in the meantime? 

Ms. HARBERT. We need to responsibly exploit the resources we 

have here at home, you know, play the home team, play to our advantages. We are investing now, right now, less in research and development than we did after the Arab oil embargo. We have to get 

serious and invest in advanced technologies. 

We have to streamline permitting for energy infrastructure, and 

that includes new nuclear plants so that it is emissions-free, and 

we have got secure, available, local supplies of nuclear energy. 

Mr. SULLIVAN. Do you believe what Mr. Manuel said about we 

already have enough going on and we don’t need even need to go 

into this because we have plenty already here in the United States 

to address this and that while we are in this gap looking for—— 

Ms. HARBERT. Well, energy demand is forecasted to go up by 30 

percent in this country. We don’t have the same amount of growth 

in production planned for this country. So there is a growing gap 

between supply and demand that has to be met somehow. 

Mr. SULLIVAN. Okay. Also, on the markets, you mentioned the 

speculation and all of that. There may or may not be some in the 

price of crude oil, but probably is a little bit. If you did regulate 

here, and we do to a certain extent some of the markets, what 

would keep them from, you know, traders just trading in another 

country? 

The CHAIRMAN. The gentleman can answer the question. 

Mr. SIEMINSKI. I think that we need to do what we can do in our 

own markets and then with the foreign agencies that we can work 

with, like in London and in Dubai, where there are actually initiatives under way to cast some light on the dark market question. 

Mr. SULLIVAN. Okay. 

Well, thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. 

The Chair recognizes the gentleman from California, Mr. 

McNerney. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 


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I want to thank the panelists. There has been some very interesting testimony today, some of it very specific, some of it very general. And I think it illuminates the issue quite a bit. 

One of the things that I hear—or there are two real salient 

points. First of all, we need to work on a bipartisan basis to find 

reasonable solutions that will make our energy future stable. And 

I think everybody agrees with that. The other one is that we need 

to encourage innovation to develop a stable and reliable energy future. 

Personally, I believe that energy efficiency is our best resource. 

And there was some very impressive testimony. For example, Mr. 

Caruso said that our current CAFE standard of 35 miles per gallon 

would save 2 million barrels a day. And Ms. Jaffe said that 50 

miles per gallon will save 6.7 million barrels a day. 

What I would like to ask Mr. Caruso, how much do you think 

that would affect our price of gas at the pump if we saved 2 million 

barrels a day? 

[Insert for the record by Mr. Caruso to follow:] 


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Mr. CARUSO. Well, we think that, as the Chairman mentioned, 

that if we can bring consumption down, in this case 2 million barrels a day, and increase supplies, that we can see the real price of 

oil go down. The prices that the Chairman was quoting are in 2006 

dollars. 

Mr. MCNERNEY. Well, how much do you think that would affect 

the price at the pump today if we were saving 2 million barrels a 

day? 

Mr. CARUSO. I don’t have that number right off the top of my 

head, but I would be happy to provide that. It certainly would put 

downward pressure on price. 

Mr. MCNERNEY. Do you have an estimate, Ms. Jaffe, or a guess? 

Ms. JAFFE. Some of it gets to the issue that Adam brought up, 

which is this, sort of, what is driving the speculative fervor. So I 

will say, just factually, U.S. demand for oil is down 4 percent this 

year versus last year. And part of what you are trying to do is create an atmosphere where people see that as a long-term trend line 

and they start to trade oil with that mentality in mind. 

Mr. MCNERNEY. Do you think a 6.7-million-barrel-per-day savings in our oil consumption would lower the price of gas substantially? 

Ms. JAFFE. Yes, I think it would make a substantial lowering of 

the price. 

Mr. MCNERNEY. You know, you mentioned a couple of things also 

that I think were interesting—the Strategic Petroleum Reserve, 

using that to reduce the speculation in the market. Do you have 

a specific proposal, and how effective do you think that would be? 

Ms. JAFFE. Well, let me give you a specific example. There was 

a period of time, and I can’t remember what the risk factor was in 

the market, but when Secretary Richardson did a quote/unquote 

‘‘test sale’’ of the SPR and the effect it had at the time, because 

prices were sort of creeping above $40 a barrel. And it spooked people in the market briefly, and prices went back down into the 30s. 

What happened then is, every time the price would subsequently 

get to $39 or something like that, people would automatically naturally assume that the SPR might be released again, and so they 

would take their profits at a certain number. 

Mr. MCNERNEY. So this is a very effective tool that is in the 

hands of the administration that is not being used. In fact, it is 

being forbidden from being used. It has been taken off the table by 

the administration. 

Ms. JAFFE. By taking it off the table, the administration has not 

only meant that you could trade up with impunity, it has also discouraged OPEC. Because if you are OPEC and you know that we 

might use strategic stocks, then it behooves you to raise your production because you might as well get the money, whereas if we 

release the SPR, the Treasury gets the money. 

So it has had a negative effect, in my opinion, on both the dynamic of having OPEC respond the way they did, say, in 1990 by 

increasing their output, and it has a negative dynamic on the, sort 

of, way speculators feel about the upside of the market. 

Mr. SIEMINSKI. I think you might want to be very careful about 

using the Strategic Petroleum Reserve, just solely looking at the 

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leum Reserve that the administration did not use was the strike 

in Venezuela. If you actually have a shortage of oil caused by something like a strike or an accident or weather using the SPR at that 

time, and not only ours but the product inventories in Europe, it 

makes a lot of sense. Doing it for price alone I think takes you 

down a path that you might not want to go. 

Ms. JAFFE. I would agree with that, but I would like to add to 

that something. When we had Hurricane Rita and Katrina, another 

time the administration didn’t really strongly use the SPR, the 

point is we had to borrow gasoline from European strategic stocks 

of gasoline. And if the outage had lasted longer, they were not 

going to lend to us a second time. 

We do not require oil companies in this country to carry a minimum inventory. That is required in Asia, and that is required in 

Europe. Had we had that requirement, then the buildup in prices 

we get every spring would be less likely to happen. Part of what 

causes the speculative run-up in gasoline prices in the spring is we 

need to attract imports because we can’t manufacture to meet demand. 

When the companies don’t carry inventory, if we have an accident like the Venezuelan strike that accidentally lowers inventories, we never catch up, and that is reflected immediately in the 

pump price. 

Mr. MCNERNEY. Now, another thing you discussed, I liked the 

idea, was substitutability. You compared the electricity market to 

the transportation market. But the way you envision substitutability applying in the transportation market, what would be the 

carbon footprint impact of that, as compared to the current supply 

for the transportation market? 

Ms. JAFFE. This is what we need to think through. We know that 

there is a problem in the power-generation sector, because we are 

so heavily reliant on coal. But we need to have, what I call, an infrastructure paradigm shift. So, over time, if we bring cars that 

have substitutability, so we bring some cars that can work off electricity. Right now we have different things. Some things in the supply stack for electricity are clean, and some things aren’t. But if 

then, over time, we can move our policies so that we move to things 

like more distributed energy—like, say we all had better technology 

for solar rooftops, then you could plug in your car, and it would 

be—in California, I would be plugging it into solar, right? So we 

would have a transition where we can marry the two things together. 

Mr. MCNERNEY. Great. 

Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. The Chair 

recognizes the gentlelady from South Dakota, Ms. Herseth Sandlin. 

Ms. HERSETH SANDLIN. I thank the chairman, and I am indebted 

to the gentleman from a Washington, Mr. Inslee, for allowing me 

to take this set of questions now. 

Let me begin by saying that I agree with Mr. Sullivan that parts 

of the area of the map that he showed us that are currently inaccessible are a piece of the puzzle, and I hope that he agrees with 

me that biofuels production is also a piece of the puzzle. And so I 

would like to explore with Administrator Caruso the issue of 


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biofuels production and the testimony that we received on April 1st 

of this year from executives of the big five oil companies. 

Four of the five that testified acknowledged that increased 

biofuels production has reduced oil and gasoline prices, although 

they didn’t agree with the magnitude. 

The analysis that I raised with them that I want to raise with 

you now comes from a March 24th article in the Wall Street Journal reported that Francisco Blanch, an analyst at Merrill Lynch, 

who has concluded that oil and gasoline prices would be 15 percent 

higher but for the expanded production of biofuels. 

So my question, Mr. Caruso, is has the EIA calculated the degree 

to which increased biofuels production has lowered oil and gasoline 

prices in the United States? 

Mr. CARUSO. We haven’t done the similar analysis as you just referred to, but we did look at the 2008 increment of biofuels compared with 2007 and looked at what impact that may have had on 

gasoline prices. And our conclusion was somewhere, I think, in the 

10 to $0.15 per gallon reduction in the price of gasoline that we believe can be attributed to the incremental production of corn ethanol. 

Ms. HERSETH SANDLIN. And so reduction where it might otherwise be in that the 1-year period? 

Mr. CARUSO. Yes, yes. 

Ms. HERSETH SANDLIN. Do you have any plans to perform a 

broader analysis? 

Mr. CARUSO. Not at this time. 

Ms. HERSETH SANDLIN. And why is that? 

Mr. CARUSO. We haven’t been asked to. We try to use our resources as best we can. 

Ms. HERSETH SANDLIN. I would look forward to talking with the 

chairman at greater length about a formal request in light of some 

of the analysis that we think currently exists that the EIA could 

supplement as it relates to the positive impact of increased 

biofuels. 

Now you did say that in your testimony—what are the key reasons for your testimony that while, ‘‘very uncertain,’’ you conclude 

that available quantities of cellulosic biofuels prior to 2022 will be 

insufficient to meet the new RFS targets for cellulosic biofuels, triggering both waivers and a modification of applicable volumes such 

that the overall RFS target in 2022 will be reduced from 36 billion 

to 321⁄2 billion gallons. 

What are the key reasons for that testimony? And what level of 

confidence does EIA have in an analysis that is explicitly very uncertain? 

Mr. CARUSO. Well, I agree that we should start off by how much 

uncertainty there is about that technology, and that is one of the 

reasons we make that statement. And we—— 

Ms. HERSETH SANDLIN. You are referring to the technology that 

exists. 

Mr. CARUSO. Yes, technology and the two of course are interrelated and we have worked with the National Renewable Energy 

Lab in Golden to come up with what they think the best outcome 

is likely to be. 

Ms. HERSETH SANDLIN. If they are developing—— 


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Mr. CARUSO. As of when that annual energy outlook was produced. 

Ms. HERSETH SANDLIN. Which was early this year. So in light 

of—— 

Mr. CARUSO. Yes, that is my best judgement. 

Ms. HERSETH SANDLIN. The investments and the advancements 

that I see in the advanced biofuels cellulosic ethanol industry, if 

within the next year to 18 months it is demonstrated that the technological advancements are much further along than when you produced the study, that would be a factor that would lead you to the 

conclusion that production cellulosic biofuels will indeed meet the 

RFS. 

Mr. CARUSO. Oh, definitely. We reevaluate our assumptions 

every year. And I think Congressman Inslee in his opening remarks mentioned a few of these areas where very significant 

changes can take place. 

Ms. HERSETH SANDLIN. So would you be willing to provide the 

committee the full analytical basis for the testimony regarding the 

RFSs of today and the report that was issued earlier? 

Mr. CARUSO. Certainly, we publish that every year. 

[Insert for the record by Mr. Caruso to follow:] 


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Ms. HERSETH SANDLIN. One last area to explore. Ms. Jaffe, I 

agree with you on this administration’s inflexibility as it relates to 

using the SPR in a more strategic manner. I met with Propane 

Marketing from South Dakota yesterday. The hedging tools that 

they typically use simply aren’t an option for them anymore, and 

I know that in addition to utilizing the SPR more strategically they 

actually called for higher margin requirements. And some of the 

other commodity folks that I represent farmers, ranchers, grain elevators, they actually have proposed the idea of making the traders 

take delivery of a percentage of the commodity that they are trading. 

Could you comment on either of those options? 

Ms. JAFFE. Yeah, I think that it is important to have financial 

clearing for the futures market for oil. The whole purpose of having 

a futures market for oil is to have a smooth and transparent way 

that buyers and sellers can meet and have transparent and open 

pricing. 

In 1979, you had to know Marc Rich to be able to figure out if 

you could or couldn’t get oil on the spot market and what price he 

was selling it at. We don’t want to go back to that. So speculators 

do play a constructive role. Academics have done studies that show 

that having a functioning futures market actually lowers volatility, 

not the other way around. 

But within that spectrum we are in a very unusual market 

today, where people’s perceptions about the dollar, the rising price 

of oil has become sort of a circular self-fulfilling motion. We are 

getting to the point where the dangers of an overinflated bubble in 

these facilities are a much larger danger to the average American 

than a normal market. 

And so under those situations it is important to have regulatory 

bodies looking at it, and if it is just a mania, right? We have had 

another market. It is just a mania. People just believe it is going 

higher so it does go higher. We still want to think about things we 

can do to slow that down, and one option is to tighten the amount 

of contracts you can buy on margin. 

The CHAIRMAN. The gentlelady’s time has expired. 

The Chair recognizes the gentleman from Washington State, Mr. 

Inslee. 

Mr. INSLEE. Thank you. Listening to the panel, I think there are 

two truths I would like to talk about, one short term and one long 

term to help our people who are taking it in the chops with $4 a 

gallon gas. First, the short term. It is clear that we have seen this 

movie before; it was the Enron debacle. We lived through it with 

1,000 percent price hikes in 30 days with electricity because the 

market was broken. And it is clear that the market is broken now. 

And you know, you just listen to some unlikely sources. A quote 

from Iyan Madani, Saudi Arabia’s Info and Culture Minister. It 

says, ‘‘There is no justification for the current rise in prices. Others 

calling the surge in crude unjustified. Saudi Oil Chief Ali Naimi 

says, ‘‘It is linked to tremendous speculation in crude oil futures.’’ 

When you get Andy Pettitte and Jose Canseco telling you you got 

a steroids problem in baseball, you probably do. And when you get 

the Saudis telling you have a broken market based on speculation, 

you probably have a problem. And that is why we have to get these 


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dark markets regulated. It is very disappointing the administration 

has refused to do so. And I look forward to the passage of Bart 

Stupak’s bill that I am helping him on in fact bring into the regulatory destruction of these speculative markets. We have seen this 

movie before. Now that is the short term. 

I want to ask Mr. Caruso about the long term. Because in the 

long term it is clear to me that we have to decarbonize our transportation sector largely, as soon as possible, or we are going to be 

stuck with these prices for a long, long time. And when I think 

about the predictions of the future, Mr. Caruso, you told us about 

some predictions. What is the assumption we have of the percentage of our private cars that can be either electrified or based largely on domestically produced substitute fuels in the next 20 years, 

what prediction does the agency make? 

Mr. CARUSO. Our current assumption on alternatively fueled 

motor, light duty vehicles is 45 percent of the new car sales in 2030 

would be what we call alternatively fueled vehicles. That is hybrids, it also includes turbo diesels and flexible fuel vehicles or 

E85. Those are the three. 

Now the point you made earlier about plug-in hybrids, as of now, 

as you alluded to, that technology is still not commercial. So we 

have very few plug-in hybrids in that outlook. 

Mr. INSLEE. I think that prediction could be hugely expanded if 

Congress will act. We got to the Moon in 10 years, in 10 years this 

country got to the Moon. Right now our policy can’t even get to 

Cleveland. We have got to have a more aggressive policy, and I 

think we need to be much more optimistic. We went from making 

3,000 planes in 1939 and then we made 300,000 airplanes in the 

next 4 years in World War II. We have no have a similar rampup of ambition. 

A paper came up by a professor at Stanford just a couple of 

weeks ago, Mark Jacobson. He is the Professor of Energy Resources 

at Stanford. He said that using today’s technology, today’s technology, without technological advances, if we build about 100,000 

wind turbines of 126 diameter blade length, we could power our entire transportation fleet with electricity, using today’s technology. 

The reason I point this out is 100,000 wind turbines sounds like 

a lot, right? But in 4 years we built 300,000 airplanes because we 

had to do it. I think that all of us need to raise the level of our 

ambition from that 45 percent to a much higher number, much 

more quickly. I believe the technology is there to do it. 

By 2011 we are going to have plug-in hybrid cars mass produced 

in the United States, something no one would have predicted 5 

years ago. The lithium ion batteries are making huge strides forward. We have potential commercialization of something that can 

be 50 times more productive than corn-based ethanol or algae 

based gasoline and even biodiesel taking place. 

I just point out that I just believe that the only way to tell Americans that their prices are going to come down long term is that 

if all of us become much more ambitious on this technology. I know 

we can do it, we did it in space, we did it in World War II, we have 

to raise our eyes. 

Do you have any comments, Mr. Caruso? Go ahead. 


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Mr. CARUSO. Yeah, I want to say it is clear, I think that almost 

everyone agrees, that the solution lies with improved technology 

and innovation and dedication to it. That includes R&D spending. 

Mr. INSLEE. Right, that is right. And the problem is we are not 

doing it. We spend one-third as much in R&D in the entire national Federal government as Microsoft does in research. Our energy budget in R&D is one-third Microsoft, one company’s budget 

for R&D. We have no cap and trade system to create a demand. 

And unfortunately, President Bush has been against it. We have no 

renewable portfolio standard. We have no feed-in tariff. We have 

no building standards. Congress and the next President of the 

United States has to, and I believe will, set us on a course for a 

clean energy revolution, and I am looking forward to that on January 20th, 2009. 

Thank you. 

The CHAIRMAN. Gentleman’s time has expired. 

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

Mr. CLEAVER. Thank you, Mr. Chairman. Do any of you know 

where we got these new contraptions, the cell phone? What created 

this? Good. I will tell you, Star Wars. And way before most of you 

are too young to remember Star Trek, but the captain would always flip out his phone. Anyway, that gave engineers the opportunity to do this. So Star Trek. Okay, Mr. Spock. 

I am obsessed with horror movies and probably because the monsters are rarely after black people, but I watch this stuff and try 

not to become paranoid or join any cult. But what I am wondering 

from all of you and I have one question, we had this crisis occur 

first during my lifetime in 1973 or close. That was generated—I 

think history will say it was generated by OPEC, okay? Okay. And 

then we had another in 1979, the Ayatollah Khomeini in Iran. And 

here we are again in 2008. Difference may be that during the first 

two we really had not hit the oil peak. 

There are some who believe that the movie that I just saw about 

3 weeks ago, when the world ran out of gas and it showed the cataclysmic impact of what happened, food crises, people standing in 

line—you have seen these futuristic movies—begging. Well, that is 

happening all over the world right now. In Ethiopia in particular 

people are dying, not to mention what is going on in the Sudan. 

But the food prices have caused a worldwide panic. All of it is depicted in a movie. But we know that oil is finite and there are 

some, including some big names in the oil industry, who believe 

that we hit an oil peak and that we are actually having a crisis 

that is not like the first two, that this one won’t go away. This is 

going to be a problem until we deplete the supply for fossil fuel deposited in the Earth. 

Is that science fiction or have we again hit reality through the 

science fiction? 

Ms. JAFFE. We don’t even have to go there, because we know we 

have global warming and we know we have to take carbon out of 

our fuel system. And because we know that it makes it different 

anyway, right? The way we would handle—let’s say we have a recession and we have a global recession and demand for oil goes 

down, the price will come down, right? I mean that is one scenario 

that could happen, right? And I know there are a lot of people who 


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feel that won’t happen again, but that does not change the reality 

that the oil reserves are finite at some point and it doesn’t change 

the reality that a lot of the oil we have left to produce is in places 

like Venezuela, Saudi Arabia and Iran, right? But the bottom line 

is we know that we want to decarbonize our economy over time. We 

know that. And since we know that, a lot of the same solutions, energy efficiency, right? Alternative energy, R&D. Some of those solutions are the same. So it really doesn’t matter whether 1973, it is 

exactly the same or not exactly the same. The reason that it is different is we know we have to do something for a variety of reasons, 

not just national security, but even environmental reasons we 

know we have to do something different. We know that the lead 

time on scale-up is decades, not months. And so that is why we 

have to start now. 

Mr. SIEMINSKI. Mr. Cleaver, you are absolutely right, we have 

seen this movie before. We saw it in 1973, 1974 and again in 1978 

or 1979 and 1980. The kinds of solutions that I think made it work 

out the last time were encouraging energy efficiency across all the 

sectors, encouraging fuel diversity, encouraging trade and investment, R&D and especially what we need to do this time I think is 

enhance our science and engineering capabilities so that the technology will come out to take care of some of these problems. 

I really don’t think it is speculators that are driving up the oil 

price. I think it is an actual fear of shortfalls in the coming years, 

and we need to take steps now to turn that psychology around. I 

think we can. This is not a horror movie with a bad ending, it has 

got a good ending. We just need to move along. 

Mr. CLEAVER. Anyone else? 

Mr. MANUEL. Well, I agree generally that we need to—as my colleagues just said, we need to innovate our way out of this. We need 

to start transitioning away from fossil fuel so that it is not a horror 

movie. And the technology is available now. Mr. Inslee was talking 

about some of these things, wind mills, fuel efficient cars, plug-in 

hybrids. All that stuff is available now. We just have to aggressively move forward and start that transition. 

Mr. CLEAVER. I know my time is running out. I apologize for 

being late. I am on the Financial Services. We are holding a hearing today on whether or not Congress should enact legislation that 

would require HUD to construct energy efficient public housing 

units. And we are in a battle because some folks don’t think that 

is the direction we ought to go. And it is just amazing that if somebody took footage of our hearing they could use it in a futuristic 

movie listening to all the people give reasons why we shouldn’t do 

this. And so my concern is—my concern is actually heightened by 

the fact that people are not taking it seriously and, you know, this 

administration is just acting as if all we need is an oil change. 

Ms. HARBERT. I will agree with your analogy. 

The CHAIRMAN. The gentleman’s time has expired. 

The gentleman from Oklahoma seeks recognition. 

Mr. SULLIVAN. Thank you, Mr. Chairman. And I would like to 

ask that the testimony submitted by Carl Michael Smith, Executive 

Director of the Interstate Oil and Gas Compact, be entered into the 

record. 


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The CHAIRMAN. Without objection, that document will be included in the appropriate place in the record. 

Mr. SULLIVAN. Thank you, Mr. Chairman. 

[The statement of Mr. Smith follows:] 


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The CHAIRMAN. So all time for questions by the select committee 

has been completed. I will turn to the panel and ask each one of 

you to give us your best 1 minute to tell us what you think we 

should know at this time in the history of the United States relationship with oil and other energy sources, and we are going to go 

in reverse order of our original testimony. So we will begin with 

you, Ms. Harbert. Your best 1 minute if you would. 

Ms. HARBERT. Congratulations on this hearing, we need more deliberate discussion on this very complex issue. It is important to 

recognize there is no single solution. There is no short-term fix. 

There is no panacea. So we in partnership with the American people have to address this in a very comprehensive way and a very 

urgent manner. We need a short-term, medium-term and long-term 

view on this. We have to remove restrictions on our resources here 

at home. We have to get serious about investing in our research 

and development. We have to invest in the next generation of leaders, scientists, engineers, so we can continue to have the intellectual feedstock that we need to sustain our competitiveness over the 

long term. 

We actually have to make available the fiscal resources so that 

we actually incentivize the investments to be made in this country 

rather than in other countries. We need to open up ourselves for 

that investment in innovation in this country that we are not 

doing. We have to make sure that we have predictability, regulatory predictability, that we have fiscal predictability so the business community can make long-term capital investments in these 

very complex capital intensive projects in this country. 

I am an optimist. We have a lot of venture capital money going 

into this. We need to sustain that so we can actually win this very, 

very big challenge. 

The CHAIRMAN. Thank you, Ms. Harbert. 

Mr. Manuel. 

Mr. MANUEL. Well, I will take off on the optimism point. I think 

I am optimistic as well, but we do urge this Congress to really lead 

America towards a clean energy future by continuing to push energy efficiency programs, renewable energy, clean energy programs 

and fuel economy. We think ultimately that is the way the country 

really needs to go and do so quickly. We didn’t learn our lesson 

from the past, and we continue to think we could drill our way out 

of the problem. And we just encourage Congress to lead us in the 

opposite direction that is more sustainable, that is cleaner for our 

environment, and reverses global warming gas emissions, and puts 

America to work in the clean energy economy that is good for our 

environment, and good for the country, and good for the planet. 

The CHAIRMAN. Thank you, Mr. Manuel, very much. 

Ms. JAFFE. So my 1-minute message is that foreign oil producers 

and countries whose interests are not the same as the United 

States are exploiting our lack of political will to gain power at the 

expense of U.S. national security and our flexibility in international 

relations. 

There are many short-term things we can do. The Senate has addressed some of those things, but when push comes to shove, given 

the challenges that are facing us both in energy and climate, we 


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need a serious research and development program in this country 

both in private industry and in government. 

We need to not only think about how we tax corporations to get 

them to spend more on R&D. We need to think about how we raise 

public funds to spend more on R&D. 

And let me end with an optimistic note. I work with 81 nanotechnologists. They are working on solar energy, they are working on 

better transmission systems, they are working on wind power. All 

kinds of very interesting technologies that I agree, had we said we 

were going to the Moon but only put in $100 million to spend to 

do that, we would never have got there. And so we need to think 

about how we are going to come up with the money to do the kind 

of R&D we need. We have the people and we have the will. 

The CHAIRMAN. We thank you very much. And we know you are 

from Rice University in Houston, and the same way that we want 

you to say Houston, we have a problem and that was the space program, I think we can say the same thing now about our energy program. We thank you for being here. 

Mr. Sieminski. 

Mr. SIEMINSKI. Thank you. Just two points, there have been tons 

of research done and investigations already underway that have 

shown that the futures markets are not being manipulated. And so 

what I would suggest as a first recommendation is that we be very 

careful about taking steps immediately to curtail trading activity 

when what we really need is to cast light on the so-called dark 

market. So let’s get the information first and then act rather than 

the other way around. 

Second point is I really feel that direct controls on prices or profits are going to give you the wrong answers to the crisis that we 

are facing now. Unfortunately and painfully, the high prices are actually what is encouraging solar and wind and alternatives in the 

automobile industry and elsewhere in biofuels, both cellulosic and 

everything else. So let’s bear the pain for a bit and see if we can’t 

let these alternatives come out because of that. 

Thank you. 

The CHAIRMAN. And Mr. Caruso. 

Mr. CARUSO. This is a problem that has been created in some 

ways by good news, and that is global economic growth has been 

very strong. We need to sustain that growth by meeting these 

needs through using energy more efficiently definitely, more economic, environmentally consciously, but also to develop all forms of 

energy resources. There is no single solution, as a number of our 

panelists have said. So we need to facilitate investment in all forms 

of energy and research and development and innovation, as has 

been mentioned. 

This is not a short-term solution. We need to recognize this is a 

large-scale, long-term solution and it is going to take time. 

The CHAIRMAN. Thank you, Mr. Caruso, very much. And we 

thank each of our witnesses. 

This is a very important hearing. It is a very timely hearing, because it really goes to the question of where are we today and what 

do we have to do in order to avoid the most catastrophic consequences of this huge amount of high priced oil that we are importing from around the world. If we do not have a plan, then 


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clearly there is going to be an incredible price that our economy is 

going to have to pay. 

So whether we are talking about using the Strategic Petroleum 

Reserve as a weapon against the speculators, against the manipulators, we have to do that. And President Bush has refused to do 

that. 

Whether it is ensuring that the CFTC, the Commodities Futures 

Trading Commission, looks in at these dark markets, finds out 

what is going on with regard to the speculators and with regard 

to the manipulators, we have to do that. But the Bush administration thus far has kept hands off this very critical part of the story 

and the impact that it is having upon these price increases. 

And going forward long term, we have to have accurate projections, because much of what goes on inside the Federal Government, much of what happens in the private sector is dependent 

upon the long-term projections of the Bush administration at this 

time and its Energy Information Administration. 

What we are seeing over the last 5 or 6 years is that there has basically been about a $0.50 lag between what the administration 

says the price of gasoline is going to be and then what it winds up 

being in year after year. And that it has a tremendous impact not 

only upon consumers, but upon what the mandates that we would 

then impose upon especially the automotive industry to increase 

their fuel economy standards. 

We again put 70 percent of all the oil we consume in America 

into gasoline tanks and we only have 2 percent of the oil in the 

world. That is our weakness. Now our strength is technology. And 

that is the weakness of the Middle East, that is their weakness. 

So if we don’t use our technology, based upon what is a realistic 

assessment of what the long-term price of oil is going to be, then 

we are ultimately going to be subservient to the geopolitical whims 

of the Middle East. 

By the way, when President Bush went to Saudi Arabia just 3 

weeks ago and asked them to produce more oil that we could consume in the United States, that is a pretty sad moment in our history. But what was even sadder is that after the Saudi Arabians 

said that they would not produce more oil, they then asked us to 

provide them with nuclear power plants for Saudi Arabia, and 

Condoleezza Rice and President Bush said yes to that request. Now 

of all the countries in the world that need nuclear power and all 

the nuclear equipment and the materials that go with it, Saudi 

Arabia is the bottom of that list. They have more oil, more gas, 

more solar, more wind in combination than any other country in 

the world. And they have a very small population. Why would the 

Bush administration be agreeing to a deal that will have us sell 

nuclear power plants into Saudi Arabia, where Iran, Iraq, North 

Korea and all those nuclear power plants and their dual use purpose for nuclear bomb programs continue to haunt us? 

That is a sad state of affairs for us. It is a very sad state of affairs and very dangerous. It will get us even more deeply in trouble 

in the Middle East, 10 years and 20 years from now. And so it is 

time for the Bush administration to get more realistic. 

The energy administration, the Department of Energy that is, 

the Bush administration is projecting $2.26 gasoline by 2016, $2.51 


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for a gallon of gasoline by 2030. It is completely unrealistic. It is 

off the mark and off the point as every other projection that has 

been made in this decade, and it as a result will diminish our ability to improve our technologies so that we can tell the Middle East 

that we don’t need their oil any more than we need their sand. And 

right now we still cannot deliver that message because we are operating in a delusory environment where the Bush administration is 

not getting real with what is happening. 

This is no longer the OPEC people deliberately saying no more 

oil. It is no longer the Shah of Iran falling. This is now structurally 

the Indians and the Chinese and others who are going to consume 

more oil as each year goes by, and we have to change the technologies and our relationship to technology in our country. And because of the Bush administration, the agency responsible for determining how efficient our automobiles have to be in 2015, 2020 and 

2030, they are going to be able to set standards at 5, 6, 7 miles 

per gallon lower than where they should be. 

By the way, the legislation which we passed in December, the 

Democrats in the first year after we came back into power, the increases from 25 to 35 miles per gallon, the fuel economy of the vehicles which we drive by 2020, that backs out the equivalent of all 

of the oil which we import on a daily basis from the Persian Gulf. 

That is the difference a change in technology can make. But you 

have to have realistic data because now the Bush administration’s 

Department of Transportation is going to implement the standards 

that are put in place pursuant to that law which we passed in December. And so all of this is interrelated, no question about it. 

When you are talking about oil, you are talking about transportation, because that is where we put it. This is again very central 

to the dilemma which we have. The Democrats came back in after 

being out for 12 years, it is the first thing we did. But the Bush 

administration had plenty of opportunity in their first 6 years to 

put those standards on the books. The Republican Congress had 

every opportunity to improve the fuel economy standards of our vehicles. They never did it. 

And so as we go forward, we have to think of this as an opportunity to create a new generation of jobs, a new economy in our 

country. Green collar jobs, yes, but they are really the blue collar 

jobs of the past, the blue collar power. Building the wind mill, the 

solar, the new technologies that will slowly, but surely wean us 

away from this incredible mess that the Middle East is now and 

is very likely to become even worse in the years ahead. 

We thank all of you for your testimony here today. It is very 

helpful to us, because it is going to help us to begin to chart a 

course where we help the American consumer to stop being tipped 

upside down at the gas pump and having money shaken out of 

their pockets every single time they refill. Thank you so much. 

[Whereupon, at 12:35 p.m., the committee was adjourned.] 


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pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 219 here 61729A.108
159 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 220 here 61729A.109
160 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 221 here 61729A.110
161 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 222 here 61729A.111
162 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 223 here 61729A.112
163 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 224 here 61729A.113
164 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 225 here 61729A.114
165 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 226 here 61729A.115
166 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 227 here 61729A.116
167 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 228 here 61729A.117
168 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 229 here 61729A.118
169 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 230 here 61729A.119
170 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 231 here 61729A.120
171 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 232 here 61729A.121
172 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 233 here 61729A.122
173 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 234 here 61729A.123
174 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 235 here 61729A.124
175 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 236 here 61729A.125
176 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 237 here 61729A.126
177 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 238 here 61729A.127
178 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 239 here 61729A.128
179 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 240 here 61729A.129
180 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 241 here 61729A.130
181 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 242 here 61729A.131
182 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 243 here 61729A.132
183 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 244 here 61729A.133
184 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 245 here 61729A.134
185 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 246 here 61729A.135
186 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 247 here 61729A.136
187 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 248 here 61729A.137
188 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 249 here 61729A.138
189 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 250 here 61729A.139
190 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 251 here 61729A.140
191 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 252 here 61729A.141
192 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 253 here 61729A.142
193 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 254 here 61729A.143
194 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 255 here 61729A.144
195 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 256 here 61729A.145
196 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 257 here 61729A.146
197 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 258 here 61729A.147
198 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 259 here 61729A.148
199 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 260 here 61729A.149
200 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 261 here 61729A.150
201 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 262 here 61729A.151
202 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 263 here 61729A.152
203 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 264 here 61729A.153
204 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 265 here 61729A.154
205 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 266 here 61729A.155
206 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 267 here 61729A.156
207 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 268 here 61729A.157
208 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 269 here 61729A.158
209 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 270 here 61729A.159
210 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 271 here 61729A.160
211 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 272 here 61729A.161
212 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 273 here 61729A.162
213 


pwalker on DSKD5P82C1PROD with HEARINGInsert offset folio 274/300 here 61729A.163