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tv   Hearing on Rising Energy Prices  CSPAN  November 17, 2021 7:38am-9:31am EST

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republican paul gosar for a violent social media post about congresswoman alexandria ocasio-cortez. the senate's back at 9:30 a.m. on c-span2 for work on executive nominations and the procedural vote on the 2022 defense programs and policy bill. and on c-span3, a confirmation hearing for several executive nominees including jessica rosenworcel to be chair of the federal communications commission. she is currently the acting chair of the fcc. later an update on the southwest u.s. border. that senate hearing starts at 2:30 eastern. watch all of our coverage online at c-span.org or watch more coverage on c-span now, our new video app. >> the senate energy and natural resources committee examined the contributing factors of rising energy costs. lawmakers also heard about steps the federal government could take to provide some relief. the hearing is just over two
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hours. [inaudible conversations] >> come to order. the committee's meeting today to vote on two nominations and to hold a hearing on energy price trends. parts of the business -- purpose of the businessth meeting are ae to vote on two nominations that were postponed because not all the senators we needed for the vote were present. ms. laura daniels davis and ms. sarah bronin. since we still don't have all the senators we need, i propose a recess to business meetings subject to the call of the chair. we will then consider the two nominations on thursday morning at 10:00 as part of the legislative business meeting already scheduled for that time. we will consider the two nomination on today's agenda along with the bills on
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thursday's legislative agenda. is there any objections to proceeding in that fashion? if not, that will be in order. now i'll turn to the hearing that brings us together today. the topic of this hearing is very timely with the rising energy prices, really the rising on all commodities in the american market, if you will. we're seeing right now across the country and around the globe prices rapidly ricing -- prizing across gasoline, heating oil, natural gas, electricity and even coal and everything else in between whether it be food and appliances and cars and everything else that we're seeing and clothing. we're not on those subjects though. we're not in charge of that. this is in the stark contrast to the prices that bottomed out during the pandemic as economies around the globe slowed. but now as our economies are rebounding, we're seeing soaring gasoline prices, and heating bills are expected to go up 10, 20, 30 and even 40% according to
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the winter outlook. this is impacting all of our con tissue wents. in fact, the consumer price index for energy has increased by 30% over the last 12 months. affordable, reliable and dependable energy is part of what made us a superpower, and it's critical that we maintain that and keep these price under control. internationally, the worst crunch is in europe and asia. this fall we've seen a surge across global markets leading to high electricity prices in europe and asia. this has led to curbs on electricity use in u china, protests in spain and shutting the power factories in the u.k. in china it's been recently reported that coal production wassedte rapidly expanded in ani attempt to meet electricity the needs with a me if slow began of -- new slogan of guarantee the supply.e upplies primarily
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natural gas and not as insulated from those as we once were. we have seen the prizes increased over five dollars per million the highest level in seven years. that is a fraction of what they are paying but still a big increase for us in the u.s. i understand there are a number of factors contributing to the situation but a primary cause and the demand is generated from the rapid recovery is outpacing primary energy production especially with respect to natural gas. i hope we will have ample discussion on how long can we expect this imbalance to last and to not see energy prices as high as europe and asia. the price trends show how the markets are becoming increasingly interconnected with domestic prices with global demand to a higher degree than we've seen in the past. fuels in europe and asia have been in high demand resulting in the record experts of u.s. coal
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and natural gas. in particular the gas prices of over $30 per million btu and made it a lucrative market for the producers. the experts in october increased to about 9.8 billion cubic feet per day at about 9% of the production expected to increase even further this winter. u.s. coal exports in particular china followed a similar trend i can tell you it's never been hotter. they cannot produce enough demand in the world. the experts jump to 20.6 millio% increase from the same timeframe last year. these record numbers are positive for the producers and the economy to become the negative implications for the global climate and for consumers paying high prices to stay warm this winter. another huge concern is the 60%
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increase from last year that american consumers are paying into the gasoline pump each one of us here about it every day. crude oil prices have rebounded significantly from negative 36 to over $80. producers ramped down operations on the collapsing oil prices and the levels still were not matching the demand. the refiners continue to be dependent on imported heavy crude oil giving the prizes linked to organizations who don't always have our best interest in mind. these rely on the political concerns and underscore the need for pipelines that can bring crude oil and related products to the refiners from those like canada and in closing i think the committee has a responsibility to tackle these complex issues that will inform the decisions to promote energy
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security and dependence and ensure energy affordability and reliability for customers while achieving the decarbonization goals. i look forward to hearing from you on the outlook of managing markets and prices that we will use to inform the policy decisions going forward and with that i'm going to turn over to senator barrasso for his opening statements. >> thank you for holding today's important hearing that comes at a critically important time for the nation. american families are facing the highest inflation rate in over 30 years. this is "the wall street journal" thursday, last thursday. inflation rate of 6.2% marks a 31 year high. so, not to be outdone by "the wall street journal," "the new york times" today, who's to blame for rising prices? president joe biden. right there, "the new york times" today saying it. that means americans through no fault of their own have significantly less spending
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power than they did last year. it also means that american families must work harder to stretch the value of their dollar while inflation hurts all of us, it hits low and middle and fixed income americans the hardest. americans are goals of using significantly higher energy prices, since january of the average price of a gallon of gasoline has increased by over a dollar. here's the charge since january, since president biden took office, gasoline prices are up over a dollar a gallon. spent 43% higher since the president took office. in addition americans are expected dramatically higher bills to pay to be a co-heat and power their homes according to the department of energy american families depending on where they live will pay between 22 to 94% more for natural gas, for propane and home heating oil this winter. higher energy prices hurt low, middle and fixed income americans the most.
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in response to this, president biden and house democrats threatened to make inflation even worse. president biden and housed immigrants want to ram through partisan legislation that is estimated to cost over $4 trillion. that's almost as much as the u.s. spent in world war ii, and it is the exact opposite of what congress should be doing to fight the inflation. to make matters worse the house housedemocrats bill will increae energy prices and impose a natural gas tax on american families. almost half of all american households heat their homes with natural gas and at a time of skyrocketing energy prices house democrats want to make it even more expensive for families to heat their homes. it's outrageous. housed immigrants bill will also effectively added new oil, natural gas and coal production on federal land and water. this bill surrenders american hard-won energy independence and makes the country dependent on
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the opec cartel and russia. mark my words mr. chairman this winter we will see photos of russian oil tankers in the boston harbor delivering to the united states and the people of america will pay dearly for the energy that we are not producing in the united states because what joe biden did in glasco was baguette opec plus, which is plus russia to sell more energy and produce more oil for the united states to buy. this is going to bring europe's energy shortages to the united states and as you talked about in your opening remarks, it's going to make it worse for us. historically americans have benefited from the lowest energy prices in the industrialized world. in 2020 households in europe and japan paid between 85 to 215% more for electricity's than those in the united states. for natural gas, households in
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europe paid between 49 to 177% more than a families in the united states. if the house democrats get their way, many american families will have to decide whether they can pay their utility bills or put food on the table. one or the other, heat or eat. people will have to decide where their money goes. american businesses have also benefited from some of the lowest energy prices in the industrialized world. european businesses paid as much as 160% for electricity than those in the united states. same year european businesses paid much more for natural gas than businesses in the united states. if house democrats get their way, america's competitive advantage will end. not all americans are going to suffer the winter the house democrats legislation. this bill gives wealthy residents of new york, new jersey, connecticut, california maryland tens of thousands of dollars in new tax breaks. it also gives couples earning half a million dollars a year up
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to $12,500 to purchase an 80,000-dollar luxury electric vehicle. 4500 of this $12,500 in this tax break is only available for electric vehicles made at unionized factories. union made vehicles are no better for the environment than those made in other factories. this is a direct gift and paid off to union bosses. the vast majority of americans the house democrats bill means more inflation, higher energy costs and fewer jobs. it's why the reckless tax and spending bill must be defeated. thank you mr. chairman for holding this important hearing. >> thank you, senator and now to turn to the witnesses who will help shed some light on the situation and what we should consider as we head into the winter months. the panel includes experts as well as global perspectives. we have with us mr. acting
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administrator of the u.s. energy information administration. it's good to have you here. at the chief energy economist of the international energy agency joining us from paris, thank you and mr. robert, author, journalist, broadcaster and producer. thank you all for joining us today and we are going to start with your opening remarks. >> good morning. ranking member barrasso, members of the committee i appreciate the opportunity to testify today about the u.s. energy assessment of energy prices and how they reflect current world and domestic energy conditions. when i last spoke to the committee in june of 2020, the united states faced a very different energy situation, for example last month the price of international benchmark for crude oil averaged over twice what it had been in june of 2020. u.s. retail gasoline prices averaged more than a dollar per
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gallon and the natural gas prices were more than three times through june 2020 average. now looking ahead towards winter we forecast heating bills for u.s. residents are likely to increase for all heating fuels and they could increase even more when we have a colder than expected winter. although the price increases are a direct result of the fact that the economies have begun recovering from the pandemic related economic contraction, serious challenges remain before we see a full recovery and the energy sector. i'd like to spend a few minutes reviewing these issues with a focus on crude oil, petroleum and natural gas, addressing them from an international domestic perspective. consumption is recovering faster than production, which is resulting in steady drawls of global oil inventory and upward pressure on prices. we expect the prices to remain near current levels with the rest of this year but to drop by about ten dollars per barrel
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next year as production increases for the united states, opec and other countries. as the economies recover, we expect global oil consumption to increase by 5.5% this year and eventually catch up to the 2019 level of 2022. global oil production on the other hand is growing more slowly than consumption and we expect the production to increase by less than 2% this year and still almost 5% below the 2019 level before the pandemic. we forecast that the production will grow significantly next year and exceed the 2019 level by the end of 2022. the consumption for crude oil and other liquids is quickly returning to the pre- pandemic level and we expect overall domestic oil consumption will return to the 2019 level by the end of 2022. we expect crude oil production to actually decrease slightly this year despite the growing
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consumption due to causes such as the hurricane, impact on the gulf of mexico production, and the fact that drilling for oil remains at fairly low historical levels. we forecast about u.s. production will grow significantly in 2022 but still not quite reach the record level of 2019. this month u.s. gasoline and diesel pump prices are the highest we have seen since mid-2014 driven primarily by the hide crude oil prices. as the oil prices begin to decrease, we expect gasoline prices will drop to closer to three dollars per gallon at the end of this year and continue to gradually decline throughout 2022. the prices should follow a similar trend. natural gas markets are working through a similar return to the pre- pandemic conditions. we expect prices will remain at current levels through the winter and then begin dropping in 2022. anxiety about the cold winter weather is likely to be the
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major contributing factor to high and volatile natural gas prices throughout the winter. asian and european natural gas markets are resulting in the maximum possible u.s. lng exports, international prices are close to the record highs in northern asia and europe and we forecast that the experts will increase 50% in 2021 and continue to increase throughout the winter months effectively building the capacity. u.s. consumption of natural gas set annual record in 2019 just before the pandemic. we see essentially flat natural gas consumption in 2020 and in 2021 is reduced use for the natural gas or electric power generation offset steady growth and residential commercial and industrial use. gas inventory began both ended october only 3% below the
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previous high which was a favorable development going into the winter. u.s. natural gas production decreased slightly after reaching record levels in 2019. we expect to see production growth by more than 2% this year and another 4% in 2022 both would establish annual records. we forecast the 36% of electricity in the united states will generate using natural gas in 2021 down from its peak of 39% in 2020. of course higher natural gas prices will directly influence wholesale electricity prices, though we have seen a shift in the united states from natural gas to the coal for electric generation it was not as pronounced as we expected. the winter could play a significant role the winter weather could play a significant role in the regional issues, energy prices and energy use.
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new england and southern california for example could face the associated effects on other fuel and electricity. as you can see there are many moving parts in both domestic and international markets, much of what i've presented here today comes from the short-term energy outlook which was the november outlook and it's updated each month to represent the latest thinking of the current energy issues. the ranking member and members of the committee thank you for the opportunity to present this information and that concludes my testimony. thank you very much. distinguished members of the committee i very much appreciate the chance to provide a perspective from the international agency on these important issues and i'd like to start with some thanks to you, senator manchin for your participation in the global
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commission for energy transitions. the ideas on preserving and creating new opportunities for the communities were very valuable to us in the findings and recommendations we released a few weeks ago. the energy prices present an important reminder of the importance of energy security and affordability as the world seeks to accelerate the clean energy transitions this remains a central focus for the work of the international agency and we look forward very much to continue in close collaboration with the united states and other members to this end. in the remarks just three points for my written testimony the first is to say there are multiple causes of the run-up in energy prices that have affected different commodities and the main factor as you've said to the rapid economic recovery from the downside of the pandemic
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there've also been various weather-related events in brazil lower than average wind generation in europe and various altitudes to supply. we do not consider that climate policies were transitions have played a significant role. some analysts looking at the markets also see signs of what you might call artificial tightness in the markets and if you look at the example of the low levels of storage facilities in europe you might see why it is called that view. my second point relates to the outlook overall assessment that the world remains in a period of economic recovery which is resulting in some patterns of energy use about some of the recent extreme pressures on prices maybe lessening. of the rapid rebound in the
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first half of the year is slowing and tempered further by the effects of higher prices and economic uncertainties and the continuing countries of the public health crisis caused by covid-19. however my final point relates to some risks that we see for the future, the risk of the further turbulence ahead in the global energy markets in our new world energy outlook we say this quite bluntly the world is not investing enough to meet its future needs in a sustainable and orderly way. investments in oil and gas has come down quite sharply as a result of the price falls in 2014, 2015 and again last year, but the worldwide investment in clean energy hasn't risen fast enough to pick up the slack and put us on a safer and cleaner
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pathway, so stepping up investment in a wide range of clean energy technologies and infrastructure is essential in our view if we are to meet tomorrow's energy demand while also bringing down emissions. this will bring enormous opportunities for growth in free countries that are well positioned in this new energy economy and we consider the united states is exceptionally well positioned both because of its industrial potential but also the scientific and innovation that the united states brings to the picture so there are these enormous opportunities however, the message today is that this acceleration needs to happen quickly or we see a looming risk of the volatility in the coming years. thank you for the opportunity to make these opening remarks and of course i look forward to answering any questions that you
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might have for the distinguished members of the committee. thank you very much. >> now we will hear from mr. rice. >> good morning. thank you mr. charan. grateful for the opportunity to testify before the committee. respectfully, just leaders and policymakers in washington need a big dose of energy realism. we need a bigger dose of energy humanism. the causes and implications of the prices are clear. europe provides a study for what not to do. millions of europeans are facing the prospect of a cold winter without enough affordable energy to heat their homes. fertilizer plants are closing because of the high energy prices and the price hikes are caused by underinvestment due to aggressive decarbonization second they are caused by overinvestment and whether the dependent renewables with has led it vulnerable to the drafts
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just yesterday and britain exceeded $4,000 per megawatt hour due to the low wind speed. third europe is shuttering its nuclear plants and finally it's relying heavily the natural gas especially the working poor. the effects could last for months or even years. fertilizer made from the hydrocarbon is the food of food. numerous food fertilizer plants are shutting down because of high gas prices that would mean less food production and therefore higher prices would lead to additional inflation. the united states must not emulate the disastrous energy blueprint about 60% of the
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electricity supplies the u.s. today to gets 18 times more energy from hydrocarbons as it does wind and solar combined. at the claims made by the politicians and elite academics that we could run the economy on wind and solar and a few drops of hydropower have no basis in physics, maps or history. furthermore wherever they've been ramped up as in europe energy prices have soared. senators look at california where electricity prices are absolutely exploding in a state with the highest poverty rate estimating that converting to the renewables could cost $4.5 trillion roughly $35,000 for every family in america how could such a staggering cost result in the energy transition that we hear so much about.
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energy realism since 2015 more than 300 communities across the country from maine to hawaii have rejected the projects into the past six months alone the solar projects in nevada, pennsylvania and montana have been rejected. more realism trying to convert the power systems to the renewables will mean making the u.s. reliance on china for the minerals. why is this okay? relying on renewables would require building hundreds of thousands of miles of the transmission lines but the november 2nd referendum showed very clearly again rural americans do not want high-voltage lines slashing through their neighborhoods. dirtying the hydrocarbon sector by killing pipelines banning natural gas, federal lands, electrifying everything and never ending the tax breaks with big wind and solar will not
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solve global climate change. instead they will turbocharge inflation, in peril energy security and impose the taxes on the poor and working-class. our economy runs on hydrocarbon and that is true for decades to come. a staking of the economy is europe has done on weather dependent unilateral energy disarmament that will hurt us and benefit russia, china and opec. who will stand up for rural america against the sprawl of wind and solar and who will speak against the federally subsidized slaughter of the birds and bats by the wind industry? energy is the enemy of the poor who in the senate will stand up for them? who in congress will stand up for the reliability and resilience of the grid that is being undermined by the rush to the renewables and the premature retirement of the nuclear reactors?
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the energy realists where he must ask you are the energy humanists? thank you. >> thank you. now we will start with questions and i will begin i am interested in what this has on the gas price in the u.s. and i think it's important to remain energy independent. we've talked about that and had an unbelievable find we found so much more oil and things we were able to produce. i'm curious to learn if the data is changing and whether the export prices because the attraction of the places are we exporting more at the detriment to the american consumer that we are going to pay a higher price so the companies that we allowed to export the products can make
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a higher profit overseas? >> it's a great question of course a lot of attention on the exports and natural gas. >> we allowed the oil exports but i think there's a provision in both of the bills that basically allows the president to put a hold on exports if it's going to damage the consumer market here in america or make them pay for a higher price. >> the u.s. has an enormous resource based on natural gas and there are tight connections between the u.s. and the international markets. we do show continued exports at record levels for maximum levels of 50% this year and 17% projecting next year with the new capacity coming online, so
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right now we see the fundamentals in the market are still primarily at play but clearly the high prices in europe and asia -- >> i understand the market. i'm just saying do you believe it is basically making the prizes in america spiked because we are allowing more experts to leave the country and not protecting the american consumer? that natural gas, coal, oil, all these things because i've seen the markets and i can't believe what i'm seeing today. but also, as far as the natural gas and gasoline prices at the pump. >> there's a connection that we are seeing higher prices. we are undertaking the study. we've modeled this relationship in the past 2012 and 2014 and we
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currently have a study underway that we hope to be finishing in the spring looking at these relationships so we understand the sort of long-term implications. >> do you have any comments to that? >> when you add more demand for the domestic supply of anything whether it's corn, soybeans or lng you will see higher prices. >> would you recommend we curtail the exports -- >> no sir. >> i believe in free markets and free trade. if we are going to limit the sale of oil and gas or soybeans, where does that stop? from the international level, give it to me. >> the u.s. has been a major
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beneficiary of the markets and i continue to believe that would be the case. >> it helps stabilize the market and also doesn't put extra burden on the american consumer or do you recognize we are putting the extra burden on the consumer? >> my response was we live in a global marketplace and the u.s. lng experts are helping to reduce emissions and others and i think that is a good thing. >> putting pressure on the residence and industry with higher prices it clearly is putting a burden. >> do you see any countries that
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you think are doing a great job as far as the portfolio and how they produce energy and how they basically distribute as far as the country to stabilize and keep it reliable if you will, dependable, affordable and reliable? >> that is an interesting analysis. i completely agree which have been the highest increase in electricity's and which had a lesser increase in electricity and looking in particular at september for the countries that had invested heavily in renewables in the northern states of europe and other
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countries that saw a lower than average rise was poland despite the carbon prices due to the relatively high share of coal into the countries by contrast saw the highest increase in gas prices were those that are the highest increase you mentioned the need for energy realism. could you share europe's problems right now for energy problems and security. >> what we are seeing right now
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with natural gas prices are about five times then here in the usa in wholesale market. what we saw was a warning from one of the largest trade unions in europe estimating that about 3 million would be an energy poverty this winter but they wouldn't be able to pay the utility bills to stay warm this winter so time will tell that the prospects people dying from the cold it's a very real possibility. >> what should this administration and congress learn from the prizes? >> to not do what europe is doing. >> should congress passed legislation imposing additional taxes and fees on the natural gas produced here in the united states which is now being proposed in the house of representatives? >> i thought about this a lot in the last few days and my latest book i read about the history of electricity in the united states and it's remarkable to come to capitol hill along with a
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representative from texas and out of the rural electrification act of 36 because they were concerned about high energy prices throughout the u.s. embassy today the democratic party pushing for the high energy prices i just don't understand it, sir. >> for all of the witnesses, president biden recently nominated to be the comptroller of the currency. this is one of the nation's most powerful banking regulators, so in february while president biden was in office, there was a presentation where she discussed small players in the industry. during the presentation, she said we want them not to go
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bankrupt if we want to tackle climate change. she has been nominated to be the comptroller of the currency. do any of you believe it is in the best interest of the united states if the small oil, gas and producers go bankrupt raise your hand if any of you do. none of the witnesses today agree with the control of the nominee of the president to be controlled in the currency that these companies should all go bankrupt. it's remarkable that anybody would agree with such a statement him certainly surprising that president biden continues to support this nominee. i want to ask about new england and the pipeline with a referendum in maine where people voted against the lines of hydropower coming from canada to the united states one of those
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is new england. at the people are already paying very high natural gas prices because of it she was the cruel irony is new england is not far from some of our nations cheapest natural gas. .. >> and think this is clearly a
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problem and it is one that has been ongoing for years and i will point to the state of new york under governor cuomo repeatedly blocking pipelines across new york state that could have taken natural gas north. >> is fair to say believe the problem with new england is in the patient pipeline capacity not lng passports from other locations the reason why they pay much more for natural gas? period that's a fair statement it's all about supply and demand if not sufficient supply prices go up. >> last week us presidential envoy for the climate by 2030 we will not have coal we want have coal plants. most recently outlook says we'll use coal as will the
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rest of the world what is the impact electric reliability of the united states shuts down all the coal plant. >> i cannot answer that i live in austin texas i was blacked out 45 hours in february. looking at the postmortem it is clear the powerplants that had on-site fuel are the ones that deliver those most likely. i understand the urge for decarbonization but with a resilient electric grid and eliminating call in our electricity system will lead to higher prices in a less resilient system and that's a bad thing for consumers. >> since you are from texas specifically the current interconnection applications i
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was looking at those in right now there is 100 gigawatts those seeking interconnection about 42 gig are on —- gigawatts a battery storage so look at the entirety about 93 percent is solarwinds and battery storage you have an upwind with solar so why is texas bent become the biggest renewables market? >> we have access solar and wind i reported informs a few months ago the subsidy investment tax credit 250 times and it's more for wind the nuclear the texas market is driven by subsidies.
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>> we can all agree there is oil and gas and with respect to nuclear and there are subsidies for renewables. and what is an indication of where price trends so look at that today in the gets a subsidies you can see how incredibly nuclear or how expensive coal is today you can see how expensive natural gas and then even combined cycle natural gas plants are more excessive so what we see in texas is a reflection of the free market and the fact
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that people do want cheap energy and they want reliable energy and texas has moved in the direction they have because of the cost in particular if you have nuclear at a price over three times of wind and solar generation use immigration in the market. obviously we see escalating prices a volatile commodities diesel natural gas so can you talk about the role of heat pumps to keep people away from those price shocks but more broadly isn't it electrification that is reliant on low-cost sources from the nordic countries that has some europeans and not others? >> and certainly to say that as a result of the virtual
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cycle of deployment with those technologies in the past they are the least cost options for the new generation and that is why they are now the preferred source of technology for new investment that pays through into the notion with electrification and for heating in some instances and also of mobility and heat and then with the b —- with the
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price shot with consumer. >> walk us through a couple of examples summa countries that have gotten it right or wrong what should be learn from the countries that have done a better job and what should we avoid? >> part of the change taking place in europe is that is heavily dependent on operational costs. so that it has higher upfront cost much lower operating expenditures in the for the move down the road the less vulnerable you are to the fluctuations of the prices of those fields they would point to the nordic countries as
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good examples of what can be achieved. >> seeing those increases of gas and other fuel sources coal has skyrocketed in price to do much better at this president with a price increase of coal happening under this administration so the question is on the cost so you talk specifically about increased typically in the market system so why is american production not increasing at the rate to keep up with american consumption as well with $80 like west
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texas intermediate and for natural gas why is that not accelerating spirit just to clarify you mean crude oil? >> that's correct. it's a great question. we are pretty early in the recovery but we are about 90 percent of where we were in oil production relative to 2191 of those major contributing factors of the economic downturn and those investors were hit pretty hard financially for the long-term certain a lot of written speculation about joe biden coming back into the marketplace and those that deal with fossil fuels and
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2019. >> i think that they just try to rebalance the balance sheet to pay off some that never starting to see the forecast with their production that will dip a little bit this year at 1 percent with 2022 but we not get back to the level next year. >> there been some conversation from the strategic petroleum reserve so how do consumers feel quick. >> . >> done some analysis recently it's complicated we have to
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know specifics about the market conditions but the analysis generally showed it is short-lived a couple months typically the other dynamics in the market that impact is short-lived. >> and john kerry a special envoy for climate in the statement that he made to bloomberg in the interview what he said by 2030 we will not have coal we will not have coal plants has your industry looks for the future to provide energy in the united states but by 2031 do you expect is not have coal plants in america? >> and we show coal reducing
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1 percent per year through 2050 and then we show roughly 75 percent of what it is. >> there is conversation of the export of natural gas by that dialogue if we just cut off the export will that's all the price issues in the united states to have different pipelines and operations going after natural gas to provide to the natural market and the infrastructure itself is built up to revive the international market and all that investment went away we were not investing for the market than what would happen to domestic prices. >> if you stop with the extra supply in the market prices would drop in the us market and then internationally that
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would encourage more production. >> and then there's less capital going in so my perception of the market is we are developing more facilities to export more access year mass more than we see in the natural gas none of that would have occurred we would not be well-positioned of our own needs. >> mr. chairman. >> thank you mr. chairman i appreciate it. but i want to acknowledge my staff member on this for who is abandoning i'm sorry leaving me. [laughter] for the energy office for the
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governor of maine so i want to acknowledge her good work. major hand. thank you a couple of issues. so gasoline prices follow oil prices is that correct. >> and oil prices basically have tripled it was $25 a barrel now is close to 80? so that his gasoline prices will increase that's just the reality why so much? >> . >> it is the recovery and increased demand one law congress cannot repeal the supply and demand. >> . >> and therefore gasoline prices are fla to choose for
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the record a recent article from forbes about the blame for gas prices. i woke up one morning and said this is my governor and my wife said what he talking about? i said i get blamed for things that are not my father my is all take credit for them. [laughter] dating politicians and presidents get blamed for gas prices which fluctuate substantially based on oil prices and fluctuations of the market rarely from executive action i would like to submit this article in some detail. second is natural gas i'm really rate about experts in the making this argument for five years and what i talk about so this is exports
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taking it back to 2018 another five years it was zero and now 10 billion cubic feet which is ten or 11 percent of us production to that's how the gases —- will go. so to take this even higher as an advocate of the market there is no question that an increase of 20 percent in demand for a commodity at least at this present time seems to be going fairly slowly will increase prices. right? >> i think so. >> we are exporting our advantage in the economy
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literally subsidizing chinese manufacturing by sending our natural gas. letter received just yesterday by industrial energy consumers of america which are big corporations employing one.8 million people with $1 trillion worth of sales if exports are limited to a surplus than it would fact domestic prices but it's getting serious now that it has to be a real problem in three or four years we're on track to export 203040 percent of natural gas and that will be a disaster for an advantage for all the testimony why would we want to screw that up? and that is what is happening to our manufacturers into our
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electric consumers. we are squandering an advantage right now because of uncontrolled exports of natural gas i will be proposing legislation not to cut it off but at least have a department of energy do a study to approve the export license as to what the effect would be a domestic prices. that is common sense. we don't do that now there is a presumption that's in the national interest of the gas act to improve these that's crazy and that's exactly what they are doing to simply say we will do a study of what the impact is on domestic prices but right now we don't even do that kind of analysis or if we do it is after-the-fact and
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slowly so i think this is an important hearing and is natural gas export we are racing blindly into a future cutting off the most significant economic advantage particularly china. >> i agree wholeheartedly senator daines. >> this is a good discussion so alaska moved there several months ago we are expecting to see higher energy prices not only gasoline and diesel prices since 2014 montana can expect to pay more to heat their homes this winter as well according to the energy information administration heating homes of natural gas are expected to pay 24 percent more the trend will only get
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worse to pass the reckless tax and spending bill that the house and the senate have been contemplating look no further than the energy crisis happening in europe to see where this administration wants to take the united states europe is the movie trailer for the united states if we continue down the path to destroy traditional made in america energy. according to the iaea the gas prices that are in the written testimony are 39 times higher than 2020 why? because europe moved too fast away from coal and nuclear input all eggs in one basket so when the wind stopped blowing they are forced to rely on russia and others for natural gas, they start to see prices soar at the president
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gets his way passing the reckless tax-and-spend bill they are headed toward the same type of position same type of future this slaps montana businesses with new fees taxes regulations to drive energy prices up and kill jobs. mr. chairman with unanimous consent like to place in the record that states clearly the methane fee tax-and-spend bill signed into law kills jobs increase energy prices and force businesses shut down the wells. >> the impact of the proposals are real adding to the pain that the administration -induced inflation it was a chilling effect anti- american
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philosophy on the capital markets to invest long-term in oil natural gas and coal production and this is all part of the equation and the economics because of the policies of the administration the tax-and-spend bill is dozens of provisions including higher royalties and more do you believe these provisions results in higher energy cost and less energy production? >> no doubt. you constrain domestic supply you have to rely more on foreign markets. i am 61 years old for nearly my entire life congress and policymakers on capitol hill have been talking about the perils of imported energy. i find it incredible over the
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last few months it's almost like i read it in the onion. >> and russian oil, the oil imports from russia have doubled over the course of last year. we now import so much russian oil it's the second-largest import of oil in the united states. we import oil from canada but russia is number two and it has doubled. if you do the quick math we are importing hundred $50000 of russian oil it is the equivalent to what the keystone pipeline would have produced living through my state of montana including 100,000 barrels of crude so you can see that mass balance of what is happening that has shut down the pipeline clearly it isn't the yet but we are
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only creating more dependencies on adversaries like venezuela and russia i would rather get more from alaska from my colleague that sits to my left supporting made in america with the traditional made in america act with the smart energy act. this bolsters us oil and gas as well as renewable energy production public land in public waters i strongly believe the us needs to ensure the all of the above energy portfolio i don't see a single person here who is opposed to renewable energy we just want to see a balanced portfolio so we don't end up where europe has ended up in the moment. we cannot go back to the days of over dependence on foreign countries do you agree the us should increase made in america energy with those traditional sources? >> i believe so.
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it is a thesis policymakers have been talking about since 1973 that i iaea has been formed focusing on energy security. absolutely that i will add that i know the senator has left the dais but this does not include that dispatch renewable i'm from oklahoma but when the grid was on the brink of failure wind and solar were nowhere to be found despite $66 billion in the years before the blackout i am for renewable energy was solar panels on the roof of my house we have to be careful with our electric grid first and foremost. >> to make the mistakes europe has made. >> .
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>> thank you for being here today i am from nevada i'm fortunate to be home this past week driving around along with many nevadans and i saw firsthand how they are paying at the pump and how much it is costing since 2015 congress has enacted a laws including the newly signed infrastructure jobs act that has mandated over 350 million barrels of crude oil from the strategic petroleum reserve. additionally congress has required the department of energy to sell approximately one.5 billion of crude oil to pay for the modernization program. can you speak to some of the immediate relief that tapping the strategic petroleum reserve would provide to all americans right now?
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>> as you said, it's an important resource of the united states. based on our past analysis of the current situation, it would provide a temporary relief of what is available and the limits in the short-term situation and the recent analysis between 15 million barrels to 40 million barrels over a short period of time to bring down the price of crude oil about two dollars per barrel about five or ten cents. >> is it reasonable to think we need short-term and long-term relief right now? >> eia is a policy neutral
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organization. i don't want to get into the policies. >> i appreciate that and that's what i am asking the administration to look at just those $6 million in the infrastructure package will provide some relief to so many that see the heightened gas prices with those long-term implications in the solutions coming together we can address this. are you able to provide an overview of the emergency tools that the department of energy has to address the nation's energy supply? >> i need to get with your staff. >> i would appreciate that. thank you so the economic cost is widespread and difficult to
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predict making it especially on —- especially dangerous you ended your written testimony by regional weather events and how this is impacting short-term generation and fuel sources can you elaborate on the impact extreme weather and climate change are having on domestic and international energy markets? >> i don't know if they can offer a whole lot. but there are situations with mike hurricane either that came through the gulf of mexico and not production off-line the texas freeze. there are events throughout the country to cause energy disruption. >> would you agree with that? and would you elaborate?
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with your written testimony are the answers that in some of the countries that had renewable energy the prices were lower. is that a correct statement and can you elaborate? >> we certainly agree the incidence of extreme weather events is something that needs to be on the radar screen this year we've had droughts in brazil from the international markets. salon the first
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>> thank you. thank you, mr. chairman. >> thank you, senator. senator hyde-smith. >> thank you, mr. chairman. we are certainly didn't with an energy crisis here and it's a result of failed energy policy. that's no question there whatsoever as we all know the assault on the american energy came on day one of the biden administration with the cancellation of the keystone pipeline and moratorium on new
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orleans gas leases which significantly affected my state. the first lease sale in the gulf of mexico in a year is expected to take place tomorrow here only prompted by a federal court order is the reason it's taking place tomorrow. still there is the hesitancy by the administration to schedule as required by law under the 2017 through 2225 your program. additionally, since the administration is waiting on its comprehensive review, , no preparations for sales beyond 2022 i've even been discussed. last time the issue of the comprehensive review was brought up this committee was told by several witnesses that it would have it by summer of 2021, which is coming on. we still have no clear answer as to why this review will finally come when this review will
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finally come to light. we're only a few weeks away from 2022 with no preparations for future lease sales. mr. bryce, how will this administrations lack of preparedness for 2022 offshore lease sales affect energy prices? >> i can't predict that but what i can say is that if you're not going to lease on federal lands and federal waters you will have less drilling in the united states. and that will mean more reliance on foreign sources because what mr. nalley has clearly said in reading the iea testimony oil demand snapping back very strongly. all over the world. and for all the remarks about clean energy and clean energy economy, zero carbon the world still runs an america particular still runs appropriate, natural gas, diesel fuel, jet fuel and fuel oil and i will not change for decades to come. i'm from domestic hydrocarbon production -- i am four.
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>> and previous studies have shown that banning oil exports could lead to higher gasoline prices. you agree agree with this? >> i can't speak to that. >> the second question looking to the role that u.s. liquefied natural gas, or lng, plays right now in global markets, what consequences or repercussions could result from preventing u.s. lng exporters from meeting their contractual obligations? >> haven't thought about this before but the first would be litigation by those exporters suing the government for the abrogating gum being forced to abdicate their contracts. these are legal contracts, these are legal businesses operating in america, and they should be able to fulfill their contracts. but i think again this idea that we would limit exports of natural gas or crude, what else
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are we going to limit? is a going to be airplanes or corn or soybeans, farm products? any of the other things use exports. i think american producers of any commodity have a right to sell it to the markets that make the most sense for them. >> and could is potentially damage the united states reputation of being a reliable energy supplier to our allies into our trading partners that we have these contracts with? >> i think that's a fair argument and i think in talked with some people i know are in the drilling sector particularly in a golf of mexico they are assessing their contracts and realizing they have as much political risk now in the united states at some of them do in mexico which is remarkable statement. >> which would definitely compound the problem we are already dealing with. and i think my time is running out. thank you, mr. bryce. >> now senator hickenlooper. >> thank you, mr. chairman.
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this is as senator king mentioned i think this is a really useful and productive panel and session. i want to get back to limit discussion again about why has price come up so much. mr. nalley, may be -- basically the reserve calculations both in this country and globally have changed significantly except for some minor disruptions but lifting costs have changed that much. is it some function during the pandemic shutdown that the supply chains somehow, there dormancy made them less efficient, less resilient? is that fair to say? >> i'm sorry, i'm not quite -- >> i find it flexing to see why we've seen such large swings in the price of crude oil when
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reserves, all the basic calculations that generally go towards price of most of our products in the world seemed to indicate that we are still in a commodity where price is often dictated by producers that are dependent on every, you know, on the price come maintaining a certain price for certain period of time. some are but many aren't. >> i think the biggest swing in price is simply the demand came back with her than production, so that's really driven up the price. and then we forecast demand will reach the pre-pandemic level in 2022 but production won't catch up. we'll see world oil balancing later in 2022, until the production catches up with demand that's why we see elevated prices. >> i guess my question is really
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why is it taking so long for production to catch up? why isn't there more resilient in the system? how could we build more resiliency in the system is a question i want to get to. >> we were showing global production will come back in 2022 and most of it is coming from about 40%, 50% from opec, there will be an increase from canada, u.s. production is falling i think by 25% of the growth in 2022. we don't see u.s. production catching back up with the pre-pandemic level during 2022. i think because with such an economic downturn, prices, such a sharp shift in the beginning of the pandemic, so much of the production was shut down, takes a lot of come back online.
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>> i mean, takes a while, the general response i don't find satisfying just in the sense doesn't seem like there that much involved in shut up you understand shutting a well doesn't happen in a matter of minutes but i do think there's a way to design more resiliency. mr. gould, a lot of political -- pushing opec to increase oil production in light of our nation's climate goals. in my view, i think there's a worldview that is, that incorporates both i guess i want to ask you what -- to questions. what are some of the policies government can use to keep and greenhouse gas quantities low in the long run? you understand what i'm asking? >> certainly. i mean, just one point to make is as we see the markets today
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there is 5.8 million barrels a day of capacity being held by the opec plus countries and the side including the potential capacity from iran. so there is a reserve of potential production there, which is not yet come to the market. i would say, however, that we do see i think we're slightly more bullish on this in terms of the increase in u.s. production over the next year. we have u.s. production increasing by some 1 million barrels a day in 2022 from existing fields coming back and bringing u.s. production back to the pre-pandemic levels. but in in terms of a longer-term policies that can help in this regard, clearly there's a lot to be done on the demand side and there is still an untapped reserve of efficiency measures that could, would certainly help in bringing come in curbing growth or even bringing down oil
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demand around the world. there are alternative fuels come alternative technologies, particularly in the passenger transport, that can also be very valuable as the u.s. and other countries are indeed showing. so the combination of efficienc efficiency, very powerful weapons in the hands of policymakers to reduce some of the vulnerabilities that we see today. >> great. thank you very much. i can't tell you how come i've got more questions that i will submit to you all in writing, but mr. bryce, at some point i will chase you guys done just because i think you're so much of the information that we need in our decision-making over the next months. mr. chair. >> thanks, senator. senator marshall. >> thank you, mr. chairman, and it's always great when we had these hearings and people on both sides of this dais agree on something. and i think everybody in this
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room agrees that lowering the supply of energy increases the price. lowering the supply of energy increases the price. so the question is, then why is the supply of energy decreasing, right? that should be the question were talking about. why is the supply of energy decreasing across this nation? as i talked to people back home, i grew up in one of the richest oil counties in the world, supplying the largest amount of oil in world war i from butler county kansas now were i grew up as agriculture and oil, oil and agriculture. this is an industry i follow everyday. i inundated with people have been in this business for 30, 40, 6060 years and can't get financing now. good stable businesses. why? its esg rolls, right? mr. nalley, would you agree with me that if people are struggling to get financing to drill new wells that is going to decrease the supply of energy?
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>> i would agree that if there's less drilling there is less finance. >> less financing is hard to do. would you agree with me stopping drilling a federal lands are stopping the drilling in waters in the ocean, set if we make it harder for that to happen because of federal policy, that would decrease the supply of oil and natural gas? .. >> making it harder for drilling on federal land and shutting down pipelines would
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decrease the supply of energy. rhetorical question, the answer of course is yes. mr. bryce, you have a unique resume' here. and i want to talk about the social injustice of increased energy costs, that increased energy costs, how it disproportionally affects seniors on income and single mom. one story i'd share with you, as an obstetrician, a woman would have visits to my office in kansas. and when the gas got to $3 a gallon, they wanted to space it out. they were driving, 30, 60, 90 miles to see me and couldn't afford the gasoline. the ultimate equity issue is energy costs. if you're paying high prices for utilities and high prices for gasoline, it's a social injustice. why does this white house want to increase the cost of
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gasoline at the pump? why does this white house want to increase utility costs for hardworking americans? is this a social injustice? that's my question and why do you think the white house wants to drive these prices up? >> well, sir, i can only speculate, but what i do know is that when you look across the country, and particularly at california and other places where this electrifying everything push is underway, you're forcing-- you're imposing regressive taxation on the working class that people don't live as jennifer hernandez says in the keyboard economy. the people that have to drive there, use the gas, pour the coffee, serve the food and in rural american hit hard. one other point on electrify everything push, earlier in january, in the federal register, the department of energy published data showing the cost of electricity on a
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per btu basis is four times that of natural gas so this push to electrify everything that's underway in california is just a form of regressive taxation by prohibiting the use of natural gas in homes and businesses, and forcing consumers to use electricity instead. you're effectively forcing a high cost energy form onto them and removing a lower cost form of energy. i think teas bad policy and it's one that i think that, if the-- i'm not a partisan, i'm not a republican, i'm not a democrat, i'm disgusted, senator. but when you look at what the democrats are pushing it's almost all regressive policy when it comes to energy. >> and that does-- the humanism and realism, these are real people with real jobs who are now paying high energy costs and impact them so they won't have enough money to feed their children because the gasoline prices are higher as well. so thank you for your time, all the witnesses, and i yield
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back. >> thank you, sir. >> senator kelly. >> thank you, mr. chairman, and i've got a similar question for mr. nal nalley. first of all, thank you, and thank you to the eia for your testimony on rising energy prices. i want to focus also on gasoline prices. this is affecting real people in my state who have real jobs as mr. marshall mentioned. and arizona is one of the top 10 expensive retail markets in the nation. as of today the average price of regular, unleaded gasoline in arizona is 3.69, $3.69, yesterday it was 3.62. went up seven cents and yesterday, 3.41 per gallon. and energy analysts say that crude oil consumption is
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exceeding global production which was disrupted last year, we all know that. although domestic oil consumption is return to pre-pandemic levels, global production hasn't caught up. whatever the explanation, the impact it's having is that hardworking families in my state who commute to work and drop their kids off at school every day, are seeing their costs go up and they need some relief. mr. nlley. in your testimony, crude oil 81 a barrel will drop about $10 per barrel next year as global production increases. so when will this drop in oil prices translate into lower gasoline prices for arizonians? >> well, typically there's a 30-day lag, once you see the drop in crude oil prices, about 30 days before you actually see
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that in gasoline markets. >> and as a percentage decrease, are they-- do they tend to be about the same? >> well, the cost of gasoline at the pump is roughly 50% of price of crude oil. >> so if we see it, let's say a 12% decrease in the price of crude oil, would you expect that 12% decrease in the price of gasoline? >> i think roughly, yes. i'd have to pull out a calculator, but i think that's about right. >> my state receives most of its gasoline from refineries in california and texas. if you remember to last february, texas had the polar blast, it knocked out refineries and increased gasoline prices. do you feel that texas is better prepared this winter than they were last winter for this kind of event?
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>> i think what texas experienced is pretty unusual and pretty rare, but putting new regulations in place to protect against that. >> do you feel those new rules and regulations have resulted in change in their refinery infrastructure? >> i think we'd have to get back to you on that, i don't know that i have information to answer your question today. >> all right, i'd appreciate that. and finally, can eia project how gasoline prices might be impacted if refineries are knocked off line again this winter? do you have any-- do you do any analysis or try to make a prediction if we see what we saw last february in texas? >> can we do it in-- if an event occurs? sure, if we can take a look and try to figure out, you know,
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what the impact would be in that situation in terms of a regular ongoing product that we've put out. and i know there's no such thing, but if there was such a situation like the colonial pipeline situation where we would do real-time analysis and figure out what the impact was there. >> well, i'd appreciate it if you do have the opportunity to do that analysis, if you do it, if you could get back to my staff. >> absolutely. >> thank you, mr. nalley and yield back the remaining time. >> thank you, mr. chairman. now, obviously, the purpose of this is to come up with wise public policy. thank you very much for your testimony and the thought occurs to me that it isn't just abstract. mr. bryce, you make an incredibly good point lower income americans, britains, germans, that are made and
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somehow they think to know better for that person than their basic pocketbook. we are in a counter point when we discuss energy policy with both foreign policy as well as environmental policy, specifically greenhouse gas emissions, so with that, as a kind of a setup. and i'll point out that the environmental left has wished to have higher energy costs. an effort to transition to a lower fossil fuel future, and the irony of course, now the left wishes to retain our exports in effect, the same effect as if we'd had increased drilling because they wish to offset the stated goal of their policy. now there's a lot of craziness here, i-- it is, it's just crazy. mr. gold, first with you, i think you're conflating when you say the nordic countries have invested in renewables and more stable electrical prices i
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think what you really mean they're using hydro power and that hydro power, yes, is renewable, it's not what we typically think of in our conversations of wind or solar, it's hydro power. is that a correct interpretation of what you're saying? >> the nordic countries have invested heavily in hydro power alongside. >> yes and hydro power is giving them stable prices and lower prices elsewhere because we've spoken of the wind drought. in fact, i was trying to look and no one has done a relationship or perhaps one of you will that one of the reasons that england is paying such a high price for gas is that they had betted on north sea wind always blowing. there's been a wind drought. wind was 34% of their electrons and now they went through a six month period of getting none. they had not invested in storage for natural gas and paradoxically or maybe not, there's a relationship between betting on renewables and
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paying a heck of a lot more for natural gas. now, this is just kind of a short-sighted policy that's both bad for the consumer, but it's also bad for international global greenhouse gas emissions because now they and others are burning more coal. so i would point out that when we think about our policies, we actually have to think about them second and third degree not just congratulate on things that sound good when we first pass it. mr. bryce when senator heinrich talked about the levelized price of renewables, he did not include the cost of the backup peeker plants or other fossil fuel generation required, because obviously, you can't store electrons from wind and from solar. if you include that cost of the required backup baseload, natural gas, whatever, the plants within the cost of the renewables, what would be the
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cost of that renewable relative to natural gas? >> well, sir, i don't have that's numbers at hand. what i do know is that whatever renewable capacity as added, it doesn't mean you can retire the thermal generation needed during peak times of peak demand. and the senator heinrich didn't allow me to respond to that, but that was clearly the case in texas, when the grid was on the verge of collapse and it was, as big magnus former ceo said on february 25th, within four or five minutes of total collapse. when you think about that and think about a grid that's heavily reliant on renewables that cannot deliver power when power is dear and 25 million texas in the market could have been put into darkness, we wouldn't have had 700 people die, it would have been in the tens of thousands. >> let me ask you, this bryce, and global and gas emissions
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and natural security. you pointed out the supply chains for the batteries renewables to restore the electrons come out of china, either they're mined by chinese companies or processed in china or often using coal as a feed stock for the energy required. what does this do to our national security to be dependent upon china for our batteries as opposed to having, you know, the alternative, which is using natural gas, et cetera? >> senator, it's not just the batteries, it's the neo dimium and the green elements, and china has a 90% share of that market globally. i'd point you to the report that iea did in may on this that laid this out clearly and mr. gould's testimony, written testimony he pint pointed to
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the minerals, and the point that we are going to have a quick change, it's not rare elements, it's manganese, cobalt, an array of minerals and the question, where are we going to mine them? and there have been hearings on increasing mining in the u.s., but my guess is the sierra club is not going to be pushing for mining. >> and if this hearing is a counter point to greenhouse gas emissions and policy, as well as foreign policy and national security, it's a great hearing, let me say that. but i think maybe another to interweave those two because we look at energy as an isolated issue, we're going to end up far worse in both a global greenhouse gas emissions and in terms of our national security. >> good recommendation, senator. >> nart senator murkowski. >> thank you, well said, my friend from louisiana and the
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nexis, you can't separate this out. i think we're all trying to find easy answers. how many people here at this hearing today have have you, you know, what are the tools that we can be using? we want a quick fix and our reality is, is that the fix comes when you have-- when you have control over the resource. when you can ramp up your production rather than going tin cup in hand to another country or to the opec nations and say, pretty please, we don't like the prices that we're paying, can you guys do more? so there are no easy fixes and i listened with interest the discussion about the strategic petroleum reserve. when i was sitting up there as chairman or ranking member i fought to defend the resources that are in the spr, not using them as a piggy bank to kind of bail us out when we don't like the high prices and you know,
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whoever is in the white house needs to have a little political relief, it's not about political relief, but i also know that there's no easy button on the spr either. we've already put in place numerous sales to get resources and revenues for things that are totally unrelated to the price of oil. and we know that those particular sales are in off years. for us to say well, we're going to sell some more oil from the spr, if anybody thinks that's an easy fix to today's price at the pump, my friends from arizona mentioned that gas at the pump in arizona is 3.69. i was home this weekend and i was looking for it and couldn't find it less than 3.80 and it was between 3.80, 3.90 and that was in anchorage. in the community that my folks live in down in southeastern, they're paying about 4.20, i
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think it isment is. so it's real and impacting every aspect of people's lives and it is about really, a level of equity and fairness to individuals and these pressures are hard, but we cannot deceive people into thinking that there is some easy button out there that we just haven't pushed yet because we're waiting for the right political leverage. this is about our ability to produce and mr. bryce, i really love what you said there at the end in response to senator cassidy about our reality with moving towards renewables. i'm a huge advocate of doing more with renewables, but you have to have the base to start with and that base is the minerals that we will need. and so we've got to be talking about how we're going to incent and put into place those
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mechanisms. i wanted to raise this issue to mr. nalley and mr. gould because mr. bryce, you were asked this question by another member here and you said that's not your bailiwick here and to crude, i worked some years back to lift the ban on domestic crude oil exports. and it looks like the biden administration has kind of walked back some of that as an idea, but they were exploring the possibility of restricting domestic crude oil as part of an attempt to counter these rising places. but if you go back, you look at the 2015eia report at the time, it actually indicates that the reverse is true, that fewer export restrictions would likely have either no overall
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impact on domestic prices or would drive those prices down. so i guess the question that i would like to have mr. nalley and mr. gould respond to is how would more restrictive oil export policies impact our domestic prices? so if you can begin first, mr. nachlt nalley. >> sure, exporting crude oil. as a basis the u.s. refineries are built to work on the heavier crudes that come out, that's imported and the crude oil out of the united states is lighter than the export. so, we're -- it's an international market and we're dependent upon the international market. so if we cut out crude oil exports we'll have a tremendous
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amount of imports to meet the u.s. needs. >> people don't understand that so much of this is related to the refining capacity that we have domestically. mr. gould, can you respond as well? thank you. >> i would concur with the remarks made with my colleague from the eia. the u.s. flows of crude and refined products to and from international markets are complex, they're to did with different re finery configurations and different grades that are required in different parts of the system, and so i would -- i mean, it's an easy way to try and simplify the debates, but in practice and these flows are quite complicated. >> thank you. and mr. chairman, no easy button here. thank you. good hearing. >> senator lee. >> thanks so much, mr. chairman and thanks to both of you for being here, all of you, i should say. mr. bryce, i'd like to start with you if that's all right.
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in your testimony you indicated there are four factors that have been contributing to massive energy shortages and energy spike, energy price spikes across europe. first you pointed to underinvestment. now, domestically we've seen some investors, some financiers, rather like black rock, diversing from companies that generate more than 25% of their revenues from thermal coal production. i've also heard of companies pressuring or threatening others who happen to determine that they don't want to diverse from fossil fuels. do you think this trend has had a direct impact or will have a direct impact on american energy security? >> i think it already has, sir. in talking to people i know who are in the energy sector, there's a shortage of capital available to drillers and some of this is due to the fact,
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frankly, that the drilling and ent sector burned through $300 billion and simply lost it and consumers benefitted from that destruction of capital, but now drillers are facing much more restrictive loan agreements and having to live within their cash flow, but my point more specifically in my written testimony was on the underinvestment in hydrocarbon exploration or production in europe and the lack of production out of the north sea and then the dutch also curtailing production from the garongan field. >> you've indicated overreliance on europe with imported energy has contributed to this energy and security in your-- >> yes, sir. >> at the same time, the biden administration seems to be proposing to increase royalty rates with the help of a number of members of congress in the democratic party. and tax coal and gas powered
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company. coupled with the gas leasing moratorium imposed by the biden administration from the outset of its administration. it seems like a lot for the energy industry to face, more than the energy industry, we're concerned about, you know, the customers, about the people who rely on those things. do these kinds of actions have a direct impact on the ability or the willingness of companies to invest in domestic energy production? >> absolutely. and i think it's moreover, sir, it's the area where this is the most dangerous is in electric generation, and the fragilization of our electric grid and what meredith calls the trifecta, too much dependence on renewables, too much dependence on natural gas is directly threatens the viability and resilience of our electric grid and this is the mother network. this is the most important energy network in our country
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and getting scant attention from washington. >> now you've also stated that overinvestment on intermittent sources was driving prices, as in california where some consumers are projected to pay three times the national average for electricity. do you think that the enactment of the democrats clean energy program, described as muscle behind president biden's climate agenda, would likewise have a tendency to drive up energy costs throughout the united states? >> there's no question about that, sir. i published a piece in forbes a few weeks ago on the cepp and not only reduce affordability and reliability of the electric grid, would be a handout of epic proportions to the solar and wind businesses and far more in federal subsidies than in the wholesale market for the power that they produce. >> for the same reasons then would it be a fair assumption
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that overreliance on intermittent energy sources that occurs at the same time as underinvestment in reliable sources, something that could result in americans experiencing rolling power outages? is that the sort of thing that could happen as a result of this? >> sir, i've experienced it firsthand. i experienced it february 15th at 2 a.m. and my lights went out for 45 hours. one quick point to me, the idea we'd make our electric grid more reliant at a time when due to climate change we're expecting more extreme weather, to make our energy and power systems more dependent on the weather, makes no sense at all. >> in some cases it could threaten the lives of people, in other words, it could be more than just an inconvenience for some, it could mean the difference between life and death. >> 700 people died in the blackouts in texas, sir. >> thank you. >> i can't believe i'm going to say this, senator hoeven.
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[laughter] >> thank you, mr. chairman. mr. nalley, your testimony mentions the natural gas prices in the u.s. have tripled as of last month and that areas like new england are at risk of higher price spikes due to limited pipeline capacity. would more robust infrastructure result in less prices and less dependence on foreign imports? >> well, new england is, you know, does face certain challenges because of limited pipeline capacity, yeah, it is subject to, you know, higher prices. >> so would more robust pipeline infrastructure result in lower prices and less dependence on foreign imports? >> yes. >> the house reconciliation imposes a new fee on methane emissions i'm sure concerns our chairman as well as myself, which, that's in essence just a tax on natural gas the bill increases fees and royalty
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rates for u.s. producers operating on federal lands. is it fair to assume that these proposals will lead to lower u.s. production and increase our reliance on energy in less stable parts of the world. >> any pending legislation, policy neutral organization, wouldn't comment on that. theoretically higher increased fees and royalties cause the price after commodity to go up? >> yes. >> thank you crude oil pricing, in 2015, we passed a bipartisan effort to lift the decades old ban on u.s. crude exports which helped to grow our energy resources. would you agree that lifting the ban on crude exports has helped counter the influence of our global energy competitors like russia and opec? >> i'm-- we'd have to get back to you on
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that. >> okay. pipeline, line three, so we're an ag state. north dakota is an ag state and we're concerned about increased fuel prices across the board, but certainly how they impact our farmers, being a large ag producing state. recently lined, three pipelines across north dakota to full capacity and replacing a pipeline built in the '60s. do you see a need for further capacity to expand crude oil into and throughout the united states as well as natural gas? >> well, you know, pipeline capacity is an issue, it's regional, you know, areas where gas or oil can flow easily, so, yes. >> okay. and if line three had not been replaced and its design capacity restored what would have happened to fuel prices? what would have been the impact on rail traffic, particularly for farmers who depend on, you know, rail capacity to move
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their product to market as well? >> i would have to look at the particular situation. i don't know off the top of my head today. >> mr. gould, in your testimony, you noted that global demand, gas, oil and coal have increased from the covid-19 pandemic and fuel switching from natural gas to coal and record high prices. are efforts to curtail fuel production exacerbating assuring that we have sufficient energy supplies to meet consumer demand? >> so i think the-- there's been a halving in investments in oil and gas upstream. >> and we're going to take you live now to the capitol as the senate gavels in for the day. senators are considering a
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treasury department nomination and also a bill on policy and programs for the school year 2022. new live from the senate floor. the presiding officer: the senate will come to order. the chaplain, dr. barry black, will lead the senate in prayer. the chaplain: let us pray. almighty and everlasting god, you are the fountain of every blessing. thank you for this good land, with her hills and valleys, her fertile soil, her trees, plains, and mountains. we're grateful for the brilliant colors of the changing seasons.

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