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How we are handling exports and Natural National security policy. Wester, we focused on the department of Energy Strategy in reviewing applications. Chargedhearing, we were stop joined by various gas from the u. S. State department, thank you both for coming. It is obvious that the u. S. Is in the middle of Energy Reduction revolution. That gives us access to word resources that were not previously recoverable. As of 2010, that number has risen to over 300 children 300 trillion cubic feet. Studies have informed decisionmaking. It indicates that the united aids will see indefinite economic benefits. Will be anrts important Foreign Policy tool. Many of our friends and allies are forced to buy gas from russias Vladimir Putin. Imports over 60 of its natural gas from russia top this gives russia on amount an immense amount of power. Russia has a habit of squeezing its neighbors energy when it wants to effect their actions. The u. S. Has the resources to come to their aid. We need the political will. As mentioned previously, this subcommittee is focused on a process for proving natural gas exports. Countries with whom we have a Free Trade Agreement that export is consistent with Public Interest. Authorization must be granted without delay. For countries with which we do not have a retreat agreement, the natural gas act presumes that. Unless the Department Finds proposed exportation not consistent with Public Interest. Natural gas has been part of a proposed pipeline through canada and mexico since the 1930s. Granted the states first permit. The facility is currently under construction in louisiana. It will begin soon. When we had our last hearing on this topic, that was the only facility approved. There are still 24 applicants waiting for approval. Doe to process these applications. It is in our international interests. In december 2012, president obama said that the United States is going to be an exporter of energy due to new technologies and what were doing of natural gas and oil. He recognized that these Energy Developments could have a huge geopolitical consequence. His remarks are embodied in the state Departments Bureau of Energy Resources. One of its goals is to manage geopolitics of state and economy through Energy Diplomacy with major producers and consumers. When objective that i hope to a college is to get a sense of how the administration is taking advantage of National Security opportunities. It seems clear to me that this administration has identified exports as a valuable part of u. S. Diplomacy. I would like to make sure that different parts of our government are functioning effectively and efficiently. The doe and these agencies are working harmonious way. Are there any barriers we can fix to move this along . This will have a clear effect on the settlement of our foreignpolicy agenda. We must safeguard our allies from political volatility. We must have crossed Agency Coordination to carry that out. I look forward to your testimony. The gentlelady from california for her Opening Statement. Thank you. I look forward to uninformative discussion. Ofgree that russian control ukraine is a critical issue. 24 ofopean union gets its gas from russia. Some countries are dependent on russia for the entirety of their supply. Obvious imperial ambitions of putin, the u. S. Must help focus this on russian gas. In the short term, proposals to help ukraine by fast tracking approval with export terminals will quickly get the u. S. Help to europe and ukraine. The u. S. Has only one export terminal. There is another one in louisiana. Terminals to find them will take several years. I am all in favor of getting the department of energy the resources they need for this process. It is a complex and slow process. It could benefit from additional resources. We should not pretend that this is a panacea. The main barrier to u. S. Exports to europe is not the permitting process. It is the fact that u. S. Gas would be substantially more expensive than cheap russian gas. Most experts agree that exports from the u. S. Would be far more likely to go to asia for prices that are higher than in europe. That is not to say that the u. S. Should not market gas in europe. That conducting Foreign Policy via Energy Exports is complex. How can we help ukraine, given these constraints . A number of efforts are underway. The u. S. Is working with you and the imf on a number of efforts to move europe toward greater diversity. Reversing flows of natural gas from existing type line into ukraine and further developing ukraines natural gas resources. Encouraging Energy Efficiency rarely makes headlines. In ukraine, it could be a game changer. Ukraine produces as much gas as it uses. The ukrainians are notoriously profligate energy users. Banks get Government Energy subsidies. By implementing efficiency measures, ukraine could be nearly selfsufficient. I think these efforts to use American Resources to bolster Foreign Policy are admirable. It will become increasingly important over the next decade will stop however, we must not lose sight of the side effects of our Current Energy boom. A Brookings EnergyInitiative Study found that u. S. Exports would have a modest impact on domestic prices. ,ven this modest increase estimated to be around 50, would be damaging to low income and tumors. That consumers. They would to choose between heating their homes and buying food. An increase in exports should go handinhand with funding of low Income Energy assistance. Lets not also forget the businesses and manufacturers. They have built plans around low price gas. Would be offset by the loss of jobs elsewhere in the economy. Increasing exports would also increase the environmental risk factors associated with drilling. A strong Foreign Policy cannot of pollutingost american Drinking Water refund and chemicals from racking fracking. My district may have uncontrolled he level rise. Benefits substantial to exports, but we must think about what is feasible and control the cost. Thank you for holding this hearing and to our witnesses for being here today for the today. We will now recognize our first worsen on the panel. , thehristopher smith Deputy Assistant secretary for diplomacy, and all witnesses are sworn in. Please raise your right hand. Affirmsolemnly swear or that the testimony you are about to give is the truth, the whole truth, and nothing but the truth , so help you god . Let the record reflect that the witnesses have answered in the of her motive. In the affirmative. After your testimony is finished, your notes will remain part of the permanent record. Tank you very much. I appreciate the opportunity to discuss the does policy of regulating the export of natural gas. The abundance we are experiencing in our supply is unprecedented opportunity. Over the last several years, domestic Gas Production has increased significantly. There has been declining natural gas imports. Growth is primarily due to the development of new technologies to stop that includes technologies to produce natural gas trapped in shell nations. Permission. Formations. There was a dramatic change in 2012. There was a Important Role played in the development of technology. Beginning in the late 1970s, the department contributed to the development of hydraulic rupturing and new drilling technologies. Private sector investments continued industry innovation. There have been billions of dollars in economic activity. Coming from American Ingenuity and knowhow, the United States is now the number one natural gas producer and is poised to become a net exporter by 2018. That is according to the Energy Information administration. Lower. Gas prices are in the United States, demand for the united natural gas is growing rapidly. The department of energy has received a growing number of applications to export natural gas to overseas markets. The authority to regulate the export of natural gas rises from the natural gas act. There are two standards for processing applications. By law, applications to export withal gas through nations a Free Trade Agreement are deemed consistent with the Public Interest. Secretary of energy must grant authorization without delay. As of march 24, the department of energy has approved 35 applications. Applications to export natural , theo nontreaty nations proposed export has found that it is not in the Public Interest. In executing that requirement, the department of energy established a robust policy for national interest. There is opportunity for the public to, and theres transparency of stop there is a balance of many aspects of Public Interest affected by the export of natural gas. Interesta broad public in consumption and favoring export, but it is not the Public Interest. Involve theons department identifying and reviewing applications for export acquisition. This includes Economic Impact and International Considerations, security, environmental considerations, and others. Theonduct its review, department looks for evidence developed in the application proceeding. Applicants are free to raise new issues and concerns throughout Public Interest that may have not been addressed. The department of energy has granted some conditional authorization for longterm applicants. Billionuivalent to 9. 3 feet per day. Pendinge applications to export gas to nontrade Agreement Companies countries. It will be evaluated on a casebycase basis. It has previously been established and work on the department website. During this time, the department will continue to monitor the impact. Further information may be coming available. I would like to note that as i mentioned earlier, the department continues international considers international factors along with domestic factors. We are monitoring the situation very closely. We are certainly taking the security of our allies very closely. It has taken recent events into account in making decisions. The United States commitment to read trade and efficient, transparent marketplaces provides both economic and strategic benefits. Increased production of domestic natural gas has significantly reduced the need for the u. S. To import. Shipments that would have been destined for the United States market have been redirected to u. S. And asia europe and asia. To the extent that the u. S. Exports supplies and increases volume, it will improve relationships between many u. S. Allies. The department of energy is committed to these applications and getting them through as expeditiously as possible. We understand the significance of this issue and the importance of getting it right. But mr. Chairman, thank you for letting me appear for this committee. Member, and the members of the subcommittee, it is good to be back here as someone who has served on the house on Affairs Committee staff. I appreciate the opportunity. The hearing comes at a critical time. The relationship between security and access to energy is in sharp relief. With the illegal annexation of crimea, we are witnessing unacceptable and shocking violation of the sovereignty and territorial integrity of one country by another. This is not the Agency Responsible for approving natural gas licenses. We have just addressed this issue. The crisis led many to argue that if a liberated approval of x words with a magic exports with a magic will. It is critically important, but resources, inc. The work, are one tool including export, are one tool among money to address challenges. We have been working in many ways around the world to contribute to Energy Security. We will continue to do so. There are renewed fears that russia will use energy as a Political Tool as it did in january 20 2009. All russian gas flows were halted. It cut off supplies completely for 13 days. The energy council. It was an annual meeting cochaired by the secretary of they to state to discuss strategic collaboration. The first meeting was held that year. The fifth meeting was held just a few weeks ago. We have to take into consideration that as we look at these issues in a global context, and supply and demand changes around the world. First the supply mechanism is changed from a number of small tontries supplying the world a much larger number of countries around the world supplying energy, oil and gas. Demands, countries were driving the demand until now. In decades to come, that demand will be driven by nontreaty countries. As we have looked worked with ukraine and europe to address the Energy Security of ukraine as europe, we are looking the Ranking Member said in her opening testimony, not just at the issue export, but the issues that would require europe to address their own needs. Means addressing the infrastructure shortages at europe suffers from. We have to make sure that those are able to reverse low so that they can supply ukraine. poland and ukraine have been able to first the flow, this is a staff that could not have happened if we had not learned lessons in 2009 and spent the last 45 years working with our partners in the eu to make those changes available. The third Energy Package. A change the regulatory framework. Without that, the reverse flows would not have been possible. It is not enough to look at this from russia to ukraine. We have to look at sideline to go not just north out, but eastwest. Gas can flow. We have to make sure that there are receiving terminals. There must be a capacity to receive energy. Look at this, it is not just about the united dates. As ive talked about before, there is a supply change. I will get back to what Ranking Members years said. Australia is coming online phenoms amounts of natural gas. Mozambique and tanzania have made amazing discoveries. Offshore, israel is delivering gas to its domestic market. It is poised to become an exporter in 2017. Lebanon, egypt, the rest of the eastern mediterranean. North africa, other areas are looking to become new users. This is a global context that we need to understand. Along withg so today the department of energy and the administration to ensure that we can be there to allow and make sure that not only europe is supplied, but that energy is used as a resource for cooperation and not a resource for conflict. These exports may become a common factor. It is only that one factor, that one tool. We have to work on other areas that i just mentioned in order to make sure that our commitment as we didsecurity with a high point in the 1990s, and as we are doing now with other projects, to make sure that that Energy Security is achieved. We are strongly committed to european Energy Security. We will continue our efforts with ge you to make that a reality. Thank you. I will begin with five minutes of questioning. We will do a second wrapped in a moment. I would like to colony ambassador for Energy Security. He is from the ministry of foreign affairs. Here is a statement about the issues. I want to just read it too quickly. She testified on the hill march 25. She says, i use 400 as an example of how unrealistically high russia may raise the price of gas over to ukraine if it chooses to use gas as an economic weapon. This was before they invaded crimea. Moscow went above that number. Now they quote 485. The current price is around 260. The amount has b