Screeria nigeria. Libya. And later a look at Global Threats and Defense Systems being developed by the pentagon. Coming up here on cspan 3 at 10 00 a. M. Eastern, live coverage of a hearing before the House Oversight committee on how a small gyrcopter entered in the air space and then later in the morning on cspan a joint meeting of congress from the Prime Minister of japan. Well have that live at 11 00. A press release from republican senator lisa murkowski, chair of the energy and Natural Resources committee offering to work with Energy Secretary ernets moniz. The Energy Secretary was before the committee today testing about the White House Quadrennial Energy review a review that recommends more than 15 billion in new spending and tax credits to modernize the Nations Energy fran structure, which includes millions of miles of pipelines and oil and natural gas and electricity facilities. Heres the hearing. Its about two hours. Good morning. Welcome to the committee. The hearing will now come to order. Were here this morning to review the first installment of the quadrennial Energy Review. We call it the qer around here. Were pleased to have secretary moniz back before the committee. This is your second time so far this year. We appreciate not only the Public Engagement but the time that i know you give each of us as you come to either discuss issues in our offices or through your frequent phone calls. I appreciate that engagement and that reachout. I think its very helpful. Secretary moniz oversaw the development of this report at the department of energy and again, i think many of us have had an opportunity to have a little bit of discussion on this report but this morning is our opportunity as a committee to review it. In the United States we take it for granted that when we flip a switch, the lights turn on that our devices charge up when we plug them into the wall that when we pull off the side of the road to fill up at a gas station when were on a family trip, that everything works. We live in a country that has abundant resources and Innovative Technologies that make our way of life and our standard of living the envy of many around the world. And we should be proud of the tremendous progress that has been made but also recognize that nothing is guaranteed to stay this way and thats particularly true when it comes to our Energy Infrastructure, which i think we will all acknowledge is facing serious challenges across the country right now. We regularly focus on opportunities to improve Energy Infrastructure in this committee. Already this year, we have held hearings on innovation related to the electric grid, increased oil production, our opportunities in the arctic and the importance of pipeline infrastructure. I think todays hearing is a good next step here. The qer looks at our Nations Energy infrastructure at a critical time. Many of our systems are aging and in urgent need of modernization. Weve seen dramatic increases of course in energy production, oil and gas are at record levels, the Market Penetration is on the rise and the stress placed on our systems has increased faster than it can be addressed. The qer makes a number of recommendations to alleviate these current deficiencies. In many cases the solution is new spending adding up to potentially billions of dollars but i think its important to note that the vast majority of the nations infrastructure is privately owned and sustained and improved by private investment. At the same time, i understand that advancing our Energy Infrastructure will require some federal funding even within our constrained budgets. But federal spending is not all that matters. So do regulations, particularly those that hold back projects and private investments. We have to keep that in mind as we seek to find a better balance. As i go out and talk to folks in alaska or just really anywhere in the country so many of the business interests when they are talking about infrastructure and where we are they say, what we really need is some level of certainty. We want some level of certainty so that we can go ahead and make shes substantial investments. Now, as we are here to discuss infrastructure today i do think that it is relevant to point out that the keystone xl pipeline has been delayed for over 2400 days. We have, in my state a critically important piece of infrastructure that transalaska pipeline system. Its something that i worry about and recognize that without ensuring that that pipeline has the resources that it carries, it is a piece of infrastructure that could face declining health and strength and its something that i worry about. Its one thing to read a report outlining our infrastructure challenges but another to set out proactively to solve them every day. Any modernization of Energy Policy should, in my view visit the defacto ban on oil exports that we have imposed over 40 years ago. I think the qer is too light in that regard. I was, however pleased to see it recognize the unique issues that impact the arctic and the valuable role of the United States can play as chair of the arctic council. I was with secretary kerry on friday but again understanding our role as an arctic nation there, i think its key and i appreciate the focus that has been given. We know that we have significant infrastructure challenges and we know that were going to have to Work Together to solve them and that goes for the members of this committee as well as we work on a broad energy bill noting that infrastructure is one of our key titles within that bill. And it goes for congress and the administration as well. Working together here. We can use the qer as a reference piece or a template to weigh ideas and to discover potential solutions for our energy bill and weve discussed that with the secretary. And secretary as you face as with you as the face and the focus behind the effort, i do think weve got an opportunity here to make considerable progress on infrastructure issues as we move forward with that. Again, i thank you for your leadership. On that i look forward to you outlining the terms of the report this morning. And with that i turn to senator cantwell. Thank you, madam chair, and thank you for holding this important hearing on transforming u. S. Energy infrastructure and i thank secretary moniz for all that he does shuttling back and forth between iran sanctions discussions and the quadrennial review must be a wide breadth of focus. So thank you very much. This hearing today is particularly important because infrastructure is the links of all of the components of our National Energy system and its increasingly complex. Its independent and, certainly as the report shows, is in need of an upgrade. As we begin the legislative process of crafting a Bipartisan Energy bill, its essential to have an analysis and data of the infrastructure that supports the systems. The need for reliable and sufficient supply of energy is becoming closely intertwined with our Economic Growth and competitiveness. Thats why its even more important that we understand the trends affecting the infrastructure deliveries of these commodities. For instance, theres been a surge in crude oil by rail in the last five years. In a fiveyear period starting from 2009, there was an increase of roughly 4,000 4,400 in the volume of rail shipment. This trend has had a number of implications. For example, crude oil now competes with other kmod mod teas, which caused delays in delivery of crops and Agricultural Products to market. The report explicitly states that these recent unexpected shifts in supply and demand for rail service has resulted in disruption to agricultural shipments, quote exceeding even those caused by hurricane katrina, end quote. The department of Agricultural Marketing service concluded that, quote, the current rail Service Problem has exceeded previous events in terms of both magnitude and dur rags including hurricane katrina, which caused major disruptions throughout the entire agricultural system. With safety implications. Obviously this carries safety risks and we also have to talk about barriers for new technology. Investing in infrastructure upgrade enables the vast benefits of new technology to increase efficiency and create jobs. In fact, projections indicate that by 2030 the Energy Sector will employ a 1. 5 million workers and changes in the Electricity Sector affect the number of types of energy jobs. New Technology Jobs demand new skill training in the electricity workforce and im glad to see that was part of the report. Older Business Models are going to change and our economy is going to involve the electricity business that must keep pace with the innovation and continue to be efficient and flexible and advanced and this work is important because our grid, i believe, is a platform. Its a platform for products and services and technology not only in the United States of america but for electricity all around the globe. I was struck yesterday by the report that solar lamps were the only public lighting sources initially available in parts of nepal after the tragic earthquake and avalanche this weekend. So new technology plays a role here and at home and in making sure that our Energy Systems are resilient and more secure. So obviously here in the u. S. We have been working with our laboratories in developing policies that inform fran structure so in terms of the different states and different geographic priorities and different mixes of energy but its my hope that we can accelerate the modernization of our grid by ensuring best practices and innovation driven ground approaches can be implemented. As the quadrennial also notes, most of our nations transmission source and distribution structure is owned and operated by a private sector. Thats why this is a private Sector Partnership that again is called for in the report. In 2008 Edison Electric institute estimated by 2030, the u. S. Electrical Utility Industry would need to make a total Infrastructure Investment of 1. 5 trillion to 2 trillion. That was the range. So analysis concludes that natural gas interstate Pipeline Investment will range between 39 and 52 billion between the similar time period and depending on overall natural gas demand. So what is the cost of doing nothing . Well, between 2013 and 2012 an estimated 679 widespread Power Outages occurred due to Severe Weather which cost the economy 16 billion each year between 2013 and im sorry. 2003 and 2013. So and as i mentioned the political report talks about spills and likes and explosions from both oil and gas pipelines. That weve incurred costs on. So investments that promote Innovative Solutions enhanced Energy Resilience and reliability and security clearly have huge benefits to our economy and i think thats what the report is trying to out leanline. So thank you for keeping our focus on what we need to do to take advantage of our Energy Resources but make them work better for the future here years ahead. Thank you. Thank you senator cantwell. Now we will turn to the honorable secretary moniz for your comments this morning and look forward to a series of questions after. Welcome. Well thank you, chairman murkowski, Ranking Member cantwell and other distinguished members of the committee. I very much appreciate the opportunity to discuss with you the quadrennial Energy Review and also thank you for the patience of the committee in terms of the scheduling of this hearing. I am going to ask for your indulgence to take a slight detour picking up on what senator cantwell said of our other missions. I want to say a little bit about the accomplishments of the department of energy within the last several weeks. We have Many Missions nuclear security, Waste Management and cleanup and i wanted to note that within the last four weeks, as you saw the our laboratories, et cetera, have been a major support in the iran negotiations. On energy were here today to discuss the qer which just came out. On science, we just completed the coral announcement which is the next big step on supercomputing and on the waste side we had the important decision a few weeks ago to pursue defense waste in a targeted way. So i just wanted to say that this department is doing work in a whole broad range of areas and i think with great accomplishment. Madam chairman i dont know if that means that energy is at the center of things or senator moniz. No, this is the department of energy. Were glad for it either way. And our laboratories are a huge glue in terms of pursing all of these missions. I just couldnt pass that up. Anyway, qer, so, again last week the administration released the first installment and, as you know focused on Energy Distribution including the huge network of pipes wires storage, waterways, railroads and other facilities that are at the backbone of our Energy Systems. The qer comes at a time, as the chair said pretty Dramatic Energy revolution in our country and we are reaping tremendous benefits and were also seeing the challenges to our fran structure for distributing these supplies infrastructure developed decades ago for a Different Energy world. These new challenges require us to modernize and transform the infrastructure to meet environmental and energy and competitiveness goals indeed for the next century. President obama established this qer task force. It had 22 agencies involved. Just demonstrating the breadth of the equities in the Energy System. Cochaired out of the by the director of the office of science and Technology Policy and domestic policy councils, special assistant to the president for energy and climate. Department of energy was the executive secretary for the task force and performed or commissioned an extensive number of technical and scientific analyses. Our office of Energy Policy and systems analysis did much of the heavy lifting for this qer. We undertook an open transparent process involving experts and stakeholders, included 14 Public Meetings around the country and also a meeting in canada and discussions with our mexico come patriots. We released a final document a week ago and thats available on the web. The first installment provides policy makers, we think with a road map for meeting our key energy objectives. There are several crosscutting themes also covered, including jobs and environment infrastructure siting and, importantly, the integration of north American Energy markets. Let me just highlight a few recommendations, for example on resilience. Clearly a National Priority resilience reliability, safety and security of our infrastructure. For example, we recommend establishing a Competitive Program of targeted funding to accelerate pipeline replacement and enhanced Maintenance Programs for Natural Gas Distribution systems. Another, by the way, very big ticket facing our country, a quarter of a trillion dollars over the next decades supporting the assurance plans and then establishing a Competitive Grant Program to promote Innovative Solutions from the states for enhancing Energy Infrastructure, resilience and reliability. That Competitive Program to move the needle would ultimately require 3 to 5 billion over a decade. We also recommend looking at and then mitigating the risks associated with the loss of large transformers. We make recommendations in modernizing the electric grid. Once again a strong emphasis on providing state Financial Assistance to promote and integrate fran integrate infrastructure and investment plans efficiency and low carbon generation are twostate Planning Grant programs we recommend in our fy 2016 budget. Clearly we promote grid modernization, another example of something in our 2016 budget but only a down payment but estimate to be a 3. 5 billion of federal expenditures to help with grid modernization. A few other recommendations ill just touch on. Importantly, we need investments to optimize the Petroleum Reserve of both to upgrade it maintenance, distribution