Hearing Of The Senate Energy And Natural Resources Committee - Energy Development on Public Lands and the Outer Continental Shelf
Copyright ©2009 by Federal News Service, Inc., Ste. 500, 1000 Vermont Ave, Washington, DC 20005 USA. Federal News Service is a private firm not affiliated with the federal government. No portion of this transcript may be copied, sold or retransmitted without the written authority of Federal News Service, Inc. Copyright is not claimed as to any part of the original work prepared by a United States government officer or employee as a part of that person's official duties. For information on subscribing to the FNS Internet Service at www.fednews.com, please email Carina Nyberg at firstname.lastname@example.org or call 1-202-216-2706.
SEN. BINGAMAN: Okay. I'd like to welcome everyone to the hearing, especially our secretary of Interiors, Secretary Salazar, on this important topic of energy development on public lands and in the Outer Continental Shelf, more specifically.
Our nation has abundant energy resources, a good portion of which are found on our onshore public lands and in the Outer Continental Shelf. These resources are owned by all the people of the United States; their management is entrusted to the federal government. That's why we're particularly pleased to have our new secretary of Interior here to tell us about his vision for the development of our energy resources both onshore and offshore.
Secretary Salazar has important decisions to make -- decisions that may prove essential to our nation's energy security and economic well-being, but also decisions that will impact upon the landscape and environment for generations to come. I look forward to hearing about the administration's plans in this regard.
I hope Secretary Salazar can share with us his vision of how we can determine the best places for energy development in the OCS, how we can move forward to get more energy production, both oil and gas and renewables, in a safe and environmentally sound manner from the Outer Continental Shelf.
I know the secretary is interested also in our onshore oil and gas leasing program, and recognizes the contribution of that program to our energy supply. I hope under his leadership the BLM can resolve any resource conflicts upfront, so that this important program can run smoothly and efficiently. And to this end, it's important that the inspection and enforcement programs there in the BLM be well-funded.
Finally, the administration is clearly committed to renewable energy. And I know Secretary Salazar is. The development of the Department of Interior and the Forest Service have a key role in the siting of generation and transmission facilities for wind and solar energy. I know Secretary Salazar has undertaken initiatives to bring about more renewable energy production on federal land.
We also have a very distinguished panel of additional experts today who will come forward as the second panel after Secretary Salazar testifies and we've had a chance to ask questions, so. Senator Murkowski is on her way and is not here yet. I'm sure she'll have an opening statement when she arrives and some comments to make.
But why don't we proceed with your statement, Secretary Salazar? And we look forward to hearing your perspective on these important issues.
SEC. SALAZAR: Thank you very much, Chairman Bingaman, and to all the members of the committee, to Senator Dorgan, Senator Landrieu, Senator Udall, and Senator Barrasso, Senator Bunning, Senator Bennett. Thank you all for being here this morning to engage in this conversation on this very important issue for the future of our nation and our world.
And thank you for being here as well, Senator Bayh.
Let me first say that this is my first hearing in front of the Senate Energy Committee since I came before this committee for its blessing in my confirmation process, now almost it seems I guess about a month or so ago, maybe six weeks ago.
And I'm delighted to be back here, because many of the issues that I'm working on in the Department of Interior are issues which you and this committee are very interested in, and they will obviously play a major role in defining the future of how this nation resolves these issues.
Let me say at the outset from the point of view of President Obama, from the time of the campaign to his leadership as president of the United States, he believes that we need to move forward with a comprehensive energy plan. And when he speaks about comprehensive energy plan, he talks not only about the whole future of renewable energy and the new energy economy, but he also talks about our conventional fuels including oil and gas and clean coal technologies and the like.
And so my instructions, as I run the Department of Interior for the United States of America, is to do what I can to implement that comprehensive energy vision that President Obama has brought to the nation.
I think it is important to note that even though this issue has been something which many of you have worked on for a very long time, that perhaps this time it's a little different than it was in the 1970s and in the 1980s when there was passing attention paid to this issue but really not much happened, and we continued to become more and more dependent on foreign oil to the point where we are now importing close to 70 percent of our oil from foreign countries.
And so breaking the chains of our overdependence on foreign oil is a central tenet of what we are attempting to do. In addition, making sure that we're addressing the issues of climate change which are affecting the entire globe are important. And finally, that the hundreds of billions of dollars that fall to other places across the world, our monies that actually could be spent here in the United States as we move forward with our economic development and economic opportunities here at home.
So those are some of the key tenets of the president's vision with respect to how we move forward with energy development. Let me make a couple of quick other -- two other quick points, and then I'll be happy to take some questions. First of all, I know that from the perspective of some, it seems like we are rolling back many of the initiatives that were taken by the prior administration with respect to oil and gas development.
And I've heard comments in the press and other places that perhaps we are antidevelopment. But the fact is that much of what we are still doing is continuing to develop oil and gas here in the United States both onshore and offshore. It is very much a part of our energy future. It is something which I will address industry officials at several meetings as the week moves on.
Just a couple of concrete examples, so you all will know some of the work that we have been doing in this area. Just in the last several weeks, we have approved seven major oil and gas lease sales on the onshore of the United States of America. Those seven lease sales have raised a total of $33 million.
They have included over a million acres of land that has been, in fact, leased for oil and gas development within the onshore of the United States. In addition, the offshore continues to be an important place for us to look for possibilities for oil and gas development tomorrow. I will be in New Orleans serving as an auctioneer.
Since I served as senator and secretary of Interior, tomorrow I'll serve as auctioneer with respect to part of at least sale 181 South as we move forward into the Gulf of Mexico. That's 34.6 million acres -- 34.6 million acres in the Gulf Coast that will be subject to this oil and gas lease sale tomorrow in New Orleans.
And Senator Landrieu, thank you so much for inviting me to go to Louisiana to participate in this, and I look forward to seeing you down there again as soon as we deal with other issues relating to the offshore. The lease sale tomorrow itself will also include about 4.2 million acres that -- within what we call "Lease Sale 181."
And as many members of this committee will remember that debate and the legislation that was enacted in that time, one of the things that Senator Alexander and others -- Senator Landrieu were involved in was the creation of a permanent royalty for conservation, the first permanent conservation royalty of its kind that was included in that legislation which was crafted by this Congress now two years ago. And so that will be implemented tomorrow.
So I finally will say with respect to development of oil and gas resources, that we are committed to having a complete process with respect to hearing from affected stakeholders throughout the country with respect to the future of the Outer Continental Shelf.
So in the weeks ahead, we will be holding meetings and hearings in Anchorage, Alaska, San Francisco, California, and New Orleans, Louisiana, and Atlantic City, New Jersey, as we hear from governors, senators, congressmen, and other stakeholders about the importance of the resources in the offshore.
We will try to identify where the holes are with respect to information that we need, and we will be releasing a report which is currently being prepared by the United States Geological Survey and the Minerals Management Services with respect to the information that they have in the Outer Continental Shelf.
That will be all of what we will be doing in those hearings, and I am hopeful that many of you will be participating with us in those hearings around the country. I know Senator Landrieu and Senator Murkowski and their respective states will be participating in those hearings.
Let me -- I have two more quick points, if I may, Mr. Chairman. I know I've run past my five minutes, but I will try to be very brief on these two final points. I want to spend just a few minutes talking about renewable energies and how important those renewable energies are to the United States of America.
We have, within the Department of Interior, formed a working group, a task force that's looking at the developing renewable energy. We have a group of members of the cabinet, including Secretary Chu, Secretary Vilsack, and the Chairman Wellinghoff, the chairman of FERC and others, working to help us do two things with respect to renewable energy.
And those two things are, first of all, trying to create a zoning process where we actually identify those zones where we might be able to site renewable generation facilities across the country both onshore as well as offshore. And second of all, looking at the difficult issue which many have been struggling with, and that is the issue of transmission. How do we get the electrons that are generated from these renewable energy sites to the places that they are going to be consumed?
And if I can take you through some quick maps -- and I don't -- I was hoping -- I think we may have brought some copies of this, but if not, I think you'll be able to see what I'm trying to demonstrate here. First of all, this first chart just shows where the renewable energy potential is for the United States of America. And these are maps that you have seen the National Renewable Energy Lab and others have produced, but it shows the great potential for solar energy within the Southwest.
The second map is one that shows the wind energy potential of the United States of America. And as you will see, the wind energy potential is very, very large for the United States right from the Great Plains and the Dakotas all the way down the middle of the country and then also in the areas on the Atlantic; most of the Atlantic is very rich in terms of the possibility of offshore wind as well as some areas off of the Pacific. So that shows where some of the potential is for huge wind energy production.
Next, geothermal energy. If you will look at the geothermal energy potential, there is huge potential especially in the Western part of the United States. Many of those geothermal properties are located on public lands run either by the BLM or by the Forest Service in the Department of Agriculture.
The next chart will show -- it's a quick table that shows what the renewable potential energy is from some of these sites. But if you look at -- the assessment has been done by a number of different people. The essence of what you will do is if you go through a renewable energy siting process, you can identify the number of megawatts that can be produced from these different streams of renewable energy.
And so the approximate portion of renewable energy on federal lands that can come just from solar energy itself, is estimated at being somewhere in the neighborhood of 42,000 watts. That's 42,000 watts, most of it located in the Southwest, that can be produced just from solar energy itself. The wind power that is located on federal lands is approximately 51,000 megawatts of power that can come from this wind energy.
Much of it located, Senator Barrasso, in Wyoming, much of it located, Senator Dorgan, up in North Dakota. And so we know that there is a lot that can be done with respect to the development of this energy, because it's already out there. These are technologies that are already proven they're not technologies that are 10 or 15 years away.
Now, let me walk through with you with three visuals that demonstrate the kind of energy -- renewable energy zoning process that the Bureau of Land Management, working with a number of stakeholders, has gone through in Southern California. The first of those charts is a chart that indicates all the location of lands in Southern California which are prime sites for the location of renewable energy sites.
The reality is, though, that there are overlays that have to go on top of those sites which have high energy potential, including the location of federal facilities, the location of places where we have endangered species such as the desert tortoise and the like. So the next chart will show what happens when you then take that set of acreage and you put the overlay with respect to other lands that might be available.
And so what we've done here is taken off national parks, national monuments, all the Department of Defense lands which are huge in Southern California, and you see that the number of acres that would be available for solar development then is significantly less.
And the final chart -- and we will put up -- will show what happens when the stakeholders, the state of California, the utilities, environmental groups and others have gone through and said what we have done here is to identify the areas in Southern California which are on public lands which are the best places for us to site solar energy facilities.
We are in the process of trying to do that around the country.
It's going to take us a little more time to get it done. But at the end of the day, what we are trying to do with this planning process -- it's no different than a land-use planning process that a local government would go through -- is to be proactive in planning where the placement of these renewable energy facilities will ultimately go.
What has happened in the past is that we essentially have had a helter-skelter kind of approach to where we site solar facilities. Today, we have 200 applications for solar energy power plants that are located in Bureau of Land Management properties across the country. There is no program or no planning that has gone into how we process those applications.
We also have about 20 applications that are pending before BLM with respect to wind projects, but again, there has been no process in how we move forward. So we hope that working with our sister agencies in the federal government, that we'll be able to move forward and create these energy zones for the United States America. So that's point number one with respect to renewables.
The second point I want to make, illustrated by this chart, is that in the Western parts of the United States, we are already significantly along the way of trying to figure out where the transmission corridors should go for the United States of America.
But this map will show through the black lines as well as the gray lines that are on that map, approximately 6,000 miles of new transmission to be built in the Western part of the United States. About 5,000 of the miles that are designated in that map are located on Bureau of Land Management properties. About 1,000 of those miles are located on Forest Service lands.
There are places along those corridors that we still need to figure out how we're going to connect them up. But it seems to us that if we can figure out a way of creating this transmission grid in the West and we can then work with our sister agencies including DOE and FERC, we can do this for the entire United States of America.
So Secretary Chu, myself, Secretary Vilsack, FERC, and others are working to try to come up with this map for your consideration and for the consideration of President Obama as we move forward with respect to that. And at the end of the day, what hopefully we will have working with all of you, a super electron highway for the United States of America that will get us into the electronic grid of the 21st century.
The last and final point, Chairman Bingaman and Senator Murkowski and members of the committee, is that there has been a jurisdictional feud that has gone on for quite awhile unresolved between FERC and the Department of Interior, MMS, relative to the siting of renewable energy facilities in the Outer Continental Shelf.
We've had several meetings with FERC, and I'm proud to let you know this morning that as of late last night we signed a memorandum of understanding between the Department of Interior and FERC that will allow us to move forward with the siting of renewable energy facilities in the OCS.
There is no dispute here with respect to wind energy. And as we move forward with wind energy in the Outer Continental Shelf, our intention is that as we continue to gather input on the future of the OCS, that we'll be able to move forward to a finality with respect to the rules that apply to wind energy off the offshore.
There are states like Delaware, New Jersey, and many others -- Massachusetts -- had asked us to try to expedite the rulemaking with respect to wind energy in the offshore. And I believe that we will be in a position where we'll be able to do that in the several months ahead. And with that, I would be happy to take questions from the committee.
SEN. BINGAMAN: Well, thank you very much.
Before we go to questions, let me defer to Senator Murkowski for any comments or opening statements she'd like to make.
SEN. LISA MURKOWSKI (R-AK): Mr. Chairman, thank you. In the interest of time, seeing as how many members are here today, I don't want to make an opening statement. I will submit mine for the record.
But I do appreciate, Secretary Salazar, your consideration of the comments that some of us have made; I, most certainly, about the concerns that I have felt where the administration may be going when it comes to our oil and gas and our traditional resources. We need to make sure that those resources are not closed off as we seek to develop more in terms of our renewables.
With that, I will end my remarks, but I do have to take this opportunity. Maybe it's because my leg is bound up and I'm not getting around very well. But there are a few things that irritate me more than maps of the United States of America that do not include that great northern state --
-- and I will include Hawaii as well. Our renewable energy resources are wonderful and vast, and we look forward to the time that you will come up to visit them. But we do encourage the Department of Interior to make sure that all 50 states are represented on the map.
Thank you, and welcome back to the committee, Secretary Salazar.
SEC. SALAZAR: That's a point well taken. And Alaska is so important that it merits a map all to itself.
SEN. MURKOWSKI: You're right, you're right. Thank you.
SEN. BINGAMAN: Let me start with a few questions. Can you tell us what your timeline is for finalizing a new five-year plan for oil and gas leasing in the Outer Continental Shelf, and what your intention is with regard to consultation with coastal states in the development of that five-year plan?
SEC. SALAZAR: You know, Senator Bingaman, our meetings will actually take place during the month of April, and we have extended the comment period for 180 days on the revised five-year plan. And so sometime within the year, after those comments are all in, I hope that we are able to then have a comprehensive plan with respect to the future of the Outer Continental Shelf.
I think the renewable energy part of it, frankly, is probably going to be easier than the parts that will deal with additional production in the offshore. But as President Obama has said, he is not opposed, the administration is not opposed to production in the offshore, but we want to make sure that it's part of a comprehensive energy plan.
It has to include what we have to do with respect to efficiency, with respect to renewable energy, with respect to climate change. We want to try to bring it all together. And so we will be working on that in the months ahead.
SEN. BINGAMAN: Let me ask about onshore. How do you see your responsibility and authority with regard to the siting of transmission lines as compared with -- as it relates to the Federal Energy Regulatory Commission? With the siting of these lines across public lands, what should your role be as distinguished from FERC's authority?
SEC. SALAZAR: Chairman Bingaman, I believe the Department of Interior should have a robust role in the siting. But I also do not believe that we should let bureaucratic silos stand in the way of us getting the job done. And so that is why we have pulled together as a team, including FERC, to try to figure out how we move forward on this agenda.
Certainly, the Department of Interior has huge resources and knowledge relative to our public lands and the protection of sensitive areas within our public lands. Our scientists, both within the U.S. Geological Survey as well as within our land resource agencies, can provide tremendous input into where we are going to site these transmission lines.
Our scientists from the Fish and Wildlife Service will also be involved.
So I believe that we ought to have really a robust role in terms of making the decisions with respect to where these corridors actually will ultimately go.
And I will say this, Mr. Chairman. I believe that the work that has gone on in the Western part of the United States has moved as far as -- has gone, in large part, because it's been an effort that has been inclusive and has included the governors of the Western states.
In fact, much of what we see with respect to the Western grid, which is half of the continental United States, much of that work is where it is today because of the leadership of the Western governors.
SEN. BINGAMAN: The Land and Water Conservation Fund has been on the books now for several decades. As you know, we have had great difficulty getting the funds appropriated that were contemplated to go into that land and water conservation fund when it was first set up. Do you think it would be helpful to have a dedicated source of funding for the Land and Water Conservation Fund? Is that something that you and the administration would support?
SEC. SALAZAR: We have not yet made any final decisions about matters that will relate to where, you know, budgeting issues and where some of this money is going to go. I have a personal point of view on that, and that is that we ought to be looking at the designation of money in trusts for land and water conservation.
I believe it could be very much a part of the treasured landscape agenda for the 21st century. And I think that in the Gulf Coast legislation that we passed several years ago where we included the first permanent conservation royalty in it, that was a good first step in terms of trying to fund Land and Water Conservation Fund.
When one looks at the numbers that we currently are investing, they really are minuscule relative to what was envisioned in the past. I think when John Kennedy first announced the Land and Water Conservation Fund he felt that it was going to be a robust set of funding for us to protect our land and water and wildlife resources of the United States of America as we continued to grow.
In 1977, I believe, the Land and Water Conservation Fund was at that point funded at some $900 million. If you adjust that for inflation, it should be funded today at some $3.4 million, and yet, the truth of the matter is that we every year end up funding only a very small fraction of that amount.
And that's something that I think we need to address. I think that is -- the country continues to grow, and we look at American citizen-owned resources that are being developed, and the revenues that come from those resources, that we should invest some of that money in the great landscapes of this country.
SEN. BINGAMAN: Senator Murkowski.
SEN. MURKOWSKI: Thank you, Mr. Chairman.
Secretary, I'm very pleased to hear your announcement this morning about the memorandum of understanding with FERC and MMS. It's very, very important. I'm curious as to what you anticipate the timeline will be. And the Cape Wind project has been out there since 2001 undergoing regulatory scrutiny.
It seems like every interested party has had an opportunity to provide comment both under state and federal law. How much longer would you anticipate that a project like this that has been out there for as long as it has been and the review its gone under, how much longer do you think we wait until a decision is made on Cape Wind or any other offshore projects?
We had a hearing a few weeks back where we had a representative from New Jersey from their -- it was a wind project off of New Jersey. And they're looking very, very aggressively to having offshore wind off their coast within a very, very short period of time. How do you anticipate we will move forward with these offshore wind projects?
SEC. SALAZAR: First, Senator Murkowski, let me say that what we have with FERC that we completed last night that I signed off on, is an agreement on how we move forward. And it essentially makes the statement that the Department of Interior and MMS under the laws of this Congress, has the authority with respect to offshore wind. And so that allows the rulemaking process which had been held up essentially to move forward.
We also know -- recognize we have some additional work to do. But the chairman and I are committed, and the members of the commission as well, to help us move forward to a conclusion in what's going to be a broader MOU. We don't want to be tripping over each other as we're dealing with ocean, tidal, or wave energy, and at the same time we're moving forward with offshore wind.
The fact of the matter is and the science will tell us all that we are very ready to move forward with offshore wind. The technology is there. We've proved it on the -- onshore we have many projects, and the offshore that are in the making. And so we ought not to let the jurisdictional disputes with respect to ocean, tidal, wave energy essentially get in the way of us moving forward with that. And so we will work out something that will be satisfactory to both FERC and to us.
With respect to Cape Wind itself and how we move forward with that, you know, obviously there has been approval given by numerous agencies. There is still litigation that is ongoing. And we would hope that we would be able to move forward with a decision in that -- on that particular project sometime in the next several months.
Let me get to, I think, what is your more fundamental point. And that is when will we be ready to move forward with rulemaking in the offshore to put it into final form with respect to wind energy development and to be able to start harnessing all this potential wind energy in the offshore? We could be ready to move forward within probably two months from now after we have our hearings around the country to move forward with the finalization of those rules.
It may be necessary, and we will do it in consultation with this committee and the Congress, and obviously the president and the White House. Whether or not there are changes that we want to make to those rules, if that decision were to be made, then they may postpone by several months when we get the final rulemaking, but we're working on it as fast as we can.
SEN. MURKOWSKI: Let me ask you about a statement that Interior released, saying that it will be taking a closer look at the energy development that is slated for the Chukchi. Can you give me a better understanding as to what you mean by "closer look" and what -- whether or not Interior has actually begun on this process?
And then also, there was a statement released, I guess just this morning, from the department that touched on leasing in the National Petroleum Reserve, Alaska. But my question is, is the commitment from the department to the five-year leasing sale up in the Beaufort, the Chukchi, the North Aleutian?
You've indicated, and we're pleased that you are coming to Alaska in April for those hearings. But can you just give me a quick update on where we are with Chukchi and what you mean with a "closer look"?
SEC. SALAZAR: You know, we are looking at everything out in the Outer Continental Shelf, and obviously Alaska has huge resources both onshore as well as offshore. And we have spoken with Senator Murkowski often about the Alaska natural gas pipeline and your interest in that, and how we might be able to be of assistance in moving that forward.
We are in a learning process on the Outer Continental Shelf, and that's part of what we are doing with these hearings, including my visit to Alaska. And I know there -- nothing in Alaska is very easy, and there is lots of conflict relative to development in the four areas that are subject to the current five-year plan in Alaska itself.
And so we are in the process of learning more about it, and making decisions about how we are going to move forward. But we haven't made any specific decisions with respect to any of the offshore areas in Alaska other than -- other than to say this, Senator Murkowski, is that as we look at the offshore, what we want to do is we want to make sure that it fits in with a comprehensive energy program.
And one of the parts of the comprehensive energy program will be the development of our oil and gas resources within the country.
There -- let me leave it at that at this point in time, and I think after we come back from Alaska, we'll have more of a sense of each of the areas that you have spoken to me about.
SEN. MURKOWSKI: But we do appreciate that. We recognize that this potential offshore is quite impressive. And the planning that has gone into the offshore for these four areas has been relatively extensive. The administration has pushed it off at a shorter term delay, but we would hope that that commitment would be there to look very seriously at that potential offshore.
Thank you, Mr. Chairman.
SEN. BINGAMAN: Senator Landrieu.
SEN. MARY L. LANDRIEU (D-LA): Thank you.
Welcome, Secretary Salazar. And I'm looking forward to your visit to New Orleans tomorrow. And you're going to be a wonderful auctioneer. There'll be, as these things go, about a thousand individuals and businesses that are there, really anxious to see what the bids are going to be in the Gulf of Mexico for a new area that you actually helped to open up when you were a senator.
And I want to really commend you for your extraordinary leadership joining with so many of us, both Democrats and Republicans, to open up some additional acres of drilling that had been shut off to development. As you know, Mr. Secretary, that moratoria stayed in place from the first Bush administration through the Clinton administration, almost all the way through the end of the former administration with only five months left.
And that moratoria, you know, set our country back in so many ways in terms of us now being very rusty, if you will, when it comes to smart development of offshore resources. So I'm looking forward tomorrow. I think you'll get a real sense of the energy and excitement that is in the Gulf of Mexico from Texas to Louisiana to Alabama to ports off of the shore of Alabama for, you know, for this lease sale.
Let me secondly say before I get into my question, as I've said this before to you privately and publicly, I don't believe the president could have made a better choice if he had looked all over the world, seriously, for a person to lead this department, than you.
I have, and the people that I represent have, a great deal of confidence in your ability to strike the right balance between moving aggressively to grasp the possibilities of renewables, but also using so much more smartly the natural and traditional resources that we have.
Senator Murkowski mentioned the great contributions that Alaska has made. As you know, I don't need to tell you what Texas and Louisiana have done over the years to produce oil and gas. And I think your approach to a more rational plan is something that I most certainly will support in looking forward to these four hearings, one of which will be in South Louisiana, as you mentioned, one in California, one in New Jersey, and then I think one in Alaska.
My question is actually following up on what Senator Bingaman said. And as you know I've worked with you and Lamar Alexander to fashion potentially a dedicated source of revenue for the Land and Water Conservation Fund.
But would you care to comment about maybe a path forward? Not just in terms of the inventory for where we need to look for offshore resources, and how we might go forward on that, but also establishing a smart partnership with the states in terms of sharing revenues from these offshore developments as is currently the law today.
Do you see the benefit of that? How is that figuring in to maybe your plans, you know, for the future, and the importance of having that sort of partnership established with the state?
So it really is everybody has got their oars in the water, moving in the same direction. And there is not this conflict between the need for the federal government to develop these resources, and the lack of appropriate support for the communities that are serving as the platform for those resources.
Could you just comment generally about that? The inventory, how we might move forward with an updated modern inventory of our offshore lands? And how important do you think this partnership between the federal government and states and local communities actually is to achieve your goal of energy security for our nation?
SEC. SALAZAR: Thank you very much, Senator Landrieu. And thank you for the compliments. And I do hope that I can be a problem solver in the time that I serve as secretary of interior on behalf of the nation and its people.
First of all let me just say that with respect to the inventory one of the realities of the offshore is that there are some places where we have tremendous information. The Gulf of Mexico is a perfect example where the geologic seismic information tells us a lot about the Gulf of Mexico.
On the other hand, the information that we have of the Atlantic is very old and very incomplete. And so sometimes I think the debate that takes place here with respect to development in -- on the offshore of the Atlantic is a debate that is taking place with respect to a phantom, because nobody knows what's out there.
So it makes great political theater for everybody involved to have a big debate about it. But that will be one of the key questions. Where are we on information in the Atlantic? What kind of additional information needs to be developed?
Seems to me that if we were a private landowner that we'd want to know what the best information is so that we can make cogent logical decisions about how to move forward. And so there is frankly an information dearth in much of the Outer Continental Shelf. And I expect that that's one of the things that we will be seeing in the report that is put together by USGS and MMS.
So I'm not prejudging what that report will say. It -- I know what -- they're working on it very hard. And I'm -- I very much support the report.
You know, the very important question that you raised on revenue sharing, it is an important question for the United States of America. And if you remember the very tough debate -- or not everybody in the committee, including our wonderful chairman -- frankly are all in the same view of what kind of a revenue sharing program might exist. That's our part of the discussion and dialogue that I believe we need to put on the table.
And maybe time -- as I said in my earlier comments -- for us to take a look at the Land and Water Conservation Fund and to get it permanently funded so it doesn't become part of the annual appropriations fight that essentially has funded probably 2% of the vision of John Kennedy when he announced that the Land and Water Conservation Fund was important.
We're going to get it done to make sure that we're investing in the treasured landscapes of America. And then we have to figure out a way of getting it done. And I know the debate between the offshore and onshore formulas is something that will move forward as you all consider an energy bill here. And we do not have a position on that at this point in time. But look forward to listening and to working with you on that agenda.
SEN. LANDRIEU: Thank you, Mr. Secretary.
SEN. BINGAMAN: Senator Bunning.
SEN. JIM BUNNING (R-KY): Secretary Salazar, welcome back to the energy committee.
At a time when our nation's energy needs are continuing to grow the Department of Interior will play a unique role in shaping and administering policies that will develop our domestic resources.
While I recognize greater public input in the regulatory process I was disappointed by your decision. And 32 of us signed a letter to the President expressing that frustration on the Outer Continental Shelf and the delay which you said you solved this morning, a delay to move forward on energy development while leasing on the Outer Continental Shelf.
Congress made the American people wait nearly 30 years to address our immediate energy challenges, yet you have told the American people they must continue to wait. On top of this initial 60-day comment period, if that is correct, this brings the total comment period to 240 days, lasting until September. Is that correct?
SEC. SALAZAR: You're talking about the new five-year plan that was prematurely proposed?
SEN. BUNNING: Yes.
SEC. SALAZAR: The answer is yes. And I will respond more in my opportunity to --
SEN. BUNNING: The draft plan already received a record 120,000 comments from the states, environmental groups, industry, labor groups, and members of the public, with 87,000 of those comments supporting expanded -- expeditious deployment.
After September do you envision any additional regulatory delays? By that time you will have prepared a comprehensive five-year program for oil and leasing.
SEC. SALAZAR: Senator Bunning, but I -- let me step back and just say there was no need to reopen the five-year plan, okay. We had a five-year plan that was in place for a five-year period till 2012. The five-year plan --
SEN. BUNNING: Was just delayed --
SEC. SALAZAR: -- was essentially opened up by my predecessor before it had to be opened up.
And the fact of the matter is that the executive branch presidential moratorium and well as the congressional moratorium expired just within the last year. And I think it is important for the United States of America to take a look at the Outer Continental Shelf in the most comprehensive way that we can because we're talking about 1.75 billion acres in the Outer Continental Shelf.
And I think for us to make sure that we're moving forward in a methodical and appropriate way, and taking the time to do it in that kind of fashion is an appropriate way. So, you know, the time that we have chosen, I think, gives us ample time to engage with you and members of the Senate and the House of Representatives to figure out a way forward for the Outer Continental Shelf.
And as President Obama has said, he believes the Outer Continental Shelf ought to be part of what we deal with in terms of comprehensive energy plan. And we hope to be able to work with the stakeholders, listen to the governors, listen to the senator, listen to others and try to figure out a good way forward on this 1.75 billion acre asset of the American public.
SEN. BUNNING: Tomorrow, you said you're going to New Orleans to be an auctioneer on 181, Section 181 in the Gulf. How long do you think it would take before the rules are in place to have some type of exploration in Section 181?
SEC. SALAZAR: I think the -- I mean, the rules are already in place for offshore leasing in the Gulf of Mexico. So we'll just move forward with the regular process that has been established, which we already deal with extensively in terms of the offshore leasing, the 34 million acres that are being put out to lease tomorrow.
We'll see how the -- what the response is in terms of those who are interested in leasing those properties on the Gulf Coast. But it is a very extensive lease sale of the area in the Gulf Coast where there are known reserves of oil and gas, significant reserves of oil and gas. So I think that will move forward in --
SEN. BUNNING: My basic question is, when do we see the first rig in the Gulf in 181?
SEC. SALAZAR: Well, as you know, Senator Bunning, you know, the oil and gas companies will go ahead and provide their bids tomorrow, you know, leases, hopefully, for whatever is leased upon ultimately will be finalized. And it will fit in within the exploration and development program of the oil and gas company that acquires a lease.
SEN. BUNNING: Thank you.
SEN. BINGAMAN: Senator Dorgan.
SEN. BYRON L. DORGAN (D-ND): Chairman, thank you.
Mr. Secretary, I think the subject of this hearing is very important. I mean, I think we need to maximize the potential for renewable energy in our country. That includes the issue of -- potential of development of renewable on public lands. We need to develop a transmission capability in order to maximize and then move renewable energy where it's needed, to maximize production, move it.
And that means siting transmission lines across the country, but also on public lands, so that's a very important element. And then we also need to maximize the potential to produce oil and gas here at home.
Senator Bingaman, and I, and Senator Domenici, and Talent -- then senator, Talent -- were the four that initiated the legislation on Lease 181. And I think much more of the Gulf should be open. I understand your point about -- you want to find out -- you want to know more about what's there and so on. But I think, you know, we're not too many months away from a drill baby drill bumper sticker which is then a political campaign when oil went to a $147 a barrel in day trading.
But the notion of being able to use more of our domestic resources -- I'm speaking of oil and gas and renewables -- is a very important element of an energy program. So let me ask you a question philosophically, that I made about what you and the administration think about offshore drilling, generally.
I mean, are we headed towards kind of a different culture and taking a look at these with the understanding that we need to be able to produce as a part of -- produce oil and gas as a part of an energy strategy going forward?
And we understand most of that production, additional production capability is in the Gulf of Mexico, not exclusively, but there is a substantial amount of it there. Tell me your philosophy and what you think the administration's philosophy is with respect to drilling.
SEC. SALAZAR: No. Senator Dorgan, as I indicated just in the last seven weeks on the offshore there have been seven major oil and gas lease sales. So no one from the administration has said don't move forward with those oil and gas lease sales. Tomorrow we're moving forward with 34 million acres of additional area in the Gulf to be auctioned off for lease.
I think actions should speak very loudly here in terms of wanting to make sure that our onshore and offshore resources are in fact made available to meet the energy needs of the nation.
As President Obama said during the campaign and as he as said since then, he, you know, wants us to have a comprehensive energy plan. And it's in that context that the OCS has got to be a part of that comprehensive energy plan.
But for it to be comprehensive in nature, you know, we need to do the things that he has talked about, the things that were included in the stimulus package, the great initiatives that we have underway for renewable energy and to try to update the electrical grid so we're not dealing with the Thomas Edison electrical grid but really update it to the 21st century.
So lots of different challenges that we have ahead of us as we deal with putting together a comprehensive energy plan. And we hope to move with that with all deliberate haste.
SEN. DORGAN: Mr. Secretary we understand USGS estimates there is somewhere around half a million barrels of oil a day under Cuban waters, 50 miles off the shore of Florida. And the Spanish are interested in drilling there, and Canadians, and I believe China is taking a look at it. Under the current moratorium -- embargo rather, our American oil companies are not permitted to be involved there.
Do you think they should be?
SEC. SALAZAR: You know, let me -- I do not know what the administration's position on that issue is. I know it is a very difficult and a very emotional issue for people. I do know that the geologic information is there from USGS in terms of what the availability is.
But it does take us down the path of what has been a very difficult geopolitical issue, which this Senate, and this Congress, and prior administrations have dealt with. And so, you know, that would probably be something that you might want to ask Senator Clinton or Secretary Clinton.
SEN. DORGAN: All right. If you will just -- I understand your point. Let me just make an additional point that's so important. Those of us that believe we need to be able to maximize renewable energy, solar energy in the south, across the south and west, wind energy from Texas, north to north Dakota in the heartland in order to maximize the production of that you have to be able to move it where it's needed. Produce it here, move it there where it's needed.
And that means that we must -- we absolutely must find a way to produce -- to develop this interstate highway of transmission capability that connects America. And it seems to me that a significant part of that is planning, siting, and pricing. And at least with respect to siting, a part of that is siting on public land.
So we had people here last week talking about, you know, green energy lines or X amount being renewable transmission. Fact is electrons are colorblind and whatever you put on the line is going to move no matter where it comes from, coal fire generating plants or wind energy.
So I want to just finally make the point to you that I -- it's very important, I think, for the production or the creation of an energy bill as we work to do this transmission piece that the public lands piece be resolved with respect to transmission as well.
And I appreciate the work you're doing. We have a lot to do together. And we have a lot to do in hurry to get this right, in my judgment. Thank you, Mr. Secretary.
SEC. SALAZAR: If I may, Mr. Chairman, just a comment on that. And, you know, I think that I always -- I said this to President Bush and to Karl Rove probably two or three years ago that I thought this whole question of energy had the potential to unify the country. You know, the need for energy independence, economic opportunity here at home, address the issue of climate change, ought not to be a republican or a democratic issue.
I remember helping with some of you on this panel put together the Set America Free Coalition, including conservatives like my good friend Senator Sessions, and Senator Brownback and whole host of other people. And I do think that this is an area where we can figure out a way of moving forward together on one of the signature issues of the 21st century. And I do hope with all fervor that it is a bipartisan way forward.
SEN. BINGAMAN: Senator Bennett.
SEN. MICHAEL F. BENNETT (D-CO): Thank you, Mr. Chairman.
Mr. Secretary, welcome. And I echo the wisdom of the President in choosing you as the secretary. I'm delighted to have a fellow westerner in that slot who understands the issues relating to public land states and states where the federal government is the primary landlord.
I'm glad that you want to move forward with another round of leases in Colorado and Utah. But you're aware that I'm still very concerned about the 77 leases that you cancelled a few ago. And I raised that issue with Mr. Hayes. I've submitted -- he said it's not firm yet, you're just reviewing them. They are not cancelled, they are postponed. I'm glad to hear that.
But I have submitted some questions to Mr. Hayes about the lease sale. And I'm going to need answers to those questions before I can feel comfortable about moving forward on his conformation.
So I hope that the department can sit down with me, and Senator Hatch and others to discuss the status of these. You say you want to unify. This early action has done more to divide -- at least in my state -- than maybe anything that's been done. So I hope we can get that behind us and get it resolved.
I was interested in your charts. You showed the tremendous amount of solar -- potential solar energy in my state and in the southwest. And then when you got to California you started blocking out large chunks of land because they were used for other reasons and would not be available for solar panels.
You're aware that there are proposals before the department, and had they been incorporated into legislation offered, that would create 9.8 million acres of wilderness in Utah. Now, I'm trying to resolve the wilderness problem in Utah. I think the 9.8 million acres is excessive.
But if you overlay the maps of what you say is available there in solar energy with the maps coming from some of these groups saying all of this should be wilderness you recognize immediately that if the folks that are arguing for the large acreage of wilderness are successful those lands will not be available for renewable energy because acres of solar panel or large numbers of windmills are clearly not compatible with the wilderness experience.
Have you looked at this? And do you have any idea about how you might reconcile these competing views?
SEC. SALAZAR: Senator Bennett, I appreciate the question. Let me take your second question first, and that is, what we've done in Southern California is frankly go through a process where we've tried to identify those areas that are sensitive. We do not believe that every acre of BLM lands, for example, that has tremendous solar potential should be developed as part of a solar power plant.
And so that's why we go from the large availability of public lands down to those areas where it would be best suited for us to put solar energy power plants. And it's that kind of planning, I think, that is important for us to do --
SEN. BENNETT: I applaud you for that. I'm just pointing out in Utah you're going to have a real problem as far as the wilderness folks are concerned.
SEC. SALAZAR: Well, and -- yeah, when we get to Utah, and hopeful -- I mean, we have a taskforce that's actually working on this. We will take a look at those overlays and see where those energy zones make the most sense. And it's really an effort on our part, Senator Bennett, to make sure that we're being proactive in our planning as opposed to the helter-skelter which we currently have underway, which essentially is anybody coming in filing an application. And there is really no plan in place.
We have 200 pending solar power plant applications, but really no strategic plan in how we're going to process that, or how they're going to be sited, or how close we're going to be to transmission and alike.
Let me say this with respect to the Utah lease sales. I appreciate your letters to me. And I appreciate your strong sentimental respect for those 77 lease parcels. It was my view, as I reviewed that particular set of 77 parcels, it's that there were some that were just too close to some very, very important ecological values for Utah and for the nation, including Arches National Park.
And so I think we need to move forward and take a review of those 77 lease parcels and look forward to working with you and the people of the state of Utah on how we move forward.
And let me finally say this. With respect to your -- we will happily respond to the questions that you submitted to David Hayes. But let me also say, I would ask the members of the Senate, the members of this committee to help us get people into place so that we can get the government doing the job that it has to do.
And, frankly, in the Department of Interior with 67,000 employees with 20% of the landmass of the U.S., 1.75 billion in the Outer Continental Shelf of acreage I am today the only person who has been confirmed by the U.S. Senate.
So we need to get some of our other people in place so that we can be more responsive to the issues that this committee has to helping with this committee in terms of moving forward with the energy legislation that this committee has been working on.
SEN. BENNETT: I want to help you get them in place too when there is a way to do that. Thank you.
SEN. BINGAMAN: Senator Sanders.
SEN. BERNARD SANDERS (I-VT): Thank you, Mr. Chairman.
SEC. SALAZAR: Thank you, Bernie.
SEN. SANDERS: I sit on both the environmental committee and the energy committee, and in both committees we hear that the prognosis regarding global warming is even worse than we had thought just a couple of years ago, which I think raises the understanding that we have got to be extremely aggressive in terms of moving toward energy efficiency and sustainable energy.
And I applaud the direction in which you are moving, and have moved, in the last couple of months since you've been at office. Thank you for what you're doing.
I am a great proponent of solar energy. And last summer I was at Nellis Air Force Base -- I don't know if you've been there -- where they now have the largest installation of photovoltaics, I believe, in the United States. And they did a very good job. They did it on budget. They are providing 25% of the electricity to a very large base just through photovoltaics.
I was also -- when I was in Nevada visited -- I think it's called Solar One, which is a solar thermal plant outside of Las Vegas as well. They are very quietly supplying electricity to, I believe, 17,000 households. I have talked to people, and I think you have as well, who believe that the southwest of this country has unbelievable potential in terms of solar energy that we have not begun to tap.
And I am a strong proponent of solar thermal plants. I have talked to people who have on the drawing board plans that could provide 500 megawatts of electricity. So my question to you is, how soon are we going to see the establishment of solar thermal plants which can in fact provide electricity to millions and millions of homes in this country without emitting any greenhouse gas -- any greenhouse gas emissions.
SEC. SALAZAR: Senator Sanders, I believe that we should move forward as quickly and as expeditiously as we can, because I too believe, as you do, that harnessing the power of the sun has huge potential for us in terms of dealing with the issue of global warming. And that's why we have started this effort to try to create renewable energy zones around the country to try to identify those areas where it's best suited for us to place solar power plants.
And also to deal with ultimately what will be the Achilles' heel of the renewable energy revolution which you so much believe in. And that is, if we are not able in some way to move forward with the chokehold, the unavailability of transmission we can study the potential of solar and wind and geothermal until the cows come home. And it's not going to get done.
And so we just need to move forward, in my view, aggressively, in building the super electronic highway which President Obama has spoken about so eloquently. And we need to do it together.
SEN. SANDERS: No, I agree. And I was very pleased that in the stimulus package many billions of dollars are being devoted to energy efficiency and sustainable energy. And I think that's a huge step forward.
Can you give us -- but I think what would be really extraordinary is if the day would come within the next few years where you and the president could be cutting the ribbon for a solar thermal plant without any greenhouse gas emissions providing electricity to hundreds and hundreds of thousands of people.
I think it would show the whole world the seriousness of what we believe in, and our ability to go forward. Do you have any idea when we may be able to see our first large solar thermal plant in the southwest?
SEC. SALAZAR: You know, I think it certainly should and will happen during the next several years. I know there are plans on the board to actually construct solar power plants --
SEN. SANDERS: There a number of very serious proposals out there. And just -- I think financing is often the problem as well -- I'm sorry.
SEC. SALAZAR: I think with a lot of them, Senator Sanders -- I think we have the potential of moving forward with solar power plants that can produce from 250 to over 500 megawatts of power. And I think that's within our reach in the next several years. And I think it's up to us to be aggressive as you were in the stimulus by providing the -- more than $11 billion to help with upgrading the grid for America.
And it's up to this Congress and up to the Administration as well to move forward aggressively in terms of making the solar and renewable energy dreams a reality. We cannot wait.
SEN. SANDERS: So what I'm hearing from you is solar thermal is high up on your priority list. And you see the possibility of moving forward within the next couple of years.
SEC. SALAZAR: Indeed. And I have put together as I said in my opening statement, Senator Sanders, a taskforce within the Department of Interior to help us move forward with renewable energy, and much of it is located on the public lands. We are working together interdepartmentally with a number of my colleagues on the cabinet to put together the renewable energy zones for the nation and also dealing with the transmission challenges that we face.
And instead of trying to put everything into silos and -- you know, have a jurisdictional dispute going on with FERC about what FERC's role is and isn't. FERC is at the table with us --
SEN. SANDERS: Good.
SEC. SALAZAR: -- and helping us draft what these energy corridors will look like.
SEN. SANDERS: Well, thank you very much Mr. Secretary. These are enormously important issue, and it sounds like you're moving in the right direction. Thank you.
SEN. BINGAMAN: Senator Sessions.
SEN. JEFF SESSIONS (R-AL): Thank you, Mr. Chairman.
And Mr. Secretary, welcome back to our committee. We're proud of your service, and I congratulate the President for nominating you. And I know you're going to do a great job. You understand the issues and understand this Senate, which is helpful too.
With -- you know, but there -- I know the White House is -- administration is under a lot of pressure. Senator Bennett talked about leases that have been delayed, that have been worked on for seven years in Utah, and then still haven't come forward.
So it has a chilling effect on investors. If they don't feel like -- when they comply with things -- they can get it done, it's going to be another delay, another delay, and another delay. So that's really what I was concerned about in the Gulf.
Alabama has some tonnage (ph) I've been out to some of the oil rigs. They are spotless out there. And -- but mostly when I visit an oil rig it's when I'm going fishing. We fish under and around the rigs, and there is no -- not the slightest sheen of oil on the water where those rigs are pumping large amounts of oil.
So I guess -- tell me about your delay. You asked for an MMS, Mineral Management Service, report within 45 days, and then you're going to conduct regional meetings to discuss this. We need at some point to get this thing done. And those of us who've watched the issue for a long time get nervous because when you can never seem to close the deal it never seems to get closed.
So what are our prospects of actually getting this open, getting bids done, and actually seeing production from some of the acreage that President Bush opened before he left office?
SEC. SALAZAR: Senator Sessions, I appreciate the compliment and also the question. My view is we are moving forward in terms of providing huge amounts of acreage for production. We see production as being very much a part of a comprehensive energy equation for the United States of America.
President Obama talked about that reality during his campaign. He has given me that direction as I move forward as Secretary of Interior.
The seven lease sales that we have conducted, onshore, actually made available some 1.2 million acres. There is no problem with respect to the development of the oil and gas within those lands. But because of the seismic and market realities, and geophysical information available to companies that are leasing these properties only about, I think, 250,000 of those acreage were actually leased.
Tomorrow we're under New Orleans trying to lease 34,000 -- no, 34 million acres. Who knows how much of that acreage will ultimately be leased. And so there is -- there is no doubt that we are moving forward with a production part of what we're trying to do with respect to energy.
Now, with respect to your question on the MMS and how we move forward, we're dealing in a relatively new reality with respect to an absence of a congressional moratoria and an executive moratorium on the OCS. And it's my view that as we move forward with this huge American citizen asset that we need to be thoughtful about how we draft a plan forward. And that why we're taking the kind of time that we're taking in moving it ahead.
But also as I -- and part of the reason that I'm going to New Orleans tomorrow is we want to send a loud a clear signal that when we talk about a comprehensive energy program for the nation that we recognize that oil and gas are going to be a part of that comprehensive energy program.
SEN. SESSIONS: Well, I think that's good. I would just say to you that when delays don't seem to have an end it's very -- causes lot of nerve-racking, and maybe reduces investment. And so I worry about that.
You know, I like to ask you to think about this, Secretary Chu was calling on the Arabs, I believe recently, OPEC countries to produce more oil. And -- but at the same time we're not producing all the oil and gas from oil shale and our coal, and coal to liquids that we could produce.
You and I work together to see energy as a national security issue -- I guess my time is up, and Mr. Chairman I'll just wrap up -- but I -- we work together to see this as a national security issue. And I know you understand that it's far preferable for us to produce more oil and gas keeping that money and wealth at home than to be dependent on foreign nations to increase their production of oil and gas.
And you might want to briefly comment on that but I do think that to me the energy question is, is national security. Number two, pollution keeping this country and world clean. Number three, the economy and having a realistic price for oil and gas and not driving it up unnecessarily. So all of those are factors I think we must consider in each decision we make. Any brief comment.
SEN. MURKOWSKI: Mr. Chairman. Go ahead.
SEC. SALAZAR: If I may, Chairman Bingaman.
SEN. BINGAMAN: Go right ahead.
SEC. SALAZAR: I think your concluding comment there with respect to the values that drive us here to try to do the right thing on energy really is what has the potential of bringing this country together around these issues.
There is no one that cares more about the national security of the United States than President Obama and the members of this committee. There is no one that cares more about making sure that we deal with the issues of emissions and global warming than President Obama. And there is no one who has been working harder and more fervently since becoming president, and even before that, on the whole economic crisis that our country faces in a large part because of the energy issues in America.
And so I think, on those values that you articulate Senator Sessions, I think there is a good opportunity for us to come together as Democrats and Republicans as we move forward.
SEN. SESSIONS: Senator, why --
SEN. MURKOWSKI: Mr. Chairman --
SEN. BINGAMAN: Did you have a --
SEN. MURKOWSKI: I just had a comment very, very briefly to follow up. Senator Sessions and Senator Wyden has allowed me just 30 seconds.
First of all, it might be good to note for the record and -- Secretary Salazar that domestic production is expected to increase this year for the first time in the United States since 1991. And I'd like this to be included in the record.
That is in 19 years. And in large measure because of the rigs coming online in deep offshore, off of your shores Senator and mine. And number two, the acreage that the Senator is speaking about or the Secretary is speaking about 34 million.
To put it in comparison, the current acreage lease, Mr. Chairman, is 41 million acres in the offshore, 34 million, I believe -- Tom, is it 34 -- is going to be available tomorrow. It is a significant lease sale.
So it answers both there is more oil being produced for the first time in 19 years in America, in large measure because of offshore, and this 34 million acres is nothing to sneeze at.
SEN. BINGAMAN: Senator Wyden?
SEN. RON WYDEN (D-OR): Thank you, Mr. Chairman. And it is good to have the secretary here, and I want to thank the secretary first for the very strong message you sent about ethical priorities at the department. You said you were going to do it and you did it right out of the box. And we appreciate that.
I am also glad that we are making headway now in terms of renewable energy development on public land. And I want to start, Mr. Secretary, by talking about a problem, that I know you are familiar with, in the west. We have this huge backlog in terms of hazardous fuels on the forest floor.
And it is really the by product of neglect and all this dead material has just piled up and it becomes a huge risk of fire. And I think you know, we've talked about it. Some of these fires that were seen in the west are infernos and they aren't natural ones, they come about as a result of neglect.
And I and others want to get that material and use it as a source of biomass, as a source of clean energy that we think, will put people to work and will, at the same time, make our forests a lot healthier. The problem is that the 2000, you know, Energy Act, included a definition of renewable biomass that essentially excluded all of the biomass including slash and thinning byproducts from federal lands.
So what you have got now is you've got people in the forest products industry, environmentalists, scientists all ready and anxious to use, you know, biomass it is a win, win, win situation. Reduce the risk of fire, green up the environment, and put people to work making clean energy. And we haven't been able to do it because of this policy with respect to federal land.
Now, I introduced legislation to amend the Clean Air Act to modify the definition of renewable biomass contained in the renewable fuel standard, so that biomass from national forests and BLM land is eligible as a fuel source.
Would you be willing to work with all of us on this? I think there will certainly be bipartisan support for it. You might recall that when we tried to do it before then Chairman Bingaman and Senator Domenici went off and tried to get it started with a good definition. We got it here in the committee and then along the way support for it evaporated.
So I think there will be bipartisan support for it. Can we have a commitment from you and your office to work with us on getting this biomass definition right so we can get this woody byproduct off the federal lands as a clean energy source.
SEC. SALAZAR: The answer is yes, we would be happy to work with you, you know, I have always seen biomass as being one of those great opportunities with respect to renewable energy. And indeed because of the stimulus package there is money in there for hazardous fuels reduction.
For whatever reason the BLM was not treated as generously as the forest service, and so we have taken it upon ourselves to work closely with Secretary Vilsack so that we have concerted approach to how these dollars are spent. And there are monies that were included in there with respect to grants for biomass facilities.
And so not into the Department of Interior but into the Department of Agriculture and so we are hoping to see some of these projects brought out.
SEN. WYDEN: Well, let us get this definition right so that we can get some of the woody biomass off federal lands. We are barred from doing it. There is a way to do this so that forest products industries, environmentalists who are concerned about old growth, they will come together.
We saw that we were able to do it with Senator Domenici and Senator Bingaman, I think working with your office, we will be able to get that definition correct.
Let me ask you about one other one, very quickly. During your public announcement, last week, you mentioned the potential for wave energy but the actually order didn't do that and wave energy didn't get in to the order.
Can we work with you to make sure that it finds its way into the actual order in the list of energy priorities. Might have just been an oversight.
SEC. SALAZAR: I mean it is, you know, in the portfolio of renewable energy is -- I think when you look at current and tidal energy they need to be very much on the table. But we can also -- we must also be cognizant of where we are with respect to the technologies.
We know that we have the technology ready and available and already deployed with respect to wind energy, we know the same thing is there with respect to solar, even though it is not quite as far along as it is with wind.
The technology around ocean and tidal and wave energy is a little further removed from becoming a reality. But it is something that is on the table and it is something that we will work on in concert and together with FERC because there is jurisdiction that they do have that we will try to work on this issue as part of our renewable energy portfolio.
SEN. WYDEN: My time is up. I want to only say, Mr. Secretary, I think making sure that wave energy gets the attention it warrants would fit perfectly at page two of the order. And if I can work with that would be great. And thank you again for getting out of the gate particularly on ethics in such a strong fashion. That message sunk in around the country and I appreciate you doing it.
Thank you, Mr. Chairman.
SEN. BENNETT: Mr. Chairman, may I --
SEN. BINGAMAN: Senator Bennett.
SEN. BENNETT: -- intervene for 30 seconds.
Wave energy maybe behind but tidal energy is not. I have visited the tidal facility in La Rance, France that is producing tidal energy. They have been doing it for 40 years, they are making money at it. It is absolutely reliable.
I have talked to the secretary of energy about this and I will be happy to talk to you about it if you have an interest in it.
SEC. SALAZAR: Thank you very much.
SEN. BINGAMAN: I believe Senator McCain is arriving and let me ask if he would like to ask some questions of Secretary Salazar before we go to the second panel. I see Senator Menendez, he arrived too. So why don't we first --
SEN. BENNETT: I will be glad to yield to the senator from New Jersey.
SEN. BINGAMAN: Okay. We will go ahead with you Senator McCain, since we just had Senator Wyden and then we will come back to Senator Menendez.
SEN. JOHN MCCAIN (R-AZ): Thank you very much Mr. Chairman.
And I didn't -- I have not had an opportunity to publicly say congratulations, Senator Salazar, we are very proud and pleased that you have agreed to serve in this very important position, and I look forward to continuing in the bipartisan and non-partisan way you have addressed issues that are critical to the future of this country and especially obviously the west where the federal government owns so much -- (laughs) -- of our land in Arizona and other -- as well as Colorado and other states.
I was very interested in your comment that was carried in the media about offshore -- about ANWR. And, I guess, my question is do you believe that the technology is there today to do the kind of exploitation of reserves in ANWR that you were discussing?
SEC. SALAZAR: Senator McCain, what I said in my statement, I think in a press statement that I made yesterday is that the technology with the oil and gas industry has significantly changed over time. Ten years ago no one would have ever thought that horizontal drilling would be a possibility at all in the way that it is today where you can go many distances from where you actually have the well heads.
I understand the technology has significantly improved. Having said that, you know, the position of the administration and my own position is that ANWR as a national refuge needs to be absolutely protected. And I have not seen the information, other than what I have seen in the news reports, about the ideas that my good friend Senator Murkowski and others have about horizontal drilling. So our position is that the administration has not changed at all with respect to ANWR.
SEN. MCCAIN: Maybe when you get a chance to get briefed and researched on it you could provide the committee with information as to whether you believe that technology is there or not. Because obviously, if we don't believe the technology is there that there is not going to be the kind of exploitation of those reserves that many advocate.
As you know I have not supported drilling in ANWR but if the technology is there I certainly feel strongly that we ought to -- and so if we don't disturb this pristine area that we should certainly pursue it.
But offshore, you don't believe -- what is your view and position on offshore drilling at this time?
SEC. SALAZAR: Senator McCain, with respect to offshore drilling, you know, we are continuing programs with respect to offshore drilling, as Senator Landrieu and others in the testimony this morning has indicated, we are moving forward with the sale tomorrow of some 34 million acres in the Gulf Coast of Mexico.
So we continue to look at it. President Obama's position on this has been, I think, very clear and that is that he looks at the offshore as part of a comprehensive energy program. And how we put together the pieces of this comprehensive energy program is something that we are looking forward to working with you and the members of the Senate and Congress on.
SEN. MCCAIN: Well, perhaps you could provide, for the record if you could, exactly what areas do you think that could be leased, what areas you think should not. I mean, again, as in ANWR, the devil is in the details.
And we would appreciate that additional information, as to what areas offshore are ready to be leased and can be explored and exploited, and which should not be. We'd appreciate that very much.
Finally, Mr. Secretary, I would like to have your views on nuclear power. The administration and the secretary of energy has said we won't use the Yucca Mountain and they have also opposed reprocessing.
You can't develop nuclear power energy in this country if you don't reprocess and you do not use Yucca Mountain as a repository for spent nuclear fuel. So I am wondering what your position is -- they have basically killed nuclear power in the foreseeable future for this country -- and to hear the argument that somehow reprocessing can't be done in the United States of America flies in the face of the fact that Japan, the British, and the French all reprocess.
So I would be interested -- and by the way, I did quote to Secretary Chu the Department of Energy report that by 2050 solar, which all of us strongly support, would only provide 5 to 10 percent of our renewable fuel requirements.
So I would interested in -- I see no way of achieving energy independence -- and the price of oil will go back up because our economy will recover -- that nuclear power can't be part of the equation. Right now it seems to me we are at a dead stop.
SEC. SALAZAR: Let me first of all say, Senator McCain, I appreciate the leadership that you have brought to this Senate on so many issues including the issue of climate change and energy and I very much look forward to working with you as we tackle those issues.
On your first statement on the OCS and wanting to have places where we can drill and where we can't. We do have those places mapped out. In fact, we are moving forward in the Gulf of Mexico, tomorrow, as a place we know is absolutely open.
There are lots of places in the OCS that we don't know very much at all about. And much of the debate that has taken place here over the last several years has been with respect to the Atlantic Coast. All the information that we are dealing with, on the Atlantic Coast, is information that is more than two decades old.
And the seismic information still needs to be developed. So we are having a conversation about areas where we really don't know a lot about. And we -- we have tried to put forward -- but it is going to be a process that includes a 45-day report, which is due in the next several weeks from MMS and USGS, that will tell us more on the OCS. And we will move forward with a thoughtful agenda to try to develop a comprehensive plan on the outer continental shelf.
Nuclear, you know that obviously is an area where Secretary Chu is very involved. And all I know is from my conversations with him that -- is that it's very much an issue that is on his agenda. And as you know from President Obama's own comments relative to nuclear energy he sees that as part of our energy future.
And there was in this committee under the 2005 Energy Policy Act that in a very bipartisan way I think 82 votes on that bill that came out of here, we included a chapter in there that would respect the nuclear energy.
Now, having said that, the fact is that there are some difficult technological issues, and yes, we can learn a lot from what has happened in France and other places. But there are people like Secretary Chu who, I know, are very much on top of trying figure out what our next steps are with respect to that part of our energy equation.
SEN. MCCAIN: Thank you.
And I thank you for the time, Mr. Chairman.
I just want to say again, Mr. Secretary, we are very proud to have you serve in this important position. I know you have an in depth knowledge of the needs and requirements for our national parks, for our public lands, for BLM, for a broad variety of issues that are important to the future of this nation and thank you again for your willingness to serve.
Thank you, Mr. Chairman.
SEN. BINGAMAN: Thank you.
SEN. ROBERT MENENDEZ (D-NJ): Thank you, Mr. Chairman.
Mr. Secretary, Happy Saint Patrick's Day, I know you are a big celebrant of it. So I want to start off by commending you, Mr. Secretary, for acting quickly to extend the public common period on President Bush's administration's hastily constructed 2010, 2015 year OCS oil and gas leasing program.
And I look forward to joining you in New Jersey when you come to hear from people along the New Jersey shore about what drilling off the outer continental shelf would mean to them, in their lives, in the economy of the state, and in coastal states like New Jersey. So I appreciate that you are going to be there.
While we now have more time to consider that plan, we are still dealing with the current five year plan for the outer continental shelf. That plan allows, for example, for a special lease sale off the coast of Virginia. The proposed site maybe off the coast of Virginia. But as we know the ocean does not respect state borders and any spill caused by an hurricane or an accident is likely to wash up in New Jersey less than 100 miles away.
As I have mentioned in many previous hearings, when you were a member of this committee, if drilling were to begin in the Atlantic, New Jersey could suffer extreme economic consequences even when a minor spill or a leak occurs.
In the late 80s medical waste washed ashore on several of our beaches and it was quickly contained and cleaned up. But 22 percent of all of the tourism to the shore that year dropped just from that one incident and that resulting in about a loss of $800 million. So I don't want to imagine what an oil spill could do.
And I know that everybody talks about how the new technology is such that that is unlikely. Well, if you look at the pictures that I have exhibited on the Senate floor from the U.S. Coast Guard about the oil spills that took place in the Gulf as a result of the hurricanes we know that there -- it is not foolproof by any stretch of the imagination.
Secondly, I want to introduce, into the record Mr. Chairman, an article from the New York Times dated March 15, 2009. The New York Times reported, just two days ago, that the number of oil and gas rigs set up to drill for new energy supplies has plummeted to less than half of what existed last summer from 2,400 to less than 1,200 today.
If oil and gas companies are not using the leases they have now, I'd like to know why they need more leases in environmentally and economically sensitive areas. And so I would ask consent to have that included in the record, Mr. Chairman.
SEN. BINGAMAN: It will be included.
SEN. MENENDEZ: Also, you know, let me get to one or two questions Mr. Secretary. I see the fact that you took this job, and you often talked about the energy moon shot as one of the things you hoped to be able to achieve. And I think that is desirable.
You know, the Energy Information Agency estimates that the United States has approximately 3 percent of the world's proven oil and natural gas reserves. Given that fact, and considering it takes an estimated 8 to 12 years to develop a new oil or gas field offshore, does it really make sense to open areas where there is no existing oil and gas infrastructure.
If we are taking that energy moon shot it seems to me we would be better focused on developing the renewable energy sources that we want. That is a question number one. Question number two, it is clear that the level of scientific knowledge needed to proceed with rational decisions about the plan OCS leasing on the Atlantic coast is in my view are sorely lacking.
How does your agency propose to manage to catch up with these glaring data gaps, with respect to economically important fisheries, coastal economic and ecological conflicts, undersea biological resources those don't seem to get the type of data or information necessary in making a decision.
And so my question is would you support a plan that would ensure that the National Research Council or the National Academy of Sciences would provide studies to the department before they made a determination at better understanding the potential impacts of drilling on ocean and coastal ecosystems.
And finally, you know, my understanding is that the department's five year OCS drilling plan does not consider the potential economic impact on a state's tourism industry, for example, or its fishing industry. And so, if that is the case, why wouldn't the federal government evaluate incompatible uses of land awarded the same way, for example, that we would do in other zoning determinations.
Those are some of the policy questions, I would like to see the department think about and I would like to get your initial reaction to some of those.
SEC. SALAZAR: Thank you very much, Senator Menendez. Let me first say, thank you, for being a part of making a statement that the department of interior really is more than just the department of the west because as you indicated when you led the effort to take us to the Statue of Liberty and to Ellis Island there are important functions of this department that touch on every state including all the national icons of this great country. So, I thank you for your efforts in that regard.
Let me try to respond to a couple of your questions. With respect to the OCS and development along the Atlantic, which I know has been a near and dear issue to your heart from the first day that I met you. It is an issue that requires, I think, the putting together of the scientific and knowledge foundation for us to be able to make rational decisions going forward.
The fact is, when you look at the Atlantic, most of the information with respect to oil and gas is at least 25 years old. So sometimes we end up fighting about something where we really don't have the knowledge base to even be engaged in the fight.
So I am expecting that this report from MMS and USGS will give an overview of the information that we do have and as importantly, what it should do, is to give us the knowledge about the information that we do not have. And so I am looking very much forward to that report.
Now, I do not expect the report to be -- in 45 days to be as comprehensive as perhaps you and others might want it to be. But it will be the beginning of the discussion of some of the issues which you raise.
I do think that one of the things that is important as we move forward with putting together a plan on this very important national asset the 1.75 billion acres of land in the -- or acres out in the outer continental shelf. That we make sure that we are listening to the stakeholders and indeed that was part of the problem that I had with Secretary Kempthorne's order.
Notwithstanding the fact that I have great respect for him as a person, I did not feel that there had been appropriate opportunity for the stakeholders to comment on a reopening up of the five year plan for the OCS. And so our time now, and our time in the months ahead will be spent hearing from people like you as well as others who are concerned about the future of the OCS so that we can make rational decisions on how to move forward.
SEN. BINGAMAN: Let me indicate, Senator Barrasso has indicated for the good of the cause, he is willing to submit his questions for the record, so we can have the second panel come forward.
They have been extremely patient in waiting. We have a very distinguished second panel. And so we will conclude your testimony at this time. Thank you very much, Secretary Salazar, and we will be in touch and some questions, Senator Barrasso will have a few questions in additions to the ones that others have mentioned.
Thank you very much.
SEC. SALAZAR: Thank you very much, Mr. Chairman and for you and Senator Murkowski and all the members of the committee, you honor me with the opportunity to appear before you today. Thank you.
SEN. BINGAMAN: Well, thank you very much.
Would the second panel please come forward. And while they are coming forward I will introduce them. First is the honorable Phil -- Phillip Moeller, who is the commissioner with the Federal Energy Regulatory Commission. We thank you for being here.
Joanna Prukop is the secretary of energy, minerals and natural resources for the state of New Mexico. We appreciate Joanna being here.
Dr. Dan Arvizu, who is the director of the National Renewable Energy Laboratory, in Golden, Colorado. Thank you very much for being here.
Robert Bryce, who is an author and energy journalist from Austin, Texas. Thank you for coming. George Cooper, is the president and CEO of the Theodore Roosevelt Conservation Partnership, here in Washington. And Mr. Steve Kopf, is a partner with Pacific Energy Ventures LLC, out of Portland, Oregon.
So thank you all for being here. If you could each take five minutes and give us the main points we need to understand about this set of issues, we would be anxious to hear your point of view.
Commissioner Moeller, why don't you go right ahead.
MR. MOELLER: Thank you, Mr. Chairman and members of the committee. My name is Phil Moeller. I am a member of the Federal Energy Regulatory Commission. Today, I appear before you to represent my views as well as those of Acting Chairman John Wellinghoff regarding energy development on public lands and the outer continental shelf.
Siting of needed energy infrastructure both onshore and offshore is important to meet our nation's energy needs and decreasing our reliance on carbon emitting energy resources.
The commission has been siting energy infrastructure for over 85 years under the Federal Power Act the commission has been charged with siting, licensing, and overseeing the operation of the nation's non- federal hydropower projects and accompanying transmission lines since the 1920s.
Under the National Gas Act, the commission has, for 65 years, issued certificates of public convenience and necessity authorizing the construction of natural gas pipelines. Although most electric transmission siting is done by state and local authorities the Energy Policy Act of 2005 gave the commission the authority in limited circumstances to permit interstate electric transmission facilities within national interests, electric transmission corridors designated by DOE.
While we have not yet been called upon to exercise this authority, the commission and eight other federal agencies executed a memorandum of understanding on early coordination of federal authorizations and related environmental reviews required in order to site these facilities.
Based on decades of experience in hydropower projects and natural gas pipelines the commission has developed comprehensive, efficient processes that provide for the public notice and extensive public participation, including participation by affected federal agencies, Indian tribes, and states.
We are guided by six principles of energy infrastructure development. They are; a pre-filing process that allows and encourages all affected stakeholders to identify issues and resolve conflicts; designating us as the single lead agency to make the overall public interest determination; allowing that agency, us, to establish a schedule for all actions related to a proposed project; building one federal record including one environmental document on which decisions are made; providing for expeditious judicial review in a single United States court of appeals; and once a federal decision has been made authorizing the permittee to use federal eminent domain to acquire the property needed.
Now, in recent years, the commission has received applications for the preliminary permits and licenses for hydrokinetic projects, which we define as projects that generate electricity through the motion of waves or the un-impounded flow of tides, ocean currents, or inland waterways. And every study has found that the estimate of our potential for wave and current power in our nation's oceans to be a full 10 percent of our energy portfolio.
And under our FPA authority, to license hydroelectric projects, the commission has issued about 170 preliminary permits representing 10,000 megawatts of potential generation to entities studying hydrokinetic projects.
The commission has also been asked to determine whether its longstanding FPA authority to license hydroelectric projects applies to hydrokinetic projects on the OCS or whether such authority resides in the Department of Interior's Mineral Management Service.
The commission determined that it has authority over such projects but that it can exercise such authority in a way that does not conflict with the authority of the MMS over other OCS activities. The staffs of the two agencies, two years ago, developed language for a memorandum of understanding pursuant to which MMS would continue to exercise its general authority over activities on the OCS, and the commission would issue licenses for OCS hydropower projects.
Under this agreement, the Commission and MMS could work together just as we've done for decades with the Forest Service when we issue licenses and permits within national forests, with interior when we issue licenses and permits on Indian reservations, on BLM lands, and on -- (inaudible) -- dams, and with the Corps of Engineers when we issue authorizations for projects at a core facility.
The memorandum has not yet been signed, but we envision it would result in all hydrokinetic projects, whether onshore, in state waters, or on the OCS being subject to a uniform licensing and oversight regime. It would permit exercise of the commission's expertise in siting the primary transmission lines connecting hydrokinetic projects to the electric grid, which would not be the case if the commission had no jurisdiction over the underlying projects.
Finally, the commission's jurisdiction over hydrokinetic projects on the OCS would not hinder in any way the timely development of associated wind facilities subject to MMS regulation on the OCS. As Secretary Salazar mentioned today, I'm thrilled to also note that both he and our Acting Chairman Wellinghoff have agreed on a principle to move forward with developing this memorandum of understanding. I personally, as a proponent of this industry, want to commend the leadership of both of them in moving forward on this subject so that we can get this resolved and move forward.
Thank you again for giving me the opportunity to appear before you today. I will happy to answer questions when appropriate.
SEN. BINGAMAN: Thank you very much.
Secretary Prukop, go right ahead.
SECY. PRUKOP: Good morning Chairman Bingaman, Ranking member Murkowski and members of the committee. I am Joanna Prukop, cabinet secretary for energy, minerals and natural resources in New Mexico.
As Chairman Bingaman said last year, in a speech at MIT, about the energy challenge we face, "We need to overhaul the existing energy infrastructure on which we all depend." While we do not usually think of our public lands as infrastructure, these lands, both state and federal, are the foundation of the infrastructure for much of America's energy development, and are essential infrastructure for the delivery or transmission of energy whether through pipelines or over wires.
New Mexico, like most states in the West, has huge reserves of fossil fuel and world class locations for renewable energy resources. We have experienced unprecedented development of these resources in the last few years. And the speed and intensity of development has stressed the land managers' and regulators' abilities and capacities to adequately evaluate proposals and permit applications in order to protect equally important resources like drinking water.
We must first keep in mind that the development of each resource has its own complications. For example, commercial-scale solar operations with their blanketing effect will eliminate livestock production on public lands, require the withdrawal of minerals for leasing, eliminate recreational use of the land, and will significantly disturb wildlife habitats and wildlife populations.
Currently, we make decisions about these public land resources in a somewhat haphazard or disjointed manner. Decision making would work better if there was an integrated system-wide process in which state and federal agencies work together to address natural resource and stakeholder needs.
Here are two examples we can learn from. First, consider the recent federal effort to designate West-wide Energy Corridors. The designated corridors followed existing power lines and pipelines from fossil energy sources. These are entirely on federal land, and completely ignored the status and use of adjoining non-federal lands. The corridors do not focus on developing renewable energy resources and are not useful for the new energy infrastructure as they could be.
New Mexico and others suggested that the corridor designation process be delayed slightly until the Western Governors' Association completed its work on identifying the best areas for renewable resource development as part of the Western Renewable Energy Zones initiative, known as WREZ.
The request was ignored and the final decision was made at the end of the last administration. If they had waited just two months, they could have utilized the information gathered to create the Western Renewable Energy Zone maps and information from the related WGA Wildlife Corridors Initiative Report.
Secondly, energy development and transmission on public lands is a reactive process, both at the state and federal level, often based on requests from private developers and on outdated resource management plans. The land managers are trying to make good decisions, but they have limited personnel and resources to wrestle with these complicated land-use decisions and developers and others are pressing them to move quickly.
Let me describe what happened in New Mexico when we did not have a significant involvement in this process. Otero Mesa is an area in Southern New Mexico that contains the last remnants of the ecologically fragile Chihuahuan Desert found in the United States. BLM issued its final environmental impact statement and resource management plan that included some environmental protections for Otero Mesa.
But the state executive branch felt the proposed protections weren't strong enough. The matter went to court. The state did not get everything it wanted in that process, but one issue the federal judge addressed was the need for additional environmental review before leasing takes place in this area, an outcome we fully supported as the state.
These two examples demonstrate the need for federal and state agencies to work together to create integrated system wide processes that include all public lands, early and frequent coordination between state and federal land managers and other agencies and stakeholders will make public lands work better for all of us.
I close by urging you to consider the following; first, continue funding the BLM Pilot Offices and add more state personnel with environmental and wildlife expertise; continue and expand support for landscape conservation initiatives like Restore New Mexico, a healthy lands initiative under the BLM; build on the data collected for the WGA, WREZ and Wildlife Corridors Process; fund state and federal jointly constructed natural resource databases.
Support creation of integrated state and federal decision support systems that use technologies like GIS mapping of spatial data layers to inform decision making early on; focus new studies on information gaps and available data rather than duplicating existing analysis; and finally, support recurring funding for these proposals, perhaps from energy development fees, instead of using discretionary funds.
Thank you very much for allowing me to appear today.
SEN. BINGAMAN: Well, thank you very much for your testimony.
Dr. Arvizu, we are glad to see you again. Please go right ahead.
DR. ARVIZU: Thank you, Mr. Chairman.
Chairman Bingaman, Ranking Member Murkowski, thank you for this opportunity to discuss renewable energy development on public lands and the Outer Continental Shelf. I am the director of the National Renewable Energy Laboratory, in Golden, Colorado. NREL is the U.S. Department of Energy's primary laboratory for renewable energy and energy efficiency. I am honored to speak with you here today and I have submitted a more comprehensive report of my spoken remarks for the record.
As our nation moves toward a clean energy future, it is becoming increasingly clear that federal lands are one of the keys to realizing the true potential of the vast resources of renewable energy. Wind, solar, biomass, geothermal, water and ocean energy resources are in abundance across the nation's millions of acres of federal lands and offshore regions.
Our laboratory has produced maps, which graphically show the renewable energy resource potential of public lands and a map of the overall renewable resource potential on federal lands is part of my written testimony. And here, Senator Murkowski I will point out that I have also omitted Alaska and Hawaii, but I will provide those for the record and note that we have a great partnership with both Alaska and Hawaii in developing renewable energy in your states.
If we take a quick look at the renewable resource potential in the 48 continental states, and make an assumption about 10 percent of that being developable, I'll note that this is a very coarse average. In fact we've done some work for western governors that would offer a much broader range that is potentially available, but we can readily see that the public land is really significant.
A hundred and forty gigawatts that's a 140, 000 megawatts of energy generated from photovoltaic solar, 400 gigawatts from concentrating solar power, 80 gigawatts from wind, 0.3 gigawatts from biomass and that's just residual type of waste biomass, and for geothermal we don't know the full potential but we, in fact, know that there are at least 20 gigawatts of suitable developable resource.
If you take a look at all of that, what you will find is that's about 640 gigawatts and if you further assume that for the variability that we find both in wind and in solar, that the capacity or factor for that would be roughly 35 percent. What that equals is one half of the total generating supply of electricity in the U.S. So it's a significant amount and we can go with various assumptions around how much that is, but that gives you an order of magnitude, sort of volume or quality of the renewable energy resource.
As federal lands gear up to meet the national demands for renewable energy they will be confronted with new issues from the emerging wind, solar, and other renewable industries. The economic drivers of wind power for example are fundamentally different from those of oil and gas. And there's a long history of leasing and resource development on federal lands in these more traditional resources.
The process of permitting renewable energy development and electric transmission projects on public lands should focus on two goals. First find sites where the most economical renewable resources can be developed, and second, among those sites selected those that can be developed with minimal environmental impact.
In addition to energy generation projects, federal lands have a major role in improving and moving electricity from remote sites to where national population centers are. Regional planning and consideration of the economies of scales are essential in factoring, and in routing the transmission lines across federal lands. And in our opinion, one super sized transmission lines poses less harm and delivers more benefit than a proliferation of a much number of smaller lines.
NREL has been working with the interior department on the renewable energy access to public lands since 2002. And we've helped the Bureau of Land Management develop permitting policies and environmental assessments for solar and wind. And we'll continue to do that as part of the American Recovery and Reinvestment Act in 2009.
A good example of multi-agency cooperation is the Solar Reserve Pilot Project, which is included in Senate Bill 539. The provision calls for the Energy Department, and the Department of Interior and other relevant agencies to work together to site and facilitate utility scale solar power on federal lands.
For my final point, I want to stress that the need for ongoing technology refinement is crucial. The wind industry, for instance, has not been -- will not be able to take full advantage of the offshore opportunities without development of second generation technologies, systems, and concepts. The same need for continuing R&D is equally true of PV solar and concentrating power, geothermal, and biomass and fuels as well.
In all of these instances, there's tremendous opportunity in the innovation cycle, and I think we need to continue to support those as we deploy first generation technology.
This concludes my opening remarks and I look forward to answering some questions. Thank you, Mr. Chairman.
SEN. BINGAMAN: Thank you very much.
Mr. Bryce, go right ahead.
MR. BRYCE: Yes, hi. Good afternoon.
America depends on cheap abundant energy. But over the past few years, it appears to me and particularly over the past few months, it appears that Congress is intent on making energy scarce and expensive.
Before going further, let me make it clear that I am here only speaking for myself. I am not a Democrat, I'm not a Republican, I'm a member of the disgusted party.
I'm not a scientist or an engineer, not a billionaire like Boone Pickens. I'm a journalist but I know how to use a calculator. And when formulating energy policy, it seems to me that the most important skill that Congress must apply is basic mathematics.
Before I go further, I am fully in favor of renewable energy. I have solar panels on the roof of my house in Austin, Texas. I'm very much in favor of solar power. But no matter how you do the calculations, renewable energy by itself, cannot, will not, replace hydrocarbons over the next two to three decades, and that's a very conservative estimate.
Furthermore, the transition away from hydrocarbons, I think, will be delayed due to the ongoing global slowdown, spending on new cars -- new more efficient cars and investments in new energy technologies has drastically been slowed by the global slowdown.
Alternative energy discussions always hinge on the matter of scale. Last month, I visited a coal mine, an underground coal mine in Western Kentucky, the Cardinal mine. They mine coal, bituminous coal 600 feet underground. This one mine produces about 15,000 tons of bituminous coal per day. That's the raw energy equivalent of about 66,000 barrels of oil.
That's nearly equal to --- again in raw energy terms to the entire output of all the solar panels and windmills in America, which have a combined total output of 76,000 barrels of oil equivalent per day.
Here's another essential number; 47.4 million barrels of oil equivalent per day. That is America's total primary energy use on an average day, counting nuclear power, coal, natural gas, wind, solar, hydro and everything else. Thus, when you calculate the returns on wind and solar, they provide less than two-tenths of 1 percent of the entire primary energy needs in the United States. We can double solar and wind power. We can double them again, and we can double them again, and I think that we should and that will help.
But the obvious point here is that Congress must take a balanced approach on developing energy policy and that means we have to continue drilling and we have to continue using hydrocarbons.
The Congressional leadership, I guess from me personally, since I have written a lot about the energy independence issue. To me personally, one of the most disappointing aspects of the energy discussion in America over the past few months has been the continuing use and -- of this and promotion of this delusional concept of energy independence that we hear from the Democratic leadership in Congress, and from the White House.
And this same rhetoric is coming out while the White House and Congress are simultaneously promoting policies such as reduced access to federal territory and cutting tax incentives for drillers, that will, without a doubt, make the U.S. more dependent on imported energy.
Let me talk about natural gas for a moment. Thirty years ago, Congress passed -- Congress fretted that the U.S. was running out of natural gas and passed laws restricting its use, particularly for electricity generation. Today, thanks to new drilling technologies and particularly completion technologies the natural gas industry has assured that the U.S. will have abundant supplies of natural gas likely for decades to come. We now have a glut of natural gas.
Gas should be seen -- and it has not been discussed at all this morning that I can tell -- gas should be seen as a bridge fuel that is a low-carbon complement that can be a very logical and agreeable source of power that can combine with the intermittent nature of solar and wind.
Regarding the Outer Continental Shelf, opponents contend, and some opponents contend there's not much oil to be found out there. That is false. Any cursory scan of the energy headlines and the energy trade magazines show that the Tupi discovery offshore Brazil and the Jack discovery just to name two offshore -- Louisiana will likely yield tens of billions of barrels of oil. That is tremendous resource available in the offshore deep water, and it should be pursued.
The U.S. now has something in the order of 250 million motor vehicles, as well as millions of recreational boats and tens of thousands of aircraft. We cannot run them all on sun juice and sails. We can't run them on ethanol. The fact is, and people don't like to admit this, the fact is we need oil, the world needs oil. And we have to drill for it. This is not a -- Senator McCain asked about this nuclear power. If Congress is serious about reducing carbon and really serious, we need to be serious about pursuing nuclear power and pursuing it, right darn, quick.
Rather than accept these realities though, what I see is Congress dallying, and promoting and expanding programs like the corn ethanol scam, which I think is an obscene, immoral boondoggle that does nothing to reduce this country's dependence on oil. The fact is the corn ethanol scam increases our food prices, worsens our air quality, perverts our presidential selection process, and yes, I'm talking about the Iowa Caucuses.
The fact is Congress must choose between rhetoric and reality. I favor cheap, abundant energy but I fear that what the actions that are being taken in the House and the Senate and what the White House is talking about will only make energy scarce and expensive.
SEN. BINGAMAN: Thank you very much.
MR. COOPER: Mr. Chairman, thank you very much and Ranking Member Murkowski, Senate panel thank you.
SEN. BINGAMAN: Thank you.
MR. COOPER: Thanks for inviting me here today to testify on behalf of the Theodore Roosevelt Conservation Partnership regarding responsible development of renewable and nonrenewable resources, both on public lands and the Outer Continental Shelf.
The TRCP is a coalition of hunting, angling and conservation groups, labor unions and individual grassroots partners that works together to guarantee all Americans quality places to hunt and fish. The impacts of expanded energy development on fish, wildlife, hunting, and angling has become a top concern of our community in recent years.
Historically, American sports and conservationists have demonstrated understanding of the need to extract and harvest resources from our public lands and waters. And we certainly recognize that need today, when it comes to energy. We also believe that these activities can and must be conducted in a manner guided by science that sustains fish and wildlife and ensures quality outdoor opportunities for generations to come.
We believe with foresight and planning resources can be developed in our public spaces, offshore and in future hunting, fishing, and other outdoor pursuits. As we sit here today we find ourselves on the heels of a -- oil and gas boom in the Rocky Mountain West and in the front end of a new push to expand renewable and conventional energy development onshore and offshore.
At this particular juncture, we believe it is vital for Congress and the administration to address lessons learnt from the oil and gas development push we've seen in the West, and proceed with new exploration and development guided by energy legislation that includes a specific fish and wildlife sustainability title.
We believe language must be adopted to ensure stronger, more consistent approach in federal management of energy development and transmission whether it's renewable or non renewable, onshore or offshore. And we believe this approach must include a new emphasis on pre-lease planning that secures the balanced multiple use management we've been lacking, that sustains fish and wildlife populations throughout development.
We believe with a strong any requirement (ph) for that science based effort on planning, federal and state agencies must have the ability to execute monitoring, mitigation enforcement when leases are sold. And this can only occur with adequate funding, something we've not had to date and that should be adopted in our opinion in new legislation.
The TRCP's recommendations too come from leading hunting, and fishing conservation organizations represented in our groups, working groups. Our onshore related recommendations are captured in our FACTS principles, offshore related recommendations are captured in our CAST principles, both have been submitted for the record.
And, when looking at those two sets of principles, the common core elements fall into the areas of precaution, planning, and investment. I will just hit on those briefly.
On precaution, the idea here is to ensure that all information about potential impacts to fish and wildlife resources are considered prior to developing those resources. And if existing information is inadequate, if there are gaps that to ensure sustainability of fish and wildlife, additional research must be done to obtain that data.
We really believe that we must discard the mindset of rushing to develop without adequate precautions. And this need not be overly burdensome, if upfront precautions are followed consistently, and adequate resources are made available to gather and synthesize fish and wildlife related data, leasing and development can proceed in a much more predictable and reliable fashion.
Let me just also say on precaution that it's essential in limited cases with certain treasured lands and waters, at exceptional habitat and recreational values that these special places be protected.
On planning, with adequate and consistent precautions taken before development, we believe a conservation strategy for sustaining fish and wildlife should be created for a given area and a well- defined plan capturing the conservation strategy will specify exactly how to accomplish adapted management in a given area.
Management includes adequate monitoring, mitigation, and enforcement.
Pre-lease planning with a conservation strategy to contain specific fish and wildlife population objectives will be critical as we weigh renewables development of new onshore areas and both renewables and non-renewables development of new sections of the Outer Continental Shelf, sections in the Atlantic where we have significant gaps.
Finally investment, Secretary Prukop hit this effectively I think, allocations of royalties paid to the federal government by the industry from offshore to energy development should be used to benefit fish and wildlife resources including expanded marine resources, I'm sorry research, and fisheries management initiatives.
And in general much greater investment must be made to enable appropriate federal and state agencies to have the scientists, and qualified fish and wildlife professionals to plan and implement responsible development.
So I thank you again for the opportunity to testify. I believe we have learnt some very important lessons from the surge in development of the Rocky Mountain West in recent years. And I believe it's critical we apply those lessons to the major new developments the federal government is currently contemplating.
SEN. BINGAMAN: Thank you very much.
MR. KOPF: Mr. Chairman and members of the committee, thank you for your interest in the ocean energy on the Outer Continental Shelf. My name is Steven Kopf. I am a partner in Pacific Energy Ventures. And I have spent the majority of my career fostering new technologies and business ideas as they move from R&D towards commercialization.
Our firm is focused on sustainable resource development and has been engaged in the ocean energy industry since 2004. I am also a board member of the Oregon Wave Energy Trust, which is funded by the state to promote the responsible development of ocean energy with a goal of producing 3 to 5 percent of Oregon's energy needs by 2025.
Beginning in 2006, I organized and led Ocean Power Technology's efforts to develop a commercial wave energy project in Reedsport, Oregon. The project is a great example of how FERC is helping this nascent industry navigate a complex regulatory process.
Through collaboration and outreach the needs and concerns of all stakeholders were identified. And based on this input a multiparty settlement agreement was developed, which addresses how the project can be monitored, and how it will be adaptively managed. Our settlement team includes state and federal resource agencies, existing users, and environmental groups.
The investment in collaboration is already paying dividends. We are building trust with the environmental and fishing communities. We are resolving how resource agencies manage early stage projects. And we are getting a real project in the water. OPT's project will likely be the first commercial scale wave energy project in North America.
Over the past year, I have had the opportunity to participate in a diverse stakeholder coalition led by the Environmental Defense Fund. The coalition consists of 34 organizations including private sector developers, utilities, local governments, universities, and six environmental organizations, including Hydropower Reform Coalition, Natural Heritage Institute, Natural Resources Defense Council, Ocean Champions, and the Surfrider Foundation.
This group worked together and drafted a set of principles that were presented in December to the President Obama's Transition Team. These principles include one, commit resources to support a robust evaluation of ocean energy and its potential environmental effects. Two, support demonstration projects to rapidly accelerate the deployment under permitting conditions that protect ocean resources. Three, fund an environmental database to assist developers and regulators in potential environmental effects.
I am going to skip the next one, because it got resolved today, and that's resolved the FERC/MMS jurisdictional dispute. Five, enable cooperation between agencies to simplify, expedite, and economize the regulatory process. Six, initiate ocean planning to balance short- term need for demonstration projects with the longer-term need for multiple uses. And finally, continue to encourage stakeholder participation in a way that values the public input balanced with an imperative to move forward.
These principles clearly demonstrate a consensus to develop ocean energy, but in a way that respects the environment and proactively plans for the growth of the industry. The power of this coalition is that it unites a diverse group of stakeholders into a common vision of how we can do this right.
Leveraging this position can only increase the probability of mutual success, and I strongly encourage the committee to adopt these principles as the framework for whatever action it takes.
I would like to thank Secretary Salazar, acting Chairman Wellinghoff and Commissioner Moeller for their leadership in resolving the jurisdictional dispute this morning and paving the way for ocean energy projects to move forward.
The three nautical mile line is indiscriminate; waves roll right over it, fish swim right under it. So thank you for deciding to develop a unified approach which continues FERC's leadership in the area of wave, tidal and current energy. The joint FERC/MMS announcement this morning preempted much of what I was going to say, but now that we've got clarity on the issue, I would like to stress the committee as well as the FERC and MMS the importance of a complete solution.
Resolving the jurisdictional dispute is a great start, but there's clearly more to do. Before MMS issues the final rule for renewables on the OCS, please consider the differences in scale and make sure that the procedures and fees for ocean energy reflect the early stage of the industry.
Overburdening developers with multiple NEPA reviews, and disproportionate front loaded license fees will limit near-term development.
Section 8 of the Outer Continental Shelf Lands Act gives Secretary Salazar broad discretion in collecting rents and royalties. Recognize that unlike oil and gas, ocean energy is not depleting a natural resource. Payments to the federal government must respect the sustainable public benefit and the long-term nature of capital cost recovery of renewable energy projects.
And finally, again, stress the importance of planning. Respect the state's Costal Zone Management Authority. Respect environmental and existing users and leverage NOAA's science and ocean planning experience. Let's think holistically. Get it right and we will enable this industry to rapidly demonstrate that ocean energy can and will be an important component of this nation's energy independence.
Thank you very much.
SEN. BINGAMAN: Thank you very much. Thank you all for your testimony. Let me ask a few questions and then I'm sure the others -- Senator Murkowski and the other senators will have some questions.
Commissioner Moeller, let me just state that I welcome the news that this issue of jurisdiction offshore has been resolved between MMS and FERC. But I'm a bit skeptical. I mean it's easy to announce that there is going to be a resolution, but from the point of view of a potential developer, you say in your testimony that -- the commission's jurisdiction over hydrokinetic projects in the OCS would not hinder in anyway the timely development of associated wind facility, subject to MMS regulation on the OCS.
And this release that was put out says, the Department of Interior has permitted, has permitting and development authority over wind power projects that use offshore resources. FERC will have the primary responsibility to manage and license such projects in offshore waters. It sounds a little bit -- as though I'm just not exactly sure that this is going to be that streamlined a process for a developer who wants to put in one of these projects.
Can you speak to that, a little more definitively?
MR. MOELLER: Yeah, thank you Chairman Bingaman. I think the first thing is that we don't have any interest in the wind. That's all in the realm of MMS. Our interest is in the hydrokinetic side of things. So I think that has been something where we probably needed to educate people a little bit better. But this is part of that process. From my perspective --
SEN. BINGAMAN: So as to wind projects offshore, you are happy to have MMS license those, site those, do whatever?
MR. MOELLER: Yeah, we don't have jurisdiction on that. I mean, there could be cases where there is a shared facility. Say a wave technology platform is used for a wind turbine. But in that case, I think that's the premise of the MOU which, again, hasn't been finalized, but there is a lot of progress being made on it.
And that is that we can workout by good communication between the agencies, how we can develop those resources or how the developer can develop them simultaneously. And we have many examples where we have to deal with other federal agencies on federal lands and we have decades of experience doing it. So and with the right attitude, this is not an insurmountable issue.
SEN. BINGAMAN: Well, I appreciate that and I don't question anyone's attitude, but I do think if you could perhaps get us whatever detail you can about how these issues are going to be resolved, so that we're going to have to decide, if we mark up an energy bill, whether to legislate some resolution of some of this.
And we thought we had done that before and it turned out, we didn't. So the question is, do we go back in and specify who has authority for what, or is the problem solved. And so if you could get us more information, that'd be helpful.
MR. MOELLER: Absolutely. I'm confident, we can solve it.
SEN. BINGAMAN: Okay. Secretary Prukop, let me ask you, in our state, in New Mexico, I'm interested in this effort that we made there, as I understand, that we have a system in place for the leasing of state trust lands for wind and solar development. At the federal level, we don't do it that way at the current time. We just essentially, grant rights of way, or permits to put in a solar plant. Should the federal government look at, following the lead of New Mexico and set up a leasing system for wind and solar project development?
MS. PRUKOP: Yes, the New Mexico, we, -- I think -- well, first the federal government should do this, yes. Because I think we need the funding to help support the work that needs to be done to develop resources to be -- to develop resources on public lands for energy production. In New Mexico under the State Land Office, commercial leasing process, wind turbines or solar facilities are going in with something I would call, using the term loosely, a royalty.
A few years ago, when the State Land Office permitted a wind facility on state trust land, they would charge by the annual lease fee based on the number of turbines on that property. Landowners in our area do the very same thing, where they get from $3,000 to $5,000 per turbine, per year.
More recently, especially, with the major wind companies like Shell Wind and Edison Mission, they are moving toward a percentage of the generation. On state trust land, that starts out at about 3.5 percent and then over a five-year period, that is intended to grow to about eight percent of the total wind -- in the case of a wind farm -- wind energy production off of that property. So you can -- using again the term loosely -- you can think of it as a royalty and that gives us a ongoing funding stream for -- in our case, public schools.
SEN. BINGAMAN: Thank you very much, Senator Murkowski.
SEN. MURKOWSKI: I want to just to follow on Chairman Bingaman's comments about this memorandum of understanding out there and I appreciate that it's not fully fleshed out if you will. But Mr. Kopf, you spoke to finding a complete solution and that we may have in place, this agreement that says jurisdiction is this way.
The question that I would have, Commissioner Moeller and to you Mr. Kopf is, is whether or not there is a legislative fix, legislative language that you feel we will have to advance and I think the Chairman's question is spot-on. You've indicated Commissioner, that you are confident that -- I think you said, you are confident that we can solve it. But does that -- solving it include a legislative fix as well? Where are we in this?
MR. MOELLER: I don't think -- thank you Senator Murkowski. I don't think we need a legislative fix. I think we can handle it with a memorandum of understanding. It's pretty clear; at least I haven't heard anyone suggesting that we are not the primary jurisdictional entity for the first three miles.
The question is, what roles do we have after the first three miles. And I think when you look at it from afar, FERC is essentially, has a role as a siting agency and that's its strength. The strengths of MMS are that it's a -- essentially, a leasing agency.
And that's where I think we can work together in a situation where there is a proposed development on the OCS. And we can define our roles, where essentially, they would have lead over the leasing aspect of it. We would have the lead on the licensing aspect of it, but that we would work very closely together.
SEN. MURKOWSKI: Let me ask you Mr. Kopf, as a stakeholder, somebody that -- part of the process is trying to make good things happen out in Oregon. What do you view as this complete solution then?
MR. KOPF: Right, thank you Senator. Again I think it comes back to Senator Bingaman's concern is, what's the MOU really going to say. Clearly, if it's split as the chairman just described, and I think it's a workable solution. Already, when you are doing a project in the territorial sea, the state is the leasor and FERC is the licensor.
So we're already working with two agencies. And as proposed this morning, I can see how that could work. But again, I think the concern, as the way the MMS rule is currently drafted, are there were multiple NEPA reviews, burdensome fees and that would really need to be worked on to make the leasor, the siting part of this really work for the industry.
SEN. MURKOWSKI: Let me ask you Mr. Cooper, in your testimony you've referenced that there are good ways, there are good examples, there are bad examples as to how we can develop our resources, our public -- our oil and gas resources on public lands. And you cite the Lacassine wildlife refuge in Louisiana as an example of a good practice.
Apparently, you've got bears, and you've got eagles and in the midst of it all, you have 82 oil wells, 15 pipelines. If this much surface activity can coexist with fish and wildlife, what would your group's opinion be of drilling for oil directionally, from outside of that wildlife refuge?
I think you can guess where I am hinting to, but if we can -- if we can be sensitive to the environmental considerations on the land, if this is not something that we would want to encourage?
MR. COOPER: Yeah. We've seen the benefits of directional drilling particularly in -- well, in New Mexico, Utah, Wyoming. And when we look at upfront planning, that takes into account impacts on fish and wildlife best management practices including things like directional drilling become crucial part of the answer.
And I think, to answer to your question, we have seen tremendous strides in terms of technology and the ability to extract these resources, also in conveying them with varying pipelines, et cetera, that we think can drive different decisions on leasing.
I think there has been a disconnect though, between first doing that assessment that determines potential impacts, matching that against what industry knows it can do, whether it's directional drilling or other methods, and then coming up with a plan upfront.
And once the plan is established with these factors in mind, giving the appropriate agencies, both state and federal, the ability to monitor. So if that -- so if that directional drilling is not doing what it needs to do, that steps are taken to carry out adapted management.
SEN. MURKOWSKI: Let me ask one final question, directed to you, Mr. Bryce. You mentioned that renewables, as a very valuable and important part of our energy policy, we need to do more, we need to be aggressive with it.
What if anything, would a massive -- a massive effort in increase in wind and solar energy, let's just say, a 10-fold increase. What do you think that that does to reduce our foreign oil imports? I mean this is where we want to go when we are talking about energy independence. Does a 10-fold increase in wind and solar get us there?
MR. BRYCE: No, Madame. I mean, as I say, I'm fully in favor of renewables. But the -- I mean the clear issue here is electricity storage or energy storage, compressed air energy storage for wind and solar are -- there is one active plant in the United States. But as far as displacing oil, right now, the solar and wind are really -- they are providing electricity.
We have virtually no electricity transportation in the United States, with Amtrak there is some but in terms of personal vehicles and heavy vehicles there is, essentially none. Hybrids vehicles have -- except that -- but that again is a hybrid.
So I mean, the short answer to your question is really the key issue now is energy storage. And that is where -- this defeated Thomas Edison. He worked on batteries for -- spend $30 million of his own money into -- in current dollars -- trying to get high capacity batteries and he failed and the market yielded to gasoline and hydrocarbons in the automotive markets.
So the key for the future of renewables, I think particularly for solar and wind, is some large-scale energy storage. And small scales, so that they can be used in the transportation fleet.
SEN. MURKOWSKI: Thank you, Mr. Chairman.
SEN. BINGAMAN: Senator Dorgan.
SEN. DORGAN: Well, Mr. Chairman, with respect to the last answer by Mr. Bryce, you know, nearly 70 percent of the oil that we bring into this country is used in the field of transportation. And if you project forward what we've done in the past, I agree with you that what we do with respect to renewables has little impact, not very much impact, on reducing our need for foreign oil.
But if you believe as I do, that we are headed towards electric drive vehicle future -- and we just put $2 billion in grants for batteries in this stimulus and so on. If you believe as I do that the future is going to be different then I think renewables can have a significant impact.
And with respect to the senator from Alaska, you know, a 10-fold increase in wind energy. The fact is if we see the potential to exploit wind energy that I think really exist, a 10-fold on the current base would not be as much as we can do. I mean we can do much, much more.
I want to ask Dr. Arvizu, we are -- you know, we are doing now 1 megawatt and 3 megawatt -- up to 3 megawatt towers and turbines. Some are talking about 10 megawatts. How much additional research is necessary for us to accomplish 10 megawatt wind turbines?
MR. ARVIZU: Thank you, Senator Dorgan for your question and I've been biting my lip here trying to figure out -- get into this conversation.
I think it's, first of all, short sighted to suggest that we need lot more innovation before we can deploy renewable energy today. I think there is a first generation technology that we've been working on literally for 30 years. And I think we can deploy that, immediately get a start in an industry that I think will ultimately bear great benefits.
Like you, I think, we need to invent the future that we are really after. If we don't care about the urgency, then really -- there probably isn't any need for government intervention. I think if we do have a sense of urgency as I do, regarding things -- to carbon emissions and regarding the volatility of price, regarding all the things that relate to the displacement of oil and transportation fuels.
Then I think we need to move most aggressively in fashioning a set of market conditions that allow these industries to flourish. The 10 megawatt turbine is a concept at this point. You know, I started 30-plus years ago, looking at wind turbines that literally were a meter and a half across. Now they are 107, 120 meters across.
There is a lot of evolution in that innovation path way. And over time, I think we'll get to 10 megawatts for offshore type of applications because they can be put many miles away from the horizon of the shoreline and essentially, it will have little impact on anything except our generation capacity.
So there -- we are within probably another five to ten years of having those kind of technologies in the market place. But we have 1.5 megawatts that are kind of the generic staple of the industry today that we can put thousands of megawatts online, really with, very little impact in terms of generation, reliability concerns.
SEN. DORGAN: And I don't think this should be an either/or, or that wind and solar should compete with oil. As you heard at the start of this hearing, I believe we ought to be drilling in most of the Gulf of Mexico, I mean, I'm for drilling.
But by the same token, I think as a country, we should try to maximize the potential of renewable energy, understand the issue of storage. But I also would point out that there are ways to make intermittent power -- to firm up intermittent power, combining it with hydro and -- range of interesting approaches to firm up intermittent power.
And so my hope is that we will move very aggressively to maximize our potential for renewable energy. Because I think it will, if we move towards an electric drive vehicles future it will helpful in reducing our dependence on foreign oil.
I must also say that we are producing at a pilot project in North Dakota, we are producing hydrogen from wind energy. And so -- taking the energy from wind, through electrolysis, separating hydrogen from water and storing hydrogen for vehicle fuels.
So there are a lot of different approaches here that are useful. I want to just mention with respect to Mr. Cooper's answer on horizontal drilling, we are doing the most unbelievable things with respect to drilling technology.
In our region of the county, the Bakken shale, which is the largest assessed recoverable oil pool ever found in the lower 48 -- just announced by USGS recently, about a year ago. They predicted up to 4.3 billion barrels recoverable using today's technology. That was not capable -- we weren't capable of getting that seven years ago, 10 years ago.
Now they go down 10 -- they go down two miles, 10,000 feet make a big curve and go out 10,000 feet, they are searching for the Bakken shale seam, which is 100 foot thick. They've divided it into top third, middle third, bottom third. And they are searching 10,000 feet down for the middle thirty feet of the Bakken seam rather. And then they go out two miles in that seam and they are getting unbelievable wells.
And the point is, that sophistication of drilling has not been available until recently. All of a sudden we are accessing the largest assessed reserve of recoverable oil that we've ever had in the lower 48, because of technology.
That's why -- I think Dr. Arvizu said it well when he said, inventing the future. The previous president kept zeroing out the $75 million for drilling research, oil and gas research. And as chairman of the committee, I kept putting it in. This new president is also going to zero it out, I'm going to put it in again.
Because we lead the world in unconventional drilling and deep well drilling. Most of that is done by independents. And we ought to continue to lead the world and make those investments in the future to invent our future.
SEN. BINGAMAN: Will that be an earmark?
SEN. DORGAN: I don't -- well, I'll be happy to cosponsor it, if you will. Well -- listen, somebody is going to earmark all of these dollars. The question is, is it downtown or the state government with the stimulus, somebody is earmarking these things.
But I want to make one final comment. I regret that I wasn't able to get back, but this is a really terrific panel. I've had a chance to review much of the testimony. I know Secretary Salazar is important, and I'm really pleased that he was here and pleased you had him.
But this is a terrific panel. And I think, what you've put together in prepared testimony is going to be very valuable to our committee. So I thank you very much for being here.
SEN. BINGAMAN: Senator Bennett.
SEN. BENNETT: Thank you very much, Mr. Chairman.
And I agree with Senator Dorgan about the quality of the panel. What I'm looking for, and anyone can volunteer and answer to this, is the point at which we cross the line. Let's talk primarily about wind and solar. I happened to think the greatest source of renewable energy is going to come from tidal energy, not wave, but tidal barrages similar to the ones that the French built in La Rance which I've visited, in reference to my previous comment and nuclear.
And I think those are the places where you get the scale. And I think, Mr. Bryce, you've given us a valuable point in saying that it is nice to talk about all of these things in stove pipes and compare this amount of progress to previous progress.
But to the nation as a whole, we're going to need an enormous amount of energy in the future. Now, we've got to look at those that will give us scale. And I agree that the promised land is probably about 30 years away and the bridge to the promised land -- if we know Moses -- is built out of fossil fuels. And we need to recognize that reality and respond to it.
But let's talk about wind and solar for just a moment, both of which are intermittent and are not intermittent on a predictable fashion. Unlike tidal, the wind can suddenly stop blowing, and the sun can suddenly stop shinning. Even though we think we've got enough warning as to when that will happen, there are still times when it happens without warning. And if you're on the grid you got a problem with that.
At what point do we cross the line, where we have solved enough of the problems of scale and intermittence that we can stop subsidizing it, and it becomes an industry that stands on its own bottom, financially earning enough money -- Ms. Prukop -- to pay royalties? I find it kind of ironic that the federal government is subsidizing so that these industries can pay the state of New Mexico, royalties because obviously the industry can't stand alone and pay royalties. But somehow the way it's structured -- it's a very interesting kind of way of transferring federal dollars to the state of Mexico.
We have trust lands in Utah and we'd like to do the same thing because, you know, we need all the money for our schools we can get. And like trust lands in New Mexico ours are all dedicated to education. But anyone, what do you see as the time, when you say, okay, the federal subsidies for research, or for demonstration projects, or whatever else it is, for wind and solar can go away. It's reached a critical mass where it can make money on its own. And at that point, obviously, you will be in an area where the scale is sufficient to make a big contribution.
Because right now, it's not making any -- as Mr. Bryce pointed out -- it's not making any significant contribution. And it's not making any money. We all believe, at some point, it will make a contribution, it will make some money where is that point. And it can either be, I guess, as to time or a statement of the conditions that have to be in place before we reach that time. But just help me see when this future finally ceases to be something worth looking forward to and starts to contribute to the overall scale that our country needs, all right.
MS. PRUKOP: Am I on?
SEN. BENNETT: Yeah.
MS. PRUKOP: I can give you several answers to what, we think, a pretty complex question. One is, you know, we can move toward a national Renewable Portfolio Standard, RPS that requires something like 25 percent renewable energy --
SEN. BENNETT: I don't want a government to impose requirements.
MS. PRUKOP: Okay.
SEN. BENNETT: I want an industry that stands on its own bottom and therefore survives in the marketplace.
MS. PRUKOP: Well then let me tell you about one transmission planning concept in a western state that is known as High Plains Express and what -- right now involves Wyoming, Colorado, and New Mexico to deliver power into Arizona. One thing that's being designed into that project is firming wind with wind, balancing geographic distribution of our wind resources, especially, because we have high quality ones on the eastern plains of Wyoming, Colorado and New Mexico.
So you deal with that intermittency question to some degree. You still will need a firm -- a firming power of some sort, natural gas or conventional or existing coal. One of the things that about wind power is wind power is very competitive right now especially depending on the volatility of the price of natural gas.
We have -- because we have a state production tax credit in New Mexico as well couples with the federal fund PTC. We have wind power being generated right now in New Mexico that's $0.05 a kilowatt hour, which is very cheap power.
SEN. BENNETT: But that is subsidized. My question is --
MS. PRUKOP: Now, that is correct but what I'm getting to, sir, is we think that, right now, wind no longer needs to be subsidized. It is somehow linked to the price of natural gas. So when natural gas prices are $6.00 an MCF or greater wind is very competitive and probably doesn't need any more subsidization.
Concentrating solar power, however, it's still not under $0.15 a kilowatt hour for whatever technology you want to talk about, although thin-film PV is supposedly going to be under $0.15, still needs a federal subsidy. So as soon as we can get more of that deployed, which a federal RPS would help with, then you'll drive those prices down. And you'll become more competitive. And so we probably could have wind and commercial scale solar, cost competitive without federal subsidies. If we had a federal RPS that drove that and you could probably do that in about 20 to 25 years.
SEN. BENNETT: Okay.
MR. : Let me offer a little bit different perspective. I think one of the things that we're struggling with here is what is the value of the energy. And essentially, what do we want the market to do? I agree with you that the only competitive alternative energy form is one that can compete without government subsidies. And I think ultimately we need to get there.
The price of energy, however, fluctuates wildly. It will continue to fluctuate wildly. So it's a kind of a moving target, so where as much as I want to camp in innovation because I believe innovation will ultimately get us there. And we got to get to what my friend Vinod Khosla calls "Chindia price."
The prices are competitive in the China and India market place because without that I don't think it matters what we do in this country. Like, that said, technology will get us a certain part of the way there. But if the value is what you -- is what you are after then you need to actually have a market set of conditions that allow that value to be priced appropriately in the marketplace.
And by that, I mean, there is a -- there needs to be time-of-day pricing.
So when you are generating solar energy in the middle of the day when everybody in Southwest have their air conditioners on and the value of that energy is over $1 a kilowatt hour. That you are matching that load with a resource that's clean, environmentally less impactful than other options that you have. And what you need in order to do that is a smart grid.
You need a grid that will allow you to vary your load as well vary your supply for the conditions that you mentioned that are sometimes less than predictable. So we have a long way to go, before we have the market conditions that allow these technologies to flourish in the marketplace.
Now, that said if we don't use something now with government intervention of some sort, we will essentially continue on the path we went on for the last 30 years, which is really minute amount of renewable energy on the grid. And so where there is a philosophical argument that says you need to get to that end point, I think as a matter of trying to overcome structural barriers there needs to be some interventions, it needs to be smart intervention. I'll add because there is a lot of ways to do this wrong, but unless we do that we will never get to the outcome that we are after.
SEN. BENNETT: Now, Mr. Bryce.
MR. BRYCE: If I could just add a couple of quick comments. The short answer is I don't know. When we stop subsidizing I don't think anyone here knows --
SEN. BENNETT: We've got 20 years, Mister, do you think that's optimistic or too long --
MR. BRYCE: I think with the national effort, I think, certainly two decades is not unrealistic to expect that we can get there.
SEN. BENNETT: Okay. Are you comfortable --
MR. BRYCE: I see a lot of tremendous progress in the solar field. If you'd noticed First Solar just announced that they have the price of their new solar panels under $1.00 a watt, which has been the aim of the industry for a long time. So if the industry continues to innovate I think they could cut that price in half again and perhaps in half again, and then solar really does become viable.
But that's going to take a while. You didn't ask -- you mentioned nuclear, and if I can just -- this is not germane necessarily directly to your point. One of the most promising -- in addition to the boom in natural gas, domestic natural gas completion techniques -- one of the most promising technologies, I see in the whole energy field, is modular nuclear reactors.
There are three Americans companies, Galvin Energy, NuScale Energy -- I don't know where -- I think Gavin is based in Arizona. NuScale Energy based in Corvallis, Oregon. Hyperion Power Generation based down in Santa Fe. All are looking at producing modular nuclear reactors with electric output of less than 100 megawatts.
Hyperion and NuScale have said they will go to the NRC this year for licensing request for manufacture so that they would have a centralized manufacturing location where they could -- its not stamping its very complex process but --
SEN. BENNETT: Right.
MR. BRYCE: -- create the reactors that could be shipped then on a rail bed on a -- on rail or by truck to the final destination. And this could provide a scalable, modular solution where they can gang individual reactors and have as large a set of generation as is needed. And one --
But the one stumbling block I hear -- and I heard this from Peter Lyons at the NRC himself. That the NRC, is manpower, and they don't -- the modular reactor is a whole different breed of cat from the 1000 megawatt plus reactors that they have been dealing with for the last few decades. They have to create a whole new separate licensing system, a whole new application fee process. And from everything that I've heard the NRC simply does not have the manpower. So I think if the Senate is really serious about baseload power, low-carbon, no- carbon electricity you have to give the NRC the resources that it needs.
SEN. BENNETT: Okay.
MR. KOPF: Could I comment on behalf of the ocean energy industry?
SEN. BINGAMAN: Why don't you do that reasonably, quickly. And then we'll conclude the hearing.
MR. KOPF: Yes, sir.
SEN. BENNETT: I didn't realize I was going to set off this kind of a --
SEN. BINGAMAN: Yeah, yeah that's fine.
MR. KOPF: Just five quick points.
SEN. BENNETT: Interesting information, go ahead.
MR. KOPF: Senator, I agree with your comments on tidal, I visited that same site in France and Alaska, Washington State, and Maine have great tidal resources that under FERC's leadership are already being explored.
With respect to wave energy, just a couple of quick comments. Electric Power Research Institute has shown that there is as much extractable energy possible as currently we have in conventional hydro.
And one thing to keep in mind is that that resource is very close to our population centers, 50 percent of the population lives within 50 miles of the coast. So again really helps to avoid the transmission issue. Thirdly, in predictability, NOAA can predict wave energy densities out of 120 hours, which really gives energy planners and schedulers a great opportunity to integrate wave energy resource.
Fourth aspect, don't forget about the Gulf Stream that's the powerful current that flows really on both sides of Florida but mainly up the East Coast. That's baseload power. If you can figure out how to tap that with a tidal like turban you've got a baseload power front for Miami, really important and something that's being looked at.
And fifth, firming. There is a recent study out at Stanford that is showing that wave and wind are kind of out of phase. You got to remember solar, solar radiation creates wind, wind creates waves, waves become a storage device for, effectively, solar and wind. And by -- that the fact that that storm -- you know, waves last for many days after a storm. And effectively, wave energy becomes a natural storage device for solar and wind. So thank you. I appreciate it.
SEN. BENNETT: Thank you very much.
SEN. BINGAMAN: I thank you all. This is very useful testimony. And we appreciate you waiting and talking with us. So that will conclude our hearing.