A Focus on the Outlook for Achieving North American Energy Independence Within the Decade
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THE AMERICAN ENERGY INITIATIVE, PART 28: A FOCUS ON THE OUTLOOK FOR ACHIEVING NORTH AMERICAN ENERGY INDEPENDENCE WITHIN THE DECADE HEARING BEFORE THE SUBCOMMITTEE ON ENERGY AND POWER OF THE COMMITTEE ON ENERGY AND COMMERCE HOUSE OF REPRESENTATIVES ONE HUNDRED TWELFTH CONGRESS SECOND SESSION SEPTEMBER 13, 2012 Serial No. 112–176 ( Printed for the use of the Committee on Energy and Commerce energycommerce.house.gov U.S. GOVERNMENT PRINTING OFFICE 85–353 PDF WASHINGTON : 2013 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Aug 31 2005 11:24 Nov 18, 2013 Jkt 037690 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 F:\112-17~4\112-17~1 WAYNE COMMITTEE ON ENERGY AND COMMERCE FRED UPTON, Michigan Chairman JOE BARTON, Texas HENRY A. WAXMAN, California Chairman Emeritus Ranking Member CLIFF STEARNS, Florida JOHN D. DINGELL, Michigan ED WHITFIELD, Kentucky Chairman Emeritus JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts JOSEPH R. PITTS, Pennsylvania EDOLPHUS TOWNS, New York MARY BONO MACK, California FRANK PALLONE, JR., New Jersey GREG WALDEN, Oregon BOBBY L. RUSH, Illinois LEE TERRY, Nebraska ANNA G. ESHOO, California MIKE ROGERS, Michigan ELIOT L. ENGEL, New York SUE WILKINS MYRICK, North Carolina GENE GREEN, Texas Vice Chairman DIANA DEGETTE, Colorado JOHN SULLIVAN, Oklahoma LOIS CAPPS, California TIM MURPHY, Pennsylvania MICHAEL F. DOYLE, Pennsylvania MICHAEL C. BURGESS, Texas JANICE D. SCHAKOWSKY, Illinois MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas BRIAN P. BILBRAY, California TAMMY BALDWIN, Wisconsin CHARLES F. BASS, New Hampshire MIKE ROSS, Arkansas PHIL GINGREY, Georgia JIM MATHESON, Utah STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina ROBERT E. LATTA, Ohio JOHN BARROW, Georgia CATHY MCMORRIS RODGERS, Washington DORIS O. MATSUI, California GREGG HARPER, Mississippi DONNA M. CHRISTENSEN, Virgin Islands LEONARD LANCE, New Jersey KATHY CASTOR, Florida BILL CASSIDY, Louisiana JOHN P. SARBANES, Maryland BRETT GUTHRIE, Kentucky PETE OLSON, Texas DAVID B. MCKINLEY, West Virginia CORY GARDNER, Colorado MIKE POMPEO, Kansas ADAM KINZINGER, Illinois H. MORGAN GRIFFITH, Virginia SUBCOMMITTEE ON ENERGY AND POWER ED WHITFIELD, Kentucky Chairman JOHN SULLIVAN, Oklahoma BOBBY L. RUSH, Illinois Vice Chairman Ranking Member JOHN SHIMKUS, Illinois KATHY CASTOR, Florida GREG WALDEN, Oregon JOHN P. SARBANES, Maryland LEE TERRY, Nebraska JOHN D. DINGELL, Michigan MICHAEL C. BURGESS, Texas EDWARD J. MARKEY, Massachusetts BRIAN P. BILBRAY, California ELIOT L. ENGEL, New York STEVE SCALISE, Louisiana GENE GREEN, Texas CATHY MCMORRIS RODGERS, Washington LOIS CAPPS, California PETE OLSON, Texas MICHAEL F. DOYLE, Pennsylvania DAVID B. MCKINLEY, West Virginia CHARLES A. GONZALEZ, Texas CORY GARDNER, Colorado HENRY A. WAXMAN, California (ex officio) MIKE POMPEO, Kansas H. MORGAN GRIFFITH, Virginia JOE BARTON, Texas FRED UPTON, Michigan (ex officio) (II) VerDate Aug 31 2005 11:24 Nov 18, 2013 Jkt 037690 PO 00000 Frm 00002 Fmt 0486 Sfmt 5904 F:\112-17~4\112-17~1 WAYNE CONTENTS Page Hon. Ed Whitfield, a Representative in Congress from the Commonwealth of Kentucky, opening statement ......................................................................... 1 Prepared statement .......................................................................................... 4 Hon. Bobby L. Rush, a Representative in Congress from the State of Illinois, opening statement ................................................................................................ 6 Hon. Fred Upton, a Representative in Congress from the State of Michigan, opening statement ................................................................................................ 7 Prepared statement .......................................................................................... 9 Hon. Joe Barton, a Representative in Congress from the State of Texas, opening statement ................................................................................................ 10 Hon. Henry A. Waxman, a Representative in Congress from the State of California, opening statement ............................................................................. 10 Hon. Gene Green, a Representative in Congress from the State of Texas, opening statement ................................................................................................ 11 WITNESSES Harold Hamm, Chairman and Chief Executive Officer, Continental Resources 12 Prepared statement .......................................................................................... 15 Daniel P. Ahn, Chief Commodities Economist, Citigroup .................................... 29 Prepared statement .......................................................................................... 30 John Freeman, Managing Director, Equity Research, Raymond James & Asso- ciates ..................................................................................................................... 41 Prepared statement .......................................................................................... 43 Daniel J. Weiss, Senior Fellow, Center for American Progress Action Fund ..... 88 Prepared statement .......................................................................................... 90 John Purcell, Vice President of Wind Energy, Leeco Steel .................................. 118 Prepared statement .......................................................................................... 120 Mark P. Mills, Senior Fellow, Manhattan Institute ............................................. 124 Prepared statement .......................................................................................... 126 Peter Howard, President and Chief Executive Officer, Canadian Energy Re- search Institute .................................................................................................... 128 Prepared statement .......................................................................................... 130 (III) VerDate Aug 31 2005 11:24 Nov 18, 2013 Jkt 037690 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 F:\112-17~4\112-17~1 WAYNE VerDate Aug 31 2005 11:24 Nov 18, 2013 Jkt 037690 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 F:\112-17~4\112-17~1 WAYNE THE AMERICAN ENERGY INITIATIVE, PART 28: A FOCUS ON THE OUTLOOK FOR ACHIEV- ING NORTH AMERICAN ENERGY INDEPEND- ENCE WITHIN THE DECADE THURSDAY, SEPTEMBER 13, 2012 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY AND POWER, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. The subcommittee met, pursuant to call, at 10:05 a.m., in room 2322 of the Rayburn House Office Building, Hon. Ed Whitfield (chairman of the subcommittee) presiding. Members present: Representatives Whitfield, Sullivan, Burgess, Scalise, McMorris Rodgers, Olson, McKinley, Pompeo, Griffith, Bar- ton, Upton (ex officio), Rush, Castor, Sarbanes, Markey, Green, Capps, and Waxman (ex officio). Staff present: Charlotte Baker, Press Secretary; Sean Bonyun, Communications Director; Anita Bradley, Senior Policy Advisor to Chairman Emeritus; Maryam Brown, Chief Counsel, Energy and Power; Allison Busbee, Legislative Clerk; Cory Hicks, Policy Coor- dinator, Energy and Power; Heidi King, Chief Economist; Jason Knox, Counsel, Energy and Power; Ben Lieberman, Counsel, En- ergy and Power; Andrew Powaleny, Deputy Press Secretary; Mi- chael Aylward, Democratic Professional Staff Member; Greg Dotson, Democratic Energy and Environment Staff Director; Kristina Friedman, EPA Detailee; Caitlin Haberman, Democratic Policy Analyst; and Alexandra Teitz, Democrat Senior Counsel, En- ergy and Environment. OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENT- ATIVE IN CONGRESS FROM THE COMMONWEALTH OF KEN- TUCKY Mr. WHITFIELD. I would like to call the hearing to order this morning. The topic of our hearing, and today we continue our hear- ings on the American Energy Initiative. This is actually the 28th day, and today we are going to talk about what I consider some very good news, and that is the achievability of North American energy independence and particularly oil independence within the span of a mere decade. As a matter of fact, one of our witnesses today made the com- ment in a study, a comprehensive study, that by the end of the dec- ade, they estimate that new U.S. oil and gas production could add at least $200 to $300 billion in revenue, which in turn could stimu- (1) VerDate Aug 31 2005 11:24 Nov 18, 2013 Jkt 037690 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\112-17~4\112-17~1 WAYNE 2 late many hundreds of billions more in economic activity, invest- ment and consumption, creating at least 2 million and as high as 3–1/2 million new jobs. So after many decades of hearing that the United States basi- cally reached the end of its reserve, as a matter of fact, as recently as 2010 President Obama stated in a national address that we are running out of places to drill, and he still cites the outdated and misleading claim that we possess only 2 percent of the world’s oil reserves. But this pessimistic view is being blown away by reality. Increased domestic oil production is already cutting into the amount we need to import from oil-exporting nations, and many ex- perts believe that this production growth can continue for years to come. And when you add the equally impressive growth from our ally Canada, the goal of North American oil independence could be reached in as little