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tv   Politics and Public Policy Today  CSPAN  January 25, 2016 1:04pm-7:01pm EST

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v.a. he appeared before the veterans affairs committee earlier this month where he outlined the key priorities of his my va initiative which improves the internal support services and changing the organizational culture and enhancing the strategic partnerships. georgia republican senator johnny size akson chairs this hearing and it's about an hour and 50 minutes. >> the meeting of the senate veterans affairs committee together to get started. and i'm going to expedite our meeting and i would like for everyone to pay close attention so they don't think i'm rushing the thing through, but we have a storm coming. we have a vote at 10:30 and we have a lot of people moving and pieces in place including some of the witnesses that are here today so we'll start promptly at 10:00 which we're doing and i'll make a brief opening statement if the ranking members are here in time and i'll recognize him and if not, he can make a statement later in the hearing and we'll go to secretary mcdonald who has asked and i have granted no limitation on
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time and we won't have a five-minute red light and we'll let him take the time he needs to make his testimony which allows me to thank senator telles and tester who originated the idea who has come to lay out the entire vision for the va and the c.a.r.e. program and i'm delighted to be in the ranking member's made it so you're lucky you're not going to get cut out after all, so on. >> don't. don't. >> any member of the committee and other than the ranking member other than myself can submit it to the record after the hearing is over. i'll make a brief statement and then we'll go directly to the secretary which we can hopefully accomplish that before the 10:30 vote and we'll rush back here for unlimited questioning until noon today and i thank everybody for being here. >> i want to, first of all, thank dale barnett. dale would you remain standing? i would love to tell officers that. >> dale is the american legion
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national commander and he's from douglasville georgia, who is my county in the state of georgia and he's from the legion post. is that not correct? >> that is correct. >> we want to thank you for your service and that of all your members' service to our country and your continuing service to help support us on this va committee because you are the eyes and ears in the clinics and in the hospitals that give us the feedback to see that we hold the veterans administration accountable. nobody has a better more conscientious more constructive view than the american legion. i want to thank you all for what you have done and i appreciate you being here today and i appreciate your comments and i've read some of them already and after hearing any additional comments you have for the record we'll be happy to submit so welcome and we're glad to have you there. >> thank you, mr. chairman. >> i want to talk about three things in my opening remark and three things only. i'm interested in making choice
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ultimately work for the veteran and for the veterans administration and for the taxpayer. we had some issues come up recently in anticipation of this hearing taking place so i want to make them public in my testimony so the secretary can at his point in time address those. we had a situation in new hampshire in the past couple of weeks where we've lost providers which i think the doctor is already aware of and the issue gets down to prompt pay. we have got to get a situation in the veterans administration where a physician can reasonably anticipate a prompt payment for services rendered under the choice program or choice won't work. in my hearing the secretary was kind enough to come to the county and gainesville georgia, in december or november of last year. we learned that some of the cumbersome nature of the paperwork that's required by third-party administrates has to get worked out by the va and third party administrator and once the appointment is set up the va has to expedite or reasonably speed up the prompt
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payments of doctor and a physician and the hospital want to provide that benefit. that's a goal i would like us to see us continue to work on and do everything we can to do. we also had the khaki situation in my state of georgia which i think the secretary is already familiar with as well as other members where we continue to find cases where the inspector general finds backlogs and we had boxes of records that were supposed to have been scanned to put in the va system and they were stacked up in the corner which was bad for veterans and bad for accountability to make sure we do. the point i'm trying to make is it's the little things that get you and not the big things. the big vision in terms of the va for the secretary is one i admire, but it's the little things that fall through the cracks that cause you the biggest problems and i think for all of us in the committee and our districts on a daily basis prompt pay. it's accessibility for the choice program and accountability toward the va and it's a no excuses the dog ate my homework type offen viern, but
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instead a can-do type of environment. the secretary has been a great leader for the department since he was sworn in in july 2015, is that not correct? >> yes, sir. we have 11 months to go under the current administration. we want to make every single month count for our veterans and the taxpayer and i look forward to chairing the committee as we work hand in hand to do that and overcome the obstacles and bring about accountability and bring about better service and a better cause and with that i'll recognize secretary blumenthal or ranking member blumenthal. >> i'm not sure that i would take that as a compliment because, frankly, mr. secretary your job is a lot more difficult than ours, and we thank you for your very diligent and dedicated work and that as well of your colleagues who are with you today. today is an important hearing because the va is at a real milestone turning point with the
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last stretch of the administration ahead the opportunity to make fundamental cultural and institutional changes is fast disappearing and so today's hearing is about your vision and the plan to achieve it. and it's a tremendous opportunity because there is a lot of work to be done, but it's also a tremendous challenge, and i know that you've been working at it very hard and very long. i'm focusing on a number of changes that i think are very important and consolidating care in the community. the va has estimated the annual cost of care to the current veterans choice program would be $6.5 billion with an additional 7 billion in general community care and that's $13.5 billion which seems largely
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unsustainable at the present rate. so something needs to be done. the inventory of appeals at the va has skyrocketed to 440,000. that's 440,000 claims that are under appeal and need to be, in some way expedited. i'm a supporter and a co-sponsor of the veterans appeals assistance and improvement act of 2015 which would change current law to expedite the most egregiously delayed claims namely those over eight years old. hard to believe that some claims are over eight years old, but if they are, there is simply no reason that they shouldn't be expedited and finally, rob nabors in his report in 2014, june 2014 talked about the corrosive culture at the va
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which has led to personnel problems across the board. changing the culture is a big job and partly will impact the ability to fill the h.a. open positions which i know has been one of your priorities one of the goals of the department in 2016 is to increase access to health care and reduce the amount of time it takes to fill open positions by 30%. that is a critically important goal because 900 vacancies which is the last number that i saw means there are 900 fewer people than there should be to be caring for our veterans and those are my concerns and we are looking forward to hearing from you and again thank you for your work at the department.
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>> secretary mcdonald, you are recognized. the floor is yours. >> thank you. >> chairman isakson, ranking member blumenthal, thank you for discussing the transformation of va what we call my va. >> my personal thanks also to senators tom tillis and to tom tester for meeting with us repeatedly to hone our transformation plans. i believe they know my va is about fulfilling the nation's obligation to those who have served and that they share our vision for va to become the number one customer service agency in the government. we have a lot of work to do to reach that goal, but we're making progress. >> this chart reflects the tremendous work done by our veterans benefits administration in reducing the backlog of disability claim an almost 90% reduction in the backlog since march 2013. our national cemeteries
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administration is already rated number one in the nation by the american customer satisfaction index. acs irates all customer service companies in the nation and nca came out on top. last year jd power ranked it with the highest customer satisfaction score among the nation's public and private mail order pharmacies for the sixth year. higher than kaiser higher than humana and higher than walmart. so that said, let me tell you about our framework to transform all of va by combining functions, simplifying operations and providing veterans care and services so that they see va as their va my va a world-class customer-focused veteran-centered service organization. this chart shows our five critical my va objectives. first we want to improve the
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veteran experience. every contact between veterans and va should be predictable, consistent and easy. it begins with respectfully receiving our veteran clients but it is also a science. we're focused on human center design, process mapping and working with exceptional design firms and companies to make every interaction with our clients better. second, we need to improve the employee experience. we can't make things better for veterans without improving the work environment with employees. it's no coincidence that the best private sector service organizations are also the best places to work. >> third we need to improve internal support services. we must enable employees and leaders by bringing our i.t. infrastructure into the 21st century. our scheduling system dates to 1985. our financial management system is written in coball, a language i wrote in 1973. this is unacceptable and it
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impedes our efforts to serve veterans. fourth we need to establish a culture of continuous improvement and we will apply lean strategies and other performance-improvement capabilities to help employees improve processes and build a culture of continuous improvement and last enhancing strategic partnerships. expanding our partnerships will allow us to extend the reach of services available to veterans and their families. >> the my va is a framework for modernizing va's culture processes and capabilities to put the needs and interests of veterans and their families first. changes to leadership were also necessary. ten, ten of our top 16 executives are new since i became secretary. all of them have substantial business experience. our new leadership team feels comfortable having honest and sometimes tough discussions to transform va. this team includes a former
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think bahhing industry cfo and the president of the uso. morristown medical center and a former chief executive and president of mcdonalds europe. a former cio of johnson & johnson. a former chief customer officer for the city of philadelphia who spent ten years at usaa. a retired disney executive who spent 2011 at walter reed enhancing the patient experience and i'm the former chairman, president and chief executive officer of the procter & gamble company. our my va advisory committee led by chairman joe robles a retired u.s. army major general and former general of usaa is also comprised of diverse business leaders, medical professionals and experienced government executives. i knew that we needed outside expert advice on business and government transformation, so i recruited these leaders well
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before the independent commission was established to help advise our team on va transformation. we're working collaboratively with many world-class institutions to capture ideas and best practices as we transform transform, well, we're listening to key stakeholders, even those critical of va. we're forming strategic partnerships with external organizations to leverage their good will resources and their expertise to better serve set rans. va can't do everything itself. over the last year we've cultivated meaningful partnerships in employment, ending homelessness, wellness and mental health with dozens of productive partners and we're streamlining business process wes community care providers and re-imagining how we obtain services such as billing and reimbursement and information sharing. we must operate as part of a community of care. we know that va has significant issues that need to be addressed so we're listening to others'
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perspect% perspectives and our people. we have the second largest department like a $181 billion fortune six organization should be run, balancing the near-term, performance improvements while rebuilding the long-term organizational health of va. >> we've narrowed down our near-term focus to 12 breakthrough priorities as shown on this slide. on the left are eight veteran facing priorities. on the right are four va-facing priorities. make no mistake. all 12 are improving the timely care and benefits to veterans. we have many accomplish ams in these areas in 2015, but i'll spend most of my time focusing on what we'll accomplish in 2016. these are the stretch objectives that we are committed to. we understand this will be a challenge, but we're committed to producing results for
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veterans. first, improve the veteran experience. in 2015, we named va's first chief veteran experience officer and began staffing that office that will set customer service standards and spread best practices and train employees. we're creating a national network of community veteran engagement boards to leverage non-va assets to meet veterans needs and we've established 36 communities with 15 more in development. in fact the ranking member attended where we established one of our very first community veteran engagement boards. in 2016, we will establish department-wide customer experience measurements to enable service improvements and increase veterans' trust in the va from 47%, that's the bench line, baseline data that we've gotten to 70%. we'll also ensure the veterans experiences offices is fully
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operational and engage the boards to over 100. our medical centers will be fully staffed at the front line with well-prepared customer-oriented employees. >> second access -- increased access to health care. >> last year, va increased the number of veteran a moments by more than 1.2 million and completed over 96% of appointments between veterans preferred dates. by the end of this year when veterans call to vha medical center their needs will be addressed that day. they will get medically necessary care, referrals and information from any va medical center. number three improved community care. in 2015, va issued authorizations resulting in 12 million community care appointments thanks to the flexibility of the choice act. in 2016, pending legislation
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that we need, va will begin consolidation, streamlining of access to our care in the community network. veterans will see a community provider within 30 days of referral. community care claims will be processed and paid within 30 days 85% of the time and the claims backlog will be reduced to less than 10% of inventory. number four, deliver a unified veterans experience. last november, va launched the initial vets.gov capability. this is a mobile first, cloud-based website that will replace numerous other websites with a single log-in. in 2016 vets.gov will provide veterans, their families and caregivers with the top 100 search terms found within one click. additionally, 100% of content features and forms from the current public facing va websites will be redesigned and
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rewritten in plain manage and migrated to vets.gov prioritized by veteran demand. 5, modernize contact centers including the veterans crisis line. >> last year the heroic staff of the crisis line in new york was featured in the oscar-winning documentary crisis hot line veterans press one. the answer to over 490000 calls initiated the dispatch of emergency services to callers in i remember nent crisis over 11,000 times and provided over 81000 referrals to va suicide prevention coordinates. by the end of this year, veterans in crisis were promptly answered by an experienced responder at the veterans crisis line. all veterans will be able to access va contact centers 24 hours a day. they'll know where to call to get their questions answered to receive prompt service, accurate answers and be treated with
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kindness. number six, improve the compensation and pension exam process. many veterans find the cmp exam to be confusing. last year, vba, vha and the veterans experience team worked to redesign the process using human center design and lean tech nieces. by february we'll have a baseline metric with the cmp exam process and by the end of 2016 will complete a national rollout of initiatives demonstrating improvement in the veterans experience with the cmp exam. number serve, develop a simplified appeals process and we've driven down the backlog to fewer than 200 in march 2013. fully transitioning processing propaper to electronic, eliminating 5,000 tons of paper a year. >> we decided 1.4 million
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disability compensation and pension claims for veterans and survivors and that's the highest for the va in a single year. in 2016, subject to the successful legislation we'll put in place a simplified appeal proses is enabling the department to resolve 90% appeals by 2021. number eight reducing veteran homelessness. >> we provided 365,000 homeless and at-risk veterans and placed almost 108,000 in permanent housing and prevented them from being homeless. in 2016 we'll continue reducing veteran homelessness and demonstrate progress toward an effective end by assisting an additional 100,000 veterans and family members. >> number nine these are the internal facing initiatives.
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improve employee experience. in 2015 we launched a program called leaders developing leaders which trained over 5,000 leaders. we also trained critical parts of our workforce in lean and human-centered design to improve and encourage problem solving. in 2016 we'll continue improving the employee experience by developing engaged leaders who inspire and empower employees to deliver seamless and responsive customer service and have 12,000 trained in the principles. all va employees will have a customer service standard in their performance plans. number ten, staff-critical positions. in 2015 we hired over 41,000 employees, a net increase of over 14,000 health care staff or 4.7% increase that included over 1,300 physicians and 3,600 nurses. additionally, we filled several
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critical leadership positions to include the undersecretary for health and the chief information officer and the chief veteran experience officer. in 2016 our targets include 95% of the director positions filled with appointments and 90% of other critical shortages addressed while reducing time to fill vacant position standards by 30%. number 11, transform our office of information and technology. in july 2015 laverne council was confirmed as our new chief information officer and she's developed a multi-year plan for world class i.t. organization. in 2016 our key i.t. goals include ensuring 50% of the i.t. projects are on time and on budget and we'll stand up in account management office and develop portfolios for all administrations. 100% of i.t.'s executive performance goals will be tied to strategy goals and will close
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100% of current cybersecurity weaknesses and will develop a holistic management data strategy and implement a compliance office and finalize congressionally mandated interoperability requirements. number twefrl transform the supply chain. in 2016 we'll build a medical surgical supply chain to drive an increase in responsiveness and a reduction in operating costs with $150 million-plus of cost avoidance which we will redirect to priority veterans programs. those are our 12 action steps for 2016 including the commitments that we've made to get them done. we're rigorously managing each of the breakthrough priorities by implementing a department-level scorecard, metrics and tracking system. each priority is a responsible individual in a cross-department team that meets every other week with either the secretary or the
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deputy secretary. mr. chairman, va is grateful for your continuing support and appreciate your efforts to pass legislation enabling high-quality veterans care. we've identified a number of necessary legislative items that we need your help with in 2016. details are in my written statement, but we need assistance with consolidation of care in the community. flexible budget authority, support for the purchased health care streamlining and modernization act and special legislation for va's west los angeles campus and overhauling the appeals process. i would also encourage the committee to support other key legislative proposals in the president's 2017 budget that will be delivered on february 9th and last, we need your assistance in supporting the cultural change of my va to transform the department. we need you to have the courage to help make the changes you're
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asking va to make and that we must make. your legislative support in these areas is critical to achieve irreversible momentum for the my va transformation. on behalf of the vast majority of va employees who work hard and do the right thing for veterans every day, thank you again for this opportunity. we look forward to working together to solve the most important national issues, caring for those who protect our freedom. we have a determination to make a difference in veterans' lives so that every veteran's experience with va is world class. we know we can do this. thank you. thank you mr. secretary. i appreciate your testimony. we'll open up to as many rounds of questioning we can do from now until noon. if senator tillis, iffy would go wrote and did ispell me if you
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would show us your north carolina spread and get over there and get back in time for me to vote, i would appreciate it. [ inaudible ] >> do your best carolina panther run. if you do as good as they did, you'll be fast, i can tell you that. >> secretary mcdonald thank you for your testimony and i want to refer you to the specific testimony to address your seven goals. i want to talk about two of those to start with. one on the cultural change. i think the quote is you need our help to make the cultural change within the va and we want to help you make that change and as much as you can coordinate with us on decisions that you made before the proverbial banana hits the fan we would appreciate it because we're in a reactive mode as a body. we can do nothing but be a critic, but in a partnership mode we can do a lot of things to help and there are things
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that you might want to do that we don't know about that might get a totally different response if you consulted with us first and i'm not saying that you don't and i know there are big things in here that you will want to do to accomplish goals in consultation with us. for example i'm assuming when you want to make a breakthrough in legislative action taking place you want to reduce 97% of appeals within one year of it being filed? is that correct? >> yes, sir that is correct. that would require legislation. >> is that the legislation that you would not allow additional information to be submitted after a claim is filed. >> we'd like to work with you on that legislation. >> it's a fully-developed claim. we'd like to work with you on that. we think there are steps that need to be cut out of the process. i'm sure danny can go into greater detail, if you'd like but we'd like to work with you on that legislation and i pledge to you that we will work together as partners, and i think this hearing is great evidence that we are doing that today, and i appreciate you
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scheduling this hearing. >> well, it is also great evidence that dale is here from the american legion and the commander of the american legion. >> you will need to be a part of that particular issue and we all want to resolve claims within a year and everybody wants to do that and the fully developed claim process, which i'm not necessarily opposed to at all, but that's going to be a major move forward that would need the vso's support, or else we'll never be able to get it done because it involves reasonable cutoff periods for the data to be submitted for a claim to be finally resolved. >> absolutely. we have involved the vsos on all of the work on fully developed claims as recently as yesterday morning and i have breakfast with the organization leaders and dale graduated from westpoint a year ahead of me so i'm used to him hazing me. we lock forward to working with him on this. >> i want to get all of the
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frogs in the wheelbarrow to begin with rather than afterward. as quickly as we can get a representative of the legion that dale thinks is possible, we can involve members of the committee from both sides of the aisle, but to do that it will take a significant legislative will power and cooperation due, but it is achievable. it is achievable if we're working together. >> it is achievable, mr. chairman, if i just may add that only about 11% or 12% of claims are appealed. so it's a relatively small percentage to the total but because veterans continue to add information and many of the claims go on for years and years and years, and generally, the people who are appealing are people who are already getting disability payments from the va. so it's -- what we've got to do is get a process which is manageable where we can get them adjudicated quickly. the continuing process doesn't get in the way of getting -- of getting these claims resolved quickly. >> and i concur, and i
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appreciate you making that one of your seven priorities. mr. pope -- pummel, is that correct? >> you have a new job. you have ten of 16? >> yes, sir. >> if you can do as good a job as dr. silicon, he's done a great job in taking over his position which leads me to a suggestion because i'll run out of my first five minutes in just a second. tell her to get in touch with georgia tech. i told you before the hearing they are developing an interoperable translator that will allow non-working, non-functioning i.t. systems to talk to each other in terms of medical i.d. and we can end a dod veteran leaves active duty and the two assistants don't talk to each other and it's very important for her to do that and i appreciate if you would tell her to give me a call and
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we'll do that. >> we'll do that. >> it's important to make that change happen and it's important to see to it that we partners in it but it means that we address the tough questions and my last comment is there was an exchange of letters from senator moran and the chairman and the house and i know you've got a response today in the wall street journal which is healthy in strengthening our relationship with our differences and i agree with you with the letter that says you can't fire your way into success, but i would also agree that if we don't have a system of accountableility that people cannot see there will always be someone that throws up a news story that slows up the cultural change in the organization and we need to work on that as much as we can. >> we agree, mr. chairman. as you know, and as we have talked we've terminated employees since i've been secretary. after 33 years in the private sector i've done many restructurings and i want to get people who violate our values
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out of the organization. we're doing that and doing it consistent with what they've done and we're doing it consistent with due process. we know that's necessary for cultural change. >> thank you for being with us. senator blumenthal? >> thank you, mr. chairman. let me begin with your chart which shows a reduction in va disability claim, but in a sense it can cause an increase in the number of appeals which demonstrate demonstrates, in a sense that you've reduced the numbers, but simply shifted the problem that's an over simplistic way of putting it but as a lawyer in the federal courts or state courts, for that matter if a backlog were cleared simply by moving that great mound of work to the appellate process where
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appeals languish for years and years and years it would not be regarded as a success story and so the 440,000 appeals that currently are pending is, in my view, unacceptable. >> that's exactly why it's one of our breakthrough objectives and as we've said, assuming we can work together on the legislation we are planning to get 90% of appeals resolved within one year, and i think we can all sign up for that objective. >> and just as -- as a qualification to the point that you just made, many of those veterans are receiving benefits. >> yes. >> but they may be nowhere near the amount of benefits that they deserve and need. >> yes. >> so simply to say, well they're already getting something doesn't mean they're getting everything that they need and deserve. >> that was a statement of
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factors. it wasn't any intent to downgrade the importance of getting them what they deserve. >> i understand. so let me come to the question that you just raised. could you give us the details and i would say that you support the measure that i mentioned earlier that senator shaheen, myself, others have supported to expedite those appeals and other additional authorities that you need to get this job done. and we would have to overhaul the appeal process and the law was created at the turn of the century -- the turn the previous -- the turn of the last century. >> last century, i'm sorry. i used to be able to say that and so the basis of it is antiquated technology and many other things that are no longer applicable. we have used our process mapping
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techniques and the lean -- the process, and we think there are steps we can take out, but it would require a change in legislation. and it would require a change in legislation and we're going have to put some more people at the -- against the problem in order to tackle it. >> my question is, specifically, what legislative changes are necessary? >> i think the legislative changes that we're working with with the veteran service organizations right now to close the record, i think if we can get that in place, i think that will go a long way to solving the problem. i believe in looking at the figures they've shown us to do veterans appeals in one year. we just have to continue to work with the vsos to make sure we're doing it the right way. i haven't had a chance to look at the legislation that's been proposed and the eight-year legislation and that sounds like a great idea to expedite the
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ones and that's what we do with the backlog and we get the oldest ones first and we put it by docket order and that doesn't inadvertently harm any veteran. >> let me make a suggestion to you. and i'm just a country lawyer from connecticut. in connecticut in criminal matters, because of a backlog and a rule was adopted that the failure to prosecute within a set amount of time would result in a dismissal. the speedy trial rule. and i think that became law in various forms in the federal system as well. in other words, and don't hold me to the details but deadlines were set. timeliness were established. the failure to proceed within that timeframe meant that the
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government's case, in effect, would be dismissed and the burden was on the government to prosecute the matter and at some point an appeal that is pending for that amount of time within a government structure or process perhaps should result in the government losing the case. >> senator, i would rather work on like the chairman said on coming up with good legislation and also systemic changes to the way we do our work rather than just setting a somewhat arbitrary eight-year limit. i understand the legislation and i understand the eight years, but the legislation doesn't say how you do it. as a business guy, the biggest challenge is always figuring out how you do it.
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so i would rather work with you and the chairman to figure out how we do it and then sure we put the legislation in place that we need to get done. >> and i am not advocating arbitrary deadlines and i am not suggesting that i'm reporting this system now, but at some point if this problem is not alleviated that kind of approach will be necessary to go back to the days in the private sector, if you could not get products to the shelf you were penalized. nobody said we're going to keep the stores closed until p & g has its products ready to go on the shelves. so there is a burden of proof, so to speak, a burden of going forward and a burden of fulfilling the government's obligation. i don't want to go on at great lengths, but what i'm suggesting is that the remedies for delay may well be that the veteran
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receives what his claim is because he's the one who is prejudice. the government isn't. the delay works in the government's favor just as it did in the criminal context because very often the criminal defendant was kept without bail or with bail that couldn't be made or under the great burden of charges pending and these kinds of deadlines for proceeding whether in the civil or criminal context in the judicial world may have applicability here. that's what i'm suggesting and we may not be at that point yet, but we may soon be there. >> we've identified as one of our 12 priorities for the year and let's work together on it and hopefully by the end of the year we'll get to a point where 90% of appeals are resolved in a year. >> thank you. >> thank you. i'm next in the order so i'm not taking any sort of chairman's
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prerogative here, senator. they -- i want to cut to first i want to thank you for being here and i want to thank you for the time you've spent in my office. we've had several meetings along with senator tester in the office. i think they've been very productive and i like what you laid out. i do have a couple of questions for you, and i know that because of the limitations of the room one thing that we ought to talk about is as you go forward how members will have the ability to track progress on these initiatives. these aren't just -- and some of the -- some of the online access it will have where we can see red, yellow green particularly on the priority projects and another thing going forward they think is important is to make sure that when they request a view in addition to what you have in this transformation, we'll will have day to day
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things that we'll complain about and we'll mess your hair up in committee meetings and do what we need to do as a part of oversight, but you all need to make sure that you're very direct when we make a request of you that you all of a sudden put something else in the critical pass and that's a very important part of the back and forth as we go forward. one question that i have is the discussion and some concern that we've had expressed to us and i mentioned this briefly when we met last week's, mr. secretary about some of the consolidation of the providers who may have had a point of entry in a relationship with choice and you're trying to do a better job of consolidating and the va providers and concerns we're hearing about in terms of reimbursement and those sorts of things. can you give those, the veterans who may be concerned with that, the providers and some sense of why this is better for the overtime and why it's an important part of what you're
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trying to accomplish? >> thank you sir and thanks again to senator tillis and senator tester for meeting with us repeatedly and honing these plans. >> as you know we do have a dashboard that you can drill down on. we shared that with you in your office. i would love to be able to provide that to this committee. i just would ask that we work together so that i'm not spending more time answering questions of you drilling down on the dashboard than i am solving problems for veterans. if we can come to that arrangement then i have no issue in sharing the dashboard because that's in essence how you will evaluate for us and these are the commitments. >> we're not sweating the details and just look at where you're trending for the stakeholders. >> just the 12 priorities. yeah. relative to providers i'm going to ask david to comment, but i
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think one of the most important things we can do in 2016 is develop a network of -- of providers including department of defense, va, indian health service private sector so that by the end of the year we have a network and academic affiliates. we have a network that we all feel good about where billing is not an issue anymore where paying bills is not an issue and where we can move forward on behalf of veterans. we have had some providers move out of the network. we have had -- i was recently in massachusetts where we were having a discussion with one of our academic affiliates because the hospital didn't want to accept medicare rates for veterans. well, you know these are the rates that we've got to pay. so we've got to find a way to get to this and i know david is working hard. >> as you respond to that, you're not going to be able to see, this is my redneck
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powerpoint and one thing i want to make sure they put this together while you were doing your opening statement and one thing that i think we need to do is always talk on eye think that there's a place for choice long term. the question is to what extent in the pyramid and this is the provider network and not all of va. to what extent this increases or decreases based on the state that you're operating in and based on the nature of the veterans population that you're serving? so we want to make absolutely certain that we're communicating that at the end of the day this is about getting the veteran to a point of care that they're comfortable with as quickly as possible. >> senator we'd appreciate a copy of your powerpoint and we'd like to use that. thank you and i think we're on the same page here which is that -- we need providers to want to work with va because frankly, veterans need the private community and we recognize that this is say
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partnership. i've spent my career in the private sector trying to get paid most of the time. so my sympathies actually go with the providers and providing a service and having a delay in payment we recognize we have a problem within 30 days. that's not good enough. so we're going to take some dramatic actions in the next couple weeks in order to improve that. the major issue here, frankly, is is that we are only getting 40% of our claims electronically. we should be getting 100%. the reason for that is is that we demand that not only do we get a bill but we get all of the medical record documentation in paper. we're going to have to change that policy. and we should so that we can pay providers in a faster time frame. >> thank you. my time is up. just a final comment. the other thing that i hope that we see come through in this transformation are leveraging best practices from similar operations like medicare in
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terms of the relationship with the providers, the on-boarding, all of those things i hope we're not reinventing the wheel. i think you are focused on that. >> i we totally agree. >> senator tester. >> thank you, chairman tillis. since you are in that position and thank you for being here, i think it's appropriate that i ask the secretary of the va -- there are four teams that may win the super bowl. who are you rooting for? >> which one are you for? >> i think it's more important you look at who is the in chair. >> carolina for sure. >> you are a great american. >> thank you all for your work. i appreciate being able to be in on some of the plans that you have been putting forward. and i do mean that, thank you. i can tell you that i met with the doctor yesterday. there are plenty of issues we need to deal with as far as the care to the veterans on the ground. we're going to continue to pester until we get to that
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point. we passed a number of bills out of here. i don't know that any of them made it to the floor yet. we're not exactly the gold standard when it comes to efficiency here in congress. do you have contingency plans if we don't pass some of the bills that you need? >> we do. it will cause us to dial back on what our outcome goals will be. but what i wanted to do was i wanteded to take the myva transformation, which arguably is a big multi-year process and boil it down to what are we going to accomplish by december 31st. and what i had given you is what i think we can accomplish by december 31st. i think they are good outcome for veterans. but we are going to need the legislation we identified. if we don't get that, we will have to dial back. >> and if you have covered this i got here, i can go back and read the record on it. but what are maybe three of the most significant short-term dead
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lines? >> the first is provider agreements. we have long-term care facilities right now refusing to do business with us because they are too small to deal with the federal acquisition rules. so that's number one. secondly, i would have to add the consolidation of care in the community. you had a hearing on it. i thought it was a very good hearing. i think the plan we put forward is a good plan. we can't get to that ideal optimum network of providers, including private sector providers until we get that rule, that law done. because right now, as you know, there are many different programs, seven different programs all with different criteria, specifications. and importantly, all with different payment schedules, which really confuses veterans and tn confuses employees, and it distorts incentives. people want the program that is the most expensive. so i think that's number two.distorts incentives. people want the program that is
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the most expensive. so i think that's number two. number three, i would say flexible budget authority. last year i had to come to the house committee and senate committee begging for money for care in the community for help tie sis c, this new miracle drug, because we had money in a separate pot that was designed for that purpose but i don't have the authority to move that money. i think as long as it's about caring for veterans, i should have the ability to use the money to care for veterans. >> okay. so of those three short-term deadlines how many can be dealt without action from congress? >> consolidation for care, as soon as we get that, it's huge. another -- a fourth one, i'm sorry. >> go ahead. >> los angeles campus, eul, extended use leasing. the minute we get that passed we can put spades in the ground in west los angeles and start building buildings with private sector partners. >> here's the point i'm trying to make, mr. secretary.
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that is you can have all the greatest ideas you want. your management team can have all the greatest ideas. the folks at the different regions can have the best of ideas. but i think you need to be very, very direct with this committee as to what needs to pass if you are going to meet the need of the veterans out there. that's all i would tell you. quite frankly, if you can't do what you need to do, we're just talk to go one another and we're not getting to where we need to be. >> i agree. ? my written testimony and in my oral testimony i said "pending legislation" purposely for a number of outcomes that we cited. anybody who wants that information can go back to the written testimony and you can see how the legislation is tied to those outcomes for veterans. >> and we can also connect up with you for that too. i just think it is really, really important that we can talk about changing the va. we can talk about providing a better service.
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but part of that talk is actually getting something done too. okay. thank you. look, i talked to the doctor about this yesterday. could you give me any sort of update? you've got a lot of leadership positions that were open, maybe still are open. give an update on where we are to help fill those vacancyiesvacancies. >> i would like to ask david to do that in terms of -- senator, thank you for the question. i know the chairman had comments about this as well. our biggest challenge is getting the right leadership in place and then getting critical positions filled within the va system. as of last evening we had listed 43000 recruits for the va health system. we are desperately trying to attract the top quality professionals to come in. we have in our medical centers 34 medical center director positions that are open. now, you know, running a health
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care system without having permanent leadership in place is a challenge. one of the legislative authorities that we've asked for and it's just one of the ones listed in the testimony is to give us the flexibility to use title 8 funding to be be able to recruit medical center directors and network directors, which frankly, i have had a significant challenge convincing any of my colleagues from the private sector to look at va as a career, and i desperately need that talent. so we are working very hard to hire physicians, very hired hard to hire nurses, psychologists, pharmacists, other mental health workers and other leaders of our system. those are our priorities. and we're out there. i know the secretary in particular out there every day talking about what a privilege it is to join the va and if anyone is -- knows of people who want to join the va, we talk to them on a daily basis to join us. >> i want to add three other things if i may very quickly.
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number one, i asked in my opening testimony about the congress helping us with this culture of change. to the degree that we continue to see negative news articles and other things, the number of people applying for va positions is about three-quarters lower than it was two years ago before the crisis occurred. number two, recruiting. i've asked members of congress to go recruit with me. you have done that. you and i went to the university of montana together. this is very important. and senator isakson has come to va to talk to town hall meetings. it's very important to show our employees that we are all together and our prospective employees that we are all together. i have been to over two dozen medical schools. and i have recruited many people right on the spot. the third point is we are leaving positions vacant because we don't want to add more people than we need.
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and we are in the process of trying to figure out how to reduce the levels and how to become more productive. for example, we recently realigned our regional medical networks. we eliminated three of them. so what we want to do is make sure we are only recruiting for positions we want to fill rather than all positions that may be vacant. >> i gotcha. i appreciate that. i can tell you i don't know what's going on in north carolina, georgia, connecticut, but i have a pretty good idea what's going on in montana. for the record, the records who go to fort harrison love those people. but they are quick to point out we are burning them out because we don't have enough staff. it is critically important -- we can talk about it, but we've got to do it. it is really important. i will walk hand-in-hand with you if it comes to recruitment because these folks have done a lot for us. we owe to to them. >> mr. secretary, welcome. good morning. good morning.
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please consider me an ally when it comes to trying to accomplish the things that you outlined in myva in our testimony this morning. i am anxious to see a transformation, that those who sempbed -- serve served our country receive the care in a timely manner and a costly way for the taxpayers and they receive quality service. that's what your statements were all about this morning. and i certainly support that outcome. what i want to again focus on is take us back to the current circumstance in which i find myself trying to help veterans. and we did have a hearing with undersecretary gibson on december 2nd on consolidation of the community-based programs. and clearly i understand the value of consolidating. we have overtime created too many programs that cannot be administered efficiently. secretary gibson committed to me during that hearing to do several things which haven't yet
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happened. and i'm asking you for your help to see that they do. on his own volition -- we had a conversation about veterans who weren't qualifying for the choice act. and his offer at his own volition was that he would provide me with a list of those veterans who qualify for choice in kansas. it seems a generous offer but it hasn't happened. programs it was too generous. if you can help me in that regard. because we have -- again those caught in the process of calling the third-party vendor and being told they don't qualify. or being told they don't qualify because they live within 40 miles. and then you start digging down and neither one of those things are true. the goal is to figure out who does qualify so there is an understanding by the person on the end of the phone who is telling a veteran whether he or she can access the choice act. that was one request we had --
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or an offer that secretary gibson indicated. also, the conversation occurred about the number of people who have been abandoned. i asked for something the va calls their abandonment rate. and i was originally concerned about what was said by the undersecretary several months ago. some long time ago when choice was new. one of the comments in the hearing is that choice is not popular with. veterans. they don't want choice. what worried me about that is i did not wanted see the va create a situation to where the choice act became so unappealing that the veterans didn't want it. i have a clear sense it will be valuable. part is the geography and state like mine demographically. one of the things i asked for is what the abandonment rate is. just as an analogy, i was in the
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state legislature a long time ago and the railroad started reducing the services available to my community, my hometown. and over time, customers decided they didn't use the rail service because it wasn't any good. then the railroad goes. to the regulators and says nobody uses the rail line let's get rid of it. i wanted to make is certain that is not the intention of the va. i don't have the sense or fear that i had some time ago. it seems to me the va is more and more embracing community care and i appreciate that. but when we see these numbers about people served, what i want to make certain is that we are taking care of those who have just given up. and that is one of the most common conversations i have with kansas is they were told they qualify when they tried the choice act. or they're told they live within 40 miles. more recently it's been -- i used the choice act they provided me with my hometown
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provider. then when the hometown provider insisted that i see a specialist, then i had to go through it all over again and i was denied the chance to go have the radiologist look at my x-rays. so it may work initially and then again fall apart in the process. i want to make certain we don't discourage veterans from using the programs because it is not working up front. the abandonment rate i would like to have to see how many people are walking away not really because they want to but because it is not meeting their needs. and then also secretary gibson and i had a conversation about 10 specific cases in kansas. it was his willingness to take those cases on and solve the problems. and i appreciate what he said. he said we're committing to fix it. if we're not executing, shame on us, bad on us. and he offered to take care of the 10 cases that had come into our office that week dealing with choice. the ultimate outcome was that somebody from the va called our
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caseworkers and said what do we need to do? and so it ended up back in our office as compared to the va stepping in and solving a specific problem. i would highlight that opportunity for the va to see. maybe this is just a pilot program which you can see what kind of conversations i have with veterans and how the choice act is failing them. and maybe these 10 examples would be useful to you as you try to solve the problems systemwide. so i would appreciate that help. and, again, we want good things to happen at the va. and if the challenge that you will have is you are trying to reinvigorate the va, alter its course, change the quality, day-to-day veterans are being left behind today. and those are problems we have to solve while we transform into the future. >> absolutely. we will get on those three things you mentioned, senator moran. there is no question by any of us that care in the community is absolutely essential for us to
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have a network of providers in this country to care for veterans. absolutely no question. in fact, earlier when senator tillis was sitting as chairman, i meant to say we have a map of the united states, dynamic map that lays out where we think the veterans live, where we think where the providers are, whether they're dod, va, private sector. and it would be good to have that discussion with each member of the committee, eventually each member of congress. so you see the kinds of capability we are trying to put in place. we don't want anybody to be abandoned. >> mr. secretary, thank you for saying that. and i would tell you i think every republican member of this committee on the staff level, we asked for a meeting with somebody from the va to describe to us to explain and to have a consultation on the definition of a full-time physician or a full-time facility. and that was to take place. it hasn't taken place yet.
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we asked for it. and i think every republican member would like to have asked to join us in that request to have a meeting with somebody from the va, not you. not necessarily secretary gibson or -- just someone who can tell us how the new definition. and i would respond to what you just said -- >> sir, i wasn't familiar with that. i would be happy to meet with every member. i have met with caucuses, doctors caucuses. i would be happy to do that. >> the choice act is a way for the va to solve some of its professional inabilities. one of the theories was we will take care of veterans where they live. but the other component of the choice act was to meet the needs of the professionals in the community reducing the challenges you face in recruiting. >> senator heller. >> mr. chairman -- thank you. to the secretary, thank you for being here today. you know, we have seen some improvements in the state of nevada. thank you for that. we have a pretty about team out there. not this weekend but next
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weekend we have the health clinic. finally. i have been working on this since i was in the house so you can manlimagine how many years that's taken. we have a new director in the regional office. very helpful. and looking forward to good things. seeing those changes, moving in the right direction. i certainly do appreciate it. i do have a couple questions for you. if you're a california veteran and chairman state of georgia, you need immediate health care, do you mind? is there a problem going to the hospital in georgia to get that health care? >> this is a very relevant and insightful question. no, it's not a problem. but today we don't yet have the -- we haven't yet built the capability to allow that to occur. and one of our break-through objectives here is by the end of
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the year a veteran can go anywhere they want and we will serve them. and so that's one of the things we've identified that -- david, do you want to talk a little bit more? >> senator, we call this seamless care. it is exactly what we want, which is that -- if you're a veteran, you should be able to be cared for at every facility. we do have some challenges to doing that. all but three of our facilities have a traveling veteran coordinator. so a veteran can ask to speak to them and their job is to help facilitate it. our goal is to make sure that you don't need to contact a person, that our systems recognize you as a veteran, you should be able to get care wherever you walk into a facility. >> what's the timeline for putting that system in place? >> december 31st, 2016. >> by the end of the year. >> by the end of the year. >> so would you care if a veteran, see -- i guess would it matter if they went to reno -- >> it won't matter where they go. it will just be like you get your prescription at cvs or
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walgreens and you go to a different state and do the same thing. >> we're getting feedback. just so you know the purpose of this question out of mesquite, right on the nevada/utah border. some of them want to go to st. george, some to las vegas. it's further to las vegas than st. george. you're saying -- >> we want the veteran to be able to decide where they want to go. we want to be agnostic. one of the things we have talked about here, which is also critical to this issue, today if you're a veteran and you move and you have to change your address with va, you have to change it in about nine different places. we want to move to one data backbone for all of va, what's called a consumer response system, where if you go online to populate a form. we automatically plate it from the data backbone we have so you don't have to write the information in. we don't have the single data backbone today but it is one of our objectives we are taking on
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this year. >> so i can't go to mesquite and talk to them and say sometime around the end of the year you will be comfortable going to either hospital of your choice. is that fair? >> yes. you should today be able to. you should today. it's just going to be more painful than we want it. but we are trying to make the system actually support what you're asking. >> right now some of our veterans in that particular area are being restricted. telling them it will be 45 minutes as opposed to going to st. george. i would certainly like to see that change. i have one other question based on your ig's report. and the question they have relative to your backlog, they say they don't trust the data. and you know in the state of nevada we were at ground zero for the problems with the backlogs. we are seeing some improvement. can you assure me that the inspector general isn't accurate on some of this data they claim they don't trust? >> i'm not sure the date of that report. but i imagine it was probably in
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2014. but i believe the date is accurate. >> you're painting a rowsy picture. >> senator, i would agree with the ig on their assessment that they don't trust the data for the backlog. the one thing we have tons of is data. and i can tell you that the data on the backlog is accurate. it's still not where we want it to be. we will continue to drive it down. same thing with appeals. but the believe that the data is accurate data. >> the nevada vfw had their mid winter conference last saturday and i had a chance to address them. this is one of the concerns they brought up was the fact that they're concerned we're painting too good a picture they are on top of this ig report, saying perhaps the data isn't as
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accurate as being reported back to them and to the state. >> every time i get one of those questions or comments. as you know i have given out my cell phone number publicly. i encourage people to call me. i always ask for -- give me the instance, give me the date. who did you deal with. because a lot of this is just simply we have to continue to work to rebuild trust. a lot of this is the trust that was lost in 2014. a lot of the ig reports coming out right now date to some time ago and have already been remediated. but anyway, i would be happy to get into great detail. >> secretary, thank you. thank you all for being here. mr. chairman. >> chair bozeman. >> thank you, mr. chairman. and thank you so much for being here. we do appreciate your hard work. in arkansas, we've got two va hospitals. they work really hard at serving veterans and do a good job. one of the huge problems we've
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got is right now, because of the turnover in leadership throughout the system, either people retiring that are my age you know, not wanting to fight the battle anymore. or good people being taken to other jobs that perhaps are a little bit more important, more authority within the bigger system. but it's a huge problem. and right now most of the people in key positions are acting people and they simply don't have the authority. they do and they don't. it is very difficult when you're the acting head versus the other. when tough decisions come up, the tendency is to put those aside to let somebody else deal with them. how can we resolve that? if it's true in arkansas, i'm sure it is true throughout the system. >> we talked a little bit about this previously. i'll ask david to comment. i think there are a number of
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things we can do together. number one, i would encourage when you're in the district and i'll go there with you, let's recruit together. let's go to the medical schools. let's go to the hospitals. let's recruit people for the va together. i think it is a very positive sign when members of congress and va leadership are together. i've been to over two dozen medical schools. i would like to get to more. secondly, we have put in as part of our proposed legislation, legislation that would allow us to treat medical center directors as title 38. many of our medical center directors are not doctors, they're not title 38 and as a result they are paid significantly less than the private sector. that's a very important job. it should be title 38 and we would like your help to make it that so we can pay them competitively. david? >> i think the secretary has identified key issues. we are trying to attract new professionals into the va to see
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this as a career. because many of our people, senator, are retiring. and unfortunately some people are leaving the system. so we have put out a call to the private sector to answer, which is to come serve your country. and you can serve your country in many ways. one of those would be to join the va system, and we've actually had a pretty good response. so we are looking to decrease our hiring time to bring new people into the system. it is one of our initiatives. we would appreciate your support on the pay authority that the secretary just mentioned. and creating an environment that people feel they can be successful in. and that's where i think much of the dialogue about us being on the same page and you helping us recruit would make a difference. >> switching gears a little bit. you do have a lot of people that want to come forward. some people have come forward in the past.
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and the whistle-blowers really in the va system have a reputation of not getting a very good rap. and i think that comes from just circumstances. you know, the cases that have come up. also when you look at the agency where you appeal to, and visiting with them they say that probably the majority of their case log throughout government comes from the va. so it's not a good situation. can you talk a little bit about what you're trying to do to address the problems with retaliation? and, again, encouraging others in that non-hostile environment to come forward and so that we can make things better? >> surely. by have trained over 450 people in something we call leaders developing leaders. we put it together in conjunction with a professor at
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the university of michigan. and it's a program where we actually train leaders in three days. we train them in leadership. we train them in whistle blowing. we train them in everything we can. and the cultural change we want from that is we want every employee at va feeling enabled to come forward with their criticisms. we want our employees to redesign the systems they work on. that's one of the reasons we're training our employees in leading six sigma. a good organization can't survive unless it's a great place to work. and people have to be trained and enabled to do that. i would also say we were the first agency to get certification from the office of special council on whistle blowers. we also have rewarded and called out whistle-blowers who have helped us. and it's something we're working very, very hard on to make sure there is no retaliation. or if there is, those who retaliate receive the appropriate discipline. >> thank you, mr. chairman.
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>> thank you. >> thank you, gentlemen, for your testimony today. i want to compliment dr. shulkin. i spent a lot of time with him the last year. last in phoenix at my office. and we have a lot of work to do. but i think -- >> my trip to alaska coinciding with your service in the military. i apologize. >> well, you know, sometimes you can't always pull it off. we'll get you up next time i'm there. dr. shulkin, you and i got all over the state. mr. chairman, thanks again for allowing me to hold a va hearing up there. you saw the level of frustration, both of you. you saw that the choice act, which in many ways got ideas from what was working in alaska came in. then when it was implemented in alaska it was a fiasco and i think everybody recognizes that. so then you committed to this
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pilot program in alaska. it was going to be up and running. initially you committed to me in november. we missed that deadline -- not "we." you. but it is starting to take hold. i would like an update where we are on the pilot program. mr. secretary, from a broader strategic perspective if we're able to fix the big issues in alaska, i think it is going to give you a good sense of how to fix things nationally. but if we're not, in alaska, i think it will spell trouble for what every member in this community cares about. you care about. which is fixing the choice program so it is serving our veterans. right now it is still not in my state. i would like an update just on the timeline and how you see that pilot program going forward. >> well, senator, first of all, i do want to thank you and acknowledge you've been a great partner in this. you've been very clear with the problems and that you expect solutions.
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but you've been working with us all along. so i thank you for that. you are correct that we agreed upon a solution that we would try this pilot program in alaska, which can serve as a model for the rest of the country. it was delayed. the reason for its delay was actually federal contracting rules. it was very tough for us once you're in a contract to actually get agreement to change the rules. but we finally got that done. as you may be aware, january 1 is 11th the pilot went live in alaska. we have now imbedded staff where the tpa staff are in our medical centers. >> are those temporary hires, or are you going to move to permanent hires? i know there is a bit of confusion on that. >> right. well, the staff in the va are permanent staff. and the tpa is committing to getting permanent hires in there. but we wanted to try to move to make sure we didn't miss our
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january 11th commitment to you. we are now taking this up to a new level. we have to have additional contracting approval. so there is one more approval to get the full pilot in place. that is to have va staff do the care coordination. >> when do you anticipate being able to make that commitment? what date? >> well, we are pushing -- i hesitate to give you a specific date because it has to do with contracting law. >> well, i like dates. >> yeah. yeah. i will get back to you with a specific date. but everybody knows that's the final piece to get done. and we do believe -- we were talk to go senator tester yesterday about potentially in montana doing a similar pilot. >> okay. it would be good to get back to us. i would like specific days on that. i wanted to turn to the issue of -- and i know we have been talking about it here today, of shortage of professionals. particularly medical professionals. and as you know, mr. secretary,
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just shulkin, we have talked about this, it is particularly acute in states that don't have medical schools. so what we have been doing is working on legislation that can help states, particularly rural states without medical schools like alaska. but i know there are other members on the committee that would benefit from this, that would encourage the partnership that mr. secretary, you talked about when you were in alaska with the different health organizations, particularly the tribal organizations in alaska. so i would like your commitments to work with us. we have some legislation already drafted up. looking to maybe get it marked up soon. i would like to get your commitment to work with my team on making sure the va is good to go with it. i think you would be. we would like to do that with you soon. >> we agree. we actually worked on that together when i was in alaska with the south central foundation. >> they have been back working with us. >> i think it's a great plan.
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i couldn't agree with you more. i'm sorry senator heller is not here because we are working together to set up a medical school in las vegas, nevada. we've got to have more medical schools in these states if we're going to expect doctors to locate in these states. and i think this was a great program. >> if i could just add, i think the critical factor to getting somebody to take a job in the va is having your residency program, so postgraduate training. that's important, in addition to medical schools. that's what we are trying to do with south central. and we could use help with legislation. we found there were 1,500 new graduate medical education spots given to va through the vaca legislation. we have only filled 372 of those spots. and the reason is what we learned is that va needs the ability to actually help the private hospitals in paying for these spots.
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they're over their caps. so they get no reimbursement. that's been the limitation. the hospitals want to and the foundations want to increase training. we want to increase training. but we could use some legislative fixes. >> thank you. mr. chairman, just if i may. it is just a commitment from the leadership here, i was back home recently and once again heard about the issue of providers not getting paid and dropping out, which i think has been a problem in alaska. dr. shulkin, we heard about it again. which is veterans who get commitments from the va to go to providers and then have their medical procedures completed don't get -- the providers don't pay. and these guys are being dogged by credit agencies to pay $25,000, $35,000 bills. and i have heard about it again where our veterans got
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permission to move forward on a procedure are the guys getting the cred digit the credit agencies coming after them. as you know, that's incredibly stressful. and you and i heard about it in alaska. and i heard about it the last time i went home. i'm sorry, there chairman, this is a big deal just to get your commitment to be able to work in some ways to stop this. you heard it. it's outrageous. >> well, thank you. you're calmer than the last time you expressed this to me. look, there is no excuse. we should never be putting the veteran in the middle of this. we are setting up a special team to deal with veterans who find themself in this situation so they can reach out. we cannot put them in the middle of this. we recognized before you came in we have to fix the provider payment issue as well. >> we committed in one of our breakthrough goals to pay our providers within 30 days, 85% by
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the end of the year. that would be a breakthrough. >> i appreciate you raising the question. the first question i raised in my town was exactly the same thing. what's happened in alaska has happened in new hampshire and other places around the country. prompt pay is a huge issue we've got to address if we're going to deliver choice to our veterans. senator murray. >> i ask unanimous consent to put my full statement in the record. secretary mcdonald thank you. in your time as secretary you've talked about moving va's focus to the individual veteran's experience trying to get care and benefits. that's the right move getting the va away from focusing on bureaucracy and procedures. i'm concerned that those changes aren't really taking hold. over the last year in my home state of washington i have gotten complaints of the seattle va refusing to help a veteran in serious pain with a broken foot get from the sidewalk to the
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e.r. and instead making him wait for an ambulance to show up. i have heard of elderly and sick veterans who are being forced to wait outside in the rain and freezing temperatures while waiting for a shuttle. veterans seeking care at a clinic including one with a dangerously high heart rate, rudely turned away from a clippic with only, "we're not taking new patients." and a veteran with shooting pains in his arm who had to wait two months to get an mri and a year and a half to get someone to read the results. those are a few problems i'm hearing and they are deeply disconcerting. >> they are disconcerting to us as well. get me the names, dates, individuals involved. that's the only way we can do anything with it. the situation about the individual in the car that was told to call 911, we have used that in all of our training. we talked about our leader developing leader training. we have now trained thousands of people in the organization.
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we use that episode as exactly what we don't want to do. we have an organization that's rules based. we need an organization that's principles based. the best customer service organizations run on principles not rules. this individual thought they were following the rule. that's the wrong thing to do. we're training our leaders in this. and we're going to make a difference. >> i love the words that you say. i do. but how do you have accountability for that? >> like i said, you need to give me the dates and names. and then i have a discussion. in the case of the person that told the person to call 911, we actually conducted an investigation to find out what disciplinary action we should take against the person who did that. because that is unacceptable. >> i appreciate that. it's just really hard to say if you have a problem, call your senator, we will get a hold of the va. >> have them call me. my telephone number is on the internet. people call me every day. >> i appreciate that you are accessible. i will pass it along. what i'm saying is we can't have
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the message be if you have a problem, call your senator, they will pass it on. we need to make sure that those people are held accountable at the very basic levels so these don't occur. >> i agree. as i told you, we ran an investigation on that one lady. the other thing we have to do is train people. va has not been doing enough training. in 2014 we spent $100 a person training. if i did that running the procter & gamble company i'd be fired. we are taking people off site and training them. that's the way you change the culture. holding people accountable, i agree -- but training. >> that is happening and we will see less of this? >> it's happening. if you go to your facilities and ask the people what they thought about their leader developing leader training, i think you would get positive feedback. >> we will do that. we will pass along the results to you too. because it has to get down on the ground. >> let me pass this along.
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the one example in seattle with somebody not being helped in the parking lot, actually. the deputy secretary sent a memo, an e-mail to every single employee in the va talking about how that did not honor our principles. so we are getting that message out. >> very much appreciate that. mr. secretary one of your 2016 breakthrough goals is to continue to decrease the number of homeless veterans and families, which i applaud. last year the senate passed unanimously the protection act which will allow va to continue funding thousands of homeless veterans. it is sitting in the house waiting for action. how important is it to get that passed out of the house? >> it's important. anything we can do to house homeless veterans. we talk about the fact we have decreased the number of homeless veterans by 36 since 2010. but there are still 47,000 homeless veterans. those who are homeless now have
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skwenl generally have medical issues that we have to care for. drug addiction, mental illness. as we committed here, we're going to continue to cause a number of homeless veterans to decline. but we need your help to do that. >> we need that legislation passed. >> yes. we need eul for los angeles because we are paralyzed from our ability to build the buildings we need without that legislation. >> okay. mr. chairman, if you wouldn't mind, i just want to ask about filling the vakcys -- vacancies in the health care system. spokane has been without a permanent director since may of last year.health care system. spokane has been without a permanent director since may of last year. they do not have a permanent associate director for patient care or chief of surgery. and the slow hiring, i'm told, is leaving a lot of these positions unfilled and has forced the hospital to cut hours back. so it is a critical goal, you said. what are we doing to make sure those positions are filled? >> senator, the chairman and
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several of your colleagues have also mentioned this. this is not only important to you -- >> i got late to the hearing. >> this is absolutely one of our key priorities. we have put out a call for help. we have asked for any of your help in recruitment. we are trying to identify individuals. we have asked for several things to be able to help do that, including giving title 38 authority to us to use funding to compensate medical center directors and network directors. unfortunately, we are so below market, that has become a barrier to us. the culture in va and all the negative attention that we received has hurt our recruiting. we are working very, very hard to give an accurate picture of what it is to serve in va, which is a tremendous privilege. it's a fantastic institution and leaders i think would be very attracted if they took a look at us. we have 33 medical center spots open in the director spots. that's far too many. i can't tell you there's not a day where i'm not calling people
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to ask them to come and help us. >> all right. we've got to keep it up. thank you very much. i really appreciate it. >> thank you, mr. chairman. i just want to go back a little bit and think about the goals you got here and the layout you have put together with regard to the myva as an integrated plan. you have laid this out i would like to know initially what your thought is. looks like you're trying to change the culture in the va. what will it take to change that culture, the specifics of how do you get that message across? you have 300,000 employees now. the second part is it time to actually look at integrating areas of excellence, the centers of excellence that you do have within the va, and integrate those within community health
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care services that the rest of our citizens in the united states actually utilize today? can we do that? what's the challenge for you right now. one in changing the culture, and second of all, can you integrate that into the existing health care that we have out there for the rest of our citizens in the u.s. today? >> senator, i think we are changing the culture. i don't think the work is done yet, obviously, but the plan i laid out will have a huge culture change by the end of 2016. what we have talked about is creating irreversible momentum by the end of 2016. so no matter what happens is when the administration changes and the government changes, thatwhen the administration changes and the government changes, that the va and employees can carry this on. because as i covered in my opening statement and written statement, this is the first time i think that the business acumen and the leaders with business experience had been brought to bare on the sixth
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largest company in the country. and va, if it were a company, is the sixth largest company in the country. we're not going to have another cio of the va who has been with johnson & johnson or dell. if we need to get it done, we need to get it done now, we need to get it done this year. we laid out the steps to do that. how do you accomplish culture change? there are lots of ways. number one, you've got to raise standards. our standards have been too low. many of our leaders, when i first looked at their performance evaluations, shall rate everybody rated everybody 5, outstanding. how can you be rated outstanding when your employees rate our outstanding. how can you be rated outstanding when your employees rate our organization as one of the worst in government? that doesn't make sense? so that's why we created this leaders developing leaders training, was to take our leaders off site and say, here's the way you run a performance management system. it's not about everybody getting rated wonderfully. it's about what we can do to help train people. it is about holding people accountable.
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it is about providing the customerers is. that training we gave it to 450 individuals. that's now cascading through the organization. so what we did was we enabled the leaders of the organization to go train their leaders and their subordinates. that's why it is cascading now. you can check on your own facility. you wanted to say something? >> looking at the timeline you have laid out for the myva plan, and full implementation goes well beyond 2016 i like the idea that you are looking long-term at it. if you get past not only this administration but the next as well, it seems some of the tools that you may need might be statutory changes or there may be additional tools. have you laid out or is there a layout specifically you need that you need to do to get the myva in? >> yes, sir. in my written testimony, it lists nine different statutory changes we need. in my earlier testimony i talked
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about consolidation, care in the community flexible budget authority, purchased health care streamlining, modernization act. title 38 authority for medical center directors. i talked about the eul, extended use leasing, on the west los angeles campus, overhauling the claims appeal process which we guaranteed by the end of the year if we can get that done. 90% of appeals will be solved in one year. we laid it all out. as the chairman has rightly pointed out, we will work together and partner with you to get that done. we know you can't do it by yourself. we know we can't do it by ourselves. we need to work together. >> i hope the one area that we are successful in is integrating and actually getting a system in place that the veterans, regardless of whether they're in rural or urban areas, they can use the health care facilities closest to them. not just va facilities but other facilities as well.
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i know that's the goal but i wonder sometimes if we work against ourselves when we talk about trying to establish and build now facilities modernize existing facilities, while at the same time suggesting that we still want these veterans to be able to go to their local facilities as well. do we have two different goals that may be inconsistent with one another? >> i don't think so. i think we are after building the best network with the veteran at the center of that. forget all the politics. look at it simply from the veteran's standpoint. we want the veteran to be able to go where they want to go to get the service they demand. we are in the process of building the optimum network across the country. earlier i talked about the fact that we have a map of the country where we have the various affiliates identified, whether it's the medical schools we do business with, whether it's the union health service, department of defense. we partner with all of these folks in addition to the private sector the triwest or health
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net. we look at that every day to see what specialties are necessary in what areas in order to recruit the professionals we need in that job. >> still committed to the ideas of centers of excellence? >> yes, senator. i think the goal is to give the veteran the very best care that can be given in the va and the very best care that frankly, can be given in the community. whatever the answer is, that's where the veteran should go. i sort of have a unique perspective on this now coming to the va from the private sector, now starting to practice as a physician in the va. since i worked on this chart i really want to use it just for a second. this is really quite a surprise to me, how much a veteran gets in the va system that is not available in the private sector. that is why we believe strongly in building the things that are great in the va and investing in those. we are not trying to dismantsle
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the va in this plan. we are trying to do the right thing for the veteran, and that means supporting our centers of excellence programs that you can't find in the private sector. >> thank you, mr. chairman. >> yes. i'm sorry. >> when you're in the private sector versus the va, with you can see, we provide peer support. you can't find that in the private sector. our crisis lines that aren't available in most hospitals. transportation services. if you can't get to your doctor or hospital, can't get good care. caregivers not available readily. we provide that support. homelessness obviously. medication support. behavioral health integration into primary care. rare in the private sector. clothing allowances. lifelong relationships. the single emrs, you know about. and the fact that we work with almost every leading academic medical center.
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there is no health system in the country that can say that. we are getting intellectual property and input from every leading academic medical center to help veterans in these centers of excellence. so these are just some of the reasons the va is unique. and frankly, why we need the va to be strong. >> senator manchin. >> thank you, mr. chairman. thank all of you. i know your commitment. i have seen it up close and personal. it resonated with all the veterans in west virginia. when you came there and basically you have done things have been changed. it lets them know you care. by doing that, you put a portable medical center in the rural west virginia. we didn't have one. the temporary one's been opened now so we're moving in the right direction. and i support what you're doing. i want to make sure that we facilitate what's needed to make these changes in this type. it is like turning the
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titanic. i understand what you're dealing with and the bureaucracy but we have to cut there that. i don't believe there's one of us in this room that believes there should be one veteran that's homeless. there shouldn't be a veteran without a job. sometimes there are problems that accentuate that that we have to address and i think you are trying to do all that. two things i wanted to ask. someone brought to my attention complaining about income-based service. he is led to believe if he's done better in life, he is not afforded the same service. he said, now, wait a minute, joe, i put on the uniform. i would have taken the same bullet that a person when they get out of the service didn't do quite as well as me. i was very lucky. but still it made me feel like now i'm not expected to get the service because i did too well in the private sector. i can't answer them. that doesn't make sense to me. it is like we have scholarship and if you do well and exceed in school and should get a scholarship. well, if your mom and dad make
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this much with be maybe you should get it but you don't really need it so we can't give it to you. so you're not really rewarding for excellence. is that a problem? >> that's a true statement, senator. i'm a veteran. i went to west point. i served in the 2nd airborne division and i cannot be served at the va because i'm what's called category 8 plus. i have too much net worth. >> is that a fact of life that we're dealing with? >> i think what we deal with is requirements versus budget. and the question is we wouldn't have enough budget to serve all the 8s. so the question is where is the balance? >> we accepted that as a policy. and i would say that the majority of the vets have done extremely well in life and god has blessed them well would forsake that or even pay. >> it is even worse than that in a sense. also we have policies that are written in the law that obviously if an individual gets cured, they wouldn't get the
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disability payment for the ailment that was cured. so it seems like the incentive there is to not be cured. these are the kinds of things that, if we work together i think we can make the laws better so that -- so we don't have these. >> and i wanted to talk about in my state is the prescription drug addiction. >> yes. >> i know it is a huge issue. >> and it's huge throughout the services. i understand that too. if you go back in history, i think that chronic pain was something that the va acknowledged early. and it was one of the factors as far as wellness where we said there are other ways to treat. i think that's when this onslaught of opiates came on to the markets and the '80s and '90s. if that's the case, we know the detriment it has had to society. i truly believe that the va could change the culture of america of how we treat chronic pain. i'm imploring any way, shape or form that we can support you,
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that these service people do not go to prescriptions first or prescriptions last. >> as you and i have talked with when we were together in west virginia, we couldn't agree more. when you look at what the va is doing on an evidence-based, equine therapy works for some veterans. acupuncture works for some veterans. stimulation works with some veterans. yoga. so many things we're learning that we can use to substitute for the opioids. we track this every day. we track how many opioids we're using. david tracks it to make sure we're going down. there is a lot american medicine can learn. >> we need to change code here in the general public. basic the policy you all can adopt can lead the cultural change that needs to be done. also, as far as the education that these doctors are not getting is how they're prescribing. you go for a toothache, you get 30 days of oxycontin. >> why can't we take the
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knowledge we have and train doctors? that's what we want to do. >> we see our role is a leadership role in the country on this issue. and we're doing several things. evidence-based therapy, we have protocols that the va has put out. we have to be open to new innovations. there are new technologies that are coming out that could help. we are doing academic detailing. we have mandated that va doctors get academic detailing. that means teaching them on the right way to use opioids. >> and continuing education. they get no continuing education on the dispensing of opiates. none. ask you -- you ask any of the doctors, they maybe get less than one week in medical school out of a five-year probably rotation. it's just awful. so i would encourage you, we're not going to change unless you all take the lead on this. going through our process is quite couple better some at times. you all have had success, have you not, in alternate care of
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chronic pain and it's helped with ptsd also? >> yes. >> so those who might have some mental challenges, you know you can cure and work on that? >> you know, we have a leadership role in american medicine, as david said. this is a big innovation that we can help american medicine. >> one more thing, if i may. how difficult -- you have come from the private sector at the highest level of a large corporation. and a very good corporation, proctor & gamble. they just chose west virginia as their new site so it is a very very smart, very good corporation. with that being said, the difference in management of what you're able to do in the public sector versus the private sector, we know that they don't operate the same. weaver's got to allow you to have your top management changes and flexibility. so how much is protected by the civil service that you can't even touch? how far down in the pecking order can you get to make the
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systemic changes you need to make? >> i think the difficulty of this challenge of changing the va is the difficulty of scale. this is the sixth largest business in the country. it's a challenge of time. because i was with the same company for 33 years. during that time the stock price went from $2.32 to $81 when i retired. so it takes time. but i think that having somebody with experience in business is critically important. what i joke with -- >> i think any legislation that you could fire some of the people who are -- >> we have enough authority to fire people. >> you do? at the top level, can you move people around? >> that's not the most important -- as i said in my opening statement, 10 of my 16 top leaders are new since i was secretary. that's, what, 18 months ago. so we have been able to change the leadership.
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we've been able to do the things we need to do. i think the question this raises is should we treat this like a business and should we make sure that somebody who's ever secretary has business large business. and what's at stake here is veterans' lives. thank you, senator. >> thank you, senator for your focus on opioids and addiction. you have been a real leader and helped us in the changes we have made. and it is also important to point out that 72% of the physicians practicing in america today go through the veteran's administration in their training. if there is one place to make a cultural change, that's the place. i think that is a good lesson. mr. second thank you for being with us today. want to thank the members of -- senator till list? >> i appreciate you all being here. i have a few more homework assignments i need to elaborate. one, i think it is very
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important that senator rounds asked a question. i think a couple of the other senators do. i think it would be very helpful to map actions that we need to take, legislative actions, to these 12 breakthrough priorities and make it very clear either it's draft legislation or legislation that needs to be drafted that are on the critical path but for we won't accomplish the goal. >> great idea. great idea. you can have that this afternoon. >> thank you. i think it's also very important in terms of stakeholder management -- we talked a little bit about this -- that we get to the vsos. i think their summer interests in what what you have to say. some are concerned about what you have to say. we have to find what that stakeholder plan -- >> sir, we have been doing that. i have a breakfast with the vso leaders every month.
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and we have been sending out our my va team. >> i would like to get -- >> -- meet with the vsos. >> i'm hearing some feedback. i don't know what level it rises to, in terms of general concern. but i would like to know a lot of the major stakeholders that are in what we are doing here. >> yes, sir. >> i want to include that in my red neck powerpoint. the vso's role and the care they're providing in the feel. >> and if you hear of someone who thinks they are being excluded, let us know. we will make sure they're included. >> and i also wanted to underscore your point about training. because people talk about the top line number for training. it looks like a big number. when it's $100 on a per-person basis, we are talking about better treatment for pain medicine and other things. i think you really need to emphasize it may look like a big number. but when you are talking about the sixth largest organization in the u.s. business operation. the last thing -- two other things. with cio council -- >> yes. >> -- i would like to see a matrix going forward of any of
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the infrastructure, technical decisions that you are making. i would like to see a running list of the buy versus build decision. you all know if you have a build decision, boy, you ought to have a really good reason for why you are building versus buying. >> you know our prejudice. we've talked -- >> i know laverne council, but i want to see it in writing. you hear things people saying -- look scheduling systems, those sorts of thing private sector's got it down. last thing, would be to extend into the other areas such as -- other capacity when looking at your capital expenditure going forward, optimizing that, making sure you're getting creative about maybe collaborations with the d.o.d. where they have capacity capacity. thinking fayetteville, womack. making sure that's articulated. final thing. i said that was final. this final one.
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organizational comparison speaks to something that senator manchin discussed. i'd like to see what the organizational model looks like as you get to a full transformation. does it have the kind of elements of a pyramid you would see in business? is the bureaucracy that we find in the mid that i think sometimes problematic being thinned out pushing more of those resources down to providing care so the organizational transfer mags model is something we haven't talked about to extend that it involves reorganizing the business. all of those things i think very helpful for us see it measure it on some basis and make sense. final thing, truly the final thing, has do with toxics at camp -- if senator burn going to communicate to your office, potential issue with timing. we like the work you've done. timing of getting that stuff online. i've heard things i'm not going to react to. we'll be in touch with your
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office. >> don't write me a letter. let get together and talk. i get too many letters. >> we'll get our office together fairly quickly. i think it was senator burn's incompin inclination to write a letter. >> we will reduce the middle manage ment management management they say they don't need it but we will do that. >> i find it hard to believe one business needs to be different from the other there they shun be mine principle, customize when you need to to meet a certain customer need. >> thank you mr. chair, for holding this important meeting. >> thank you for raising the question of vsos. the first remarks were the vsos are the representatives of our customers. and in the changes legislative talked about seven items secretary outlined in his
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remarks is going to be critical to invut of the vsos and having be partners. some changes take hard decisions to affect customers. customers have to have input before the fact and be a team player rather than after the fact and be reaction area. i'm going it see all hands of deck when we make the decisions. a a>> thank you, we stand askrurned.
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on this monday, live look at u.s. capitol here in washington, where the city continues to dig out from winter storm jonas. the house will be in pro forma sessions this week no legislative business conducted. while the senate will attempt to return tomorrow with the first votes scheduled for wednesday. and down constitution avenue to pennsylvania avenue, this is a live shot of the white house. the president plans to travel to walter reed medical center today to visit with wounded warriors there. >> democratic presidential candidate martin o'malley will be a campaign rally in iowa today. we'll take you there live 3:30 p.m. eastern on c-span. >> c-span's campaign 2016 is taking you on the road to the white house for the iowa caucuses. monday, february 1st, live coverage begins at 7:00 p.m. eastern on both c-span and
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c-span2. we'll bring you live precaucus coverage taking phone calls, tweets and texts. 8:00 p.m. eastern a republican caucus on c-span. and democratic caucus on c-span2. see the event live in its entirety. stay with c-span. join in on c-span radio and c-span.org. >> tonight on the communicators craig timburg joins us from stanford in california to discuss articles for the post net of unsecurity. he examines the creation of the internet founders' objectives and what cyber security issues face consumers today. >> hundreds of millions of billions of us we're forever choosing things other than security. we're choosing speed, performance, the features, and so security, i don't know, i think it's maybe between 5 and 10 on the list of the priorities
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of most software developers for whatever else they say. they will tell you ask security experts tell you security doesn't pay. >> watch the communicators tonight 8:00 eastern on c-span2. senate energy and natural resources committee held a hearing recently on the outlook for energy and commodity markets. the administrator of the u.s. energy information administration testified, along with several analysts, focusing on electricity, minerals and renewable energy. the committee questioned witnesses on the impact of iran entering the world's oil markets this is over 2:15. >> good morning. we will call to order the committee on natural resources. gentlemen, thank you for joining us this morning. this is the first hearing that the energy committee has had in 2016 and i think it rather
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auspicious that that today we're going to be conducting oversight to examine the near term outlook for energy and commodity markets. i think everybody's interested in what you have to say the predictions, the forecasts, hopefully your crystal balls are clear and sharp this morning. it is an issue that is not only interesting but clearly consequential in consequential so many different ways as we look to the outlook for not only the energy but the mineral markets, as well. there are few commodities that are more foundational to the health of our economy than energy and minerals. most americans are certainly familiar with gasoline prices and their electricity bills but i would submit that it's our responsibility as senators on this committee to do our best to understand the complex interplay of our nation's energy mix and
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the influences that drive key energy and resource indicators. low oil prices, for example, lead to lower gasoline prices. americans are certainly enjoying that. but what is the knock on effect with respect to our natural gas prices? as fossil fuel prices fall, how does that affect the competitiveness for renewables as well as nuclear power? and also what is the impact on jobs on consumer spending and so on. there's just so much that is again interrelated and the complexities are such that we require experts to come and give us a little bit of a forecast as to how it all plays out. i am reminded, however, that as we see things like lower oil prices in the lower 48 they are not necessarily reflected evenly
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across the united states. i was home in nome, alaska, about ten days or so ago. the prices up in nome are in the mid-$5 range. where i was the following day, about $5.40 a gallon. they're looking with some envy at the fact that in the lower 48, we're looking at gas prices at the pump just above $2. sometimes things don't work to the benefit of all evenly and i think that is something that we keep a particular eye on in alaska. we did some good work on the committee here last year in 2015. and i think within the senate itself, we saw the return of regular order in the senate a little bit. in energy policy we laid some foundations to modernize our strategic petroleum reserve.
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we lifted the ban on oil exports and then more specific to where we are right now, we passed out on an 18-4 bipartisan vote the energy policy modernization act that moved out of this committee. i'm working to ensure that that bill gets to the floor. hopefully as soon as possible. and i think it is fitting therefore, that we hold this hearing on the broad energy outlook shortly before the full senate might turn to our broader energy bill. it's my hope that we'll gather critical current information this morning to inform our thinking before we head to the floor to debate s-2012. again, i thank all the witnesses for joining us this morning. we have some familiar faces, mr. siminski who has ably led the energy information administration. we have some newcomers, as well, and we welcome you. we are fortunate that there are reams of data from government and neutral sources to help us
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deepen our understanding of the energy markets and i look forward to hearing from you all. with that, i will turn to my ranking member senator cantwell for your comments this morning. >> thank you for holding this important hearing to examine the near-term outlook for energy markets. and i thank the witnesses for joining us here today on a important and timely discussion ahead of the floor debate on the bipartisan energy bill. energy markets have been changing rapidly in the last year. i'm sure we're going to hear a lot about that. i want to emphasize a few things. utility scale wind capacity has again by 67% to nearly 70 giga watts in last ten years. in part the successes enabled by an all-time row reduction in the cost of wind power. the prices have fallen 7 cents kilowatt hour in 2009 to 2 cents a kilowatt hour recently. that's a 71% drop.
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these trends are prevalent all across the united states. utility scale wind power is developed across 39 states and in nine states wind exceeds 10% of the total in-state electricity generation. it's not just wind. solar technology has rapidly emerged as a mainstream technology over the last few years. utility scale pv solar has grown to more than 10 gig watts in 2015. and distributed pv systems installed on customers and business rooftops have seen is the same level of growth. now there are more than 80,000 distributed pv systems installed. this is possible because of dramatic decline in the price of pv systems down 59% over the last six years. but interest in renewable energy just hasn't been from electric utilities and customers, in 2015, there was a record
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breaking year for corporations such as amazon, microsoft, google, walmart who purchased large scale wind and solar energy. these corporations signed roughly 3 giga watts purchase agreements for renewable energy last year, more than double the amount signaled in 2014. so these trends have also been benefiting in my home state. washington. wind industries seven in the nation for installed wind capacity and ranks 15th in the country for solar power. i'm sure people can't quite understand but it's true. and 25th in the nation for total solar capacity. recent policy changes will accelerate trends, creating more jobs, reducing carbon pollutions and saving consumers money. why the sudden drop in cost? part because after policy. in 2015 in the addition of new policies that build upon the success of previous support for renewable energy. for instance, august 2015, the epa signed the clean power plan rule which will reduce car pollution from
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power plants and drive a transition to renewable energy. and this last december, more than 190 nations reached a historic accord to address climate change committing nearly every country to lower carbon pollution and to keep global temperatures from rising more than 2 degrees celsius by 2011. so these domestic and global commitments to reducing kargen pollution will create new global market opportunities and export opportunities for the u.s. and and our technologies. in fact, the international $4 trillion renewable energy investments and about $8 trillion in international efficiency investment will be made in the next 15 years across the world. and lastly, as the end of the last year, can omnibus spending bill included long-term extensions for clean energy tax credits. that will be sending a signal, according to bloomberg, new energy finance as i'm sure we will hear shortly, it's estimated that this will result in 76% more wind energy and 44%
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more solar energy. if these policies had not been extended. all of these policies continue to accelerate the trends of clean energy development, reducing pollution and saving consumers money and creeing jobs. there are job creation activities going on here. a report from the solar foundation found that u.s. solar industry employed more than 200,000 americans in 2015 with a 20% growth in the solar industry employment. for perspective, for the industry grew 12 times faster than the national employment growth rate during the same aim time period. the solar workforce is larger than the more established fossil fuel generation sector, such as oil and gas extraction industries. the u.s. wind industry has had similar job growth trends supporting over 70,000 well-paying jobs. but it's also important here to talk about the consumer in this
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equation. renewable energy policies not only create jobs but help save money for consumers and provide consumers with more choices. in a new study by the national renewable energy laboratory and lawrence berkeley national laboratory, renewable portfolio standards helped to lower prices, saved consumers up to $1.2 billion from lower electricity and $3.7 billion from reduced natural gas prices. recent low oil and natural gas prices have also resulted in savings for consumers, for example, the aaa estimates that americans saved $115 billion on gasoline in 2015 compared to 2014, and that i think is an average of about $550 per driver. so, however, these fossil fuel commodities are still susceptible to price swings. i'm sure we'll hear about that today. less than two years ago the oil prices were over $100 a barrel and eia short-term energy outlook states that" oil prices could continue to experience
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heightened volatility." and that is over the next two years, that prediction. in contrast, renewable technologies which use wind and solar are not as susceptible to these price volatilities and consumers should have choice and should not face roadblocks on being able to implement these choices. so we'll continue to support those policies that give homeowners and businesses the freedom to generate their new development, whether you're an environmentalist or a tea party person supporting distributed generation and making sure that they get access to be in the own distribution business is something i think we will continue to be talking about here. so again, thank you, madame chair for holding this important hearing and i hope that we will hear a lot from our witnesses today about how and what we can expect from the next few years. thank you. >> thank you. with that, we will turn to our panel of witnesses. it will be led off by mr. adam
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siminski, the administrator for u.s. energy information administration. the eia. he will be followed by mr. antoine halff, the program director for the global oil markets for the center on global energy policy located at columbia university, we also have mr. james la see air, the managing director for capital alpha partners. we also have ethan zindler who has joined the committee here today as head of the americas bloomberg new energy finance, and rounding things out is mr. daniel mcgroarty, the principal at carmot strategic group. with that, siminski, if you would begin with the panel and i know you have a lot to say so we will probably have to go over our allocated five minutes. we're good with that because there's a fair amount of information that i think needs to be imparted.
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>> maybe just a couple of minutes, senator. >> we appreciate what you will give to us. and know that we'll also have opportunities for expansion when we come to the q & a. if you would please start off. >> thank you, chairman murkowski. ranking member cantwell, senators cassidy and hoefben hoeven. i appreciate the opportunity to provide testimony today on the u.s. energy outlook. the energy information administration is a statistical an analytical agency within the department of energy but by law eia's data analysis and forecasts are independent of approval by any other federal office or employee. therefore, my views should not be construed as ripping those of the department of energy or any other federal agency. major changes affecting energy marks have occurred over the past year in the areas of global commodity prices, energy technologies, and u.s. energy and environmental policies. eia's annual energy outlook for
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2016, which will be published by midyear, will include these changes. what i'd like to do now is talk a little bit about last year and then we'll talk about the forecast. crude oil ended 2015 with both brent and wti below the $40 a barrel, the lowest level since early 2009. the decline has continued with today's wti price trading just under $30 a barrel. with the fall in prices, u.s. on shore crude oil production began to decline in early 2015, but still averaged 9.4 million barrels a day, 8% higher than 2014. natural gas spot prices at henry hub in louisiana averaged $2.63 per million btu in 2015 and that was 40% below the 2014 average. however, the rig zik continued drill were highly productive and totals dry natural gas production in 2015 reached an estimated 74.5 of billion cubic feet, almost 6% higher than
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2014. in april of '15, natural gas fired electricity generation surpassed that of coal fired generation on a monthly basis for the first time in history and did so for much of the rest of the year. that and lower exports led coal exports to fall below 900 million short tons, the lowest level since the mid-1980s. commodity prices, weather, investment in renewable capacity drove changes in electricity. the wholesale price of electricity set by natural gas generators fell by between 27 to 37% at major trading hubs across the nation. nuclear generation through october of '15 was the highest since 2010 due to low levels of outages. that was they were the lowest on record of about 3% of summer capacity. hydroelectricity accounted for nearly 6% of total generation through october.
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despite lower than normal water and snowpack levels in several regions. wind provided something like 4% of the number. net generation from distributed solar systems increased 28% and utility scale solar photovoltaic generation increased by half over the first ten months of 2015, based on eia's new monthly estimates of capacity and generation from small-scale distributed solar that we're now doing by both sector and state. now, i'm going to turn to the short-term energy outlook which provides monthly forecasts through 2017. crude oil refined product prices in 2016 and refined product prices are forecast to be lower than in 2015 with brent crude back up to about $40 a barrel by the end of '16 and $50 a barrel in 2017 with wti averaging $2 to
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$3 a barrel lower than brent. a word of caution is advisable. the current values in the futures and options markets suggest that market suggest that market participancy very high uncertainty in the price outlook, similar to what senator cantwell said and the risk is that both the upside and the downside, the retail price of regular gasoline is forecast average just a little over $2 a gallon in 2016 and $2.21 in 2017. that's down from $2.43 last year and down from $3.36 in 2014. so a big drop in gasoline prices. u.s. crude oil production is expected to continue to decline through 2016 and through most of 2017. so this is very different than two years ago when production was climbing and climbing rapidly. the global oil market becomes more balanced because of these
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declines in 2017. non-opec production is estimated to fall by 600,000 barrels a day in 2016, about two-thirds of that is driven by lower production in the united states. outside of the u.s., non-opec production declines are relatively small because of past investments. and project commitments made when oil prices were higher, canada and brazil are good examples of that situation. eia forecasts that a half a million barrel a day increase in opec crude oil production in 2016 and about .6 million barrels in 2016 with iran accounting for most of the increase at 300,000 barrels a day in 2016, half a million in 2017. there were developments there over the weekend with the sanctions finally being removed. eia's forecast assumed that sanctions targeting iran's oil sector would be lifted and that is the case. eia's forecast for henry hub
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spot prices to average $2.65 a million btu in 2016 and $3.22 in 2017. currently levels are near $2 so that will be a fairly big increase, but it reflects consumption growth mainly in the industrial sector, fertilizers and chemicals, for example, and eia expected a small decline in the power sector as natural gas prices rise and renewables hydro, wind, solar, increase. eia projects production growth will be slow in 2017 as prices rise, with more demand from industrial users and exports. and the exports are expected to grow quite a bit, both pipeline to mexico and liquefied natural gas tanker shipments, with the start up of the pass facility later in the spring. coal consumption in the power sector is forecast to remain unchanged in 2016 and declined slightly in 2017 while the forecast of higher natural gas prices helps to support coal
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generations, expected increases in electricity from renewables and nuclear reduce the need for coal generation, with slower growth and world coal demand at a lower international coal prices also expected, u.s. coal production is forecast to decline by 38 million short tons in 2016 and by an additional 9 million tons in '17. the change in the mix of electric generating units that supply the united states is expected to continue with the declining generation share from fossil fuels offset by the growth in the role of renewable resources, as shown in table 1 in my full written statement. madame chairman, this concludes my testimony. and i would be happy to answer questions later. >> mr. sieminski, thank you very much. i'm sure there will be questions. mr. halff, welcome. >> thank you very much. chairman murkowski, ranking member cantwell, senators cassidy and hoeven.
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appreciate very much the opportunity to share some of my views here today and provide testimony. i'd like to focus on the oil market and take a step back on some numbers and try to identify some of the key drivers that i see as pushing the price lower. the selloff, the scope the duration of the downturn in prices has come as a surprise to the market. it hasn't run its course. there's more room for low prices but the selloff is not sustainable and eventually the price will rebound and the market will show a recovery but it will emerge different from the recovery from what it was before. this is not the first selloff in the market. there's been major price collapses about every ten years. this one is different because the market has changed in key ways on the supply side and on the demand side. on the supply side, two key factors are the event of shale oil in the u.s. and also the
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wave of social unrest and instability that is sweeping through many producing countries. the impact of shale oil has led opec to give up its price management strategies, the practice of cutting supply to support prices, with which opec has been identified over the last 30 years. there's three main reasons why that is so. one reason is that shale oil has changed the perception of supply scarcity into a perception of supply abundance. it has unlocked huge resources not just in the u.s. but potentially elsewhere in argentina and russia. this has likely changed the view of major producers like saudi arabia about how best to optimize revenue from their resources. the saudi oil minister in the last 18 months or so has repeatedly come back to the idea of what he calls a black swan, the idea in 20 years, demand will not be there and saudi arabia might sit on a huge ocean of oil that's not worth as much as before.
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so this has essentially seemingly incentivized producers to speed up the pace of extraction of their resource and maximize their revenue by selling more now and keeping less for future generations. another way in which shale oil has changed the picture is by shrinking the trade map for crude oil. the u.s. doesn't need to import as much crude oil as before. that is the case of europe because european refineries have found it difficult to compete with u.s. refineries which have increased their activity with the development of natural domestic resources in the u.s. so there's less crude flowing into the u.s., less crude flowing into europe. the market is now heavily concentrated in the eastern region east of suez and asia, and increasingly so in the next few years. that makes it much more difficult for opec to cut production and allocate
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production across the world when, in fact, opec producers as other producers are increasingly competing with one another in a very fine night marketplace in asia. and the third factor which limits the scope for opec to cut production is the way shale has changed the business cycle of the oil market. it's a much shorter business cycle. the shale industry, the shale companies, are very different from traditional conventional oil require less initial capital investment. they have much shorter lead times, much shorter payback times steeper decline rates, much more price responsive at least in theory. so that means if opec had clung to its old strategy of cutting supply, it would in effect, have subsidized shale production and enabled shale oil producers to come back in the market very quickly as soon as prices came back up. so it's not entirely a surprise
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that saudi arabia and the other opec members have given up the practice of cutting production. now, other producers also have been incentivized to produce more by the unrest in their countries, this is the case of russia this is the case of iraq. this is the case of brazil. this is the case, all these producers have been incentivized to produce more and to make up in volume and what they've lost in per barrel price. on the demand side, demand has been very weak and that has undermined prices as well. the normal demand response that one might expect from a drop in prices has not happened for a number of reasons. the slow pace of the economy, the slowdown in china changes in the currencies of major countries and an effort to desubsidize oil prices by a number of emerging economies. in addition, the deflationary quasi deflationary environment in many economies has meant that low prices increased expectations of deflation
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instead of stimulating economic growth. and there's concerns in the oil sector about the rapid pace of penetration of competing fuels in traditional oil markets like natural gas and renewables. so all these factors are changing the picture. and mean that there's much more supply, much more downward pressure on prices. we are seeing now the beginning of a supply response but supply continues to exceed demand, inventories continue to build, than means more pressure. longer term though, there will be a correction because the same factors like incentivizeing producers to maximize revenue incentive size them to invest very little in future production. there's a lack of new projects to make up for decline rates, and the decline rates themselves are increasing because necessary maintenance has been pushed back or reduced. we're likely to see an increase in decline rates, an increase in
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is natural drop in production, and the lack of new projects to make up for those declines. so eventually, we'll see a very steep rebound in prices when really the shift in inventories reaches an inflection point and inventories start drawing down. this concludes my remarks. i'd be very happy to take questions. thank you. >> thank you. mr. lucier. >> well, chairman murkowski, ranking member cantwell, senator cassidy, senator hoeven, thank you for the opportunity to testify before this committee. i'm honored you would request my views on the state of the electric power industry and the power markets. in these remarks i'll present high-level views on electric utilities, merchant power producers and the critical issues of price formation and market structure in the wholesale power markets. my name is james lucier. i'm managing director and head of the energy practice at capital alpha partners, an independent advisory firm that
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serves most institutional asset managers and financial participants in the power markets. i, personally, have been devoting the bulk of my time to the electric power industry and to the power markets since i first started following them as an analyst at the prudential equity group in the california power crisis of 2001. and 2000 and 2001 actually. so it's been an interesting 16 years. if i were to characterize the state of the power markets in five points, i'd offer the following -- first, inflation adjusted retail power prices are at historically low level. but also consistent with the historically stable range. showing that the system and the industry generally have served consumers well by maintaining low and stable prices over a considerable period of time. also, wholesale power prices are at a ten year low which against shows service to consumers but also reflects low interest rates
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and low natural gas prices which cannot be taking for granted and possible design flaws in the wholesale power markets which i believe may not be sustainable. in the regulated utility space, corporate management faces a conundrum. how to maintain or increase earnings to satisfy shareholders at a time when power demand after declining year on year for the first time in u.s. history after 2008, remains flat or nearly flat as far as the eye can see, which is to say well into the forecastable future. in the merchant power space, generators are hard pressed to show a return on equity that would justify new investment in competitive markets that serve two-thirds of the u.s. population. a step change downward in natural gas prices since 2008 which we will credit to the shale revolution is part of the story, but so also are troublesome issues price formation in the energy markets and the development of appropriate pricing mechanisms
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for reliability and ancillary services. finally, as this committee knows so well, the demands of the epa's clean power plan will drive the greatest investment cycle ever in the history of the u.s. power industry, perhaps amounting to hundreds of billions of dollars as existing base load power plants retire. beginning, as we've seen with the mercury and air toxic standards mats driven cycle of 015 and continue through 2030 and beyond. single greatest challenge in the power markets today is financing the technology investment and the infrastructure upgrade cycle needed to replace retiring base load and to handle new perhaps even unforeseen demands between now 2030 and beyond. this challenge must be dealt with now in a prudent, thoughtful, and timely manner lest due to failure to act consumer price increases that could be managed or mitigated
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now become bo disruptive price shocks later. the power industry has been battered by a series of exogenous shocks, including interest rates, commodity prices and the lingers effects of the great recession of 2008. but, at the same time, this always-evolving industrial is in a period of rapid technological innovation. policymakers should take a balanced, long-term view looking to maintain a diversity of options long into the future. new technology and innovation by all participants should be welcomed. but, at the same time, policymakers should recognize that the existing infrastructure, with its diversity of business models fuel types and public or private ownership, represents not just the spinning reserve or flywheel that keeps power flowing, but also the deep pool of invested capital that keeps account system working financially, as well. that concludes my marks. i look forward to your questions. >> thank you, sir. mr. zindler, welcome. >> good morning. good morning and thank you for this -- got it.
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good morning. and thank you for this opportunity today. this is my first appearance before this panel under chairman murkowski's new leadership. i appreciate the opportunity to contribute. i'm here today in my role as analyst with bloomberg new energy finance, a research division of financial information provider bloomberg lp. our group provides investors and others with data and insights what we call new energy technologies. these include renewables such as wind and solar, electric vehicles, energy efficiency technologies, power storage such as batteries and natural gas, among others. i would note that my remarks today represent my views alone, not the corporate positions of bloomberg lp and do not represent specific investment advice and should not be construed as such. i'd like to start by saying these are, without doubt,
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auspicious and exciting times for new energy technologies both globally and in the u.s. thanks to a confluence of economics, and policy actions. i would argue that a fundamental rethink is now well under way about how energy gets produced, delivered, consumed, and managed in many parts of the world including the u.s. in 2015, investment in these new energy sectors achieved an all-time high of $329 billion globally. the volume of renewable energy capacity deployed into wind, solar and other similar power generating technologies also soared to a record globally. what's notable is that this build out of new projects is rising at a much quicker pace than is investment reflecting the fact that clean energy unit costs have dropped be dramatically. in all, the clean energy sector has received over $1 trillion in new capital over the past four years and over $2.5 trillion in the past decade. with approximately one-half of all new capacity built worldwide in 2015 represented by renewables, it is fair to say
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that clean energy is no longer an alternative source but now very much in the mainstream. what's behind this growth? improved price competitiveness for these technologies and policy support from governments. it should be noted that the latter, policy actions, has certainly assisted in achieving the former of lower clean energy prices. here in the u.s., we are seeing the power sector continue an unprecedented shift away from traditional higher co2 emitting sources of power generation. in that regard, last year will likely be remembered as a watershed year for decarbonization. consider that in 2015, an annual and record volume of coal-fired power generating capacity was either retired or converted to burn other fuels, such as natural gas or biomass. a record volume of natural gas was burned in power plants and gas accounted for approximately a third of all u.s. power, about the same as coal for the first time. solar photovoltaic capacity hit an all-time high with a growth
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in rooftop and utility scale sub sectors and u.s. clean energy investment totaled $56 billion the most in four years and the second most ever. since 2007, the share of u.s. power pride by renewables including large hydro projects in natural gas and nuclear surges are from 49% to 65%. wind gas solar accounting for near le all capacity added. the net result is that co2 emissions in 2015 fell to their lowest level since sometime in the 1990s from the power sector. average retail a power prices in most marks remained level while average say prices have dropped. regarding energy efficiency, over the past five years u.s. demand for electricity and all sources of energy has remained remained,basically flat. even as the economy has grown. efficiency improvements to homes, buildings and automobiles have all made contributions.
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as an aside, i would note that many of these trends will be highlighted in upcoming sustainable energy in america fact book which we'll be releasing in a few weeks. the achievements of the past year came even as fossil fuel prices, most notably oil and to a lesser extent coal were falling. the impact on new energy technologies has been muted for a variety of reasons. the one area where lower oil prices did impact this sector was in the sale of hybrid electric vehicles which slipped in 2015. however, it should be noted pure electric vehicle sales continue to rise, and automakers are now rolling out new, more affordable electric vehicles are longer ranges thanks to lower priced batteries. looking ahead, the growth path for clean energy technologies appears wider and better defined than perhaps at any time. the paris agreement at the end of 2015 saw over 190 nations committing to reduced co2 emissions. here in the u.s., the epa's clean power plan has the
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potential to offer greater certainty for clean energy through the next decade. finally, congress' extension of key tax credits for wind and solar insured growth for these technologies, as well. just as importantlyienly the playing field where clean energy technologies compete and costs continues to expand thanks to innovation and economies of scale. while risks and potential obstacles still exist the outlook is generally positive for continuing growth and change. thank you again for this opportunity. i look forward to questions. >> thank you. mr. mcgroarty. >> thank you. my thanks to the committee for the opportunity to testify this morning. i'm dan mcgroarty, principal of car mit strategic group based here in washington, d.c. strategic resources are a core element to my practice. my advisory companies include texas resources, graphite one,
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america manganese, denim capital management and rio tinto working to develop new sources of metals. i also consult to the institute for defense analyses which supports the departments of defense and homeland security, is the joint chiefs and intelligence community on issues related to strategic materials and resource security. that said, the views i express today are my own. the committee asked a central question and that's where i will start. the near-term outlook for the commodity markets can be summed up in a single word, bleak. we've heard about the collapse in the price of oil. the same is generally true for hard rock commodity pricesing look at five key industrial minerals aluminum, copper, lead, nickel and zinc in the past five years an lumen is down 36%, lead 35, zinc down 40, copper down 55, nickel down 64. of course, it's not as if commodity cycles are novel. they happen. that's econ 101. the market is self-corrective and in the long run, that is true.
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it's also true as canes put in the long run we're all dead. i can't answer the question how long is the long run. what i can discuss is what risks we run now and in the near term while we wait for the long run to arrive. those risks are real. when it comes to critical metals, the united states is deeply dependent and growing more so. the u.s. geological survey just released a u.s. historical snapshot. 30 years ago, the u.s. was 100% foreign dependent for 11 metals and minerals. today it's dependent for 19 metals, and more than 50% dependent for 47 minerals nearly half of the naturally occurring elements on the periodic table. this dependency has serious implications for national security. in the most recent defense stockpile report of the 12 materials the pentagon recommends for stockpiling, china is a significant supplier of all 12. we are in the midst of a material science revolution and access to the so-called minor metals takes on major
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implications. unfortunately, u.s. dependency is severe, even complete. consider clean energy. graphite is key to ev batteries and energy storage. the united states produces zero natural graphite. 1010% imfor dependent. we produce zero indium. thin film solar panels are made of sigs material, copper, selenium. we have a 600,000 metric ton copper gap at present and selenium is recovered from copper processing. gallium comes from aluminum processing, we are 99% import dependent. we need radium on fighter jets like the f-35. it is dependent on copper processing, and we're 83% import dependent. we need rare earths in wind turbines, lasers for medical and national security applications smartphones, smart bombs.
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we produce zero rare earths. we're 100% dependent on china. in the effort to reduce our depend answer, the american minerals security act is a strong step in the right direction. in the executive branch, work is being done at the logistics agency to address strategic metals needs and critical materials at d.o.e. and at the white house the white house's materials initiative which ames at u.s. efforts to discover manufacture the advanced materials twice as fast at the cost. that's a laudable goal but it's going to prove difficult for american innovators to be twice as fast when the american mine process is twice as slow as mining nations. we can do more to encourage recycling of rare metals from scrap laptops and cell phones so-called urban mining. we should continue efforts to fine substitutes to rare metals but we must recognize that the search for substitutes may swap our dependency on one scarce
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material for another equally or even more scarce. that's can are why i'm a subscriber to all of the above school. let's recycle and seek substitutes and realize there's no way out of dependency without added production. going backing to that commodity cycle, pricing will come back. remember the long run. but if the u.s. allows the trends make a long permitting process even longer, production of key metals will take place elsewhere, and the manufacturing we want to see here in america will be pulled to where the metals are. i close with a comment and a question. i don't think there's another nation in the world that can match american ingenuity. we can pioneer ideas behind wind and solar. we can design ever more powerful technologies for our war fighters. but where will the materials that make these new applications real? where will they come from? i thank the committee for this opportunity to testify. and i look forward to your questions. >> thank you, mr. mcgroarty. i think it's so important to the conversation that we be discussing minerals and those commodities.
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i think far too often we get focused on the vulnerability that we have historically when it comes to reliance on others for oil. that's understood. people know about that. but they fail to make that connect when we're talking about the need for our minerals. and what it is that we use them for. so i look forward to that discussion with you. i want to ask the question that i think is on everyone's mind here today as we have seen over the weekend, the implementation day with the agreement with iran. the fact that the sanctions that have been put in place on oil coming out of iran have now been lifted, that those reserves that were sitting in tankers offshore are now able to go out and find customers. you have suggested, mr.
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sieminski, that in '16, we should anticipate about 300,000 barrels coming out of iran into the global oil market. by '17, is 500,000 additional. >> additional, right. >> that's what i'd like to ask you about because there's been suggestions that what we will see ultimately from iran is in the range of a million barrels a day coming from iran. when you look to the longer term, and what is happening with the response today from iran getting their oil on the market, the impacting to the global market and to the price of oil, the fact that we already have a glut of oil out on the market, what does that mean for the
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short-term pricing off oil? you've indicated your estimate is somewhere between 40 and 50, between years 2016 and 2017. can you give me more certainty going beyond '17 in terms of what iran does to the market and then also if you can discuss, and i'll ask you, mr. halff, to join this conversation, discuss the situation in venezuela and the fact that you have indicated that we can't ignore venezuela in this discussion as we're looking at the international picture on production. so if we can have this conversation, iran, venezuela, and just for good measure, we can throw in saudi arabia here. >> mr. sieminski, if you want to start.
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>> senator, iran had been producing about 2.0 -- 2.0 million barrels a day of crude oil and other liquids. so we think that that could hit 3.3 million barrels a day by the end of 2016. so these numbers move around a lot, depends on how much comes out of storage and how much comes out of production, and i'll come backing to that in a second. we thought that the number could hit 3.7 million barrels a day by the end of 2017. so that's a little less than million but close to the million barrel a day growth number from where they are now to where he would be at the end of 2017. the annual averages would be a little bit different because the trend is up, so the annual averages will be a little bit lower. in thinking about iran, there are two aspects to this. they have between 30 million and 50 million barrels of floating
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storage in tankers that could come onto the market fairly quickly, but a lot of that is believed to be condensate. it's a very light kind of crude oil, and the markets for that are mostly in chemicals business. and a lot of it was probably destined for china, and we'll just have to see how that works into the estimates for china's economic growth. the second aspect is how quickly production can actually grow and that may depend on be how rapidly foreign investment is allowed to come into iran to help them rebuild their oil fields. and that could be a bit slow, too. there are a lot of uncertainties in this. and layering on something that antoine mentioned earlier, this relationship between saudi arabia and iraq and iran is very important.
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iran is one of three big players along with those other two countries in the gulf area. and how each of those countries puts their volumes of crude oil on the market has a lot to do with where prices end up and so there's probably going to be a lot of back and forth between those three countries. so i think we're back to that observation that says that the uncertainty in crude oil prices as we look out over the next year or two was very high. >> greater volatility. mr. halff? >> yes, i agree totally. i think for iran, the question is -- is there's four questions that we have to consider. the first one is how much can they produce now. the second one how much are they willing to prodice now. the third is how much is the mark capable of absorbing now from iran and the fourth is how much is the long-term production capacity or the capacity to increase production in the
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longer term. the bottom line is nobody knows exactly mouch they can produce today. we tried to look at it when i was working at international energy institute looking at testimony from people who had access to the fields there. our perception was that iran had managed to repair some of the damage that had been caused under the previous president and it had the capacity to increase production fairly rapidly instantly between 500 now and 800,000 barrels per day. the question is, for iran how much is it willing to sell, given its price appetite. it's always been a hawkish member of opec. since the early day of the iranian revolution it's always taken the view west or mark should pay more for i'll. i think iranian leads have made
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contradictory remarks. they said they want to question market, they don't want to flood the market with too much oil too quickly and cause the price to fall further. the real question is can take, and i don't think it can take more than 300, 400,000. now, the capacity to increase production over the longer term will depend on the willingness of investors to go back, the terms offered. that's more questionable. much more longer term. >> go ahead. because i asked about venezuela. we haven't heard that yet. >> venezuela is struggling. its production capacity has been degrading over the years. production volumes have been falling. it's managed to produce as much as it can, but its revenue has been doubly hit by the drop in volumes and the drop in prices. and it can't sustain its production. the national oil company is
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asking for its foreign partners to pay for the light liquids and the condensates to blend the heavy crude to export it. the partners are not willing to do that. it's going downhill. and the social outlook, the social stability outlook is also looking very bleak. the question there is whether social turmoil could actually cause production to fall or to be disrupted. as had been the case in 2002-2003 during the general strike there. my view is that capacity would be for insulated from social turmoil now than it had been in the time but the outlook in sustaining production looks very dismal. >> thank you for your comments. this whole discussion about iran is just so galling as a representative from a state that has enormous potential, we will, as a country tell iran go
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ahead, produce more, while at the same time we're going to continue locking up our potential for further oil exploration and production whether it's on anwar or whether it is a potential for offshore. so know that this is going to be a year where you're going to continue to hear me not complaining but being very discouraged and very, really quite angry at the way that we have chosen to advance a policy when it comes to greater reliance on people, nations that have not been good actors and yet continuing sanctions on ourselves, which is what we're doing with certainly alaska production.
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senator cantwell. >> thank you maem chairdam chair. i want to thank the witnesses. when i think of your collective wisdom here of covering energy markets over your careers, it certainly must be an interesting time to now have your expertise asked for. certainly we're on a roller coaster of sorts. i'm sure it's been very interesting. i think, for me, you just have to understand i come from a hydro state where cheap electricity has rebuilt our economy over and over and over and over again. and so i appreciate not only -- it's not without some environmental cost. there clearly have been, but the efficiency, which i think is the nome de jour of where we are in the country.
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efficiency of every business model. efficiency is going to continue to drive the energy sector as well. that's why so many are interested in distributed generation. because that being closer to the source automatically cuts out a big part of cost. so i wanted to ask you mr. zindler, about the -- the year has brought a significant shift in fossil fuels. can you talk about -- how you see these trends moving forward, whether they'll continue to compete based on price and how do you see solar and battery technology and their trajectories in continuing to lower costs? >> sure. thanks for that question. well, look, the first thing to note about renewables. and hopefully i made this point in my comments is that they are increasingly cost competitive.
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they're not cost competitive everywhere. essentially, the playing field on which this competition is taking place is growing virtually every day. and so obviously the place where renewables are most competitive are places where you have excellent natural resources and/or very high incumbent power prices so they can compete against the incumbents and potentially win. so the places where we're seeing, let's say, wind most xestive are often in the center of country. particularly oklahoma and parts of texas. but also iowa and minnesota and elsewhere where you have some extraordinary winds. that combined with the fact that we're seeing bigger and more effective wind turbines that are being deployed that can scoop up more wind and generate more power is making wind for competitive all the time. on the solar side the costs have been dropping as you noted in your comments as well quite rapidly. we don't see the same level of decline over the next couple
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years, though we do see declines longer term. as you note, when competing at the local level solar can be best positioned. in other words, there is -- as you -- as i'm sure you know electricity is priced on a wholesale basis and it's priced at a retail basis. at a retail basis the prices are much higher. solar can be more competitive at a retail level so-called behind the meter because you just have to offset the price that the home owner or business owner is paying, the final price for electricity is paying which includes the distribution costs of getting it there. those costs and the regions where this is taking place is expanding all the time. i would say this that looking forward, a big part of thinking about how competitive renewables will be will be contingent on the price of natural gas. gas is the price setter in the market. adam was saying they're forecasting up to $3 in the next several years.
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we forecast probably in the same ballpark. as long as gas prices say relatively low, there will be strong competition between these technologies. if gas prices zoom back up then renewables are extremely well positioned. renewable costs continue to slope downward, more gently going forward. >> if you were going to describe this inning of the ball game in reducing costs, we're probably just in the first or second inning. >> yeah. swrp in somewhere in the third or fourth. everybody thinks we'll wake up one day and clean energy is cheaper than fossil energy and it doesn't work that way. last quick thing just on storage. you did ask about that and i didn't answer. similar sort of economics. where power storage starts to make the most sense on the distributed behind the meter level at first because you're helping offset the costs of retail power.
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and in some cases you're helping to offset if you have to pay surge pricing or particularly high pricing or any kind of fees related to your excessive use of power, if you can offset that with power storage, you're in good shape. that's where we'll probably see some of this stuff come into the money first. but there has been a lot of developments around utility scale power storage takes place as well and battery prices have been dropping. we anticipate they'll continue to drop as more capacity comes online. >> on that point i want to keep making for investment. when we look at where the discussion has gone about oil and i remember mr. tillerson was before the finance committee a few years ago and i asked him what the price was just on the development. and so -- he is a very forth right and basically said $60 a barrel. 30 today and if 60 is the recovery cost it seems to me that, yes as mr. halff said there will be a correction at some point in time. i am not hoping for back to $60
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a barrel oil. i want to diversify and make sure that we have a smoother path toward this transition. thank you for that. >> i think i heard dr. -- mrs. cantwell, senator cantwell mention that -- and i think i heard this senator cantwell, that either wind or solar provides more jobs now than those which are in oil and gas. if that's what you said, maybe i heard, that's not true. the burrow of labor statistics points out the direct employment under oil and gas is 1.86 million jobs. and renewable jobs related to all renewable jobs in the united states is 724,000. there is a greater differential if you include the indirect. just to mention. mr. zindler, you in your testimony speak about how renewables now account for 67% of energy production but you include natural gas as a renewable. is that -- in your list of those
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which accounts for the 67%. was that a misprint? >> i think i said, if you include renewables with the definition including large hydro if you include nuclear and you include natural gas. those are different categories. >> under renewables you're lumping in natural -- in that statement renewables plus natural gas. >> i think what i wrote was i described these as different categories and that's my intention. >> i'll look at it again. i think i read differently but not to dwell upon it. mr. halff, really enjoyed your testimony. i never understood -- i've enjoyed it all but never understood the perspective of the saudis as well until i read your testimony. thank you for that. let me ask a couple questions on that. the -- you had mentioned that imports of light oil into the united states are increasing. why is that if we have all this
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surplus light oil in the united states? >> so that's a function of the -- thank you for the question, sir. it's a function of the differential between u.s. prices and european prices. >> i presume that our louisiana light suite and west texas intermediate is priced now similar to brent but yet the transportation cost has to be less here. i mean, obviously you're shipping it from louisiana into a gulf coast refinery sort of thing. so it seems like that would be a price advantage for domestic producers. >> that's the trick about u.s. transportation of crude oil within the u.s. it has to be done with jones act vessels or by rail. >> or by pipeline off the louisiana coast. >> right. but there is only so much that can be moved by pipeline from east to west and to the markets, where the imports of the light crude have been coming into --
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>> i'm still not quite sure on -- just because again, it seems like most of the louisiana -- most of the west texas intermediate is coming by pipeline. and so i'm still not sure the impact of the jones act upon that. i can see if you're moving from louisiana to philadelphia, but since most of our refining capacity is on the gulf coast i'm still not sure. unless you're saying that we're importing the light oil into philadelphia. >> yes. my understanding is the imports of light crude light sweet crude tend to go to the east coast of the u.s. >> gotcha. gotcha. next, mr. sieminski, the -- this is not related to your testimony but it is something you're probably familiar with. the eia projected decreased energy consumption relative to baselines a little bit ago. so if there is a baseline five years ago, your predicted energy consumption would be here. your more recent forecast has
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energy consumption there. there is a tight correlation statistically and it's reflected and the e.i. data as well between economic growth and energy consumption. is it fair to say that e.i.a. has decreased its forecast for the amount of energy consumed electricity consumed because you forecast less economic growth? >> our economic growth forecasts have come down slightly over the past few years, but i think that's just a reflection of some of the overall economic conditions and not just in the united states but globally. i would say that the ratios of energy consumption to gdp generally have been improving because of efficiency gains and some structural changes in the economy. so as you move from high-energy consuming industrial activities to service sector, consumption
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goes down. >> so manufacturing -- energy intensive enterprises offshore to china and what's left are service-related jobs. if i may interpret that. so you less using -- you use less. your gdp is down. >> i think the gains and efficiencyies are taking place around the world, including in china. >> i have read, though if i may, actually in times past when efficiencies has increased the amount of electricity used has likewise increased because the cost input, if you will, is now lower, so therefore folks are able to ramp up production because the cost input is lower. >> one of the things that when e.i.a. has done our long-term projections and annual energy outlooks on the electricity side, i do know that a lot of the improvements, the reduced -- the improvements in efficiency,
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that's reduced use, have come about in households for example, because of improved efficiency of lighting, improvements in the efficiency of big energy. >> do you -- i'm sorry. i'm way over. hopefully there will be a second set. so i'll come back to that. >> happy to do that, senator. >> thank you madam chairman. i see where now i have alaskan water, which is very nice. >> alaskan glacier water. >> yeah. that's great. thank you. i would like to thank all the witnesses. we have an administration -- the obama administration, that continually makes it harder and more expensive and more difficult to produce oil and gas in this country through regulation and other restrictions. and at the same time making it easier for our adversaries to produce and export oil and gas. an example is recently lifting sanctions on iran.
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and that's actually borne out in your projections, i think both mr. sieminski mr. halff and maybe others just got done informing us that u.s. domestic production will decline by approximately 600,000 barrels a day over the next several years and that iran production and export will increase by 800,000 barrels a day over 2016 and 2017. i think that's the wrong approach, and i think it has ramifications in job creation in this country, in economic growth in this country and in national security from the standpoint of energy security. so my question to you -- and i would like to start with mr. sieminski and mr. halff. i appreciate both of your testimony very much. i might ask mr. halff also to put in some projection in terms
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of what he anticipates for price over 2016 and '17 as mr. sieminski did. others can respond to this as well, but i would like you to give me your recommendations as to what we should do from a public policy standpoint so that our industry can better compete in this global economy and, as we look at energy legislation. i know senator murkowski and cantwell have energy legislation they hope to bring to the floor possibly even this week. what type of provisions should we advance to help our industry compete? i would like to start with mr. sieminski. >> senator i think i'll let antoine talk about policy recommendations since e.i.a. generally tends to stay away from those. if i want to keep my job, i should as well. on the question of what has been
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the main factor driving oil prices -- oil production down i would say it's the price. so i don't think it was policy decisions that caused oil production to decline. >> that wasn't my question. >> right. >> my question is how do we empower our industry to compete rather than shackle it at the same time that our adversaries we're actually taking steps that assist our adversaries. that was my question. >> right. well one thing that congress and the administration did in a bipartisan fashion was to agree to allow crude oil exports. so that would be one answer to your question. i think that allows for u.s. crude oil production to compete on global markets. the thing that's kind of limiting the impact that that would have, in the near term, but there's a lot of years to go yet, in the oil area, is that
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brent and w.t.i. prices are very close together, and so the advantage that our crudes had on global markets is somewhat limited. >> i agree. lifting the oil export ban was very important. that's a very good example of what i am talking about. what else can we do that can make a difference? again, empowering our industry to compete? if you don't want to make recommendations, i understand then i'll go to mr. halff. what can we do that helps our industry compete which benefits our nation? that's what i am looking for. >> i don't know whether it's necessarily a government function senator, but i think one of the big advantages that u.s. industry has had and is likely to continue to have is the technology the technology of shale oil development occurred here and maintaining the improvements and costs of
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drilling and production is something that would make a big positive difference for our producers. >> mr. halff, do you have recommendations as to how we can better help our industry better compete in this global competition, this global economy? >> i wish i had but i think it's actually doing a pretty good job of competing. i would agree the lifting of export restrictions is a very positive step because it allows oil to go where it's needed in the market and the u.s. can compete in that. it's opening up new markets potentially, if differentials support exporting. so that's a very good step. another thing which i think is very good for competition is what adam sieminski has been doing at the e.i.a. which is improving data transparency. the more the market knows about how the industry is doing, where the stocks are going, what are the transit production and
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demand, the more investors are capable of providing the right response and making the right moves and helping the industry compete. i think it's a new world for the oil industry. for most of its history oil companies have operated of some kind of price umbrella. whether under the rockefeller/standard oil system or the seven systems texas commission or opec, there was always some kind of protection against the fluctuations in prices that was provided to industry and enabled it to make very large, long-term investments. that umbrella has disappeared. opec is out of the picture for now. it could come back later but it's out right now. and the industry has to learn to live in a very different world. this is a process that will run its course naturally but my projections are that once the rebalancing of the market runs its course and the market starts recovering the u.s. industry will be in pretty good shape. i don't think that the oil
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companies in the u.s. will be the largest the main victims of the price correction. opec i think will come out pretty good. saudi arabia kuwait and u.a.e. and u.s. companies i think would come out on top. the bigger victims of the downturn would be the very heavy big-ticket projects. deep water, west africa, all the very high investment intensive projects will likely be more affected by the downturn in my view. >> any other recommendations before i specifically that would help us compete? all right. thank you. >> thank you, senator hoeven. very important questions in terms of where these forecasts kind of place the united states and our domestic production, what it means for our economy, what it means for our jobs, and what it means for prices for the american consumer.
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it's been a tough tough 18 months or so in alaska. we have seen shell, obviously, lay off almost all of their folks up north. conco has had major layoffs. bp announced last week major layoffs in the state. repsall canceled a winter project. stat oil returned their leases in the offshore. it has been a very discouraging time. low prices in alaska don't necessarily translate to good news. our treasury is certainly hurting as a state that is very reliant on oil. but, as i mentioned, low prices for the consumers don't necessarily line up with what you're seeing in lower 48.
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i mentioned the prices in nome. i tried to get a better read on what they were actually. in october they were hanging at $6.22. when i was there in january they've dropped to about $5.50. this weekend they have gallons at $9.99. they're trying to work with the parks service to haul fuel across park service lands and i don't know whether we'll be able to do that. by gosh i'm going to try because nobody should be paying $9.99 for their oil when people here in washington, d.c. are getting it for $2 or whatever it is here. a great deal of inequity. that's what gets my ire up. when i look to the opportunities that we have now created for iran that we are not creating,
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that we are not allowing for alaska or other states like north dakota or louisiana it should get us riled up. i recognize that so much of this is about price but it is also about the policies that we put in place and making sure that you have an environment that is constructive. this is where i want to talk a little bit about the critical minerals and the situation that you spoke of, mr. mcgroarty. you said that the outlook is bleak when it comes to our mineral -- critical minerals and particularly with our rare earths. mr. zindler, you have stated that 2015 will likely be remembered as watershed for decarbonization. i think mr. mcgroarty went on to state exactly how important these minerals are so that we can move forward with wind and
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solar and all of the smartages that smart technologies that we want but we don't want to be even more reliant than we already are. and i appreciated what you did in terms of outlining how historically we've been so reliant in certain areas, but instead of making progress it seems that we are actually going backwards. now, you have indicated that there are some areas that we might be able to reduce this dependence, you know the fact that we produce zero rare earths and are now, again 100% dependent on china for our rare earth should be unsettling to all of us. we've got lousy permitting processes where in terms of permitting for mines, minerals if we're not the worst in the
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world we're close to being the worst. i think papua new guinea is worse. you've mentioned prospects for recycling and substitutes but you have indicated that really, even with that, unless we do something to increase our production we're not going to get ourselves out of this hole. can you speak a little bit to what you think our genuine alternatives may be when it comes to this reliance on our minerals. >> thank you senator. yeah, there is a -- it's a very deep dependency, first of all. and in terms of bridging topics from oil and gas to hard rock minerals as we look at just from the energy side, new energy
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sources, alternative energy sources. i certainly would not want us to move from a dependency that's been difficult for us over 50, 60 years to a whole new set of technology -- >> in fairness, aren't we there already? >> we are there. that's why i said in my remarks all of the above. we have to recycle. such is our agree of dependency. we have to recycle and reclaim the minerals that are in the devices we use every day small and large. urban mining, as they say. we have to look -- i didn't mention one in the oral testimony, but a lot of waste piles from mines that have -- are no longer in operation that date back 50 years 70 years, 100 years. and the rate of extraction there is very dependent on the technology of the time and also our interest in the metals and
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minerals of the time. in many places around the united states we do have opportunities to reclaim a waste tailings by extracting the metals and minerals that are still there that either we did not do efficiently enough the first go-round or we weren't after them at all the first go-round and now they're part of the periodic table that we're suddenly interested in. we should be doing all of that and we should be looking to substitute. but i am concerned about the easy discussions of substitution when you look at what the possibilities are, the material scientists on these issues, where you're substituting for rhenium where we're 83% dependent and you can substitute but we're 95% dependent on radium. are we looking at the agree of dependence that we're reinforcing or are we looking at the geopolitics of it?
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it pushes me back to the direction of we absolutely have to expand where we can, bringing new production into play. the metals and minerals we're talking about all of the devices that we use, we're at the very bottom edge of that. i really do believe there is some revolution going on in materials science. and it is impossible that's not going to put a lot more demand pressure on us so that we're going to have to get very inventive. we're a blessed nation. we're resource rich. but are we bringing these new resources into development or are we creating obstacles there? i just think, as this whole sphere is evolving so rapidly i don't think our ability to kind of process what the physicality of the needs, you know, we're bringing power from the wind and the sun. the physicality of bringing it into the grid distributing it as we talked about today. those take devices. what are the devices made of?
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will we be buyers of those devices or would you rather be producers of the devices? big issues for manufacturing, national security and there are a lot of metals and minerals we're going to have to get used to treating in the same way as we've talked about oil and gas. >> the good news is that not only are we blessed with amazing resources when it comes to our energy potential, we have some amazing mineral resources as well. senator cantwell. >> thank you, madam chair. i want to go back to electricity for a few minutes. obviously the business models are changing for utilities. i don't know if they feel that intensely at this moment, but i think future change will continue to drive that. used to be that we would have vertically integrated monopolies. built power plants. strung lines distributed customer billing and now customers and consumers and businesses are demanding more
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control and getting it. they are looking at cleaner sources, and clearly there is a lot of change to what has been the traditional utility model. we obviously want to continue to stir investment as well. so i wanted to ask you, mr. zindler and mr. lucier. how do you see these business models evolving for utilities over the next several years, and how do we make sure that consumers feel even more empowered to get the kind of efficiency that they want out of their energy prices? >> well, the utility business -- thank you, senator cantwell, for that very important question. the utility business model has really been evolving rapidly ever since thomas edison in 1882. the initial concept that served us well into the 1970s was the idea of economies of scale, to get low consumer prices we needed bigger and bigger operations. that broke down for a lot of
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reasons in the 1970s and it's actually the '70s, the '80s and '90s when we heard about distributed generation on a big scale. then the focus was on distributed generation in terms of natural gas. it still raised the issue of unbundling. i think that the model of cost-based regulation has been very helpful for providing infrastructure but we're moving into a model now where scarcity based pricing is what applies to the wholesale power markets. that's the fundamental issue here. you need to define scarcity based pricing in such a way that you adequately price reliability, you adequately price load following you adequately price ancillariy services to keep the grid going. for that reason i think that you need to pay attention to a balance of industries and a balance of business models so that you have not only the fly wheel, the power reserves to keep the grid going but also the financial wherewithal to keep the entire thing flowing
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financially too. >> well, before mr. zindler answers i should note we're pretty big fans of cost-based power in the pacific northwest. >> i would just say that i think that this is a very interesting time for utilities. in the particular the question you were asked earlier around distributed generation is what is causing probably the biggest sense of disruption and frankly concern. obviously when you -- when a customer on your -- in your operating area starts generating power off their roof, they don't need to buy as much necessarily, from you as the utility. if you compound that by the fact that there may be something called net metering that they can sell the power back into the grid at a retail price that can also be threatening. so we've seen what i would say what are at times
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confrontational times in what has been a small industry but growing of installers who put these systems on people's roofs. the most constructive statement i would make about that is i would hope utilities would view this trend as something that they want to participate in and take advantage of and find business models whereby they can be the ones who can help either be directly involved in doing the installing or partnering with some of these players. i say that only because, lisa, in our view this is to a large agree inevitable. the costs are coming down. the technology is getting easier to put on people's roofs. it's going to happen. probably better to be involved rather than being in conflict necessarily, with what is an emerging industry. >> do you have a way to communicate that? >> testifying before the u.s. senate energy committee. >> i hope you're right. i hope you're right. i see, as i mentioned in my opening statement everybody from tea partiers to environmentalists coming to
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terms on the fact that they don't want to be overcharged just to get more energy efficiency as they participate in creating energy. i think utilities have to understand that. i, madam chair, will submit for the record department of labor statistics on green energy jobs versus fossil fuel jobs just to show the growth and amazing surpassing of that sector. yes. >> senator i wanted to follow up on the question of regulated utilities and the business model. with regard to distributed generation one of the key issues is really cost allocation. how do you price the power, how do you price the grid? there is a lot of experimentation going on at the state level and i think it's only a matter of trial and error evolution, until we find an answer that will work consistently across the country. if you look at what happened last year in the equity markets the s&p were down about 1%. utilities were down about 7%. but on the whole i think utilities have a much more stable business market and
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utilities in the regulated space actually have their own interests in utility scales. solar as well. where i would direct your interest would be the merchant power markets where last year we saw the stock prices of major merchants going down anywhere from 30%, 40%, even 70%. a lot having to do with natural gas but a lot having to do with market price issues and policy questions about how markets will be structured in the future. so, while i think that we can certainly accommodate distributed generation in a variety of ways, the area that's probably most urgent right now is the wholesale power market that serves two-thirds of the american public. >> i would just note on that that we in the northwest i think have one of the largest deployments of electric vehicles because, again we have cheap electricity. there is upside as well to the utilities. but clearly i think they should as mr. zindler said, get on the side of the consumer and see the many applications here that
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could grow the business but grow it in a different way. thank you. >> mr. sieminski when i look at the -- going back to where we left off, our last conversation, whether or not the residential efish efficiencyies can totally make up for this loss of projected power. you can explain it, if you will. i am looking at e.i.a.'s annual energy outlook figures and years cannot look. i'll mention them. your 2015 base case had 4070 terra watts in 2013, increasing to 4691 terra watts in 2030. a terra watt being 500 -- a hundred billion kilowatts i think. yeah. under the clean power plan rule,
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you tilely-- there is a savings of 581 billion kilowatts, which is to say 581 terrawatts. can we really save 581 terra watts on residential efficiencies? is that part of your all's projections? >> there are three big factors that are driving the deployment of renewables. tax issues, regulatory issues and technology issues. >> that's -- wait. going back to this question. >> right. >> can we really -- is e.i.a. really -- granted, this is clean power plan projections but e.i.a. is estimating a 581 terawatt increase over the clean power plan rule in 2030. you mentioned some of the savings will come from residential efficiencies. is it reasonable to assume that we can save 581 terra watts from
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residential efficiencies? >> i will have to get back to you with numbers. we have not done our final analysis of the clean power plan overall impact. we will have that as part of the 2016 annual energy outlook. how the -- where the savings come from that would be required with the reduction in coal are -- there was also the other side of that, which is the possible increases in output of electricity from natural gas and of course renewables. >> under the clean power plan rule, natural gas will stay basically stable. it's amazing. we have been looking at how much we would have to invest in renewables in order to make up for the shortfall. it'sen it's an incredible -- the entire
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state of massachusetts would be covered with the highest efficiency wind mills sort of thing. it doesn't seem practical. that said that's what the numbers show. okay. mr. zindler, by the way, apologize. you were right when i read your statement again, it is -- you do read renewables, natural gas account for most of the increase, and i thought you were including the two. but as it turns out, of course, natural gas is the lion's share of that. i misread. i apologize. mr. lucier. mr. zindler. distributed energy. we speak in terms of solar panels. i remember being in california and people were putting in distributed energy natural gas generators at their office buildings. it comes to mind mr. zindler. you said that almost a prerequisite for renewables to be competitive is for a high cost of electricity in that setting. to what agree are the distributed energy sectors
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actually natural gas as -- in these areas of high electricity like california as opposed to solar or wind? >> i can come back -- have to get back to you about exact numbers. but in the most recent years most of the distributed phenomenon has been around solar. >> now is that in terms of volume of kilowatts produced or in terms of installations? >> certainly in terms of installations because obviously the pv systems can be very small. in terms of kilowatt hours produced it's probably a smaller margin but still mostly my understanding, is pv. you raise a good point. there is an interesting opportunity there for gas. gas is finding its way into the economy in lots of different ways. there was a good deal of talk around natural gas vehicles before the oil price collapsed. now it's going to be more challenging, of course, for gas to compete in vehicles. but there are more and more ways. i would say this that
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obviously, when you do on-site natural gas generation, you have to get the gas there. there can be those issues but it's certainly not -- something about the solar distributed generation revolution that we're seeing that precludes gas also being a distributed source. >> mr. halff, you did a really good job of showing the international instability that is being created. some countries have an increased instability because of high energy. two things. either high energy costs and/or low energy low income from energy production, if you will. i'm struck. mr. zindler says that for renewables to work the base load has to be expensive. coal is cheap worldwide. india and china have clearly invested tremendously in coal in an effort to increase their economic growth. obviously, coal is cheap. it's there. they don't have to import it.
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that sort of thing. if we were to bring in those sorts of high-energy costs that seems to be a prerequisite for mass scale electrification of, say, india. that almost seems unaffordable for india. i say that because economic growth is clearly in the interest of india. they are going to chinese will head off instability with economic growth, so in this context, is it practical -- is it foreseeable that those two countries, for example, will forego the use of their own natural resource, coal, for a, you know, renewable sort of grid? >> you are absolutely right that coal is very attractive for those countries and it's been the backbone of the chinese energy sector. but we've seen some retrenchment in china in coal use. coal use has actually been declining lately.
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and -- >> is that related to the economy declining or is that related to -- >> i would say it's related to the economy in part because there is less industrial activity but also the external costs associated with coal. and for instance, pollution in the major cities has become a top concern with chinese policy makers. it's deterred, for instance, expatriate workers from going to the beijing area. it's caused social instability. it's been a cause of protest and riots and dissent. so it's a top concern. and we've seen renewables take market share from coal in china, at the margin. so it's -- it's not entirely just based on the domestic availability and the cost. there are other factors at play. also, some of the coal power plants, for instance, or coal-run factories in china have been very ineffective, and those
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are the ones targeted for closure first by the government. in india, coal remains a very big part of the picture for the foreseeable future, but there the case for renewables comes from the idea of generated -- of distributed generation and leap-frogging some of the costs that have been associated with transmission and distribution in other emerging economies as they've gone through periods of expansion. >> mr. zindler, i'm sorry. i'm out of time. is that okay? mr. zindler? >> i would jump in and say, i think on india in particular, i am happy to share with you, senator, some of the really exciting things that have gone on around renewables and particularly distributed solar as antoine mentioned. there are 400 million people in india with no basic access to electricity. one of the most interesting developments we've seen in the last few years as a result of the lower cost of solar are very tiny micro-systems that are
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being distributed for $100 or less into rural communities to provide basic power needs to turn on a light, a radio. these are -- these are the most basic needs that people have that are starting to be served. frankly, if you do the math on that versus building a giant coal plant with the hub and spoke network. solar definitely competes. >> totally works on that. it's the energy intensive enterprise that actually elevates them out of poverty. >> step one for 400 million people, though, is just to turn on a light bulb. >> i yield back. >> i have a couple hopefully brief questions here. i want to go back just for a moment on natural gas and the reality that we've got to be able to move that natural gas and some of the opposition to infrastructure development. you noted this in your testimony mr. lucier. i think you state opposition to
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infrastructure development could prolong the supply gut and put -- excuse me supply glut and put the timing of relief in question. so the question to you is is -- if we have a situation where pipeline siting and permitting is delayed on a bigger scale, what happens? what do you think the consequences are for natural gas and could -- could these types of impediments -- and we're seeing them, believe me, we're seeing them particularly in certain parts of the country where there is amimbe attitude that we want pipeline transmission but we don't want it through our state. move it through somebody else's. could we be in a situation where, because of just that kind of political opposition we have a real threat to natural gas supply itself?
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>> senator murkowski we have too much of a good thing in some parts of the country. in the marcellas obviously there is a tremendous amount of gas. it is really building up there. we don't have the takeaway capacity. what that means is the price of gas is lower in that marcellas region which corresponds to pgm and miso. this is putting huge pressure not just on prices. take away capacity for that gas is key. on the other hand, just three, four, five hundred miles away, depending on where you count we have new england, which is totally dependent on gas for its merchant power. very efficient network but they don't have access to this great gas supply from the marcellas. we have been fortunate this year to have warm weather, el niƱo shining on us. we came very close to severe weather events during the polar vortex in 2014, not once but
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twice. and new england is still in a situation where they could still be one weather emergency away from a serious power or heating crisis. that shows the urgency of delivering gas from areas that are gas-rich, in fact, oversupplied, to areas that are actually quite exposed right now. so i think, in your oversight you should definitely pay attention to the efforts to build pipeline capacity into new england. but on the broader question of delivering natural gas to provide clean gas generation, we're seeing a record number of pipeline proposals right now. that's straining the resources. they're doing quite a good job to move forward but we're seeing it surrounded by hunger strikers that are demanding that they issue no new permits for anything. it's slowing down the pipelines.
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i was driving through the coal country of southwest virginia this time last year and noticed anti-pipeline signs. the state of virginia wants to build natural gas power plants to reduce its overall dependence on coal. if you can't billed a pipeline in virginia. if people in my client meetings are constantly asking about what's happening with the constitution pipeline what's happening with any number of other projects, there is a lot of uncertainty among investors as to whether you can build the power plants if you can't actually supply the gas to them. >> these are huge issues for us, and they don't get near the attention. this is why i think it will be important that we're able to move some of our energy policies forward such as we have within the energy policy modernization act that we hope we will bring to the floor here very shortly. in this same context, then about the impact of natural gas
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and what it does to other energy sources, whether it's coal or whether it's nuclear, i want to ask mr. sieminski about your projections on nuclear because, in your chart, your table, number one on non-hydro-renewables expected to make up 9% of electricity generation by 2017 you indicate that by '17 actually our nuclear generation makes up less of that overall portfolio than it has in years past. if we have a situation as mr. lucier and i have just been talking about where you're not able to either move that gas to where it needs to get, what does this do to your projections? how do you see the viability of nuclear as part of the energy
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portfolio going forward given what we're seeing with some of the constrictions on natural gas? >> senator i think in our annual energy outlook we have just the -- a small amount you know, .8, i think, or 800 -- the difference between 789 and 808 billion kilowatt hours of generation from nuclear in the annual energy outlook. in the clean power plan the proposal, we'll have the final numbers out soon, but that didn't change very much. so i would say that was nuclear is flat because we have total electricity consumption growing by about .7 or .8% per year. nuclear's share is slightly
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decreasing. back to the question that senator cassidy was asking. we do see, under the clean power plan, and the extension of the ptc and itc for wind and solar, the tax credits as well as improvements in technology that have been talked about by other members of the panel, that there will be improvements in the use of solar and wind as you look out, but we -- we are also assuming that natural gas, fire generation, goes up, both in the annual energy outlook and in the clean power plan. so it doesn't -- the amount of generation under the clean power plan will come down a little bit. it will be replaced by more wind and solar and natural gas not
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so much nuclear, back to your question, lower coal but the total amount of generation is just a little lower, and so you don't have to have massive changes in the inefficiency and the residential sector to make up for that. so basically residential users will be using more solar and wind capacity as well as natural gas capacity. but not nuclear. >> not nuclear. mr. zindler, i am out of time but if you wanted to add quickly we'll give you the opportunity. >> back on the gas pipeline question. i wanted to note that we're looking at our forecasting of 2017 will probably see more capacity added for natural gas delivery than we have seen since 2008 with about 65 billion cubic feet per day added over the next three years. there are a lot of pipelines that have been approved coming online that are directly related
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to marcellas and utica. it's worth noting that that may ease some of the bottlenecks that have existed so far. >> we hope so. senator hoeven. >> thank you. i want to go back to mr. sieminski and mr. halff in terms of their energy -- oil and gas price outlook. and mr. halff, you indicated that you talked about this black swan concept whereby opec and others may pump a lot of their oil now with the thought that later there may be less demand. given that saudi needs about $100 a barrel and so does russia to cover their all-in costs in terms of spending in their budget, how does that impact their continuing to produce at a high rate with prices as low as they are and to -- how long do they continue that?
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mr. halff. >> thank you. so saudi arabia can produce and draw on its reserves for some time. there is no immediate pressure. suddenly they have been dipping in their reserves. >> you're talking about their financial reserves now. >> yes. yes. but they have the capacity, perhaps more than any other producers, to continue running at very low prices for quite a while. however, we're seeing signs of pressure, and we're seeing signals that they may be considering some quite revolutionary changes in the economy. there is talk of privatizing the national company to some agree. it's hard to say how much of that is for real. but there are signs of pressure and signs of a shift in the makeup of the economy and the mindset. russia it's a different situation because russia has, in
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a way, benefited from the collapse of its currency. so its production costs have come off dramatically compared to the revenue which continues to be in dollars. so that, i think, partly explains why russia has done so much better than anybody expected. in fact, its production has increased dramatically since things started looking really bad for russia, since the beginning of the price drop and the imposition of international sanctions, production had been expected by many to fall and it's actually increased steadily and russia has been producing at record levels. so how long can this go on? not forever. one advantage that the russia companies have had also is that they haven't been affected by the price drop as much as the state revenues have. the tax system is such that the companies have managed to keep to hold on to a lot of their take, and the state budget has
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suffered most from the price drop. now, the companies go to state financiers for funding. that's where, i think, the companies will hurt eventually, and that's what's going to put a stop on the kind of steady production and growth that we've seen in the last few months. >> will not those factors drive prices higher at some point? how long -- i mean if their all-in cost is $100 and they're selling at $30 or $40, how long can they sustain that? >> there is no question in my mind that the price will rebound and rebound even steeply. when that will happen, it's very difficult time. is it going to start at the end of 2016 or sometime in 2017? currently the futures market pricing oil in 2020 under $50 a barrel. i don't think that's realistic. and futures market are not particularly good forecasters of
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long-term prices. their track record is quite poor. in my view it's almost a given that prices to be significantly above $50 by 2020. the timing is difficult to assess. and the capacity to grow from action from many countries would be degraded. russia i don't think continue producing growth base we've seen. iraq increased production but hurt by its incapacity to pay companies operating there. so dramatic increase we've seen, more than 1 million barrels per day capacity since the price collapse and take over of mosul by isis, that's not sustainable to continue. and we're seeing now production drops in the u.s. in light oil production, those declines, i think, will continue. eventually, there would be a rebound, lie much more price responsive, be able to come back more quickly when the price turns.
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>> who is that? >> shale oil, for short. now one of the big questions is will shale oil when it comes back to the market, when growth comes back, will it come back at the kind of pace we've seen over the last few years or diminished? pace one key factor the deflation that companies have enjoyed since the price collapse be will that will stay or how much inflation we are likely to see as demand for oil services rebounds with price increases. >> mr. sieminski, your thoughts? >> with the chairman's permission -- >> well, would you like to -- >> thank you. >> senator, i grew up in pennsylvania and not in the great state of north dakota but there is a phrase that might apply here, this ain't my first ride yo. and i've seen seven big price declines and i've seen six big price increases i think
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antoine and i agree that prices are cominging away i think getting at the heart of your question, let me try to separate it into two parts. a number of countries, iraq was in there, venezuela also in there, had numbers calculated at, you know, a while ago at they needed $100 to make their budgets. and in russia's case the collapse in the ruble and the strength in the dollar have really improved their position. so they export oil, they get dollars for it costs are in rubles, so that currency exchange ratio's helped russia. in the saudi case, they might not need $100 a barrel anymore either because they've undertaken price reform. they're starting to look at ways to charge people more for gasoline and electricity and so on. so you know they make some changes. coming back to the heart of your question is can we have $30 a
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barrel oil continuing indefinitely into the future, and i think the answer to that is no. prices could go lower we could see $20. why? the cash costs, you know, sort of three layers of costs in the oil business. there's cash costs and that's what you need to cover your immediate bills, in a sense, and that's down near $20 a barrel. and then you've got mid cycle costs. this is kind of like what you need to kind of hang on, you know, it's like you might not be doing really well but you're paying your -- some of your debts and so on, you're not being shut down. that's probably in the range of $40 to $60 a barrel. and then there's the full cycle costs. what does it actually take to go out and find more oil? and to meet rising demand for
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oil because every forecast that i've seen assumes that. and those numbers are at least $50 i think, and possibly as high as $75, maybe even $80 a barrel. so at some point, i think we've got to get back to that full cycle cost range because if we don't this big buildup that we've seen in inventories over the last year and a half is going to get drained down, and something will happen, and we could come back to the senator's question. i think it was your first question, senator what about venezuela? they're -- they're exporting 2 billion a barrel a day on nat and that could go off the market, given the social political turmoil in that country, and then we wouldn't be talking about these layers of costs. we'd be talking about, you foe, what does it take to replace 2 million barrels on a global market where there's not a lot of spare capacity.
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>> i'm going to -- oh, i have a couple of more questions but i would certainly defer if you have -- if you want another round. >> i'm enjoying this exchange. alaska legislature is convening this morning for their inaugural -- the kick-off of their session and questions that are being raised and the discussion here is as important as anything for a state like mine that relies so heavily on oil and a state like yours that has relied so heavily and we've seen what happens when the price kind of tanks not kind of tanks but when the price tanks, and what that does to your economy. so please continue. and -- i'll have some when you're done. >> thank you, madam chair. the testimony really is important. if you look over the last several years the testimony
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that you and others provided, the information you provided, was very important we just recently, led by our chairman lifted the oil export ban which had been in place for 40 years. that was only possible because of the information you put forward that actually showed the benefits of doing so, in terms of jobs, economic growth energy security, lower prices at pump and all of 0 those things. so in terms of creating, i think the public policy we need this testimony i think, matters dramatically so we do create an environment wherein american entrepreneurs and companies can unleash ingenuity and compete. mr. halff your comment about reducing the price curve and ability to respond in the markets is an incredibly important key just like understanding long term pressures that will drive underlying pricing. that's not just important to fossil fuels. it has a dramatic impact on what happens and realistic approach in renewables and other types of energy. i want to shift, mr. lucier, to
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coal for a minute. what is the impact going to be from the administration's three-year moratorium on leasing coal on federal lands? what are the ramifications going to be for the coal industry as a result? this is in addition to co2 regulations stream buffer rule raeglation, many other things. what's the impact of the three-year moratorium going to be. >> senator thank you for that question. that's actually an extremely important question. i haven't prepared an analysis for the impact of the three-year moratorium on coal leasing. but obviously it's going to be quite significant because it points to assets which are being tied up through extended studies in which may be developed in the future, only subsequent to you know, increased charges, carbon
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charges, land access charges increased royalties et cetera. so this is interesting the coal industry right now, as you know is tremendously depressed. we have oversupply in coal which is driving coal prices down. but i think you need to watch what the administration is doing here to see what this means for all fossil resources because if we have to have programmatic environmental impact statements looking at leasing on federal lands for coal, this is clearly the first for doing such programmatic environmental impact statements pertaining to leasing oil and gas in public lands, too. so, i think the economic significance given coal's depressed state is actually not a major issue right now. but the precedent this sets for all other fossil fuels and public lands generally is quite substantial. >> thank you. mr. sieminski? >> senator just some facts on
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this and in 2014, that's the latest data 42% of coal produced u.s. coal production was from federal lands. that's a fairly high number. main states montana colorado wyoming, new mexico, arizona north dakota, senator i think possibly alaska might even have some coal production from federal leases. so there are issues there that in the longer term, could be impacted. and the short term, probably enough property under lease to maintain output. i wonder if i could take a minute to come back to your question about i'm going to -- i'm going to risk talking a little bit about policy which i'm not supposed to do. i want a do-over on your question. >> i knew if we kept you longer we could get some policy.
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>> i think that if you were looking to say what can you do to enhance u.s. energy production in the oil area, maybe even in a few of the other areas the issue of infrastructure are really important and policies that deal with the -- i was remained senator, you were asking about the ability to move natural gas around -- i think the ability to move oil around is an important one. even crude oil products colonial pipeline which runs up into this area is running pretty full. the even issues like the electric grid, which is being looked at by many people, including the department of energy, the strategic petroleum reserve and the ability to get oil water borne from the strategic petroleum reserve, so it can be moved to other parts of the united states and the d.o.e. is looking at that.
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in fact i think part of the law that just passed and instructed d.o.e. to do so. so there are a lot of policy issues associated with improving the midstream. not so much the well head but i in that bit in the middle before we get the products to consumers that are, i think, really ripe for a good look at the policy issues surrounding that. >> thank you, mr. sieminski. i think that's absolutely right on. and i appreciate it. mr. lucier i think you bring up a very important point when you describe ho the moratorium that the administration's put forward is right now on coal. but what are ramifications of that for other types of energy like oil and gas? so i think your point is very well made. and it's deeply concerning. and i'll just wrap up with this
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question and that is as part of the legislation that our chairman and ranking member are advancing one of the provisions included in the lng permitting certainty and transparency ask which the senator is lead on and i'm co-supporting with our chairman and others. i would like some sense of, from -- i'd start, again, with mr. sieminski, mr. halff but from any of you, in terms of what -- if we're able to advance that legislation and more readily allow for lnd export what do you see the ramifications in terms of making a difference withsome of our allies? for example, in not only -- creating markets here at home but also actually making a difference for some of our allies in europe, so forth, reducing russia's tremendous control because of the energy supplier to europe? i mean, will that help? are there other things that will
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help? >> right now i think that the main impediment to lng export is not the permitting, was -- i mean there are a number of federal agencies involved in permitting, but the two mains are federal rail engineering commission for environmental aspects and department of energy office of fossil energy for the -- >> you're not just saying that because you're part of the department of energy? >> i think that there was at one point, there was a view senator, that there was a bottleneck there, but that doesn't really seem to be the case. there has been an alignment between the department of energy and federal regulatory commission on the permitting. so i think that coming back to what are the issues i think that it's largely the economics. with lower oil prices the spread between global oil prices and lower u.s. natural gas
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prices has narrowed and it's made it more difficult to export lng or to look at the economics of lng exports, if we should see a recovery in oil prices that was probably due much more to improve the prospects for further lng exports. if eig's up in we have lng exports going up. i mean it's still -- it's still makes sense into the -- into the asian markets. and possibly into europe. so i think that things will look very different at the point that we get back more towards those full cycle costs associated with oil prices that you were asking
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about earlier. >> mr. halff? >> what i think -- the rise in the future in u.s. lng exports, that's part of the game changer there real transformation of the gas market. and i would just pint out a couple of pays in which things would be different. one is the growth of gas as an international, global market with probably different pricing mechanisms looking forward and more international competition. that's going to be very important for european energy security because it will provide additional source of gas supply, in addition to the sources that europe relies on right now. but also very important for asia. and i think one key factor will be, within key way in which lng
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will have an impact -- it's not just u.s. l in nng, which are increasing, allow for more competition between oil and gas. increased use of gas as a bridge in the energy transition. >> mr. lucier? >> well, senator, you're really correct that if you want to help our friends especially our gas-consuming friends in japan, asia, elsewhere, we do want to increase global supply. this will certainly help europeans looking for broader supply. but it's not just our friends that we have to think about. we have competitors, too. and in a very tight global lng market right now, there could be competition to see who actually builds the export facilities and see who gets export business. so anything we can do on the margin that means that u.s. projects have an edge or u.s. projects have more certainly against last-minute delays does
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help u.s. producers and it does improve our competitive position. sure, it helps our friends but i think we need to think of ourselves in comparison to competitors, as well. >> just very very quick point, which is that i think the lng everything's set on lnd. one area, take a look at, which is interesting, exports into mexico which is not lng but simple cross-border stuff and that we think will continue to rise. a very interesting area for the gas mark. there's major energy reform under way in mexico as well that could drive even further gas demand as well. >> all excellent points. >> thank you madam chairman. >> senator cantwell? >> senator hoeven that was the longest question session i think i've seen in this committee. >> we gave him leverage. >> i understand. i think it's been a good discussion and panel, again, i thank the witnesses mr. halff,
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i thought your -- to me i don't necessarily want to argue about the past as i want to planner for the future. i think your answers to my colleague, senator cassidy, about the chinese, are, you know to point that you know part of the discussion here is also political and that consumers are demanding a different world and china is responding to that. so, no, i don't think india's going to build coal plants galore when they have issues, nor do i think china's going to pursue than that. the president's action, since we have 20 years of coal under lease it's very important we assess for the taxpayer what 30 years beyond that look like and make sure consumers are getting a fair price. my question to mr. zindler on the corporate installation of renewables -- because i think this is where people are driving -- consumers are somewhat driving behavior but also corporations are driving
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efficiency. i think corporations are looking at it as a win-win. a wall markmart says energy efficiency is a win for us. i think that's where google and other people are. so what do you think the renewable purchase from corporates to do grid scale renewable is going to look like for 2016 and into the future? >> that's a good question. so last year things were roughly about a third or so of all power purchase agreements signed in the u.s. for large-scale clean energy were signed by corporations, essentially directly, to buy the electricity themselves. and i think the motivation there is primarily economic which is that essentially gives you the opportunity to know that what your price of power is going to be over a long fixed period of time. and essentially lock it in. it's not that they're buying all of their power from renewables but if they can lock in some chunk of it they can offset the risk of luck situations in
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electricity prices going forward. so that is -- that's one of the main motivators, i think that we've seen take place so far. and you're right, noting google, microsoft in your stake. but not just tech companies but others as well, kaiser permanente ikea, all involved in renewable energy. how they view it, eliminate one risk, the unknown of electricity prices tied to a variety of factors. we talked about here today including gas prices and other things and you lock it in. that is an area we think will continue to look interesting. ily say it is predicated on the notion you have fears of power prices rising. if power prizes go down, corporates might get less interested this in area because they're not as worried about the fluke wax of fluctuation of prices because they feel like it could down in
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the future. to lock in a price over a long fixed period of time. >> i think what's happening, consumers find out more information about pollution, particularly china, they are raising great concern. and people are trying to responden but i see it across the board even in marking, i3 a great vehicle by bmw, who is advertising not only the fact that it's this next generation car but also built with renewable energy, their plant run in moses lake using hydropower. trying to say all-renewable car from the beginning of origins and power to create it and it's recyclable material in the car. i think people are trying to win in the marketplace and i think consumers are demanding it. i think it's probably beau,oth, at least for now anyway. i definitely think it's something for us to continue to look at, how grid scale renewables solve some of the
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questions that we want answered as it relates to distributed generation and moving forward. i don't know if you have anything else on that point, mr. lucier about questions we want answered in the electricity. obviously, everybody from elon musk to many others putting lot into battery technology as it relates to giving us more flexible on renewables and building that capacity into the grid. >> well, that's the big -- thank you, senator cantwell, that's a big open invitation. i'm not sure what i can say succinctly in 30 seconds. clearly putting power storage on the grid combining it with distributed generation on the edge of the grid is something that really could revolutionize the industry. it certainly does provide a lot of solutions for many issues. i point out, the grid is a totality and that well the grid
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has an edge the grid also has a core. and at the moment, it's the cover core, core transmission networks assets keeping the grid alight, if you will. back to discussions of thing likes participant funding or stranded assets, back in the '80s and '90s part of a discussion that led to distribution, too in apartment 90s. these are not new issues. the key point power has a price, access to the grid should have a price. regulators who do cost allocation are very good at figuring this out. over time in market evolution we figure out ways to fairly price resources, whether it's the energy side or infrastructure side. i'm very confident we'll see a very robust partnership develop. i think there's an opportunity for many thousand flowers to bloom. i think you'll see a lot of innovation going forward. >> i certainly like that analogy.
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i definitelilyyily definitely that what we get out of the grid, a layer of efficiency. when we look at ability to have technology not only utilized in the united states but around the globe, now that is a major transformation. so, thank you madam chair, for this hearing. >> thank you, senator cantwell. thank you to each of you, gentlemen. appreciate the time that you've given us. we've gone well over our usual time. when you think about what has been discussed here today we really are at that point of -- of substantial change. mr. zindler you say a fundamental rethink is now well under way about how energy gets produced, delivered, consumed, and managed in many parts of the world including the u.s. i would think, base the on the testimony from each of you, that you would all concur with that. when you think about where we are the discussion that was raised about coal the impact
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that we will have of this three-year moratorium on leasing on federal lands the impact of the clean power plan, when you think about where we are with natural gas what's happened with the low prices the potential for some disruption because of infrastructure issues, when we talk about the necessity for critical minerals and how that will allow us to build out a renewable energy sources through enhanced technologies and yet we recognize that we're going the same direction with critical minerals that we were historically with oil oil picture we could take a week of hearing and just understanding what is going on in iran and iraq and saudi arabia and venezuela, we didn't talk about libya. russia.
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layer in now the discussion about our ability to export on to the global oil market and what that moonseans, the impact to all of this on nuclear, seeing change, policy decisions made through clean power plan what the price of natural gas does to nuclear, what we're seeing there distributed generation in the mix of renewables, the policy decision that we made last month to allow for continuation of the production tax credits there the policies that we're putting in place juxtaposed to the political and geopolitical aspects of energy, the pricing situation infrastructure, it begs for a modernization of our energy policies. and that's what senator cantwell and the members of this committee have produced in an
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18-4 vote, moved out of the committee in july. it might not -- it might not solve all of the problems in the world. i think we can guarantee it won't. but what it does do is updates our energy policies from eight years ago, which desperately need updating in all of these different areas whether it is -- whether it is permitting whether it's how we look at our grid, it's how we move forward in the energy space. so, my hope and i think senator cantwell says we'll be able to move to this quickly, i think it is an imperative, imperative for our economy because when we're talking about energy security, to me that translates to national security which also translates to economic security. so we've got a lot to offer in the space, know that we'll be working on it but we appreciate your guidance this morning. and i don't know if you've made the crystal ball clearer or have just remained us as to how
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cloudy and complex it really is, but we appreciate your wisdom. with that, we stand adjourned. >> this monday, a live look at u.s. capitol here in washington where the city continues to dig out from winter storm jonas. the house will be in pro forma sessions, no legislative business conducted while the senate will attempt to return tomorrow with first votes scheduled for wednesday. and down constitution avenue to pennsylvania avenue, this is a live shot of the white house. president plans to travel to walter reed medical center today to visit with wounded warriors there. >> tonight on the communicators "the washington post" national technology reporter craig timber joins us to discuss the series of articles, net of insecurity. he examines the creation of the
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internet, founders' objectives, why security played a small role for them today. >> as consumers, billions of us now we're forever choosing things other than security. we're choosing the speed the performance, the features and so security, i don't know, i think it's between five and ten on the list of the priorities of most software developers for whatever else they say. security experts will tell you, security doesn't pay. >> watch tonight 8:00 eastern on c-span2. >> the countdown is on. as we approach the iowa caucuses we're really the only place where you can watch these events unfold as they happen. so whether it's a campaign rally, the a house party, a town hall meeting, if we're covering a policy speech nobody else is
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go heing to give you that unfiltered look at candidates as they work the crowd and talk to voters and headache their best sales pitch. so we're going to be crisscrossing iowa for the next couple of days, leading up to caucuses. we'll be covering all of the candidates, democrat and republican candidates, and then keep an eye on what happens on caucus night itself because we'll be the only network that will take you to a republican and democratic caucus. so if you have ever wondered how it all happens watch c-span. >> police officials sociologists and muslim american advocates talked about the role local police forces can play in preventing violent extremism. part of a panel discussion hosted by duke university took place here in washington. also discussing results of a multicity survey of muslims in america and interactions with law enforcement entities. this is under an hour and ten minutes.
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>> we will start promptly and try to close on time. thank you so much for coming to those in the audience. my name is david schanzer, the leader of this project. and we're here to discuss a report that we are issuing today called the challenge of promise of using policing strategies to prevent violent extremism. very glad to see a lot of friends and colleagues in the audience. i think it's because all of us share a mutual interest in this topic. how do we prevent acts of violence like took place in san bernardino last month and in charleston, north carolina, last summer? you know, these acts account for a very small percent of the violence in america, but they generate a disproportionate amount of fear, they undermine confidence in our institutions. they tear at our social fabric,
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they cause a government reaction. some would say government overreaction. so it's really in our national interest to prevent these types of acts of terrorism. i think it's a very noble pursuit that i know many of you are engaged in on a day-to-day basis to try to prevent these -- this violence before it occurs. before we just dive into the subject matter, i do want to say a couple of quick thank-yous. jeff harris and melissa dac at duke and d.c. office who put this together. our research was funded by the national institute of justice and the united states department of justice, friend, colleague, and our grant manager john pickerelli is here and he's been a great person to work with and i thank him for the support and effort he put in. of course the report is -- the opinions of authors alone, not any representation of the government. but it's very helpful to have fund that we received to do this
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research. also, i have brett steele from the department of justice has been a big supporter as well. my co-authors, charles kurzman, professor of socialology at unc chapel hill. friend and partner in this for many years. working together. jessica tolliver to his right from the police executive research forum, director of technical assistance there has been a wonderful colleague. our other coof author elizabeth miller is in the front seat and elizabeth did a lot of interviews and work on this report and did a terrific job. and on behalf of all of my co-authors i want to thank our guests for being here to comment on the report. we have chief j. thomas manger from the montgomery county police department. we're very honored to have him taking time out of his important duties to talk with us today.
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and we have dahlia mogahed, research director of the institute of policy and understanding which is a think tank with offices here and in michigan. and she is straight from an appearance on the daily show with trevor noah, so she is officially the coolest person in the room. certainly on the standards of any college student which charlie and i are very familiar with. and also dahlia and chief manger did not participate in the report. again, they're here to comment on it, but the findings and the conclusions, they're not responsible for them. let me just make a quick few overarching points and then i'm going to turn it over to my colleagues. so in 2011 president obama issued a national strategy which was called empowering partnerships with law enforcement to counter violent extremism. and really a key element of that strategy was to have police and communities build partnerships
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and together find ways to try to prevent these kinds of acts of violence. so what our project did, starting many years after the strategy was issued, was really to try to assess how this concept was being implemented in the field by local police departments and also how the communities that were going to be partnered with, how they were responding and what they thought about the policing efforts to do outreach and engagement. now, we're well aware and all the authors are well aware that there are multiple forms of extremism in the united states, extremism inspired by first al qaeda and now isis, maybe both of them, and also extremism inspired by anti-government, racist, anti-capitalists, and other ideologies. so we fully understand that.
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now, this project was focused primarily on prevention of al qaeda and isis-inspired terrorism because, frankly, we found that this was the core focus of the policing programs that we were able to identify in our field work. so what you will hear today is about the results of our discussions with police about their efforts to engage with muslim american communities and our focus groups with muslim american community members in the eight cities around the country. now, you will see in our recommendations, we discussed that a lot more work needs to be done on prevention efforts with respect to the anti-government, racist, and other forms of extremism, and i'm sure we'll get some questions from you and some discussion from our panelists on this topic as we go along. so with those few framing comments, let me turn it over to professor kearseman. >> thanks very much. again, i'm charlie kearseman, professor of socialologies at the university of north carolina
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at chapel hill and co-director of the carolina center for the study of the middle east and muslim civilizations. i'd like to say a few words about the methods that we used for this research project. the first method was a survey conducted with the help of our partners at the police executive research forum of 382 state, county, and municipal law enforcement agencies. we were able to get a response rate of over 70%. we got a huge portion of the large municipal agencies around the country, and a good number of state agencies as well. covering, all told, 86% of the united states population in their cumulative jurisdictions. we asked them a series of questions, including what forms of community engagement were they involved with in the
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prevention of violent extremism and found that more than 3/4 of these law enforcement agencies were engaged in at least one form of community out reach in this area. among the large municipal agencies, the percentage was even higher. almost nine out of the ten of the agencies that responded to our survey. we followed that up with in-depth interviews with law enforcement officials at 19 agencies around the united states as well as with field visits to hold focus groups and interviews with muslim american community members in eight sites around the u.s. and five site visits for conversations with law enforcement officials. what we found in these conversations is a fair bit of mistrust between some community members and some members of law enforcement. but we also found numerous
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models of community partnerships such as sports league in one city where young muslim americans saw police officers as coaches and mentors. in another city, officers were working with muslim shopkeepers who had concerns about theft in their neighborhood as a problem there, criminal problem. in another area, there was a volunteer project where law enforcement officials in their free time helped partnered with local mosques to clean up vacant lots in the neighborhood that were being used for criminal activities and police officials and community members got to know one another through this activity. in another area we heard about a relationship with the police that helped put mosque members in touch with the social service agency in order to help homeless member of their congregation who needed assistance. that personal relationship with
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law enforcement turned out to be a really useful avenue to find out what kind of services would be available. so one of the central recommendations that comes out of our report is that the full range of these kinds of activities and engagements with community members can be a real boon to building relationships of trust, overcoming whatever bad media, bad press, and poor experiences may exist out there and are worth replicating we believe in communities and jurisdictions around the country. thank you. >> turning over to jessica. >> hi, my name is jessica tolliver. i'm with the police executive research forum. i am director of technical assistance. for those of you not familiar with perf, we are research and membership organization, and in addition to research reprovide management services, technical assistance and executive leveled indication to support law
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enforcement agencies. so i'll try and keep it short. they've given you a lot of background. i'm going to tell you about the site visits we conducted. based on the survey results and the 19 agencies we spoke to on the phone, we chose 7 sites to travel to, spend a few days there, and we spoke with the executive of the agency, the supervisors, the line officers, and the outreach and engagement team members as well as the community members that they worked with. and for each of these agencies and folks we met with, we signed a confidentiality agreement because we think it was very important that they be able to speak frankly with us. not -- so we could identify not only these promising practices but also the lessons learned. we wanted to know about them as steps as well so we could help and form agencies to implement these similar programs. so the key findings based on the site visits and conversations,
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first is that it has to be a whole community approach. this means that the outreach program actively engages with all subsets of the community not just a particular group. similarly this program should address the whole spectrum of public safety concerns and quality of life concerns. so, for example, if you're reaching out to a community and you're having these conversations, you're not just asking them for information, you're explaining them. hopefully you're introducing them to other government agencies that can help them with quality of life issues. if there's a problem with speeding near, say, in their neighborhood near a mosque, then you can help them figure out how to get speed bumps in the area and that's a quality of life issue that will help. you can also help with getting lights installed in a stretch of
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the street that's too dark and makes them feel unsafe. so these are ways that you can build communication and trust with these community members, showing them that you have an actual interest and ability to help them with their quality of life issues. we also found that cultural competency of course is important when first recruiting outreach team members, but what really matters most is personality. so of course we say you should have a diverse outreach team and to the extent possible it should reflect the communities that you're conducting outreach with. but really the individuals you choose to be part of that team have to have not necessarily an outgoing personality that's going to, hi, nice to meet you, whatever, they can be shy. they can be reserved. they just have to have a genuine interest in making the connections and learning about the culture and the people that they're working with because everybody senses that. and they have to be willing,
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like curious to learn. tell me about your community. tell me about your concerns. we really found the most successful team members were those that didn't have any qualms about asking questions and making mistakes maybe but just so they learn. they're open to learning. they're curious. so our research also showed language training and cultural awareness training are very important. some of the lessons learned for cultural awareness training we met with an executive whose first attempt to engage the community was to host a town hall and invite muslim americans from a subset of their community to attend. and as an ice breaker they decided to bring their bomb-sniffing dog. well, dogs are considered impure for this subset of the community and they were horrified. they didn't want to go near the dog. this did not break the ice.
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this made everybody uncomfortable. it was a big lesson learned. if they had done some cultural background they would have known. there is also another example where a male officer was trying to introduce himself to female members of the town hall audience and trying to shake their hands, not realizing that it's inappropriate to shake the hands of the opposite sex unless you're related. so, you know, little things like that make a big impact. if you have some sort of cultural awareness, a great way is by connecting with leaders in that community. they are happy to give you that information and their with you, like when you approach people this is what you should do, this is what you should say. and, you know a lot of law enforcement agencies don't have the resources to put their outreach and engagement team through intensive language training but perhaps you can do key phrases, laminated cards, so
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that when you approach these different groups, you're showing that you have an interest in learning their language and culture. this is all i know but let's talk. it's a way to introduce yourself. i know i'm going over my amount of time. i'm sorry. i'll just skip to the really, really important one. we found that outreach and the investigations intelligence function of your agency should be completely separate. that way there is no misinterpretation about your intentions. you are there to provide policing services and connect with members of your community. you are not there to get information about potential terrorist attacks. of course, if you build that relationship of trust you may at some point have a community member come to you with concerns and it should be clear what your role will be, who you will give that information to, and then you will be as an outreach and engagement team member completely removed from any next steps. okay. that was the biggest.
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>> thank you. thank you, jessica. let me quickly just make a couple of points about our recommendations and i'll turn it over to chief and dahlia for their review. jessica outlined a lot of the recommendations that are in the executive summary that you will have with you relating to what we recommend for the policing agencies. obviously we recommend that they follow these promising practices. we also made some recommendations relating to the federal government. and the first one was that if we're going to take this issue seriously, if we think that policing can really contribute to preventing violent extremism there needs to be resources put behind this effort. police departments have a lot on their plate. and, believe it or not, preventing terrorism, which is a very rare event, is not on the top of the agenda of most police departments around the country. it's about crime, violence, drugs, and other problems that face communities on a day-to-day
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basis. so these outreach and engagement efforts are well supported in many places but in many places they are not. and i think if we want to give a boost to this effort we need to see some form of federal funding for it. second, we found in a lot of our interviews that while people talked about the community members, you know, spoke well about their police departments and the people that they knew locally, their distrust flowed from a great extent on their interaction with at least some federal officials, and we heard over and over, especially about people's treatment at airports and immigration. we know the department of homeland security has been engaged in trying to iron these things out and get people's names off of lists that shouldn't be. we call on the federal government to redouble their efforts in this regard.
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you can't have people who on one hand are attending meetings with officials and promising their cooperation, their engagement, however, we can't, and then have that same person go to an airport and then miss their flight because they are held up because of issues that don't exist, that these are innocent patriotic people. indeed, who the police or other officials have asked to be part of this outreach engagement. and the third recommendation for the federal government is, you know, we do see a void in ideas, training, technical assistance, research relating to how police departments get engaged, especially with to try to prevent anti-government, racist forums of extremism. there's an idea that, well, these are not folks who like the government so how can we do outreach and engagement with them. but the fact of the matter is, everybody comes from a community
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and if we are engaging essentially with innocent muslims to try to prevent violence by muslims, we can certainly engage with innocent non-muslim communities to try to prevent those other forms of extremism. and finally, we do make a recommendation for muslim american communities. we interacted with a lot of them and we made recommendations at the end which pretty much said, listen, work with the police. have an open and candid and transparent relationship. tell them what you want. tell them what your don't like. but have that dialogue. don't put up a wall to start due to past occurrences, maybe historical mistrust. but give them a chance. work together with them. and if they are willing and we believe that they -- all the police departments we interacted with are willing to abide by
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these, you know, promising good practices and if they don't do it at first, they certainly are learning institutions, then they will do so in the future and you can build a relationship that will benefit you in many ways and then help us with security problems as well. with that, i'm going to turn it over to the chief. >> thank you very much. good afternoon, everyone. i'm tom manger, chief of police in montgomery county, maryland, and also the president of major city chiefs association. it's an association of the largest 70 police departments in the united states, canada, and now the uk as well. we deal with the issues that large urban police departments are dealing with every day. and countering violent extremism certainly is -- i like the way it was characterized. it's not the -- at the top of the list of the things i lose sleep over every night but it's on the list. there are certainly higher priorities for local police departments that we're dealing
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with, but it is dealing with terrorist activities and countering violent extremism certainly is part of the things that local police departments are now dealing with that in fact before 9/11 we really weren't dealing with. we felt that was a federal responsibility. so it's with great interest that i read this research. and i want to focus my comments on the 14 recommendations that start with policing agencies should, because that -- this is my area of expertise and as i read through i had thoughts about each one of the recommendations. and i will tell you that my over arching thoughts were, these are great recommendations. any police department, especially police departments in large urban area it is they're not doing this kind of outreach they certainly should be. the fact that it was mentioned that nine out of ten in the
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survey were doing them doesn't surprise me. in fact, it should be ten out of ten. one of the recommendations was to establish outreach and engagement units. there's really -- i have two views on that. one, you can have -- you can have a unit that does this targeted outreach. they can be very effective. a great example is lgbtq units that some police departments have. the fact is that my view has been that every police officer that i have i want doing outreach and engagement activities. and if you just create a unit, okay, we're to have this unit that deals with a specific segment of our community, then sometimes the rest of the department feels like, well, we don't have to because they do that we don't have to do that. the fact is that a lot of police departments take the view that they want every single one of their police officers to be
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engaged in policing and part of that is being engaged in outreach and engagement with all of the segments of our community. so i don't think there's anything wrong with creating this unit but you've got to make sure that you don't adopt that culture of, okay, well, i don't have to do outreach and community policing because they do it. everybody in the organization has to be engaged in that. there was another recommendation that talked about don't use the term cve, don't use the word countering violent extremism. i think that there's -- you can make arguments on both sides of that issue as well. on the one hand, i fully understand why that recommendations was in there. you don't want to have you're out reach and this effort to be seen as antimuslim, you don't want it to be seen as anti-anyone in particular. the fact is it is anti-crime, it is pro-safety of our community. i understand using that term
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could make some segments of the community feel marginalized but, in fact, i do think it's important that people know exactly what the goal is, and that is, in fact, to counter violent extremism, it, in fact, is to keep our community safe. violent extremism is not, as we all know, you know, no one thinks this is targeted and strictly targeted at the muslim community, countering violent extremism has only to do with only islam. the fact is 50% of what we do is -- you can look at the sovereign citizen movement that's ongoing, white supremacy. you can look at gangs in general. all of these things can fit nicely into this cve basket. so again, i think you can make arguments about whether or not that recommendation is critical or not. you know, addressing basically an all crimes approach that this
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is not strictly targeting any one type of crime or any one type of criminal activity is important as well. i think that goes to -- that recommendation is good in that it makes sure that the community understands that we're looking at everything. we're not, again, targeting one specific group or one specific type of activity. there's a recommendation that talks about making sure that you separate the outreach from the intelligence function. and i think i can name some police departments that got in trouble and kind of ran afoul of this concept. and one of the responsibilities of a chief is to make sure that there is that firewall between the outreach activities and the intelligence activities. and so that's an important recommendation and one that needs to be taken seriously if you don't want this whole effort to collapse because once, you know, someone is able to see
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that, geez, this outreach activity has resulted in nothing but arrests, all of a sudden it becomes questionable as to the credibility of what this outreach activity is really trying to accomplish. they talk about having a diverse workforce within a police department. that was one of the national conversations that came out of ferguson, is what does a police department look like, should it reflect -- it should in fact reflect the diversity of the community they are serving. that's obviously an important issue of all police departments to make sure we're reflecting the diversity of our community. cultural awareness training. that is relentless. start in the police academy with new recruits and it needs to continue throughout a police officer's career. i don't claim my cops are experts on every culture but you've got to have enough of an understanding that you don't have a situation where i'm knocking on a door -- and this
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happened to me, i'm knocking on a door to serve a warrant and a muslim woman answered the door and i said i had a warrant individual, member of her family. she told me he wasn't there. normally what police would do is say, well, i've got a warrant, can i come in and look around. she -- i said, well, you know, can i look around. she said no, you can't come in. and i realized, it kicked in right then, okay, she's here by herself. and so i said, well, when can i come back. and she told me when later on when people would be in the house. i went back later and we were able to resolve that. it could have gotten ugly then. again, just -- me and my cops have enough cultural awareness training, whether it's faith based, whether it's -- or otherwise, to make sure that we're not creating problems when we're trying to do our job. basic language training, tremendously important. again, i don't have to be fluent
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in every language but at least having some ability to community and knowing where i can get the help i need to get translation services right there, right then is very important. outreach to the immigrant communities is tremendously important. i police a community that is majority minority. we're also one-third of our residents were born in a country other than the united states. so outreach to immigrant communities. again, it has to be a relentless activity. great recommendations wide variety again, you don't want to target one thing or one person or one group. and i want to finish by talking about the fact that i felt very affirmed as i read these -- because we've got an effort that we have put in place in montgomery county, that's been in place for a couple years now, and we -- what makes it our -- why really love about ours and is a little different and you
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may want to consider this, our effort is a community-led effort. we are so fortunate to have partnered with dr. he'dia miramadi and world organization dollar and the research for development and education. we have got a faith-based effort where we have individuals from every faith 60 or 70 people strong who led this effort to educate the community and the schools are involved and we are looking for folks that through their behavior have caught the notice of a school counsellor or parent or family member or a friend and because of their behavior, there is growing concern if they are being radicalized or headed down the wrong path in terms of their
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activity. we are workings to intervene in the folks's lives and to try to get them back on track and we had a couple of cases who ended upcoming to the police department and the majority of the cases long before it's a community case. it's a strong person and it's a community-led effort and not a police-led effort and we believe that's why it has been successful for us. thank you. >> thank you so much. >> thank you very much. i would like to open by saying that the findings and the recommendations take us forward. they are an enormous improvement on the status quo and on what many people are experiencing. i support the effort made and
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the recommendations that are really a step forward. i want to start my remarks by making an observation. i think the report makes the case that it's not just programming, but also intentions that the community wants to be seen as a group of citizens and not a pool of suspects. that's really important. everything has to start from there. that's why this idea of a whole community and you are not just focused on muslims, but all communities that are at risk of extremism or radicalization and you are not just focusing on the cde aspect of public safety that we hear is actually among the more rare issues that are happening at the local level. there other things that are much
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more likely and the response of american muslims. we are worried about our kids joining isis and we are worried they are on drugs and they are looking at porn. the issues that are actually happening and the frequency of them are so far removed from what seems to be the conversation all the time when it am cans to american muslims. i had a question. why isn't our national cve strategy reflective of the strategies on the ground. i never get a good answer to that. if the reality is that other forms of extremism are more likely, why is the strategy at a national level only focused on isis-inspired extremism.
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why isn't there a strategy for these other types of extremism with equal levels of proportional levels of funding and resources at the local level? i want to briefly talk about the details of the police training recommendations and i support the idea of cultural training and competency. i would like to add a few things and a few thoughts to the recommendations. language is of course a great thing to have but it would be unrealistic to expect every police officer to know every language. what would be probably more important is to examine the kind of training that police officers and law enforcement are getting. we know there has been an unfortunate number of cases with islam phobic material that law
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enforcement is being expoed to. that is actually the problem is not not having training, but having training that is biased. i was surprised that i didn't find that in the report as a red flag. where is the training coming from? making sure it is accurate. the call out that the fact that radicalization does not occur in mosques. if you look at radicalized in the local mosque. we are engaging local mosques and the assumption is somehow that's where it's happening and it's important to understand it's not. in a lot of cases they are being kicked out. it's maybe another problem and what's happening is they are being excluded or self selecting
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to believe because their perspective is not in line with the majority of the members. they are either getting exploited or finding like-minded people. by engaging the local mosque, are we going to where the problem is? maybe we need a stronger cyber security strategy than just a community outreach. where is the problem coming from? one regarding media and one regarding definitions.
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i think you must have heard from mu limits and i think it has been referred to, is this idea that the community is stigmatized in the media when there is an arrest or when there is a suspected activity. there is not only a local story, but a national story. the equivalent amount of media is not afforded to anyone else who might be arrested and so they are not sure who to blame. i read this buried article and i was shocked by this. last august a group of people who were charged with 99 years of prison for what the federal government or the fbi called the weapons of mass destruction and they wanted to kill the president. they are getting 99 years in prison for this. this attempted crime and none of you have heard of it and neither
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had i until i read this article in this obscure website. i was unsure it was true and i clicked on the link and i found the fbi reference. this is true. i didn't make this up and it's not a hoax. yet a story like that, no one's heard of it. the fbi doesn't hold press conferences about stories like this and only about muslims and the idea of stigmatization and media outreach and involvement and muslim arrests is problematic. the second thing is i think you have heard this from every muslim you talked to. i hear it and that's the definition of terrorism. it's -- i will voice this frustration on behalf of so many people.
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this is not applied consistently and it's applied when it comes to community engagement. i will mick the case and i don't think there is a community in america that is more interested in preventing violent acts in the name of islam than the muslim american community. they are hurt by it in every possible way. there is not a lack of interest, but obstacles to engagement because of all of this baggage around stigmatization and consistency in engagement and definitions. thanks. >> thank you so much. i think the thing to do now is open it up to questions and other members of the officials.
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so please do us a favor and state your name before you do the question. jeff has a microphone so would anybody like to ask? >> you didn't tell us the number of civilians you spoke to or any data about the civilians. you can run through and you told us about the police departments. it would be good. >> we did focus groups in eight cities and each of those visits lasted two or three days. we spoke to roughly two dozen or more in each city and the groups ranged from three to eight people and we had conversations
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outside of the focus groups. this is not a nationally represented sample. with focus groups in general, to get conversations going that can juxtapose different perspectives and we made sure to include people who they were from different generations come to the united states, men and women in different age groups as well. # this is within the communities. >> we met with between 15 to 30.
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we would speak with people as well as one on one introduce. # >> for everybody from the chief as well as the members of the
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research, i'm not on the law enforcement side and one of the things that i have been interested in is how you do prevention which is the purpose of what you are talking about. it seems to be one of the crucial aspects and getting to people before they engage in criminality. certainly i think one of the common conceptions in the community and i think muslim communities has been that things and law forcement tends to direct things towards criminality. to a place where you can get convictions and there by stopping terrorism as opposed to preventing things before they happened. you mentioned this is something you try to do something on a regular basis and in terms of
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research, you have found police departments and other people including the fbi to stop and redirect away from criminality in a way that is more productive. thank you. >> i will e will be rate and apply the definition of terrorism across communities. the impression that many muslims have and i think is quite accurate is that the going definition of terrorism at least in discourse is a violent act. when other people commit violent acts. but not terrorism. it's not just about pr but it's much more serious in my view.
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that's in terms of how it's defined. there was a case of a man who had the blueprints and the manifesto. the police found it in his apartment because his wife called the police because of domestic abuse. he had the plan to bomb 40 mosques and he was charged with a hate crime. hate crimes and terrorism is different. the issue of a definition that we come up with and we agree on and that is applied consistently, that is really
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important. >> i sat on a task force and we developed what we thought prevention, intervention and enforcement. the police have the enforcement side, but if we were dealing with enforcement, prevention and intervention failed. that's where we needed to make our investment. i think that the prevention piece of it is important. you can interview 1 human human people that are living in a prison somewhere and talk to them about what got them there. you see what at risk issues they dealt with and whether it caused them to join a gang or caused them to get involved with drugs and drug abuse and cause them to
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commit suicide. investing in our community partners to try to deal with the mental health issues and other things that if we can intervene early in someone's life, look at the behavior and catch a red flag and let's put some time and effort into trying to get this individual back. police don't play as big of a part in that. >> let me just quickly comment on the interviews that we did. all the different police departments we spoke to said
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hey, we would love to develop infrastructure to deal with intervention. people who seem like they have adopted possibly a violent ideology and haven't committed a crime idea or have done precursor things and don't feel like they have to charge them and they can be diverted to try to turn them away for violence and that has been done in other areas of law enforcement certainly. even in the departments where they have been working on this for a long time, that is undeveloped and those won't be development programs. to have the community partner that provides that programming and has resources that can be turned to. that's what police departments need and they would love to see those things develop.
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the programming needs to be done at the community level and there has to be partnership with the police department. there can be the right people and can be diverted and the whole point of our report is for that whole system to work. you need trust. and relationships. and if those don't exist first. >> to echo the things that have been said by their panel. we met with agencies that had partnerships in the county. after building the relationships of trust and assessing the needs of the community members. they would connect them to the people within the community like social workers or help them get food stamps or bus passes or language assistance and these are forms of prevention.
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they are helping the members of the community feel like they are part of the community. >> community policing is a concept that existed for many years or decades and it's not just about outreach done by law enforcement. several other principals require adjustments of how police departments of structured. again, the basis of it has an assumption of geography. it is focused and how the relationships are built. given the reality of how the muslim population is distributed across the country and where we have numbers where extremism is happening online. in your research, did you find the principals of community policing at the very core of it have to be adjusted improved, or changed to meet the needs or
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the concept of violent extremist extremist? lot of these recommendations are about better community engagement. >> i think the chief got to one of those issues in terms of structure in his comments. because most muslim communities are not large concentrations, it is much more diffuse over a geographic area. one of the reasons that led us to the idea of outreach specialists that were not people who had assignments for a particular precinct. that said it's good if you can spread the philosophy across as many people within the bureau. we did start by looking at the literature and the tradition and
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felt that it was a model that account have applicability to this problem. let me turn over to the chief. >> a couple of reactions. one, i agree that what he said, radicalization is not occurring in mosques. i am not talking about just -- this is not unique to muslims. any radicalization whether white supremacy is going on in a basement or a red room somewhere with the individual sitting in front of a computer. that's where the radicalization is occurring. and in terms of the policing it has been around forever. it is a philosophy with two cornerstones and one is community outreach and engagement. the other is problem solving. you identify a problem and you
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come up with a solution. one size does not fit all. i think police departments need to be adaptable and flexible and creative in terms of how they approach these problems. if you want to pick the problem of violent extremism, one size does not fit all. you have to react to the issues in your community. >> you are referring to the strands that you made a large reference to. the oversight in government agencies, another is that if radicalization is occurring in front of computers, still face-to-face interaction remains hugely important in improving relationships between law enforcement and communities on a
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host of issues. it remains important on that side of community policing. the face-to-face side may not catch every instance of potential violence. there will be violence in the world. the building of trust among communities and between communities is a good thing in its own right. regardless of isolated instances of radicalization. >> i don't think they are going to be having the face-to-face with the young person in front of the computer. that's not the idea. that person has a family and goes to work and that person interacts with others in the community. what you are trying to do is create an early warning system. to have that system you have to have a broad reach to the innocent people. that is the case of community
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policing that has been applied to other forms of violent crime gang violence as well. the community police officers are working with noncriminals and community leaders to build those programming trusts, outreach and to then use that to the more difficult to reach elements of the population. we had someone interested in asking a question back there. >> senior fellow i want to thank you all. i'm very much looking forward to this and i commend you for this great effort. thank you for the great nch mention. in terms of preventive policing as we have been discussing, this is not a new concept. we used it in gang prevention efforts, but it's a new crist to apply it. in a lot of our trainings and
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engagements with communities and police, we find that training individuals on how to identify vulnerable individuals and understanding the potential risk factors are this almost requires a cultural shift within law enforcement to kind of get in touch with the social work aspect of their job. i was wonder figure that came up in interviews. if you can talk more about that as the chief may be able to speak to her, we may be able to implement a social worker in the police department which i believe has been instrumental and community policing and in the efforts. is that something you would recommend that can be applied in other jurisdictions?
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would you recommend greater funding? any thoughts on expanding and pushing in that direction would be great. >> sure. >> on the interviews it has to be folks that have that ability to connect with people and realize the social work part of it is so important. this is not the crime-fighting police officer who wants to arrest people. this is the officer who wants to engage and connect with folks to learn about different cultures and religions. it's naturally curious and also willing and able to connect individuals to the different organizations i was talking about. the agencies or community organizations that can offer the other social services they are in need of. we did hear that and we think
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it's important if you are creating a specific outreach and engagement team. >> i can bolster that. we asked that very question and very terminology came up. we asked him if he gets social work and police work and they said absolutely. what the folks who do this are interested this 106ing problems. and the preference is to solve a problem without using the system. if that's necessary they are more than being to do that. they are trying to solve the problems and mitted that that is not the culture that pervades in their department or law enforcement in general. it does within some. i think that attitude is really what's needed to get a handle on
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this problem. because there is a com pone theant have a social worker within the police department, it has just been invaluable. >> sure, of course. >> i wish that everything you just said would be broadcast nationally. every woman would understand this. this idea that there is a mental health component is never discussed. i joke sometimes that we think there is no prevention for mental health but being a muslim makes you immune. you cannot be mentally ill if you are a muslim according to the public discourse. to understand that there is all kinds of complexity to where people go wrong and become radicalized is essential. the second thing is this idea of
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where and how people get radicalized and closing down mosques is how you increase radicalization and not how you decrease it. >> we will take a couple more questions and then we will try to answer them all and finish up. let's go over to mike and two people had their hand up in this row. we will try to answer them all at once. keep it to one concise question. i wanted to end at close to 2:00 as possible. >> jennifer bell eam. aclu. my question is, are there consequences to be identified as a need of prevention and also what are the criteria for determining that youth is at risk and in need of prevention? >> mike? >> and mike follows up on that which is number one, what are the criteria by which someone
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gets referenced and what will be the criteria that have you say this goes to social work and this goes to the police? >> two folks over here. >> just a quick question. i'm heartened by this discourse of broadening definitions and saying that there a lot of issues besides what we have come to known and secondly what dahlia was talking about is how are resources allocated? my question is, the first recommendation you have for luz mihm communities is that we should comply with law enforcement. i'm troubled by this recommendation because as an advocate in the field i heard so many stories that i could
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spend the next 20 minutes on on how they have reported incidents and what do you have toing is they are not complying and working with law enforcement. i will leave it at that. >> i'm daniel tut with unity foundation. my company offers training to police departments across the country. eric holder made a reformat the level of trying to tackle the bigoted trainings. i wonder if you think that has been effective. the issue is there two types. cultural competencey and counter terrorism. it's in the category of counter terrorism that the bigoted stuff happens. obama is fine for the most part but it's former veterans and
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military officials and people who went to iraq and they are given the trainings and they have an accident to grind. how do we tackle that? they are still happening. >> all right. let's see if we can cover a couple of these. i'm looking at the recommendation. the first one for luz limit american community. engage with police departments to address public safety and other corn occurrence. i was surprised because that's not the language we use and we have been doing research and talking on this point. he compiled lots of data and i think muslim-americans are part
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of the solution and we have talked about that many times. maybe we can talk afterwards if there language difficulties. on the training point, we do talk in the report a little bit about training and that make it into the recommendations. and they understand that you can talk about the history and where this comes from. that is so biased.
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>> that is in the hospital. isn't it? >> did you want to talk about how people might be ided for prevention? if there were consequences for that. >> i was try ing toing to go to the intervention strategy or where we would initiate the investigation. one thing is behavior. what is the behavior or the action that has caused this to
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come to our attention and someone the first where the case was brought to the group's attention was a criminal matter. very few of them end up that way. most do go down with the prevention and intervention path and it has to do with was the kid involved in a fight at school. those would not go to the fights.
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and through a way he has actually performed bomb-making materials it's going to the investigation. those are fairly rare. we have great community partners and we will get recommendations. and in fact if i told everyone who offered to train, do you know there is not one problem in our world who cannot be solved of our police training. we get people all the time saying we can come in and help you. we take advantage of those and we vet the training and do invite community members in to
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give their evaluation of their training. what we find i want to approach that behavior versus racial profiling which we have been hearing about in different places. contrast it with the approaches that we have seen and read about overseas. it's primarily in europe where the alarm bell sounded not because of behavior but because of increased religion and to underline the point that that is a bad way to find sbhon is prone to extremism. when you look at the people who carried out the paris attack. if that's how you were going to
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find criminal behavior or someone getting ready to do a major terrorist attack, you would never find these guys. they were not particularly religious and if you look at the behavior before the attack and doing the opposite of what you would expect in terms of muslims. i want to congratulate you all on this report and focusing on the idea of what you would look for. criminal behavior rather than an imagined profile of what a terrorist looks like. >> i think we are going to end there. i want to invite everybody to have coffee and cookies at the reception if you go past the elevators and bear left, you will see the office. we would love to continue the conversation there. thank you for our guests and for all of you for coming today. >> on this monday a live look at
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the u.s. capitol here in washington where the city continues to dig out from winder storm jonas. the house will be in sessions this week. no legislative business will be conducted. the senate will turn tomorrow with first votes scheduled for wednesday. and down constitution avenue to pennsylvania avenue this is a live shot of the white house. the president plans to travel to walter reed medical center to visit with wounded warriors there. tonight on the communicators "washington post" national technology reporter craig timber joins us from stanford in california to discuss a series of articles for the post. he examines the creation of thor and net and why stuart plates has a small role for them. what faces internet users today. billions of us were forever choosing things other than security. they are choosing the speed and
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the performance and the features and security. i think it may be somewhere between 5 and 10 on the list of priorities of most cost wear developers. security really doesn't pay. >> watch the communicators tonight at 8:00 eastern on c-span 2. next, new york governor andrew cuomo delivers his state of the state address in albany. the governor outlines his priorities including transportation and infrastructure improvements and raising the minimum wage and investing in education. his remarks are about 90 minutes. >> it's my pleasure to call the 239th legislature to order. in our five years, we have accomplished much. after many, many bad years for the state that we love. the arrows are finally pointed
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in the right direction. government as you know is ultimately about results. and you delivered. you made this state a better state and that's what government is all about. congratulations to each and every one of you. we are not immune. >> political polarization and gridlock. all challenging issues to be sure. thanks to the people in this room they have a government that is built to lead. these problems may have confounded other states in the government. i know new york must and can
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address them. # today i am proud to report to the 239th legislature that we stand stronger than at any point in recent history. # the empire state is poised to grow and to lead. while our challenges are daunting because of what this body accomplished in the past, it should give us great hope for the future. as president clinton likes to say, we brought arithmetic on to the government. we limited the new spending to less than 2% a year. we passed a 2% property tax cap that brought welcome relief to the citizens of our state. we cut income corporate and estate taxes. in total we reduced the tax
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burden on new yorkers $114 billion. why is that important? reducing taxes is creating jobs and when you are creating jobs, you are creating opportunity and creating hope and creating progress and it is working here this the state of new york. unemployment is down from 8% to 4.8% and today, new york state has more private sector jobs than ever before in the-of the state of new york, 7.9 million jobs. to niagara falls, the new york economy is on the rebound. economic success was matched with an uncommon partner namely
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unprecedented social progress. in the past, our government offered a choice. it embraced either fiscal responsibility or social progress. one or the other. we said we could do both. we said we could bring fiscal responsibility to the state and also be the nation's progressive leader. a beacon for social justice and fairness and we did it. we were right to do it. we were right when we showed the nation true leadership and past marriage equality. and we were right when we stood up for the women of this state and passed the women's equality act. we were right when we passed the most aggressive law stopping sexual violence on college
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campuses in the nation. we were right when we stopped fingerprinting for food and right when we led the way on climate change. we were right when we stopped discrimination based on sexual identity. we were right and since sandy hook when we passed our gun control law, we had fewer gun deaths in the state of new york thanks to your good work. that is leadership. fiscally responsible democrats
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okay, s sem bleeman and okay, everybody sees you. have a seat. vast leadership. fiscally responsible democrats were brought -- okay. okay assemblyman. everybody heard you. everybody heard you, assemblyman. fiscally responsible democrats people said were impossible. socially progressive republicans and people said they were impossible. these legislateors acted responsibly and we reached compromise and we showed that
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that can happen. we didn't listen to the zealot and we didn't listen to the extremists and we didn't listen to the naysayers and we governed and refused to be intimidated. we refused to be shouted down. we said we are new yorkers first and we are going to come to dinner and we are going to kick the extremists in the side and we are taking this state forward on what's good for the state of new york. and just because you yell, doesn't mean you are right. and just because you stand doesn't mean you are correct. that's what this legislature is all about. going forward, we must continue our laser focus on
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reinvigorating the state's economy. that is the imagine that pulls the train. and remember, my friends, when you are helping the economy, you are helping everyone. the best social program is still a job. we chartered a new path and it's working. new yorkers on the move. and we have just begun. building forward starts with maintaining our fiscal discipline. i will submit a $145 billion budget that spends an additional 1.7% less than our 2% spending limit. to stimulate economic growth. i propose a tax cut for small businesses. that is the imagine that is driving the economy.
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97 percent are of all businesses in new york employ fewer than 100 people. that is 3.4 million employees working in small businesses. i propose a $300 million tax cut that reduces the rate from 6.4 to 4% plus a 15% income exemption for partnerships. that's a tax reduction for one million small companies and another clear signal that new york is open for business. at the same time we will continue to reduce the mandates and their cost of the locality. the largest mandate is the medicaid program. three years ago, we capped the increase in cost to the locality.
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localities are now held harmless. since then the state assumed approximately $3 billion in cost from the counties. i believe the state should continue to cap the growth and assume the cost as long as the local government adheres to our 2% cap. remember my friends the property tax is the killer tax in this state. it has been for a long time. it's nothing new. listen to what fdr said. i quote, the public is at last coming to realize that the increase in real estate taxes is due wholly to the increase in the cost of local and not state government. these taxes on real estate are too high. local government has in most communities been guilty of great waste and duplication. closed quote.
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the cost, the waste, the inefficiency of our 10,500 local governments is still this state's financial albatross and that is what is driving up the cost. consolidation, shared services, local efficiencies must be a top priority and we must encourage those choices by framing the true economic realities for local governments. local governments must be sustainable from a financial point of view. that is the clear economic sdpruth that is what we have to work towards. controlling spending and reducing taxes will continue our growth, but we can do more. our state's founding fathers and founding mothers, early vision
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and daring was breathtaking. their boldness in constructing our transportation and infrastructure made this state the success it is today. the tallest buildings and the longest bridges and the deepest tunnels. they never said quit. now it's our turn, my friends. we must provide the vision for the next generation to continue to grow in size and strength we must develop a new interconnected plan system of mass transportation of bridges in the airports for the next 100 years. we can and we will. i propose the new york built to lead program. it's a development initiative that would make governor rockefeller jealous. a 100 billion dollar investment in transformative projects state-wide. all experts are unanimous that investment in the infrastructure
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tomorrow creates jobs and builds economic strength. in washington, both sides agree, however like so many issues, washington just can't get it done. in new york, we can and we will. our new tappan zee bridge is an exciting symbol of what we can accomplish. a bridge that other administrations couldn't even begin is now moving forward. it's rising from the hudson like our aspiration is rising for this state. let's take a moment and recognize some of the daring men and women who are working on the tappan zee bridge in the winter when it's cold and under dangerous circumstances and are doing a great job. they are here today and we will ask them to stand and show them
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our appreciation. >> the international destination at the cutting edge of air travel. downstate new york we will build a new airport to replace the outdated airport. it will be the first new airport in the united states in over 20 years and new york will lead the way again. it will present the new vision for the current maze of
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terminals at kennedy airport. we will continue our development of republican steward airports. i proposed this year a 6 million dollar addition to make mac arthur airport on long island a real international hub once and for all. this will reduce the air demands on la guardia and kennedy and also reduce traffic and increase the economic activity on long island. but mass transit is the key for our new new york. if our regions are going to grow, it's going to be through mass transit. we must move more faster, with less damage to the environment. a record $26 billion investment buying 1400 new subway cars 3100 new buses will reinvent the
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commuting experience. likewise 5.6 million invested in the long island railroad and $3 billion invested in metro north will improve the comfort safety, and reliability. our $20 billion gateway partnership a project long overdue is now a reality. it is a coordinated effort among the federal government, new jersey and new york. it will build a new rail tunnel. the first one in 100 years. it will speed commuters from the west. >> from the east, the commute from long island to new york city is one of the worst commutes in the nation. why would you applaud for one of
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the worst commutes in the nation? i thought it was senator flanagan for a moment. we need to add a third track to the long island rails so we can expedite commuters and promote interisland transit. the mass transportation access point is penn station. penn station is grossly over capacity and under performing. in a word is miserable. amtrak owns it and it is unnew york and unwelcoming and unacceptable. if vice president biden was critical of la guardia airport, we are lucky he didn't take a train and land at penn. i can only imagine what he would have said.
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we are not going to give him the chance. we are going to build a complex. new york state did a great thing in 1986 when it opened the convention center. it attracted thousands and thousands of tourists to new york. but it's no longer competitive for the big shows. it's too small and the configuration is not conducive to the exhibitions of today. we will add one million square feed to the convention center and the diesel fumes that lineup along the westside. it will be a benefit to the environment and financed by the center and that's what i call a win-win-win.
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now, upstate new york must remain an economic priority. the upstate new york for many years. and that was shortsighted. not only are we one new york family but we are one new york balance sheet and upstate growth means a stronger economy for all. i propose a record $20 billion -- that's right. [ applause ] i propose a record $20 billion economic development program to grow the momentum in upstate new york. [ applause ] one of the heavy costs for upstate businesses and citizens are the tolls that we impose on the new york state throughway. now, as you know, the new york
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state throughway was paid off in 1996. but the tolls have continued. i propose we set aside $1 billion of our settlement funds as a reserve fund to maintain and improve the throughway system. it will also allow us to freeze tolls for all users until 2020. [ applause ] we can also cut tolls by half for all frequent users. and, listen to this, eliminate all tolls for our agriculture sector, which has been struggling for many, many years. [ applause ] this will show upstate business and citizens that we are on their side.
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we owe it to them. let's do it and let's do it this year. [ applause ] upstate's roads and bridges, broadband and other infrastructure, must be upgraded also. i propose the largest roads and bridges investment in history, a $22 billion five-year investment achieving parity with down-state new york. [ applause ] i also propose $250 million necessary to assist local governments in rebuilding their water and sewer infrastructure. [ applause ] it's not fancy but it's necessary. the regional councils are producing dividends. today, there are more than 4,000 economic development projects under way thanks to their work. i propose another round of
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regional economic developments councils, our sixth, for $750 million to keep the momentum going. our redc partnerships have created or retained 165,000 jobs. let's give them a round of applause. [ applause ] the "i love new york" tourism campaigns have been a phenomenal success. we've invested $181 million in tourism over the past five years. that $181 million has seen tourism spending increase $8.5 billion. and the total impact is now over $100 billion in tourism. [ applause ]
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i want to add another 10% to that budget for total of $50 million because what we've learned is when people see upstate new york they love upstate new york so we just have to keep them coming and the "i love new york" campaign is a way to do that. [ applause ] this year, we will continue our part by holding the adirondack challenge, and we will add the catskill challenge, to which you are all invited. i hope you all can make it. leader flanagan appears physically fit. [ laughter ] and he is legendary for being fast on his feet. i mean, running. but we don't yet know how he can handle the rough water. i mean, rafting.
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we will soon find out because i'm sure the leader is going to come to both the adirondack and the catskill challenge. [ laughter and applause ] mr. leader? [ applause ] now speaker carl hasty grew up near a river so he is the -- [ laughter ] he is the odds-on favorite to win. i understand the speaker is wagering 2-1 odds on his victory. that's assembly confidence for you. for those of you wondering what river the speaker grew up next to of course the legendary bronx river where they were rafts there very early. [ laughter and applause ] our paradigm of entrepreneurial government is the way of the future. the regions of this nation that excel will be the most functional, creative public/private partnerships and new york is already leading the way.
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we began in 2011 with our partnership to stimulate dairy production through our greek yogurt industry expansion, and it has worked. we now produce more greek yogurt than greece, believe it or not. [ laughter ] and on our dairy industry is booming because the yogurt companies are consuming all the milk that we can produce. it's been a great victory and an important lesson. and besides having some cows suffering from sore udders, it's been a great, great success. [ laughter ] we can also toast our wine and beer initiatives. the number of wineries has increased fourfold. breweries have increased six fold. distilleries and ciderries seven fold. we've made it easier for these businesses to grow and do business by revising some of our laws but we have to do even more.
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we have to overall the prohibition-era sla laws that are way overdue and are an obstacle to growth. and we have to do it this year. [ applause ] this year, i propose two new entrepreneurial partnerships that we are excited about. first deals with the field of agriculture and food. as you know, agriculture is a critical part of our economy. as you also know, there is a growing health concern among consumers about the food we eat. what is in it and how it was grown. there is a burgeoning market around healthy food. however, consumer confidence is lacking. many of the labels that are on those products are virtually meaningless, and they have no standard and they have no legal
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definition. labels like "all natural" or "no antibiotics" actually have no legal definition. much of our quote/unquote organic produce comes from overseas. so consumer skepticism is justified. to reassure informed consumers and provide an opportunity for new york farms, we will initiate the first program to certify the bona fides of natural products. the departments of health and agriculture will define what are now vague standards and conduct inspections to certify those standards are being met. so labels like "all natural" will mean something. "no pesticides" will mean something. "hormone free" will actually mean something. the attorney general will police the program so consumers will know when they buy that product they're getting exactly what
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that product says it is. [ applause ] we are going to call it the new york certified high quality program. it will be voluntary for our farmers to participate, but we will advertise this program and its products nationwide, and we think there is a significant marketing asset for the firms that participate. it's an exciting opportunity. it can help grow our farms, better products for the consumers. it's exactly what we need. let's take a moment and give a thanks to commissioner ball, dr. zucker and attorney general eric schneiderman who have worked up this exciting initiative. [ applause ] second partnership the problem
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of climate change is finally being recognized by most world leaders, anyway. here in new york we have already been actively working to address it. now new york state is a business and environmental opportunity. let's become the international capital for clean and green energy products. we've already attracted -- [ applause ] we have already attracted some of the largest solar manufacturers on the planet to new york state. we've already attracted some so the biggest research and development firms on the planet to new york state. i now propose a $15 million clean energy opportunity training program so suny and our community colleges can train the workers within solar technology and installation.

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