tv Key Capitol Hill Hearings CSPAN April 24, 2015 1:00am-3:01am EDT
to support the ban, the administration produced a 184 page review of recently published research papers, but a detailed review discovered significant and undisclosed ties to eat some of the research used to ban fracking in new york and a political campaign to ban fracking in new york. for example, one paper was written by fracking opponents who actually used dockets line with plastic bags to take air samples near oil and gas wells. you might think that this kind of paper would get shot down in the peer review process, but that the reviewers were also fracking opponents. one of them was the cofounder of new yorkers against fracking. when asked by a reporter, she insisted that her peer review was "absolutely objective." then a few days after, she gave a few speech at for acte frack
-- a speech for anti-fracking activists where she says "it is so sweet to come together in one room to tell the story of our victory." but there is more. we found a network of environmentally active foundations funding the groups that produced this paper some media outlets that covered the paper, and campaign organizations that pressure the colombo administration. these financial ties total $3.7 million. more than $60 million at the campaign phase. this was not an isolated case. we found at least five more research papers cited by the cuomo administration were anti-fracking foundations that provided funding to the researchers, media outlets, and campaigns that sees the research to drum up political opposition to shale development.
the anti-fracking work of these foundations was led by the park foundation best at ithaca, new york whose president has openly admitted to funding anti-fracking research and call campaigning. in effect, these foundations build an echo chamber to drown out the facts in a debate over hydraulic fracturing and shale development. thank you again for the opportunity to testify. >> thank you. mr. holstein: thank you, mr. chairman. think you for this opportunity to appear before you today to discuss the issues associated with unconventional oil and natural gas production. the essential question before the committee is whether it is appropriate for state and local governments to exercise their long-standing traditional authority in order to ensure
that their citizens and communities are reasonably protected from economic and environmental harm. we believe the answer to that question is yes. while environmental defense fund has not been engaged directly in the various debates over state and local hydraulic fracturing bands and other restrictions, we believe that many of the issues around which those debates revolve are legitimate and to do reflect scientifically supportable concerns. unconventional oil and natural gas development is a heavy industrial activity. it is understandable that states and municipalities are seeking to exercise their traditional role in protecting their communities, and i think that response is entirely consistent with state and community application of things like stoning, -- like zoning. achieving a true balance of interest is critical. that means ensuring that gas developers are responsible with environmental protections
striking the right balance also beans continuing to invest in the deployment of energy efficiency and renewable energy, even as our nation moves to dramatically expand our domestic oil and gas resources. i would like to touch on several of the key issues presented by hydraulic fracturing. one is well integrity. it is true that there has yet to be conclusive evidence that hydraulic fracturing itself has caused drinking water contamination however it is widely understood that for well construction and maintenance can create pathways for contamination of groundwater resources by introduced and naturally occurring chemicals. water management. between one million and 5 million gallons are typically used in a typical operation, and around 800 billion gallons of wastewater are generated annually by onshore oil and gas operations in the united states. where the water comes from and
how it is managed during storage, transportation, treatment, and disposal are issues of legitimate concern. air-quality. because of intensive shell gas -- shale gas development wyoming has experienced concentrations comparable to those of los angeles. polluted air from oil and gas operation is a growing concern across the country. in addition, methane emissions from natural gas operations are a potent source of greenhouse gas solution. earthquakes. reports of earthquakes occurring as a consequence of hydraulic fracturing are now widespread, including in oklahoma, arkansas, texas, ohio, and kansas. whether those earthquakes are the result of high pressure frack jobs or much were commonly high-volume wastewater disposal wells, earthquakes can be deeply alarming to members of the
public. this week, the oklahoma geological survey released a statement concluding that it is very likely that most of the recent earthquakes in the central part of the state -- and there have been hundreds -- were triggered by the injection of produced water into disposal wells. infrastructure. the impact on roads, water systems, schools, social services, land, and neighborhoods is a leading concern of the many communities across america that find themselves, often for the first time in the center of new energy development. in states like texas and oklahoma, hundreds of cities have adopted local rules that have enabled the orderly development of oil and gas. unfortunately, such measures are under attack in many jurisdictions, including most recently in texas, where the legislature is considering a bill that would sweep away nearly all local authority. we think that would be an
unfortunate overreaction. this maddening authority increase risks by creating regulatory gaps. it also stops communities from imposing even the most reasonable rules governing issues like well setbacks. the results can be even more determined citizen opposition to oil and gas operation. in many states, new regulatory measures have not kept pace with the intense right of new oil and gas development which of course is made possible by hydraulic fracturing and other new technologies. local communities have become increasingly restless about shale and oil and gas development within their borders, and as i note in my testimony, many communities and states have very little -- and in some cases no -- experience with oil and gas operations. while drilling bans may not be the solution in the long run
they surely do reflect a need for government at the federal, state, and local level to take more aggressive actions to protect the environment and the economy. thank you for the opportunity to share our thoughts. rep. smith: thank you. i recognize myself questions. ms. craddick, you mention in your statement that much of the criticisms directed towards fracking is unfounded and inaccurate and i pointed out in my opening statement that the administration is now 0 for 3 in their accusations that fracking contaminates water. what is the harm caused by this kind of misinformation, and what can we do about it? ms. craddick: first and foremost -- and i appreciate the question -- a lot of harm is caused by misinformation and i think part of the job as a regulator is
to ensure that we are out there inspecting and doing our jobs. but when you look at a fracking ban like what is proposed in texas, and we always want to make sure we are respectful of the voters, but i think misinformation is part of what caused the fracking ban. it is the taking of private property rights. that is a real challenge that all of us respect. citizens should be able to develop their own interests. it is also an economic problem. just to give you a little perspective of where texas is -- last year, the oil and gas industry put into the texas economy $15.7 billion. that's both property tax, all kinds of taxes, but also payments to mineral interest zoners. they created direct and
indirect, two point million -- two million jobs in the state. i think those jobs will go away and not come back. rep. smith: thank you. doctor, you mentioned two studies that were cited by new york to justify their banding in fracking. euros study refuted their findings. you mentioned several times the bias involved in those studies in the coverage of the studies. what accounts for the bias? what drives the bias? what is the motive and what can be done? turn on your mic. dr. siegel: that is an excellent question. i can't read into the minds of the researchers of why they designed the study the way they did.
but as i said in my testimony it struck me when i first saw the paper, the first in 2011, that the sampling appeared to be done in a way to highlight places where a few gas well problems had occurred. some have occurred, a few handfuls. it struck me -- if their goal was to come up with an assessment of a general systemically -- is there a problem with gas wells they should have sampled differently. in new york, it got such impact, i think it had to do with the media coverage and the promotion of the paper. people picked up on that. how to prevent that -- i really don't know. it is a big issue of how
scientists are perceived by the public, and how to present the best science there is in a way that the public can understand. rep. smith: mr. siegel and mr. loman, you discovered this network of foundations and activists who seem to engage in what we might call advocacy science, which i don't think his science at all. you might take a swing at how do we counter this bias that you have discovered, why it is not scientific, and what we can do about it. mr. loman: i mentioned in my testimony that i live in colorado, in denver, which is a major -- it is good to see you congressman. [laughter] i have the great privilege of working alongside and interacting with on a daily
basis and then and women of oil and gas industries in colorado, who make the industry run. geologists, engineers, technical experts. oil and gas business is fundamentally a scientific enterprise. without the science of geology you don't know where to get the oil and gas. without engineering, you don't know how to build a well. or turn it into consumer goods. if there is one thing that i can convey from my discussions with them, it is that they just want a debate based on facts. they just want a debate based on facts, because as practitioners of science they know that the facts, while not being perfect is most certainly safe. in terms of the undisclosed
conflicts and bias that you see sometimes in research and in some via platforms that claim to be news outlets, that should be more clearly disclosed. i am here at the committee's day, very clearly an advocate of the oil and gas industry, it is something i am very proud of. i chose to go to work in oil and gas after a long, happy career as a reporter. people know where i am coming from. they can judge for themselves if i am somebody worth listening to or not. one of the things i think you may have noticed about my testimony is that i was pointing people to things, pointing people to authoritative sources from outside the industry. particularly environmental regulators. so you don't have to take my word for it.
rep. smith: thank you. the ranking members recognized. rep. johnson: thank you, mr. chairman. i am seeking information and i am looking at an article published in "the wall street journal." it talked about the oklahoma geological survey, saying that it is now considered very likely that most of the hundreds of earthquakes in the state was triggered by the intention of producing water and disposal -- water in disposal wells.
a small university in dallas, texas indicated that 2013 northwest of fort worth was also a likely cause by wastewater injection. now, i don't see anything wrong with the findings. what concerns me is the denial of the findings. it would seem to me that if these findings continue, even with the university of texas research, are we addressing the findings? that is my major concern. just last weekend, there was a major incident just northwest of fort worth, near arlington. a family's house collapsed. the water -- everyone was told
not to drink the water. i have never found anything wrong with research. but my feeling is that once we find findings, rather than denying it is happening, can we start to address the issue? what do we get from denying citizens from being so fearful that they don't want to see that near their homes? i would like to see mr. loman's -- would you address that? i am trying -- i just want the information so we cannot just focus on -- what can we do about it? rep. smith:dr. siegel: well, i would
never deny that the injection of water at extremely high rates wouldn't potentially cause earthquakes. i have seen the studies usgs has done, and there are a number -- not many, but if you -- high-capacity injection wells which produce waters are being injected. the remedy to that is to inject, probably, at much smaller rates. oil wells injecting at lower volumes. i certainly wouldn't deny those results. they come from very credible sources. in terms of allaying the public spheres -- the public's fears i'm not sure how to do that. in the context of what you just said, it is fairly well known
that if you inject too much fluid at a given location, you could induce an earthquake. having said that, from my reading of the journals in the literature being produced on the earthquakes in oklahoma and elsewhere, most of them are the kind you can't feel, but there are some you can. rep. johnson: i have felt them. dr. siegel: i would never deny that. but the solution to that, although this is not my area of expertise, my understanding is that you would have more injection wells spread out over a larger area and you wouldn't have that kind of problem. at least that is the sense i get for my colleagues. rep. johnson: mr. loman? mr. loman: yes. my issue is almost never with the actual research, but the way those findings get politicized
and misrepresented by groups to say that hydraulic fracturing -- even though we are talking about a completely separate process -- when they use that to build a case for banning fracking. on the issue of seismicity, i always go back to some testimony that was presented to the united states senate a couple years ago by one of the nations leading geophysicists, affair for university geophysicist. -- a stanford university geophysicist. he went against the obama administration on this issue he just wanted to put it in perspective. for instance, he said that there are more than 140,000 of these wastewater disposal wells used
by the oil and gas industry, but other industries too. the vast majority of those have been operating safely for decades. it is the context and it is the lack of a factual discussion of the research that i take issue with and i hear about all the time from geologists inside the industry, who just want the debate focused on facts rather than it being politicized and sensationalized, in an effort to run a media campaign to ban fracking. rep. johnson: thank you. ms. craddick? rep. smith: you went over more than i did. [laughter] rep. johnson: one more question. rep. smith: the ranking member will be recognized.
rep. johnson: thank you. we are aware that some of these incidents happen. my concern is when people get concerned, it is real to them. is the answer to just keep them from expressing it by keeping them from having local ordinances, or do we make some type of recommendation to move out of these urban areas perhaps some other area? no matter what we can say, i was in my office which is downtown dallas, in the building shook a week ago. i said, i am on the sixth floor that could not be a car. then the news came on and said it was an earthquake. we are not accustomed to earthquakes in the area, but now we are. therey are happening very
frequently. is it stupid to say people don't want that to happen near their homes? because to me, to say -- you are not going to pass an ordinance to stop this -- do we have the funds to pay these people when their homes get torn up, when their health is affected? ms. craddick: thank you for the question. obviously we take seismicity is very seriously. last year, we hired a seismologist for the first time that we have ever -- for the first time ever, because we are looking for answers. i am not sure it is always oil and gas related. however, we have been out inspecting on a regular basis we have rules to be followed.
based on recommendations from our seismologists we adjusted some roles for saltwater disposal wells and are following those rules because they think -- we are trying to be respectful and responsive. we are still looking at the science and data like everyone else. we think our rules and information have to be based on good science. but at the same time, we have been up and down townhall meetings. we want to be involved with the communities so they understand what we do, and that we have very stringent rules -- you mentioned arlington with a potential well that had some problems. we were on scene once we got the call within an hour, and were on scene for 24 hours straight, and are continuing to follow up with that well to make sure our rules are being followed.
we take being a regulator and inspector -- and if a rule is not followed, and we have a stringent enforcement process. i think part of our challenge is to communicate that information to local communities and local residents, and we are as we speak trying to up our communication efforts. we do work with cities and we want to continue to do that. rep. johnson: one more question. when people's homes collapse, when they have that kind of incident, what responsibility does the company have? ms. craddick: if it is proven that they have the right to file a lawsuit, we have -- if a well has a problem a rule has been broken, then we do enforcement penalties. they have the ability to file a lawsuit.
rep. johnson: thank you. rep. smith: thank you. the gentleman from california is recognized. rep. rohrbacher: we pride ourselves in believing in local controls. however, with that said, i would like to ask -- you mentioned hundreds of earthquakes. when people who talk about -- when people talk about earthquakes, we californians know what earthquakes are. what was the dollar damage done
by all these earthquakes in oklahoma? mr. holstein: i don't know sir. rep. rohrbacher: ok. you mentioned hundreds of earthquakes -- that is striking. i think that -- does anyone else have any idea what the dollar damage was? or was it -- that was an earthquake? do we know what the dollar damage? i would ask the panel to get back to me with that information, because my guess is that it is not very much. my guess is that it is like a big truck driving by, and that shake is an earthquake. does your organization consider any seismic activity as an earthquake? mr. holstein: let me emphasize
that many of the states that have been experienced it are scurrying to answer the questions you are raising, but their first order of business as regulators of the industry is to discover scientifically, what is the connection between the earthquakes -- rep. rohrabacher: how about answering that question. does your organization consider any seismic activity as an earthquake? mr. holstein: no. rep. rohrabacher: so what is your definition of an earthquake that gives us hundreds of earthquakes in oklahoma? mr. holstein: congressman, in my testimony the references i made to the earthquake came from the report that the oklahoma geological survey has issued in the last few days. let me just say -- we did not do any independent investigation. secondly, i want to endorse your
suggestion that we gather information about the cost of whatever earthquakes -- i think the insurance industry is a good source of that. rep. rohrabacher: i am a formal journalist as well and i remember a story i covered years ago. when -- we have had oilwell disasters. it doesn't exist anymore -- the water is back to its normal state in california after 1969, when there was a big oil spill. anyway the oil companies had decided they would pay for major research into the danger of oil wells. i was called in as a reporter to cover one of these hearings that they were having. you have these guys with phd's,
talking about professionals that were hired on to try and get the public answers about the actual dangers. when i got to this hearing there was a young lady outside with a rubber dock covered with oil, screaming "murderers" as they went by. that young lady with the rubber duck got all the press coverage that day. she was put on par -- and i asked her, are you a student? she said, no, i am just hitchhiking through town. this guy who picked me up said that he would put me up if i would hold up this rubber duck and scream "murderer." i don't like these oil companies anyway. we have to get serious about these issues. there are a lot of people holding up a rubber duck and
screaming "murderer." what we end up with is less safe energy. what we end up with, and what we ended up in california with and other places where they banned oil drilling for so long, we ended up with oil being delivered by tanker, which is 10 times more dangerous than anything coming from an offshore oil well. we have people who opposed the pipeline, the keystone pipeline, for environmental reasons, and then we end up with even more danger transporting that same oil and gas by trains. look nobody in their right mind is going to want there to be more danger. we all have children and we want
our children to inherit a planet that is cleaner. but what we have is people who are acting irrationally and i believe it is all based on some may see ethnic -- some theory that we are changing the climate of the planet thus anything we do is justified. i think we need to be very careful. think you for this hearing. rep. smith: thank you. the gentlewoman from oregon is recognized. rep. bonamici: i would like to recognize my daughter for the day. she has a class in science and in technology. when we talk about science and c, there is hope for the next generation. back home in oregon, my
constituents live near an active fault. oregonians are very concerned about seismic issues, as they should be. currently, i know that oregon legislature is studying hydraulic fracturing. we have none in our state at present. mr. holstein testified -- he was talking about the oklahoma geological survey. has this already been entered the geological survey? i would like to ask that this be made part of thee record. the statement dated april 21, 2013, when they are talking about how the seismicity rate has increased. i will read this -- "very likely that the majority of recent earthquakes, particularly those in central and north central oklahoma are triggered by the injection of produced water and
disposal wells." i know that water being injected in oklahoma deep wells comes from two main sources -- the wastewater used to frack the wells. we do have that now in the record and i hope everyone will take a look at it. mr. holstein, you talked about hydraulic fracturing and mentioned heavy, industrial activity. my colleagues are talking about the right of states to properly regulate that type of activity. i know we have a colleague here from new york. we've had a lot of conversation about what they have done new york -- done in new york. i want to ask you, mr. holstein, in addition to the seismic issues which were raised with regard to oklahoma that my constituents are especially concerned about what other
environmental concerns are associated with the disposal of fracturing -- excuse me fracking wastewater. also i want you to address a little bit more the use of water. you mentioned it in your testimony and i know texas alone has used more than 44 billion gallons of water in fracking activities. could you talk a little bit about the amount of water? in parts of oregon we are very concerned about drought. we look across a lot of the country that is facing drought -- can we have a sense of this? mr. holstein: certainly. you are right to put your finger on the issue that so many communities are worried about and states, particularly states suffering through terrible droughts.
these unconventional oil and gas drilling operations frequently require very large amounts of water, one million to 5 million -- 1 million to 5 million gallons per well. that is one of the reasons we argue that this is a heavy industrial activity. but the broader context is exactly right. it is the availability of water the challenge of treated water the challenge of injecting water, and the issues which you have just discussed with respect to earthquakes and protection of water supplies. all of these issues kind of for of all around the fact that there are enormous quantities of water. there are approximately 800 billion gallons of water that
must be managed or disposed of in the course of a year's worth of unconventional -- rep. bonamici: i would like you to address in the remaining time the studies looking at the release of methane. mr. holstein: yes. we have done a lot of work in that area, jointly with the industry as well as academic partners and others in peer-reviewed studies that are taking a look at the methane issue across the entire natural gas supply. natural gas is 97% methane. emissions from anywhere in the supply chain are harmful to the climate, but they also come along with volatile organic compounds. to answer your question, the release of methane from unconventional oil and gas wells
is a problem, but it is a solvable problem. provided that operators used techniques that are available to them and equipment that is available to them. if you look at the whole supply chain of where natural gas and methane leaks from, what you find is that as much as 40% of those methane emissions will come from the production segment. we are working with these partners to get a better handle on that figure, but the important point that has come up through these peer-reviewed studies is that the design of the wells and the techniques used by the operators can make a huge difference in the amount of methane that escapes. this is a concern for local communities because of local air pollution, and for the nation as a whole because of its contribution to greenhouse gas and missions.
i would finally say that methane is a nasty climate actor -- it is 84 times as powerful as carbon dioxide in the first 20 years or so after it is released. the significance of that point -- i attached it to my testimony and you will find a scientific article about it -- the significance is that it creates a near-term problem with respect to greenhouse gas emissions damage to the climate. together with co2 it is a one-two punch. rep. bonamici: thank you. rep. smith: mr. posey is recognized. rep. posey: thank you. i have a lot of concern with fracking in seismic testing.
we have three people saying positive things and what people saying negative things -- it is hard to tell who is telling the truth and who might not be telling the whole truth. mr. holstein, and your testimony, -- in your testimony you made things a little bit different. in your oral testimony, i think i heard you say that there is no evidence tracking causes contamination. would you repeat that for me? mr. holstein: yes sir. hopefully i said the same thing in my oral testimony as i did in the written, but if i didn't, i welcome the opportunity to repeat it. there is yet to be conclusive evidence of hydraulic fracturing causes drinking water contamination, however it is widely understood that poor well construction and maintenance can create pathways -- rep. posey: that's what i wanted
to hear, thank you. i heard people say the same thing about the alamo. it is true that the alamo did not cause any contamination, but all those people that go to visit it travel by car and they cause pollution. someone said the same thing about the super bowl. the super bowl doesn't cause pollution, but people that see the super bowl, that turn on television, that consumes energy. people say the same thing about the statue of liberty. the statue of liberty doesn't cause pollution, but people that take the boat to it, the boat causes pollution, the energy for the boat has to be produced. the white house itself does not cause any environmental damage, by people who go to see the white house have to travel there. we know that every product that
we enjoy consumes some type of energy in the making of it. how to those examples differ from the point you are making? [laughter] mr. holstein: congressman, i think it is important for me to point out that the environmental defense fund is not reflexively opposed to unconventional oil and gas development or the widespread development of these new resources that previously were economically unavailable to america. sadly summarized, the thrust of my testimony by saying that it is too narrow focus simply to look at one dimension of hydraulic fracturing. that is why my testimony
addresses the many issues that come along with unconventional drilling, but at the same time, it points out considerable details, the actions that have been taken in states like texas in states like colorado, in states like pennsylvania and wyoming, to try to address these concerns. one of the things i believe miss craddick said that we so strongly support -- i was thinking about it -- one of the essential challenges for regulators is to simply keep up with the enormous amount of innovation that is going on in the oil and gas industry. i make the complaint about that innovation, i simply note that it is a highly complex and heavy industrial activity, and regulators need to be on their toes.
let me conclude my response to you by saying if you can imagine the many communities and states where suddenly oil and gas development is occurring where no one alive has ever seen it before has ever experienced it before has ever worked in the industry before, you can imagine the challenges to elected officials at the state and local levels in trying to devise a appropriate programs and oversight. that is why we have such differences from state to state with states like texas having 100 years or more of aggressive and increasingly complex regulation of the industry, but other states that are just starting out. similarly, we have a tremendous difference in the reactions that you see between -- the reactions
politically to some of the local fights over banning. rep. posey: my time is up and i want to thank all the witnesses for appearing today. my particular interest is an offshore drilling. it is through hearings like this that the chairman was kind enough to have that we share those ideas and we learn from different states, learn different techniques and do more fact-finding on these issues. mr. chairman, thank you and i yield back. rep. smith: thank you. the only member of the science committee from colorado is recognized for his questions. rep. perlmutter: my friend has given examples of the super bowl or whatever.
he and i both serve on the banking committee and one of the places we see intersections is with insurance if there are dangers that some have suggested. we will see this come up in our other committee. colorado, we have had a lot of discussion about fracking, about its place in the politic in legal communities and regulatory areas. i have been dealing with this subject for 10 years now, as a policy maker. for me, the fact that we have moved ourselves toward energy independence as a policy and as a successful goal from the innovation of horizontal drilling and hydraulic fracking is good.
but, and i think miss craddick said it well, we have to take reasonable precautions with something that has helped us achieve another goal. as policymakers, we have to balance the dangers that potentially, from an industrial operation, as mr. holstein described. the fact that some things are going on in the ground, we may or may not be able to see -- some things are happening at the surface where there is a collision of an industrial operation and the school next door and whether you need a curb cut for the trust and what is going on in the air? is there an escape of methane or some other admission into the air? mr. lomax notes we have been having that discussion in colorado on a pretty heated basis, whether it should be a local government, state government, or federal government in charge of it.
colorado, similar to texas, it is the state government that has the final say. our colorado oil and gas commission. that is generally where i have been. we cannot ignore the potential for dangers. we as policymakers have to recognize dangers and i am looking at oklahoma -- there was an article yesterday where the oklahoma geological survey said we are worried about seismic problems. so they said -- they attributed it to deep waste water injection wells. in colorado, we have had seismic activity that ordinarily is not something we have. we want that to be -- we want people not to cut -- [laughter] sorry. i would like to ask a question.
mr. holstein, good to see you. take a look in what you do, what you did formerly within the administration. and my incorrect in trying to divided up into three sections? what goes on underground, what goes on on the surface, and what goes on in the air? mr. holstein: fair enough. rep. perlmutter: so i have come to the conclusion -- the surface part really is a local matter. curb cuts,ruckckg. mr. holstein: i think my testimony strongly suggests a similar line of thinking. i had and divided it up the same way but it makes sense. rep. perlmutter: mr. siegel, how do you look at how we divide certain regulatory components? dr. siegel: it is hard for me to reply, because i am not a
regulator. i have pretty much restricted my views to what i know and feel pretty comfortable with, which is water. rep. perlmutter: you are a scientist and you are dealing with what is going on underground. dr. siegel: that is correct. and on the surface. rep. perlmutter: so from your experience and your study does the pollution or the contamination you've seen -- has it been poor practices with respect to the well? dr. siegel: not quite. in my experience, which is largely restricted to the appalachians the kinds of problems that pennsylvania experiences tells us -- before the industry took notice, and now that amount of spillage has decreased. as far as the -- a few handfuls
-- rep. perlmutter: would that be the problem in dimmock ? mr. holstein: it could have been drilling but it could have been casing as well. that was natural gas coming into people's homes. as far as the other fluids associated with the industry, it is mostly a surface issue. those are readily taken care of, in most cases. in terms of the flow backwater it is my understanding that most of the flow back is reused to drill new wells. the quantity of flow back has gotten small. ship it to ohio or something for injection. the industry has developed ways
to do that. in pennsylvania, there was a remarkable situation where one of the companies -- and i forget which 1 -- suggested developed a way to drain: mind's -- to drain coal mines, but there was a state regulation saying you can't get economic advantage out of using a waste products. but the chemical engineers are at work to try to solve an issue so that in the future we won't have to use fresh water. rep. perlmutter: thank you. mr. lomax, i wanted to ask a question but my time is expired. rep. smith: without objection the gentleman is recognized. rep. perlmutter: oh. [laughter] i am done. i will talk to mr. lomax. rep. smith:mr. lomax: i would like
to add a little context. i think what you are seeing in colorado, on the whole you see the oil and gas industry working constructively with state and local governments in order to support local regulations to make sure that the development is done responsibly and is done with the support of the community. there have been some cases where there have been local bands and acted -- local bans enacted. in terms of local regulation, there is a lot of constructive work going on between the state and between local governments. that kind of stuff doesn't generate a lot of headlines because there isn't a lot of
conflict associated with it. but during this whole task force the governor set up last year, you had the colorado municipal league and the colorado association of counties say we can work through these issues using the existing regulatory framework rather than turning -- rather than coming up with statewide policies that are being proposed by national ban fracking groups. rep. perlmutter: mr. holstein -- >> we believe that the set of --mr. holstein: we believe the rules colorado has put in is the most comprehensive in the nation in terms of a range of issues they developed. we were delighted to partner
with the three largest oil and gas developers in the state in coming together to develop a consensus that led to that comprehensive new set of roles. as a driver for that conversation, what brought everyone to the table was the fact that colorado communities, one by one, were adopting or considering bans, putting them on ballots. there were indeed, headlines about whether or not oil and gas development, particularly involving unconventional developments including hydraulic fracturing, would be permitted. i simply point out that this is the danger of ignoring the local l concerns that can sometimes lead to these bans. you need to bring people together. rep. smith: thank you.
the gentleman from ohio was recognized. rep. johnson autoliv: -- i live in a very shale ritual region and it has been a process that has had a profound economic implications to the people that live in appalachia. i am very concerned about some of the issues we are talking about here today. miss craddick, there has been a lot of discussion about earthquakes. is there some confusion at the earthquakes are being caused by hydraulic fracturing when it is really the deep well injection of the waste? would you take a minute and comment on that? ms. craddick: thank you for the question. i will cite that your governor
-- i will say that your governor and your legislators -- hopefully we continue to give you good advice. we obviously all take seismicity very seriously. the information available today is that hydraulic fracturing is not causing earthquakes. we are still researching and looking at the available science and we just had a new study come out on monday night that our seismologists are going through and working with them. we are still looking at deep
water injection wells and whether or not that is a potential challenge. the answer is i don't think anybody knows. what i do think some of these studies do is rule out the potential problems -- rep. johnson: let me clarify. you say there is no evidence at this point that would indicate that hydraulic fracturing is causing earthquakes. ms. craddick: yes sir. what i think some of these studies do is rule out -- they can never say specifically what is causing it. rep. johnson: thank you. dr. siegel, many advocacy groups claimed that the methane found in drinking water of various homes was caused by hydraulic fracturing. if methane is naturally occurring, how can you tell if it is naturally occurring or as a result of oil and gas wells? rep. smith: i always thought it
was fairly simple. if you have fugitive gas from a gas well, if it gets out and gets into a domestic water supply what you will find is methane alka-seltzer being produced. there are some places in pennsylvania and new york where we have naturally methane alka-seltzer occasionally coming out of some drinking water where there is no drilling a t all. the state of pennsylvania doesn't identify fugitive gas by analyzing and seeing dissolved concentrations that you can't see. homeowners say, my well is bubbling gas and it hasn't bowled before and there is a gas well nearby. very few cases i've seen have had fusion of gas most of which
were easily taken care of. it is very apparent. that is what concerned me about those previous studies. which vary enormously over time, naturally, are somehow related to oil and gas. that's what we found wasn't the case. >> sure. although it makes more good cinema and eapt fracking advocacy, is natural gas in drinking water a new phenomenon? >> well, not to my knowledge. the very first time i came to syracuse in 1981, the first call i was from a citizen. it had to do with natural gas in her water well pism asked a few questions. that particular natural gas came from a wetlands setting. they did a study on natural gas
and found every well had some natural gas. syracuse, some funded by a national science foundation to look at natural gas in the southern tier of new york and pretty much everyplace we have looked for it or looked there has been natural gas certainly in pennsylvania anyway. >> i'm going to be respectful of my colleague's time and my witness' time and geeled back. chairman smith: the gentleman from virginia, mr. beyers. representedive beyers: you said something -- some of them near two of the wells that had failed. yet when you gathered your 12,000 or whatever -- they were gathered by employees of chesapeake. a natural gas explorer. why is that inherent bias not much greater than independent
researchers working for universities. mr. siegel: chesapeake gas to my knowledge and what i was told is they hired natural consultants who sampled for them and recognized certified labs, the e.p.a. and so forth to do the analysis. they hired independent contractors who were hired all over the country, environmental work to, do the sampling. i don't see that those samples cowl have been compromised or would have been compromised. other than the fact that chesapeake hired independent consultants to do the sampling. >> you expressed some concern or blobs that were critical of the failure to disclose your connection to chesapeake. i know you corrected it last week. the orgal -- declared no
competing financial interests even though samples were paid for and to be collected by chesapeake you were funded by chesapeake. can you explain this oversight? now corrected? mr. siegel: i don't think it was an oversight in the sense that the editors and everyone else at the journal fully understood by the bylines under our names that it would be obvious that we were being paid by chesapeake. chesapeake or any of these large corporations is not just going to hand over 34,000 analysis and say just do with them what you want. it was a collaborative agreement. so my colleagues across the country, when they start seeing these blogs about me, say that i had of course, it must have been paid by chesapeake. but i guess it is an oversight in the context that people brought it up. so we took care oifert. as editor, i have edited five or six journals in my career.
i have seen lots of cases like this. yeah, it is a corporate connection. representative beyer: you had great questions about advocacy science. why is it advocacy science when citizens worry about what's happening in their community to their health possibly but it is not advocacy science when the oil and gas industry hires scientists and journalists and others to represent their perspective? mr. siegel: the question is? representative beyer: what makes his science and yours not? mr. siegel: my paper we leased
today on the fracking ban is about a failure to disclose all the interests that are being brought to the table and the funding there of. i think that as a representative of the oil and gas industry and an advocate for the oil and gas industry, you know where i'm coming from. what we found when we looked at some of these research papers particularly the research paper that was wrained peer reviewed by proopponents of the industry, that opposition of the industry wasn't disclosed so that people with respect able to judge for themselves whether that information husband trust worthy or not. it was a -- an issue of disclosure rather than it is not a question of whether or not people can advocate for a political viewpoint that they believe in. of course they can.
independent researchers when they are actually running campaigns to try to ban hydraulic fracturing in new york. that is something that at the very least needs to be disclosed. you don't have to take my word for it. there are plenty of scientific codes of conduct that say these sorts of conflicts at the very least need to be disclosed. representative beyer: plch, mr. chairman, i yield back. >> thank you mr. mairman. -- chairman. ms. accuratic: if there is a fault, that fault is a known
fault, then we make sure that we're not allowing drilling to occur in that fault first and foremost. we take that into account as part of their risk assessment as well. >> in that rart isn't it true that the geology of texas, the history of it is that there has been more than 100 earthquakes large enough to be felt over the recent past. how many of those -- the ones in the 1800's, the early 1,900's. i've got a whole list of texas earthquakes that occurred before fracking. why do you think that happened? ms. craddick: you have done your homework. irving is an earthquake capital of texas. i think it is a fair suggestion to think there are other things
besides just oil and gas causing earthquakes at this point. >> how about oklahoma? there has been a long history of earthquakes in oklahoma. i know it may not be a fair question for you since you're not from oklahoma. isn't that true as well? that there have been a number other the last 100 years of earthquakes in oklahoma that probably were not attributable to any human activity. ms. craddick: even though i'm not from oklahoma, we share a border so yes, that would be true. >> it is also true of colorado. in terms of history, they have recently been tracking colorado earthquakes. maybe the earliest was 1870. they had a series of earthquakes that occurred in colorado that caused damage in the early 1,900's in denver. obviously there is more damages
and buildings and settlement. more people moving in. i would like to cite something from a report from the university of texas. the jackson junior high school of geo sciences. the earth quabes with the magnitudes between m 4 and m 4.8. it says fortunately the vast majority of -- do not cause earthquakes and the majority of them are small and harmless. would you agree with that? ms. craddick lon that is what we have seen thus far. yes, sir. also with regard to methane emissions, there is a research report done through the university of texas that was done in close coordination with the environmental defense fund. i think one of our witnesses works for them. they basically found that the
e.p.a.'s estimate for methane emissions are far lower than what anti-fracking groups claim. as a matter of fact, i think the newer technology employed they are capturing most of these emissions now. could you validate that? chris: we do work with our sister agency, the c.d. ghmbings texas. they are telling us emissions for methane have dropped in texas since 2001. >> can we conclude from that that as the technology has improved, the methane capture has improved along with it? ms. craddick: yes, sir. >> one last thing. it was mentioned that states ought to be able to regulate -- well, actually it was justice
brandeis that referred to the state as a laboratory of democracy. i agree with that statement and i think that the states have -- particularly since they have more knowledge of their geological issues than the federal government does in many respects these things should be dealt with at the state level. mr. chairman, thank you. i yield the balance of my time. chairman smith: thank you, mr. palmer. the gentleman from new york is recognized. >> thank you, mr. chair. it is very odd to have a hearing in which we seem to be belittling local communities for the decision making about their own quality of life. i think that kind of freedom is the essence of our democracy. to claim that communities are making these decisions simply because of bad information is rather interesting, but irrelevant. i could point out that bad information on climate change or
on the costs of the affordable care act which some refer to as obamacare seem to be driving all kinds of voter choices around this country, but i don't think my friends on the other side of the aisle are going to work very hard to set those records straight. to my question, first to mr. lomax, in your testimony, you state that research by energy and death found that many of the research papers were financed by groups that oppose fracking. is that correct? mr. lomax: yes. representative tonko: is that correct? mr. lomax: yes, sir. mr. tonko: we should now trust the results of these studies because the work is financed by
groups opposed to fracking. founded by the independent petroleum association of america along with financial support from the american petroleum institute, the a.p.i., chevron shell, b.p. and other oil and gas companies. by your logic, we should not trust energy in depth either when energy in depth was launched by ipaa in june of 2009, they sent out a letter announcing its launch. the letter said and i quote energyindepth.org, a resource center to combat new environmental regulations especially with regard to hydraulic fracturing. in a paper by one of your colleagues, chris tucker, published last year, he described how energy and depth helps to combat the opponents of hydraulic fracturing. he wrote, and i quote, the e.i.d. teams also helped generate and guide stories
behind the scenes. this year alone, the number of news stories influenced was in the hundreds. close quote. he goes on to say they regularly engage on social networks such as twitter, facebook and youtube always with the goal of driving the debate. close quote. mr. lomax, is it a very behind the scenes way to drive the debate. i appreciate this opportunity to ask how you generate and guide stories behind the scenes. with a number of news stories influenced by e.i.d. in the hundreds, can you tell us how you carry out that influence? mr. lomax: let me deal first with your question about disclosing tice to the campaigns, trying to ban fracking in new york by researchers who were producing papers cited by the state of new york in order to ban fracking.
my criticism of that practice was the failure to disclose those ties so that this research was -- and these researchers in effect misrepresented themselves as unbiased observers as opposed to advocates. representative tonko: i only have so much time. just to the question, how do you carry out your influence? i would rather hear about that right now. mr. lomax: i am an oil and gas industry advocate. representative tonko: but you're involved in several behind the scenes scenarios. how do you carry out your -- what publication is the most receptive to story ideas pitched by your organization? mr. lomax: i see my role both here before the committee and answering questions from anyone
who has questions about the way oil and gas is produced, is to direct them to authoritative sources like federal regulatory agencies and members of academia who can help answer their questions. that basically is the role that i serve and it is very much -- and i draw from skills i had as a reporter trying to finance this for myself. representative tonko: does the press even know how the contact you? e.i.d. is not exactly a household name. is this orchestrated behind the scenes with an effort to obviously provide a bias? researchers who observe real occurrences are not biased to reality perhaps? what context do the press have? how do they know to reach the e.i.d.? mr. lomax: they first could go to our website.
energyindepth.org. i don't think that there is much about energy in depth that is hidden or behind the scenes as you suggest. representative tonko: i was only quoting from the individual who was in charge of carrying forth the mission. mr. lomax: i see my role, and it is one that i am proud to hold as an advocate for the oil and gas industry is getting the facts in front of the people who want to see them. that is really as far as it goes. representative tonko: it is a goal driving the debate that the presentation was done. mr. lomax: i think i said in an earlier answer that the people that i am privileged to work with in the oil and gas destroy, particularly geologists and engineers and other technical
experts, they want a debate driven by facts and someone has to put the facts -- someone has to help disseminate the facts, and energy in depth particularly through its website, makes those facts available. chairman smith: thank you, mr. tonko. the gentleman from georgia, mr. loudermilk is recognized. representative loudermilk: as a conservative, as an outdoorsman, i made a complete statement that i think we need to look at true science and the facts that we see the science. but at the same time, we shouldn't pollute our land.
we should be good stewards of the environment. unfortunately, the reporter decided to parse out my statement and take out all of the parts that did not support the end to which he wanted to make his article. i'm seeing more and more of that to where some in the scientific communities where the in the past scientific opinions were based on true science or fact and today it seems that we're manipulating the facts to support whatever political end that we want to come up to. so the question goes back to some research from a minority staff report on the senate environmental and public works committee from october of last year. the new york-based park foundation asked the professor to write an academic article that would make a case that shale gays was a dangerous polluting fuel.
later that year, the foundation paid $135,000 for that study. when the study came out, allegations came out that there was data manipulation. in the end it was condemned by the current administration and members of academia. later by the environmental defense fund. however environmental activists such as robert kennedy jr. supported the work as proof that hydraulic fracturing was worse than coal. dr. siegel, how could this type of paper ever make it past the peer review process? dr. siegel: that is a good question. i'm glad you asked that. i know bob howarth quite well.
i have debated him. the problem really in the review process and i speak as much as an editor, as a contributor to publications is that -- well let me give you a quick -- how it happens. a scientist submits a paper to a journal. and it goes to the chief editor who assigns an associate editor to handle the paper. they have to find three to five reviewers who would be viewed to be nonbiased to review the paper. usually the person writing the paper suggests three names and the editor or the associate editor can assess whether those names would be ok and then they pick some others from outside. it is not unlike n.s.f. and how they do their work. the problem that happened is that the publication system is so overwhelmed with that a lot of editors simply will take whoever is offered as possible reviewers by the author in order to
actually get the peer review. that is probably what happened in the papers that we're referring to with respect to the health department ruling in new york. in my case, for example, the paper they submitted just got published. i chose a professor at penn state who was clearly unbiased. national academy of science person. i chose a couple of people who i thought knew a lot about methane and had done a lot of independent work and i purposely did not choose for my reviewers anyone who i thought would be biased toward the oil and gas industry. i know who those people are. ok? and so i got the review back. there are some really good comments. we modified the paper to address certain concerns. and on it went. but that kind of openness that i think i'm proud of what i do and my review issues, you know
sometimes it doesn't happen. clearly there have been a lot of papers, a number of papers that have been opposing hydraulic fracking. these papers have been pretty outrageous. when i asked the editors who reviewed these papers, let them out, i discovered it is a community of people who have common views. >> have an end in mind? dr. siegel: that is unfortunate. there is just too many papers being submitted. too few reviewers able to do it capably and so stuff is getting out that just isn't very good. chairman smith: thank you mr. loudermilk. the gentleman from illinois, mr. foster is recognized. representative foster: thank you, mr. chairman. first, a general question.
what fraction of hydrofracking operations depend on waste water injection for their economic vieability? let's imagine that in some area waste water injection had to be restricted because of seismicity concerns. is that a mortal blow to fracking operations or merely a new sans? if anyone wants to -- >> if i understood your question, over 90% of the wells being drilled now are unconventional oil and gas wells. they frequently use large quantities of the water as noted in my testimony there. because of concerns about earthquakes and because of concerns about other problems, impacts on taxpayers, for example, in the state of pennsylvania where the publicly owned water treatment work simply couldn't handle some of the materials that were coming back and the wastes that were coming to those treatment works and waste water, states have
been racing to put in place new measures to protect the taxpayers and their water supplies, but yes. so now in pennsylvania they don't do injection wells at all and the waste water goes to state of ohio mainly. that still permits deep well injection. so it is a common practice. >> if it turns out that it is only the waste water injection that is the big problem. >> industry is working on recycling but you can't do the scale without these large volumes as far as i know. representative foster: in areas where there appears to be an increase in seismic activity associated with drilling and injection operations, is there evidence of either insurance rates going up or property values going down and if that does happen, what is the legal framework for home owners, you know, recovering from their losses?
mr. lomax: i can give you some information about the gas wells in colorado. it has almost half of the state's 50,000. and property values in weld county have been growing significantly at the same time as increased oil and gas development and there are some waste water disposal wells in weld county, colorado. there is an increase in values. representative foster: relative comfortably situated places without the drilling activities. i understand colorado real estate is doing pretty well these days. this is a side by side comparison or just an absolute statement? mr. lomax: this is based on some commentary from the weld county tax assessor who was asked
specifically about do you see any kind of impact on oil and gas, do you see an impact on property values including based on waste water disposal and he said they don't see any difference between that and the rest of the county. representative foster: it is my understanding that there is anecdotal resident -- there are might be some effect in oklahoma of lowering property values. another thing has to do with the time scale for observing and diagnosing seismic activity as a result of drilling or waste water injection. you can imagine different geological scenarios. one is that you start the waste water injection and you have a very large number of small quakes or that nothing happens and you simply get a stress build-up under ground to the point where
you get after a long period of time one giant or relatively large quake. how would you actually correctly identify the causal link? it would be easy in the first case because you could start and stop the waste water injection and watch the seismic activity start and stop. it sounds tough. you're talking about something where a large seismic event could be the result of long decades of drilling. how do you handle that from a liability point of view and from even identifying that the causal relationship there? ms. craddick: i think that is what we're all trying to figure out at this point. because if you look in the permian basin, we have been drilling for a long time and don't see a lot of earthquakes out there. but if you look in the barnett shale which is where the s.m.u.
study is from, we have been drilling actively since 2008 but the amount of drilling has declined because it is a natural gas play by quite a bit. that is where seismologists and scientists are trying to figure out. i'm not sure you can ever completely find the answer to your question. that is the biggest challenge, as you're modeling, it depends on modeling of the scientific study as i've been advised and the researchers looking at that. there is not one best model. representative foster: my question is about the legal framework. what is the legal framework? do individual home owners have to sue someone who may have gone out of business years ago? chairman smith: could we have a brief answer to this question?
we're going to try to finish before we have to go to votes. mr. foster, who were you directing the question to? representative foster: anyone who feels comfortable answering. >> i would emphasize this conundrum makes my point earlier which is that the oil and gas industry is not static and therefore regulatory oversight and scientific inquiry must keep up with the ever changing elements and challenges associated with this industry. chairman smith: thank you mr. foster. if the three remaining members who have questions can limit themselves to three minutes each we can get you in. we have an hour's worth of votes. i would like to spare the witnesses having to wait for us. yourp next. >> thank you, mr. chairman. ms. craddick, thank you for being here. i wanted to get your perspective. it sounds like in texas you work very hard to work with the local
communities and there is a partnership that you have been able to work out and resolve concerns. the question about the federal government's role, i know in michigan, we have been doing fracking for many years and our department of environmental quality has done i think a very good job communicating with citizens about the technologies being used and i don't see a big role for the federal government in this. what is your sense, you're on the ground floor working with this both on the state level but also working with local communities. do you see a role for the federal government that would in some way address issues that are not being addressed currently at the state level? ms. craddick clonk: we think we do at the state, quite honestly.
they are way behind where the technology is. we think it is better at state and working with local communities. we don't deal with noise, pollution, traffic issues. those are local issues. so that's where we encourage operators to really work with those local communities and be good citizens. but i'm not sure where e.p.a. or other federal agencies and we're blessed we don't have a lot of federal lands like some of the western states do. most of us who have been active in oil and gas for a long time in the states already have rules in place and it would add another layer of bureaucracy is the biggest concern. thank you. chairman smith: mr. veasey. representative veasey: ms. craddick, it is good to see you. i think it is perfectly
reasonable that we would want to be able to produce any of our fossil fuels and natural resources that we have for energy here so we don't have to depend on the middle east now particularly with all the craziness that is going on over there, i think it is perfectly reasonable that we would want to be able to produce our minerals. i also think it is personally reasonable whether you're a fisherman or a hunter or you just like gardening in your backyard, you want to be able to have clean air and clean water and that is where your agency and city councils and what have you, they take those things into consideration when trying to pass ordinances. in 2009, your hometown, midland had some issues with spacing. the city council there, which is a community that is pretty much completely dependent upon oil and gas for the most part, they wanted to be able to create an environment where the city could thrive and prosper for economic reasons and enjoyment of property and they ultimately
passed ordinances. the city of denton did that too and the legislature acted and denton is a much more progressive or liberal city than midland is. do you think that these cities are being treated fairly in regards to being able to outline rules for themselves and how they want their city to be able to function? because it just seems like there is some unfairness there. it seems like what denton was trying to do was the same thing that midland was trying to do. they were trying to come one a policy that was good for their particular city. ms. craddick: i think the difference between what midland has done what most people would consider reasonable setbacks is they worked with local operators and communities to try to figure out what works for their community. the difference is that in denton, they have banned the use of anybody in denton being able to develop their own private
property whereas with a local ordinance, you still can with horizontal drilling develop those properties because you can have a little setback. i think we all agree that being 500 feet or whatever a community considers appropriate for a setback to protect health and safety, is not unreasonable. but banning hydraulic fracking -- fracturing in a community, the private property rights of those individuals, you have basically banned drilling, which historically has been the purview of a state -- the state to regulate it and so that is the debate right now going on in the texas legislature and we'll see where they get. representative veasey: thank you very much. chairman smith: thank you and the other gentleman from texas, mr. babin is recognized. representative babin: thank you all you witnesses for being here today. thank you ms. craddick for your
leadership of the railroad commission of texas. texas has provided about 50% of the jobs in the country over the last six years. and i think fracking has been a huge contributor to that. in more ways than one. but i represent the 36th district in texas, in southeast texas. there was an incident in 2012 where an individual claimed that the water from their garden hose lit on fire. it turns out that a texas district court found out that the individual had coordinated this stunt with an environmental activist to deceive. in this case the hose was attached to the gas line. how does your commission respond to these types of claims when you hear about this? ms. craddick: if somebody complains that they believe their well -- water is on fire,
we're going to go out there and inspect it first and foremost. get the facts. if there really is a problem we're going penalize and enforce, make sure there is remediation for the problem and penize or enforce the rules that we have available to us. representative babin: as far as the incidents are concerned, perhaps only a handful of studies, how do we put these risks into perspective with the enormous economic and societal benefits of hydraulic fracturing technology? ms. craddick: historically we have drilled over a million wells in texas. we have over 400,000 that are active wells that we are regulating as we speak. part of our challenge is to make sure we are out inspecting and enforcing our rules and to make sure we're doing it on a reasonable basis and to also make sure there are facts involved. i think we're a fact-based agency.
we have good rules i believe. representative babin: thank you very much, mr. chairman. i know we have to go vote. chairman smith: thank you, mr. babin. let me thank all of our witnesses today. this has been an exceptionally good hearing. i want to say to you all, it is a credit to the significance of the subject that we had 20 members here at this hearing. that is probably a new record any time but it is certainly a new record for a 9:00 in the morning hearing. again, i appreciate your presence. hydraulic fracturing has occurred safely for decades and is largely responsible for an improved economy, less reliance on middle eastern oil. given its history and importance to our economy attempts to regulate the process should be based on sound science and not science fiction. the record will remain open for two weeks for written questions and comments from members. again, i thank the members and the witnesses and we stand adjourned. >> thank you mr. chairman.
>> she was considered modern for her time. called mrs. president by her detractors and was outspoken by her views on slavery and women's rights. she provides a unique window into colonial america and her personal life. abigail adams. on c-span's original series first ladies, examining the public and private live s of the women who fulfilled the role of
first lady from martha washington to michelle obama. and as a complement to the series c-span's new book is available. first ladies, presidential historians on the live s of 4045 iconic american women providing story s of these fascinating women creating an illuminating and inspiring read. through your favorite bookstore or online book serial. >> coming up on c-span, remarks by the president of the export/import bank and then reaction from the president and senate debate on the loretta lynch vote to be the next attorney general and leaders holding a conference to discuss the judicial process in the senate. >> on the next "washington journal" we look ahead to this
weekend's white house correspondence dinner. we speak with joyce woodhouse. then dr. john noseworthy, president and c.e.o. to have mayo clinic is here to discuss the new medicare law and the future healthcare in america. you can join the conversation with your calls and comments on facebook and twitter. >> on friday homeland security secretary jeh hohnson will hold a conference onboarder security efforts. >> in 2003, new york times reporter judith miller wrote several stories on the leadup to the invasion of iraq and weapons of mass destruction. in an effort to reveal her source, scooter libby she was
found in contempt of court and imprisoned for 85 days. she talks about her time in jail as well as her new book, the story, a reporter's journey. >> i was in jail because i refused to reveal the identity of a source whom i thought did not want his identity revealed. in our business, as you know brian, protecting sources is the life's blood of independent journalism. i felt that the people that i routinely spoke to, who had access to classified information, if they could trust me to protect them, my sources would dry up and eventually i just would be writing what the government wanted you to write. and so i felt this was a question of principle they didn't really have much choice. >> sunday night at 8:00 eastern and pacific on c-span's q & a.
>> the export/import bank charter expires. thursday, the bank held its annual conference in washington, d.c. where president and chairman fred hochberg spoke about the importance of the bank to u.s. businesses and global competition. his remarks are 20 minutes. [applause] >> good morning. welcome once again to the 2015 export/import bank annual conference. april 23, 1910. exactly 105 years ago teddy roosevelt traveled to paris to deliver a message to the world
about the character of the american people. roosevelt had just finished his presidency and he was invited to reflect on his time in office and speak about citizenship. they wanted to hear from him what he thought set americans apart and he delivered one of the most iconic speeches in our history and one which i think perfectly captures the american spirit. he said, it is not the critics who count. the credit belongs to the person who is actually in the arena who strives valiantly. who knows that triumph and high achievement and who if he fails at least failed while daring greatly. there is something uniquely american about risk taking.
about striving for new frontiers. about failing and getting up again, dusting yourself off, getting back in the saddle. very few cultures value that. and that is something that truly separates the american spirit from the rest of the world. to put it simply, what teddy roosevelt meant was that success belongs to those who show up. who are not afraid to take on risks or step into the arena. look around this room. what do you see? i see entrepreneurs. i see ino vators. i see main street american businesses sitting side by side with buyers who count on your quality of goods and services and to borrow a phrase, i see job creators. lots of job creators. and the thing about those pesky
job creators is they always show up. every time i visit a small business that uses our insurance to break into new markets overseas, every time i meet an entrepreneur who use our working capital to hire more employees, every time i speak to a group like this, full of people who use exim products to take on foreign competitors, all i ever see are job creators. that is who shows up. that is who is in the arena. and america faces a choice today. whether we will continue to engage in the arena of global competition or whether we will retreat. it isn't easygoing up against russia china, to win export sales and the jobs that come with them. you know how tough it is out there. if you're an american business
looking to grow your overseas sales, you have to contend with a lot of uncertainty. the dollar has risen to new heights. the pricor-hole has dropped to starting lohse. new multilateral institutions such as the asian infrastructure and investment bank are forming. not only could they tilt the competitive landscape they could also further cloud transparency and global finance. u.s. firms and competition and worldwide market has never been more intense the nature of that competition has changed fundamentally in recent decades. you know there is a persistent myth out there a belief that a u.s. company goes simply goes head-to-head with a foreign rival competing for sales solely on the merit s of quality
quality, innovation and price. it is a romantic idea. it is just not how the world works. it is not reality. the reality is there is a lot of hard-nosed competition. of grueling hours, red eyes and long nighs in the office. american workers produce the highest quality, the most innovative good and services in the world. they can step the arena and compete with anyone, but they shouldn't have to compete against whole countries. there are some 60 other versions of exim in countries around the world. and many of them don't play by the same rules that we do. they are propping up the domestic exporters. they are offering bargain basement financing. that often relegates free market factors like price and value to the sidelines. more and more u.s. companies are
not just competing against their counterparts in china, japan and elsewhere, they are forced to compete against china i this afternoon c. -- inc. our foreign competitors particularly those in asia. they are forceful and unrelenting in the global marketplace. exim is not like them. we don't want to be like them. we're actually cap thrists. we don't take the place of the private sector. we simply provide a backstop for american companies when private financing is unavailable. how do we do that? by reducing risk. we unleash opportunity. let me tell you what that means. you know in the past, i have talked to you about planes, trains, automobiles. this year i want to talk to you about fire trucks.
in 1926, henry ford had a conversation with a chicago entrepreneur, william stuart darling. the conversation prompted him to transform his equipment company into a manufacturer of fire trucks. hen he rolled out to first commercial fire truck later that year, built on the chassis of the model t, it marked a new chapter to remain innovative and competitive to this very day. after he passed away in 1935, his wife, mary, took the reigns. she ran the company for 40 years raising a family and building on an iconic idea. today darly still manufactures fire trucks and pumps just like this one. after 100 years, you can still talk to a darley. so i did.
i talked to three darleys. last summer i had the opportunity to meet the founder's grandsons. peter, paul and jeff. jeff told me that buyers get to choose over 150 shades of red. that is more than you'll find at revlon. he told me unfortunately it is a little lost on him since he is also color blind. jeff and his brothers lead the business these days fulfilling orders for fire trucks and increasingly overseas buyers. one of those buyers is lagos nigeria, the largest city in africa. recently their fire fighting capacity was in dire straits. they knew they needed to upgrade their fleet. the city turned to a town of fewer than 14,000 people chippewa falls wisconsin where darley builds their trucks.
for a small family-owned business getting into the global marketplace is intimidating. securing the financing necessary to win overseas sales is not always possible. private financing proved unavailable for the lagos transaction so darley turned to exim. there is a picture here. he said make sure you take my good side. mark, as any good person said boss, i didn't know you had a good side. [laughter] 6 took a $16 million loan to deliver 32 fire fighting vehicles and the training for the fire department and the result, we reduced the risk and darley unleashed opportunity. here is what opportunity looks
like. the fire trucks will support 100 u.s. manufacturing jobs while fortifying lagos with quality, reliable equipment. those 100 jobs could easily have ended up in china or austria where darley's competitors are located. i think we can all agree we would rather have those jobs go to chippewa falls and other towns in the darley supply chain. even though darley is a small business 100 manufacturing jobs is big business when you're in a small town in wisconsin. today 80-85% of darley's exports are financed by exim. that means more jobs, more security for more american families. in fact sh that is why today we're awarding darley exporter of the year aword. let's give that company a round
of applause. [applause] now the opportunity we are unleashing isn't just the opportunity for one company to grow. the question is will america seize the opportunity and continue to lead in the global economy? the global middle class is expected to grow at more than 200 million people a year for the next five years. that is the size of the adult population of the united states growing year after year. they are going to need smart highways, power plants, brings, satellite communications, consumer good. the demand will be unprecedented. who going to step into the arena and meet that demand? the rewards are huge. a robust economy. a vibrant manufacturing sector and most importantly, houston hundreds of thousands of good paying jobs. america can't afford to sit this
race out. we need to use every tool in our arsenal to make sure that u.s. companies are able to get into the arena and win. exim is one of those tools. trade agreements such as the transpacific partnership are another. we cannot turn our back on american workers. we have a responsibility as a nation to break down every barrier we can so our businesses can reach the global middle class because every sale an american firm loses out on means that good paying jobs are not going to texas, california, or chapewa falls. instead they are slipping thousands of miles away. at exim, our vole to support american exporters. but at our core we're about u.s. jobs. these are private sector jobs. the fruit of free enterprise. evidence of america's ability to
compete in the global marketplace. and we measure our success not just by the number of jobs but by the families made stronger by each over them. how will america keep writing those stories in the coming age? we have talked about what is ahead of us. we know that export jobs pay up to 18% more making that progress real for more american families and we also know that as demand grows for each sale whether it is fire trucks or ice cream, the jobs either come to america or they go some place else. it is a zero sum game. that is the choice being made. it is a fact that some politicians seem to ignore. who feels the impact most of all? small businesses and they make up about 90% of the exim customer base. more and more small businesses
are making exporting a part of their d.n.a. they know the opportunity is out there. but many of them don't have access to the financing they need to compete globally. exim provides that access when there is a gap in the private sector. people like the darleys, they are not well connected. they are not crony capitali stnch s. they are not interested in hand yachtouts. they are ino vators who want to make more american-made goods and export them to the world gabriel is one of those exporters. we met last summer in mesquite, texas. he runs a small concrete business out of a small ware house in east texas with his wife jane and their son david. they would be here today but they are celebrating his 60th
birthday in spain and he had planned that trip about six months ago. the company is called fritz pack. they manufacture 40 different specialty products like plastics. the things you will mind the swimming pools and sports arenas. if you gone to a cowboy game you have seen their handy work. just as he was preparing to mover into a new facility, the great recession hit. gabrielle was forced to lay off three of his 14 employees. people who are like family to him. he even contemplated selling off the business. but then gabrielle and david came up with the idea of going global. but when your typical sale is $10,000 or $12,000, your local bank isn't always interested in financing you. and that's the problem they ran into.
so when private financing proved unavailable, they turned to exim for reliable insurance package to protect their overseas sales. the result? exports now account for 35% of their business. and now it is not just the nfl. it is world cup stadiums in brazil, the olympic stadiums in vancouver. and the best part, that export growth allowed gabriel to rehire those three laid off employees, delvin, pam and andre. they're back in the fritz pack family, they're earning a paycheck and creating more great exports. it is a testament to the obama administration, the ground work we laid, coupled with the hard work and ingenuity of american private sector that we have added 12 million jobs in the last five years. and we landed almost 600,000 since january alone.
and at exim we're proud to have done our part by supporting 164,000 jobs last year alone. i used to run a family business. and, in fact, my mother -- my mother and my brother david are here, sitting right up front. so i know firsthand the jobs are more than just a number. but as a country, we often don't talk about what those jobs mean on a personal level to our friends and family. we often don't think about what a job really means to a person who has one. having a good job is a tremendous source of pride and self-esteem. it brings added meaning and purpose to your life. it is a part of your identity. how often are we all asked, what do you