Hearing of the Senate Committee on Energy and Natural Resources Department of Energy Budget Request

HEARING OF THE SENATE COMMITTEE ON ENERGY AND NATURAL RESOURCES DEPARTMENT OF ENERGY BUDGET REQUEST
 
SEN. LISA MURKOWSKI (R-AK): Thank you, Mr. Chairman. Good morning and welcome, Mr. Secretary. In looking at—and I think these goals of the administration—when it comes to your particular budget, and certainly in keeping with the president's message at the State of the Union and his emphasis on reduction of imported energy sources, where we see the emphasis here on the hydrogen fuel initiative, Freedom Car, coal research, weatherization and nuclear energy. And I'd like to know where from the administration's perspective, where from your department's perspective, increased domestic production fits in. Of course coming from Alaska our focus is the oil and natural gas that we have available, and how this is going to fit into your budget this year.

SEC. ABRAHAM: Well, in terms of our budget, I think that I am not sure if there is—if I can give you a specific dollar attribution. What I would say is it's our view on both the issues that relate to natural gas, as well as domestic oil production, that there are obviously impediments with respect to access which have been major issues that the Senate has debated many times, and I am sure will again this year—the question of ANWR. There's also issues that relate to access to natural gas on various—the Rocky Mountain region and other parts of the country that have been I know part of the challenge. And so I think it's more of a regulatory in my opinion challenge dealing with existing statutes or regulations that have made it more difficult. It's difficult to cite some of the transmission or distribution capabilities, the pipelines and so on. I think our focus is more on that part of the equation right now. We believe the product is there. It's whether or not we will be able to explore and develop it and then get it to market that obviously poses a big challenge.

SEN. MURKOWSKI: Well, we both agree that that is the problem, and we are trying to figure out a way to—for instance with the natural gas—how we make that happen—the simple recognition that we have a supply-demand gap that is growing at I think an alarming rate—we have got a hearing on that this afternoon—and the recognition that we need to do more to bring our gas to market. And I think when we look at those sizable sources of natural gas for the country, it is going to be coming out of Alaska. And we need to figure out how to make that happen.

One of the things that you had mentioned of course with electricity, talking about incentives—and we recognize that in the past there have been incentives that had been afforded for oil and gas developments across the country. And I would just like your two cents' worth here on the possibility of incentives, or what we are calling now "fiscal enablers" for the Alaska Natural Gas Pipeline.

SEC. ABRAHAM: Well, this is an issue which aroused much debate during the work that was done in the last Congress in the energy bill, and we worked with Alaska senators and the industry as well to try to come up with something that we felt was an appropriate level of support to that effort. We in the administration did support some support or some proposals in the area of loan guarantees. There was, as you know, as you well know, there were requests for very substantial, robust support in the form of essentially putting a floor on price that could be triggering additional backing. We did not support that, and in light of the price projections we have today, as well as the prices we have today, it's our view that there is ample incentive for industry to bring this gas to market. But we're looking forward to continuing that discussion with the interested parties to see if there might be a proposal that we could all come to agreement on. And we haven't ruled support totally off the table. We are just trying to find what we think is an appropriate level of taxpayer incentives here that we think is justified in the circumstance.

SEN. MURKOWSKI: Well, we'll look forward to working with you on that, recognizing too—and I think it was Senator Craig that had mentioned with the president's emphasis on the hydrogen initiative he suggested that you look to nuclear to make that happen. We'd also submit that natural gas can help you make that happen too. But, again, and as you point out, it's the access issue. So we look forward to working with the administration in seeing how we can't make that happen in a more expedited manner to meet the demand that we know we are going to be facing.

SEC. ABRAHAM: We do as well.

SEN. MURKOWSKI: Thank you, Mr. Chairman.