| 00:00:21 |
Bingaman, Jeff - U.S. Senator, [D] New Mexico
TODAY. THIS IS AN OVERSIGHT HEARING OF THE SENATE ENERGY AND NATURAL RESOURCES COMMITTEE ON THE CURRENT AND NEAR TERM FUTURE PRICE EXPECTATIONS AND...
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| 00:03:34 |
Murkowski, Lisa - U.S. Senator, [R] Alaska
WITNESSES, LET ME TURN TO SENATOR MURKOWSKI FOR ANY COMMENT SHE WANTS TO MAKE. >> THANK YOU, MR. CHAIRMAN. WELCOME TO OUR DISTINGUISHED PANEL. WE'RE...
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| 00:08:56 |
Gruenspecht, Howard K. - Acting Administrator
DR. GRUENSPECHT. >> THANK YOU, MR. CHAIRMAN, RANKING MEMBERS OF THE COMMITTEE. I APPEAR THE OPPORTUNITY TO APPEAR BEFORE YOU. WE ARE THE STATISTICAL...
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| 00:16:16 |
Bingaman, Jeff - U.S. Senator, [D] New Mexico
MEMBERS, I WOULD BE HAPPY TO ANSWER ANY QUESTIONS THAT YOU MAY HAVE. >> THANK YOU VERY MUCH. DR.
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| 00:16:22 |
Yergin, Daniel - Co-Founder and Chair
YERGIN, GO RIGHT AHEAD. >> MR. CHAIRMAN, RANKING MEMBER MURKOWSKI, MEMBERS OF THE COMMITTEE, IT'S AN HONOR TO BE HERE. IT'S OBVIOUSLY THIS IS A VERY...
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| 00:25:08 |
Verrastro, Frank A. - Senior Fellow and Director
PRICES HAS BECOME A STAPLE ON THE EVENING NEWS AS YOU'RE ALL TOO WELL AWARE. IT'S PAINFUL FOR THE AMERICAN CONSUMERS AND A THREAT TO THE ECONOMIC RECOVERY....
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| 00:34:36 |
Bingaman, Jeff - U.S. Senator, [D] New Mexico
ON THESE ISSUES AND LOOK FORWARD TO ANSWERING YOUR QUESTIONS. >> THANK YOU VERY MUCH. DR. HORSNELL. >> THANK YOU. CHAIRMAN
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| 00:34:45 |
Horsnell, Paul - Managing Director and Head
BINGAMAN, RANKING MEMBER MURKOWSKI, I'M VERY GRATEFUL FOR THE OPPORTUNITY TO APPEAR BEFORE YOU TODAY. MY WRITTEN TESTIMONY DETAILS SIX SALIENT POINTS...
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| 00:42:57 |
Bingaman, Jeff - U.S. Senator, [D] New Mexico
I LOOK FORWARD TO ANSWERING QUESTIONS YOU HAVE. THANK YOU. >> THANK YOU, AND THANK ALL OF YOU FOR YOUR EXCELLENT TESTIMONY. LET ME START WITH FIVE...
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| 00:43:51 |
Gruenspecht, Howard K. - Acting Administrator
AS TO HOW MUCH OF THE PRICE INCREASE WE'RE SEEING RESULTS FROM THAT. >> THANK YOU, MR. CHAIRMAN. AS YOU KNOW, THE EIA PUT OUT A COUPLE OF REPORTS, PRETTY...
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| 00:46:59 |
Verrastro, Frank A. - Senior Fellow and Director
LARGEST INDEPENDENT IN THE UNITED STATES. I THINK HOWARD AND DAN HAVE SUMMERARIZED IT CORRECTLY. THE REFINING BUSINESS HAS ALWAYS BEEN DIFFICULT. WE'RE...
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| 00:48:43 |
Horsnell, Paul - Managing Director and Head
JUST BRIEFLY. IT'S AN ISSUE REALLY FOR REFINERIES ACROSS AMERICA AND EUROPE AND THOSE WHO DISADVANTAGED EITHER BY POSITION OR BY THE NATURE OF THEIR...
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| 00:49:18 |
Murkowski, Lisa - U.S. Senator, [R] Alaska
IMPORTS. >> SENATOR MURKOWSKI. >> GENTLEMEN, THANK YOU ALL FOR YOUR TESTIMONY THIS MORNING. VERY IMPORTANT, VERY INTERESTING. I WANT TO EXPLORE A LITTLE...
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| 00:50:59 |
Verrastro, Frank A. - Senior Fellow and Director
YOU. GO AHEAD, MR. VERRASTRO. >> ALL THINGS BEING EQUAL THAT WOULD BE CORRECT. SO IF DEMAND ALSO GOES UP AND ABSORBS THAT EXTRA PRODUCTION, YOU'RE...
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| 00:51:32 |
Yergin, Daniel - Co-Founder and Chair
LOWER PRICES. >> SENATOR, I THINK YOUR FOCUS ON SPARE CAPACITY GOES TO THE HEART OF THE MATTER. BEFORE THE BOOK THE PRIZE WHEN I WAS WRITING IT I SPENT...
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| 00:53:38 |
Horsnell, Paul - Managing Director and Head
OVERWHELMED -- >> MORE SUPPLY. >> IF SAUDI ARABIA DID INCREASE DRAMATICALLY FROM THIS POINT. THERE'S MORE SUPPLY, THAT SHOULD BE A DEPRESSING EFFECT...
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| 00:55:51 |
Franken, Al - U.S. Senator, [D] Minnesota
MAKE $137 BILLION IN PROFITS IN ONE YEAR. AND THEY MADE NEARLY A TRILLION DOLLARS OF TRAFTS OVER THE LAST DECADE. WE'RE LOOKING TO REMOVE, AGAIN, $2...
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| 00:57:10 |
Verrastro, Frank A. - Senior Fellow and Director
THAT? WOULD THAT RAISE PRICES? >> A COUPLE THOUGHTS ON THAT, SENATOR. I THINK THE SUBSIDIES, SUBSIDIES HAVE BEEN THROWN AROUND THE SENATE AND TAX LOOPHOLES....
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| 01:02:06 |
Barrasso, John A. - U.S. Senator, [R] Wyoming
YERGIN, I WOULD LIKE TO ASK YOU ABOUT THE PETROLEUM RESERVE. OBAMA ADMINISTRATION IS PROPOSING THAT SEVERAL EUROPEAN NATIONS TAP THEIR STRATEGIC OIL...
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| 01:03:10 |
Yergin, Daniel - Co-Founder and Chair
CAUTION IS STILL THE WORD. I THINK THIS SYSTEM OF THE INTERNATIONAL ENERGY AGENCY, EMERGENCY SHARING, WAS SET UP TO DEAL WITH DISRUPTIONS AND MAJOR...
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| 01:08:10 |
Manchin, Joe III - U.S. Senator, [D] West Virginia
SENATOR. >> THANK YOU ALL FOR YOUR SERVICE. THE THING I WANTED TO KNOW, YOU WERE TALKING ABOUT OIL PRICES AND GASOLINE PRICES AND WHAT IT MEANS TO...
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| 01:09:53 |
Horsnell, Paul - Managing Director and Head
THE PUMP AND GO RIGHT DOWN THE LINE. >> AGAIN, DON'T MISINTERPRET, I DON'T REMEMBER SAYING THERE'S NOTHING YOU CAN DO. I THINK WHAT WE'RE SAYING THE...
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| 01:11:32 |
Verrastro, Frank A. - Senior Fellow and Director
COMMENTS THERE ARE SOME BENEFITS TO BE DERIVED FROM HIGHER OIL PRICES. AND THE FIRST AND FOREMOST OF THAT IS THAT A LOT OF THESE UNCONVENTIONALS...
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| 01:13:08 |
Yergin, Daniel - Co-Founder and Chair
IF I COULD DIVIDE INTO TWO, WHAT FRANK SAYS COAL TOOLEY QUIDS, THE TECHNOLOGY IS DOABLE, IT'S THE COST. THE OTHER SIDE, NATURAL GAS I THINK THE DIFFERENCE...
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| 01:13:53 |
Gruenspecht, Howard K. - Acting Administrator
BUT YOU KNOW, I GUESS GAS IN LIGHT DUTY VEHICLE, NATURAL GAS, THERE WAS AN EFFORT TO DO THAT. IT HAS BEEN TRIED. IT DIDN'T SUCCEED VERY WELL IN THE...
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| 01:15:17 |
Risch, James "Jim" E. - U.S. Senator, [R] Idaho
EYE OPENER AS FAR AS HOW IMPORTANT THE REFINING PROCESS IN ALL OF THIS. I THINK AMERICANS HAVE A TENDENCY TO THINK ABOUT THIS AS THE PRICE OF A BARREL...
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| 01:18:46 |
Yergin, Daniel - Co-Founder and Chair
PART OF A WORLD OIL MARKET. WE'RE NOT THE WORLD OIL MARKET. WE'RE THE NORTH U.S. OIL MARKET. IF YOU LOOK AT THESE ANNUAL REPORTS OF SOUTHWEST AIRLINES,...
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| 01:19:47 |
Horsnell, Paul - Managing Director and Head
WOULD REGULATE THE SPECULATORS IN BRITAIN? >> I THINK I BRING ONE FURTHER COUNTRY INTO THIS, WHICH IS ACTUALLY SWITZERLAND. I COVER FOR THE FISCAL MARKETS...
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| 01:20:50 |
Verrastro, Frank A. - Senior Fellow and Director
THE TAX INCENTIVES. I THINK THAT'S RIGHT. TIME CHANGES AND I THINK THE DEBATE WOULD BE MARKEDLY DIFFERENT IF THERE WAS A DISCUSSION OF CORPORATE TAX...
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| 01:21:24 |
Cantwell, Maria - U.S. Senator, [D] Washington
DISCUSSION, AND I CERTAIN LYLY BELIEVE IN MARKET FUNDAMENTALS MYSELF AND CERTAINLY BELIEVE THAT MARKET FUNDAMENTALS ARE POLICED. BUT I CAN REMEMBER...
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| 01:24:10 |
Yergin, Daniel - Co-Founder and Chair
BECOMES A PROBLEM? >> WELL, I THINK THAT THE FINANCIALIZATION CERTAINLY HAS TO DO WITH WHAT YOU'RE TALKING ABOUT, INSTITUTIONAL INVESTORS OR HEDGE...
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| 01:27:49 |
Portman, Rob - U.S. Senator, [R] Ohio
OF THE THREE HEARINGS GOING ON AT THE SAME TIME. ONE THING THAT STRUCK ME ABOUT YOUR EARLIER TESTIMONY IS AS HARD AS CONGRESS TRIES WE CAN'T REVEAL...
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| 01:29:17 |
Yergin, Daniel - Co-Founder and Chair
HAS ACTUALLY BEEN VERY BENEFICIAL BECAUSE WE WOULD BE LOOKING AT MUCH HIGHER PRICES IN A MUCH TIGER MARKET WITHOUT IT. SO THIS -- THAT WHAT'S HAPPENING...
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| 01:30:45 |
Gruenspecht, Howard K. - Acting Administrator
COUNTRIES OUR SUPPLY MAY MATTER BUT MAY MATTER LESS FOR THE PRICE THAN FOR OTHER ASPECTS, YOU KNOW, SECURITY ASPECTS. ALSO PRODUCTION IS AN IMPORTANT...
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| 01:32:51 |
Verrastro, Frank A. - Senior Fellow and Director
YEARS? WOULD IT HAVE A POSITIVE OR NEGATIVE EFFECT OR NO EFFECT? >> SO TO THE EXTENT YOU'RE PAYING MORE IN TAX AND LESS IN INVESTMENT AND E&P ACTIVITY,...
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| 01:34:48 |
Coons, Chris - U.S. Senator, [D] Delaware
SOME DIFFICULT ANNOUNCEMENTS IN THE PAST YEAR BY SUNOCO AND CONOCOPHILLIPS THAT THEY'RE EITHER IDLING OR CLOSING MAJOR REFINERIES ON THE DELAWARE...
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| 01:35:29 |
Verrastro, Frank A. - Senior Fellow and Director
CONDITIONS AND PRIVATE BUSINESS DECISIONS. MR. VERRASTRO, DO YOU HAVE ANY OPINION ON THAT? >> THANK YOU, SENATOR. TWO QUICK POINTS. I THINK WE WERE...
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| 01:38:00 |
Gruenspecht, Howard K. - Acting Administrator
WHY DON'T YOU JUST CANCEL -- >> IT'S HARD TO PUT THESE THINGS TOGETHER. I MEAN, THERE ARE LOTS OF DIFFERENT WAYS TO SLICE AND DICE IT. WE TRY TO DO...
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| 01:40:04 |
Yergin, Daniel - Co-Founder and Chair
BACK TO THE SUBSIDIES THING, I THINK THE SENATOR FIRST SAID THAT WORD SUBSIDY, INCENTIVES, GOES BACK AND FORTH. I DID READ ONE STUDY THAT SAID THAT THE...
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| 01:40:51 |
Hoeven, John - U.S. Senator, [R] North Dakota
HIGHER. FOR CRUDE OIL AND FOR ENERGY IN GENERAL. AND SO WE HAVE TIGHT OR VERY LITTLE SPARE CAPACITY IN THE CRUDE OIL MARKETS. AND SO THAT KIND OF...
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| 01:42:04 |
Yergin, Daniel - Co-Founder and Chair
RATHER THAN CONSTRICT IT? >> WELL, I THINK THE INCREASE IN SUPPLY WOULD HAVE AN IMPACT. HERE I HAVE A SLIGHT DISAGREEMENT WITH FRANK. I THINK A 300,000,...
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| 01:43:53 |
Gruenspecht, Howard K. - Acting Administrator
INVESTMENT DECISIONS GIVING THEM CONFIDENCE TO GO AHEAD. >> DR. GRUENSPECHT? >> BOTH DIRECT AND INDIRECT EFFECTS IS IS PROBABLY WHERE I WOULD STAND ON...
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| 01:44:25 |
Verrastro, Frank A. - Senior Fellow and Director
ISSUE IS TIMING? RIGHT. SO THERE'S A DIFFERENCE TIMING. IF YOU BRING A LOT OF BARRELS TO BEAR IMMEDIATELY IT HAS A BIG IMPACT. SAYING THAT YOU'RE GOING...
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| 01:46:03 |
Horsnell, Paul - Managing Director and Head
TIMING. I THINK THE QUESTION THAT THE SUPPLY SITUATION MAY IMPROVE IN INTO THE MIDTERM IS SOMETHING WHICH STARTS TO ANCHOR LONGER-TERM PRICE EXPECTATIONS....
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| 01:47:32 |
Bingaman, Jeff - U.S. Senator, [D] New Mexico
THANK YOU. WE ARE IN THE MIDDLE OF A VOTE SO I'M GOING TO GO TO THE FLOOR TO VOTE. SENATOR WIDEN HAS ALREADY VOTED AND HAS RETURNED. SENATOR SHAHEEN,...
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| 01:47:54 |
Shaheen, Jeanne - U.S. Senator, [D] New Hampshire
ALL OF YOUR TESTIMONY EARLIER, AND I'M CONFUSED, I THINK, AS I THINK MANY OF MY CONSTITUENTS ARE, IF SUPPLY IS UP AND DEMAND IS DOWN, WHY ARE WE NOT SEEING...
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| 01:48:30 |
Gruenspecht, Howard K. - Acting Administrator
GRUENSPECHT? >> I WOULD SAY THAT OIL AND OIL PRODUCTS ARE REALLY GLOBAL MARKET, AND WHILE SUPPLY IS UP IN THE UNITED STATES AND DEMAND IS DOWN MANY...
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| 01:49:51 |
Yergin, Daniel - Co-Founder and Chair
UP, OUR DEMAND WENT DOWN, AND THAT WAS A BIG FACTOR THAT LED TO OIL PRICES COMING DOWN. SO WHAT HAPPENS IN THE UNITED STATES REALLY DOES HAVE AN IMPACT...
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| 01:51:03 |
Verrastro, Frank A. - Senior Fellow and Director
IN THAT MODEL. >> SURE, SENATOR. WHEN WE TRIED TO COMPARE SECURITY, AVAILABILITY, AFFORDABILITY, THE ONLY SWEET SPOT WAS EFFICIENCY. YOU CAN GET ALL...
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| 01:52:51 |
Yergin, Daniel - Co-Founder and Chair
ENERGY EFFICIENT AS A COUNTRY TODAY THAN WE WERE 20 OR 30 YEARS AGO AND WE OUGHT TO BECOME TWICE AS EFFICIENT AGAIN. I THINK THAT, YOU KNOW -- I THINK...
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| 01:53:40 |
Wyden, Ronald "Ron" Lee - U.S. Senator, [D] Oregon
MUCH FOR BEING WITH US, AND APOLOGYIES THAT IT'S SO HECTIC. YOU CAN SEE SENATORS RUNNING HITHER AND THITER TRYING TO KEEP UP WITH HEARINGS ON THE FLOOR....
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| 01:55:54 |
Gruenspecht, Howard K. - Acting Administrator
ROW. DOCTOR? >> MAYBE IT'S NOT ALLOWED? I MEAN, I ACTUALLY THINK IT'S A LEGITIMATE QUESTION, ONE THAT WE'RE VERY INTERESTED IN. BUT IT'S HARD -- YOU...
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| 01:57:05 |
Yergin, Daniel - Co-Founder and Chair
WELL, YES, I THINK IT'S BEEN A SIGNIFICANT CHANGE. I DON'T THINK BASED UPON OUR UNDERSTANDING TODAY THAT IT IS THE DRIVING FORCE THAT CAN ACCENTUATE...
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| 01:57:28 |
Verrastro, Frank A. - Senior Fellow and Director
IT'S YOUR GRAPHIC. >> SO, SENATOR, PART OF THE REASON I THINK WE DIDN'T GO INTO DETAIL IN ANY OF YOUR TESTIMONY BECAUSE WAS AT ONE POINT I THINK WE ANTICIPATED...
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| 01:58:04 |
Horsnell, Paul - Managing Director and Head
REASON IT WASN'T ALREADY HIGHLIGHTED IN TESTIMONY IS, YOU KNOW, REASONABLY HAPPY WITH THE SUPPLY/DEMAND PRICES AND HOW THEY'VE BEHAVED. THERE'S NOT...
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| 02:00:27 |
Gruenspecht, Howard K. - Acting Administrator
ROW. >> I MEAN, I WOULD WANT TO READ THE SPECIFIC STUDIES FIRST BEFORE I COMMENTED ON THEM, BUT I THINK -- I THINK A LOT OF THE ISSUE -- YOU KNOW, SOMETIMES...
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| 02:01:40 |
Yergin, Daniel - Co-Founder and Chair
SO I WOULD NOT CALL IT A SPECULATIVE PREMIUM. I'D CALL IT A RISK PREMIUM OR SECURITY PREMIUM. BUT THERE IS A PREMIUM THAT REFLECTS THIS INCREASED...
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| 02:01:54 |
Verrastro, Frank A. - Senior Fellow and Director
DAN. I MEAN, I THINK THAT THERE IS A PREMIUM IN THE MARKET OVER AND ABOVE FINDING DEVELOPMENT COSTS. I WOULDN'T ATTRIBUTE IT ALL TO SPECULATION. AND...
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| 02:02:09 |
Horsnell, Paul - Managing Director and Head
SAME FOR ME. THOSE RESULTS DON'T SOUND VERY PLAUSIBLE. IF THERE WAS A LARGE SPECULATIVE PREMIUM, PRICES WOULD THEN BE HIGHER THAN A MARKET PRICE, WHICH...
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| 02:03:53 |
Udall, Mark - U.S. Senator, [D] Colorado
INFORMATIVE, ENJOYABLE. I'VE LEARNED A LOT AS I THINK WE ALL HAVE. THIS MORNING I WANT TO JUST PIGGYBACK ON WHAT SENATOR WIDEN JUST POINTED OUT, AND...
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| 02:06:23 |
Gruenspecht, Howard K. - Acting Administrator
FRACKING, FRACTURING, HYDRAULIC FRACTURING OPERATIONS, IN PART BECAUSE I THINK THEY WOULD LIKE TO GAIN SOME EXPERIENCE. TO THE EXTENT THAT PLAYS OUT...
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| 02:07:48 |
Yergin, Daniel - Co-Founder and Chair
HERE. >> HARDLY. BUT I THINK THAT -- I THINK WHAT YOU'RE ALSO TALKING ABOUT IS ENCOURAGING OTHER COUNTRIES TO HAVE MORE OPEN MARKETS TO INVESTMENT AND...
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| 02:08:32 |
Verrastro, Frank A. - Senior Fellow and Director
BY BRINGING SAUDI ARABIA INTO THE G-20 IT REALLY HELPED IN THE POST-LIBYAN CONFLICT. THERE WAS -- THERE WAS A DAY IN JULY, EITHER END OF JUNE OR JULY,...
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| 02:09:52 |
Horsnell, Paul - Managing Director and Head
GROUNDS TO DO THAT. I'VE MENTIONED ALREADY THERE ARE SPECIFIC CIRCUMSTANCE WHERE IS THERE IS A FOREIGN POLICY ASPECT AND WE ALREADY MENTIONED PERHAPS...
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| 02:11:15 |
Yergin, Daniel - Co-Founder and Chair
SENATE ENCOURAGED IT TO HAVE AN ENERGY BUREAU. AND THAT IS A DIFFERENCE TO HAVE THAT AS A CLEAR COMPONENT IN FOREIGN POLICY. >> I'M SURE THAT WAS DRIVEN...
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| 02:11:48 |
Murkowski, Lisa - U.S. Senator, [R] Alaska
YOU, SENATOR. SENATOR MURKOWSKI. >> THANK YOU, MR. CHAIRMAN. AND I THANK MY COLLEAGUE FOR THE PLUG THERE ON THE ENERGY BILL. LET ME ASK, SINCE GOOD...
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| 02:12:44 |
Gruenspecht, Howard K. - Acting Administrator
I THINK I'LL HAVE TO GET ON A PLANE THAT GOES ALL THE WAY TO AUSTRALIA. BUT, NO, I THINK -- I THINK IT REALLY DEPENDS ON THE -- ON THE -- FOR THE AMOUNT...
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| 02:14:00 |
Yergin, Daniel - Co-Founder and Chair
LOOKING OVER THE STATUS WITH IRAN RIGHT NOW, I THINK YOU CAN SORT OF SEE THE CHANGE OF EXPECTATIONS IN THE MARKET ALREADY OCCURRING AMONG OTHER PARTICIPANTS...
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| 02:14:57 |
Verrastro, Frank A. - Senior Fellow and Director
BE HELPFUL IN THE SHORT TERM. >> DAN'S COMMENTS ARE VERY WELL DAN'S. I THINK THAT THE VALUE ADD HERE IS ESPECIALLY AS WE MOVE INTO THE YOUNG CONVENTIONALS...
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| 02:17:52 |
Horsnell, Paul - Managing Director and Head
THOSE? >> YES. TO ANSWER YOUR QUESTION, I JUST WANT TO SAY THAT THE TAX INCREASE WAS GREETED BY THE INDUSTRY WITH A CERTAIN AMOUNT OF SHOCK. NOT ONLY...
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| 02:20:01 |
Wyden, Ronald "Ron" Lee - U.S. Senator, [D] Oregon
KNOW NOT JUST THIS COMMITTEE BUT OTHERS IN THIS COUNTRY ARE GOING TO ASK YOUR OPINION ABOUT SOME OF THE POLICIES THAT WE'RE GOING TO HAVE TO ADDRESS...
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| 02:23:58 |
Gruenspecht, Howard K. - Acting Administrator
OUT. YOU KNOW, IN 2009, WE LAUNCHED AN ENERGY AND ENERGY MARKETS INITIATIVE EXACTLY WHAT THE AIM OF ASSESSING THE INFLUENCES OF FINANCIAL ACTIVITIES...
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| 02:25:59 |
Yergin, Daniel - Co-Founder and Chair
FINANCIALIZATION OF COMMODITY MARKETS WHICH YOU'RE DESCRIBE HAG BEEN QUITE MARKED SINCE 2005. SO IT IS REALLY IMPORTANT TO UNDERSTAND IT AND IT AFFECTS...
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| 02:29:28 |
Horsnell, Paul - Managing Director and Head
POINT, BECAUSE I BELIEVE THEY'RE WRONG. >> I GOT THE DRIFT ON THAT. >> I WOULDN'T LIKE YOU TO HAVE THE IMPRESSION THAT THOSE VIEWS REPRESENT THE MAJORITY...
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NOTE: The transcript for this program was compiled from uncorrected Closed Captioning.