 Thank you, John. I wish I could say because I already learned from so many people here including John and I'm sure it's much more interesting. Fati be role. I see a whole gang of people. I know I won't start because then I won't stop But as I sometimes tell my mother, I'm the only person here. I don't recognize But I do want to just start by saying one thing that's It's separate from today's events, but it's it's It's actually quite relevant and that is to note as many of us well know that The nation and many of us personally lost a dear friend Recently and that's dr. Jim Schlesinger former secretary of energy great friend to CSS a great American patriot had a atomic energy commission head of the CIA head of the Pentagon and the first secretary of energy so if I could just Ask people to take a moment of silence to honor Jim's memory. I would appreciate it so Thank you somebody said the mark of true fame is when People know you that you don't know so I first met Secretary Schlesinger when he was secretary of defense and I was the note-taker in the science center at Harvard I think what they called the god can lecture and he gave a speech the title of which I think was called the seamless web of deterrence and people remember This is when we were trying to move away from mutual assured destruction and having a much more graduated set options for purposes of assuring that our Nuclear deterrent would be as credible as as possible And just recently within the last couple of months. I would say Jim came in and had lunch with secretary Moniz and me and he He verified Story that I heard many times and I'll just take a minute because it's it's a true story and a good one And it's this He was as many people remember here the senior energy advisor to President Carter Before he became the first secretary of energy and in fact he had that great misfortune that happens to people of appearing on the cover of Time Magazine and Superman costume, which is usually really bad luck and in any event he became the first secretary of energy and He wrote down on a single sheet of paper A Statement that the real property at the location of a thousand independent Southwest Should be made the headquarters of the newly Created Department of Energy right there on Independence Avenue beautiful view facing the Smithsonian Castle at that time occupied as of my recollection served by the US Army Corps of Engineers Takes this thing into the Oval Office Gives it to President Carter. Dr. Brzezinski could tell us if it's either true or credible and It's the one sentence thing as I've just described it and with a box approved this room and President Carter checks the box When the Secretary of Defense Harold Brown found out about this he said Jim What are you doing? Why would you show the president a memo like that taken my building without showing me first? And he said why Harold you know you would have objected So back in those days when I was taking notes for people like Secretary Schlesinger giving lectures There was a big debate This is at the time the first oil shocks and we had all of these Academic discussions is energy merely a commodity and you should just live let the neutral forces of supply and demand Allocate resources accordingly or is it a strategic asset that has to be dealt with from a national security perspective? Somewhat differently we've been through the first oil price shock 73 79 this debate is raging Look, I think everyone is clear now that energy is fundamentally and deeply a strategic asset We need to view it in such terms and and we certainly do and I think history is full of areas where major muscle movements have occurred around the world of people making major decisions That have been deeply informed by acquisitive energy strategies only the most Notorious of which is Saddam Hussein seizure of the oil fields down in Kuwait so I think that debate is is largely over and Certainly the United States has taken the view that we need to be energy secure President Obama has been very articulate about that I invite Many of you have already seen him to look at the speech He gave at Georgetown a couple of years ago where he talked about that and in fact if you look at the president's Overall energy policy It is I think deeply informed by this desire to be energy secure and to be any energy Diverse in a manner that promotes our security So the all of the above strategy, which I think you've all heard of that Characterizes the president's approach to the development of us energy resources I think clearly is one that promotes diversification and therefore security of our fuel supplies now as has been written about and and discussed now at length in Our own case the all of the above strategy with the incredible prodigious outpouring of oil and gas that recent years have witnessed have really quite substantially Transform our own energy security and by the way to the benefit of countries around the world I will merely in this very expert audience cite a couple of very brief factoids having gone from Only on the order of 1% of our gas production Coming from shale gas in 2001 We're now up to 40% and this on an annual gas economy on the order of the order of 23 trillion cubic feet So it's had a tremendous effect and of course that has had the effect We've all seen on gas prices coming down which has meant that all of the Expectations that we had had and the people have written about about LNG imports have now turned turned into a discussion about LNG Exports which has taken a lot of the heat off of natural gas prices in Europe So it's already provided some substantial relief and then of course more recently But also incredibly impressively our oil production is going up on the order of a million barrels per day Year on year so and I don't know if Adam Saminsky is here to give me the third decimal place To the order of magnitude we were at six and a half million barrels per day production last year about seven half million barrels per day This year we're heading towards eight point five next year practically a million barrels per day out of the Bakken alone and This has also had a tremendous And positive effect on our economy on our energy security so we are witnessing in practice the the strength of energy diversification and The president has also been very clear that this is an issue that extends throughout the platforms of power generation certainly the Incredible increase we've seen in the various renewable forms of energy has been quite impressive And we have the first nuclear power plants to be built commercially in the United States in three decades supported in the case of the Vogel reactors by the loan guarantee authority of which six and a half Billion dollars have now been drawn from and Secretary Moniz went down to Vogel to to celebrate that milestone So we have seen that in terms of the United States our security has been very much enhanced By the diversification of our supplies it brings us not only security benefits and the reduced vulnerability that our own Production has permitted but also as I said has provided I think serious security benefits to our allies and trading partners as well This is important because it goes to how we think about energy security we think about energy security in terms of a positive asset something to develop and to share and to trade and to Allow the country of the world to benefit because all of us are ultimately tied in so many dimensions by shared bonds of security interests and interest in protecting the environment of this small planet that I think all of These areas will continue to flourish as we are able to pursue this Diversification strategy that has been so successful in the United States of America it's also very important to note that we view security in a broader sense than just production and Energy security also means security against all forms of threat natural and unnatural So if you look at the president's climate action plan Not only is the first pillar of that climate action plan Dedicated to a mitigation strategy which does talk about the development the responsible and sustainable development of all Elements of our energy equation including and very significantly so energy efficiency and reducing demand for energy where we can be smarter about the way we insulate buildings the greater use of Applying standards to drive efficiency in in that realm the fuel economy standards have all of which have Lower the demand side of the equation which is equally effective and in many cases as we say It's the cheapest megawatt to build is the negawatt that you don't need to build but we have also seen that that the Importance of the second pillar of the president's climate action plan on adaptation is also very much tied to our security and We had this brought home searingly to all of us in the case of hurricane sandy and we found deep vulnerabilities Particularly vulnerabilities that we had not thoroughly processed to be candid Between the fuel sector and the electric sector and here I would be remiss if I did not acknowledge Tremendous leadership thought leadership of John Hess who you will hear from shortly who I call him professor He was ahead of me in school a little bit But I really learned a lot from John in that experience about exactly how those two sectors interact and and Let me say it is a work in progress But we have become incredibly focused and the president is incredibly focused on the importance of resilience And I will I will pivot off that to make one other point here At the time of hurricane sandy President was very very clear He said that after preservation of life and limb That restoration of power we had eight and a half million People out of power was his highest priority and the second thing he said is he would have zero tolerance for a red tape and This mobilized the level of effort between the public sector and the private sector Which we are trying to now build out of an improvisation to something that's more systemic But it led to a series of conversations Not only within the government, but between the government and the private sector and that conversation went beyond just storm response and In fact when President Obama came to the Department of Energy in May 2013 To discuss with the CEOs of the major electrical utilities not just East Coast by the way This is coast-to-coast What lessons need to be learned and how they could be applied in the future the conversation turned to cyber? Because people recognize that the threats that we are facing are not just natural disasters They can be unnatural Disasters they could be visited by a very sophisticated cyber attack and as we learned In Silicon Valley last April it can come in the form of a rifle attack on a transformer So we have a holistic integrated view of energy security Which is something that I think is relevant to countries around the world now John admonished me not to talk either too long, which I perhaps have done already Or too much about Ukraine, but I just will say the following the third pillar of the climate action plan is international cooperation And it turns out that fits very well with the other two pillars it felt if it's very well with the all-of-the-above strategy and What we have seen in the recent weeks Following the episodes that we're all discussing in Ukraine and Crimea is a deepening of that conversation And an important deepening of that conversation last it was just last week I had the opportunity to meet in the US EU Energy Council Secretary Kerry and I Were on the US side and Lady Ashton and Guter ettinger on the EU side And it was a very useful conversation about the development and the responsible development of our resources individually and collectively and This is an issue that the president has has spoken to and I think I could not do better than to Quote the president's words and how he thinks about some of these issues because I think it will usefully inform our Conversations and the president said on his recent trip to Europe. I Think it is useful for Europe to look at its own energy assets as well as how the United States can supply additional energy assets Because the truth of the matter is that just as there's no easy free simple way to defend ourselves There's no perfect free ideal cheap energy sources every possible energy source has some inconveniences or downsides And I think that I'm continuing the quote here I think that Europe collectively is going to need to examine in light of what's happened their energy policies to find Are there additional ways that they can diversify and accelerate energy? Independence the United States as a source of energy is one possibility and we've been blessed by some incredible resources But we're also making choices and taking on some of the difficulties and challenges of energy development and Europe is going to have to go through some of those same conversations as well That's what the president said in the Hague and so what we're talking about for both the United States for Europe and beyond is a diverse set of solutions and That's the conversation that we're having That's why the president asked Secretary Moniz to participate with other G7 energy ministers in a conversation about Energy security. What can we do in that context? It's a global conversation is being pursued through multiple channels as we mentioned through the US EU channels now Soon to happen in the form of a ministerial that will lead to a report to the G7 leaders as well It's a great moment of opportunity. There's the famous cliche but most cliches have something of The truth in them of never let a great crisis go as a missed opportunity I'm sure there's a more eloquent way of saying that and has been by Rahm Emanuel. So But in any event, I think that's how we look at this moment We have tremendous challenges that we face But it is also an opportunity to reset the terms of the discussion and if I may say I can't think of a better place than CSIS and the people who I see Many of whom I've had the pleasure to work with and learn from all these years to have that conversation It has to be an open conversation where we talk about things that are both possible, but things that are difficult and As we go through this conversation I am confident that we will emerge the stronger for it and that we will find just as the United States has found its Strength in security through diversity that others will as well We are very very sharply focused on ensuring that Ukraine Receives the assistance that it needs in this critical moment We're very very focused as well on other portions of Europe that have become quite dependent on imported Gas supplies, but we're also focused globally on how this presents opportunities and challenge for all of us And how by working together we can emerge with a stronger level of security against external threats To our sovereignty to our economic prosperity and how we can do this in a way that actually promotes our own prosperity Creates great jobs creates new industries, which we have already seen in great Measure so far and do so at the same time that we lower carbon in the service of a long-term plan to keep this planet as Stewards for the next generation so that they can enjoy the bounty that providence has provided this small planet But one that is the only one we've got to live in so with that I think there's some time for Q&A and I wanted to say to everybody here again Thank you for all that you're doing not just today, but every day. Thank you We do have a few minutes for some questions before the secretary has to leave So let me ask people that would like to pose it and we've got some microphones around here We'll catch real quickly Let me walk over here to get it to you. Thank you I'm David Bardeen. I served with Jim Schlesinger in President Carter's energy establishment My question has to do with the president's emergency powers And what review the administration has made of them if you conceive of an emergency in which the president concludes That to help one or more allies We need to do something extraordinary such as overriding contractual arrangements Temporarily to make crude oil or refined petroleum products conceivably natural gas directly or indirectly available Does the president have all the powers he needs as the administration reviewed? The powers he has and may not have and Has it informed Congress of what powers the administration believes the president has and any defects And I just give you an analogy if you think back to the Berlin blockade on the various different circumstances because we weren't occupying power then President Harry Truman Sent coal by airplane to Tempelhof to save the Berliners from that blockade Well, I only consider myself a recovering lawyer and I haven't practiced law since I think 2000 and I'm not at the White House anymore But I'll limit myself to some rather general observations What I recall is that the president does have a quite robust emergency authorities on such things as the International Emergency Economic Powers Act IEAP and so forth But I would not it'd be remiss of me to try to parse any of that here what I will say is this that We are focusing in the first instance not in a sort of dry Legalistic analysis of what the powers are but actually Rolling up our sleeves and solving the problem. So just as we've been working very hard to support the IMF in Developing the program that will support Ukraine. We've been working very closely with the Europeans on the package They're putting together. We've passed our own package through the the US Congress So what we're focusing on now is in the first instance and and we have Fortunately the situation of a not overly harsh winter and at high storage of natural gas in the region We are trying to make sure that in the first instance the Ukrainians themselves and second interest Instance countries like the visa ground for that are on the other side of the pipes That they have what they need. We've looked at things like reverse pipeline flows We've looked at other storage measures. Actually, there's some some things It's not easy given the nature of the energy infrastructure in Ukraine to look at some conservation Measures, there's a variety of things that are being looked at. I'm sure that the lawyers who are working with us are looking to see what Powers and authorities can be used if need be but I have not directly been involved in in that conversation Then let me pose a question on behalf of people here and that is you didn't have a chance to see the chart, but our colleagues Sarah Latteslaw and Martin lead showed an interesting chart that showed price differentials for natural gas Our Japanese colleagues pay four and a half times as much as we pay our European colleagues pay three and a half Time or three times as much as we do Wouldn't it be good for everybody if we could start exporting gas? I mean it would help it would help our Japanese colleagues get their prices down and their productivity up It would help our European colleagues with security and we'd get we'd make money It's a great question. So let me just put that in a little context first of all as I said Even before any natural gas gets exported The fact that all those LNG import terminals are not getting used has taken a lot of pressure off of gas demand in in terms of imports of the United States and and provided relief already And by the way also driving down coal prices Coal exports to Europe also bringing a lot of cheaper energy So the United States even before you get to the question which I'm I promise I'm about to get to is doing a lot to Support energy security in Europe point one point two, you know, there will be a limit Below which you you will not see my hunches. I would defer to John Hess Natural gas ever become commoditized to the degree that oil is because the fungibility will never be the same Because of the transportation cost five or six bucks per MBT you so I think you're gonna see some continuing Delta That's the second but the third point is again, I think most people here know Having gone from expecting to be a major import of LNG in May 2011 we issued our first export license for LNG and We have now we're now up to seven including the most recent just a couple of weeks ago that together And these are conditional approvals and the exception of the first one which is gone final that If they go through the final approval will make available 9.3 billion cubic feet of LNG exports available per day and for those Europeans out there that's on the order of like 95 BCM per year and Roughly speaking again Careful to know these are conditional so far But that's on the order of what Europe now Imports in terms of LNG. It's on the order what cutter exports. It's about half of what Russia imports so so I think we're already moving significantly into that space and We're gonna continue under the natural gas act to apply the criteria that that you've I'm sure all seen in terms of Looking at the overall effect as we're required by law including the macroeconomic effects of our LNG exports and we look at trade balance. We look at employment. We look at geostrategic factors as well So I think you're seeing already the benefits of what the US has done and I think in terms of Exports it's already. I think a very significant story I'm probably for one more question before the secretary has to leave if there is one and otherwise we'll give him an early out Sarah Thank you so much for being here You know you weren't able to be at part of the morning discussion but one of the things that we talked a lot about is Sort of us perception of what sort of our new energy posture means for us But then also international perception of what our new energy posture means for us and a lot of times You know I work in the energy space but we've brought in a lot of our foreign policy colleagues to talk about what it means for sort of the foreign policy implications and Quite honestly, there was a lot of anxiety, right? But you talk with a lot of folks from around the world to you know give you their perspective on sort of what this new Resource optimism for the United States is if you could think, you know quickly about whether or not there's a You know there are some points of optimism and some points of anxiety and how you sort of think about those things I think it'd be very enlightening for me Well, let me say this it's a great question For me the principal point of optimism. I think this is leakin Stephens who said I've seen the future and it works I'm not sure it panned out in the specific case that he cited but in any event That is how I feel in other words We've all been in these conversations for years and years and years and I can tell you I for one did not foresee what has happened in this country and in terms of I can't remember who came over the phrase now natural gas is not so much discovered as manufactured and And they're really tremendous upside potential and of course It's many of those same technologies that have led to this also prodigious outpouring of oil But even in that optimistic point there is a note I won't say of anxiety because that would not be the right thing to display But I will say in terms of caution Which is we can't take anything for granted We do what we do Under appropriate widespread public scrutiny What we do we have to do in a manner that Supports and promotes and preserves public confidence And it is no secret that there are Countries around the world that have gotten themselves tied up in moratoria Where they're not able to develop some of these resources? It is obvious that in the post Fukushima era That if you are not a good steward of nuclear safety that the promise of low-carbon electricity in large baseload Units will not be something you can rely on obviously Japan has shut 50 reactors And so I think the note of optimism is that the source of security is present and widespread point one point two that in thinking about energy Not as a weapon Not as something to use coercively not as something to deny, but as something to support As something to support our own independence as something to support our allies as something to support our trading partners and our friends there is great cause for optimism that Not just our individual security, but our collective security will be enhanced the cautionary note is I would say twofold number one and you heard from the president None of us. I think has the luxury to say I'm Some of the above I'm looking at this. I'm not looking at that I think we all of us it would not be the right thing to expect one country to be the sole Provider of one particular energy source and that's not terribly secure way to go anyway Even though we would not use energy in the way that is sometimes contemplated But I think that's why we have to have a frank and candid conversation About natural gas and its use elsewhere in the world about nuclear and its use elsewhere in the world And we have to recognize the decisions that are made in one country will profoundly affect decisions made in other countries and that even Entities that are completely responsible and transparent and Developing energy resource can be adversely effect affected By others who are less so and so that means I think we really have a common interest in deepening the dialogue that we have on many of these energy resources, so I think that The last thing I'll say on that which is the second one is going to make on this point is The way you preserve that public confidence is and this is where I'm proud of the Department of Energy We're a science and technology based agency. We need good science We need good data We need honest conversations about How to make sure that just to take the the shale gas example how that resource can be developed by In ways that are mindful of air quality and water quality issues that are mindful of the concerns that people have about fracking fluids and their chemical Constituents that are mindful of overall water usage issues and clean completions So all of these things I think are legitimate issues that need to be discussed and openly and frankly and that people have to come to terms with Because if we are going to continue to enjoy this this bounteous Outpouring of energy which lowers prices and and brings all these other great economic effects We're gonna have to step up our game frankly and this is not a public thing or a private thing It's a public private thing. So we've had conversations in National Petroleum Council about how to do this and to think intelligently about Governance because the industry can do a lot on its own. So I would say the optimism is in the widespread Availability of resources that can solve problems all around the world the cautionary note is If we are not wise stewards of development of those resources that we may not always achieve the the ultimate payoff that we'd otherwise hope for Colleagues with would you please thank Dan Ponderman with your applause and we're grateful to have him