 Secretary Jewell comes to this position with ideal background and experience for what is the nation's number one lands stewardship responsibility. Secretary Jewell was an engineer, a petroleum engineer for the early part of her career that had banker for a good portion of her career. A chief executive of a publicly held company and lastly a mountain climber and a kayaker. I think the last two attributes that she brings to this job are probably going to be the most important attributes in Washington, climbing mountains and avoiding rocks in a rapids. So I think she is extraordinarily well credentialed for this position. I've had sometimes distressing experience in energy policy formation. I have a lot of, I see Bennett Johnson in the background here. A lot of us have bruises that have lasted for years from that process. Senator, good to see you. Bob Fry, the late Bob Fry was the head of resources for the future, once testified before the committee I was on, that the task of defining an energy future was to chart a safe, secure, environmentally responsible energy path that would sustain human progress for present and future generations. That was probably the most graceful articulation of what is in my mind one of the more difficult balancing acts. Because as we know energy policy is derivative from our security, our environmental and our economic goals and responsibilities. And finding the balance point among those goals, sometimes conflicting goals, and they particularly come to a conflicting challenge in the Department of Interior's responsibilities. Finding that balance point has proved over the last 40 years that I've been involved in this area an extraordinarily difficult challenge to policy making. Energy policy legislation often passed in the House or the Senate by single vote margins. So it is a great challenge that Secretary Jewell has in her hands. And we welcome here to CSIS. It is common to refer to our cabinet secretaries and other officers and the executive as honorable. So I am pleased, honored, in fact, to welcome the honorable Secretary Sally Jewell to the podium. Thank you. Thank you, Charlie. Thank you very much. Bennett, where are you out there? There you are. Bennett and I worked together on the second century commission of the National Parks and it was a wonderful experience. So it's great to see you here. And you're even more green than I am. So thanks, Charlie, for that introduction. And thanks to the Center for Strategic and International Studies for inviting me to be with you here today. I appreciate everything that this organization does to advance a bipartisan dialogue around some of the most pressing issues of our time. And thanks to those in the audience for being here today. It's great to see there's really no better way than to celebrate St. Patty's Day than by talking about energy policy. So welcome. Welcome to the best party this afternoon. So we've had a breakthrough year for the U.S. economy. As President Obama reminded us in his State of the Union address, companies are creating jobs faster than at any time since 1999. Wages are climbing, deficits are shrinking, graduation rates are at record levels. Our economy has emerged from a session with a stronger, more stable foundation. And it's no coincidence that our economic recovery has been accompanied by the biggest energy transformation of our lifetimes. The energy revolution we experienced in these last six years helped spur the recovery. But it's also been accelerated by the policies our country put in place. So since 2008, American oil production has surged from 5 million to 9 million barrels a day. And our dependence on foreign oil has fallen to its lowest level in more than 30 years. The amount of solar energy has increased tenfold and wind energy has tripled since 2008. That's been helped by more than $340 billion of private sector investment and a tax policy that helped move these investments off the sidelines. Families are driving farther than ever on a tank of gas. And with lower gas prices, the average household will have an extra $750 in their pockets in 2015. These shifts in the U.S. energy markets aren't marginal or temporary. They are tectonic shifts. And from a business perspective, these changes are going to present both challenges, risks and opportunities for industry. I can promise you that every CEO of an energy business out there is reassessing the plans they had on the books a year ago. They're asking, especially today, how do falling oil and gas prices affect us? Do we have the right projects in the pipeline, or do we need to diversify? Can we capitalize on consumers' growing demand for smarter homes and cleaner cars? The tectonic shifts are forcing governments at every level to face questions of the same magnitude. Can we adapt in this fast-changing environment, not the fastest places, government, you know, coming from the private sector? It's tough. How do we modernize our energy programs to anticipate the new energy future? Are we doing what's needed for the U.S. to lead the world in energy? This is a speech about energy, but you can't talk about energy without talking about climate change, and that's good. It's one of the reasons I left the private sector for this job, was not just to talk about climate change and to do what you could do within the bounds of a country, but to do something about it on a much bigger scale. And I am proud to work for a president who is taking historic, meaningful steps to cut dangerous carbon pollution. So as a person interested with America's biggest land management portfolio, I've also got to ask myself questions like, what are we doing to achieve a low-carbon future? Are we striking the right balance between conservation and development? What measures do we need in place for our land, our water, and our climate today to protect the families of tomorrow? So as CEO of REI, and it's not a public company, REI members out there, it's probably a few. All right. So you own the company. There you go. It's a member-owned cooperative. But I needed to pay attention to the current year's earnings, but I also needed to make long-term decisions to make sure that our business would be relevant and profitable 10, 20, 30 years down the line. And I was just chatting with Frank and Charlie about how my colleagues at REI, and I did a study on what's impacting us over the long term, and then I saw a CSI study just a couple of years later, and they were almost completely aligned. You do, as a business, have to think long-term. That's the same balance that I have to have as Secretary of the Interior. Managing our resources to help drive our nation's economy without taking our eye off the America we want to hand to our children. The fact is, I know, we all share a desire for a cleaner and more secure energy future. But getting there is a complex task, and many thoughtful people will disagree over the right path forward, right, Charlie? That's why today I want to talk about the path we're forging at the Department of the Interior, because put simply, our task by the end of this administration is to put in place common-sense reforms that promote good government and help define the rules of the road for America's energy future on our public lands. These reforms should help businesses produce energy more safely and with more certainty. They should encourage technological innovation. They should ensure American taxpayers are getting maximum benefit from their resources, and they should apply our values and our science to better protect and sustain our planet for future generations. After all, as my colleague, Secretary Kerry, said just last week, there is no planet B. I thought it was clever, too, it's good. Over the past six years, the Obama administration has launched the most ambitious reform agenda in the Department of the Interior's history. We saw and inherited how a drill everywhere plan doesn't work very well if nearly half the lease sales are challenged or later overturned in court. So we put in place onshore leasing reforms to front-load engagement with the public about where it does or doesn't make sense to develop. Through smarter planning, we're seeing reduced conflict and litigation and more certainty for industry. In 2009, the renewable energy industry was knocking on our door to permit wind and solar projects, but there was no clear path forward. So my predecessor, Ken Salazar, stood up a strike team to get the most promising projects across the finish line and to establish an enduring renewable energy program at the Department, and he did a great job. That legacy is the gift that keeps on giving. So in the span of six years, we have now approved 52 commercial-scale projects on public lands across the West. Together, that's 14,000 megawatts of renewable energy that when built would produce enough electricity to power over four million American homes. So let me put that in perspective. How many of you have ever visited Hoover Dam or Grand Cooley Dam, Glen Canyon Dam? Quite a number of you. Okay. So 14,000 megawatts is roughly equivalent to the clean hydro power the Bureau of Reclamation produces through 53 facilities built over the course of 100 years, including Grand Cooley, Hoover Dam, Glen Canyon Dam, and the other 50 dams that we have in the Bureau of Reclamation portfolio. So this is not minor. This is huge. Offshore. We've also made sweeping reforms for safe and responsible development in the wake of the devastating Deepwater Horizon oil spill. Interior strengthened drilling and emergency response standards for oil and gas companies. We've raised the bar through new standards for well-designed production systems, blowout prevention, and well-control equipment. And we've overhauled federal oversight by restructuring ourselves to provide independent regulatory agencies that have clear missions and are better resourced to carry out their work while keeping pace with the rapidly evolving industry. But our work's not done. There's still areas where we need to change how we do business. So the United States can better compete and lead the world when it comes to energy and climate change. Our reform agenda over the next two years has three goals, safe and responsible energy development, good government, and encouraging innovation. I'll start with safe and responsible energy development. It's pretty simple. If we don't have the right measures in place to protect the communities we live in, the air we breathe, and the water we drink, we all lose. I quote, the critical path to sustained and expanded resource development in North America includes effective regulation and a commitment of industry and regulators, industry and regulators, to continuous improvement in practices to eliminate or minimize environmental risk. Sounds like the Interior Department, right? But it wasn't. It was the National Petroleum Council, largely made up of industry. It's because many in industry get that effective regulations and independent oversight of energy development not only help minimize risk, but are absolutely critical to building the public confidence necessary to sustain our energy revolution. But many of the regulations on the books haven't kept pace with the advances in technology. They're the same ones that were in place when I was working on drilling and fracking operations in Oklahoma more than 30 years ago, 30-year-old regulations. It's why in the coming days, if we will release a final rule related to hydraulic fracturing or fracking on public lands, the rule will include measures to protect our nation's groundwater, requiring operators to construct sound wells, to disclose the chemicals they use, and to safely recover and handle fluids used in the process. Some have already labeled these baseline proven standards as overly burdensome to industry, but I think most Americans would call them common sense. Standards only apply to activity on public and tribal lands. Where as a matter of geology, listening to my friends at the US Geological Survey, about 25% of America's unconventional oil and gas sits. So you can all do the math. It means that three quarters of the resources are found on state and private lands. So the responsibility for developing this energy safely must now be taken up in state capitals, in engineering labs, and in boardrooms all across the country. We owe it to our kids to get this right. If we do, we can continue to grow our economy just as we work to protect our water, our air, and our communities. Interior will continue to do its part. In the coming months, we'll also propose standards to cut methane emissions and wasted gas. The results are venting and flaring during oil and gas operations, or leaky pipes like they had in this building. Apparently it smelled like natural gas in here just a few hours ago. Methane is the third largest source of greenhouse gas emissions. It traps more than 20 times as much heat as carbon dioxide over the course of a century. But this powerful greenhouse gas is routinely released during energy development. In fact, above Northern New Mexico, where there's more than 40,000 gas wells, satellite images show a methane plume the size of Delaware. So we'll be updating our decades-old standards to encourage the kind of infrastructure and technology that companies I've met with in the Bakken and the Permian Basins have demonstrated can reduce harmful emissions and capture the natural gas as a source of energy and revenue for the American people. And when I was last up at the Bakken, Statoil was showing me a device that they were about to use to recover some of that natural gas right after a well had been completed. They just skid mounted it. It hadn't worked yet. I gather now it's not only working, but they've ordered a couple more. So that's a great illustration of industry doing its part to really innovate. Further addressing the impacts of energy development, we're also moving forward with a proposal to modernize the way coal mining operations protect community water sources and make sure that companies restore streams and forests to a healthy condition. In the Gulf of Mexico, exploration and development activity is booming driven by new discoveries in deep waters and the expansion of existing fields. In the next two years, 13 fields are expected to start up and offshore production is projected to steadily increase, reaching 1.6 million barrels per day in 2016. So as we continue to make vast areas available for offshore oil and gas, in fact, tomorrow I'm heading to a lease sale in New Orleans where we're offering 41 million acres in the Gulf of Mexico. Safety remains our top priority. We can't forget the lessons of the Deepwater Horizon tragedy. Building on the sweeping reforms that I mentioned earlier will propose a rule in the coming weeks that raises the bar on blowout preventers and well control measures based on technological process, excuse me, progress advanced by the industry. Operators will be required to use best practices to protect against and effectively respond to any loss of well control. And in the Arctic, we just released a proposal to make sure that any oil and gas exploration offshore Alaska is subject to strong standards and specifically tailored to the region's challenging and unforgiving conditions. We know the Arctic is a sensitive environment that has sustained Alaska natives and their culture for thousands of years and we can't afford to get it wrong. When it comes to these reforms, I recognize there'll be pushback from various corners, no surprise. I also appreciate the importance of the oil and gas sector and I'm committed to its ongoing success but I strongly believe that they're not only achievable with modern technology and science but absolutely critical to upholding public trust to responsibly develop our natural resources. We've got to update these regs. Second, when it comes to reforms, we need to improve the way we do business as a federal government, plain and simple. Part of that means ensuring the American taxpayer is getting a fair return for the use of natural resources on their public lands. I think most Americans would be surprised to know that coal companies can make a winning bid for about $1 a ton to mine taxpayer-owned coal. Coal is gonna continue to be an important part of our nation's energy mix in the future but the Government Accountability Office, our own Inspector General and members of Congress from both sides of the aisle, agree that the federal coal program needs reform. So we need to ask ourselves, are taxpayers in local communities getting a fair return from these resources? How can we make the program more transparent and more competitive? How do we manage the program in a way that's consistent with our climate change objectives? These are hard questions but it's time for an honest and open conversation about modernizing the federal coal program and we welcome that. In the coming weeks, thanks. In the coming weeks, we'll also take public comment on a proposal to give the Bureau of Land Management the flexibility to adjust royalty rates on the oil and gas resources that belong to all of us. This is important especially given the dramatic growth of oil production on public and tribal lands. Production has increased in each of the past six years and overall combined production from public and tribal land was up 81% in 2014 compared to 2008. It's not just about royalty rates. We need smarter management too. In 2015, incredibly, we're still processing a majority of our oil and gas permits by paper. And we got about 150 inspectors out in the BLM who are responsible for inspecting 100,000 oil and gas wells spread across millions of acres of public and tribal lands as a lot of territory and it means we're not able to do our job effectively. To carry out our mission and to be a better partner to industry, we need resources. Repeated budget cuts have tested BLM's ability to keep up with industry demand for new permits and to effectively enforce safety and environmental standards. It's why the president's budget calls on Congress to support a strong onshore inspection program partly funded through fees. This proposal takes a page from the offshore energy industry where industry pays fees for permits and inspections, which means we can keep pace with the workload and we don't have to divert funds from other programs to support permitting, leasing, or inspection activities. Coupled with the transition to a new automated permitting system, which is underway that eliminates paper applications, these budget resources will significantly strengthen the BLM's capacity to do its job well. That's a perfect example in the budget where Congress needs to move beyond mindless austerity brought about by sequestration. And I can tell you, my first year in this job was 2013. I thought I left the private sector for this, crazy budget, but this enables us to move beyond that sequestration and make a smart investment in the future in infrastructure and in innovation. That means investing in safe and responsible energy production but also in our ability to protect our critical landscapes, our wildlife, and their habitats. So when it comes to good government, we're also working to provide predictability to industry by identifying on a landscape level, where does it make sense for them to develop and where does it make sense for them not to develop? So to that end, we're taking a targeted leasing approach in offshore frontier areas. We're also completing comprehensive oil and gas leasing plans onshore places like Moab, Utah in order to open up access to resources in the right places but recognize there's some places that we don't wanna develop. We've already done that in the National Petroleum Reserve in Alaska where we've made nearly 12 million acres available for oil and gas development while protecting sensitive habitat that's critical for species like the caribou. They're valuable oil and gas resources in the NPRA that companies can explore and bring to market and we're facilitating that. But to be clear, predictability also means identifying places that are too special to drill. Talking about places with rich cultural resources or key wildlife habitat or awesome outdoor recreation opportunities like you talked about, Charlie. That all matters to our economy and to our future. I'm also talking about places at the doorstep of Utah's national parks, North Dakota's Theodore Roosevelt National Park or the coastal plain of the Arctic National Wildlife Refuge not only should we, thank you. Not only should we actively avoid damaging special or sensitive places like the ones I mentioned but we should permanently protect some areas for their conservation values. Future generations of Americans deserve to enjoy those incredible places just like we do. So we're using this comprehensive landscape level approach for renewable energy too. Because all energy development has its consequences. We have to be thoughtful about it. So onshore we've mapped out nearly 20 zones across the West where solar potential is high and other conflicts are low. Because of this early planning work, companies will see faster permitting times. For example, three solar projects in the pipeline in a solar zone in Nevada were reviewed by the BLM in about a third of the time, nine months. Whereas previous project by project approvals often took two years to complete. Offshore, we're identifying energy areas that will allow our nation to capture the huge potential of wind along the Atlantic. It is windy along the Atlantic, I've been there. Didn't used to, it was on the Pacific. We can do that without compromising fishing, recreation, national security, the environment or view sheds when we're smart about planning upfront. We've already held four successful auctions where industry has competitively bid to develop offshore wind farms. We now have over 800,000 acres offshore under commercial lease and we're looking forward to seeing steel in the water in the coming years. The third and last reform I'll talk about today is making sure that our country is positioned to encourage innovation and be competitive in a global economy. America is both blessed with diverse natural resources and more importantly the human capital to develop new and better ways to harness them. Just as the United States is a leader in unconventional oil extraction and is now the world's top producer of natural gas, there's no reason why we shouldn't also be the top producer of solar power and wind power. Why not? Let's do it. The government has a role to play here. For example, the Department of Energy has for decades been a key player in research and development, things like directional drilling and tools to assess oil and gas potential, technologies that help spur our nation's recent energy boom. Today, the DOE is investing in innovative technologies that make our energy production cleaner, more efficient, and finding ways to make solar more cost effective. The government's also supported the development of a strong and profitable oil and gas industry through many tax credits and incentives that lowered the cost of doing business. I worked with those incentives when I was a banker, banking oil and gas companies, and I was surprised to find out that they're still in place 35 years later. So these credits may have made sense at the time, but I'm not sure they make sense for as mature as this industry has become, and I think we need to look at that. Instead today, we should be investing in incentives for industries that are still getting a foothold in our nation's sector, like wind and solar energy. We need Congress to make tax credits for renewable energy long-term and predictable instead of allowing sunsets and stutter steps that create so much uncertainty for businesses and manufacturers. Many enlightened states have spurred the growth of clean energy through renewable energy standards and incentives. So when you talk about creating jobs and growing the economy, this is the kind of action that Congress can take that will move billions of dollars of capital investments into the clean energy economy. Our nation's policies should accelerate American innovation and entrepreneurialism, not blunt them. Renewable energy tax credits, energy efficiency targets, carbon reduction targets, and thoughtful regulations thoughtful regulations that incentivize clean technology are a few ways that we can get there. So I've talked about our reform agenda from my perspective as Secretary of the Interior responsible for representing the interests of all of us taxpayers on their public lands. But I'm also a grandmother. My responsibility to my grandchildren's generation is at the top of my mind with every decision we make. It's why I'm determined to help make energy development safer and more environmentally sound in the next two years. It's why I believe that new energy development should be matched with new protections for lands and waters. And that's why we must. We must do more to cut greenhouse gas pollution that is warming our planet. I see the cost of a changing climate everywhere I go. Recently I was in Kivalina, Alaska. Coastal erosion there threatens to wipe out an entire native village. And it's one of several that's in danger. In the Marshall Islands, where I was in 2013, they have to sandbag the airport runway to keep the rising ocean from washing it away. And I got an email last night from Esther Kia Aina who is Assistant Secretary for Insular Affairs who said that just king tides in some areas in the Marshall Islands are making parts of inhabited areas now uninhabitable. That and one storm and it could wipe out 15,000 people who share 80 acres right now with the average elevation that's just a few feet. Right here at home, across this country, communities are facing more extreme wildfires. We saw some of them in the news last night. Bigger storms, devastating droughts like California's experiencing, disappearing wildlife and rising economic damages, these are not free. So for us at Interior, we're already adjusting our land management strategies for the impacts of climate change. But we also need to do more and we can to address the causes of climate change. Helping our nation cut carbon pollution should inform our decisions about where we develop, how we develop and what we develop. President Obama has rightly described climate change as the single most pressing energy and environmental challenge of our time. But he's also right that we're in a moment of remarkable opportunity and promise. In the State of the Union, he said we have risen from the recession freer to write our own future than any other nation on earth. It's now up to us to choose who we want to be over the next 15 years and for decades to come. I share the President's belief that the US should lead the world on energy, climate and conservation. And to accomplish this, we need to encourage innovation. We need to provide clear rules of the road and make balanced decisions. Every day, I think about this phrase, we don't inherit the earth from our ancestors, we borrow it from our children. We don't inherit the earth from our ancestors, we borrow it from our children. My job is to take the long view. It's what the American public expects of us and that's what we all owe the next generation. Thank you. Thank you, Secretary Jewell, excellent presentation. Let me allay some of your fears. I'm Frank Verrastra, I'm a senior vice president here at the center and I have this messenger chair. The gas leak was on 17th at M, so no panic. But for our safety moment in the event that we have to evacuate, the unlikely event, since we're on the second floor, down the stairway out the front, across the street to the park for those of you in front, out the back where the exit signs are, takes you to an alleyway, dumps you on M Street, okay? You should have said that in advance. I'm gonna wait and get the crowd warmed up. And I'm secretary, so I got my start in the federal government at the age of four in the interior department, so I have an affinity for the oil and gas office there. You and Charlie both talked about the trade-offs, especially at interior where you're charged with resource development in a prudent way and environmental stewardship. But then when you expand that throughout the government to national security, foreign policy interests, labor and economic interests, how do you reconcile what are the trade-offs and the balances? Because I'm not sure the public has a full appreciation for the deliberations that go on to get to a policy decision. I'd say that the American public has an amazing capacity for the truth and when you explain the trade-offs, when you engage communities in the process, you actually end up with some pretty smart thinking about where we need to go. So as I was talking about, we've done a fair amount of engaging with communities on landscape level planning. What are the areas they think make sense to develop? What are the areas too special to develop for the industry? What are the areas that has the greatest potential and how can we help steer development to the right places and avoid the wrong places? Now the worst thing I think we can do for industry as well as for the country is to make hasty decisions that aren't well thought through that just end up in court. Slows everything down and there was a fair amount of that that we inherited. In fact, my husband's not happy that all the lawsuits in the Department of Interior bear my last name, or just most of them, our last name. Because a lot of those are formed when you don't have the right kind of upfront discussion about what is the right balance and what's at stake. So I think that we've made some really important progress in that area of engaging the public so that we're really, they trust the decisions that are being made more than before and they recognize that there is balance in trade-offs and I think that has enabled us to avoid some conflict. Well also building understanding for the very real conflicts that do exist out there. And you talked too about, so in addition to the outreach as the technology moves is an extraordinary time that we've seen over the last five years. But as with budget that I'm sure you're keenly aware of the restrictions on budget availability, the notion that is there a better way to collaborate with industry and the private sector on research and technology and regulatory proposals so that the regulations are lined up with the best thinking of the day and best practices as they are put in place. Yeah I think that that's, we are doing that and I think it's very important. I mentioned a lot of the regulations we're looking at upgrading right now were created in the 80s. And that's when I was in the early 80s is when I was in the oil and gas industry directly and they haven't changed but the technology has gone miles. It's not easy to change regulation and maybe it shouldn't be easy but you want regulations that can adapt with new technologies and that's what we're doing in a lot of the regulatory work that we're doing right now to update these things. So I used a quick example of stat oil and the skid mounted unit to capture natural gas and natural gas liquids right at the well head in the box and when the pressures are really high right after they complete a well. And we're listening to technologies like that as we formulate the methane capture strategies. For capturing methane what you really need is a gathering system and gas processing plants. It takes time to put those in place and you've got pressure issues that are very complicated for industry to deal with early on in that well's production life. This is innovation by industry. We want to learn from that. We want to figure out what's practical, when it might apply, how practical is it to apply across the network. Likewise in offshore, tremendous amount of work has been done post deep water horizon. I mean that that accident really hurt the oil and gas industry. It hurt every producer out there. It certainly hurt the Gulf Coast States and I think it horrified the nation but it inspired a lot of soul searching on what went wrong. A lot of human error involved. A lot of not paying attention to the technologies that were there and that had to do to a certain extent with a safety culture. So we can work with industry on enhancing that. We were not structured to provide the kind of support and focus on safety as distinct from leasing as distinct from revenue. We have now split that into three parts. That's not technology, that's human capital and focus and clarity of mission. So all of those things are factoring into how we are updating our regulations and when you look at the well control work we've done around blowout preventers and so on that's embracing technology industry has but also innovations that industries done in the Gulf of Mexico to say we need better well containment than we've had so they've got two different organizations both consortiums of oil and gas companies that have pooled their resources to build new technologies to address well control and those are the kinds of ways that we're working closely with industry so that our regulations match what they're able to do and so they're able to progress over time. Well and since we're coming up on the fifth year anniversary of Macondo this whole notion that you can expand best practices internationally and be a leader whether it's the Gulf of Mexico or offshore Cuba and the opportunity that that presents for the United States in terms of leadership position also in the Arctic. That's exactly right. And my colleague Mike Conner deputy secretary is in Mexico right now. He's working on water but he's also working on energy. We've got for the first time ever a trans boundary hydrocarbon agreement which will take into account the oil and gas resources that know no international boundaries but both countries want an opportunity to develop and so we're working closely with them sharing our practices, listening to their practices and making sure that the Gulf writ large is protected in the future. So learned a lot of painful lessons since the Gulf oil spill. We've learned a lot in the Arctic as well with a lot more to learn because Russia's developing, Canada will be developing, China's poking around. We need to know what we're doing. Well and so the Arctic now that you have in that there's an NPC study that's coming out shortly about the Arctic but this whole notion that if other Arctic nations develop the resources as well and if we are a bit of a laggard on that what does that happen? Does that put us at a disadvantage? Is sometimes more is more in terms of capability, shoreline backup systems and staging areas, Coast Guard defense capability as well so it's a bigger geopolitical issue as well as just a resource issue. Yeah I think that's exactly right. The US will be chairing the Arctic Council coming up I think later on this year the transition occurs. My colleague Brian Salerno, wave Brian, runs the Bureau of Safety and Environmental Enforcement. Brian came from the Coast Guard. We need to make sure that our Arctic response capabilities, search and rescue capabilities, safety environment, all of those things are solid and in place and I think as has been well documented through Shell's challenges that they had in the 2012 drilling season, we are talking about harsh conditions. We're not talking about the Gulf of Mexico. This is very different and we want to know how to do it right. I will also say that many of the companies that may be interested in developing the US Arctic are also the same companies that are developing in other parts of the Arctic, ExxonMobil I believe is doing work with Russia. So we need to know what we're doing to the extent that there is development there and we believe there is strong potential. We want to make sure we do it right. We want to make sure that the resources are there to drill a relief well, to contain a spill if there is a spill and it's not a problem as much in the Gulf even though it was with Deepwater Horizon but you've got a lot of assets there. That's not true in the Arctic. It's a long way, it's a lot of time and you've got a much shorter season because of ice. So lots to learn and I think that it's important that as companies show interest as they have with the lease sales that have occurred that we do it right. Talked a lot about climate change and the focus within the administration as well as in the Interior Department. So when you look out on conventional or unconventional energy production or renewables, how do you weight averages to decide where there's areas that should lease or you talked about primary spots where you think that that would be good for wind energy offshore? What's the process within Interior? Well first it starts with science. Where are the areas that are consistently windy and then where it's consistently windy, what other attributes might that area have? Is it part of a critical bird flyway or bat flyway? Is it close to transmission? Is it right in somebody's view? We have to think about all of those things. Offshore wind, 800,000 acres now under lease and we de-conflicted that before we put those acres up for lease. So we said, where's the Navy in the Coast Guard activities, where's the Merchant Marine in the fishing activities? What are the critical recreation areas? Can you see these future wind turbines? And is that going to bother anybody? Yes, usually. That's a short answer. So we need to de-conflict and say, these are the areas that have the lowest conflict and the highest potential. These may be areas with high potential but really high conflict. You know, there are places, there are national parks with oil and gas resources. That's not the places we should be developing them. I don't believe we should develop oil and gas in the Arctic National Wildlife Refuge. The President agrees. He made that point and that is a recommendation we'll be making to Congress. So this is through applying science, understanding, other uses of the land, the impact of the energy development and trying to chart a course forward that says, let's go to the areas where there is limited or no conflict. So we're doing that in Moab, Utah with our master leasing plans and we're engaging local communities and they're part of that effort. We've done it in the National Petroleum Reserve. We're doing it in the California desert. There's all kinds of areas off the coast of the Atlantic and it's really working and the community's engaged. And those are good solutions. When I was in the private sector, we were developing Pornark Way off the coast of California and there was one proposal to encase the offshore rigs with mirrors so that they wouldn't be a visual pollutants. We thought that was a bad idea. Let me just suggest one of the reasons that we invite you all is to participate and the secretaries agree to take some questions from the floor. We have a couple of simple rules. One is to wait for the microphone. Number two is to, to the extent that you can, pose your question in the form of a question. So that's a little voice inflection at the end and then identify yourself and your affiliation if that's okay, please. So, any questions? Wow, you're good. Okay, all the way in the back there on the left. My name's Andrew. I'm with the Biomass Thermal Energy Council. I'm an intern there and I have a question about the department's initiatives in forest restoration and kind of energy opportunities. So lesser known energy opportunities and innovation at the forest edge. Thank you. Thank you very much for your question. So there is actually a lot of work going on in USDA and the US Forest Service, which isn't part of the Department of Interior, but it is a very important potential. So for example, because of climate change, just a few degrees difference have caused a proliferation of the mountain pine beetle. Many of you are aware of this, which if you're a westerner as I am, you fly over or drive through these landscapes. It's just astounding how much standing dead timber there is. There is fuel potential in that timber and this is something that Tom Vilsack, Secretary of Agriculture, has been working on with his team. It's a matter of economics. How do you make it economic to harvest that for energy development or for manufactured wood products or otherwise? But it's certainly a very important part of the equation. I will also say that I visited the National Renewable Energy Lab, which is a DOE facility and there's incredible research going on in biomass energy development. More of that is with grow materials like switchgrass, but it also includes wood products. So there is potential to doing that and I think the research absolutely is critical to continue. It's not yet being done on an economic scale but it's only a matter of time and it's a good illustration of where a little bit of incentive, the right kinds of tax incentives as the oil and gas industry continues to enjoy and has for over 30 years. Actually it's just the 30 plus years I've been since I've been in the industry but I think they were in place long before that. Maybe we could take a few of those incentives and move them to areas that are just getting their start so that technology can bring the price down and we can learn a lot from the science and that's a big part of where I think we have an opportunity to go. So if I can just pull back on that a second. So on the economic side, put yourself your REI hat back on as well as your government hat. So in times of low prices as fees or structures or economics change for companies that are struggling but where you still wanna get development can you be flexible in how you encourage or disincentivize people from doing certain things in certain places? Yeah I got a great REI example for you. I hope it answers your question directly. So REI was very concerned about being a company that supported human powered active outdoor recreation and yet having a carbon footprint ourselves and we wanted to go about understanding that carbon footprint and figuring out sort of where's the low hanging fruit to reduce it and one of the areas was energy consumption. So we went about figuring out what were our dirtiest markets in other words which stores were located in places that used high carbon producing sources of energy and so we took that and then we married that with the potential that local utilities had for green power and we locked in green power supply contracts to give those utilities certainty that they had a market for that green power. We signed up for long term contracts. Those contracts were more expensive than buying conventional energy but it was something that we were committed to doing but that was in 2007 when oil prices ran up and at the end of the day those contracts ended up being much better for us economically because we locked in several years at a time when oil and gas prices were high and associated electricity rates went up if you were tied into fossil fuels. So that's an illustration where we as a business could help support renewable energy. Now the states typically that had those renewable facilities were states where there was some kind of a renewable energy standard. So it wasn't a tax credit necessarily, it was an expectation that utilities have a certain percentage and so it basically was a requirement that they developed it. So if you marry that incentive if you will or expectation from a state with a willing buyer and there are lots of willing buyers out there that want to reduce their carbon footprint. You've got a situation that actually drives the cost down for those technologies because more people get into it and I've got other examples actually with the company on where we put solar panels, distributed solar on our roofs and which ones we used and which states they went to and had everything to do with both national and state incentives to support energy development and we accelerated, I think we did 11 stores one year because the tax credits were gonna be expiring at the end of that year. Which is kind of a crazy way to do things. Very difficult to plan that way but that's how these stutter steps I talked about have worked with tax incentives around renewables. Yeah, uncertainty doesn't help with planning. Does not. And I won't put you on the spot to say when a carbon tax gets put in place. We have a question here in the front row. Hi, my name is Todd Tussi. I'm with Advocates for the West in Boise and Washington, D.C. and I'm intrigued by your presentation, Madam Secretary, regarding deconflicting energy development and conservation and I'm just wondering if you've had a chance to review a recent letter from 11 sage grouse scientists to you noting that it appears the agency is abandoning science-based conservation measures for sage grouse and developing more elastic subjective measures. How many in the audience have any idea what a sage grouse is? Quite a few. Okay, I know the front row does because you guys, we got two of our three grouse critters we call them in the front row over here. So let me just, for those that didn't raise their hands, let me just bring you up to speed a little bit. There is a species that is under consideration for listing under the Endangered Species Act called the Greater Sage Grouse. That's the minor part that I want to talk about. The major part is we have ecosystems across the American West that are at risk of a number of different factors. We think about Redwood Forest in California as old growth forests. We think about my home state of Washington, the Olympic Peninsula and the old growth trees there as really incredible habitats worthy of protection. But we have old growth sagebrush ecosystems throughout the Great Basin that are equally important to 350 species. Greater sage grouse is one of them, but mule deer and pronghorn antelope and hundreds of other species call these places home. And so when we have a wildfire that burns through range land we can wipe out in the space of a day or two hundreds of thousands of acres, hundreds of square miles just like that. And we don't think about it as being old growth and the way we do when you've got crowning fires running up through Yosemite. But it is very, very important from a habitat standpoint. So we have 11 states working together to say how do we strike the right balance between conservation and development? In a state like Wyoming development, oil and gas resources typically, some coal resource development can be the biggest potential disruptor to sage grouse habitat. In the Great Basin, wildland fire and invasive species like cheatgrass is the biggest threat. So we're trying to come up with comprehensive strategies across the landscape to understand the critical areas for these species and to protect those areas with the highest level of protection. We are using sound science. We're using the best available science we have. I haven't read specifically the letter that you referenced but I will say that it is very complicated. And there are, states have done a lot of science. There's independent work. The work that we do scientifically is available and open to the public. Some of the private science that is done by others or by states is not open to the public. We will take at the Fish and Wildlife Service all of the science into account. And we must do that because if we don't do that and we come out with a decision on whether a listing or not is warranted, we know it's gonna be challenged in court. The question is, will it be defensible? And we have to have our ducks in a row. But I will say this that it is unprecedented to have 11 states, 11 governors, really the core is probably seven governors that are where they have most of the habitat working so hard alongside the Fish and Wildlife Service and the Bureau of Land Management and private land owners to put in place conservation measures that protect these lands that have helped define the American West and the species that call it home. So I am very, very proud of the collaborative work that's happened with states, the BLM, the Fish and Wildlife Service, the U.S. Geological Survey and others. And I'm confident we'll reach the right conclusion when all the science is in. Excellent. And Tommy's working on the answer right now, is it? Oh, Charlie. Charles Ebinger from Brookings Institution. Madam Secretary, I was wondering if you believe that with the TAPS pipeline in Alaska and such serious jeopardy as to its flow levels, whether any criteria when you have lease sales in Alaska ought to take into consideration those that might be nearest TAPS if something was found and hence keep the pipeline alive. Well, thank you for that question. You know, I actually worked on the Alaska pipeline when I was a college student, solving little engineering problems like what do you do when you put hot oil in a cold pipe and the pipe moves and how do you keep the insulation on it and little things like that. It's a very tricky place to do business. And what's interesting is that, I mean, when Alaska achieved statehood, Alaska chose lands, federal government chose lands, tribes up there, native corporations chose land, Alaska chose wisely. They chose Prudhoe Bay Oil Field in Kaparek and developed that very thoughtfully and it peaked in production in the 80s. So it's no surprise that production's been going down and I will say that state of Alaska is really hurting right now because of oil prices and I'm sympathetic to the situation that Governor Walker finds himself in and the whole state. We certainly support development in the National Petroleum Reserve in Alaska. Conoco Phillips has developed the Colville Delta or CD5 and the area around Alpine. I've actually been out there personally myself. Janet Schneider who's Assistant Secretary for Land and Minerals has been out there, Tommy's been out there, a number of others. And that is already hooked up to the pipeline network. The National Petroleum Reserve, Alaska, the Greater Musa's Tooth Unit, which is the record of decision that we just reached on development with Conoco Phillips of that will tie in to the Alpine facility and we'll be able to go straight into TAPS. So it's our expectation that as the National Petroleum Reserve is developed that that will help keep oil flowing through TAPS. The other thing I would say as we did all of the work to look at the National Petroleum Reserve and what are the areas that are really critical habitat to not develop, like to Sheckpook Lake for example, which is really critical habitat for caribou birds and other species. We thought about if there is exploration and ultimately production in the Chukchi Sea, is there a way to move that across overland through the National Petroleum Reserve to the Trans Alaska Pipeline? And if you look at the areas that we set aside for conservation and the areas we set aside for development, you will see that it facilitates the ability to ultimately have a pipeline corridor that runs through there. So TAPS is a national resource. It's very important to the state of Alaska. It's certainly important to us. And so we have every expectation that we will facilitate making public lands available for oil and gas development. Obviously it'll be up to industry to develop those resources and that's gonna depend on a whole bunch of factors, including economics, but we will be supportive but doing it in the right ways and in the right places. One of the reasons we get folks like Secretary Jewell to join us is that we try to adhere to their time constraints since they have an active day outside of CSIS and hard as that is to believe. Madam Secretary, you've been candid. You've been informative. It's great to have you here. I hope you do come back. We'll look for the proposals. And I think given your background, you're the right person at the right time. So if you'll join me in thanking Secretary Jewell. Thank you.