 Good morning. How is everybody doing? Good. Great. My name is Sarah Ladislaw. I direct the Energy and National Security Program at the Center for Strategic and International Studies. We're very pleased to have all of you here today. I told Melanie it's not a small feat to get 100-plus people in a room in the middle of July for any good reason. So there's clearly interest in her talk today about energy security as it relates to the Quadronial Energy Review. We were lucky enough to have Melanie come by in May of 2014 and talk about this wonderful new process that they had launched called the Quadronial Energy Review, which was really meant to be sort of a synthesis analysis of the U.S. energy system and looking at in its first installment infrastructure issues and transmission issues in the U.S. And to be quite honest with you, when we heard sort of the scope of the plan that they had laid out for achieving the Quadronial Energy Review, we sort of all snickered a little bit because it was in a year actually taking on a fairly comprehensive review of what just seems like, oh, just the midstream. But it's actually a hugely important aspect of understanding how our energy system works or doesn't work, the efficiencies, the reliability issues. And as Melanie will talk a little bit about today, some of the energy security issues. And lo and behold, as of April of this year, they have accomplished the first part of the Quadronial Energy Review. For those of you who haven't read the document or have used the document, I certainly commend it to you. And in our work at CSIS, I know I have personally, I have a hard copy, so I pick it up occasionally and I read it, use it as a reference document, look at some of the issues and policy recommendations that are in it. And so within just a short couple of months, it's become sort of a go-to reference document for folks who are thinking about the U.S. energy sector in some serious and in-depth ways. So we're very pleased to have Melanie back today to talk about sort of the energy security aspects of what's in the Quadronial Energy Review and hear a little bit about how the implementation is going and what there are plans for next installments of the QER process. So we're having a little bit of technical difficulty with our microphone up here, but Mariah, maybe if we could get a temporary mic for a minute just so she's able to give... I can do it from here. You can do it from here? If I have something to move the slides. Okay, we can... I'll give you this. Thank you for being so flexible. Okay, you just sort of... I'm at the same time. Okay. So you're just putting it down here. Oh. Thank you all very much for coming today. I feel very at home at CSIS, as Sara said, I've been here before. Secretary's been here several times, and I appreciate the opportunity to talk to you today and to not answer questions on today's announcement between the P5-plus-1 in Iran. I have not read the details, and I watched the news like you all did this morning. The Secretary has been there for 18 days today. I've been working for Secretary Moniz for 18 years, and I realize this is the longest I've gone without talking to him in 18 years. And so it's been, I think, that his effort and input will be worth it. And we look forward to his return for many, many reasons. It's been tough. We have a very able Deputy Secretary who has kept us in line while he's away, but we're looking forward to his return. I would like to, I'm happy to answer questions and discuss two key and related areas of focus that we've been working on at the Department of Energy. As Sara said, energy security and the quadrennial energy review. And I'm going to describe the QER very briefly first. As you all know in this room, you're all experts here. Our energy landscape has changed dramatically in the last decade. I see a few people here I've been working with for a couple of decades, and I dare say several people are shocked at the changes that we've seen from gas imports to gas exports. I actually wasn't shocked about that. Major increases in oil production, dramatic reductions in the costs of renewables, and increases in their deployment, reduced demand for oil. 11% of our gasoline supply is from ethanol now. These are all positive changes, but these changes have come with a new set of challenges and a new set of vulnerabilities. That's why the President launched the QER, directed us to do it, put out a presidential memorandum in January of 2014. As Sara said, the final QER product, the first installment of the QER, we redefined quadrennial. We're doing four installments. The Secretary was pretty firm that these comprehensive energy plans are too broad and don't have actionable, aren't as actionable as they might be, so we are happy to break this up into more discrete chunks. Here we focused on TSND infrastructure, and that's TSND writ large. Pipes, wires, and a little bit to our surprise, we ended up spending a lot of time on railroads, inland waterways, and ports as well. Not something I would have thought I would have been doing when I was at the Department 15 years ago. It is an integrated system analysis, and in the end, we didn't start out this way, but we ended up with four major focus areas, increasing infrastructure resilience, reliability, and security. Those are the little petals on the inside there. Using the electric grid, that was our one concession to an actual physical infrastructure. We don't have a chapter on gas pipes, for example, but we did electric grid because all other infrastructures depend on electricity. Enhancing energy security, and that's both our physical infrastructures for that, as well as our diplomatic infrastructures, I'll say more about that in a minute, and improving shared transport infrastructures. That gets into the ports, waterways, barges, et cetera, et cetera. We also looked at North American integration. There were over 60 actionable recommendations in the QER. I'll talk about a few of those, but I really am not here. You can look at the recommendations, and I can highlight a couple. But I'd like to weave more of a story together here about energy security, and this, let me switch to the Russian aggression in Ukraine. And after that, the G7 energy ministers met in Rome in May of 2014, not long after we launched the QER. And from that meeting, we derived and released a set of energy security principles that we believe are modern energy security principles, not the oil focus that we have had over the last several decades. And I've highlighted the words here, flexible, transparent, and competitive energy markets, including gas markets, diversification of energy fuel sources and routes, reducing greenhouse gas emissions, major threat multiplier that we see in climate change, enhancing efficiency, promoting clean and sustainable energy technologies, improving energy system resilience, and emergency response systems. That goes more to oil, but some to gas these days. And I'll say a few words about that. I'm going to focus first on the first two principles here. You can see them. I'm tracking them in shorthand across the top. And when we went, we did follow up the G7 leaders in 2014. This was in that these principles were in their communique. They reinforced theirs in their communique in 2015. And we went to Hamburg in 2015 to meet again with the G7 energy ministers. And our deliverable at the G7 energy ministers was the QER. And so at that point in time, I crosswalked these principles to the QER recommendations and findings. And that's what I'm going to show you here. This will be familiar to many of you, but this is the importance of gas transmission infrastructure. This is in the QER. Those wide, that wide basis differences there in 2007, you see a huge disparity in the various price points across the US. And then over here in 2014, you see them narrow down at the bottom there. The only real, the place where they don't narrow is in the Northeast in New England. You see up there on the upper right where their prices are much higher. That is because of infrastructure constraints. You see a little blip there in Chicago, Illinois, that gold line down there in 2014. That was a temporary aberration. But the Northeast in New England, that persists because of infrastructure constraints. We also think that the narrowing is in part due to infrastructure, but also in part that shale gas resources are more widely distributed across the country. These are what competitive energy markets do, and low cost gas does for the United States. You can't read this. But these are new industrial natural gas related projects announced or being completed between 2015 and 2020. Those are chemicals, metals, petroleum, and other industrial. There are a total of 405 projects where you are on-shoring energy-intensive and gas-intensive industries back to the US. That represents an additional 4.7 BCF a day of gas demand, and we think that that's easily achievable. This, you don't have to read any of this other than, this is diversification of our liquid fuels infrastructure in the US. Our infrastructures have had to do a lot of catch-up because this is oil, liquid infrastructure, because we are producing oil in places where we have not traditionally produced oil before. And all you need to see there are the red lines. Those are reversals or expansions of pipelines. And that's a lot of activity that you're seeing in order to accommodate this new production. As you can see, much of that is moving to the Gulf of Mexico. I'll say a little bit about that in a minute. This is a pretty startling, a sequence of slides. This is crude by rail movements starting in 2010. What you see is a lot of the start of crude moving by rail down to the Gulf of Mexico. This is 2011. You also see the Eagleford starting to move into the Gulf of Mexico there. But you're starting to see rail moving from the Bakken to the East and West Coast. 2012, huge amounts of oil starting to move to the Gulf Coast, both from the Eagleford and from the Bakken. And then 2013, look at what's happening on the East Coast in particular. And then this is 2014. And so crude by rail is important for many, many reasons. It has been the alternative to pipelines. We can't get them sited that fast. It has kept this movement to the East Coast refineries is by and large, not by and large, but in part due to the basis differential, the discount of Bakken crude to Brent. And the East Coast refineries are taking advantage of it. So it illustrates many things. But I think that that's pretty amazing how much is moving to the East Coast by rail. These are, as I said, we had to look at ports and waterways. And I would start by noting that these are, the ports and inland waterways are, by and large, federal responsibilities. A lot of what we looked at and recommendations are for private industry, where much of our infrastructure is owned by private industry. But here, the ports and waterways are federal responsibilities. This is a cartoon of the Lake Kaukeshu Ship Channel. And the left cartoon, you know it's a cartoon because they're not passing each other. They're going in the same direction. But that is what the design specs are for that channel. And on the right is a cartoon of what that channel looks like at points in time along the channel. The ship channel operators call itself dredging. We're not, yes. And we didn't put that in the QER. They came in and they met with us. But I would note that Lake Kaukeshu is where your first LNG exports are going to be moving. And a lot of exports we contemplate moving through that ship channel. This is a problem with funding, federal funding, for this kind of operations and maintenance responsibility here of the Corps of Engineers. They have put some more money into O&M for the Kaukeshu Ship Channel. But it's an ongoing problem. The ports in the Gulf of Mexico silt up more quickly than ports elsewhere. And so it is an issue. I checked the numbers right before I came. We have given final approvals to 9.9 BCF a day of exports. That is approaching, if all of that gets built, that is I think a gutter is 10 or 11. And it's the largest LNG exporter in the world. So we are getting into that range. Much of that is going to be moving through ship channels like this. And you all can look in the QER itself. But we also looked down, this graph you can't read or a table you can't read in the lower left-hand corner. Those are top 10 port systems by energy commodity shipments. That includes crude oil and petroleum right now. It doesn't include gas and it includes coal. Some of them were surprising to me. Lake Charles is not surprising, but Huntington Tri-State in West Virginia. Virginia Beach Port of, let's see, look at Delaware River. Some that you would not necessarily think are large energy ports. Those are going to be competing for funds with the Panamax ships and the container ports as we widen the Panama Canal. We also looked, as I said, at North America, North American Energy Integration. We have signed an MOU with Canada and Mexico to expedite this and our cooperation on climate issues. And that was at the CEM in Mexico a couple months ago. This just shows you the enormous energy trade. The dark purple there, that is crude oil movements and the size of the arrows are significant. Gold is refined product. Green is natural gas and the thin black strings, you probably can't see them well. That's electricity. Very important for the U.S. and for clean energy. Canada exports about 10% of its electricity to the United States. That's all hydro. So we are getting CO2 benefits from their hydro exports to the U.S. And four out of seven NERC regions, I believe, are completely integrated with Canada. So we will be looking at electricity in QER too. And so this kind of integration, electricity integration is important. Let me turn to Europe for a switch back and forth a little bit to our G7 energy principles. And I met yesterday with the foreign minister of Bulgaria, Daniel Mitoff. He's gonna be speaking here later. We talked about many issues. Southern Corridor and interconnections in Europe is one of them. Obviously we are all, this is the Southern Corridor and the various pipelines. We are all concerned about diversification of supplies and routes. That's an energy principle from the G7. Also something that we looked at in the QER. And you can see how important this is from Chardonnay's, the Trans-Anatolian Pipeline Trans-Adriatic and how, and actually, Italy has approved the TAP entry point there and how you can move gas from Azerbaijan elsewhere, non-Russian gas into Europe. And very important for energy security, diversity of supplies and routes. I would say that as recently as March of 2015, President Erdogan in Turkey acknowledged a couple of things and Turkey's desire to be an energy distribution hub. They've been talking about being a gas hub for many, many years now. And at the Trans-Anatolian Pipeline has special importance because of its route and its goal. It is not an alternative project to others. There is no alternative to it. This is an important message from the President in the context of Turkey's stream. And we're looking forward to working through the Southern Corridor issues with Turkey and all the countries involved. In that regard, and I use this slide in Turkey, I wanted to describe for them precisely what you needed to have an extremely robust gas hub. The U.S. has obviously the most robust in the world, but this is what Henry Hub is. Henry Hub is nine interstate pipelines for interstate pipelines to compressors and the capacity to transport 1.8 BCF a day of natural gas. That is an incredibly robust hub. Turkey, if it wants to be an energy hub, gas hub as President Erdogan says, needs multiple pipelines and multiple sources of supply. Eastern Europe, I mean Eastern Mediterranean, North Africa, Russia, et cetera, et cetera. And so that's important for Turkey's aspirations to be a hub. Also important is the understanding of market power. And I thought it would be important to understand the definition, not understand it, just repeat it. You all understand it. It's the ability to engage in unilateral anti-competitive behavior. Turkey wants to be a hub. Europe wants the Southern Corridor. We need diverse routes and diverse sources of supply. That's problematic right now with the Russian monopolies in many areas. Turn to three principles in the G7 principles on clean energy, reducing greenhouse gas emissions, enhancing energy efficiency, and promoting clean and sustainable energy technologies. And I'm gonna crosswalk these to what we have in the QER. This is hard to read, but the map on the left, upper left, that is Indianapolis. The map on the right is Boston. The yellow dots are methane leaks from the local distribution system. And Indianapolis looks great in this depiction here. What I would say, however, is that Indianapolis had a gas leak and explosion in the 1980s. And so it launched a pipeline replacement program in the 80s. Massachusetts has launched a pipeline replacement program. I think it was 2009. They have reduced their methane emissions substantially. This just shows you how important those pipeline replacement programs are. It's important from a safety perspective. It's important from a greenhouse gas emissions perspective. One of the recommendations in the QER is to accelerate the replacement of this aging infrastructure. The graph down in the lower left that you can't read, that shows the timelines for various pipeline replacement programs of utilities across the country. The top one is 80 years. And so we would like to accelerate those replacement programs. There's incentive structure in the QER. And when I started working on this, I assumed that those needs for pipeline replacement would be in old cities in the Northeast and upper Midwest. That's not the case. These are the top 10 states for cast and wrought iron on the left and bare steel on the right. Bare steel, Ohio, Pennsylvania, New York, Texas, Kansas, California, West Virginia, Oklahoma, Massachusetts, and New Jersey. So these are very widely distributed across the country and it's an important thing to do. Very briefly, this is just a pie chart. It's a survey of the range of entities involved in transmission and not surprisingly, and these are transmission investment drivers for them. The highest is not surprisingly reliability, 48% mentioned reliability is our number one concern. Surprising to me was number two, which is renewables integration. So they are very much focused on integrating renewables into the transmission grid. This is, I think the last slide that you won't be able to read, but this is, we spent a fair amount of time in QER1 looking at valuing a range of services and technologies that are very difficult or unevenly valued across the different states. And these are, it's micro grids, ancillary services, CHP, distributed generation, storage efficiency, and so we would like to, in QER2, focus a great deal on frameworks for consistent valuation of all of these services. And that's important because of this slide. The maps, look at the maps on the right. The middle map is the electric grid, the infrastructure, transmission infrastructure. The top and bottom maps are the different jurisdictions. The top one is the NERC regions. The bottom is the RTOs. And what you see there is there is no relationship between how the electrons are flowing in the country and how our jurisdictions are structured. You have 50 states on top of this. And we did not recommend that we get rid of these regulatory and reliability structures. We did recommend that we convene. We DOE work with other agencies and states to develop these and frameworks for valuing all these services because without that, we can't take full advantage of the technologies and services that exist. And then finally, oops, let's go, oops, this one. I love this picture. This is the largest wind turbine blade in the world. It's 80 meters long. In the 80s, wind turbine blades in the US were five to 15 meters long. They average about 60 meters long. This is in Europe, it's for an offshore wind farm. It just shows you the enormous logistical issues associated with moving these blades around the country. 40% of the value of wind turbines, we import most of them, 40% of the value of those imports moves through Houston. They have a lot of wind generation in Texas, but they are moving elsewhere as well. This puts enormous strain on our roads. A lot of these are moving on rural roads and on the services, police, et cetera, et cetera, for moving these around. Wind turbine blades right now have to be moved in one piece in order to withstand the force. It's getting difficult to find cranes to move these off of docks, et cetera, et cetera. And so we're gonna look at, do a transportation corridor study for this and are looking at R&D to figure out if we can break these into pieces. You have similar issues associated with moving around very large transformers. Another issue that we looked at. This, going back to Europe again, this is lowering energy intensity efficiency and it can enhance energy security. This is energy, the intensity is tons of energy per thousand US dollars here. What you see here, the OECD Europe is 0.09 and you look over at Ukraine, it is 0.8. Bulgaria, 0.4. Enormous differences in energy intensity, particularly in Eastern European countries. We should have a major focus and do or working with the Ukrainians on reducing their energy intensity. Very important in, particularly in Eastern Europe. Improving energy systems resilience. This is another principle promoting infrastructure modernization and to withstand systemic shocks. This is a billion dollar disaster event types by year, 1980 to 2014. These are all weather events and we saw, clearly you get over there, 2010, 2011, you see a dramatic increase, it has been declining and the thing that jumps out at me here and we've seen it in this area, the yellow on those bars which remains very high and increasing, those are severe storms. And so you might see a decline in some of the others but severe storms, you still see, it's a huge chunk of the billion dollar weather events and it's increasing, we saw that in Hurricane Sandy, we saw it in the derecho here, I had to move out of my house, I don't know about you and we had a storm the other night, that was where we had 74 mile per hour winds, the most severe storm since the derecho, that's very, very costly. This is a weird slide and I'll tell you what it is in a minute, that little dot in the middle, that's Cushing, Oklahoma. Those lines are recorded tornado tracks and I went through and the question is not whether but when Cushing, where we store an enormous amount of our oil, when it gets hit by a tornado, I looked at many, many large tornadoes very nearby as you can see from the tracks and this illustrates a problem with severe storms and our energy security and resilience. That just came up, we call that our pestilence slide. The orange is wildfires, green is earthquakes, gold is tornadoes, purple is hurricane, all of those have different impacts on energy infrastructure. We looked at the variations in the QER and say earthquakes for example, particularly problematic for pipelines, wildfires, you had a fire 150 miles away from San Francisco and they declared an emergency in San Francisco because it was that wildfire was threatening the transmission lines, hurricanes, we know what happened in Sandy and tornadoes we just discussed. We also did regional fuel resiliency studies and we are now doing cost benefit analyses on some of these, the Southeast, this is for liquid fuels, particularly vulnerable because it's only served by a couple of product pipelines and is not enormously served by imports. So you get a hurricane in the Gulf of Mexico and we did have a hurricane in the Gulf of Mexico, cut off supplies to product supplies to the Southeast, major price spikes when that occurred. The upper Rocky Mountains, I was surprised by this, many of the cities in the upper Rocky Mountains are served by only one pipeline. We think they could recover very relatively quickly but that's something we would like to keep an eye on. And then the far west, we are actually in the middle of a cost benefit analysis on a regional product reserve for the far west. It's obviously isolated both geographically and infrastructure wise and so, and it's very earthquake prone areas so we're looking at that as well. These are, this is sea level rise and inundation Gulf of Mexico. This is hard to read but what you see there, those yellow dots are 20, 30 vulnerabilities. The green dots are existing baseline vulnerabilities and those are electricity substations. And so we're very concerned about sea level rise and this is another, we have recommendations for infrastructure hardening. The industry has done a fair amount at this point in time but we see continuing vulnerabilities with sea level rise. I then went back last night and looked to see what the Europeans are doing on climate and resiliency. I looked at their spending adaptation which is what we have recommendations on in the QER for things like hardening. They're only spending about 400 million euros. That's over there. Second to write, putting a lot of money in sustainable transportation, renewable energy and research and development and adaptation comes up short. Our recommendation in the QER, however, is very similar, $350 million a year for 10 years for hardening infrastructure in ways that would take care of some of the substation issues I just showed you. And finally, putting in place emergency response systems. This is including reserves and fuel substitution. This is another amazing slide. This is from the Keystone EIS. The upper left-hand corner is 2010 and those are the number of crude oil rail loading stations. There were six of them. 2013, three years later. Those are your crude oil rail loading stations and you can barely see them but the little green triangles, those are barged and crude loading stations as well. And I didn't show you this to talk about rail. I showed you this to talk about changes in our energy flows. This is important for the Strategic Petroleum Reserve. All of this, and you saw going from the Eagleford as well, going from north to south as opposed to our south to north historical patterns moving into the Gulf of Mexico, Eagleford moving into the Gulf of Mexico. So you have congestion of commercial facilities in the Gulf of Mexico and the SPR is sharing those commercial facilities. And so what we were concerned with and there are recommendations in the QER on modernizing the Strategic Petroleum Reserve, its infrastructure. Right now, it has a drawdown capacity, design capacity of 4.4 million barrels a day. We think that its distribution capacity is far less than that. And it's very important in a modern global oil market, the laws, triggers, et cetera, designed for the SPR were written in 1975. When we did not have, we were not participating in a global oil market. We are now doing that to prevent economic harm to the US economy, which is the test in the statute. You really need to get oil on the water. And to get oil on the water, you need dedicated to ensure that you can get incremental SPR oil onto the water. You need dedicated docs. And so we recommend funding for dedicated docs. There, when we did the test sale for the SPR, we found that pipelines that serve the SPR distribution system had been reversed. And so there are both modernization issues and ongoing maintenance issues and life extension issues for the SPR. We need to be very mindful of the SPR is 40 years old. And so major recommendations on moving incremental barrels of oil into the market. One thing we also found is that the distribution capacity of the SPR now because we have global oil markets and we're exporting a lot of product out of the Gulf of Mexico is its distribution capacity is greatly affected by where a disruption occurs. We still import oil from Venezuela into the Gulf of Mexico where we refine it. We don't import a lot of oil from the Middle East into the Gulf of Mexico. So if you had a disruption in Venezuela, you would have more space to distribute SPR oil than if there was a disruption in the Middle East. And so it's now kind of a location specific as to what its distribution capacity is and we would like to increase that. Finally, this last slide, I lied and said there wouldn't be any more you couldn't read, but this is about natural gas in Europe and it's growing importance as an energy security problem. And I'm just gonna read you what it says down there. Energy markets have changed substantially since the creation of IEA. Natural gas is playing an ever-growing role in the energy balance of IEA countries making gas security a key element in energy security. Unlike the case of oil, there is no framework for taking collective action for natural gas. And this graph is import diversity of supplies and it's the HHI index as you approach one or hit one, that means there's only one supplier and you can look those little triangles there are a lot of Europe where there's only one supplier or huge, you're approaching one in many, many locations. And so we are very focused on natural gas security as well. That goes back to the Southern corridor, et cetera, et cetera. And so let me just close by saying each of these recommendations can contribute to the nation's overall security. I am quoting the secretary here. He did give a big speech on this at EIA at their annual conference. He said it's our hope that our energy security investments and policies will be viewed in the broader sense to value and include the resiliency, reliability and modernization of key energy infrastructures, responses to climate change and the collective needs of our allies and partners. Thank you all very much and look forward to questions. Thanks very much, Melanie. That was an amazing amount of information in a short period of time. And I think perhaps the most relevant for a lot of folks in the audience here is I look out lots and lots of energy expertise, some internationally focused, some very domestically focused to see how you all are thinking about the Quadrennial Energy Review as it relates to some of the international remits and pressing issues for the administration, including European energy security vis-a-vis what's happening in Russia. I wonder, and I don't hope this isn't putting you on the spot too much, but could you talk a little bit about what is happening within that G7 process and in terms of how you've explained that the QER feeds into this broader notion of energy security that you're all trying to think about and is this an ongoing process? We've all saw what happened in the summit, but what are the next steps? Is there something further that you'll be doing to sort of develop these concepts as it relates to you? We actually, I have briefed the European Commission also participated in both G7 meetings, so they're very engaged on this as well, and they have put out their projects of common interest, very focused on the gas infrastructure issue. I actually, when we were at Atlantic Council last November, we met with Foreign Minister Mitoff, the secretary offered me up to go over and talk to them about doing their own energy plan like the QER, and so we, I did go to Bulgaria. That's why I have been working with the Bulgarians. The most horrible thing for me, however, was that I had to go to Bulgaria the week before the QER was rolled out by the vice president, and so I was trying to get the roll out of the QER done here while we were there meeting with the Bulgarians. They were very interested in doing a soup to nuts energy plan like this, taking it as we tried to do, and I think successfully did, out of the kind of political, raising it a level above the political process, they're obviously in Bulgaria, a lot of different currents on energy, and I was surprised when we went to Bulgaria how interested they were in the process, and so because, and I've heard the same thing from the European Commission and from IEA talking with Fatih Birol that this kind of process is very helpful for looking at the need for integration of these systems. Things that we didn't know, that we now know, I did not, as I said, we did not start out thinking that shared transport was going to be a focus area of this QER. I dare say when you do this kind of analysis and you do systems analysis, you're going to find things like that, so we have been working, I've been to Turkey talking about the QER there, and the Secretary at G7, and we continue to work together on a range of issues, in particular the gas infrastructure in Europe. We also continue to work with the Ukrainians, we have a team over there right now, we sent this team over there earlier, they're back again as you all know, there is yet again a dispute between Russia and Ukraine on gas, I believe they shut off, gas pumps shut off the gas last week, you're not seeing a huge impact right now because they don't need gas for heat, but we have a team over there, it's the Ukrainian's job, but we are advising them on kind of worst case scenarios, options for action, et cetera, et cetera. We sent this team before, they put together, the Ukraine government put together a plan and we're back there looking at it again in anticipation of this winter, and so we work with a lot of the countries, we talk to the EU often and have some very specific asks that we're working on as well, so. One of the other questions I had was about the context in which the study was written and its robustness to sort of some of the changes that have happened in energy markets between when you started out and today, we similarly had a midstream oil market study that we were doing here and quickly read it through once the oil price collapsed to make sure that everything was still accurate as when we wrote it. Given the fact that there's a lot of folks thinking about whether or not the US is going to be in a fundamentally different position than it's been in for the last three years with a precipitous surge in oil and gas production and the price drop that you've seen, is there anything about the next round of the QER you said you focus on electricity or this last study that you think has changed in light of that new oil and gas reality or the ways in which people are talking about it or do you think that it's robust and resilient? Actually, I think that it is pretty robust and as many people here on the room were working on gas imports in 2003, 2005, I believe Lee Raymond in 2005 said that North America was running out of natural gas and that we had to develop a global LNG import infrastructure. That's really, that's 10 years ago. Look where we are today. We have approved 10 BCF a day of LNG exports in the US. I also think something like the slide, the oil loading stations by rail in three years. You saw a huge, huge increase in shipping oil by rail. What I would say is that's a fixed system and it did have impacts on other commodities. The railroads have invested money in expansion, et cetera, as a result of the impacts on commodities and we'll continue to closely monitor that, had impacts on coal, it had impacts, I think Powder River Basin Coal goes by rail to about 34 states, has an impact on ethanol, 70% of ethanol is transported by rail, has an impact on agricultural products. Something that I found in common with that and the Bakken oil is a lot of that's in the Midwest. But I think that it has adjusted fairly well. There are issues. There are rail safety issues, there are competition with commodity issues. Four small units, coal units in 2014 had to shut down because they didn't think they could get the coal for the winter because of competition. So you have to look at those issues and reliability but I think our system has demonstrated that it is robust. Where I see the biggest concern is in areas like the things that are pure federal responsibility. You're operating under sequestration and budget caps and all of these issues have to be balanced against each other and but when you see the operations and maintenance needs on the SPR, the deferred maintenance on our ports and waterways, I think that we should be paying a lot of attention to that. It's not only important to energy, that's my focus but it's important to commerce and so that's where I think industry is pretty good about coming in. You see some dislocation and but I think that the industry has demonstrated its ability to accommodate. There are not requirements everywhere for hardening for resilience for example. So there are recommendations in the QER to incentivize that. We're never going to pay for all of it. Industry has to do that but we provided recommendations on incentives in there and are working with Congress on those and other issues they're working on energy bills now. So we've got about 10 minutes for questions. Please state your name and affiliation and your question in the form of a question. We'll start with Ben. You have done a phenomenal job as Sarah pointed out presenting an incredible amount of information in a short period of time and also the project is really impressive. I had two things that struck me. One is on Turkey back to diversification of gas supplies. We've worked with utilities as you know for many years and price is extremely important. It's the second most important thing they worry about that the supply security is the most important thing. All the way back to Boston's issues in 1971 and what happened when you actually run out of gas as a utility. So these guys understand this. People in the gas industry. Is there some way to tie to one major thing on one minor thing. The major thing is there's some way to tie more closely together European recognition of Turkey's potential role in this. You put your finger on it directly. We've spent a lot of time speaking with people in Botash and other entities in Turkey including giving class and stuff on what it takes to run a hub and the market freedom to operate is as you point out is extremely important of multiple supplies. Imagine from the Europeans. We've got to get Europeans to imagine that they had hubs on either end freely operating hubs and BP on one end Turkish hub on the other end how it would help their gas supply security. It would help gas price to that. That's why I put up the definition of market power because it would also help price. The second thing just minor point. The methane leakage certainly from safety perspective greenhouse gas perspective. This is a third perspective. The rate payer perspective. This pays to get rid of. You got a $90 billion industry. If you're losing 2% God knows where. That's a crazy waste of rate payer money and somehow maybe rate payers need to focus on it as well. Thank you so much. Thank you. On Turkey. I think that it's beneficial for the Europeans but it's also beneficial for Turkey. And I didn't put it in this slide when I spoke in Istanbul in May. I looked at their trading partners. Turkey's trading partners by far. By far the biggest trading partner they have is Europe. The EU 28 and so there is enormous relief between next between EU and then it's Russia like one eighth or whatever. And only slightly behind that the U.S. I was surprised that their trading with Russia and U.S. was roughly equivalent. But I think it has to be mutually beneficial to both the Europeans and the Turks. And when you look at it there are obvious reasons and beneficial reasons for both sides to continue to work forward, push forward the Southern quarter. The Turkish stream, the Turks might need it to satisfy their own domestic demand but that's not going to satisfy their desire to be a hub. And the problem right now developing natural gas in that region it's a little, it's not the most stable part of the world and in the Eastern Med or North Africa. So but there will be some LNG imports from the United States on the way. So anyway, I agree we need to push forward on it. I think that we have to demonstrate that it's beneficial to both Turkey and the Europeans. And I was glad to see President Erdogan on his comments Sam. And on the methane leakage, rate payer perspective is important. What we did hear from was the consumer advocates, our focus, the consumer advocates are concerned about the rate shock of accelerating these replacement programs. Nationwide we estimated it's a $270 billion price tag to replace all of these pipelines and at least local distribution systems. And that's a lot of money. And so the recommendation that we have in the QER is to buy down that rate shock for people that can't afford it under the theory that that would give the PUCs more incentive to move forward with it if they weren't, if they weren't putting rate increases on those that can least afford it. So there is a rate payer benefit that there's also a consumer, a near-term consumer cost, Sam. Got about five minutes left. So I'm gonna take the gentleman in the orange tie and this lady over here. And then you, if you can keep your questions very, very brief. Thank you, Richard Kidd, United States Army. Glad I wore my orange tie today. So Melanie, real quickly, what is your comments or impressions about the interagency collaboration and the drafting of this document? Given that there are two other quadennial reviews, one by State Department, one by the Department of Defense, all three documents mention energy security and the security threats from climate change. Do you think we as a federal government have got a whole of government effort yet on those particular topics and energy security? Thanks. Okay, and then Zhao right here. The room tickle. We, there were 22 agencies. QER was a White House-led process and there were 22 agencies engaged in the task force that the document went out for interagency review. It's a 348 page document and I have to tell you that return from Bulgaria was tough and getting all of those comments adjudicated was a major undertaking. We actually got 1,500 comments. 600 of them were from us and were largely editing and EIA doing another round of fact checking, et cetera. 300 roughly were from the agencies. I found all of the agency comments to be incredibly helpful. We did the analysis in my office and but we're not experts on what you do and so the interagency process I found to be very, very valuable. It was tedious and very hard to get done in the timeframe that we had to do it but exceedingly important to the final product. The QDR, for example, that's an internal document. It informs your budget. This is very, very different. It's an outwardly focused document. 22 agencies have equities and energy and DOE doesn't own the assets. It doesn't even own the regulatory structure by and large and so for all of those reasons it's a very different document than the QDR but I have actually sent staff over a week or so ago to talk with the Defense Department staff on energy supply chains. We're very interested in that. You all are doing a lot of work there and would love to work further. Also on energy security, I did find a couple of very good DOD documents. We're looking at energy security valuation as well in our next steps, implementation of the QER, not valuation just of oil but of other things that I mentioned there in the G7 principles and the DOD document very concerned about the energy and national security implications of a reliable electric grid, for example and the pipes that serve it and so I'm going through right now and reading numerous documents, literature, search on energy security valuation, the value of efficiency, the value of diversity of fuels, et cetera, et cetera and that's why we started working with you all supply chains are very important too, soon. Melanie, if you're able to go over by five I'll take these last questions as a group. Thank you for taking my question. I was just wanting to get more details on what the next installment of the QER will be about and the timeframe when you plan to put that out. Well, we have, it has to be done in 16 months. I can give you that for sure. We're going to focus on electricity. We are at this point in time working on a scoping document so I don't have all the details as to what would be in the final scope and my office does an enormous amount of electricity work regardless of whether it's QER related work or not and so that's all I know at this point. We should be, when the secretary gets back this evening we'll probably know more in short order. Thank you, we join you in hoping that the secretary will end his self-imposed exile. What can the department do to fix the QER which appears to have a problem? It proposes up to $7 billion in federal spending to prop up infrastructure to move coal and natural gas. This has the effect of cutting the market price of systems that use coal and natural gas and cutting that price via taxpayer subsidy nibbles away at the nuclear side which does not require any help moving its fuel so the result may end up being counterproductive. How do you fix that? I'm not sure what subsidies you're talking about that are recommended in the QER. It calls for federal spending of up to $7 billion to improve ports, canals, rail lines and pipelines. It's in the recommendations. Well, those, actually the recommendations on ports it doesn't have $7 billion of recommendations for ports and inland waterways. Two point five for one and three point five for the other. I don't think that we recommend that, okay. The ports and waterways, that's where you get into enormous benefits from shared infrastructure. It doesn't just accrue to the benefit of coal, it accrues to, as I said, the benefit of ethanol. Agricultural products, et cetera, et cetera. And we did not look at nuclear because we did not do generation. And the recommendations on ports and inland waterways were to look at innovative funding mechanisms for ports and inland waterways. The Congress, as you probably know, just passed an increase of a user fee. It's not ports, there's a trust fund for maintaining ports. So that neither of those are, one is an ad valorem tax, I believe and the other is a user fee. So those, we don't recommend increases in either of those. We recommend innovative funding mechanisms for how you might deal with it. But I would take issue with those being a direct subsidy for coal and for natural gas. It is essential to energy reliability, energy security and for a lot of, and for commerce, Sam. Well, Melanie, we know you've got a lot of demands in your time, especially with the Secretary coming back after such a period of time away. I wanna thank you for spending your time here today and I just wanna say personally that the idea that you put on the table about trying to calculate the value of some of these other characteristics of the system is something that comes up often in our seminars here and seems like a really important innovation, so. We would love to work with you all on that. Love you, absolutely. Please join me in thanking Melanie for being here.