I have received a copy of the "United States Senate Committee on Sincerely, Jederics Pens Federico F. Peña CC: The Honorable Dale Bumpers Ranking Minority Member Stephen D. Potts Director, Office of Government Ethics Ralph D. Goldenberg Assistant General Counsel for General Law Printed with soy ink on recycled paper I In accordance with the Ethics in Government Act of 1978, enclose a copy of the financial disclosure report filed by Federico F. Peña, who has been nominated by President Clinton for the position of Secretary of Energy. We have reviewed the report and have also obtained advice from the Department of Energy concerning any possible conflict in light of its functions and the nominee's proposed duties. Attached to his report is a memorandum dated January 27, 1997, to Mr. Peña from the ethics official of the agency advising him of statutory and other restrictions applicable to his service as Secretary. Based thereon, we believe that Mr. Peña is in compliance with applicable laws and regulations governing conflicts of interest. Sincerely, Sigan Batt's Stephen D. Potts Enclosure APPENDIX II Responses to Additional Questions Hon. FRANK H. MURKOWSKI, February 3, 1997. Chairman, Committee on Energy and Natural Resources, U.S. Senate, Washington, DC. DEAR MR. CHAIRMAN: Thank you for the opportunity to appear before the Committee on Energy and Natural Resources as Secretary-designate for the Department of Energy. Enclosed for the record are answers to the questions submitted to me in writing by the members of the Committee. Please let me know if I can be of any further assistance. FEDERICO PEÑA. RESPONSES TO QUESTIONS FROM SENATOR MURKOWSKI Question 1a. There is a feeling among some in the Department that the President's choice of someone for Secretary without a strong background in energy, nuclear weapons and science was tantamount to "raising a white flag" to the Department's dismantling. As you have become familiar with the Department of Energy and its functions over the past few weeks, do you believe that the Department should continue as a cabinet-level department? Answer. Yes, I do. The Department has four important missions: energy, environmental cleanup, national security, and science and technology. I believe the work of this Department is vital; the importance of its missions has been validated by congressional funding action for many years. I also know from my own personal experiencee-as Secretary of Transportation-that there is no substitute for representation at the Cabinet level. Our competitors worldwide shape these issues at the highest levels of their governments. So should the United States. I believe that these important missions should be advanced with diligence, as well as high-level attention and priority, and that they should be the primary responsibilities of a Cabinetlevel officer. Question 1b. Is it your intention to be a strong advocate for the continued existence of the Department of Energy? Answer. Yes, it certainly is my intention to be a strong advocate for the Department of Energy; the importance of its missions justify that it should remain so. Question 1c. If Congress, after careful consideration, decides to dismantle the Department or restructure it as a non-Cabinet-level Department, will you work with Congress toward that end and direct your subordinates to do the same? Answer. The Clinton Administration already reviewed proposals to dismantle DOE and rejected them. The issues I discussed during my hearing are complex and enormously important to our domestic and global security. The Congress is frustrated that in some areas DOE has not acted on a timely basis. I believe I must focus my time and energy on these issues. Of course, I will work with the Congress on reforms of DOE, as on all other issues, but I would resist strongly any ill-advised action on this subject. If after such efforts I still believed that such a bill would endanger the accomplishment of these important missions, I would urge the President to veto it. U.S. ENERGY SECURITY DEPENDENCE ON FOREIGN OIL Question 2. In 1993, the world was shocked by the magnitude of the spill in the Komi Region of Russia, not only was this a threat to the Russian Arctic, but also to the global arctic. However, this brought up a larger question for discussion in the sense that the United States is encouraging and providing direct financing for Russian arctic oilfield development without, to my knowledge, any environmental constraints on how this development is carried out while at the same prohibiting U.S. companies operating under strict environmental guidelines, from developing our domestic resources. The result of this often is lost U.S. energy jobs and increased world environmental problems. Do you think it makes sense to export our oil industry jobs overseas so they can operate in an area of the world with less environmental control while displacing American workers and American technology designed to protect the environment to the maximum extent possible? Answer. I share your concern about insuring that high environmental standards are used by the_U.S. based companies that maintain international oil and natural gas operations. I understand that in a number of regions where U.S. oil and gas companies are active, including the Russian Arctic, the Department has taken an active role in working with foreign governments, state run oil companies and U.S. industry to insure that high environmental standards and practices become a part of operations as our companies engage in foreign exploration and production. I believe these activities are important efforts to ensure that U.S. oil companies employ sound environmental practices when working abroad. I also believe that the development of oil resources around the world by U.S. companies contributes to U.S. energy security by expanding sources of oil outside of the Persian Gulf, creates jobs in the United States, and provides opportunities for the sale of U.S. technologies to the oil industries in other countries. DOMESTIC PRODUCTION Question 3. Will you support exploration and development in the Naval Petroleum Reserve-Alaska? What will you do as Secretary of Energy to facilitate resumed leasing in NPR-A? Answer. I understand that the Department of the Interior is in the process of initiating a study that will evaluate the leasing potential of NPR-A. The study will determine to what extent lands within NPR-A may be suitable for oil and gas exploration and development in an environmentally and scientifically sound manner. I support the Administration's position on investigating the potential of the lands in the NPR-A for leasing in an environmentally responsible manner. Question 4. Does the Clinton Administration have a bias in favor of developing natural gas, and a predisposition against crude oil? Answer. The Clinton Administration does not have a predisposition against crude oil. Indeed, the Administration's policy is to work cooperatively with the private sector to develop a domestic energy resource portfolio-utilizing all of our domestic energy resources—which will strengthen our competitive economy, protect our environment, and keep our nation secure. Accordingly, the Administration is committed to enhancing the competitiveness of domestic oil producers; expanding the role of clean, efficient and domestically produced natural gas; encouraging the continued development of renewable energy resources; promoting efficiency; reducing the environmental impacts of coal; and maintaining the safety of nuclear power plants. Natural gas does play a critical role in our domestic energy resource portfolio. It is abundant, clean-burning, and affordable. Recognizing the economic, environmental and energy security benefits of increased natural gas use in the United States, the Administration is endeavoring to maximize the benefits of increased natural gas use. POTENTIAL FINANCIAL INCENTIVES TO DRILL FOR OIL AND GAS Question 5. Mr. Peña, your predecessor and President Clinton supported legislation to provide financial incentives to drill for oil and gas in the deep water areas of the Gulf of Mexico. Are you willing to commit to us that you will work in support of similar incentives to drill in the areas offshore Alaska? What kinds of incentives should be provided to explore onshore areas in the lower states? Answer. The financial incentives you refer to for the Gulf of Mexico should go a long way toward promoting the cost-effective, environmentally-sensitive development of new resources in the Gulf. The Administration actively supports those initiatives. With respect to offshore areas in Alaska, I believe that we should certainly consider similar incentives to determine if they would be beneficial in those circumstances. Those deliberations should weigh the benefits and costs to the nation and the region as well as the industry, impacts on the environment, and all other important regional and local concerns with that development. With respect to your question as to incentives that might be effective to promote exploration in onshore areas in the lower 48 states, I believe that there is a range |