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Democracy & Development
February 16, 2015

A lecture by Congressman Marsha Blackburn

by
Alex Treptow

Listen to the event audio here

Congressman Marsha Blackburn

U.S. Congressman for the 7th District of Tennessee

Vice Chair of the House Energy and Commerce Committee

Chaired by Henry Smith MP

Monday, 16th February 2015

Portcullis House, London

Transcript

Henry Smith MP

Good afternoon, ladies and gentlemen. Welcome to this Henry Jackson Society event. My name is Henry Smith and I’m a Member of Parliament. It’s a great honour this afternoon to be able to host on behalf of The Henry Jackson Society, here in the Palace of Westminster.

I know Congressman Marsha Blackburn needs little introduction, but I think I am duty-bound to give you the biographical details. Congressman Blackburn is the U.S. Congressman for the 7th District of Tennessee and Vice Chair of the important and influential House Energy and Commerce Committee, which interestingly includes health. She began her elected service career in 1998 as a Tennessee State Senator and was first elected to the U.S. House of Representatives in 2002. She has served on the majority and minority whip teams since then.

As I said, Congressman Blackburn holds a seat on the vital Energy and Commerce Committee, which has jurisdiction over health, energy, regulation and telecommunications issues. She also serves on the House Budget Committee and is a founding member of the Republican Women’s Policy Committee. Finally, you may have seen speculation in the media of her as a possible Vice Presidential running mate, which will be a space to be watched with great interest.

So the format for this afternoon… We are honoured to hear from Congressman Blackburn for fifteen to twenty minutes, and then there’ll be an opportunity up until 2pm for questions from the floor. When it comes time for questions from the audience, could you please state your name and if you represent any particular organisation? Obviously, the more efficient we are with questions, the more of them we will be able to get through. So with that, it’s my very great pleasure to hand over to you, Congressman.

Congressman Marsha Blackburn

Thank you. I appreciate that so much. Yes, at the House Energy and Commerce Committee, we have a wide portfolio of issues such as energy, commerce, manufacturing and trade. We also get into healthcare and we oversee telecommunications on the internet.

What we would love to cover with you today is the issue of cybersecurity, and the need for data security and privacy. Last year, our FBI Director, [James] Comey, said that there were two kinds of companies in America: those who know they’ve been hacked by the Chinese and those that are yet to find out they’ve been hacked by the Chinese. [Laughter]. If you read Financial Times this morning, you would see that that list is growing just a little bit. Of course, we all know that China is not the only bad actor in this arena. There are other countries, as Sony found out, that are in the ‘hacking business’ if you will.

Cybersecurity is a term that’s being talked about by political leaders, elected officials, corporate leaders, consumers, and individuals that are utilising the virtual space. It leads to the questions: What is cyber? Why does it need to be secure? What are we risking if we fail to do so? How is it that we have come to be so dependent on the internet?

Contrary to popular belief, the internet was not invented by my fellow Tennessean, Al Gore. [Laughter]. Let me take you back through how it actually came to be. The original internet was first developed in 1969, where four universities and four professors were involved. They were located in four separate places. They were all vetted by the Defense Department. They all had their clearances. The four computers were located at the University of California, Los Angeles, the University of California at Santa Barbara, Stanford University at Palo Alto, and the University of Utah. This project was for limited research, as it was only used to send documents back and forth. There was no shopping, no online universe, and no Google or Wikipedia; it was just these four computers talking to one another and the utilisation of the individuals that housed those computers.

As time went on and technology developed, people began to want to develop utilisations and attachments. So in the early 90s, the internet was commercialised. Think about this; as far as time goes, it took two decades to move the internet to the point of commercialisation. Now, think about all the apps, applications, and software. Most things [electronic devices] have the life of about eighteen months to two years. Isn’t that amazing? We have seen the internet grow to be something that is somewhat of a technological curiosity if you will. It has become a foundational element of modern society and it wasn’t even commercialised until the early 90s. What an impact it has had!

Cyber reaches beyond all of the wires, signals, hardware, and software that make up the infrastructure of the internet. Cyber is indeed cyberspace. It’s that virtual world that we have built on top of that infrastructure. It’s what we utilise in that spectrum as we send pictures, opinions, and funny stories, and we keep up with our families by doing things like I did this morning. I walked outside and to the roof, where I took a picture of Big Ben and sent it to my children and grandchildren with a note that said, ‘Wake up!’. [Laughter]. Big Ben was waking them up.

Cyberspace is also where the digital economy lives. [It’s a place] where you can open up an app on your smartphone and access almost anything that you can possibly imagine. You’re walking around and can pull it up, then pull it down. Cyberspace is where knowledge has been democratised; where with a good search engine and a few keywords, you can learn whatever you need to learn. You can learn about history, philosophy, science, nutrition and healthcare―it is all right there.

Cyberspace is also home to what I call ‘the virtual you’, which is essentially your online presence. This is where you have an explosion of data as you build your virtual self, online. It is right there and all that data is powerful, transformative, and it affects every single one of us. The questions that U.S. policymakers now have are: Are we going to explore it? Protect it? Are we going to learn to commercialise it? Are we going to respect it, or are we going to restrict it? These are the options. Going forward, the one thing we have not been able to do is to find a way to protect it, and that is the problem that many of us face. Cyberspace needs to be secure because it is no longer simply a place we visit, it is a place of residence for your virtual you and all the information that you enter online every day.

Each of us has created that virtual you and we have entrusted that identity to cyberspace through our social media profiles, bank accounts, digital health records, and our browsing history. This raises a very important question: what happens if your virtual you is not safe and you’ve got a peeping tom looking at all of that information?

Well, assurance of confidentiality and assurance of privacy is something that American businesses have been built on. Assurances are the cornerstone around which the internet and cyberspace were built. There were four computers, four professors, and four different locations which had an understood and implied assurance in that space. The internet was designed to be an open platform through which a network of peers could share information. Not only did the researchers who first used it know each other, their computers also knew each additional computer in the network. The protocols which allowed the internet to function were designed to move information from one remote location to another. There was no need for technologies that guarded the confidentiality, the integrity, or the authentication of that information, because it was an open platform.

The internet that exists today must provide greater assurance. The foundational architecture of the internet has not changed. It’s a free and open system that allows for rapid interaction and innovation, but the numbers of users and utilisations have changed. At its inception, the internet was used by known parties. However, we have now entered the age of the internet of things. Sometimes, I think it is the internet of everything.

Experts at Cisco estimate that by 2020, the internet will consist of fifty billion internet enabled devices. Fifty billion internet enabled devices! People around the world are buying smartphones and many other interconnected digital devices by the minute. However, stolen information can now be placed on computers and highjacked to the point that 2014 was labelled the year of the breach. We went from four computers and four known users at its inception to fifty billion devices by 2020. When you look at the fact that there’s so much data out there in your portfolio, this is why we’re moving to a point where there has to be an assurance given for protections.

The year of the breach was 2014. Think about the breaches that took place in the U.S. that I am sure you have heard about. At Target, 110 million customers were affected when hackers stole their credit card data. In April 2014, 53 million email addresses and 56 million credit card accounts were compromised at Home Depot. At Community Health Systems, which is a hospital in my district, 4.5 million patients had their information and data stolen. Last summer, 76 million households and 7 million small business customers had their account information compromised at JPMorgan Chase. We’ve all heard of what happened at Sony Pictures. CNN reported that between May 2013 and May 2014, hackers had exposed the personal information of roughly 110 million Americans. To put that in context, 21 million Britons watched last year’s World Cup final. 21 million who watched the World Cup final compared to 110 million Americans who had their PII’s stolen and exposed!

The Heartbleed, Shellshock and POODLE bugs exposed substantial portions of the internet to malicious activity. Perhaps most famously, the compromise and subsequent consequences of the hack against Sony Pictures Entrainment underscored just how reliant on the internet and cyberspace we, as a society, have become. It foreshadowed just how much damage can be done when they are used as weapons instead of productive tools. The year of the breach exposed the stark reality that cyberspace is not secure. Cyberspace cannot provide assurance to individuals that their data will be secure.

So what is your virtual you risking by continuing to live in cyberspace? There are many answers to that question. We risk our intimate conversations and pictures falling into the hands of strangers. We risk our financial and health information falling into the possession of criminals. At the most basic level, we are risking assurances.

Imagine the following scenario. You’re out running and receive an email that states there’s a bill due. You are a savvy tech user, so you’re able to pay it electronically. So what do you do? You unlock your mobile phone, you select the company’s app, you tap a few options, and the bill is paid. It is checked off of your to-do list. But wait a minute. Are you really using the latest version of your mobile operating system? Did you connect to the internet using cellular data or Wi-Fi? How do you know that the application you just used is the official company application? Does that company have strong security practices that will protect the financial information you have just elected to share with them? We rarely ask ourselves these questions, and yet we trust that we are going to be able to use the internet to send messages, to pay bills, to post pictures, and much more. We trust that when we log on and sign in, it is all going to simply work. It’s going to be there. Even further, we believe that it is going to work in a way that protects our security and our privacy.

This trust forms the foundation for today’s digital economy, our virtual social interactions, and much more. That is the purpose of cybersecurity. Consumers may be reluctant to participate in the digital economy without assurances. This could have severe economic consequences not only to us, but also to our allies.

Here are some stats from the U.S. economy. In the 3rd quarter of 2014, internet advertising revenues hit 12.4 billion U.S. dollars. That’s the highest on record and 17% higher than the 3rd quarter of 2013. In 2014, mobile revenues increased 76% to 5.3 billion U.S. dollars, compared to the first half of 2013. In 2014, digital video, a component of disc play related to advertising, is estimated to have reached three billion U.S. dollars. Social media revenues, which include advertising delivered on social platforms such as social networking, gaming websites, and apps, reached 2.9 billion U.S. dollars in 2014―a double digit hike of 58% over the same period in 2013. In 2014, global digital ad spending will be nearly 140 billion U.S. dollars, with the U.S. holding the largest share of that. As of 2013, internet ecosystems accounted for about 300 billion U.S. dollars in economic activity in the United States. E-commerce was responsible for 222 billion U.S. dollars of gross revenues in the U.S., which was about 5% of all retail expenditures. The other significant portion of our data is that data driven marketing accounted for 8.7% of total U.S. GDP and a total of 9.2 million U.S. jobs.

Without assurances, governments will have an increasingly difficult time communicating with their citizens, which will reduce the efficiency and transparency that the internet has enabled. Individuals would be less and less willing to participate in social media, thus inhibiting the social, diplomatic and cultural benefits that it has brought. To prevent these effects, we, as a society, must find a way to establish and provide security in the cyberspace. These challenges are not defined by borders, cultures or ideologies. The internet and cyberspace broke down these barriers and created an international ecosystem that enables individuals, businesses and governments to react in real time. For all the benefits this affords, it also means that the security of this digital environment is a global challenge. No one country, government, organisation or group will be able to protect cyberspace on its own. It’s essential that countries like the U.S. and the U.K. build on the long history of cooperation and partnership to confront the risk that threatens cyberspace. This work has already begun. Last month, President Obama and Prime Minister Cameron announced that the U.S. and U.K. would participate in joint cyber training exercises.

As we fight cybercrime and cyberespionage, we know it’s important that we work to protect and allow information sharing data localisation and consumer protections. The sharing will help eliminate the information silos that currently exist; where organisations become aware of active hacking campaigns or other malicious cyber activity, but are unable to share valuable intelligence they hold with others who may benefit from it.

Finally, as Vice Chair of the Energy and Commerce Committee, and a sitting member on the Subcommittee on Commerce Manufacturing and Trade, I fully understand the need for consumer and individual protections. There are a few important points to keep in mind when we all look at consumer protections. First, security and privacy are different issues and they need to be treated differently. Second, we must remember that privacy remains different things to different people, and that any attempt to impose a one-size-fits-all privacy protection will probably end up doing more harm than good. Third, the internet is the most transformative tool for spreading democracy, freedom and commerce that the world has ever known. Only through cooperation and dedication to the ideals on which the internet functions can we hope to continue reaping its benefit. It is a tool for the expansion of freedom, free people, and free markets.

Thank you for inviting me and allowing me to be here with you today.

[Applause]

Henry Smith MP

Congressman Blackburn, thank you very much indeed for that very erudite presentation on the history and the challenges ahead.

So we have some time for some questions and answers, and I would just reiterate that can you please identify yourself and if you represent any particular organisation when you are called to speak? Sir.

Question 1 – Masato Kimura, Journalist at I-Media Japan

My name is Masato Kimura, and I’m a Japanese freelance journalist. My question is about security and privacy. As some said, the discretion between industry and government is going [inaudible]. So if industry… If everything will be encrypted, somehow, that seems impossible. What is the compromise between industry and government in your point of view?

Congressman Marsha Blackburn

Yes, pointing to the compromise, where do you find common ground between industry and government to share? As we look at data security information and legislation that will move us along towards data security protocols, this is one of the things that we want to put in statute to enable.

When private companies think they have a bad actor in their system, we want to allow a pathway for them to bring that information to the federal government, and then for the federal government to be able to move that information to similar industries. They can then share the information that there may be a known malware, botnet, or some other malicious activity that is embedded in that system. This would go for how that data is transferred, whether it is the internet itself, or getting into the internet of things, if you will; in appliances and automobiles etc.

I have seen legislation which is called the Secure IT Act.  One of the components of this legislation would be to allow for that information share and transfer. It would also put in place some penalties and enforcement for those penalties; it would allow data breach notification, it will put standards in there so that individuals and companies would receive notice when they were breached and would know to take the precautions, and it will allow for that simple notification standard to take place at a time period in which that would have to take place.

Henry Smith MP

Thank you, the gentleman straight ahead of me.

Question 2

I didn’t realise the microphone was on there, Mr. Chairman! [Laughter].

Congressman Blackburn, thank you for a fascinating presentation.

When President Clinton was in power, he compared the Chinese trying to successfully censor the internet to trying to nail jelly to the wall. Unfortunately, as we know, they have shown tremendous ability to restrain freedom in that domain in quite a frightening way.

I put it to you that the fundamental problem is that censorship is of a strained trade and it should be firmly positioned, legally, within the trade framework. For example, Facebook, who I carry no flag for, is showing a worrying tendency at the moment to suggest that they might submit to Chinese censorship in order to get access to the market. Now, that’s just media speculation, but it just shows you how, shall we say, western paragons of freedom are prepared to submit to this type of… Let’s be honest, a form of tyranny. It’s fundamental to the compromising of human rights in China and it’s not just China, in fairness. We all are guilty when it comes to censorship. There is an eternal struggle in both the United States and the United Kingdom for freedom, as we are all too well aware.

I know I’ve gone on long enough, Congressman, but I really want to ask this fundamental question: that if we really do want to protect freedom of expression online, surely we must bring it to the trade domain? I would also suggest to you that isn’t it long past time that we have a Bill of Rights for the internet? It’s a fundamental basic requirement. What I mean to say to you is that the demilitarisation of the cyberspace is very necessary because it’s an asymmetric deal. It’s impossible to defend yourself in cyberspace. The only way to do it is to get all countries together, like the nuclear arms talks, to agree to this type of demilitarisation. As I said, look at the [inaudible] spent. When that was effectively launched, we all know what happened. Leading American and other Western companies paid billions cleaning up the mess because it’s like launching a germ. You can’t just aim your germ at the enemy because it’s going to come back and infect you too. That’s the nature of cyberspace, so thank you for an interesting presentation today.

Congressman Marsha Blackburn

Thank you for the question. I appreciate that. When you talk about the issue of intellectual property protections and the internet as a trade issue, I think that you’re exactly right. I had dinner with some individuals last night where we discussed this issue and it’s time for this issue to be thought of in those terms. China wants to be a world economy, so it is important that we look at them and we say, ‘Don’t censor this internet because look what it brings forward to people, and don’t pirate it’. Many times, people get bloated with malware when they go to a website selling counterfeit merchandise and then you’ve got a rogue financial network, sometimes housed in Russia, that they enter their information to. And then you have activities like from The Financial Times front page this morning about the transactional activity and the losses that are there.

The other thing is this: when you’re talking about trade like TTIP [Transatlantic Trade and Investment Partnership], you might as well do a trade agreement, because willing sellers and willing buyers are going to find avenues for product that they want to get to a marketplace.  When you talk about the democratisation of information and education over the internet, look at what it has done for commerce. It allows people to find willing buyers and willing sellers to find one another.

Henry Smith MP

Very good. Any further questions? Yes, we’ll go to the lady behind and then I’ll come to you, sir.

Question 3 – Maggie Day, Board Member of Republicans Overseas

Hi, I’m Maggie Day from Republicans Overseas. This is a bit like his question but less to do with trade.

We’ve seen a divergence between U.S. policy and EU policy on consumer and internet user privacy. Is this something that Congress is concerned about? Do they see the U.S. going more towards personal freedoms or more towards… I hate to call it censorship in the EU, but right now some Google searches are restricted and results are pulled from the search.

Congressman Marsha Blackburn

Yeah, thank you for that. For the past two years, I have co-chaired the Privacy Working Group in Congress. This has been with Peter Welch, a Democrat out of Vermont, who is also a senior member of the House Energy and Commerce Committee. We spent two full years looking at the issue of online privacy and data security―separate, but related issues. One of the things that individuals want to make certain of is that when they log on, they have the tool box necessary to set the privacy protections for themselves, and enable the amount of risk that they would like to enable. Likewise, when it comes to the data security issues, they expect the ISP’s to block rogue websites that would infect their network with malware.

I mentioned a healthcare company that had been breached this year. The breach occurred through the PC of a physician who was affiliated with one of the hospitals in this corporation. That’s how they got the worm in. That’s how the germ came into the system, to use the previous question’s analogy. Then, it waited for a time when it could go in and capture patient information. It then moved it to another system, off of that company’s system, to a completely separate system, with a separate company, and housed it there for a period of time. It then moved it offshore. Consumers expect that companies are going to have the appropriate firewalls and guard rails, that they are going to be protecting that information, and that they have that assurance that the transaction is through a safe source.

Now, at Energy and Commerce, we have looked at how you empower the consumer. How do you hold government and businesses responsible so that you have that ability to do that business in the same form as in the physical world, and those penalties that exist for privacy invasions in the physical world can be applied to the virtual space? Again, when you’re dealing with bad actors, it comes to the issue of being linked to trade.

Now, I will say this also. It is one of the reasons that you see us fight against the FCC [Federal Communications Commission] taking control of the internet and exercising their net neutrality that they want to exercise. Net neutrality sounds good, warm and fuzzy, but basically what it would do is allow the federal government to come in and siege your ISP. Thus, it would be able to assign transmission speeds, and assign priority and value to content, which gets to her [Maggie’s] question; should you have some censorship and some searches restricted?

Henry Smith MP

Thank you. Sir.

Question 4 – Erik Van Dyke

I’m Erik Van Dyke and I’m a concerned American abroad. My question was actually similar, so I was thinking of another one.

Obviously, you know your stuff because you deal with IT and such.  [Inaudible] politicians talk about IT and such. In fact. Prime Minister Cameron and President Obama were talking about how we can’t have encryption because we need access to secure the country from ISIS and such. Is there a serious need to educate politicians as to what is involved in all of this? I was at an event last week where Ed Vaizey and others, who are obviously up on this, were talking about the reaction on what Cameron said about encryption. The immediate reaction from the IT world was that, ‘Oh, these politicians don’t know anything. They’re stupid, so we’ll do it’, whereas in fact, he has a point [inaudible]. Is there a need for educating both sides?

Congressman Marsha Blackburn

Absolutely, there is a need for education and that is one of the reasons why we did a working group instead of doing formal hearings. We took two years and allowed committee members the opportunity to do a deep dive. It was so exciting that we had some committee members that wanted to opt in to this working group. How often do you have MPs’ wanting to opt into a committee and go into another meeting? [Laughter].

What we found was that people were interested in the topic and had a desire to be educated.

I’ve worked for about four years with online advertisers looking at how to provide online awareness in the ads. [For example], putting in an icon, kind of like a good housekeeping seal of approval, so that people know this is a safe source that they can trust. It’s a legitimate business that is not going to sell their data, do a lot of data mining and other things of that nature. They won’t have the risk of being on a rogue website with a rogue financial network.

We also talked with a couple of big retailers that have very aggressive online websites and are doing a large portion of their business online. We want to take their brick and mortar components and educate consumers in their stores by walking them through how to set these privacy guidelines, so that they feel more comfortable doing business online with them. We’re looking forward to seeing some of that. Part of this is going to happen through desk practices that will come forward from the business community working with the FTC [Federal Trade Commission]. But the thing is, we are past the time where something needs to be done with this.

Henry Smith MP

Thank you very much.

Question 5, Davis Lewin – Deputy Director & Head of Policy and Research at The Henry Jackson Society

Congressman, I’m going to be audacious and draw you away from the topic for just a moment. You mustn’t leave before you talk to us about not only possibly another angle in terms of committee, healthcare, and issues other like that, but do also talk to us about the presidential election and the Republican primary. What can we expect to see from American politics going forward in the next eighteen months?

Also, can I draw you on… President Obama has rightly said, as Bob Gates said when he left office, that this country needs to do more on defence spending.

Now I know you’re a very capable politician, so I know I can’t draw you in too far, but can you say something on the nature of the special relationship? Please list any concerns that might exist. We know the relationship is strong, but should we be concerned about the nature of that relationship… A turn to Asia, China is on the agenda and so forth.

So pick from them, but pick the controversial ones. [Laughter].

Congressman Marsha Blackburn

Well, a couple of things. In regards to the upcoming presidential election, I think as soon as you all… What are you, 87 days away from your own election?

[Laughter]

Henry Smith MP

It’s eighty something.

Congressman Marsha Blackburn

As soon as you turn away from that, you’ll probably be looking at what we’re doing in the U.S. with the presidential election. At this point, it’s really kind of an open field. I think the jury is still out as to whether Secretary Clinton is going to end up running. If she does run, she would be the Democratic nominee, I have no doubt. But I think that people are uncertain as to whether or not she is going to run in that race, so we’ll see what happens there.

When it comes to the Republican side of the aisle, we have a very deep, robust and lively bench. [Laughter]. They’re out there and they’re filling up column inches in papers and making their opinions known. Yes, a lot of information has come out there from these campaigns and they’re filling up things and going to it every single day. So, I think the field has not rounded itself out yet and will probably not do so until the fall. You’ve got several governors that want to run. You’ve got some that are in the Senate that want to run. You have some that are in the business community that also want to come in and run, so it will be very interesting.

In regards to defence spending, Republicans have been frustrated with the actions of the administration for drawing down defence spending and drawing down the strength of the U.S. military. When you talk about getting down to a 490/420 number, you’re talking about a dangerously small number. We need to be looking at 21st century warfare, of which cyber is a part of and takes a special skill set to combat. We need to be looking at the amount of strength needed to fight the wars that is in front of us to keep the peace. Also, I did not like and do not like the [inaudible] of the military component of the spending. I would have preferred 5% cuts across the board coming on discretionary spending and push for that every single year. But strengthening our military is something we need to do. We’ve got threats that we know are there and our allies are fighting them too. We’ve got ISIL and other radical Islamic extremists. We know how to find our enemy and are aggressive in doing so. That’s why the House has continued to put in more money and not less into defence, because it is important to us and our allies.

Henry Smith MP

Thank you very much. Sir.

Question 6 – Alexander

My name is Alexander [inaudible]. I’m a private businessman. Since energy is part of your coming to Britain, I must ask about that area as we haven’t touched it yet. I have a couple of questions.

One is the long suffering issue of the Keystone pipeline. What do you think about it and what are the prospects? The second, also related, particularly in light of quite a large increase in production in U.S. oil, is a mission to export. Isn’t America at least officially for free markets? What do you think are the prospects?

Congressman Marsha Blackburn

First of all, in regards to the Keystone pipeline, that did come out of our committee and out of our Chairman, Fred Upton. He has done a superb job of steering that through the process. We passed it in the House, sent it to the Senate, concurred in the Senate bill, and now it sits on the President’s desk. I’m one of those that think at the end of the day, the President will sign it. I think there are plenty of opinions that are out there. Some say he won’t because of environmentalists, but quite frankly, at the end of the day, I think he signs the bill. I think he’ll see it as less of a downside for him, personally, to sign it then to not sign it, because we will most likely override his veto.

U.S. production is up and much of that has to do with the Bakken shale region. It has been quite aggressive fracking. We’ve got more natural gas than anybody. It is important that we begin to export and quite frankly, I think it would be very healthy for the world economy if we aggressively worked to move ourselves towards energy independence, and then be able to trade and export with our allies. I would love for us to take some of Russia’s market. I think that would be a very good thing.

Alexander

I’ve got one more question about energy. A few years ago, I was touring in Alaska, which is a great and beautiful place. At that time there was a lot of debate over whether they should be more open to drilling in Alaska or not. I think they decided not yet. I was talking to local people, including one guy who was the Professor of the University of Alaska and some people on the ground, just for curiosity. I had no axe to grind, I just wanted to know what the Alaskans thought about it.

He said that 90%+ of our people think we should drill. So I thought why is it that nobody asked them to make a decision? Why are Washington and some other faraway places deciding that we have got to protect those people from ruining their environment when the people right there, who are very concerned about their environment as they live off this land, are not worried? How come there is this division of powers?

Congressman Marsha Blackburn

That’s a great point. Many states would say this is a states’ rights issue. It’s one of the reasons that at our committee, we talk about one-stop shopping for permitting, because it would simplify the system. It’s also the reason that many Americans do not want more land going into federal hands and being controlled by the Bureau of Land Management, because they want to utilise those natural resources.

You’re exactly right about Alaska. When you’re in Alaska and talk to people, they are frustrated with the federal government and feel as if many times they do overstep their bounds, try to go in and acquire land, and move it off so that the citizens of that area do not have the benefit of those jobs and revenue dollars in royalties that come back into that local economy.

I think if you were on the committee with us at Energy and Commerce, you would sit on my side of the aisle and would be voting yes on the legislation we bring forward. [Laughter]

Alexander

To me it seems like a no-brainer. How could anyone defend the other position? What is the argument?

Henry Smith MP

We can’t expect the Congressman to be a lawyer!

[Laughter]

Congressman Marsha Blackburn

We wonder too, many times! We think it’s an indefensible position also. When you hear about the Department of Energy and the EPA [Environmental Protection Agency], we get very frustrated with them. The administration just does not seem to understand the importance and the necessity of domestic exploration, production and commercialisation of hydrocarbon product.

Henry Smith MP

The gentleman there and then I’ll come to you, sir.

Question 7 – Harold Forman

I’m Harold Forman of [inaudible]. I’m a reader of the longstanding International New York Times, which I read heavily from cover to cover, except for some idiots in it.

The Keystone project… I cannot understand exactly… I believe this is to bring the mud containing oil from Northern Canada down below to then extract it somewhere. However, in all honesty, I cannot see the benefit health-wise and environment-wise, to do this. America has so much to take from its ground that it doesn’t need this. Now, I may be completely wrong in how I think about Keystone, so could you clarify for me?

Congressman Marsha Blackburn

First of all, Canada is our largest trading partner. We trade with them when it comes to hydrocarbons more than any other entity. They want to utilise those tar sands and oil sands and we have the refining capacity in the Gulf that can refine from that. Also, I think we must realise the extent of the petrol hydrocarbon market, not only for your oil and gas products, but also the derivatives from that. So this is a way that they can commercialise that product.

There is also the economic benefit, as the Keystone would yield 40,000 jobs for Americans. There are jobs that would take place through the building and of the actual pipeline. There are jobs in the maintenance of the pipeline. There are refining jobs that are a part of it. There are logistics jobs that are a part of it. It is a great jobs generator and because of that, it is of economic benefit to each country individually, and then through trade together, to move the project to completion. That’s really the reason we have continued to push it.

Additionally, we would love to be at the point where we wouldn’t have to buy oil product from OPEC [Organisation of the Petroleum Exporting Countries]; we think that would be great. I like that idea that we are moving towards energy independence and we are working to be a net exporter on a consistent basis. We continue to say that as we look at energy policy in the U.S., we need an ‘all of the above and below’ strategy. We also know that it is going to take looking at alternative fuels, and looking at new uses for existing fuels; for example, looking at natural gas as a transportation fuel. We’re also looking at applications for wind and solar, and stopping this silly war on coal and bringing that back into the marketplace by utilising clean coal technologies. We need to be smart about it and we don’t need to say we’re not going after or utilising any one of our natural resources.

Harold Forman

Could you just explain to me the derivatives that are going to come with the mud, for lack of a better word, from Canada? What do you mean by derivatives as well?

Congressman Marsha Blackburn

I was speaking of the other products, for example, the polymers and other things that come from your hydrocarbons. The polymers are used in your fabrics and fabrication of casings or plastics. You have polymers that are used in everything from clothes to plastic bottles. There is a major market for those and the market grows every single day. It is just another area where we can exercise innovation and have another product base. We are moving through the global marketplace, so that is something that works to our advantage.

Last night with this group at dinner, I was telling them of a little formula I use all the time when talking about economic development and jobs growth. It’s very simple and you can take it to the bank. Less regulation + less litigation + less taxation = more innovation and job creation. That’s the formula we should apply to all of these problems that exist on an economic sector, on trade and looking at how we enrich the U.S. economy and keep it robust.

Henry Smith MP

I think we got time for one more question… I’ll come to you, sir.

Question 8 – Michael Radomir, Investment Manager

My name is Michael Radomir and I’m an investment manager who is also looking to get into U.S. politics on energy at a future time.

To clarify for the previous gentleman, I think the tar sands are made into crude oil in Canada and then they are sent as crude to refineries in the Gulf of Mexico so they can be made into usable products.

Congressman Marsha Blackburn

That’s correct.

Michael Radomir

Congressman Blackburn, I think it’s only 2% of the total volume of oil that are made into polymers and derivative products. Going back to the tar sands and Keystone, it’s a political issue, as it’s a question of jobs vs. climate change. It’s also the fact that tar sands are an inordinately carbon intensive and energy intensive production process for oil, which relates ineffectively to climate change.

It’s magnified out of proportion probably, but it’s a kind of a political bellwether in terms of how serious politicians are about climate change. I advocate for all you do for jobs, global security, and economic growth, but climate change would cause the largest loss of jobs, international prosperity, and freedoms. Also, as you know, last year’s bipartisan National Climate Assessment, done by Congress, showed that by the end of the century, you expect sea levels to rise by three to six feet and that 90% of Florida sits four feet above high tide mark. We’ve already seen some flight damage in New Orleans, New York, and the New Jersey coast; thus accepting that climate change is a serious issue. So very interestingly, with this power you now have as an exporter of gas and to some extent, oil in the future, do you see any opportunity for… [Could you] explain your vision for how you hope to leverage international cooperation around some of these traditional fossil fuel products?

Congressman Marsha Blackburn

Sure. First of all, I’m not certain I’ve seen the report that you’re referencing.

Michael Radomir

It’s a Congress bipartisan report study called The National Climate Assessment, done by the U.S. Congress.

Congressman Marsha Blackburn

Okay, well I’ll tell you, I have not seen that report. I will tell you that I differ on the issue of climate change. We have not had a ‘warming’ necessarily for thirteen years.

Michael Radomir

But that’s benchmarked against the highest year on record.

Congressman Marsha Blackburn

That is correct, but I think that in order to have the discussion with you, it would be accepting your premise, and I don’t accept your premise. I’m not a believer in the global warming premise. So, therefore, I wouldn’t agree with you on the discussion that you want to have. I think that the jury is still out on that. The earth warms and cools on a cyclical basis and we should all be concerned about conservation and preservation. But one of the things that are many times not done by federal agencies or other entities around the globe… They say they do not need to do cost/benefit analysis. That getting the desired outcome is more important than looking at it on a comprehensive or holistic basis.

Henry Smith MP

Thank you very much indeed for a fascinating and very informative presentation, Congressman Blackburn. Thank you also for your questions as well, which I thought were varied and furthered the discussion.

[Applause]