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Summary of Hearings on Energy (11-13-07)
Witnesses Panel I Panel II Committee Members Present Chairman Jeff Bingaman (D-NM) United States energy needs are increasing while the industry is facing workforce decline. The purpose of this hearing is to understand what policies Congress can support to avoid an energy workforce shortage. Ms. Emily DeRocco testified for the U.S. Department of Labor (DOL). She stated that within the energy industry, the average personnel age is over 50, and half the workforce will be of retirement age within five to ten years. A large portion of the potential workforce lacks the required interest and skills to work in the energy industry. Better comprehension of basic math, science, and technology is necessary to prepare people for these jobs. Ms. DeRocco asserted that the ability to quickly ascend the ranks through "career ladders" is needed to incentivize workers to start a career in the energy industry. The DOL has multiple initiatives and grants it uses to help bring personnel into these careers. Much of the work is done with community colleges, which are "well positioned" to know what the energy industry is looking for and what skills students need to learn. Ms. DeRocco believes Congress should support programs that encourage and reward innovation, promote public-private business partnerships, and increase industrial competitiveness. Ms. Patricia Hoffman represented the Department of Energy (DOE), stating that the technology workforce is the "backbone of the economy". She agreed that Congress needs to address the workforce transition issue because a large percentage of personnel are about to retire. Ms. Hoffman applauded the nuclear sector for their cooperative research with universities because it gives students experience with the energy industry. Grants and mentor relationships are two of the most important ways that the energy companies can introduce students to the industry and possibly begin their careers. To alleviate the workforce issue, she recommended that Congress foster math and science education, support "strategic" engineering research, and promote better understanding of the industry. Ms. Andra Cornelius of Workforce Florida, the state's workforce investment board, called the energy industry a "critical sector" in Florida and across the country. She recommended that Congress support legislation that will build effective partnerships, create and support policies that will help the U.S. meet its energy demands, and build a "talent pipeline" of new young workers with necessary skills and training for the energy industry. Training opportunities should begin in high school to reach young people that will not continue to college. She also indicated that any national solutions should make the workforce issue a priority, focus on bringing in and training new people, and reduce redundancy between efforts. Chairman Jeff Bingaman (D-NM) asked to what extent the federal agencies (DOE, DOL and Department of Education) coordinate their efforts on the energy workforce issue. Ms. DeRocco stated that new efforts are much better coordinated and have reduced past redundancies. Many government organizations are now working on science, technology, engineering, and math education and workforce skills development. Senator Bob Corker (R-TN) asked about efforts to bring in students at the college level, and specifically how to make the necessary classes appealing to students. Ms. DeRocco replied that colleges need to look at local economics and growth sectors and adjust their curricula to meet workforce needs to ensure job security for their graduates. She also noted the success of cooperative efforts with the National Science Foundation (NSF) to ensure that Ph.D. candidates are prepared for the workforce. Ms. Hoffman asserted that organizations must continue to stimulate interest at the high school level and encourage science and math education. She agreed with Corker that students need to be shown the relevance of majors, such as engineering, that will provide a career in the energy industry. When asked what types of workers are needed in the industry, the panel replied that line technicians, pipe-fitters, electricians, and plumbers were among the highest in demand. Climate change legislation is "spurring interest" in clean energy, for which a "whole new set of competencies and skills" are needed, according to Ms. DeRocco. Ms. Hoffman said the DOE currently does not have any clean energy workforce statistics, but there is a "huge potential" for careers in the industry. The National Academy of Sciences (NAS) is currently working on a study that will give industry projections. Senator Ron Wyden (D-OR) stated that clean energy will be a "huge magnet" for workers, and that the government should not give renewables and clean energy the "short end of the stick" by leaving them out of its efforts. Senator Larry E. Craig (R-ID) asked how to make energy industry jobs attractive and desirable to young people. Ms. DeRocco replied that the DOL uses its Career Voyages website to promote these positions. She stressed the importance of meeting young people "where they are", by campaigning on the internet with tools such as Facebook and YouTube. Another issue is preparing young people for jobs in the energy industry. She is concerned that too often "we have not made education relevant to their work opportunities" in the industry. Senator Lisa Murkowski (R-AK) asked if the government is spending enough money on job promotion and training to make a difference. Ms. DeRocco said that the DOL needs to focus on using the $15 billion yearly budget effectively on current needs first, and then see if additional funds are needed. She asked Congress to help align and appropriate funds correctly. Senator Jeff Sessions (R-AL) asked how Congress could help young people that have finished high school and work in low-paying jobs with no visible desire to have a career. Ms. Cornelius replied that six out of ten high school students in Florida do not go to college, often because they do not want a "traditional learning environment". She asserted that these young people need to see the relevance of what they are learning in high school to the real world and their careers. Senator Robert Menendez (D-NJ) said clean energy is and will continue to be a growing source of jobs in the U.S. energy industry. He asked what the DOL has done to ensure many of these positions go to people in underemployed communities. Ms. DeRocco said some of the grant programs the DOL provides are focused on clean energy jobs, and these do provide jobs in underemployed areas. But progress is very slow, and she believes now is the time to look at the marginalized workforce and add legislation to address this issue. Senator Menendez said the issue of workforce should have been addressed before and that the "current workforce didn't age overnight." Congress needs to learn from past mistakes so they do not repeat them. Mr. Norm Szydlowski from Colonial Pipeline testified that within the petroleum sector 27% of employees are within five years of retirement. He suggested that Congress support policies that combine school programs with workforce needs, help decrease the "stigma" that keeps many people from working in some energy industry jobs, and address tax issues that force personnel into retirement while they are still an integral part of the workforce. Mr. Paul Bowers testified that there is an ongoing decrease in the number of skilled workers in the energy industry, and the way in which this is addressed will affect the U.S. economy. In all, tens of thousands of employees are needed. He stated that educators, counselors, and parents no longer encourage technical skill careers. Educators and students need to be aware of these important, good-paying jobs in high demand, and high schools should give credit for technical skills classes. Mr. Bowers cited the Florida Career and Professional Education Act, which helps local educational systems to create technical training and certification programs, as a "perfect example" of what Congress can do to address the energy industry workforce problem. Dr. Ray Stults of the National Renewable Energy Laboratory testified that many new clean and alternative energy power plants will be built in the next few decades, requiring huge amounts of technical labor to build and maintain. There is a projected shortage of technical workers, engineers, and scientists which is already affecting the energy industry. Dr. Stults asked Congress to continue its hearings and workshops on the subject. Ms. Carol Berrigan of the Nuclear Energy Institute testified that legislation such as Energy Policy Act (EPAct) of 2005 and the America COMPETES Act is a good start to addressing energy workforce issues. New nuclear power plants are planned in the U.S., which will provide thousands of additional jobs. Ms. Berrigan suggested that Congress raise awareness of the workforce shortage, create partnerships between the government, industry, and education efforts, and implement new education-based training programs for the energy industry. Mr. Jim Hunter testified on the state of the utilities sector, which is facing a "critical shortage" of personnel. There has been a steady decline in workforce for years, but a simultaneous increase in overall electricity generation. Hunter said this increase was due to huge amounts of overtime hours and little work done on maintenance. He stressed that new workers "must be hired and trained today" because it takes years of experience to be ready for many of the jobs that need to be filled. He stated that colleges were great resources for finding personnel, but those people need additional training to become skilled workers. He recommended Congress give funding assistance to training programs to prepare more employees for the energy industry. Ranking Member Pete V. Domenici (R-NM) brought up President Carter's initiative that started training schools across the country to prepare young people for technical careers, and asked if the government should use a similar program now. Mr. Hunter replied that most energy companies train their workers internally, or sometimes in a partnership with community colleges. He said joint classes in community college can allow students to very quickly experience the industry and see if they want to pursue that type of career. Senator Domenici responded that he has considered creating an energy-worker training act to increase technical training schools and will give it further consideration. Domenici asked the panel to promote the average salaries of energy industry jobs. Mr. Hunter said the average lineman makes over $100,000 each year. Dr. Stults said electricians make an average of $25-35 per hour or more. Senator Murkowski addressed the stigma often associated with technical work, saying "we have got to change our attitude" about these jobs. While the No Child Left Behind Act of 2001 looked at important academic subjects for college, it did not address students who will not go to college. She asked if these students are receiving enough preparation in high school for careers in the energy industry. Mr. Bowers replied that all new employees at his company must take a basic math and reading test when they begin work, which 40% of them fail. Senator Murkowski stated that Congress needs to help ensure that students see how basic math skills can lead to a good-paying technical job. The DOL and DOE currently have joint programs with schools to bring personnel into the energy industry. These programs are effective but more needs to be done. All witnesses acknowledged that an energy workforce crisis was likely, and came to a broad consensus about what Congress can do to help prevent it. The most important solutions are to reduce the stigma associated with technical jobs; promote jobs and workforce needs to high school (and younger) students, educators, and counselors; and to implement training programs and schools for technical skills. The committee has not yet presented any legislation on the subject, but shows interest in doing so. A link to witness testimony can be found here. -EAL
Witnesses Panel I Panel II Panel III Committee Members Present Chairman Jeff Bingaman (D-NM) As U.S. energy demands continue to increase, additional energy sources become progressively more important. Geothermal energy is one significant option because it uses natural geologic heat sources to heat, cool, and create usable energy without any hazardous by-products. The purpose of this hearing on geothermal energy is to understand the possibilities and limits of geothermal energy in the U.S. and to assess the value of Senate bill S.1543, entitled "National Geothermal Initiative Act of 2007" The main goal of the measure is to increase geothermal energy to 20% of overall U.S. energy production by 2030. The measure would help to achieve this goal by funding geothermal research and development through the Energy Department and supporting a survey of geothermal resources by the USGS. All federal funding for geothermal research and development was terminated in fiscal year 2007 and the last national survey of geothermal resources was published by the USGS in 1978. Energy needs will only increase in the future, and with the concern of rising carbon dioxide levels and global warming, clean sources of energy will be in high demand. In their opening statements, all the senators expressed their interest in the topic and hope for the U.S. to increase its use of geothermal energy. Senators Daniel K. Akaka (D-HI) and Larry E. Craig (R-ID) informed the committee that Hawaii and Idaho have already utilized geothermal energy sources for decades. However, some senators expressed concern about the 20% goal, including Senator Lisa Murkowski (R-AK) who called it "ambitious" and Senator John Barrasso (R-WY) who referred to it as "unrealistic". The senators who attended the hearing did support greater use of geothermal energy resources in the United States. Ólafur Ragnar Grímsson, the President of Iceland, testified on the extensive use of geothermal heat and energy in his country. He stated that the Icelandic energy system has been "transformed" from 80% coal and oil to 100% clean energy sources in the lifetime of a single generation. He believes that geothermal energy use will be good for the economy and security of the United States, and is cost-effective, reliable, clean, and flexible enough to meet the wide variety of needs in this nation. President Grímsson asserted that geothermal has "the most profit-making energy potential" of any renewable energy source, and is a base for many different business ventures. He also highlighted the necessity of significant funding for interdisciplinary research and development to achieve geothermal energy goals. Countries such as China, Germany, India, and Russia are already using experts trained in Iceland to build geothermal heat and energy production facilities. President Grímsson said there is already a race between other countries to export scientists from Iceland with the necessary knowledge. Locations in the U.S. using geothermal energy will be "magnets" to businesses looking for clean, renewable, low-energy costs. A cooperative effort between the U.S. and Iceland could give the United States an economic and technological advantage in the pursuit of clean domestic energy sources. The Honorable Alexander Karsner, Assistant Secretary for Energy Efficiency and Renewable Energy at the U.S. Department of Energy (DOE), believes geothermal energy is part of a "new era of energy security" for the U.S. The DOE has been working with experts on geothermal energy research. Assistant Secretary Karsner quoted an MIT study as saying that the 20% goal established in S.1543 "may be technologically unattainable" by 2030, although a much smaller percentage of U.S. energy generation may be feasible. Even if this specific energy goal cannot be met in the allotted time frame, he stressed that DOE believes geothermal energy plays an "important and growing" role in U.S. energy sources. Dr. Mark Myers, Director of the USGS, testified that the U.S. needs to produce more energy to meet its growing needs. He believes that geothermal energy sources in this country are "incompletely developed or inadequately characterized" as a whole. Currently the USGS is conducting an assessment of 250 moderate and high-temperature geothermal energy sources which will be finished in 2008. Additional research authorization given by S.1543 would allow continued research of many types of geothermal energy, including traditional geothermal systems, enhanced geothermal systems, geopressured geothermal resources, and geothermal that is co-produced with oil and/or gas. Senator Jon Tester (D-MT) expressed his concern that the DOE used data from the 1970s to make its predictions about future energy use and production. He said that "very little" was being done by the DOE that shows it is concerned about carbon dioxide release and global warming. Assistant Secretary Karsner responded that while more up-to-date data would be better, the data used was sufficient, and that none of the data available to the DOE suggests the goal stated in S.1543 will be obtainable. Senator Tester replied that research and development cannot move forward when researchers have an attitude that a goal is unattainable. He concluded by saying that while he understood that the DOE was bound to follow the guidance of the Administration, a new assessment of geothermal energy resources was necessary. Ms. Susan Petty of AltaRock Energy, Inc. presented findings from a study on geothermal sources in the U.S. Currently only high-temperature, shallow-depth sites are viable, and harnessing energy is not economic across the whole U.S. But even with today's technological and funding limitations, a large amount of energy could be available. Other countries are ahead of the U.S. in geothermal energy use. Germany's first grid goes online soon, and Australia has 20 companies working on harnessing geothermal energy, while the U.S. has only one. If the industry continues to expand here like it has in other countries, federal lands with geothermal energy sources could be very profitable for the federal government as well as the county and state where the source is located. Dr. Lisa Shevenell, a professor at the Mackay School of Earth Sciences and Engineering at the University of Nevada, testified on geothermal research from the past 24 years. She emphasized the need for longer-term policies, not "uncertain funding cycles" based on changing federal interest in the subject. Major universities need to be involved in geothermal research to help produce future geothermal energy specialists. Currently the funding is not available to keep training students in this field. If funding is decreased, this "growing industry will be reduced accordingly". She believes that now is the time to "aggressively pursue" geothermal energy in this country by increasing research funding. Dr. David R. Wunsch, the State Geologist of New Hampshire, offered the Association of American State Geologists as an excellent resource for information about geothermal resources in the U.S. Currently less than one percent (<1%) of America's energy sources are geothermal, but the potential for direct heating and energy production are immense. The harnessing of these sources could be a major economic boon for the U.S. and enhance energy security. Dr. Wunsch echoed the sentiments of other witnesses when he said that "now is the time to act" on research and development of geothermal energy, and that he fully supports S.1543. Geothermal consultant Dr. Kenneth H. Williamson testified of the practical ways the government could help geothermal energy grow. Because there is so much work to be done, motivation for initiation of projects is key. The government can offer incentives (such as subsidizing energy costs) to the industry. Such incentives have worked in Australia and Germany. Increased funding for research and education is needed to be able to harness geothermal energy in the U.S. And finally, the federal government can help by choosing and allowing use of lands with geothermal sources. The benefits of a clean domestic energy source will be worth the funding and resources given by the federal government. Witnesses unanimously supported increased and stable funding for geothermal energy research and development. Senators were encouraged to act now, allowing the U.S. to expand its use of this clean, secure energy source as so many other countries are doing. Witnesses were divided on the attainability of the primary goal of S.1543, but believed that research in the field should move forward regardless of whether this main objective can be fully met. A summary of the bill can be found here.
-EAL
Witnesses: On June 21, 2007, the Senate Commerce, Science, and Transportation Subcommittee on Science, Technology, and Innovation nominally convened for a hearing on "Energy Efficiency Technology." However, Chairman John Kerry (D-MA) was only one of two senators present, and the sole member to stay for longer than five minutes of the 90-minute hearing. Senator Amy Klobuchar (D-MN) was present to make a quick opening statement, but left soon after to preside over the chamber. In his opening statement, Kerry emphasized the lack of recognition for the role that energy efficiency can play in dealing with climate change. Kerry mentioned the attention received by potentially carbon neutral clean coal technology and renewable fuels such as cellulosic ethanol. Energy efficiency, he said, is "staring us in the face" and is no doubt the most immediate way to tackle the climate change crisis. In his remarks, Kerry referenced recent headquarters construction by the U.S.-based company Texas Instruments. The company, he said, designed its new building to be lower and smaller; it used straight pipes instead of ones that curved so as to conserve pumping energy. These efforts among others, Kerry said, led to a net of $3 million every year in energy cost savings for the company thereby making it profitable for the company to stay in the United States and keep American jobs. The first witness to testify was Ms. Kateri Calahan, President of the Alliance to Save Energy. Calahan began with the startling statistic that households produce about 40% of the United States' carbon footprint, equal to that of Japan and India combined. She continued by applauding Senator Byron Dorgan's (D-SD) effort to encourage carbon neutral buildings in legislation. Calahan also urged the committee to monitor the Department of Energy (DOE), by maintaining its funding and by ensuring it adheres to its regulatory schedule. Calahan cited many efforts in energy efficiency that the nation has succeeded in, but added that there was substantial room for improvement. Referencing a particular study by energy efficiency advocates, she said that there are 15 household appliances that lack any federal efficiency standards. Implementing such standards would save consumers nearly $54 billion between now and 2030, in addition to the hundreds of billions of cubic feet of natural gas saved. Mr. Charles Zimmerman, Vice President of Prototype and New Format Development for Wal-Mart Stores, Inc. next testified on the first-hand benefits of energy conscious construction. Zimmerman outlined all of the major energy saving techniques Wal-Mart uses in its thousands of stores, which as a whole are considered unofficially to be the largest energy purchaser in the world. Zimmerman detailed the designs of new stores that now include motion-activated lights in freezer aisles that only turn on when shoppers approach. In addition, skylights provide natural sunlight to accompany sensitive overhead lights that dim and brighten depending on cloud cover. Ongoing retrofitting efforts are underway for over 1,300 Wal-Mart stores, and although there is an initial cost, the energy savings makes the switch pay for itself in less than two years. In sum, Zimmerman provided a comprehensive set of concrete examples for energy efficiency, and on behalf of Wal-Mart came out in support for the government's efforts on such energy conservation. Representing California's longstanding effort to be more energy efficient was Dr. Martha Krebs, Deputy Director for Research and Development at the California Energy Commission. Krebs described the various actions taken by the state government aimed at reducing energy and water consumption ever since California became the first state to enact efficiency standards for appliances in 1976. Since then, Krebs said, California per capita use of energy has remained constant since the 1970s, while average American usage has increased 50% over that time. Statistics presented also demonstrated 15% annual energy savings in the state consumption. Mr. Douglas K. Johnson, Senior Director of Technology, Policy and International Affairs at the Consumer Electronics Association (CEA), testified next. Johnson's comments mainly focused on particular programs aimed at reducing appliances' energy consumption, specifically the Energy Star program. Johnson detailed the efforts by CEA, a trade association, in educating the public and promoting energy efficiency. He argued, however, that regulation on the state level is an unnecessary risk, citing the voluntary nature of programs like Energy Star as critical to the program's success. The final two witnesses represented two organizations that focused on energy efficient infrastructure. Mr. Jay Birnbaum is Senior Vice President and General Counsel at the Current Group, LLC, which offers power companies an electric utility monitor called Smart Grid. Mr. Tom Hicks is Vice President of the Leadership in Energy and Environmental Design (LEED) division at the US Green Building Council. Birnbaum provided an alternate aspect to energy efficiency by describing what can be done on the supply-side of the energy equation. American businesses lose $100 billion due to power outages. By adding an automated monitoring service like Smart Grid, which detects outages and failures in a system, utility companies can assist consumers and reduce annual carbon emissions by up to 25 percent, according to Birnbaum. In his testimony, Hicks ran through the various successes of LEED and LEED buildings. LEED-certified green buildings, he said, "use an average of 36% less energy than conventional buildings," but come at a cost "less than 1.5% more than conventional construction." Hicks even mentioned the health and productivity benefits which have been found, in some studies, to correlate with green buildings. Though visibly tired, Chairman Kerry pursued a lengthy question and
answer period, addressing each panelist's testimony individually.
His questioning varied from cost to consumer to suggested government
role in the process. One issue for which Kerry evidently held an adamant
opinion was the lack of public awareness of these programs and their
benefits. Harking back to previous testimony, Kerry expressed his
disappointment at the statistic that only 50% of the American public
recognizes the Energy Star logo. When being questioned by Kerry for
suggestions for promotion of energy efficiency, Zimmerman stumbled
into what was likely the most memorable exchange of the day. Admitting
his typical "habit," Zimmerman said he counted over 100
incandescent lights in the room where the hearing was taking place.
He described the congressional offices as being the "most energy
inefficient buildings" and criticized them more so for setting
a bad example for visiting American youth who frequent the buildings.
Kerry agreed and expressed hope that Congress would move forward to
encourage more efficiency not only in their offices, but nation-wide. -SDJ
Witnesses: The House Science and Technology Subcommittee on Energy and Environment met on June 14, 2007 to discuss the status of renewable biofuels, such as corn-based ethanol. The hearing was held to examine federal efforts on technologies related to all parts of the biofuel industry: fuel source (e.g. agriculture and other biomass), refining, distribution, and consumption. Chairman Nick Lampson (D-TX) opened the hearing by encouraging increased attention to renewable energy resources. He acknowledged concerns that the expansion of corn-based ethanol could lead to higher food costs and problems with corn supplies. But, he was quick to point out that no other liquid transportation fuel is as cost-effective as ethanol right now. Lampson supports diversification of alternative renewable fuel sources by increasing funding for research and development. In his opening remarks, Ranking Member Bob Inglis (R-SC) advocated regional decisions regarding the diversification of biofuels. Preferred biomass sources for fuels differed from region-to-region based on the availability of different crops. He emphasized his desire for a regional component to any biofuel legislation that will support the "beginning stages of what will be a very profitable industry." Inglis cited job growth, national security, and environmental protection as benefits from increasing the national consumption of biofuels in the transportation sector. Chairman Lampson also yielded the floor to full committee Ranking Member Ralph Hall (R-TX), who issued a long introduction for the panelists, with particular attention for Michael McAdams, a former aide of his. Dr. Thomas Faust, Biofuels Research Director at the National Renewable Energy Laboratory, was the first to testify. Faust ran through the various sources and methods for manufacturing biofuels, such as corn-based ethanol, cellulosic ethanol, and biodiesel. He suggested that future production from investment in biofuels could be significant. Recent studies suggest that ethanol production will reach about 12 billion gallons per year (bgy) within two years. In addition, Faust cited the so-called "Billion Ton Study" by the United States Department of Agriculture (USDA) and the Department of Energy (DOE) that suggests the possibility of utilizing 1.3 billion tons of biomass to yield the equivalent of as much as 3.5 billion barrels of oil. Faust also expounded on the inheritability and potential integration of current petroleum infrastructure to the manufacturing and distribution of biofuels. Lastly, Faust encouraged greater user-end integration of biofuels by encouraging production of flex-fuel vehicles and enhanced technology to improve the fuel efficiency of those vehicles. Chairman and CEO of Standard Renewable Energy, John, Berger, presented testimony relating to the operation of a renewable resource energy company. Berger delineated the benefits and promise of biodiesel and emphasized the differences in chemistry and manufacturing from other biofuels, such as corn-based ethanol. Berger seemed optimistic about the future of biofuels, but advocated a structured future; he believes it is "imperative" for the biodiesel industry to set goals for progress. He also stressed the need for federally funded research to help the industry reach its goals and efficiency at a faster rate. One such endeavor worth pursuing, he said, is agricultural research. Berger cited the statistic that 60%-80% of the cost of biodiesel production is in feedstocks. Thus, by using modified crops that grow in typically arid regions and requiring less labor, biodiesel production costs could be reduced significantly. Bob Dinneen, President and CEO of the Renewable Fuels Association, a nation-wide association representing the ethanol industry, focused on the research potential for new biofuel technology and production. He stressed the necessity and urgency of funding more biofuel research. He also advocated setting tough regulatory standards on refinery efficiency as well as biofuel blend levels. These regulations would ensure a viable and competitive product and transition to the technology. Executive Director of the Advanced Biofuels Coalition, Michael McAdams, echoed the previous witnesses in expressing the technology's feasibility. He presented various visuals to demonstrate to the committee members the prospects for improvement on the already functional technologies. He addressed skeptics' concerns by showing current efforts in overcoming challenges posed by biofuels: namely volume, volatility, and stability in cold weather. Like Dinneen, McAdams also supported a low carbon fuel standard to regulate refinery emissions. The last witness to testify was David Waskow, International Program
Director for Friends of the Earth, U.S. Waskow ran through the benefits
that renewables like biofuels could provide environmentally and economically
and called for "a robust research and development program "
now to advance the technology and As suggestions for such research,
he mentioned better understanding of production, modification of marginal
land into fuel production, and a full analysis of the potential impacts.
Ranking Member Inglis' questions were directed more on the management of research itself. He wanted to know how well laboratories coordinated and if too many research centers could hinder the effort. Dinneen and Foust agreed that about five research centers nationwide, one for each petroleum district, would be a warranted. Currently there are three centers, so two more would be sufficient. The petroleum districts each have different fuel quality standards, so coordinating biofuel development with these distrcts would allow for a smoother transition from petroleum-based fuels. Several other representatives engaged in the questioning. Rep. Hall only asked a few questions pertaining to the time frame of development of higher quality fuels. McAdams respond that higher quality fuels are already in production abroad. Rep. Lynn Woolsey (D-CA) and Rep. Roscoe Bartlett (R-MD) were the most vocal about their views pertaining to biofuels. Woolsey expressed her concern about the United States' current dependence on petroleum. She viewed changing to renewables as a necessity but held reservations about the rising cost of corn for food products. Panelists agreed that with proper diversification and technological support, food price increases could be avoided. Bartlett displayed open skepticism about the viability of biofuels. In Dinneen's last comment before the panel, he said that auto manufacturers
predict that by 2021 50% of vehicles will be flex-fuel. That, in and
of itself, indicates that the potential for widespread biofuels will
be on the minds of industry, government, and consumers for years to
come. For witness testimon and relevant legislative links, click here. -SDJ
On June 6, 7, and 13, 2007, the House Natural Resources Committee held a full committee mark up of H.R. 2337, the "Energy Policy Reform and Revitalization Act of 2007" introduced by Chairman Nick Rahall (D-WV). According to the summary of the bill, it would "promote energy policy reforms and public accountability, alternative energy and efficiency, and carbon capture and climate change mitigation…" The bill would repeal parts of the Energy Policy Act of 2005. Specifically it would repeal the prohibition of fee increases for energy resources developed on federal lands, repeal a deadline for considering applications, repeal the requirement to designate rights-of-way on federal land, change the requirements for oil shale and tar sands leases and repeal the right to a rebuttable presumption regarding application of categorical exclusion under the National Environmental Policy Act (NEPA). The bill would also disallow royalty-in-kind payments except for the filling of the Strategic Petroleum Reserve and it would require the Minerals Management Service to conduct a minimum of 550 audits of oil and gas leases per year. Besides changing the Energy Policy Act of 2005, the legislation would add some additional requirements for the Department of the Interior, particularly the U.S. Geological Survey and also for the National Oceanic and Atmospheric Administration (NOAA). HR 2337 authorizes the USGS to assess potential sites for carbon capture sequestration, sets up a National Global Warming and Wildlife Science Center within the USGS and sets forth initiatives for dealing with climate change, including an intra-agency adaptability panel. The bill calls for continued research of the effects of climate change on the oceans by establishing a national oceans observation system. The bill also adds a regulatory process for future siting of commercial scale deployment of wind power to protect wildlife, provides provisions for renewable energy technology and sets forth many additional requirements for environmental protection related to energy extraction on public lands. Chairman Rahall reminded the committee that this bill is not set in stone and will be sent to several other committees for amendments. Ranking Member At Large Don Young (R-AK) called this bill the "suicide bill". Young, along with other Republican representatives, felt that this bill undoes the work of the Energy Policy Act of 2005. Young stated that he hopes the President vetoes this bill. Despite strong partisan opposition to the bill, the legislation was ultimately approved to be reported to the House as amended by a vote of 26-22. The full text of the legislation is available from Thomas -DM
Witnesses: The subcommittee of Energy, Natural Resources and Infrastructure of the Senate Finance Committee met on May 24, 2007 to discuss the role that tax incentives might play in bolstering energy efficiency. The subcommittee also discussed new energy efficient technologies for which there are no tax incentives. Chairman Jeff Bingaman (D-NM) noted several existing tax incentives aimed at increasing energy efficiency, but felt that those incentives were "only a fraction of what could be accomplished in terms of energy efficiency." Bingaman cited a report from the McKinsey Global Institute which stated that global implementation of current technologies could reduce world energy consumption by 50% over the next ten years. Callahan supported Bingaman's claim of improved energy efficiency within the U.S. The Alliance to Save Energy Coalition estimates that without the efficiency gains already made, the U.S. would be using 43% more energy. Much of these savings are due to federal energy policies and other programs like motor vehicle standards and the Energy Star program. Callahan's testimony encouraged tax incentives that support research and development, create markets for the most advanced technology, support public education programs that encourage people to buy efficient appliances, and create an efficiency code. Casten told the subcommittee about the benefits of combined heat and power (CHP) systems and recycled energy. He also laid out tax incentive options that reward CHP technology and energy efficiency. CHP technology takes normally wasted exhaust heat and uses it to produce electricity. Unlike normal power plants which only have an efficiency rate of 33%, CHP technology has a 60-90% efficiency rate. This technology goes beyond saving fuel, it can also lower CO2 emission rates and decrease the likelihood of power outages. Despite these benefits, CHP technology is hindered by outdated regulatory polices, for example "in 15 states, it is illegal for any company other than the electric utility to sell a kilowatt hour, effectively preventing the deployment of an energy outsourcing industry" said Casten. Deployment of this technology was also set back when the CHP investment tax credit was cut from the Energy Policy Act of 2005 EPACT (Energy Policy Act) because of an imprecise cost calculation by the Treasury. Casten hoped that the Senate would endorse the H.R. 2001 provision which provides tax incentives for CHP technology. Thorn on behalf of The National Electrical Manufacturers Association (NEMA), described a wide array of energy efficient technologies and tax incentives and additional incentives options that need to be added. Some examples include, extending the Commercial Building Tax Deduction. This incentive has led to greater efficiencies in lighting and other retrofits of existing buildings. Currently this provision expires at the end of 2008 but NEMA feels it should be extended to 2014. NEMA would also like a tax incentive placed on energy efficient electric motors. Estimates of savings from these new motors are around 8 billion megawatt hours by 2030 which would translate into $500 million in savings to consumers. Currently there is a provision for expanding the use of efficient motors under the Energy Savings Act of 2007. This tax provision would be limited to three years after the legislation was enacted. If these incentives are adopted it will greatly enhance the productivity and efficiency of the U.S. in years to come. DeLurey's testimony was based on the findings of the Demand Response and Advanced Metering Coalition (DRAM), which focuses heavily on developing an efficient electrical grid system and the use of smart pricing. He pointed out some of the absurdities of current energy pricing by stating "a majority of customers do not pay more [for power] in the summer than in the middle of the night in the spring and fall". DeLurey is also a proponent of smart meters. Smart meters allow customers to see when and how their electricity is being used. Consumers can then alter their energy use to reduce their electricity bills and conserve energy.. The smart grid system as stated by DeLurey "is that of an intelligent dynamic 'organism' that allows electricity to be planned and operated in a way that optimizes all of its components to lower costs, increase reliability and utilize new informational and communication technologies." Using the last blackout in the northeast as an example, using smart grid technology power was restored in some areas a full day earlier than expected. However, there is no tax policy currently in place that would help expand deployment of this technology. Congress supported the expansion of smart grid technology as stated in the EPACT 2005 section 1252 (f). DeLurey said that if Congress wishes to accomplish this policy goal it should give serious consideration to tax incentives that reduce depreciative rates and start a national smart grid fund. Dr. Smith's testimony shed light on thermal insulation manufactured by NanoPore Incorporated. Thermal Insulation can be used to retrofit existing technology while costing less and producing similar energy savings in a much shorter time frame. Using refrigerated cooling trailers on reefer trailers as an example, Smith stated that the cooling units on 200,000 of these trailers alone burns 2,000 gallons of diesel fuel a year. If just a ¼ inch of thermal insulation was applied to these trailers the amount of fuel required to run the cooling units would be cut in half. Despite these savings, there is no benefit to the operator to install that saves on emissions and no help on the financial burden of purchasing the insulation. NanoPore believes that the best way to encourage the use of this technology is to provide a tax incentive for retrofitting existing technology. Despite the positive push for tax incentives on energy saving technology Edwards was strongly opposed to the idea. Raising the tax complexity creates many loop holes that cause problems. Instead of having Congress try to micromanage the economy there are other tax provisions that can be eliminated that encourage energy efficiency. In his testimony he stated that the number of energy tax expenditures has jumped from 11 to 23. This increase of tax provisions hinders economic efficiency by distorting market prices which in turn causes labor and money to be put to less productive uses. Edwards concluded that these tax incentives give special treatment to certain people instead of making consumers and businesses as equal as possible. There is a plethora of available energy saving technologies that
are within reach of being deployed today. Despite Edwards's disapproval,
the subcommittee and the other witnesses seemed optimistic about tax
incentives as a positive step towards increasing energy efficiency. The witness testimony can be viewed here. -DM
Witnesses: The Senate Energy and Natural Resources met on May 23, 2007 to discuss the potential of coal gasification as a future energy source and its impact on the environment. Chairman Jeff Bingaman (D-NM) laid out the situation in no uncertain terms "We are entering a challenging time for energy in the U.S. While our fuel prices are going up and we are becoming increasingly reliant on unstable or unsavory regimes for that fuel…I don't think anyone here would seriously dispute that coal is an important part of our fuel mix for the foreseeable future." However, while this fuel source may be an attractive alternative, particularly for the transportation sector, Bingaman cautioned that the nation must consider coal gasification's impact on greenhouse gas emissions before investing billions of dollars in development. Ranking Member Pete Domenici (R-NM) added "Coal is a resource we have in abundance, and if we develop it wisely and lead the march to new clean technology, it will give us the economic potential to compete with the world's emerging economies." According to Dr. Herzog the U.S. has two major obstacles to overcome to address its energy needs: reduce its dependence on foreign oil for security purposes while at the same time use technologies that reduce CO2 emissions to combat global warming. While she noted the benefits of coal gasification Herzog does not support the use of coal gasification without carbon capture sequestration (CCS). More research is needed to find more effective ways to make coal gasification cleaner. She also pointed out the other harmful environment effects associated with coal, such as mountain top removal, mine accidents, acid-mine drainage, and toxic sulfur dioxide and nitrous oxide emissions. Fulkerson's testimony resonated Herzog's in terms of carbon capture technology "Of course, liquid fuels from coal can be produced using oxygen blown gasification and Fisher-Tropsch, but this will result in about twice the amount of CO2 vented compared to petroleum…if excess CO2 is sequestered instead of vented the coal synfuels process can be equivalent to petroleum in net CO2 emissions." This process is economically feasible as long as gas prices remain above $50 a barrel. However, Fulkerson felt that there is more promise in developing biofuels. He claimed that by 2050 all fuels could come from biomass but this could only be accomplished with a large fleet of light weight vehicles that have an average fuel efficiency of 60 miles per gallon. Bartis described how the Fisher-Tropsch method of coal gasification works. Coal is gasified to form three gases, hydrogen, carbon dioxide and carbon monoxide. Carbon dioxide is removed from the mixture along with trace elements of other contaminants. The hydrogen and carbon monoxide is then sent to a reactor and catalytically converted into a liquid form, which is refined and then ready to be used as jet fuel, diesel fuel or regular motor fuel. Bartis explained the national security need for increased production of coal-liquid technology. He stated that OPEC earns over $500 billion a year from exported oil. This raises security concerns because OPEC members are a part of regimes that do not support the U.S. If new fuel sources were developed today it would displace millions of barrels of oil being imported from OPEC thus lowering their revenues and increasing national security. A 2005 analysis done by RAND showed that an increase of 3 million barrels of liquid fuel produced could result in a world oil price drop of 3-5% and further research suggests that an increase of 6 million barrels a day would cause the price of oil to drop between 6-10%. Less revenue for OPEC could mean less money spent on munitions by unsavory regimes. On the domestic side, RAND found that the average American consumer could save hundreds to thousands of dollars on fuel expenses. Bartis stated that increased greenhouse gas emissions would result from using coal-liquid technology. In his testimony he urged the development of a limited number of plants particularly in the western U.S. where water sources are more limited and carbon emissions are more pronounced. Bartis also noted concerns about limited capital investments to support greater development of such plants and the next witness, David Denton, a business manager for a gasification company provided more details about the economics of coal gasification. Denton's company, Eastman Gasification Services Company, even with 20 years of experience is unable to persuade financiers to bring down the risk premium cost. The cost is 20% higher than the cost of plants built after the initial first dozen are constructed. Large scale demonstrations of CCS are also needed to find effective ways to eliminate the additional carbon dioxide emissions produced by coal gasification processes. Dr. Brown offered a solution to future transportation fuel needs that would use a combination of biomass and coal-liquid technology to produce synfuels. This combination would take advantage of a renewable energy source while cutting carbon emissions to almost zero. A plant in the Netherlands is producing synfuels through this combination right now. Brown cautioned about problems with such synfuels. The most significant problem being that the energy density of biomass is on average only about 10% of that of coal. Domenici's asked Bartis what Congress should do to help develop coal-liquid technology commercially. Bartis replied that first investors should be educated about the actual costs, which are less than people think and then the federal government should provide a 50/50 cost share plus tax credits and protection if oil prices fall below $50 a barrel. He stressed that improving and advancing CCS technology was key to making coal-liquid technology economically and environmentally feasible. Denton addressed Senator Jon Tester's (D-MT) question about the key concerns with CCS. The current concerns with CCS are who has the rights and thus the liability for carbon storage reservoirs and what the possible impacts are from long term carbon storage. Committee members were also curious about the local environmental impacts these plants would have. Senator Bob Corker (R-TN) noted that coal-liquid plants are heavily reliant on water and was curious as to how much water such plants would need compared to biofuel facilities. Bartis was unable to answer that question but he did comment that installing cooling towers would reduce the need for water but add to the cost of running the plant. Senator Lisa Murkowski (R-AK) asked Denton if some of the operating plants could be retrofitted with carbon capture technology. Denton said that yes it is possible and noted that carbon that is not sequestered may also be used for enhanced oil recovery. Bartis suggested offering tax credits to get companies to retrofit their plants. He added that a tax needs to be put on carbon, in order to get consumers to switch from petroleum to synfuels. Herzog was the only witness who was not optimistic about coal gasification. While using Integrated Gasification Combined Cycle plants (IGCC) could be used to produce liquid fuel without excess CO2 emissions it still does not address the need to cut total emissions that will eventually cause damaging climate effects. She favored cleaner, more diverse and renewable sources for fuel. She said "Further complementary and targeted energy efficiency and renewable energy policies are critical to achieving CO2 limits at the lowest possible cost but they are no substitute for explicit caps on emissions." While coal-gasification may be a solution to energy independence it does not address the larger looming problem of global climate change. Link to witness testimony can be viewed here. -DM
Witnesses: On May 23, 2007 the Joint Economic Committee met to explore the topic of how recent oil company mergers have affected the consumer. Senator Charles Schumer (D-NY) opened the hearing with "we have an elite group of five very large, integrated oil companies dominating our domestic petroleum market, and there has been very little analysis on the impact of those mergers…should we begin serious exploration of whether or not to undo some of those mergers?" This question stems from the fact that the national average for the price of gas reached $3.22 last week. The Department of Energy (DOE) predicted that the price of oil would hover around $66 a barrel, $4 less than last summer; however, gas prices are up 34 cents. Schumer expressed concern that the profits being made are not going towards renewable energy resources or reducing the price of gas. Schumer listed several reasons for this. Within the past 30 years there has not been one new refinery built and last year the oil industry spent $52.4 billion on stock buybacks while spending just $1.2 billion on renewable energy resources. "By 2005, the largest five [oil companies] controlled 55% of the market and the largest 10 refiners dominate the market with over 80% market shares." Schumer said. He closed his statement saying "When markets have been distorted from lack of competition in the past, the federal government has taken action." Ranking Member Jim Saxon (R-NJ) took a different look at the problem and felt the issues surrounding high gas prices had more to do with the Organization of Petroleum Exporting Countries (OPEC) than American oil companies. He stated that OPEC controls about 70-80% (about 730 billion barrels of oil) of the world oil reserves and they are artificially making oil scarce to increase profits. Since production within the Persian Gulf is less than $5 a barrel it would seem logical that gas prices should be lower, instead OPEC is exploiting the augmented Asian demand and increasing the price of oil. Representative Carolyn Maloney (D-NY), however, felt that the high cost of gasoline was associated with Bush Administration policies. She noted that since Bush took office the price of oil has gone up over $30 a barrel and tax breaks have been given to "big oil". Maloney believes that restricted capacity and lack of competition is hurting consumers. The first panel of witnesses, Dr. Salinger and Mr. McCool, did not believe there was a lack of competition among big oil corporations. In Mr. McCool's testimony he stated there were other factors that affected the price of gas other than just the price of crude oil. He cited four other factors that the Government Accountability Office (GAO) found to affect gas prices. As cited in the Energy Markets Report: Mergers and other Factors that Influence Gasoline Prices, they are "increasing demand for gasoline, refinery capacity not keeping up with demand, a declining trend in gasoline inventories and regulatory factors, like the national air quality standards, that have induced some states to switch to special gasoline blends. In 2006 the U.S. consumed an average of 387 million gallons of gasoline per day. This consumption is 59% more than the 1970 average per day consumption of 243 million gallons." However, he did comment that the 1990's oil mergers did cause a slight rise in wholesale gasoline prices on average between 1-7 cents per gallon but he could not comment on mergers made after 2000 because the effects on gasoline are still being studied. Dr. Salinger agreed with McCool's assessment, that consolidation has not been a major factor in gas prices. He added that domestic reliance on crude oil has increased while the level of importation of cheaper foreign oil being imported has decreased thus causing a rise in gas prices. He stated that the Federal Trade Commission (FTC) has found the level of industry concentration to be moderate and that for the past two decades merger policy has been consistent. "Since 1981 the FTC has challenged 21 petroleum mergers and received significant divestiture or other reliefs in 17 of those cases, the other four mergers were abandoned after the commission challenged them." Despite their testimony, Schumer challenged the panel in his first round of questioning as to why gas prices are up compared to last year when the price of crude oil was higher compared to the price of crude oil now. Both witnesses answered it is due to tighter refining capacity and refining breakdowns. Salinger added that the price of gas on one day or during one week is not a good indicator of economic trends and cannot be used to determine what factors may cause longer term (one year or longer) changes in gas pricing. Maloney asked the same question however, this time Salinger answered the question in a different way. "Gas prices are high compared to what they used to be. You don't realize how fortunate we were to have them that low for so long." Salinger also pointed to evidence that oil prices would be higher than they are now without the mergers. The mergers have made companies more efficient, allowing them to keep prices from rising more rapidly. Salinger also pointed out that there was no evidence that companies are operating at lower refining capacities because of the mergers. Representative Maurice Hinchey (D-NY) countered that it would make sense for oil companies to want their refineries to operate at reduced capacity because this would drive up gasoline prices and increase their profits. Salinger disagreed because gasoline is the highest money maker for oil companies and it would not make sense to inhibit their own ability to sell gasoline. He assured the committee that the FTC is more aggressive with this industry than others and that oil companies are not conspiring together to fix prices. "From 2000-2005 the oil industry reported $383 billion in profit while only investing $1.2 billion in renewable energy sources. Again how can we argue that this is better for consumers and do you find those numbers confounding?" asked Schumer. Salinger replied that the profits were not surprising given the scale of the petroleum industry. McCool added that companies will only invest a certain amount of money in renewable energy sources based on the potential profit of renewables and their overall economic plan for future growth. However Schumer felt it was wrong that during an energy crunch oil industries use their money to buy back their own stock rather than invest it into increasing refining capacity or into renewable energy. Senator Robert Casey Jr. (D-PA) ended the round of questioning with a message urging the FTC to take further initiative to further investigate oil mergers He said "This reality is stark and profound…it doesn't help anyone to say that there is nothing we can do." However, in the second panel, Slater shed light upon strategies of the oil companies, other than mergers, that were affecting gas prices. Slater claimed that oil companies are purposely blocking E-85 (gasoline that is 85% corn-based ethanol) from their pumps by invoking penalties which are in violation of the 1980 Gasohol Competition Act. According to Slater under this act it is "unlawful to impose any condition or restriction…that unreasonably discriminates against or unreasonably limits the sale, resale, or transfer of gasohol or synthetic motor fuel of equivalent usability." This act was adopted by Congress in order to prevent oil companies from creating barriers that would prohibit the sale of gasohol and other synthetic fuels. DeCota verified these remarks in response to a question citing his own service station as being a victim of this. "I have a supply agreement. I can't buy E-85 or I get penalized." Slater suggested to the committee that a regulatory agency be formed in order to enforce the gasohol act. DeCota went back to the issue of mergers causing rising gas prices. In his testimony he stated that "Dealers must compete with proprietary company operated stations at margins that simply won't sustain their economic viability…dealers are forced out of their stations they are replaced by company operations…who simply raise the price to that community once the competition is gone." Cavaney assured the committee that oil company mergers are not the cause of high gasoline prices and instead the government needs to focus on the factors that are shaping those prices which would include demand out pacing supply. Full text of the GAO Report can be viewed here -DM
Witnesses: Panel 2: Only two years after the passing of the Energy Policy Act of 2005, Congress is again seeking to create and amend guidelines for energy development and usage. On May 23, 2007, the House Natural Resources Committee held a legislative hearing on H.R. 2337, the Energy Policy Reform and Revitalization Act of 2007. Bill sponsor and Committee Chair Nick Rahall II (D-WV) stated that the bill will "advance alternative energy strategies" while exploring ways of dealing with climate change, such as carbon sequestration. He mentioned that the bill will help to curb handouts to oil and gas companies that "in many instances are not paying what is owed to the American people." While he stated that he was not against oil production on public lands, he lamented that "in the rush to drill, American values are being placed on the chopping block," noting the loss of pristine lands and the negative impacts on farmers, ranchers, and hunters. Rahall stated his belief that H.R. 2337 does not overturn the 2005 Energy Reform and Revitalization Act, but rather fixes holes in it while holding major oil and gas companies accountable. Representative Steve Pearce (R-NM) expressed his extreme discontent with the bill, saying, "the only thing I see being revitalized by this bill is the economy of Iran and Venezuela." He believes the bill would hurt American manufacturing jobs, and reflect the wishes of "extremists and environmentalists that care more about birds and bats than the price Americans pay for energy." Pearce also commented that less than three percent of the outer continental shelf is currently being leased for oil and natural gas production, but H.R. 2337 would limit further exploration and cause constituents to "sweat it out in the dark" because the costs of electricity will continue to rise. "We have a bill before us that guts biomass development," he continued, adding that it also "limits wind development" and would put the country "at the mercy of OPEC." The Republican committee members who attended the hearing opposed H.R. 2337. Ranking Member Don Young (R-AK) said the bill would "make energy more expensive and less available," adding that "the only thing this bill will do is create more hot air, which might drive the wind mills." He complained that "the environmentalist community does not want to supply energy to this nation," and energy production in the Arctic National Wildlife Refuge is not developed because "we have to worry about the Cuckoo bird." He criticized the 110th Congress, saying they have done "nothing but spend money overseas." Several times throughout the hearing he referred to the legislation as a "bastard bill," and he concluded simply with "this is a bad bill." Rahall apparently was not happy with Young's comments on the bill, stating "I cannot wait to hear some sane opposition to this bill." He questioned the accountability of appointees of the current administration, noting the use of "retirement as some sort of perverse witness protection program." He cited the upcoming retirement of Johnnie Burton of the Minerals Management Service, as well as another official at the MMS who retired shortly after being asked to testify at a hearing. He also mentioned the scandal surrounding Julie MacDonald, who resigned from the Department of the Interior after allegedly coercing scientists to manipulate data. They are "building a wall of shame at the DOI," he stated. Bobby Jindal (R-LA) stated that high natural gas prices are hurting the chemical industry, and limits on oil and gas production would hurt the over 80,000 people employed in the industry in Louisiana. Henry Brown Jr. (R-SC) also said that the bill would limit development of America's natural resources while increasing the cost of oil and gas. William Sali (R-ID) described how many of his constituents in Idaho must drive great distances in rural parts of the state, and high gas prices have hurt them. He expressed his belief that H.R. 2337 would not help to lower gas prices, and would also hurt the development of wind power. Many of the Democrats supported the bill. Representative Donna Christensen
(D-VI) expressed her approval of the bill, noting that it provides
for ocean technology development that could be very useful in insular
areas of the U.S. This bill "will begin the process of ending
our dependence on foreign oil," she stated. Peter DeFazio (D-OR)
also noted his support for the bill, emphasizing that it provides
"adequate protections for wildlife" while helping to prevent
large companies such as Exxon-Mobil from gouging consumers while handing
out multi-million dollar bonuses to their executives. Edward Markey
(D-MA) also criticized big oil, saying "the Christians had a
better chance against the lions than consumers have against the oil
companies." Jay Inslee (D-WA) mentioned that he is a member of
the Audubon Society, and approves of the bill's attempt to find a
balance between development of wind energy and protection of bird
life. Jim Costa (D-CA) noted that Japan and Germany are the current
leaders in solar energy, which is "unfortunate, because at one
time [the U.S.] was the world's leader." He expressed the need
to be good stewards of the land while still using the planet's energy
resources. All of the witnesses voiced opposition to specific sections of the bill. Walter Cruickshank, Deputy Director of the MMS, noted "serious concerns" about portions of the bill that would set restraints on the MMS's Royalty in Kind and Royalty in Value programs. Henri Bisson, Deputy Director of the BLM, also noted technical issues with the bill, especially as relating to granting permits for geothermal and wind energy production on federal lands. Melissa M. Simpson, Deputy Undersecretary of Natural Resources and Environment for the U.S. Forest Service indicated that parts of the bill would repeal portions of the Energy Policy Act of 2005, creating negative effects. She noted that significant amounts of time and money have been spent to comply with the 2005 act, and the new bill would negate this spending. She also noted that a narrow definition of biomass in the bill could hurt the Forest Service's ability to use biomass for energy production. Vickie Van Zandt, representing the DOE, noted that the DOE does not "believe this legislation is necessary." The final witness of the first panel, Timothy R. E. Keeney of NOAA was the least negative about the legislation, praising the bill's call for an integrated ocean observing system. However, he still cited technical problems with specific language in the bill. When Pearce asked about "provisions in the bill that limit dependence on foreign oil," he was met with silence from the panel. Maurice Hinchey (D-NY) asked the witnesses about what was being done to develop solar energy and he received vague answers that suggested nothing was being done. The second panel included John Engler, President and CEO of the National Association of Manufacturers, and Jim Martin, President of the 60 Plus Association. Engler stated that you "cannot separate energy, great jobs, and the economy," and stated his disapproval of the new bill. At one point he held up a piece of oil shale from the Barnett Shale formation in Texas. He cited the removal of oil from the shale as an achievement of improved technologies, noting that while the rock contains only "four percent gas," more than 1.6 billion cubic feet of gas are extracted from the formation each day. He stated that H.R. 2337 would hurt the ability to develop similar resources, including the oil shale reserve that is "ten times greater" than the entire amount of oil the world has used over the past 200 years. Martin voiced concern for the need for cheap energy, stating that "when energy supplies are tight, seniors are hurt the most" because they have fixed incomes. While partisanism ran high during the hearing, there was some reaching across the table for compromise. Boren, who was one of the few Democrats present to voice concerns about the bill, also called for continued bipartisan discussion and a push for finding the "common interest" of all committee members. Grace Napolitano (D-CA) assured the Republicans that their concerns would be taken into account, saying "if we can make changes in the legislation to address some of your legitimate concerns, we will."
Full text of the witness testimony is available here. -PS
Witnesses: "The solution to our energy problems will come from a variety of sources, and they need to be clean, renewable and affordable." stated Ranking Member Bob Inglis (R-SC). On May 17, 2007 the House of Science and Technology subcommittee of Energy and Environment met to hear about two new renewable energy bills, H.R. 2304 introduced by Congressman Gerald McNerney (D-CA) and H.R. 2313 introduced by Congresswoman Darlene Hooley (D-OR). "H.R. 2304…directs the Secretary of Energy to support research, development, demonstration and commercial application of advanced technologies to locate and characterize geothermal resources and produce geothermal energy." as stated by the hearing charter. H.R. 2313 directs the Secretary of Energy to do the same thing except to "produce electric power from renewable marine resources, including: waves, tidal flows, ocean currents, and thermal gradients." In McNerney's opening statements he said "If geothermal is going to be used here we need to be consistent." Dr. Tester laid out carefully what geothermal power is: "Geothermal resources are usually described in terms of stored thermal energy content of the rock and contained fluids underlying land masses that are accessible by drilling." In Dr. Tester's testimony he favored investing now in geothermal power because there are no CO2 emissions, no cooling water needs and a limited environmental footprint. "Geothermal power would have a positive influence on security, the economy and the environment." Using Iceland as an example he said "Iceland's extensive geothermal network developed by Reykjavik Energy and other companies now provides 100% of Iceland's heating needs and 25% of their electric power." Congressman Nicholas Lampson (D-TX) asked Tester if he thought geothermal was a mature technology. Tester replied "Geothermal is a resource that has a variety of grades and it can be improved, however, it cannot be regarded as a mature technology." Thomsen added that geothermal power is captured by a suite of technologies that are not fully mature. In a follow up question Lampson asked Tester to describe the resources and potential. Tester answered that geothermal potential exists largely on the Gulf Coast and areas west of the Mississippi. He also added that areas in the west are ready to be developed now. Thomsen added that "The U.S. is the world's largest producer of geothermal electricity. The 2,800 MW existing power capacity generates an average of 16 billion kilowatt hours of energy per year." The U.S. Geological Survey has identified an additional 100,000 MW of baseload power that is ready to be developed. He went on further to state that an investment of $6 billion will create 10,000 permanent new jobs and stimulate over 40,000 in construction and manufacturing. In regard to wave energy application, Dr. von Jouanne said that it is still in its preliminary stages and that Oregon State University is leading the way in wave energy research. Right now there are 12 preliminary applications for wave energy sites along the Pacific Coast. The potential for this energy source seems to be vast according to von Jouanne. "If we could just tap into just 0.2% of the ocean's power we could power the entire world." Wave energy is a broad term that encompasses many different applications of wave energy being converted to electricity. As outlined in Sean O'Neil's testimony they include wave energy converters, tidal/current, ocean thermal energy conversion (OTEC), offshore wind, and marine biomass. The kind more often referred to in the hearing was tidal current systems. As stated in O'Neil's testimony "these systems capture wave energy of ocean currents below the wave surface and convert them into electricity. Typically these systems rely on underwater turbines, either horizontal or vertical, which rotate in either the ocean current or changing tide (either one way or bi-directionally)." In the first round of questions Lampson asked Jouanne how the Army Corp of Engineers is involved. She answered that they are key in the regulatory process and in regard to participation they do the most sand transport needed for building the facilities. Ultimately O'Neil concluded in his testimony that offshore energy can reduce our need on foreign oil and create new jobs in coastal communities. However, development of this resource is lagging far behind. Congresswoman Hooley asked Jouanne in relation other renewable energy sources how does wave energy compare Dr. von Jouanne answered that the technology is about 20 years behind and a great deal of research and development needs to take place for this to be cost competitive. Wave energy can be cost competitive in the future, because water is 832 times denser than air, so more energy can be extracted from a smaller area. Hooley asked when wave energy would be available for commercial use in this country. O'Neil responded that wave energy technology could be economically viable in Alaska now because Alaskans pay 80 cents a kilowatt hour, while ocean wind power costs less than 40 cents per kilowatt hour. However, in other areas he stated that it could take 5-8 years for commercial development to become profitable. Finally in Greene's testimony he offered the committee recommendations
for how federal funding should be outlined in the two bills. For the
wave energy technology bill, Greene suggested the legislators "Focus
federal R&D dollars on studies of a few regions with high resource
potential…ensure that studies address the cumulative impact of
multiple projects and of multiple installations within one project."
Greene had a similar recommendation for geothermal power as well.
Finally, Greene called for a consensus among regulators, the public
and industry on ways to avoid and limit the cost and scale of geothermal
technology so that it can be deployed quickly. -DM Witnesses: The House Science and Technology Subcommittee on Energy and Environment met on May 15, 2007 for a hearing on advanced coal technologies. The purpose of the hearing was to educate the committee on carbon capture technology and the future of coal fired plants. "Approximately 50% of the electricity generated in the U.S. is from coal…and the electric power generates over 40% of the nations CO2 emissions." said Chairman Nick Lampson (D-TX). "Promising technologies are being developed to improve the efficient production of electricity from coal-fired plants which could help reduce CO2 emissions. I look forward to learning more about deployment of technologies that can capture CO2 from new and existing power plants and keep it out of the atmosphere." Ranking Member Bob Inglis (R-SC), shared these sentiments adding "…today, we must work to make sure that our coal consumptions is as emission-free and energy efficient as possible, bringing benefits to both industry and the environment." Gardiner Hill from BP described how carbon capture sequestration works. Hill said "The best rocks for CO2 storage are depleted oil and gas fields and deep saline formations. There are layers of porous rock, such as sandstone, more than half a mile underground, located underneath a layer of impermeable rock, or cap-rock, which acts as a seal." Congressman Inglis asked the panel how readily available are such locations for carbon dioxide storage. Finley admitted that the Atlantic states do not share as much porous rock formations that are more feasible for carbon storage as do the western states, however, infrastructure, such as pipelines, could be built to move the CO2. Dr. Bauer added "97% of coal plants have locations 50-100 miles that are suitable for Carbon Capture Sequestration (CCS)." Congressman Inglis went on to ask how much carbon can be stored in the U.S. Bob Finley from the Illinois State Survey cited the Carbon Sequestration Atlas of the United States and Canada published by the Department of Energy which estimates about 3,500 billion tons of storage capacity in the region. Bauer added that there is hundreds of year's worth of storage in the U.S. Congressman Lampson's asked about the probability of CO2 release and the overall safety of carbon sequestration. Finley explained that the same methods used for enhanced oil recovery when drilling for oil and gas are used when injecting CO2 into the ground for storage. He went on further to say that "Since 1983, more than 600 million tons of pressurized CO2 have been injected...The safety record of this process has been excellent with not a single incident of loss of life." However, he did admit that there is some probability of leakage and it is difficult to quantify how much might leak from any given reservoir. Hill pointed out that there are real examples of CO2 stored in public places and there is no danger. In his testimony, Hill emphasized the importance of starting large scale demonstrations (about 1 million metric tons) now so they can be studied, for potential leaks and how to best develop long-term monitoring. Through CCS he said that there could be a reduction in emission. He further pressed on the safety of injecting carbon in the ground stating that "secure storage increases with time; the reservoir acts as a sponge and CO2 cannot escape through the pore throats and some gets dissolved in water." Representative Jerry Costello (D-IL) asked Hill where large scale demonstrations were taking place. Hill responded in the Sax formation in the North Sea there is a 1 million metric ton demonstration taking place. The hearing gradually shifted from CCS to current coal reserves and the cost of this large endeavor. Congressman Costello gave an estimate that there is 250 years worth of coal reserves and he asked the panel what they thought of that estimate. Dr. Finley quoted from the DOE-Energy Information Administration that the U.S. presently uses about 1 billion tons of coal a year and reserve estimates put about 247 billions of coal left in the U.S. so those estimates given are correct. Representative Gabrielle Giffords (D-AZ) asked about the obstacles that must be overcome for CCS to work. Bauer answered that educating the public on CCS and changing over to new energy sources. Bauer concluded, "it will be hard to change over while still keeping up with the economy." Dalton said that the main problem of carbon capture is the energy required to get it in the ground. Dalton noted that "right now it takes about 30% of the power generated to inject carbon in the ground; we're trying to get that number down to 10-15%." This would mean an increase in cost to consumers when compared to other coal-fired plants that do not use CCS technology. However, advancements in coal burning technology will help reduce the energy need for carbon injection. The committee also questioned new coal technology. Rencheck outlined two new types of coal-fired plants: Ultrasupercritical plants and integrated gasification combined cycle (IGCC) plants. Some of AEP's new projects include using some of the captured CO2, about 1.5 million metric tons, for enhanced oil recovery as outlined by their commercial performance verification project. In the second round of questioning Inglis inquired as to how pre-combustion capture works. Hill answered the question in laymen's terms that basically the coal is only partially burned but not completely, the result is a release of pressurized hydrogen and carbon, the hydrogen is used for power and the pressurized carbon is injected into the ground without the additional need of energy to pressurize it. Overall the committee seemed open and excited to the possibilities
of the new efficient coal burning technology and CCS technology. Rencheck
did caution the committee about its support of near-zero-emissions
coal-based energy. Rencheck said "Commercially engineered and
available technology to capture and store CO2 does not economically
exist today and we strongly recommend that any legislation you adopt
reflect this fact." -DM
Witnesses: The Senate Appropriations Subcommittee on Energy and Water Development met on May 8, 2007 to discuss reducing U.S. dependence on foreign oil. Rising prices at the gas pumps as well as security and economic concerns continue to provide impetus for finding ways to achieve independence from foreign oil. Chairman Byron Dorgan (D-ND) noted that the United States uses about
25% of the 84 million barrels of crude oil extracted from the earth
each day, and 70% of this oil is used for transportation related purposes.
"We need to find ways to both conserve [oil]… and produce
more domestically," he remarked, adding that increasing auto
efficiency and expanding biofuel production would both help to lessen
dependence. Dorgan also commented that any increased oil production
in the U.S. should simply be "a bridge to get to the next technology,"
such as hydrogen fuel cells. "Ultimately I want to disconnect
from our need for and our demand for oil," he added. Ranking member Pete Domenici (R-NM) focused on maximizing U.S. energy
output. In reference to off-shore drilling, he stated "it is
our natural gas and our oil, and we must use it." Senator Larry
Craig (R-ID) echoed Senator Domenici's thoughts on expanding off-shore
drilling, suggesting that the entire eastern and western seaboards
be opened to petroleum exploration and production, as "it is
a matter of needing it all." He brought along a poster of the
U.S. showing large swaths of ocean which are currently not open to
drilling, and the relatively small area of the Gulf of Mexico in which
all U.S. off-shore production takes place. Craig also raised concerns
about not losing raw vehicle power while increasing fuel efficiency,
citing his recent meetings with the Idaho State Snowmobile Association,
whose members often tow heavy loads through mountainous regions. Fred Smith remarked on how unusual it was for him to encourage government
intervention. As the president and CEO of FedEx, he typically is pro-business
and anti-regulation. However, he stated that government regulation
is needed in order to promote the use of more fuel efficient vehicles.
FedEx has a fleet of 77,000 trucks and 677 aircraft, most of which
run on diesel engines. If federal regulations do not require competitors
to switch to more expensive hybrid vehicles, it is not financially
viable for FedEx to self-impose fuel efficiency standards. Smith suggested
tax credit expansions as a way to encourage all shipping companies
to switch to more efficient fleets, and also stated that any efficiency
regulations should also apply to light trucks, not just cars. Secretary
Karsner seconded this idea, stating that if regulations were not mandatory,
the Senate would be "asking leaders of industry to voluntarily
erode their profit margins," but added that government funding
will not be enough on its own. Smith also expounded on the nature of international oil producing
regions, saying that the U.S.'s supply of oil "is determined
by a cartel" of oil producing countries. Similarly, Senator Craig
commented on the power some of these nations hold over the U.S., saying
that "[oil producing countries] in the name of petro-nationalism
have learned how to jerk the tail of the giant." Admiral Gregory
Johnson agreed that oil dependence "is one of the most serious
economic and national security challenges facing this nation,"
adding that a "handful of maritime chokepoints" present
a major security risk. Smith, Craig, and Johnson all endorsed the
use of multiple strategies, including increasing domestic oil production
and tightened fuel efficiency standards in order to reduce the economic
threats posed by dependence on foreign oil. Johnnie Burton expressed optimism for increased domestic oil production, commenting that the Mineral Management Services' new 5-year Outer Continental Shelf Oil and Gas Leasing Program would result in "a mean estimate of an additional 10 billion barrels of oil, 45 trillion cubic feet of gas over a 40-year time span, and $170 billion, in today's dollars, in net benefits for the nation." However, Burton also acknowledged that the lack of infrastructure on the Atlantic and Pacific seaboard would significantly delay oil production if these areas were opened to exploration. When questioned about whether oil might be present around the Florida coast, where off-shore drilling is currently |
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