AGI Home | About AGIContact UsSearch 
 

Printable Version

Summary of Hearings on Energy (through Dec 2009)

  • December 3, 2009: House Science and Technology Committee Energy and Environment Subcommittee Hearing on “Marine and Hydrokinetic Energy Technology: Finding the Path to Commercialization”
  • November 19, 2009: Senate Energy and Natural Resources Committee Hearing “To receive testimony on environmental stewardship policies related to offshore energy production”
  • October 29, 2009: The Senate Environment and Public Works Committee Hearing on “S. 1733, Clean Energy Jobs and American Power Act”
  • October 21, 2009: Senate Committee on Energy and Natural Resources Hearing on “The Costs and Benefits for Energy Consumers and Energy Prices Associated with the Allocation of Greenhouse Gas Emission Allowances”
  • October 14, 2009: Senate Committee on Energy and Natural Resources Hearing on "Energy and Related Economic Effects of Global Climate Change Legislation"
  • September 24, 2009: House Select Committee on Energy Independence and Global Warming on "Solar Heats Up: Accelerating Widespread Deployment"
  • September 9, 2009: House Natural Resources Committee Energy and Mineral Resources Subcommittee “Legislative Hearing on H.R. 2227”
  • July 30, 2009: House Natural Resources Committee Energy and Mineral Resources Subcommittee Hearing on “Unconventional Fuels, Part II: The Promise of Methane Hydrates”
  • July 14, 2009: House Science and Technology Committee Energy and Environment Subcommittee hearing on “New Roadmaps for Wind and Solar Research and Development”
  • July 9, 2009: House Science and Technology Committee Energy and Environment Subcommittee hearing on “Technology Research and Development Efforts Related to Energy and Water Linkage”
  • July 7, 2009: Senate Environment and Public Works Committee Hearing on “Moving America toward a Clean Energy Economy and Reducing Global Warming Pollution: Legislative Tools”
  • June 11-16, 2009: Senate Natural Resources Committee Markup of the American Clean Energy Leadership Act of 2009
  • June 4, 2009: House Natural Resources Committee Energy and Mineral Resources Subcommittee Hearing on “Unconventional Fuels, Part I: Shale Gas Potential”
  • May 21, 2009: Joint Economic Committee (JEC) Hearing on "Oil and the Economy: The Impact of Rising Global Demand on the U.S. Recovery"
  • March 24, 2009: House Committee on Natural Resources Joint Subcommittee Hearing on "Energy Development on the Outer Continental Shelf and the Future of Our Oceans"
  • March 11, 2009: House Committee on Science and Technology Subcommittee on Energy and Environment hearing entitled "FutureGen and the Department of Energy's Advanced Coal Programs"
  • March 10, 2009: Senate Committee on Energy and Natural Resources Hearing Entitled "To Receive Testimony on Pending Water Resources Legislation"
  • March 5, 2009: Senate Energy and Natural Resources Committee hearing "To Receive Testimony Regarding Draft Legislative Proposals on Energy Research and Development"

Energy Hearings from 2010
Back to policy page

BAR

House Science and Technology Committee Energy and Environment Subcommittee Hearing on “Marine and Hydrokinetic Energy Technology: Finding the Path to Commercialization”
December 3, 2009

Witnesses
Jacques Beaudry-Losique
Deputy Assistant Secretary for Renewable Energy, Department of Energy
Roger Bedard
Ocean Energy Leader, Electric Power Research Institute
James G.P. Dehlsen
Chairman, Ecomerit Technologies, LLC
Craig W. Collar
Senior Manager of Energy Resource Development, Snohomish Public Utility District 1
Gia D. Schneider
Chairman and CEO, Natel Energy, Inc.

Committee Members Present
Brian Baird, Chairman (D-WA)
Bob Inglis, Ranking Member (R-SC)
Lincoln Davis (D-TN)
Paul D. Tonko (D-NY)
Dana Rohrabacher (R-CA)
Vernon J. Ehlers (R-MI)
Jay Inslee (D-WA)
Adrian Smith (R-NE)

On December 3, 2009 the House Science and Technology Committee Energy and Environment Subcommittee held a hearing on “Marine and Hydrokinetic Energy Technology: Finding the Path to Commercialization.” Chairman Brian Baird (D-WA) cited studies showing that ten percent of our nation’s electricity demand “may be met through energy generation from river in-stream sites, tidal in-stream sites, and wave generation.” Ranking Member Bob Inglis (R-SC) added that although the hydropower and hydrokinetic technologies may face environmental challenges and competition with recreational activities, they have great potential for energy reduction.

Jacques Beaudry-Losique, Deputy Assistant Secretary for Renewable Energy at the Department of Energy (DOE), stated that DOE “believes the marine and hydrokinetic (MHK) energy technologies have significant potential to contribute to the nation’s future supply of clean, cost-effective, renewable energy.” He added that these technologies could potentially produce 400 TWh per year, which is enough to power 36 million average U.S. homes.

Roger Bedard, Ocean Energy Leader at Electric Power Research Institute, testified that the U.S. has access to a significant amount of wave and tidal hydrokinetic energy resources that have the potential to be cost competitive with other renewable technologies.  He added the technology needed is emerging and ready for testing, but that challenges still remain before commercialization is possible. In his written testimony, Bedard states that his main point is that “MHK energy is a renewable resource that we as a nation should seriously consider as an addition to our national portfolio of energy supply alternatives and that this consideration requires government support and incentives.”

James Dehlsen, Chairman at Ecomerit Technologies, LLC, stated that hydropower and hydrokinetic energy has very little in common and should be considered two separate technologies. He agreed with Bedard and testified that early commercialization would be possible “provided the U.S. government implements an effective program of incentives.” Dehlsen spoke of the discontinuous government support of wind energy, which has stunted the success of the industry. He added that the “fundamental factor of success is sustained federal commitment.”

Craig Collar, Senior Manager of Energy Resource Development at Snohomish Public Utility District No. 1, spoke about the Snohomish Puget Sound Tidal Energy Demonstration Project as well as the European Marine Energy Center (EMEC) studies, both of which use OpenHydro turbines. He stated that the EMEC OpenHydro turbine has been constantly videotaped since its debut in 2006 and that no marine life incidents have been recorded thus far. He added that more data might eliminate the barrier to large-scale commercial deployment of MHK technologies.

Gia Schneider, Chairman and CEO at Natel Energy, Inc., testified that the potential for MHK technologies is significant and that there is particular potential in low-head hydropower. She added that Natel Energy believes that low-head hydropower is the “true low-hanging fruit energy opportunities in this country where we can bring distributed renewable baseload power online relatively quickly.” She stated that out of the 71 GW of low-head hydropower potential available, the U.S. has used less than 2 GW to date. She suggested that low-head projects be developed in existing man-made conduits and canals, as projects there would have low incremental environmental impacts. She stated that the biggest challenge with these technologies is  expense, so support from DOE for R&D would help to speed up innovation.

Chairman Baird spoke of the lack of testing facilities for the MHK technologies on both coasts and asked Bedard to comment on that. Bedard replied that in fiscal year 2008, money was appropriated to initiate National Marine Energy Centers, but “consistent, long-term, sustained support to these test facilities” is needed so developers have a place to go and test their technologies in the water. He added that once a prototype is developed, system test facilities will be needed. Conner stated that one of the main challenges in moving the project forward is a lack of data. It is difficult to get projects permitted with no data, but one needs a permit to get data. He added that one way to deal with this challenge is to do small, contained projects to gain data. Baird asked what the specific concerns are with MHK projects. Conner answered that most concerns are related to the effects on the Ecological Society of American (ESA) listed species.

Ranking Member Inglis asked the panel to comment on the possibility of combining wave barges with wind barges in order to “get a twofer out of the lines running back to the shore.” Dehlsen replied that projects like that are being considered in the United Kingdom. He said it is believed that for every offshore wind turbine, three wave devices could be deployed as well, and that combining the two types of technology is a nice way to save energy. Bedard added that having the two resources together would also lower the combined variability of energy production.

Representative Dana Rohrabacher (R-CA) stated that the MHK resources need to be cost-competitive in order to develop the technologies and added, “We don’t want to create technology in order to create technology.” He then asked the panel how competitive the MHK resources would be compared to other electricity generating  resources. Dehlsen answered that the technologies being worked on at Ecomerit Technologies, LLC would range from 10-12 cents per KWh while carbon-based fuels are closer to the range of between 4 and 8 cents per KWh. He added that once you take into consideration the external costs of the carbon fuels, the MHK technologies are competitive.

Representative Jay Inslee (D-WA) asked Bedard to comment on the energy density of water compared to that of wind. Bedard replied that because the power density of MHK resources is much greater than for wind or solar projects, smaller machines are needed, which require less material. He added that the challenge is that these machines are operating in remote, hostile environments. This requires operation and maintenance technology to lower the lifecycle costs in order to make the technologies more competitive compared to other renewable energy technologies.

Representative Vernon Ehlers (R-MI) asked the panel if it would be possible to anchor something to the bottom of the ocean and let the up and down motion of waves create energy. Bedard replied that many devices already take advantage of this motion. Ehlers asked Bedard what technologies seem most promising at this point in time. Bedard replied that the technology is not advanced enough to know which will be the most cost-effective in the future. He added that more testing and evaluations of the different devices will be needed.

Representative Rohrabacher said that people who live on the coast might complain about their view being disturbed and asked for comment. Dehlsen said that, although the turbines have a very strong impact, “people are starting to get that there are priorities beyond the view aspect.” Representative Inglis later added that he thinks the wind turbines create a beautiful scene, especially when one thinks about “how they are out there producing no emissions.”

A link to the witnesses’ testimony and a video archive of the hearing can be found here.

-MMP

Senate Energy and Natural Resources Committee Hearing “To receive testimony on environmental stewardship policies related to offshore energy production”
November 19, 2009

Witnesses
Dr. Walter Cruickshank
Deputy Director, Minerals Management Service, U.S. Department of the Interior
Mr. Marvin Odum
President, Shell Oil Company
Mr. John Amos
President, SkyTruth
Mr. David Rainey
Vice President, Gulf of Mexico Exploration, BP America Inc.
Dr. Jeffrey Short
Pacific Science Director, Oceana

Committee Members Present
Jeff Bingaman, Chairman (D-NM)
Lisa Murkowski, Ranking Member (R-AK)
Byron Dorgan (D-SD)
Robert Menendez (D-NJ)
Mary Landrieu (D-LA)
Jeanne Shaheen (D-NH)
John Barrasso (R-WY)
Jim Risch (R-ID)

The environmental concerns with offshore energy and the idea of “buffer zones” between the coast and production sites were the focus of a Senate Energy and Natural Resources Committee energy bill mark-up earlier this year. Committee Chairman Jeff Bingaman (D-NM) convened a follow-up hearing on November 19, 2009 to “move away from rhetoric and to focus on the facts surrounding offshore oil and gas production and its impact on the environment. Chairman Bingaman objective is “a better understanding of these issues that will help on the debate in the Senate going forward.” Ranking Member Lisa Murkowski (R-AK) said, “We’ve got a duty to prevent and ameliorate environmental harm and certainly buffer zones are one of the many ideas to help protect our coastal areas,” but expressed her concern over the perceived administration view of Outer Continental Shelf (OCS) development. “It’s now been a year since the offshore moratoria were lifted. This committee has voted for greater offshore production to boost our economy and energy security. But there have been many executive actions – and perhaps a few that have not been taken – that appear to be taking us in an opposite direction,”

The witness panel included representatives from the federal government, industry, and environmental groups. Dr. Walter Cruickshank, Deputy Director of the Minerals Management Service (MMS), described the various environmental research and assessment programs the MMS currently operates before leasing oil and gas sites as well as during development. MMS conducts a 5-year assessment of lease sites to look at potential human or environmental impacts as well as various research programs to learn about the marine environment, physical oceanography, and best practices for oil spill clean-up.

Mr. Marvin Odum, President of Shell Oil Company, and Mr. David Rainey, Vice President of Gulf of Mexico Exploration for BP America Inc testified on behalf of the oil industry. They stressed that OCS development and environmental protection do not have to be mutually exclusive. Rainey admitted that oil spills happen, but BP is working on better technology to prevent and clean-up oil spills, calling BP part of the “high-tech industry.” Although oil spills are an unfortunate occurrence, both companies stressed that they are not enough of a reason to prevent OCS leasing in the interim as the nation transitions to alternative energy resources. Shell and BP are working to develop an expanded portfolio of energy resources within their companies, but the industry leaders warned this would take time. Ranking Member Murkowski praised Odum for calling out the federal government on the slow, under-supported permitting process, saying it was something she hoped the committee could help to resolve.

Mr. John Amos the President of SkyTruth, a non-profit organization that promotes environmental awareness using remote sensing technology, talked about his organizations work tracking oil spills, effects of severe storm on the offshore oil infrastructure, and pipeline failures. Amos singled out the aging seafloor pipelines as increasingly vulnerable to cracks and failures. The other group represented, Oceana, is a conservation organization that is against expanding offshore drilling because of the unknown affects on marine ecosystems. Both groups asked for the risk inherent in OCS development to be acknowledged. Dr. Jeffry Short, Pacific Science Director for Oceana, said claims that ecosystems are not changed by offshore drilling “rings hallow” since no one studied how the ecosystems behaved before development.

Chairman Bingaman wondered whether Congress should have the authority to determine buffer zones, or how and where development proceeds. Dr. Cruickshank replied that MMS has the authority to rule on buffer zones, but has no position as to who should take the lead. MMS has taken “line of sight” issues--or preventing development where it can be seen from shore--into consideration in the past, but it is not an agency-wide policy. Senator Byron Dorgan (D-SD), one of the original senators calling for this hearing, asked Cruickshank more about the buffer zones he would recommend. Cruickshank had no definitive answer, as the agency is still analyzing the public comments on the issue.

With that, the committee moved into more environmental questions. Senator Dorgan asked why the massive drill rig leak and subsequent fire off the coast of Australia described by Senator Robert Menendez (D-NJ) is not a concern in the Gulf of Mexico. Cruickshank said the drill well design would not have been approved in the U.S. Senator Mary Landrieu (D-LA) emphasized that the Australia case should not be used to dissuade Congress from offshore development. She estimated that 20,000 offshore rigs exist, and of those “19,999 were not on fire [that day].” Senator Landrieu advocated for good stewardship, saying, “Good stewardship starts with telling the truth.” She explained the actual source breakdown of oil in the ocean: 63 percent is natural seepage, 32 percent is from car/boats/recreational transportation, 4 percent is from petroleum transport (tankering), and only 1 percent is from offshore drilling and extraction. She pointed out that the benefits far outweigh the risks, and it should be “put in the perspective it deserves.” Short seconded that the natural seeps are the majority of hydrocarbons in the ocean, but explained they are released so slowly that the marine ecosystems can adapt or avoid them unlike human-caused oil spills.

Chairman Bingaman, Ranking Member Murkowski, and Senator Jeanne Shaheen (D-NH) asked about oil spill recovery studies and the onshore/offshore oil link. Odum and Cruickshank told of the many studies industry and government conduct on how to best clean up oil in a variety of environments. Short asked that the methods be reviewed and tested more rigorously in the field. Cruickshank explained testing is shared between the federal agencies and the MMS facility includes a large-scale testing site that accurately portrays ocean conditions so field testing is not necessary. For oil spills onshore, MMS has no authority. Onshore oil spills are controlled through state permitting and Cruickshank thought the Environmental Protection Agency (EPA) plays a role in permitting and spill clean-up. Cruickshank and Amos noted that onshore storage sites and offshore drilling sites are intrinsically connected, however it seems the federal and state authorities may not be.

The oil spilled during Hurricane Katrina was mostly from onshore storage, leading to the need for co-analysis of the structures. Senator Landrieu was quick to explain the Katrina oil spill, clarifying that the storage tanks were not filled like they should have been to survive the storm. Landrieu asserted that mistakes happen, and this human error has been forgiven since the homes that were damaged were oil employees who do not want to see their employer forced to leave. In addition, new regulations have now been passed to make sure tanks are filled before a storm.

Senator Menendez was skeptical of all the defense of offshore drilling. He believed Odum “painted what I think is a pretty absurdly rosy picture of the oil reserves contained in the Outer Continental Shelf, listening to your testimony one might think we have several Saudi Arabias beyond our shores ready to be drilled and wash over us in low gas prices and rainbows.” Senator Menendez was concerned about the affect of such a “rosy picture” on policy, especially “when in 2004 your parent company was caught falsifying its oil reserves.” Odum defended the projected oil reserves, saying they continue to grow with increased knowledge and technology.

The senators ultimately disagreed about some of the environmental risks from offshore drilling, and to what extent those should play a role in expanding offshore development as part of future climate change or energy legislation.

The full text of the witness testimony and video archive of the hearing can be found here.

-CCD

The Senate Environment and Public Works Committee Hearing on “S. 1733, Clean Energy Jobs and American Power Act”
October 29, 2009

Witnesses
Preston Chiaro
Chief Executive Officer, Rio Tinto
John Rowe
Chairman, President, and Chief Executive Officer, Exelon Corporation
Willett Kempton
Professor, University of Delaware
Bob Winger
President, International Brotherhood of Boilermakers
Fred Krupp
President, Environmental Defense Fund
Mike Carey
President, Ohio Coal Association
Bob Stallman
President, American Farm Bureau Federation

Committee Members Present
Barbara Boxer, Chair (D-CA)
James M. Inhofe, Ranking Member (R-OK)
Max Baucus (D-MT)
George V. Voinovich (R-OH)
Thomas R. Carper (D-DE)
Frank R. Lautenberg (D-NJ)
John Barrasso (R-WY)
Benjamin L. Cardin (D-MD)
Arlen Specter (D-PA)
Amy Klobuchar (D-MN)
Christopher S. Bond (R-MO)
Sheldon Whitehouse (D-RI)
Lamar Alexander (R-TN)
Tom Udall (D-NM)

On October 29, 2009 the Senate Committee on Environment and Public Works held a hearing on “S. 1733, Clean Energy Jobs and American Power Act.” Arlen Specter (D-PA) started off by saying that he hoped that the committee would “hold its fire until [it] had heard from all the witnesses.” Despite his request, the committee members voiced their concerns about the bill in their opening remarks. Senator Lamar Alexander (R-TN) said cap and trade does not work and gave four suggestions for reaching climate goals: build 100 new nuclear power plants, electrify half of the cars and trucks in the U.S. over the next 50 years, explore offshore for more natural gas and oil, and create mini-Manhattan projects in carbon capture, solar, electric batteries, and the recycling of nuclear waste. Senator Christopher Bond (R-MO) thought the bill fails to protect electricity consumers from price increases and fails to protect workers. John Barrasso (R-WY) testified that “a massive energy tax will unplug the American economy” and will hurt the Midwest states. Thomas Carper (D-DE) disagreed with several of these early remarks and said the best way to bring jobs and energy independence to the country is through a cap on carbon.

Senator George Voinovich (R-OH) pointed out that although the U.S. can build electric cars and green technologies, “who will buy them?” He added that the bill favors some states more than others, giving preference to western states. As his time ran out and Chairwoman Barbara Boxer (D-CA) repeatedly hit her gavel, Voinovich continue to insist that the bill should not be “jammed” through. Boxer replied that the EPA analysis found there would be “barely any regional differences,” and she had worked with the Congressional Budget Office (CBO) to make sure the bill is deficit neutral. She added that she felt the “aggressive kind of argument ...is misplaced” and hoped the Republicans would not attempt a boycott of the markup of “a landmark bill.” Senator Tom Udall (D-NM) spoke of his dismay with the “fear mongering from the other side.” He added that “what we need to be looking at is what we face if we don’t do anything.”

Preston Chiaro, Chief Executive Officer of the Energy Product Group at Rio Tinto, testified that there are three features that need to be addressed in climate policies and he related each feature to elements of the bill. First he spoke of the need to accelerate the development and deployment of low emissions technologies, which he added the bill does by supporting carbon capture and sequestration (CCS). Second, he stressed the importance of provisions to minimize the cost of climate policies and said the bill includes important key features, such as flexibility through banking and borrowing. Third, he talked about the threat of “carbon leakage”, which he described as the migration of  jobs and industry from a country that regulates carbon to a country that does not., He supports the bill’s use of output-based rebates for industry to help deter this type of “carbon leakage”.

John Rowe, President and CEO at Exelon Corporation, testified that bill is a “very good beginning although [Exelon] hopes certain alterations will be made.” He suggested four provisions be added to the bill: 1) a formula that allocates the emission allowances in a way that protects electricity customers, 2) a cost containment mechanism that will protect the economy and jobs, especially at the beginning stages of the program, 3) less aggressive and more reasonable timetables for curbing greenhouse gas (GHG) emissions, and 4) support for large-scale deployment of nuclear power.

Willett Kempton, a professor at the University of Delaware, testified that offshore wind “is the U.S.’s largest ocean energy resource” and offers over twice the resources of all U.S. offshore oil. He added that many of the largest sources of carbon-free power are regionally concentrated and that offshore wind power is ideal along the East Coast. He said that research and development (R&D) is necessary to develop offshore wind turbines and he thinks the bill can be used for this purpose.

Bob Winger, President of the International Brotherhood of Boilermakers, spoke favorably of the bill’s CCS demonstration and deployment programs but did have some suggestions. He said the goal of cap and trade programs is to reduce emissions in an efficient and cost-effective way, however, the bill’s programs fall short of these goals. Like Rowe, Winger also suggested the addition of cost containment provisions and a more reasonable timeline for GHG emission reductions.

Fred Krupp, President of the Environmental Defense Fund, testified that not only can the country meet the emission targets by 2020, he thinks they can be achieved at low cost and create jobs in the process. He added that the clean energy sector is “poised to grow” and in doing so the nation has an opportunity to become more competitive in the global market. 

Mike Carey, President of the Ohio Coal Association, testified that the green job economy is a myth. Not many new jobs are actually created, and those that are generally pay low wages. He stated that the effects of the legislation will vary dramatically from region to region, but that almost the whole country will see lower standards of living. He added that the bill will “kill the coal industry” and has insufficient funding to make CCS technology ready by 2020.

Bob Stallman, President of the American Farm Bureau Federation, testified that the Federation opposes this bill for several reasons. He stated that the bill did not provide a cost-effective plan for transitioning to a clean energy economy and that it would not “provide an alternative source of energy to the fossil fuels that will be lost.” He said the bill does not make economic sense for agriculture and does not include agriculture and forestry in the offsets program. He added that the increased fuel prices will put U.S. farmers and ranchers at a disadvantage compared to other countries that do not have similar GHG restrictions. He ended by saying that the Farm Bureau believes that “agriculture and forestry can play a key role in any future national energy policy” and the bill does not recognize this role.

Boxer stated that with so much happening already on a state-by-state basis, she asked the witnesses whether a national program to control GHG emissions would be more helpful. Rowe replied that nearly every state in which he does business has adopted some measure to deal with climate change, mostly in a mix of renewable energy technologies. Chiaro added that a global system would be better than each state having a different cap and trade system.

Boxer asked the panel if the nuclear titles in the bill would benefit the nuclear industry. Rowe replied that they would. He added that a large number of nuclear plants will be needed in decades to come. He said a market based portfolio is needed and that is why Exelon supports cap and trade. Voinovich mentioned titles in the bill that encourage natural gas and expressed concern that this would take pressure off building nuclear plants. Rowe agreed and said that the low costs of natural gas would probably remove the stress placed on advancing new nuclear or renewables. He added that six or eight nuclear units are supported by existing federal loans and they should be in operation by 2020. He said there will be more by 2030, but he doubts it will be anywhere near the 100 plants requested. Alexander noted that nuclear power is not counted as a renewable energy and asked the panel if they thought there should be a carbon free goal rather than a strictly renewable goal. Rowe strongly agreed that a carbon free goal would be preferable. Senator Amy Klobuchar (D-MN) asked Rowe what incentives are needed to get 150 or so nuclear plants built in the decades to come. Rowe replied that nuclear plants should be included in the renewable energy package. He added that there needs to be a legislative finding that the onsite storage of spent nuclear fuel is an acceptable solution in the long-term. Lastly, he suggested increasing the amounts of loan guarantees available for new nuclear power plants.

Senator Frank Lautenberg (D-NJ) asked Kempton what kinds of jobs are created when clean energy companies are created. Kempton replied that the jobs created are not “green jobs” or exotic jobs, but are “American jobs at American plants.” Voinovich spoke of the nation’s “feeling” that we will somehow replace coal and gas through wind and solar. He added that this is not the route the rest of the world is taking and asked for comment. Carey reported that, according to the Energy Information Agency (EIA), 80 percent of the coal jobs will be gone by 2030. He said that these are well paying “American jobs” and that this would be a “real hit to the Appalachian economy.”

Voinovich asked Winger to comment on where the technology is for CCS. Winger replied that the “technology is not there yet.” He said without the bill and the incentives it provides for CCS to progress, the technologies will never get there. He added that no power plants are being built right now because of uncertainty relating to future emissions regulations, but that “coal needs to be a part of the energy mix.” Ranking Member James Inhofe (R-OK) spoke of other member comments about the “sweeteners” within the bill for coal. He asked Carey why he is opposed to the bill if it does in fact “take care of coal.” Carey replied that CCS needs to continue to be studied and that basing CCS on a cap and trade scenario is not the right way to do it.

Inhofe noted that agriculture is exempt from a carbon cap under the bill and asked Stallman why he opposed the bill. Stallman replied that although agriculture is exempt, “We are not exempt to the affects of this bill.” He said that because 20 percent of agriculture costs are energy related, there would be serious cost increases and an effective downsizing of agriculture. Udall addressed Stallman and told him he thinks preventing severe climate change is critical to protecting agriculture, especially in the Southwest. He added that he thinks the way to support agriculture is to “be aggressive and forward with climate change legislation.”

Lautenberg talked of companies like DuPont, Ford, and BP supporting the bill and asked Krupp if these companies would support the bill if it adversely impacts society. Krupp said he does not think there is any way the companies would support the bill if they believed that. He added that their statements all support that “they believe that this legislation will yield a real economic growth in this country.”

Testimony from the panelists can be found here, as well as a video archive of the entire hearing.

-MMP 

The Senate Committee on Energy and Natural Resources Hearing on “The Costs and Benefits for Energy Consumers and Energy Prices Associated with the Allocation of Greenhouse Gas Emission Allowances”
October 21, 2009

 

Witnesses
Denny Ellerman
Senior Lecturer, Massachusetts Institute for Technology
Gilbert Metcalf
Professor, Tufts University
Karen Palmer
Senior Fellow, Resources for the Future
Chad Stone
Chief Economist, Center on Budget and Policy Priorities

Committee Members Present
Jeff Bingaman, Chair (D-NM)
Lisa Murkowski, Ranking Member (R-AK)
Byron L. Dorgan (D-ND)
John Barrasso (R-WY)
Maria Cantwell, (D-WA)
Robert F. Bennet (R-UT)
Jim Bunning (R-KY)
Bob Corker (R-TN)
Mark Udall (D-CO)
Jeanne Shaheen (D-NH)

On October 21, 2009 the Senate Committee on Energy and Natural Resources held a hearing on “The Costs and Benefits for Energy Consumers and Energy Prices Associated with the Allocation of Greenhouse Gas Emission Allowances.” Chairman Jeff Bingaman (D-NM) testified that the point of a cap is to send a price signal to decreases the amount of greenhouse gas emissions, and wondered to what extent that signal should be mitigated by free allocations. Ranking Member Lisa Murkowski (R-AK) testified that allocating allowances might create a situation where energy producers are battling over them, “like dolling out pieces of pie… [We are] faced with the harsh reality that there is not a lot of pie that is available out there to satisfy all the groups that are vying for [it].” She added that the free permits could be seen as “decade long earmarks.”

Denny Ellerman, retired Senior Lecturer at the Massachusetts Institute for Technology (MIT), testified that debates on allocation often focus on a choice between auctioning and free allocation, which is “incomplete and misleading in focusing on the means of distributing allowances.” He added that what should be focused on is the ultimate recipient of the allocations, such as energy R&D or households. 

Gilbert Metcalf, Professor of Economics at Tufts University, testified that it is important for allocation systems to be simple, transparent, efficient, and have distributional outcomes. He called a cap and dividend scheme, an approach in which the proceeds from the emission would be given back to Americans on a per capita basis, one “particularly transparent and simple allocation scheme.” He said that past cap and trade systems provided a restricted assortment of the possible design choices and that nothing is stopping Congress from looking at alternative schemes and goals for allocation. He added that cap and trade systems will most likely affect low-income households. Lastly, he said that the allocation distribution design “can have significant impacts of the overall efficiency of the program” and that if the money is returned to households on their monthly bill, they will most likely assume this is due to a reduction in the prices of electricity and gas and will make no changes in regards to energy consumption.

Karen Palmer, Senior Fellow at Resources for the Future, testified that regional disparities will result from the emission allowances and suggested two ways to reduce them. One way she spoke of is to auction a majority of the allowances, and the other is to allocate the allowances to local distribution companies. The latter of these is incorporated in the American Clean Energy and Security Act (H.R. 2454) in a way that she thinks will “increase the cost of the economy as a whole,” saying the details of the approach will likely be hard to execute in practice. She agreed with Metcalf about a cap and dividend approach, and said it could “improve both the efficiency and effects on households.”

Chad Stone, Chief Economist of the Center on Budget and Policy Priorities, testified that a disproportionate burden of the costs associated with emission allocations fall on low-income households, which he thinks could “push more families into poverty.”  Like Palmer and Metcalf, Stone also recommended a cap and dividend approach. He expressed his views against using the revenues to cut payroll tax rates. He said that the bottom 60 percent of households would, on average, get a smaller tax cut and would lose money. He added that one of the key goals should be “to ensure that the policies necessary to reduce greenhouse gas emissions do not increase the depth and extent of poverty.”

Bingaman asked how the overall burden of the emissions permits would affect consumers. Metcalf replied that the prices of goods and services would rise along with the prices for gas. He said that some of the permit revenue could be used to compensate people for some of their costs, “but not for all.” John Barrasso (R-WY) added that the government has an obligation to help the nation’s economy and asked for comment from the panel. Ellerman, Metcalf, and Stone agreed that a transitional system is needed. Ellerman suggested auction revenues and free allocations. Metcalf said that opportunities would arise along with the raise in cost, and the “states need to be looking at how to take advantage of these opportunities.” He mentioned a greater demand for wind and solar as an example.

Murkowski spoke of the elevated cost of living in her home state of Alaska and asked the panel if there is any way that legislation could account for the differences of the cost of living across states. Palmer replied that the impact of controlling carbon will be the same everywhere, so percentage increase in places with a high cost of living would probably be smaller than in places with lower costs of living. Stone added that it is difficult to take regional differences into account. He said that “if you focus on just one piece of the cost, you miss the fact that states don’t get hit by all the parts the same.” Metcalf agreed and added that there is a “delicate balance” in addressing regional fairness. He said that often impacts differ even within a single region, but in the end, the overall differences are not as large as they appear.

Robert F. Bennet (R-UT) called the whole issue of permits and allocations an “incredible mess” and stated, “[Rube] Goldberg is still alive and well and is dwelling in the House of Representatives.” He wondered, “How in the world this is all going to work.” He said if the whole reason is to get people to use less carbon we should simply tax it. He asked the panel if he was off base with his reaction and asked them how any sense is going to be made of the issues. Metcalf replied that it depends what is done with the permits.  He recommended auctioning off all permits and dealing with revenues in a simple and transparent way. Ellerman said that a carbon tax and cap and trade both have the same problem, which is what is to be done with the allowance allocations. Stone agreed with Ellerman and said, “What really matters is what [is done] with the allowance.” Bennet added that he believes we “have fallen in love…that cap and trade is the way to solve all [these issues]…and this just keeps getting bigger and more complex and the question arises, ‘Why are we doing this?’”

Murkowski asked if there is any way to make a cap and trade or cap and dividend program truly transparent, simple, and understandable. Ellerman replied that he thought it possible, although without a simple solution. He stated that one way to deal with the issue is to give all the money back to the households equally, but said that this does not address all the issues. Ellerman added that “Goldberg is alive and well in the tax code.”

Jim Bunning (R-KY) questioned China, India, and Russia’s future participation in limiting of greenhouse gas emissions. He asked the panelists why the U.S. should punish its economy when these other countries may do nothing. Metcalf replied that this is “an international problem that requires an international action” and that the U.S. is taking the lead to “break the impasse.” Bunning responded that we can lead, but that we need the other countries to follow in order to be successful. Ellerman replied that there have to be leaders and the U.S. sees itself as leaders. He added that if there are no voluntary followers, than action will need to be taken.

Bennet spoke of a “promise land” where all future energy comes from non-emitting resources. He added that the bridge to this promise land “is built out of fossil fuels.” He asked the panel what the role of cap and trade should be in “building this bridge.” Stone replied that a price signal needs to be created that encourages people to make investments sooner than they would otherwise. He added that this will take time and prices will rise. Bennet said he fears that cap and trade will “distort the building of the bridge.” Ellerman replied that “if there is one lesson we can draw from existing cap and trade programs…it is that they are effective in reducing emissions and the side effects are small.”

Testimony from the panelists can be found here, as well as a video archive of the entire hearing.

-MMP

Senate Committee on Energy and Natural Resources Hearing on "Energy and Related Economic Effects of Global Climate Change Legislation"
October 14, 2009

 

Witnesses
Douglas Elmendorf
Director, Congressional Budget Office
Richard Newell
Administrator, Energy Information Administration
Reid Harvey
Chief of Climate Economics Branch in the Climate Change Division, Environmental Protection Agency
Larry Parker
Specialist in Energy and Environmental Policy, Congressional Research Service

Committee Members Present
Jeff Bingaman, Chair (D-NM)
Lisa Murkowski, Ranking Member (R-AK)
Jeanne Shaheen (D-NH)
Bob Corker (R-TN)
Mary L. Landrieu (D-LA)
John Barrasso (R-WY)
Maria Cantwell (D-WA)
Jim Bunning (R-KY)
Jeff Sessions (R-AL)
Sam Brownback (R-UT)
John McCain (R-AZ)

On October 14, 2009 the Senate Committee on Energy and Natural Resources held a hearing on “Energy and Related Economic Effects of Global Climate Change Legislation.” Chairman Jeff Bingaman (D-NM) testified that climate change will require a major transformation of the energy sector. He added that greenhouse gas trading in Europe has had good results and shown that it can be successful. Ranking Member Lisa Murkowski (R-AK) cautioned that, in the midst of recession, “we must ensure that climate legislation does not endanger our recovery.” She added that before asking constituents to do more, congressmen need to make sure they cannot ask for less and get the same results.

Douglas Elmendorf, Director of the Congressional Budget Office (CBO), testified that the changes related to the reduction of greenhouse gases “will have extensive, highly uncertain, and costly impacts throughout the world.” He stated that reducing the risk of climate change will come at a cost to the economy and that the economic impact will depend strongly on the design of policies. He said that climate change legislation will cause a shift in production and employment away from carbon-based energy industries and toward the production of alternative energy sources. He added that the loss in purchasing power that would result from cap-and-trade programs would be modest at first and would rise over time and that the amount of loss depends on policymakers’ decisions on how to allocate allowances.

Richard Newell, Administrator of the Energy Information Administration (EIA), testified that in the process of reducing greenhouse gas emissions, the American Clean Energy and Security Act of 2009 (H.R. 2454) increases the cost of energy production which in turn reduces economic output, purchasing power, and the demand for the goods and services. He said the free allocation of allowances to distributors will initially lower the price of electricity for the consumers, but will in turn reduce the overall efficiency of the cap-and-trade program. He added that barriers in making these technologies more cost effective are directly influenced by policy choices.

Reid Harvey, Chief of the Climate Economics Branch in the Climate Change Division of the Environmental Protection Agency (EPA), testified that there are three factors that EPA feels are the most important to consider when creating climate change policies. First, the cumulative emissions reductions achieved by the bill affects the overall costs more than the cap level set for any given year. Second, allowing the use of emission offsets lowers costs significantly. Third, the introduction of low- or no-carbon technologies will increase substantially by 2050 according to the H.R. 2454.

Larry Parker, Specialist in Energy and Environmental Policy at the Congressional Research Service, started his testimony by saying that it is not easy to project costs to the year 2030 and beyond. He gave six points summarizing the costs and benefits of H.R. 2454. First, the cost of the bill will be ultimately determined by the economic responses to the technological challenges the bill presents. Second, those who bear most of the program’s cost will be determined by the distribution of allowance value. Third, he agreed with Harvey and says one of the major factors in determining the cost of this bill is the availability of offsets present. Fourth, there will need to be a considerable amount of low-carbon generation in order to meet the reduction requirement set by the bill. Fifth, it has been difficult to attempt to estimate the household affects. Lastly, he said the environmental benefit should be thought of in a global context.

 Jeanne Shaheen (D-NH) asked the panel if any of them had looked at the potential gains of the economy such as job creation, manufacturing, or output increases. Elmendorf replied that there was sure to be a decline in the employment for the fossil fuels industry and an increase in the employment for non-fossil fuel industries. He added that there would be a decline in employment during the transition. John Barrasso (R-WY) expressed worry of significant job losses over time and asked Elmendorf to discuss further the employment shift. Elmendorf replied that the shifts will be significant but that he thinks the affect on overall employment will be small.

Bob Corker (R-TN) asked the witnesses if they felt it was counterproductive to give away free allowances to the energy sector. Newell replied that it can be counterproductive and reduces efficiency. Corker asked if it would be better to sell off all allowances. Elmendorf replied that this is a purely distributional question that determines who bares the burden. Maria Cantwell (D-WA) asked Elmendorf about his analysis, which states that 40 percent of the money saved with emission allowances would be passed on to the residential consumers and the other 60 percent would stay in the utilities. Elmendorf replied that assumptions were made concerning the ways that utilities and distribution companies would behave. Jeff Sessions (R-AL) said that giving away free allowances has been a major problem for the European system and asked the panel to discuss how free allowances make systems less simple. Elmendorf replied that policies that incorporate free allowances are more obscure.

Barrasso asked how many nuclear energy plants will be needed in order to meet the energy demand projections of the studies. Newell replied that 96 Megawatts of nuclear energy is needed by 2030. John McCain (R-AZ) asked the panelists if they would assume that “given the state of nuclear power, unless there are significant changes, we are looking at a stagnant industry?” He added that there is no recycling technology and nowhere to store the waste and that it is a “bit presumptuous for [the witnesses] to take nuclear power into [their] calculations.” Harvey replied that the EPA did not assume anything and that they are aware of 20 projects that are in the licensing process now. Newell said that due to the significant degree of uncertainty, EIA’s report looked at a range of different scenarios.

Sessions stated that he thought it was “not [a] fair argument to say cap and trade will increase employment.” He asked the panel if it is true that international offsets transfer wealth and jobs overseas. Elmendorf said that it needs to be thought of like any other type of imports. We get goods from overseas because we think it is less expensive than making it ourselves. Cantwell asked why we would want to spend so much money overseas when we could make an investment here in the U.S. Harvey replied that allowing these international offsets is simply a matter of reducing costs for the U.S.

Murkowski discussed the importance of climate change from a national security perspective and asked how much the witnesses projected the amount of oil needing to be imported would be reduced. Parker replied that according to one EPA model, there would be an almost 20 percent decrease in oil imports. Newell added that EIA estimated a decrease between 8 and 24 percent.

Testimony from the chair and panelists can be found here.

-MMP

House Select Hearing on Energy Independence and Global Warming on "Solar Heats Up: Accelerating Widespread Deployment"
September 24, 2009

Witnesses
Dr. Stephanie A. Burns
Chair, President and Chief Executive Officer, Dow Corning
Frank De Rosa
Chief Executive Officer, NextLight Renewable Power
Steve Kline
Vice President for Corporate Environmental and Federal Affairs, Pacific Gas & Electric
Ms. Nada Culver, Esq.
Senior Counsel, The Wilderness Society
Dr. Gabriel Calzada
Economics Professor, King Juan Carlos University

Committee Members Present
Edward J. Markey, Chair (D-MA)
F. James Sensenbrenner, Jr., Ranking Member (R-WI)
Earl Blumenauer (D-OR)
Jay Inslee (D-WA)

On September 24, 2009, the House Select Committee on Energy Independence and Global Warming held a hearing on “Solar Heats Up; Accelerating Widespread Deployment.” Chairman Edward J. Markey (D-MA) referred to the climate and the economy as two challenges our nation faces. He thinks that the development of renewable energy technologies will be important in solving both of them. He said the development of solar energy resources will create jobs within the United States, unlike much of the imported oil consumed by the country. He mentioned the Waxman-Markey American Clean Energy and Security Act (H.R.2454) that, if passed, would provide $200 billion towards the development of renewable technologies. Ranking Member F. James Sensenbrenner (R-WI) warned that solar energy will cause problems and high costs. He referenced Dr. Gabriel Calzada’s study (PDF), which found that the expensive renewables program in Spain actually destroyed more jobs than it created. Sensenbrenner said he is for renewable energy, but is “opposed to government policies that pick winners and losers based on popular sentiments [and is] opposed to raises in energy prices.” Earl Blumenauer (D-OR) disagreed with Sensenbrenner, suggesting that Calzada is a non-credible source, and advocated that many examples of solar energy development be looked at rather than focusing on only one impaired study. He also stated that “all American energy sources have been heavily subsidized at one point or another along their development”, many of which later evolve into huge “job engines.”

Steve Kline, Vice President of Corporate Environmental and Federal Affairs at Pacific Gas & Electric, testified that solar energy would create jobs, reduce greenhouse gas emissions, and help to create a low-carbon economy within this country. In order to support these developments, he suggests extending tax credits, grant programs, and loan guarantees as well as the creation of a “Green Bank” that would help to provide financing for renewable energy projects.

Frank De Rosa, Chief Executive Officer of NextLight Renewable Power, testified that the biggest obstacle related to the large-scale deployment of renewable energy is the up-front costs of the projects. He thinks Congress can reduce the costs by enacting three measures.  First, he wants the $2 billion used for the Cash for Clunkers Program to be restored to the Loan Guarantee Program authorized by the American Recovery and Re-investment Act (H.R.1). Second, he suggests extending the Treasury Department’s grant program for renewable energy property past the current expiration date. And last, De Rosa supports a long-term financing program for renewable energy projects, such as the “Green Bank”.

Nada Culver of the Wilderness Society testified that the development of solar energy is important in moving our nation towards cleaner sources of energy, but that this must be done while keeping habitats intact. She said that the development that takes place on public lands must occur responsibly and could occur, for example, on already disturbed or damaged lands.

Stephanie A. Burns, President of Dow Corning Corporation, agreed with Kline and Chairman Markey, saying the development of solar energy would help create jobs and be a source of economic growth. She had several suggestions concerning the development.  She encouraged Congress to enact policies and regulations that would promote the renewable energy industry. She supports increased funding for the research and development of these technologies and creating a “green collar workforce.” She added that the federal government needs to “lead by example” and implement these technologies on Capitol Hill. Finally, she wants policies looking at reducing greenhouse gas emissions, such as carbon tax or cap-and-trade systems, to not inadvertently discourage the growth of renewable energy resources.

Gabriel Calzada of King Juan Carlos University testified that, based on his study of the Spanish experience in developing renewable energies, the development of such technologies and the creation of “green jobs” in the United States is a bad idea. He claims that for every green job that was financed by the taxpayers of Spain, 2.2 jobs were destroyed and that Spain spent $753,778 for each green job. He also mentioned that one out of ten green jobs was for maintenance and operation and the rest were only sustainable during expansion.

Blumenauer brought up the point that the U.S. National Renewable Energy Lab repudiates Calzada’s report (PDF). He said that Calzada’s report failed to account for the role of government in emerging markets and the success of renewable energy exports. He referred to a Wall Street Journal article that said the study does not actually identify the jobs that were allegedly destroyed by the spending. Blumenauer then asked Calzada if he could give a list of the jobs that were destroyed. At this, Calzada became flustered and could not give an answer. He suggested that Blumenauer ask the Spanish government or Spanish trade unions. Jay Inslee (D-WA) then told Calzada that he felt the U.S. proposal had a more realistic time frame and had built in more safeguards than that of Spain. He added, “We just need to design it correctly.” He then asked Calzada if he felt the U.S. needed to show care in developing solar energy technologies. Calzada responded that as long as other new cases are similar to the case of Spain, the results in the U.S. should be similar. Inslee responded that solar development programs have been successful in other countries already.

Markey asked if Burns thought it possible that the U.S. could have a revolution in the area of solar technology. She said that solar cells have come a long way and that we are marching on a path where we could potentially reach grid parity within the next 2 to 5 years. Burns added that about five major companies, as well as some smaller companies, have been making major investments in the solar technologies at Dow Corning. Inslee noted that the cost of solar power has declined with increases in volume on a fairly consistent level. He asked Burns if she had any reason to believe that this would not continue at the same rate. She replied that it should continue at least at that rate. She added that research has shown ways to make cells more efficient. Burns thinks that, with an increase in demand, the costs would go down at an even greater rate than a linear trend.

De Rosa stated that the development of solar energy was not a question of technology, but of financing. To this, Markey asked him what financial people are concerned about right now. De Rosa replied that they are cautious of investing in something that has not been done before. They are looking for a demonstration that they will get their money back; that it will work. He suggested that the challenge is to take this proven technology and convince the investors that, just by scaling it up, there is nothing different about it.

Markey commented that the Department of the Interior estimated that there is enough solar potential on public lands in the Southwest to generate three times the current electricity generation capacity of the country. He asked the panelists if they thought the nation would be going down this path toward solar technologies if it was not economically viable. Kline responded that solar energy is one of the most cost effective renewable energies out there at the moment. He added that the best thing about solar energy is that it is collected at a time when it is most needed unlike wind, which tends to blow strongest at night. He pointed out that finding an efficient way to store the energy would be a valuable finding.

Markey asked Kline if Pacific Gas & Electric was basically saying to NextLight, “If you build it, we’re buying from you.” Kline responded that that was the case. Markey added that it is just a question of when the inevitable solar revolution breaks through.

Testimony from the chair and panelists can be found here.

-MMP

House Natural Resources Committee Energy and Mineral Resources Subcommittee
“Legislative Hearing on H.R. 2227”

September 9, 2009

Witnesses:
Panel 1
The Honorable Tim Murphy (R-PA)
United States House of Representatives
The Honorable Neil Abercrombie (D-HI)
United States House of Representatives

Panel 2
Mr. Athan Manuel
Director, Lands Protection Program, Sierra Club
Mr. Doug Morris
Group Director, Upstream and Industry Operations, American Petroleum Institute

Committee Members Present
Jim Costa, Chairman (D-CA)
Doug Lamborn, Ranking Member (R-CO)
Doc Hastings, (R-CO)
John Fleming, (R-LA)
Cynthia Lummis, (R-WY)
Eni F.H. Faleomavaega, American Samoa
Jason Chaffetz (R-UT)

The House Natural Resources Committee Energy and Mineral Resources subcommittee held a hearing on September 9, 2009 in order to discuss the American Conservation and Clean Energy Independence Act (H.R. 2227). Chairman Jim Costa (D-CA) started by detailing some of the history of the energy policy issues Congress has faced over the years. He noted that the committee and our nation was beyond the point at which rhetoric was tolerable, and that it was necessary to move forward in a productive way to find  common ground on these issues. He commended the bill sponsors, Tim Murphy (R-PA) and Neil Abercrombie (D-HI), for their work on a comprehensive, bi-partisan bill which would in concept add money to the treasury. Chairman Costa then brought forward letters of approval from the American Chemistry Council and the National Propane Gas Association in support of the bill.

Ranking Member Doug Lamborn (R-CO) praised the legislation as actually helping to provide energy here in the U.S., while utilizing a number of sources for energy production, especially the outer continental shelf, and creating jobs here in America. He countered, however, by saying that the legislation falls short of being truly “all of the above”, with limited development of nuclear and other sources. Lamborn insisted that while this bill is a move in the right direction, a better option would be the “American Energy Act” (H.R. 2846), which he noted that the Republican members of the committee were ready to “mark-up” with the Democrats later this month. 

The ranking member of the full committee, Doc Hastings (R-CO), said that it was unfortunate that there would be no representatives from the Department of the Interior at the hearing to provide insight from the Obama Administration regarding offshore development right now, especially in regards to U.S. assisting Brazil in developing an offshore oil field. Hastings questioned why our country would be lending money to foreign nations to develop energy production when we were not able to do so within our own boundaries.

The committee then heard testimony from the bill sponsors. Murphy began by noting the problems America faces, including jobs, energy production, a growing deficit, and terrorists funded by our energy spending. He then went on to explain how the bill could solve these problems. It would create new jobs in the U.S. and the potential revenues of the legislation were, in a “low balled estimate”, as high as $2.2 trillion, “without raising taxes or fees.” Murphy then noted that the bill actually does provide an “all of the above” approach, contrary to what Hastings thought, and was written without lobbyists or party leadership present, just a group of committee members “rolling up our sleeves.”

Then Abercrombie iterated the importance of the legislation, bemoaning the lack of a comprehensive energy policy in this country. He called this bill “the only truly bi-partisan piece of legislation in the Congress today,” as opposed to the “American Energy Act” alluded to by Lamborn. He reminded the members of the energy crisis in the 1970’s which was never effectively dealt with and called upon Lamborn and the other Republican congressmen to work with Murphy and himself to make H.R. 2227 better. Abercrombie said they are “wide open” to making changes in order to reach an agreement. This legislation is far closer to reaching an agreeable middle ground than the “American Energy Act”, according to Abercrombie, and so should be the bill upon which emphasis is placed. 

Hastings asked the sponsors how to push this bill through, and if the sponsors would be willing to combine this bill with another bill. Abercrombie responded that he would be more than willing to do that, and expressed the importance of everyone being willing to compromise on this. For example, drilling in the Arctic National Wildlife Refuge is one of many hot button issues intentionally left out of the bill, to avoid what Abercrombie called, “The equivalent of settlements in east Jerusalem.” 

In the second panel, Mr. Athan Manuel, Director of the Lands Protection Program at the Sierra Club, praised the investment in renewable energy sources and energy efficiency in the bill, however noted the Sierra Club’s objections to the offshore drilling provisions. Coastal economies are a great “economic engine” for the U.S, which may be damaged by coastal drilling. The Club however is in support of wind power development offshore, in addition to solar and other renewable energy development. 

Mr. Doug Morris, Group Director of the Upstream and Industry Operations for the American Petroleum Institute (API) recognized and supported the need for renewable energy sources, noting that many of the companies that comprise the API’s membership are leaders in these fields. Oil and gas, however, are the lifeblood of the American economy, and will be necessary for decades to come. It will be key to harvest the resources in the Gulf Coast, and “diversify our sources of production” by expanding the offshore supply. 

Chairman Costa then explained that he agreed with the Sierra Club’s proposals regarding expansion of renewable energies and energy efficiency, but asked Manuel how he intended to finance these measures without income generated by offshore leasing, setting the stage for an industry versus environmentalists debate. The Sierra Club supports cap and trade legislation which would generate revenue to finance some of the measures discussed here to build energy independence. Costa added that he has not seen a cap and trade program work anywhere in Europe where it has been implemented, and went on to ask Manuel if his organization opposes drilling for oil in the central or western areas of the Gulf of Mexico where it is currently permitted. Manuel responded that the Club does not oppose drilling in areas already permitted, but does oppose drilling in areas that represent a number of the planet’s remaining “untouched” environments. Morris noted that the Eastern Gulf of Mexico is probably the more important area for development, as there is existing infrastructure there to be plugged into, and more is known about the region, as opposed to the East Coast for example.

Lamborn asked about the realistic potential for developing such a large quantity of power using wind offshore, claiming 166 windmills per mile from Maine down to the Florida Keys would be needed. Manuel responded that as technology develops, it will not result in such a large infrastructure. Costa wanted to know the timeline for moving to a completely renewable energy portfolio, to which Manuel responded, “A very, very long time.” Lamborn noted that without breakthroughs in technology, he sees a greater environmental impact from this wind infrastructure than from only a few concentrated sources of oil and gas drilling. 

Cynthia Lummis (R-WY) asked Morris how many jobs offshore leasing would create, how much money this would generate, and how long until this would take place. Morris responded that offshore leasing  would create upwards of 160,000 jobs and hundreds of billions of dollars.  He could not give an accurate estimate as to when this would begin because it depends on how long it takes Interior Secretary Ken Salazar to permit lease sales. He anticipates production will come online 5 to 10 years after the lease sales.

Representative Murphy, who in addition to Representative Abercrombie had joined the committee, questioned the Sierra Club’s positions, asking Manuel if the Club was in support of cleaning up the bays and wet lands which have been damaged by dumping for centuries, to which Manuel replied yes. Murphy made the point then that without the funds to pay for such cleanups, they cannot happen, and that without the resources prescribed for by the bill, we cannot move forward with development of the alternative energy measures supported by the Club. He then asked Morris to speak briefly on the measures taken by the petroleum industry to improve safety and environmental impacts recently. Morris noted the emphasis on safety that the industry has placed in the past several years since Hurricane Katrina. Although mistakes were made in the past,  the industry is much more conscious of these vulnerabilities and how to avoid problems. 

Abercrombie then asked if the Sierra Club and API can see themselves collaborating to provide a plan for America’s energy future. Manuel noted that he was very open to working for a solution together, but that they did not agree about the drilling. Abercrombie retorted, “Well, you’ve got to think about that because drilling is what we’re going to do.” Abercrombie then moved into an impassioned speech extolling the need for energy independence and willingness of so many of the involved parties to compromise, including the petroleum industry. The only alternative is to “keep sending money out” to other countries. Abercrombie thought this idea was incredulous and asked, “Can you imagine 7 billion dollars just coming from Hawaii to go to places like Dubai, so they can build an indoor ice palace and wear Patagonia jackets and go skiing in the middle of the damn desert?”

The hearing ended with Lamborn presenting a Wall Street Journal article describing the large settlements paid by petroleum companies to compensate for the death of birds in oil accidents. He then noted that wind power in the U.S. is responsible for orders of magnitude more bird deaths than the oil industry, and asked Manuel if he thought this presented a double standard. Manuel noted that the Sierra Club thinks sites could be safely located so that wind turbines would not present a significant risk to bird populations, and that they do generally support enforcement of the endangered species and migratory bird acts.

Chairman Costa thanked everyone in attendance, the witnesses for the day, and brought the meeting to a close. The written testimony of the witnesses can be found here, as well as an audio archive of the entire hearing.

-JJF

House Natural Resources Committee Energy and Mineral Resources Subcommittee Hearing on “Unconventional Fuels, Part II: The Promise of Methane Hydrates”
July 30, 2009

Witnesses
Dr. Timothy S. Collett
Research Geologist, U.S. Geological Survey
Dr. Ray Boswell
Senior Management and Technology Advisor, National Energy Technology Laboratory, U.S. Department of Energy
Mr. Steve Hancock
Well Engineering Manager, RPS Energy

Committee Members Present
Jim Costa, Chairman (D-CA)
Doug Lamborn, Ranking Member (R-CO)
Martin Heinrich (D-NM)
Cynthia Lummis (R-WY)
Rush Holt (D-NJ)
Gregorio Sablan (I-MP)

On July 30, 2009, the House Natural Resources Committee Energy and Resources Subcommittee held a hearing on the potential of methane hydrates to become a major source of domestic natural gas. Experts in methane hydrate research and in the technology used to extract the methane from these gas hydrates gave testimony.

Dr. Timothy Collett of the U.S. Geological Survey (USGS) described methane hydrates as a crystalline solid made of water and methane molecules. They are found on the continental shelves and in permafrost, where they are stable under the pressures and temperatures there. Dr. Ray Boswell of the Department of Energy (DOE) described the different types of methane hydrate deposits, explaining that sand rich sediments are the most important. He stated that there has been recent progress, but there is still much to learn about gas hydrates. Lastly, Steve Hancock of RPS Energy described the technology used to extract the methane from gas hydrate deposits. He advised that extraction costs must be reduced, while difficult problems with the low operating temperatures and pressures and the structural integrity of the deposit complicates extraction.

The committee members were excited by the potential of the methane hydrates, but wanted more information on the feasibility of accessing such a vast resource. Chairman Jim Costa (D-CA) was optimistic, asking for a descriptive estimate of the amount of gas available and a perspective on the technology needed. He wanted to understand the estimate he quoted from the 1995 USGS study that determined methane hydrates could house 200,000 trillion cubic feet of natural gas. He wanted a more descriptive explanation of what the estimate means and said, “Clearly it’s bigger than a bread box.” Collett explained that while the estimate from 1995 has probably not changed, the USGS is no longer trying to estimate the volume of all natural gas and is instead looking at concentrated pockets and sand reservoirs to estimate the amount of gas that is recoverable. Collett stated that a recent “landmark study” by the USGS “estimated that more than 85,000 trillion cubic feet of natural gas could be extracted from gas hydrates on the north slope of Alaska, which would be one of the largest single sources of natural gas in the U.S.” In response to Costa’s desire for a better understanding of the resource, Collett said it is enough energy to “heat 100 million U.S. homes for 10 years.”

Costa then asked if there is any new insight into methane hydrates. Boswell answered that recent field expeditions have taught them about the different forms in which methane hydrates can be found. Boswell indicated that the concentrated deposits in the marine environment are a relatively recent and important find because these deposits can be drilled using the same techniques as current oil and gas wells. This prompted Costa to ask for a description of the process to extract the natural gas. Hancock explained that the hydrate dissociates into water and gas when drilled and flows up the well due to pressure differences. Costa then asked if this process would lead to any air quality or environmental problems, and Hancock replied that the water will need to be disposed of in dedicated disposal sites, but there will be no air quality problems or carbon dioxide released.

Ranking Member Doug Lamborn (R-CO) continued this topic, asking if the water that dissociates with the methane would be potable. When Hancock replied that the water coming out of the well will be slightly saline due to the presence of saline pore water mixing with the dissociated pure water, Lamborn queried if the water would need much treatment to become potable. Hancock claimed that he was not an expert in desalination, but said that the water is less saline than seawater. Collett added that some companies are looking at possible joint extraction techniques, especially as concerns about groundwater supply arise. Lamborn also asked if collaboration between the government and industry is important for technology development. Boswell agreed that this is very important because companies like BP, ConocoPhillips, and Chevron own the land rights and have important data for this purpose.

In his opening statement, Lamborn stated his interest in the potential and research for accessing the methane hydrate resource. However, he is frustrated that both conventional and unconventional resources are still not accessible as the leasing on the outer continental shelf of Alaska and Virginia has been stalled. He claimed leasing of this land for these resources could produce jobs and reduce dependence on foreign oil. He then called for a hearing on the “tremendous promise” of oil shale.

To get a better understanding of where methane hydrates are found, Martin Heinrich (D-NM) asked about the global distribution of the concentrated deposits and if they are correlated to oil and gas reservoirs. Collett replied that the geological controls are similar, so gas hydrates are found near conventional hydrocarbons. He gave an example of a conventional gas field in the West Siberian Basin that is capped by gas hydrates. He said that the hydrate cap dissociated and supported production when the conventional gas field was mined in the 1960s. Heinrich was concerned with who has the ownership rights if methane hydrates are found at sites where companies are already extracting oil or natural gas. He asked if the site lease covers all depths below the surface, indicating that the companies would own the rights to the methane hydrates even if they are at a different depth than the oil reservoir. Collett responded that there has not been a documented case, but agreed with Heinrich’s statement.

Cynthia Lummis (R-WY) called the methane hydrates “fascinating” and asked what the next steps for recovery of the gas should be. Boswell said that a long-term project with BP in Alaska will test the extraction techniques. Lummis wanted to know why Alaska is the appropriate platform for this testing, and Boswell answered that it is the best “natural laboratory” they have because they know where the gas hydrates are and how to find them. Lummis also asked about the industry involvement in the international 2002 Mallik project that was supported by Canada, Japan, USGS, DOE, and India. Boswell did not believe that industry played a major role in the testing, but said the success of the project is why industry is becoming more interested in gas hydrates. Lummis asked what is needed to make the methane hydrates economical and commercially available, and Hancock replied that each site is different so there cannot be one price for all sites and commerciality has yet to be proven.

Costa concluded the hearing by asking about competitiveness and DOE’s goals for methane hydrate production in the Arctic by 2015 and in the marine environment by 2020. Costa was concerned that Japan is spending twice as much on methane hydrates, and asked if the U.S. might have to import technology from Japan. Boswell answered that the U.S. is in active collaboration with Japan, so the spending difference does not put the U.S. at a competitive disadvantage. As for the goals, Boswell stated that DOE wants “all the knowledge and technology and the demonstration in place so that [methane hydrates are] now an option that industry has to consider for meeting demands.” He explained that the marine production is more expensive and less understood so will take longer to develop. Lastly, Costa asked what the price of natural gas should be for methane hydrates to be competitive in the market. Hancock responded that onshore production is likely more expensive than offshore, saying that $10 to $12 per thousand cubic feet (Mcf) would make methane hydrates economical to extract but the current market is $4 Mcf. Costa and Hancock agreed that this is a problem.

Testimonies from the witnesses and an audio archive of the entire hearing can be found here.

-RHP

House Science and Technology Committee Energy and Environment Subcommittee hearing on “New Roadmaps for Wind and Solar Research and Development”
July 14, 2009

Witnesses
Mr. Steve Lockard
CEO, TPI Composites; and Co-Chair, America Wind Energy Association Research and Development Committee
Mr. John Saintcross
Program Manager, Energy and Environmental Markets, New York State Energy Research and Development Authority
Mr. Ken Zweibel
Director, George Washington University Solar Institute
Ms. Nancy Bacon
Senior Advisor, United Photonic Ovonic and Energy Conversion Devices, Inc.
Professor Andy Swift
Director, Wind Science and Engineering Research Center, Texas Tech University

Committee Members Present
Brian Baird, Chairman (D-WA)
Bob Inglis, Ranking Member (R-SC)
Paul D. Tonko (D-NY)
Vernon Ehlers (R-MI)
Gabrielle Giffords (D-AZ)
Randy Neugebauer (R-TX)
Donna Edwards (D-MD)
Roscoe G. Bartlett (R-MD)
Mario Diaz-Balart (R-FL)
Dana Rohrabacher (R-CA)

On July 14, 2009, the House Science and Technology Committee Energy and Environment Subcommittee held a hearing on the status of research and development (R&D) of wind and solar energy. Testimony was heard from five research and industry experts in wind and solar energy. The purpose of the hearing was to discuss legislation (H.R. 3165) introduced by Paul Tonko (D-NY) that would set up a program in the Department of Energy for wind energy research, development, and demonstration. Also under consideration was the feasibility of the 2008 report [summary] by the Department of Energy (DOE) that said the U.S. could get 20 percent of its energy from wind sources by 2030.  

Witnesses talked of the great potential of wind and solar energy, addressing the specific needs they felt were most important for R&D funding. Steve Lockard of the TPI Composites and the America Wind Energy Association stated that R&D to increase turbine efficiency and achieve better wind project siting will aid in attaining 20 percent of U.S. energy from wind by 2030. John Saintcross of the New York State Energy Research and Development Authority believes that R&D of specifically offshore wind turbines is necessary because offshore turbines are 2 to 4 times larger than land turbines and wind flow through the turbines is not as well understood. Professor Andy Swift of Texas Tech University thinks that R&D should focus on reliability and performance of the individual wind turbine and the wind farm, where arrays of turbines affect the wind flow patterns. He also pointed out that setting up wind energy research programs in universities around the country will better prepare a competent workforce and spur innovation. Ken Zweibel of the George Washington University Solar Institute also talked about reliability and performance, but stressed that ways to reduce costs are most important for solar panels. Lastly, Nancy Bacon of the United Photonic Ovonic and Energy Conversion Devices, Inc. supported the DOE funding of wind R&D as it would strengthen the government-industry collaborative relationship.

The opening statements of the witnesses also boasted of the new jobs created by wind and solar energy, and Ranking Member Bob Inglis (R-SC) spoke highly of the new jobs made available by General Electric’s wind and gas turbine manufacturing plant in South Carolina. This caused Chairman Brian Baird (D-WA) to ask for clarification, because he said that a common argument against expansion of renewable energy is that jobs would decrease. Lockard cautioned that while 2008 showed a tremendous growth in jobs, 2009 may not see as many new jobs. Bacon also warned that while her company employs 4 times the number of employees it had in 2006, the economic recession is slowing down expansion. She also remarked that her company exports 80 percent of their products, creating numerous installation and electrician jobs where the products are sold. Baird asked how the technology jobs can be kept in America, to which Bacon suggested that taxpayer money be used for technology R&D and that the demand for renewable energy products should be increased through a government preference for buying U.S. technology. She also recommended that the government lead by example and install solar panels onto the roofs of federal buildings. Swift noted that companies will build where the research and educated workforce exists, so university programs could help keep companies in the U.S.

Inglis inquired about the potential for all roofs to have solar panels on them, even small houses. Bacon showed the committee a sample of the thin solar panel technology her company makes, touting the glass-free material and its flexibility. When Inglis asked about the cost, she responded that it does not yet compete with utility pricing. There are incentives for current customers to use the solar panels, but an assumption has to be made about how utility costs will rise in the coming years, which is reflected in the 20 year power purchase agreement that increases costs a certain percentage each year. Mario Diaz-Balart (R-FL) was concerned about the durability of the panels, and Bacon replied that the panels can withstand up to a category 4 hurricane. 

Most of the committee members were in favor of expanding solar and wind energy R&D. Many asked about the current technology and what was needed to reduce the costs of these renewable energy sources. Tonko asked about offshore wind energy R&D and the costs of installing the turbines on the ocean floor. Lockard reiterated the point that offshore turbines are different and less understood than land based ones, and Saintcross stressed that research is needed to find new technology that would reduce the cost of the turbines and the meteorological towers that cost between $4 million and $6 million to install but are necessary to quantify and verify wind resources. Randy Neugebauer (R-TX) queried if subsidies were needed to close the gap between solar and wind energy and coal, gas, and nuclear energy pricing. Lockard said that the raw material and U.S. manufacturing are still too expensive, and called for innovation. Zweibel pointed out that the initial capital costs of wind and solar energy would be expensive, but there are no variable fuel costs so the long-term costs would be lower. Switching to the status of solar energy technology, Gabrielle Giffords (D-AZ) asked about a roadmap for solar energy. Zweibel and Bacon responded that a roadmap is essential to set clear goals for reducing the costs of using solar energy. Diaz-Balart was a little skeptical about solar energy, asking if Germany’s incentive program was able to bring prices down. When Bacon replied that prices were not lower, he commented that there is still a long way to go to be able to compare solar to nonrenewable energy sources.
 
Vernon Ehlers (R-MI) strongly believes that solar energy can work, asserting the two problems with solar energy are easily addressed. He said the first problem is the low temperature of sunlight hitting Earth, but it has already been solved with solar panels that convert the light to electricity. The second problem is that sunlight is diffuse, hitting all over the planet. He stated, “If energy is diffuse, then collect it in a diffuse manner,” suggesting houses have “solar shingles instead of asphalt ones.” He concluded that the price needs to come down and more R&D is needed.

Roscoe Bartlett (R-MD) has used photovoltaic panels for 25 years and recently installed a Skystream wind turbine at his home. He stated, “Wind potential is real,” suggesting that the only obstacle would be energy storage. Lockard commented that the 20 percent wind energy estimate from the DOE does not consider energy storage, and 30 to 40 percent of energy from wind could be possible with cost effective storage. Zweibel believes that R&D of energy storage is needed with “aggressive deployment” of solar energy. Discussion of energy storage continued, and Baird decided that a hearing on the topic is necessary.

Donna Edwards (D-MD) discussed the transmission of energy, asking if a decentralized system where a “local mix of sources” is used would be better. Bacon replied that she is a strong proponent of distributive generation, meaning power is generated close to where it is used, suggesting that local wind turbines could be used for communities. Baird noted that impacts on the environment should be considered, and asked if there is technology to reduce bird mortality. Swift said that radar is used to track bats and birds, and that the turbines can be shut down when a flock of birds appears on the radar. Saintcross mentioned that the radar is post construction monitoring, so data is collected after building the turbines. They can map the flight patterns of the animals, but they cannot distinguish between species on the radar. 

Talking for “those who believe global warming is the biggest hoax,” Dana Rohrabacher (R-CA) supported the expansion of solar energy because he is “committed to cleaner air and energy independence.” He asked about net metering that subtracts the power generated by solar panels from the amount of energy used. Bacon described the process of running the meter backwards during the day as energy is produced and then forward at night as energy is used. Rohrabacher suggested a national standard be considered to get people interested in using this net metering. He then asked if panels are biodegradable and if they have to be replaced every five years. Bacon corrected him, saying that panels are non-toxic and are sold with 20 to 25 year warrantees. Rohrabacher then noted that nuclear energy has been ignored, and wanted a price comparison with wind, solar, and nuclear energy.

The consensus from witnesses for both wind and solar energy is that R&D is necessary in order for these renewable energy sources to become significant parts of the U.S. energy supply. They stressed that R&D and innovation is needed is many different aspects, from the base technology to implementation. The witnesses all agreed that it is possible for wind and solar energy to be significant energy sources in the near future.

Links to the testimonies from the witnesses and a video archive of the hearing can be found here.

-RHP

House Science and Technology Committee Energy and Environment Subcommittee hearing on “Technology Research and Development Efforts Related to Energy and Water Linkage”
July 9, 2009

 

Witnesses
Dr. Kristina M. Johnson
Under Secretary, Department of Energy
Ms. Anu Mittal
Director of Natural Resources and Environment, Government Accountability Office
Dr. Bryan Hannegan
Vice President of Environment and Generation, Electric Power Research Institute
Mr. Terry Murphy
President of SolarReserve
Mr. Richard L. Stanley
Vice President of the Engineering Division, General Electric Energy

Committee Members Present
Brian Baird, Chairman (D-WA)
Bob Inglis, Ranking Member (R-SC)
Ben R. Lujan (D-NM)
Paul D. Tonko (D-NY)

On July 9, 2009, the House Science and Technology Committee Energy and Environment Subcommittee held a hearing to discuss the research and development (R&D) of technologies relating to the interdependence of energy production and water use. As climate change decreases available freshwater while population growth increases demand, ways to reduce the amount of water used during electricity generation are being developed. The hearing discussed the status of these technologies and their potential for implementation.

Dr. Kristina Johnson of the Department of Energy opened the hearing with testimony of the impacts of climate change on water supply and a discussion of the intimate relationship between energy and water. She explained that 90 percent of electricity generation is thermoelectric and requires a large amount of water to cool the system. However, 80 percent of these power plants are over 30 years old, and improvements could greatly decrease their water use. She also discussed efficiency of energy use, applauding the energy standards proposed by Energy Secretary Steven Chu for buildings and lighting. She succinctly summed up the issue under consideration, saying, “Climate affects water, water affects energy, and energy affects climate.” 

The other members of the witness panel concentrated on the available technology for increased water efficiency during energy production. Ms. Anu Mittal described the water used in biofuel and cooling technologies for electricity generation, information which will be released as two reports by the Government Accountability Office. She commented that R&D is needed in all steps of biofuel production: cultivation, conversion, distribution and storage. An example of problems with distribution is the corrosion of pipelines by ethanol and the possible contamination of groundwater. For cooling technologies, more efficient air cooling needs to be developed, and a lower cost solution for using brackish water instead of freshwater is required. Dr. Bryan Hannegan of the Electric Power Research Institute (EPRI) also discussed air cooling and the need for cost reduction. He spoke of the problems associated with ocean water withdrawal and marine life, suggesting more research is needed for withdrawal techniques that do not disturb the ocean ecosystem. He also discussed the technology to reuse treated sewage water for cooling.

Mr. Terry Murphy of SolarReserve talked about their technology that stores heat from solar plants in molten salts in order to make solar energy more reliable. He then cautioned that dry cooling encounters problems on hot days because it is not yet efficient enough, and suggested that hybrid systems combining wet and dry cooling techniques could reduce water consumption by 80 percent. He also pointed out that power plants will not voluntarily switch to dry cooling without some kind of policy regulation. Lastly, Mr. Richard Stanley discussed the General Electric (GE) gas turbine and commended the House for including text from H.R. 3029 to establish R&D of gas turbines in section 175 of the American Clean Energy and Security Act of 2009 (H.R. 2454) that passed in a House vote in June.

To start off the questioning, Chairman Brian Baird (D-WA) inquired if the projected population growth was factored into calculations of future energy and water needs. Dr. Hannegan said that this only adds urgency to develop more water efficient technologies for energy generation, since drinking water and agriculture are given priority over water needed for energy. Johnson stressed that behavioral changes are imperative to reduce the amount of water wasted as population is projected to reach 9 billion by mid-century. She remarked that legislation to establish standards would help. Baird commented that the term “global warming” is too passive, and people would pay more attention if it were called “lethal overheating.”

Continuing with the global warming discussion, Hannegan added that combining water regulation with power plant hybridization of solar and other energy sources would aid in achieving a low carbon future. However, Mittal warned that it is a “3-D equation” and there may not be a way to keep carbon emissions down while using less water during energy production. Stanley was more optimistic, and mentioned that the U.S. reuses only 6 percent of water during energy production. Other countries reuse more, so he believes the U.S should accelerate its efforts for reusing water and that gains can be made in water efficiency and conservation.

Baird also asked about the water that carbon capture and sequestration (CCS) would require. Hannegan stated that the process to treat carbon dioxide for pipeline transport would need more power and more heat, implying higher water use. He said mitigation of the rising energy and water demands is a challenge, but possible, citing an EPRI $40 million solution to reuse water through evaporation. Baird said he would look into this plan because it is much cheaper than FutureGen, a proposed $1.5 billion near-zero emissions coal power plant that would capture carbon as well as producing hydrogen and other byproducts for other uses. He also commented that he believes too much stake is put into CCS as a deployable solution within the next 20 years.

Congressman Ben Lujan (D-NM) emphasized the importance of innovation, asking Johnson if there are useful collaborations between academia and the private sector right now. Johnson replied that the best and the brightest from universities and industry are brought together and encouraged to maintain their collaborative relationships. Lujan then asked about energy efficiency within the power plants, to which Murphy responded that coal power plants produce more energy than needed at night because they do not change  production levels based on consumption rates. Stanley added that power plants are designed to produce power at peak demand rates, and become less efficient during “part load periods.” Turbine efficiency also depends on how hot or cold the day is. Hannegan cautioned that the challenge will be getting the utilities to switch to more efficient technologies, because they only consider the lowest costs and not the big picture.

Ranking Member Bob Inglis (R-SC) asked if there is technology or research focused on the combination of nuclear power plants and desalination of water. Stanley responded that nuclear and gas turbine plants use their heat to evaporate and recover water in closed circuit systems to limit the amount of water lost. Inglis queried about the large quantities of water that have to be used for cooling, and Hannegan responded that the amount of water withdrawn to keep temperatures down can be reduced by cooling ponds. These ponds let water equilibrate with the outside temperature before it is returned to its source, limiting the thermal shock on the ecosystem.

Inglis asked if GE was in favor of the cap and trade bill, commenting that currently there is no accountability, so companies will continue to “belch and burn” instead of buying GE energy efficient products. He emphasized the need “to attach a price to carbon.” Stanley replied that new technologies are coming, whether it is gas, wind, or solar, and the carbon legislation will help reduce the costs of these technologies.

Paul Tonko (D-NY), who introduced the original bill that would establish more R&D of the gas turbine, inquired if ripple effects would come from funding GE. Stanley replied that this would lead to improvements for land based turbines and aerospace technology. He also discussed the development of heat transfer technology, where a carbon composite would allow turbines to operate at higher temperatures where they are more efficient. Tonko asked if funding would be “a down payment” for the future, and Stanley agreed that developing this technology allows the U.S to remain at the forefront of gas turbine technology, leading to increased energy efficiency and more jobs.    

Links to the testimonies from the witnesses and a video archive of the hearing can be found here.

-RHP

Senate Environment and Public Works Committee Hearing on “Moving America toward a Clean Energy Economy and Reducing Global Warming Pollution: Legislative Tools”
July 7, 2009

 

Witnesses
Panel 1:
The Honorable Steven Chu
Secretary, United States Department of Energy
The Honorable Lisa Jackson
Administrator, United States Environmental Protection Agency
The Honorable Tom Vilsack
Secretary, United States Department of Agriculture
The Honorable Ken Salazar
Secretary, United States Department of the Interior

Panel 2:
Rich Wells
Vice President of Energy, The Dow Chemical Company
David Hawkins
Director of the Climate Center, Natural Resources Defense Council
John Fetterman
Mayor of Braddock, Pennsylvania       
The Honorable Haley Barbour
Governor of Mississippi

Committee Members Present
Barbara Boxer, Chairwoman (D-CA)
James M. Inhofe, Ranking Member (R-OK)
Jeff Merkley (D-OR)
Kit Bond (R-MO)
Amy Klobuchar (D-MN)
Lamar Alexander (R-TN)
Benjamin L. Cardin (D-MD)
John Barrasso (R-WY)
Frank J. Lautenberg (D-NJ)
Mike Crapo (R-ID)
Kirsten Gillibrand (D-NY)
Thomas R. Carper (D-DE)
Bernie Sanders (I-VT)
Sheldon Whitehouse (D-RI)
Tom Udall (D-NM)
Arlen Specter (D-PA)

On July 7, 2009, the Senate Environment and Public Works Committee conducted a hearing to discuss the Waxman-Markey bill, also known as the American Clean Energy and Security Act of 2009 (H.R. 2454), which was passed by the House of Representatives on June 26, 2009. The historic Senate hearing was held only two legislative days after the House bill passed by a slight margin of 219-212. Four Cabinet level witnesses testified on the first panel, while the second panel consisted of stakeholders from state and local governments and industry and environmental concerns.

Chairwoman Barbara Boxer (D-CA) started the hearing with comments on the importance of addressing climate change and investing in clean energy. She warned that the debate would produce “fierce words of doubt and fear from the other side of the aisle.” Nonetheless she continued,  the committee should reflect the “Yes we can, and yes, we will” attitude of the President and move forward with the House energy bill that she believes would create millions of clean energy jobs, reduce American dependence on foreign oil, and protect future generations from air pollution. All members of the Cabinet level witness panel agree with her that the Senate committee should pass the Waxman-Markey bill.

Ranking Member James Inhofe (R-OK) was less enthusiastic about the bill, declaring that the public does not want to pay for renewable energy with higher utility costs and the largest tax increase in American history. He was quick to refute Boxer’s comment that the bill has a tax credit for consumers. Inhofe called for an all inclusive domestic energy policy instead, and was frustrated that the House had added sections to the lengthy bill at 3 am on the morning of the House vote. Kit Bond (R-MO) also attacked the multiple versions of the bill, calling the carbon cap and trade program “a bureaucratic nightmare.”

In his opening statement, the Secretary of Energy Steven Chu discussed the need to act now to create sustainable, clean energy with costs estimated by the Congressional Budget Office at less than 50 extra cents per day for each household. Environmental Protection Agency (EPA) Administrator Lisa Jackson also referenced these low costs asking, “Can anyone honestly say that the head of an American household would not spend a dollar a day to safeguard the wellbeing of his or her children, to reduce the amount of money that we send overseas for oil, to place American entrepreneurs back in the lead of the global marketplace, and to create new American jobs that pay well and cannot be outsourced?” Both Chu and Jackson stressed the need for the U.S. to invest in renewable energy to reclaim the lead in innovation and the global economy.

The other members of the Cabinet level witness panel included the Agriculture Secretary Tom Vilsack, and the Interior Secretary Ken Salazar. Vilsack and Salazar also commented on renewable energy investments, both reiterating the positive consequences of the bill. Vilsack concentrated on the effects of the bill on rural America, where farming costs would probably increase, but jobs and incentives for wind and biomass energy production would benefit them in the end. He thought a greenhouse gas offset program would be necessary for the farmers, ranchers, and forest owners, whose land is a net sink for carbon. Salazar talked about the new renewable energy development that is beginning in the southwest and offshore. He recommended a booklet released by the National Academies of Science and the U.S. Geological Survey on the impacts of global warming seen around the U.S., calling for the Democrats and Republicans to come together to reach a solution.

A recurring concern for committee members was the creation of jobs in America, and the prevention of job outsourcing as renewable energy is developed. Generally, Democratic senators proclaimed the bill a way to create new green jobs in America. Amy Klobuchar (D-MN) commented, “It’s time we start investing in the farmers of the Midwest and not the oil cartels of the Mid East,” while Kirsten Gillibrand (D-NY) emphasized the immense potential for economic growth from renewable energy development in New York. Senators Sheldon Whitehouse (D-RI), Benjamin Cardin (D-MD), Thomas Carper (D-DE), and Bernie Sanders (I-VT) all heralded the new green jobs that the bill would create.

The Republican committee members were more skeptical. They worried that higher costs in the U.S. would drive production of renewable energy technology, and therefore manufacturing plants and jobs, to countries where production is cheaper. Lamar Alexander (R-TN) emphasized that the only available, affordable option to reduce carbon dioxide emissions is nuclear energy. He explained that nuclear energy is currently 70 percent of non-CO2-emitting energy sources, but is not specifically addressed in the bill. Alexander called for 100 new nuclear power plants to be built while research and development of renewable energy is doubled.

Mike Crapo (R-ID) echoed the nuclear energy concern, and asked Energy Secretary Chu why nuclear power is not considered part of the renewable energy standards established in the bill. Chu responded that nuclear power is incorporated as a carbon free source, and a carbon cap will lead towards more nuclear energy production. He affirmed his support of the Nuclear Regulatory Commission speeding up approval processes for new nuclear plants, indicating that the nuclear industry needs to be revived so the U.S. can take back the lead in nuclear power. Tom Udall (D-NM), Carper, and Cardin were also in favor of nuclear energy expansion, while Sanders was against it, stating, “Nuclear waste is highly toxic. We don’t know how to get rid of it. The folks in Nevada at Yucca Mountain have said they don’t want it. Maybe the people in Wyoming want it, maybe the people in Missouri want it, and we’ll send it there. Right now, to the best of my knowledge, no state in the Union wants this highly toxic waste.” Sanders instead emphasized Salazar’s comment that 29 percent of electricity in the U.S. could come from solar power plants.

Committee members also had concerns regarding transportation. Cardin asked about the benefits of public transportation, and Chu endorsed public transportation for the energy it saves and suggested using trains instead of trucks for long distance freight. Jackson added that most of U.S. greenhouse gas emissions that come from the transportation sector are from cars. Carper asked Jackson to think of a way to get more cars off the road, because recent trends in transportation show that more people are driving and making more driving trips every year. Carper does not believe the Corporate Average Fuel Economy (CAFE) standards that were passed as part of the Energy Independence and Security Act of 2007 had an impact, claiming that the CAFE standards “effectively took 60 million cars off the road in terms of the emissions reductions” but people continued to drive further and longer.

Frank Lautenberg (D-NJ) pointed out that 62 million more cars are on the road and asthma rates have doubled since the 1980s, confirming with Jackson that this all relates to air pollution. Arlen Specter (D-PA) expressed his worry about the coal business in Pennsylvania, but also acknowledged that the atmosphere needs to be cleaned to protect his grandchildren.

John Barrasso (R-WY) was clearly against the bill, questioning Jackson about an article in the Washington Post that said the bill would not stop climate change. Jackson responded that the bill is a step in the right direction, and it is a bill for jobs, energy, and climate change. Barrasso also complained about a lack of transparency in the EPA.

Inhofe also asked if reducing emissions in the U.S. would make a global difference if developing countries like China continued to emit the same amount of greenhouse gases. He showed a graph from the EPA that indicated global carbon dioxide concentration levels would be unaffected by a U.S. reduction. Chu disagreed with the graph, while Jackson emphasized the importance of the U.S. to take the lead in reducing emissions.

The second panel of witnesses at the hearing consisted of various stakeholders, including: Mr. Rich Wells of The Dow Chemical Company, Mr. David Hawkins of the Natural Resources Council, Mayor John Fetterman of Braddock, Pennsylvania, and Missouri Governor Haley Barbour who is also the Chairman of the National Governors Association.

Mr. Rich Wells of The Dow Chemical Company testified to the energy-intensive nature of the products his company produces. However Dow is “committed to sustainability,” and has reduced greenhouse gas emissions by 20 percent since 1990. His company is looking for further ways to reduce emissions through efficiency and alternative energy sources. Wells testified that Dow prefers an “economy-wide U.S. program, the centerpiece of which should be cap and trade” to address climate change because setting a price on carbon will be the best way to promote development of new breakthrough technologies. He also spoke about the need for different solutions over different timeframes which will most effectively “slow, stop, and then reverse the growth of greenhouse gas levels in the atmosphere.” He recommended that any climate change legislation should avoid harming the U.S. competitiveness by not penalizing the use of fossil energy in feedstock material, providing free allowances to the most vulnerable U.S businesses susceptible to carbon leakage, and taking steps to minimize switching from coal to natural gas in the power sector. Wells also pointed out that a price on carbon will not necessarily raise costs for businesses, but will instead cause them to change their behavior and technologies. Chairwoman Boxer was impressed that Dow had saved over $8 billion since 1995 by becoming more energy efficient. Sheldon Whitehouse (D-RI) was also impressed by Dow’s actions saying “Dow should ramp up advocacy” for energy efficiency in the business community.

Mr. David Hawkins of the Natural Resources Defense Council (NRDC) testified that climate change legislation in the U.S. can “help deliver economic, energy, and climate security” saying, “Clean, sustainable energy is one of the pillars of growth and prosperity in the 21st century…[and]…the time to act is now.” Hawkins asserted that “enacting U.S. legislation this year is the single most important step we can take to unlock the global negotiating gridlock of the past decade.” Hawkins said that NRDC recommends increasing emissions reductions to 20 percent by 2020 because we need a strong start in capping emissions. He added that “energy bills can decrease because of energy efficiency.” He testified that the bill has a strong cap and trade architecture built in, but there are problems with the offset provisions. He said that NRDC supports cap and trade, adding that “a cap can be designed so it is fair to all regions” in the country. They also support “complementary standards” to the cap and trade that will achieve emissions reductions through energy efficiency, renewable electricity, and carbon pollution control standards.

Boxer asked Hawkins, “What parts of the Clean Air Act should be restored?” He responded that ambient and total air quality standards were important in the Clean Air Act. She also asked if the Congressional Budget Office’s (CBO) scoring provisions for energy efficiency were off. Hawkins said they probably needed to be changed because “the CBO position is difficult to defend.” He added that the more money we invest in energy efficiency “the better off we’ll be.” Boxer asked if there is some type of awards system to ensure a national cap and trade system will work without states’ systems undermining it. Hawkins responded there are incentives for a “single harmonized system” adding that “states are usually a step ahead.” Hawkins also added that NRDC supports “a performance standard” for aging power plants so they are slowly decommissioned over time as they come to the end of their useful lives.

Mayor John Fetterman of Braddock, Pennsylvania testified to the loss of economic vitality in his community due to declining steel jobs in the area saying, “We need change – and we need it now.” Fetterman asserted that the new path for the U.S. is a “cap on carbon pollution [because] it offers us a chance to create new jobs.” He added that a cap will “spur our companies” to be innovators in new technologies and market leaders in a new energy economy. Fetterman asked the Senate “to be as bold as the House has been” and pass climate change legislation so the U.S. can move forward “to build a new energy future.” Boxer agreed with Fetterman and the other panelists that “there is a tremendous opportunity in front of us,” to create new jobs and technologies. If we do not act now, “we’re losing out.” Whitehouse asked for confirmation from Fetterman that he sees climate change legislation as an opportunity for his community and not a threat, and Fetterman responded that he absolutely sees it as “an opportunity to create new jobs” and to improve air quality.    

Whitehouse did voice concerns about the “overabundant” allowances in the Waxman-Markey bill, citing in some cases 107 percent of allowances would be given out. Wells responded that allowances allow companies to stay here in the U.S. and it is “an issue of transition,” from slowing to stopping to reversing emissions. He added if we reversed emissions right away it could hurt the economy. Hawkins asserted the conditions for using allowances would differ between sectors, and a greater fraction of allowances would go to “energy efficient, cost effective strategies.”

The National Governors Association Chairman Haley Barbour is against the cap and trade program, stating in his testimony that electricity rates will increase by 20 to 50 percent. He believes it will put unnecessary costs on the consumer without changing the global dynamics of the problem. Like others he referenced the EPA graph that showed the bill will not alter global emissions because China will still be emitting carbon dioxide. When Barrasso asked how the bill would affect families in Mississippi, Barbour responded that more jobs would be lost than created. He concluded, “The public needs to know the facts, and the longer the facts are in front of the public, then the better decisions they will call their Senators about.” Inhofe agreed with Barbour, saying that the bill will pass the committee, but will not pass the Senate because the American people will have had time to look it over and will oppose it.

Overall, the committee was in favor of passing some sort of climate change legislation, with varying degrees of commitment to the bill from committee members. Most Democratic senators agreed that the status quo of U.S. energy production and greenhouse gas emission must change with the U.S. at the forefront of global reform. The Republican senators were more hesitant, with Inhofe, Bond, and Barrasso most strongly against the bill. However, a major point for debate from both sides will likely be the inclusion of nuclear energy expansion in the bill.

Links to the testimonies from the witnesses and a video of the hearing can be found here.

-RHP and SMP

Senate Energy and Natural Resources Committee Markup of the American Clean Energy Leadership Act of 2009
June 11-16, 2009

 

Committee Members Present
Jeff Bingaman, Chairman (D-NM)
Lisa Murkowski, Ranking Member (R-WA)
Byron L. Dorgan (D-ND)
Richard Burr (R-NC)
Mary L. Landrieu (D-LA)
John Barrasso (R-WY)
Maria Cantwell (D-WA)
Sam Brownback (R-KS)
Robert Menendez (D-NJ)
Jim Risch (R-ID)
Blanche L. Lincoln (D-AR)
Bernard Sanders (I-VT)
Robert F. Bennett (R-UT)
Debbie Stabenow (D-MI)
Jim Bunning (R-KY)
Mark Udall (D-CO)
Bob Corker (R-TN)
Jeanne Shaheen (D-NH)

The Senate Committee on Energy and Natural Resources has been working on marking up a comprehensive bipartisan energy bill for the last twelve weeks. In the final two weeks of markups, the committee met four times to review and vote on the committee members’ proposed amendments. The bill, called the American Clean Energy Leadership Act of 2009, was passed by the committee on June 17, 2009 with a vote of 15-8.

During one of the final markup meetings on June 11, 2009, the committee worked on amendments proposed by Chairman Jeff Bingaman (D-NM), Mark Udall (D-CO), John Barrasso (R-WY), and Maria Cantwell (D-WA). Because of time constraints, Udall and Barrasso offered and then withdrew their amendments, stating they would reintroduce the amendments on the Senate floor for debate. Udall’s withdrawn amendment addressed mineral rights on private lands, requiring drillers to notify landowners before they start to drill for minerals under the surface. Barrasso’s amendment would allow more time for small refineries to reach the renewable electricity standards (RES) proposed by the bill. The RES set by the bill require the utilities who sell electricity to obtain a certain percentage of their electricity from renewable energy sources starting in 2011.

Cantwell split her amendment into two parts, possibly in anticipation that one section would not be as well received as the other. The first part passed, which allows the Federal Energy Regulatory Commission (FERC) to present cease and desist orders to companies suspected of “manipulative activities.” Ranking Member Lisa Murkowski (R-WA) was not pleased with this amendment, objecting to the expansion of authority given to FERC, which would not be required to have a trial before the cease and desist orders are given and the company’s assets are frozen.

On June 16, 2009, the committee reconvened and discussed the second half of Cantwell’s amendment. Cantwell stated that the purpose of this part of the amendment is to protect the pipelines and the consumers. FERC would be given the authority to mandate natural gas pipeline companies guilty of overcharging consumers to refund customers from the date the complaint was submitted. Murkowski, Jim Risch (R-ID), and Bob Corker (R-TN) urged more consideration before deciding to add the amendment, while John Barrasso (R-WY) and Mary Landrieu (D-LA) voiced their objection to the amendment in general. When Risch and Murkowski asked for a hearing on this topic, Cantwell was quick to say that there had already been one in March. However, the hesitant committee members were not convinced, and the amendment was voted down 10-13.

At the markup on June 16, 2009, two other amendments were withdrawn until the bill reached the Senate floor. Jim Bunning (R-KY) withdrew an amendment concerning the American military’s reliance on foreign oil, and Bernard Sanders (I-VT) withdrew an amendment that would require carbon capture and sequestration (CCS) projects to have private insurance instead of federal coverage. Sanders firmly stated that his amendment would relieve taxpayers from the unnecessary costs of unproven and at-risk CCS projects.

Two amendments backed by Bingaman were voted to be adopted during this markup meeting, but were first met with debate from Murkowski, Landrieu and Richard Burr (R-NC). The first amendment reduces royalty relief for companies drilling on the outer continental shelf by giving the Secretary of the Interior the authority to choose who gets relief money. Landrieu was the only democrat to vote against the amendment, saying companies need incentives like royalty relief to have enough money to move forward with drilling projects. Cantwell supported the amendment because she felt the money was just going to overpaid oil and gas companies. She quoted as much as $60 billion is lost in royalty relief and concluded that the oil industry does not need a bailout.

The second amendment from Bingaman would develop a pilot program for the leasing of federal lands used for wind and solar projects. The Secretary of the Interior would be given the authority to select four areas in the trial program. Bingaman believes this will smooth the transition from projects that are pending to the implementation of a federal leasing program. Murkowski was wary of the amount of authority given to the Secretary of the Interior, indicating a leasing program that promotes competition between companies would be better, but still supported the amendment. Landrieu complained that the compensation given to states where the projects are placed does not take into account the coastal states that have a large amount of offshore federal land right outside their borders, instead favoring the western states with large amounts of federal land. In the end, the amendment passed with no objections.

The final committee approved version of the bill includes other controversial amendments, including a provision to reduce the drilling buffer zone in the gulf coast from over 100 miles to only 45 miles. Senator Bill Nelson (D-FL) is greatly opposed to the buffer zone reduction that would bring oil and gas drilling to 45 miles off Florida’s coast and is expected to debate this issue on the Senate floor. The RES are also expected to be debated on the Senate floor, with some wanting higher standards and others wanting lower. Another amendment, aimed at inciting more use of distributed energy sources such as solar panels, was barely passed by the committee. This amendment from Bingaman would create a FERC regulated national standard for interconnection of these sources to the grid. Murkowski again opposed the expansion of power given to FERC.

Overall this comprehensive energy bill is a bipartisan effort to tackle all energy issues. The bill has titles to address new energy development, like clean energy deployment, renewable electricity standards, carbon capture and sequestration, and energy efficiency including water usage associated with energy. It also covers production of traditional oil and gas resources, the electricity transmission grid, and energy security. Finally, there is a section committed to energy workforce and innovation development.

-RHP

House Natural Resources Committee Energy and Mineral Resources Subcommittee Hearing on “Unconventional Fuels, Part I: Shale Gas Potential”
June 4, 2009

Witnesses
Mr. Douglas Duncan
Associate Director, Energy Resources Program, Unites States Geological Survey
Mr. Scott Kell
President, Ground Water Protection Council
Mr. Mike John
Vice President of Corporate Development and Government Relations, Eastern Division, Chesapeake Energy Corporation
Mr. Lynn Helms
Director, Oil and Gas Division, North Dakota Industrial Commission
Mr. Albert Appleton
Infrastructure and Environmental Consultant, Former Director of the New York City Water and Sewer System

Committee Members Present
Jim Costa, Chairman (D-CA)
Doug Lamborn, Ranking Member (R-CO)
Eni Faleomavaega (D-AS)
Cynthia Lummis (R-WY)
Dan Boren (D-OK)
Louie Gohmert (R-TX)
Martin Heinrich (D-NM)
John Fleming (R-LA)
Maurice Hinchey (D-NY)
Rush Holt (D-NJ)
John Sarbanes (D-MD)
Diana DeGette (D-CO)

On June 4, 2009, the House Natural Resources Committee Energy and Resources Subcommittee held a hearing on the potential of shale gas as a significant energy source now and in the future. A panel of five witnesses gave testimony: Mr. Doug Duncan from the United States Geological Survey (USGS), Mr. Scott Kell, the president of the Ground Water Protection Council, Mr. Mike John representing the Chesapeake Energy Corporation, Mr. Lynn Helms, the director of the Oil and Gas Division of the North Dakota Industrial Commission, and Mr. Albert Appleton, an environmental consultant who was the Director of the New York City Water and Sewer System from 1990 to 1993.

Chairman Jim Costa (D-CA) opened the hearing by explaining the significance of shale gas as part of a comprehensive energy package that will reduce the United States’ dependency on foreign energy sources. He acknowledged the enormous potential of the Marcellus Shale in the Appalachians that could supply the current natural gas demands of the United States for fifteen years. However, Costa is concerned that this vast resource must be developed in an economically efficient and environmentally safe way, citing air quality, land use, and water and wastewater supply issues. Ranking Member Doug Lamborn (R-CO) also emphasized the large potential of shale gas as a current and significant future energy source in the United States. He commented on the concern of groundwater contamination from the fluids used in hydraulic fracturing, defending a technique that has been around since the late 1940s and stating that it has not had an adverse effect on drinking wells. He concluded that planes and trains do not run on natural gas, and there would still be a need for oil.

While no subcommittee member or witness was against the extraction and use of shale gas, the main point of discussion in the hearing was the possible groundwater contamination from chemicals used in the hydraulic fracturing process. The fluids used during drilling and fluids injected into the shale contain chemicals that are currently exempt from the Safe Drinking Water Act. This means the drilling companies are not required to report the chemicals they use to the Environmental Protection Agency. Therefore, the current regulations on hydraulic fracturing practices vary from state to state.

On the witness panel, Mr. Albert Appleton expressed support for a federal oversight program to have all drilling companies under a “one size fits all” regulation. Appleton is worried that harmful chemicals are being introduced and left in the environment, and he thinks the shale gas industry should develop a biodegradable liquid instead of continuing to use chemicals like benzene in the hydraulic fracturing fluids. He believes land zoning will resolve some of the groundwater issues, but warns that global warming should be taken into account when planning the extraction and use of natural gas. Louie Gohmert (R-TX) later informed Appleton that he had misspoken, “I appreciate the reference and the concern, Mr. Appleton, about global warming and not getting proper consideration, but you may not have gotten the memo, you’re supposed to say climate change because there is emerging evidence that the planet may be cooling.”

With the exception of Mr. Doug Duncan, the other members of the witness panel strongly believe that the regulations provided by each state are sufficient. Duncan did not comment on which side of the debate he supported, but stressed the importance of the research and assessment of shale gas provided by the USGS. Mr. Scott Kell talked highly of the STRONGER (State Review of Oil & Natural Gas Environmental Regulations) review process that twenty one states have undertaken voluntarily, resulting in uniformity and consistency between the states. Mr. Lynn Helms discussed the safety regulations in North Dakota, going into the processes used to isolate and dispose of the waste fluid. When questioned about accidental spills, he said that a weekly inspection finds and cleans up one hundred percent of any spills. He is confident in the OSHA (Occupational Safety and Health Administration) regulations, which require the workers on site to know all of the chemicals used and the hazards associated with them. Mr. Mike John agreed that the OSHA regulations are sufficient, indicating that he has not seen any cases of groundwater contamination in his career. He emphasized that the fluids are removed and not left in the environment.

As the groundwater contamination issue was the basis of the hearing, Kell called into question recent reports of one thousand incidences of groundwater contamination from natural gas drilling. He brought a signed letter from the directors of five of the six states where the supposed contamination occurred. This letter denounced the cases of groundwater contamination in the five states as false. Kell could not speak for the sixth state, Colorado, because he could not reach the newly appointed director before the hearing.   

The most heated questions on this topic came from Representatives who support  federal regulation. Diana DeGette (D-CO), who was sitting in on the hearing and is not a member of the subcommittee, and Maurice Hinchey (D-NY) who is a member of the subcommittee. Hinchey and DeGette are working together to introduce legislation that would require the chemicals used during hydraulic fracturing to be subject to the Safe Drinking Water Act of 1974. Hinchey was against the bill that removed natural gas drilling from such regulation in 2005, referring to cases of adverse impacts from natural gas drilling in Arkansas, Alabama, Colorado, and Texas. Hinchey pressed Kell about the sources of funding of the Groundwater Protection Council, insinuating that contributions from the oil and gas industry may influence the outcome of their research. Kell responded, “I would emphasize that our opinions are not for sale and our emphasis is on the protection of groundwater resources.” Hinchey then focused on the chemicals used in hydraulic fracturing, asking John if he were aware that some of these chemicals are toxic. John responded by saying that the chemicals were accurately regulated at the state level and he reiterated that no incidences of groundwater contamination have been recorded. DeGette aggressively questioned John about reporting the chemicals used in hydraulic fracturing as part of the Safe Drinking Water Act requirements, interrupting several of his responses. She interjected, “If it’s perfectly safe, why would you object to disclosure of the chemicals that are used?” She completed her argument for the new legislation by pointing out that the reason no injuries have been linked to groundwater contamination is that the chemicals have not been reported.

Most of the subcommittee members who attended the hearing were against the federal regulation of the drilling practices. Eni Faleomavaega (D-AS) remarked that Canada is now extracting offshore natural gas and selling it to the United States. He doubts that the regulations in Canada would be any less severe than the United States. Duncan responded that the focus of the discussion was on onshore drilling techniques. Dan Boren (D-OK) referenced the fact that Obama had voted for the Energy Policy Act of 2005 that repealed hydraulic fracturing from the Safe Drinking Water Act. Cynthia Lummis (R-WY) praised a point raised by Helms, that implementing federal regulations would halt natural gas drilling for too long. She introduced a joint resolution from the state of Wyoming that asked Congress not to extend the Safe Drinking Water Act to hydraulic fracturing chemicals. Gohmert did not question the witness panel, but stated that the “one size fits all” approach did not work for education and will not work for regulating hydraulic fracturing either. He believes there will be some states that are better than others in their regulations, and that it is the job of each individual state to determine the best way to handle the natural gas drilling. Lastly, John Fleming (R-LA) made a point of the economic success of the hydraulic fracturing of the Haynesville shale in Louisiana offer in terms of producing energy and providing jobs.  

Committee members also concentrated on the processes involved in extracting shale gas. Boren noted that hydraulic fracturing is a necessary technique for the efficient extraction of the shale gas, and questioned John about the depth of the shale relative to drinking water aquifers. John answered that the Marcellus Shale is 8000 feet deep, while the freshwater aquifers are 200 to 300 feet deep. Martin Heinrich (D-NM) quipped that his questions would be short and “not add too much CO2 to the already very dense environment,” before he delved into the process of extracting and storing the waste fluid. Kell informed him that all of the fluids were returned to the surface and stored in lined pits or metal tanks before being transported to the waste site. He reaffirmed that there has not been a single case of groundwater contamination. Citing the detrimental effects of groundwater leaching from coal combustion waste in Maryland, John Sarbanes (D-MD) pointed out that advances in science now show the harm caused by certain mining practices.

Costa concluded the hearing by indicating he will look into a collaborative framework between the states extracting shale gas that would allow them to learn from each other. In this way, states with the most efficient and environmentally safe techniques can share their knowledge.

Testimonies from the witnesses and an audio archive of the entire hearing can be found here.

-RHP

Joint Economic Committee (JEC) Hearing on "Oil and the Economy: The Impact of Rising Global Demand on the U.S. Recovery"
May 21, 2009

Witnesses
Dr. Daniel Yergin, Chairman, Cambridge Energy Research Associates, Cambridge, MA
Dr. James Hamilton, Professor of Economics, University of California-San Diego

Subcommittee Members Present
Carolyn Maloney, Chairwoman (D-NY)
Kevin Brady, Ranking Member (R-TX)
Sam Brownback (R-KS)
Maurice Hinchey (D-NY)
Michael Burgess (R-TX)
Vic Snyder (D-AR)

On May 20, 2009, the Joint Economic Committee (JEC), comprised of Senate and House members, conducted a hearing to receive testimony regarding the impacts world oil prices will have on the U.S. economy as it moves towards recovery from the recession that began in the fourth quarter of 2007. Two witnesses with expertise in global economic energy issues provided in-depth testimony focused on two major themes. The first being the trends in oil markets that contributed to the 2008 price shock that helped contribute to the near freefall into global recession by the fall of 2008. The second focusing on what direction the United States needs to take to avoid such alarming price shocks in the future.

In his opening remarks, Dr. James Hamilton explained to the JEC that although the housing markets and the failing of major financial institutions were typically identified in the media as being the culprits for the recession, the rise in oil prices starting in 2007 was a significant factor in the economic downturn as well. Historically, spikes in oil prices had only a small influence on consumer trends. But, when prices surpassed $4/gallon by June 2008, they captured the attention of drivers immediately. This spike, as noted by Hamilton, quickly changed consumer demands, which had a ripple effect through the economy by late summer in 2008. In fact, research Hamilton conducted with economic models in 2003 indicated that the economy does not feel the full effect of an oil price spike for three to four quarters after the prices peak.

Dr. Daniel Yergin elaborated further on the impact oil prices had on the recession, indicating that the price of oil peaked 2 months before Lehman Brothers declared bankruptcy, and noted “oil prices are a barometer of the world economy.” Yergin further explained that currently, the economy is in a state of “long aftershock” from the 2008 price spike. This aftershock has created a surplus in production that currently amounts to about 6.5 million barrels per day. Because of this spare capacity, prices should not climax again until the world economy starts to improve, a condition that would tighten supplies. This temporary lull in increasing prices should be seen as an opportunity according to Yergin, as he noted a move towards unprecedented improvements in efficiency all across the energy spectrum could provide a buffer from future energy shocks.

Members of the JEC also recognized the opportunity. Chairwoman Carolyn Maloney (D-NY) asked the panelists, “What steps should we do to minimize impacts in the long run, especially now that we have some breathing room?” This question was essentially the centerpiece theme of all questions directed at the panelists throughout the hearing. To Maloney’s question, Yergin indicated that there is now a focus in thinking long-term in the energy sector, especially with green energy sources. Yergin also pointed out that new, innovative technologies can also change the energy and transportation, indicating that the natural gas discoveries in the western U.S. could be a way to reduce the thirst for imported petroleum.

The question of how U.S. domestic oil production could influence oil prices was also a topic of discussion that took on a slightly partisan tone. Maloney asked Hamilton if the U.S. can domestically drill itself out of the current problem. Hamilton informed the committee that if there was some more production during the summer of 2008, the price shock could have been curbed slightly, but since oil is a globally traded commodity domestic production “wouldn’t put a dent in global consumption.” Despite the relatively small impact that U.S. oil production would have on the current markets, Ranking Member Kevin Brady (R-TX) lambasted the Obama Administration’s policy to limit domestic production, particularly in offshore areas. Brady noted in his opening remarks that “a policy designed to suppress U.S. oil and gas production is absurd,” and noted U.S. production must occur to give the nation time to bridge the gap between fossil-based technologies of today and the emerging renewable technologies of tomorrow. Brady asked the panel what types of long-term investments are needed from the federal government, noting private investments in energy research are currently outpacing federal investments at a ratio of 5 to 1. Yergin answered Brady by indicating “diversification is the starting point,” and further elaborated that Congress should support a “big research agenda” that explores clean coal technologies as well as expanding on the opportunities natural gas might provide in the transportation sector.

Maurice Hinchey (D-NY) brought a sobering mood to the hearing as he expounded on the reality of oil being a finite resource, indicating that the oil crisis is “very, very complicated.” Hinchey urged caution in relying on oil, noting that the world consumption continues to grow while the overall amount obtainable continues to dwindle. Hinchey also explained that the potential of oil sands in Canada should be approached with caution because of the stress extracting the oil from these deposits would have on the environment. Yergin responded to Hinchey’s question as to how the U.S. should reduce its dependency on fossil fuels, noting that the energy sector should be divided into transportation and electricity generation. Yergin indicated that the transportation sector must move away from the internal combustion engine, and noted the role wind and solar must play in electricity generation. Yergin further indicated that oil and natural gas will still dominate the mix for the next decades, and that the answer to Hinchey’s question is “all of the above. We can’t afford to make mistakes.” Hamilton further addressed the Canadian oil sands potential, noting that these sources are “very challenging” and will not impact the markets for several years.

Michael Burgess (R-TX) expressed support for energy diversification, especially nuclear energy stating “nuclear has a place in my opinion,” and noting that the U.S. already obtains 20 percent of its electricity from nuclear power plants. Yergin responded to Burgess by noting constant innovations in energy technology are occurring, using as an example the potential to use small nuclear power plants to generate the heat needed to extract oil sands in Canada. Burgess asked Yergin if there is potential for natural gas to replace diesel as a transportation fuel. Yergin did not give a definitive “yes,” but shared the story of how from 1895 to 1905, the race was wide open for the dominant transportation fuel to power the newly-invented automobile, and the same opportunity exists today for “outside the box” thinking. Unfortunately the weakened state of the automobile industry might delay research in this area according to Yergin.

Brady touched on the topic of geopolitical influence on oil markets, noting that government-owned companies control 80 percent of the world’s oil reserves. He indicated that these nationalized companies are cutting deals with other countries with growing economies, thus “shrinking the piece of the pie” that private companies can invest in. Brady quizzed the panel as to the potential these agreements may have on the U.S. economy, to which Hamilton responded, “I think it is unfavorable, many countries [with nationalized oil production] aren’t managing the industry as efficiently as possible.”

Despite the difference in views regarding exploiting domestic oil sources, the JEC appeared to get the message from Yergin and Hamilton that diversification of energy resources, both in fossil and renewable sources are paramount to protecting and growing the U.S. economy in the future. Brady perhaps summed it up best stating, “I think there’s more common ground on this issue than what sound bites lead you to believe.”

Written and oral testimony from the chairwoman, ranking member, and panelists can be found here, as well as a video archive of the entire hearing.

-CPC

House Committee on Natural Resources Joint Subcommittee Hearing on "Energy Development on the Outer Continental Shelf and the Future of Our Oceans"
March 24, 2009

Witnesses
Mr. Ian Bowles, Secretary, Executive Office of Energy and Environmental Affairs, State of Massachusetts
Dr. Joshua Eagle, Assistant Professor of Law, University of South Carolina Law School
Dr. Thomas Kitsos, Consultant to the Joint Ocean Commission Initiative
Mr. Robbie Diamond, President and CEO of Securing America’s Future Energy (SAFE)

Subcommittee Members Present
Madeleine Bordallo, Chairwoman, Insular Affairs, Oceans and Wildlife Subcommittee (D-GU)
Jim Costa, Chairman, Energy and Resources Subcommittee, (D-CA)
Doug Lamborn, Ranking Member, Energy and Resources Subcommittee (R-CO)
Henry Brown, Jr., Ranking Member, Insular Affairs, Oceans and Wildlife Subcommittee (R-SC)
Don Young (R-AK)
Edward Markey (D-MA)
Lois Capps (D-CA)
Neil Abercrombie (D-HI)
Louie Gohmert (R-TX)
Jason Chaffetz (R-NM)
Bill Cassidy (R-LA)
Doc Hastings (R-WA)
Dale Kildee (D-MI)
Eni F.H. Faleomavaega (D-AS)
Jay Inslee (D-WA)

On March 24, 2009, the Energy and Mineral Resources and the Insular Affairs, Oceans and Wildlife Subcommittees of the House Natural Resources Committee held a special joint oversight hearing titled Energy Development on the Outer Continental Shelf and the Future of Our Oceans.” The hearing was held on the 20th anniversary of the infamous Exxon Valdez oil spill in Alaska’s Prince William Sound. As indicated by Chairwoman Madeleine Bordallo (D-GU), the intent of the joint subcommittee hearing was to gather testimony on potential environmental impacts and the planning needs regarding development of both traditional and alternative energy sources on the nation’s outer continental shelf (OCS). 

A partisan tone was evident from the onset of the hearing, with the ranking subcommittee members each questioning the motive and intent of the hearing. Following Bordallo’s initial statement, Ranking Member Henry Brown (R-SC) bemoaned in his opening remarks, “I’m sure it’s no coincidence that this off-shore hearing was specifically scheduled on the 20th anniversary of the Exxon Valdez oil spill,” and provided numerous statistics about the small percentage of oil spills from offshore drilling operations. Brown further stated that misconceptions need to be overcome for proper action to be taken. Ranking Member Doug Lamborn (R-CO) expressed his frustration with what he considered a lack of balance in the selection of witnesses, noting that no representatives from the Minerals Management Service (MMS) or the U.S. Coast Guard would be providing testimony on the challenges of oil spills, but that there were witnesses from fisheries and environmental groups testifying to the dangers of offshore energy development.

The witness panel provided diverse testimony for the joint subcommittee on the need to maintain ocean health and offshore energy development. Mr. Ian Bowles gave a brief review of a project the state of Massachusetts has undertaken to develop offshore wind energy. He also provided his input on what federal agencies need to do for a more efficient process in such endeavors. He indicated that the National Oceanic and Atmospheric Administration (NOAA) must “embrace its’ coastal mission” when working with states. He urged t the Federal Energy Regulatory Commission and MMS to work together on determining what is needed to develop large-scale offshore energy projects, noting the intricacies and complications of an offshore transmission infrastructure.

Dr. Joshua Eagle presented the importance of “marine spatial planning,” a term he used to describe ocean zoning for management of coastal water resources. He noted implementation of this type of planning would provide an assessment of private and public resources for sound decision making, help prevent costly conflicts between property owners, and provide a stable legal environment by having zones designated for particular uses or protections before any offshore development.

Dr. Thomas Kitsos recommended to the subcommittees the need for a national ocean policy, noting “Our ocean governance system is broken,” and suggested that “good policy requires good planning, and good planning requires good coordination.” Such a policy would create a cabinet-level ocean policy advisor to the president. Kitsos indicated that this sort of arrangement would streamline efforts among the numerous federal agencies involved in OCS energy and environmental issues.

Finally, Mr. Robbie Diamond shared with the subcommittee the important role OCS energy development plays in long term energy security for the U.S. Diamond suggested that short term goals for enhancing security include electrifying the American car fleet and development developing domestic sources of oil, noting that 56 percent of the trade deficit in 2008 was attributed to oil imports. Diamond also used Norway as an example of a nation that utilizes safe and productive technology to extract offshore oil deposits, a result of cooperation between the Norwegian government and the private sector.

The subcommittees quizzed the witness panel on a variety of concerns, some which instigated passionate dialogue from both parties. Energy and Resources Subcommittee Chairman Jim Costa (D-CA) asked the witnesses how ocean safety regulations in the U.S. compare to other nations. Kitsos noted that the U.S. has “some of the best in the world” and that the stringency of the MMS is “sound.” He also indicated that petroleum extraction technology is relatively global, as the same types of infrastructure being used in the Gulf of Mexico are likely being used off the coast of Nigeria. Costas also inquired about what difficulties lie ahead in implementing an ocean zoning process. Bowles stated that attention must be given to wildlife habitats and fisheries so that planning does not lead to obstruction. Kitsos again called for a cabinet level advisor to coordinate process when multiple jurisdictions exist. Both Bordallo and Costas brought up the timeframe question in regards to a zoning plan, and although no specific number was given, Eagle noted that it took Australia about two years to develop a zoning plan of the Great Barrier Reef.

Don Young (R-AK), who called the Exxon Valdez accident in his home state a “tragedy,” was adamant that domestic oil production is bolstered. He noted the importance petroleum plays not only in transportation needs in the U.S., but in many of the everyday products made from petroleum derived compounds, from eye glasses to airplanes. Young also noted that of all the ocean pollution from oil worldwide, 63 percent is naturally occurring, so “the biggest polluter we have is mother nature herself, and I hope we’re not thinking about capping mother nature.” Young concluded his commentary by addressing the entire room, urging the subcommittees to “recognize the need for fossil fuel” and that “we can’t continue to put our heads in the sand when we are a nation of fossil fuels.” Jay Inslee (D-WA) commented to the room that the new Boeing 787 identified by Young, a more fuel efficient plane because of petroleum-derived composite materials used in its construction, could someday be powered by biofuels. In response to this possibility, Young sarcastically replied, “That’ll be a warm day in Alaska.”

Louie Gohmert (R-TX) left no doubt on his stance on offshore oil development. The congressman indirectly expressed his views on climate issues in his opening remarks by stating, “It was interesting to hear about the Arctic melting because I don’t know if everybody’s got the memo, we’re supposed to quit saying global warming and talk about ‘climate change.’ That way, if we’re making a lot of money from contributions from people that want us to fight global warming and it turns out the planet’s actually cooling, then we can still keep the contributions coming in because now we’re gonna fight climate change.” Gohmert pointed out what he felt were many things to be pleased about since Exxon Valdez in regards to oil spills, noting that no significant spills occurred on the fleet of oil platforms in the Gulf of Mexico during Hurricane Katrina in 2005. He also indicated that the presence of oil platforms has actually benefited the fishing industry off the Texas coast, claiming that oil platforms “make great artificial reefs.” Gohmert further added, “I don’t like tankers running around full of oil, that is a problem about to happen, especially if you got a lot of wind mills they might collide with out there in the water.” The remainder of Gohmert’s time involved a somewhat confrontational exchange with Bowles regarding potential wind energy off of the Massachusetts coast. Gohmert asked Bowles if he was “100 percent in favor of the wind mills off Cape Cod coast.” Bowles indicated that the governor of Massachusetts supports the plan to which Gohmert responded, “And you personally do, correct?” Bowles indicated that he has not had a personal opinion because of his regulatory status when providing the environmental review as chair of the sighting board. Gohmert pointedly fired back, “Wait a minute, if you’re gonna come up here and take our time testifying about how great wind mills are, then all you need to tell me is you don’t have an opinion on having them off your own coast. I think you answered my question.” Bowles tried to explain that he was representing the governor of Massachusetts when Gohmert interrupted, “I know you’re speaking for the governor, I asked you a personal question and you didn’t have an answer…then you said you didn’t have an opinion.” Bowles attempted to clarify his position before Gohmert again interrupted, “Question is, do you have an opinion or not?” to which Bowles replied, “I don’t have a personal opinion” which finally satisfied Gohmert’s inquiry.

Neil Abercrombie (D-HI), passionately shared his views on U.S. energy policy abroad, and questioned the panel as to the current status of the national offshore inventories. Diamond informed Abercrombie that a complete inventory has not been conducted in 30 years, and individual investigations keep finding more oil than ever previously thought to exist on the OCS. Abercrombie expressed his frustration with the current trend of using the military to ensure foreign sources of oil, and the complacency Congress seemingly has with “endless planning” of developing domestic energy sources. Abercrombie concluded his remarks by informing the Chairwoman that a bill will be on the way with an equal number of Democrats and Republicans on board that will specify a domestic energy policy, emphasizing that “this is something that has to get beyond these ideological constructs that we have developed in here.”

A second witness panel, not covered in this summary, focused on the impacts of energy development on the fishing industry in Alaska. This portion, and the entire hearing, can be viewed in an archived video broadcast here.

-CPC

House Committee on Science and Technology Subcommittee on Energy and Environment hearing entitled "FutureGen and the Department of Energy's Advanced Coal Programs"
March 11, 2009

Witnesses
Dr. Victor Der, Acting Assistant Secretary, Office of Fossil Energy, U.S. Department of Energy
Mr. Mark Gaffigan, Director, Natural Resources and Environmental Team, U.S. Government Accountability Office
Ms. Sarah Forbes, Senior Associate, Climate and Energy Program, World Resources Institute
Mr. Robert Finley, Director, Energy and Earth Resources Center, Illinois State Geological Survey
Dr. Larry Monroe, Senior research consultant, Southern Company

Committee Members Present
Brian Baird, Chairman (D-WA)
Bob Inglis, Ranking Member (R-SC)
Mario Diaz-Balart (R-FL)
Daniel Lipinski (D-IL)
Ben Lujan (D-NM)
Donna Edwards (D-MD)
Jerry Costello (D-IL)
Lynn Woolsey (D-CA)
Paul Tonko (D-NY)
Ben Chandler (D-KY)
Jim Matheson (D-UT)
Bart Gordon (D-TN)
Eddie Bernice Johnson (D-TX)
Vernon Ehlers (R-MI)

The Energy and Environment Subcommittee of the House’s Committee on Science and Technology received testimony from five panel witnesses on the status of the Department of Energy’s (DOE) FutureGen (FG) project and the status of advanced coal technology research during the March 11, 2009 hearing “FutureGen and the Department of Energy’s advanced coal programs.”

The controversial modification of the FG project was the centerpiece of discussion at the onset of the hearing. Some background on FG is necessary to understand the hearing discussion. Initiated by the Bush administration in 2003, FG is a partnership of the federal government (through DOE) and the FutureGen Industrial Alliance (FGIA), a group of 11 of the largest coal producers and users in the world. This partnership is devoted to the development a zero-emissions electricity and hydrogen producing coal-fired power plant. Originally budgeted at $1 billion over 10 years, the proposed FG power plant was designed to incorporate the integrated gasification combined cycle (IGCC), an emerging technology that uses less coal to generate an equivalent amount of electricity as conventional coal-fired power plants produce. The facility would also serve as a laboratory for testing more efficient methods for carbon capture and sequestration (CCS). The original cost-share structure had the federal government set to pay 74 percent of the project and FGIA responsible for the remaining 26 percent. By late 2007, FGIA had selected a site for a pilot IGCC-CCS facility in Illinois and completed the required environmental impact analyses. However, in January 2008, DOE, which has the authority of granting final approval of a site, announced that because of cost concerns, it would not continue its cooperative agreement with FGIA and would take a different approach to FG.

At the request of this subcommittee, the U.S. Government Accountability Office (GAO) investigated the sudden change in strategy at DOE. In his opening statement and responses to questions from the subcommittee, Mr. Mark Gaffigan detailed the modified FG project and contrasted it to the original plans. Both plans have similar goals, but the original FG project focused on researching an integrated IGCC-CCS system, and the modified plan is designed to implement CCS technology on currently operating coal-fired power plants. Gaffigan shared with the subcommittee the puzzling cost numbers used by DOE to justify project modification, and noted they were not comparable. He indicated that the DOE’s hastily prepared assessment of cost “doubling” was misleading, because DOE used a constant-cost (non-inflationary) formula unlike the FGIA’s analysis. The DOE estimate of $950 million was based on 2004 constant dollars while the FGIA’s estimate of $1.8 billion was calculated in current-cost (inflation included) dollars. If the FGIA’s estimate used the 2005 constant-cost dollar amount, the increase in the project would have been only 39 percent of the original $950 million DOE estimate, which is substantially less than the “near doubling of costs” as reported by the DOE. He stated that the DOE did not conduct a comprehensive analysis of costs, benefits, and risks of an alternative to the original FG. The goal of the modified FG plan is to encourage applications from utilities currently operating coal-fired plants to test new CCS technologies as well as proposals for new IGCC-CS plants. However, at the time of the hearing, the DOE had only received a small number of applications for participation in the modified FG project.

Jerry Costello (D-IL), whose home state was set to host the IGCC-CCS site, expressed frustration with the DOE’s position on FG. “You can imagine how disappointed I was, not only disappointed, but outraged after five and a half years of research and spending literally tens of millions of dollars on this project that the DOE and the [Bush] administration decided to pull the plug on,” Costello remarked. He felt that the real reason for the FG modification was politically motivated, noting that when the the non-partisan FGIA chose Illinois over Texas as the FG site, the Bush administration officials disagreed with the decision and called for the restructuring of FG. Costello informed the subcommittee and witness panel that his goal now is to “get the project back on track” and “move FG and carbon sequestration forward and look at other clean coal technologies.”   

With the status of the modified FG project somewhat in limbo while the new DOE secretary evaluates the plan, Chairman Bart Gordon (D-TN) expressed his concern with the expediency of the entire project in relation to the significant carbon dioxide emissions reductions recommended by the U.N. International Panel on Climate Change (IPCC) in 2008. He questioned Gaffigan regarding what the government should do to avoid the problems encountered with the DOE’s shift in plans. Gaffigan told Gordon that it “starts at the top” and emphasized the commitment needed to schedule and place the right resources and people in the right places. Gaffigan also added that projects such as FG are “high risk.” The theme of “high-risk” brought some consternation to the subcommittee, as some members questioned whether FG is even the right approach to tackling climate change and whether the funding allocations would be better spent elsewhere. Donna Edwards (D-MD) asked the panel to raise their hands if any were skeptical about CCS as a future technology. Ms. Sarah Forbes was the only panelist to raise a hand, and was asked to elaborate her concerns by Edwards. Forbes stated, “We have to demonstrate it. I think the research has been really promising, but we haven’t done it at scale.” Edwards further expressed concern as to whether resources should be spent on developing new technologies and facilities or on modifying current coal-fired facilities. Forbes insisted that any emerging technology must address the existing fleet of plants to reduce carbon dioxide emissions.

Chairman Brian Baird (D-WA) expressed his skepticism about the project and asked the panel about the timeframe of getting CCS technology operating at a beneficial scale. In his questioning to the panel Baird stated, “My hunch is it is going to take a long time and we’re not going to ultimately get that much out.” Forbes answered, “Unless we demonstrate the technology, it’s [CCS] not going to play. The urgency lies in when we decide to demonstrate it.” Dr. Larry Monroe explained to the subcommittee that based on projects he has been involved with, technology will not be commercially available until 2020 to 2025. “2025 sounds like a long way away to me given the urgency of this situation. It feels a little bit like having followed the debates on fusion energy for 20, 30 years now myself, and it’s always ‘20-30 years away’,” responded Baird. Vernon Ehlers (R-MI) briefly lightened the mood by telling the chairman that “as far as fusion is concerned, it used to be 20 to 30 years, now it’s 30 to 40, so we’re making progress. Just call me the Bernie Madoff of physics.” Baird also questioned the storage capacity in the U.S. to which Dr. Victor Der responded that there are a few hundred years worth of liquefied carbon storage capacity available in geologic formations.

Both Ehlers and Mario Diaz-Balart (R-FL) expressed curiosity about what is being done internationally with research efforts in CCS and cooperative cost-share arrangements. According to the GAO report, South Korea and India made financial contributions to FG in 2006 and 2007, but these nations were not considered as part of the modified FG project. Finley informed the subcommittee of the lack of international awareness of  FG, noting that scientists from China visited the test CCS injection facility in Illinois, but were unaware of such operations taking place in the U.S. before their visit. Forbes informed the panel that the European Union (EU) is now funding 10 to 12 combined IGCC-CCS demonstration sites across Europe, including commercial-scale testing facilities. Diaz-Balart asked the panel if the EU is becoming a bastion of CCS research, to which Forbes replied, “the EU is further along in testing and regulation, but U.S. research efforts are still one of the best [in the world].”

Ranking Member Bob Inglis (R-SC) addressed the panel on implementation of a cost mechanism to drive research and development and entrepreneurship. “Until entrepreneurs and inventors are marrying each other because a price signal has been sent that now something is going to happen and you can make money doing it, until that happens, nothing happens.” Inglis also expressed concern about the proposed cap-and-trade system, stating that it would be a “massive tax increase” and has little chance of getting support from conservatives. Even if such a system were passed in a House bill, Inglis predicted it would be “dead on arrival” in the Senate. “The collaborative opportunity I think we’ve got is a revenue neutral carbon tax, if I may be so bold to suggest it,” Inglis added. His proposed incentive mechanism would reduce payroll tax to offset the added carbon tax placed on the consumer, and the carbon tax would be used to fund innovation and invention in the energy sector. He indicated that this approach would be bipartisan in nature, noting that he wants to “bring the best of conservative thought, which is how markets work when properly adjusted, and the best of democratic thought which for a long time has been ‘we got to do something.’ We put those two together, and we get a solution that works.”  Inglis noted that until now, efforts to solve the energy-carbon emission problems have been similar to an unimaginative American football strategy of “up the middle, up the middle, up the middle, punt.” Baird brought laughter to the room by telling Inglis that the “up-the-middle” strategy is well used by the professional football team, the Seattle Seahawks who play in his home state of Washington.        

Links to witness testimonies and a video archive of the hearing can be found here.

-CPC

Senate Committee on Energy and Natural Resources
Hearing Entitled “To Receive Testimony on Pending Water Resources Legislation”

March 10, 2009

Witnesses

Mr. Carl Bauer, Director of the National Energy Technology Laboratory, U.S. Department of Energy
Mr. Stephen Bolze, President and Chief Executive Office, General Electric Water and Power
Dr. Michael Webber, Associate Director, Center for International Energy and Environmental Policy, the University of Texas at Austin
Dr. Peter Gleick, President, Pacific Institute for Studies in Development, Environment, and Security
Dr. Lon House, Energy Advisor to the Association of California Water Agencies

Committee Members Present

Jeff Bingaman, Chairman (D-NM)
Lisa Murkowski, Ranking Member (R-AK)
Mark Udall (D-CO)
Jeanne Shaheen (D-NH)
Bob Corker (R-TN)
John Barrasso (R-WY)
Robert Bennett (R-UT)
Sam Brownback (R-KS)

In the March 10, 2009 hearing “To receive testimony on pending water resources legislation,” the Senate Energy and Natural Resources Committee received testimony from five expert witnesses on the symbiotic relationship of water and energy in support of the drafted Bingaman-Murkowski Energy and Water Integration Act (S. 531).

In his opening remarks, Chairman Jeff Bingaman (D-NM) addressed the panel on the interdependency of water and energy and noted that issues involving management of these resources “are likely to intensify” in the coming years. Bingaman briefly described how energy consumption affects the supply of water, and the scarcity of water affects the cost of energy. He indicated the water-energy nexus is beginning to influence permitting decisions for new energy facilities across the nation.

Bingaman’s initial comments were further supported by commentary in individual testimonies by the witness panel. Mr. Carl Bauer emphasized the “inextricable” connection of water and energy, and stated most Americans do not realize they use more water by turning on lights and appliances in their houses then they do through washing clothes and lawn watering on a daily basis. Bauer further explained the potential impacts carbon capture and sequestration (CCS) technologies installed at fossil fuel power plants would have on water resources. Bauer shared with the panel that analyses performed by the National Energy Technology Laboratory indicated that with current CCS technology, power plants would need to consumer twice the amount of water currently used for operations, a condition that could substantially raise electricity prices for consumers.  Mr. Stephen Bolze presented the committee a brief overview of how General Electric (GE) is working on the water-energy nexus to reduce withdrawals and consumption in energy production. He shared with the committee several sectors GE is involved with, including development of clean-coal technology that consumes 30 percent less water than conventional coal plants, developing new methods of oil and natural gas extraction that use less water, and working with industry throughout the world to expand methods of water reuse. The remaining three panelists each shared with the committee more statistics and trends in the water-energy interrelationship and provided several suggestions regarding improved management of this relationship in their testimony.

The committee brought the topic of water reuse to the forefront during the open question portion of the hearing. The witness panel first explained the difference between water consumption and water withdrawal to clarify some misunderstanding among a few of the Senators. Bingaman questioned the status of water reuse in power generation and industry in the U.S. Bolze informed the panel that nationwide, around 6 percent of water for these purposes is reused. Comparatively, Israel currently reuses 70 percent of their water devoted to energy and industry, Singapore reuses 15 percent, and Australia reuses eight percent with plans set to increase to 30 percent. Bolze told the committee that the simple answer as to why the U.S. reuses so little water is economics. At the present time, it is cheaper to withdraw water from surface sources or aquifers than it is to reuse the same water in industrial or energy producing activities. He suggested tax credits as a way to spur holistic reuse. Dr. Peter Gleick also indicated how economics plays a role in developing new water sources, such as the energy intensive process of ocean water desalinization. Gleick told the subcommittee that the only way desalinization will become a more reliable source of fresh water is when the process becomes more cost effective. He indicated that based on a National Academy of Sciences study the energy required for water desalinization was decreasing as the technology evolved, but rising energy costs in recent years, partly attributed to greater scarcity of fresh water, has again forced the cost of desalinization to levels prohibitive for large-scale development.

Ranking Member Lisa Murkowski (R-AK) questioned the panel as to where federal engagement is needed for improving management of the water-energy nexus stating, “Water is the next oil in terms of the fight and the competition [of resources], and I truly believe we’re going that way.” Dr. Michael Webber suggested more involvement from the Department of Energy (DOE), and an expanded role of the U.S. Geological Survey (USGS) in obtaining water data across the nation. The USGS is the primary agency for collecting water information, but Webber pointed out that their current resources are too limited and measurements are too infrequent for developing a comprehensive nationwide database of water resources. Gleick offered further support for a national census of water uses and resources, stating that “the USGS is the perfect place” for conducting a census. Although many water issues are local in nature, Gleick emphasized the need for federal involvement, noting that state and watershed boundaries are rarely identical and federal oversight can provide more comprehensive cross-boundary watershed analyses than individual states are likely to do.

Murkowski also asked the panel about water rights issues and the role they play in management of the water-energy nexus. She cited a recent article in the Denver Post on a water rights case Shell Oil, Inc. is facing for development of oil shale in western Colorado. She indicated a lack of involvement by the federal government and asked if in lieu of federal government involvement, water courts in western states are starting to consider “the big energy picture.” Gleick responded to Murkowski’s question stating, “It’s a key question, the whole question of water rights, especially in the western U.S. is central to a lot of the debates we’ve been having for 100 years about water, and now energy policy.” He cited an example of how long-term drought has forced Australia to restructure its water rights system, a move that is “something some of us might wish we could do in the U.S. but aren’t holding our breath for.”      

Also raising questions from the committee is the emerging water issue facing an energy industry trying to reduce greenhouse gas (GHG) emissions through carbon capture and sequestration (CCS). Currently, CCS technologies double the amount of water needed to generate electricity at conventional fossil fuel plants. “I’m a skeptic. It’s sort of like when donkeys fly we’ll be doing it on a commercial basis,” stated Bob Corker (R-TN) about the CCS process. He asked the panel for their thoughts about impacts CCS might have on water resources. Webber indicated that CCS could have impacts on groundwater quality if not properly stored in aquifers and stated, “It’s an important, complicated system. You start to see the energy-water-carbon tradeoff. We have to be very thoughtful about this.” Dr. Lon House shared with the committee that water agencies in California are investing more into renewable energies to offset their carbon footprints caused by the energy needed to transfer water throughout the state. Gleick added that he was unaware of any comprehensive research that has been done on CCS impacts to water resources, and that the question further supports the need for a national water census. Jeanne Shaheen (D-NH) asked the panel what could be done to improve the efficiency and potential for widespread use of CCS. Mr. Bauer replied that the question is location dependent- the appropriate amount of water needs to be available for CCS to occur, and, the right types of geologic formations are essential for the proper disposal of the liquefied carbon dioxide.

Murkowski questioned the panel on the role water plays in national security issues, as noted by her comparison of water to oil. Gleick informed the committee that there is a strong connection and long history of the role water plays in conflict and stated, “I actually think we’re more likely to see more conflicts over water issues than oil in the long run.” He did indicate however that there are solutions to reducing the potential for conflicts over water. Webber addressed the committee with a glass-half-full outlook, stating, “Water scarcity can be a source of war, or water availability can be a source of peace. We can use our technology and our prowess as a nation to improve our foreign policy in offering clean water and clean energy to different parts of the world.”

Links to witness testimonies and a video archive of the hearing can be found here.

-CPC

 

Senate Committee on Energy and Natural Resources
Hearing Entitled “To Receive Testimony on Pending Water Resources Legislation”

March 5, 2009

Witnesses
Panel 1
The Honorable Steven Chu, Secretary of Energy, U.S. Department of Energy (DOE)

Panel 2
Dr. Gregory Crabtree, Senior Scientist, Associate Division Director, Argonne National Laboratory
Mr. Bob Fri, Visiting Scholar, Resources for the Future
Dr. James Bartis, Senior Policy Researcher, RAND Corporation
Ms. Deborah Wince-Smith, President, Council on Competitiveness
Dr. Mike Corradini, Director, Wisconsin Institute of Nuclear Systems, University of Wisconsin-Madison

Committee Members Present
Jeff Bingaman, Chairman (D-NM)
Lisa Murkowski, Ranking Member (R-AK)
Mark Udall (D-CO)
Jeanne Shaheen (D-NH)
John McCain (R-AZ)
James Risch (R-ID)
Bob Corker (R-TN)
John Barrasso (R-WY)
Debbie Stabenow (D-MI)

The March 5, 2009 Senate Energy and Natural Resources committee hearing “to receive testimony regarding draft legislative proposals on energy research and development” provided an update on energy research from Energy Secretary Steven Chu, and five other scientists and policy experts.

In his opening statement, Secretary Chu highlighted the funding allocations for energy research and development from the recently passed, H.R. 1, the America Recovery and Reinvestment Act of 2009 (ARRA). Chu, a physicist by training, also discussed his views on reshaping energy research, development, and deployment with science, a topic he described as “near and dear to my heart.” He told the committee, “I strongly believe that the key to our prosperity in the 21st century lies in our ability to nurture our intellectual capital in science and engineering.” Citing ARRA as a critical starting point for energy transformation in the nation, Chu presented additional key recommendations beyond what ARRA has designated. He urged more funding towards research, a greater emphasis on nurturing science and engineering talent, a more focused commitment to transformational research, and pursuing broader, more collaborative efforts between federal agencies and the private sector. Chu described “transformational research” as the type of work that pursues entirely new avenues of technology and is “game-changing,” not just incremental improvements on current technologies.

Committee members each questioned Chu on a variety of energy topics. Chairman Jeff Bingaman (D-NM) first asked Chu if legislative involvement is needed to bridge the gap between basic science research and development (R&D). Although not direct in his answer about more legislation, Chu indicated that as Secretary of Energy he would like flexibility in how funding is shared between different agencies and research programs. He cited the biofuel research institutes as models of successful collaborative efforts in moving R&D discoveries into the marketplace. Bingaman then asked if the proposed funding levels in draft legislation that double current levels over the next four years are adequate to meet what the Department of Energy is trying to accomplish. Smiling in his response, Chu replied, “I applaud the authorization levels, let me be very frank about that.” Chu did not get specific about numbers, but was emphatic about the urgency of the energy problem facing the nation. Chu expressed optimism on the topic, indicating the trend of what he described as “extraordinarily talented people” at the mid-career level shifting fields to take on the energy challenge. He also noted that the energy crisis has created a new wave of enthusiasm in young people, from the undergraduate level to entry-level professionals, which he has not witnessed since the 1960s.

Senator John Barrasso (R-WY) pressed Chu on two topics. The first was whether DOE was considering small businesses in the effort to solve the nation’s energy problem. Chu responded that the DOE was developing a very transparent and simple online process that allows businesses to apply for funding to spur entrepreneurial research, stating “small businesses are the true engines of innovation.” Barrasso also asked Chu about clean coal technology, especially in relation to China. Chu informed the committee that the DOE is trying to develop an international alliance on clean coal technology since the world recognizes that China and India are not going to back down from developing their coal resources for energy. “We have to get this right” when considering carbon emissions and climate change.

Senator Mark Udall (D-CO) asked Chu about the link between applied science and commercialization of products, stating that “green is the new red, white, and blue.” Chu informed Udall that currently, energy efficiency is where the greatest improvements have been made that are now available in the marketplace.  He did indicate however that cost issues are of great concern in the chain of the basic research- to-commercialization process, because currently the price increases 5 to 10 times for each step from discovery to commercialization.

Senator John McCain (R-AZ) pressed Chu on the topics of solar energy potential and the role nuclear power will play in the nation’s energy portfolio in the 21st century. McCain cited a DOE report that indicated even with emergence of improved technologies, solar power will only comprise five percent of carbon-free energy sources by 2050. Chu responded by stating, “I’m a little bit more optimistic than that.” McCain then indicated that based on the limited potential of solar energy, nuclear power and clean coal technology both deserve more attention, and Chu agreed “in the short term.” McCain was very pointed when discussing nuclear power and the issue of long-term nuclear waste storage at Yucca Mountain, Nevada. The Obama Administration recently declared that Yucca Mountain is not a viable storage option. “What’s wrong with Yucca Mountain, Dr. Chu?” McCain asked. “We have learned a lot more in the last 20 to 25 years,” Chu replied before McCain interjected “I know that. What is wrong with Yucca Mountain, Dr. Chu?” Chu responded, “I think we can do a better job” and described efforts currently underway to solidify waste stored at individual plants across the nation, a step that would allow more time for selection of a suitable long-term storage site.

Senator Lisa Murkowski (R-AK) also expressed her concern on storage of spent nuclear fuel and its implications on expanding the nuclear energy industry. She found Obama’s dismissal of Yucca Mountain and Chu’s statement that the process of finding a new solution is “just getting started” to be “very disconcerting” for the nuclear industry. McCain also asked Chu about reprocessing of spent nuclear fuel, and Chu indicated his support for reprocessing research. McCain responded by asking Chu, “Why would we need research when we know the Europeans and Japanese are already doing it in a safe and efficient fashion?” Chu stated that the methods used in Europe and Japan actually allow for nuclear proliferation as a result of the processes used. McCain ended the discussion on nuclear energy by stating “nuclear power has got to be an integral and vital part of America’s energy future if we’re going to reduce greenhouse gas emissions, and to say that after 20 years and $9 billion dollars spent on Yucca Mountain that there’s not an option, period, to me is a remarkable statement.” McCain’s final comments focused on his disappointment with the Obama Administration’s budget outlook that expects around $650 billion in revenues from a proposed cap-and-trade system for carbon emissions, a program that he initially supported. McCain indicated that the revenue goes to the general funds account, and not to R&D of green energy technologies. Chu countered that $150 billion of that revenue is indeed designated for research and development, and the remainder will support poorer sectors of the population in becoming more energy efficient. 

Murkowski also questioned Chu about the current energy grid and its suitability for new technologies coming online in the future. Chu confirmed that the transmission system today is not suitable for adding the renewable energy component planned for the year 2021, and building up the transmission system is one of the key tasks in addressing the energy crisis. Chu added that “the United States is blessed with incredible renewable energy resources, but they are localized in certain areas.”

In the second panel testimony, five experts in research and policy shared their thoughts on the current status of energy research in the nation and the direction efforts need to move towards to address the energy crisis. Dr. Gregory Crabtree first spoke to the committee about the status of the nation’s energy development strategy. Crabtree also shared a list of potential, sustainable technologies that will be part of the energy portfolio in the future, but followed this list with, “Why have we not deployed these technologies? The answer is simple. The current versions of these technologies don’t perform well enough to compete with conventional fossil energy alternatives.” He indicated the roadblocks to introduce emerging technologies into the marketplace are extremely challenging.

Mr. Bob Fri shared findings from a series of studies under the guidance of the National Research Council, including studies reported at the National Academies Energy Summit in 2008. One conclusion from all of the studies is clear, “it is still too early to pick winners in our search for energy technologies that adequately address the challenges of energy security, economic viability, and climate change.” However, the studies indicate the nation is getting closer. In his concluding remarks, Fri expressed urgency in moving new technologies to a scale beneficial for commercial use, and also reiterated Secretary Chu’s comments on the role “game-changing” technologies will play in the coming decades.

Mr. James Bartis explained to the committee the urgency in reducing greenhouse gas emissions, but also stated that the nation can’t turn its back on greenhouse-gas emitting fuels in the short-term. He felt consumers will pay a heavy price if coal is removed too soon from the energy supply. He shared several areas of important research, including carbon sequestration and development of methane hydrates.

Ms. Deborah Wince-Smith presented the committee her views on the importance of energy technology research for the U.S. in the global economy. She felt that improving the bridge between research and development, and commercialization is essential in moving forward. She also stressed the importance of enhancing computational capacity for research, noting that “the nation that outcomputes, outcompetes.”

Dr. Mike Corradini discussed the importance of nuclear energy as a key component in developing energy security, and provided an overview and opinion of two DOE programs started in 2002 that extend the life of current facilities and develops the next generation of nuclear power plants. Corradini also discussed current DOE efforts in research of spent nuclear fuel reprocessing. He concluded by emphasizing the importance of education and training of future nuclear engineers that will be needed for emerging nuclear energy development, and shared that enrollment in nuclear engineering programs nationwide has increased in recent years. 

In the panel discussion following the opening statements, the economic question was the central theme. Bartis stated that there is not enough funding at the university level currently to support research and attract more students towards energy-focused careers. Crabtree pointed out that several of the technologies currently being developed are not deployable yet because of costs. He indicated that prices come down to basic materials and that a cost reduction by a factor of five is needed to make many products economically viable. “The issues are fundamental,” Crabtree stated, noting that basic research in physics, chemistry, and materials science are needed to get these costs down. In his commentary to the witness panel, Udall quipped “there’s no silver bullet, but maybe there’s a lot of silver buckshot” regarding a diversity of emerging technologies providing a solution to the energy crisis instead of one technology alone.

Links to witness testimonies and a video archive of the hearing can be found here.

-CPC

SEPARATION BAR

Sources: Hearing testimony.

Contributed by Corina Cerovski-Darriau, Government Affairs Staff; Clint Carney, 2009 AGI/AAPG Spring Intern; Rachel Potter, 2009 AGI/AIPG Summer Intern; Stephanie Praus, 2009 AGI/AIPG Summer Intern; Joey Fiore, 2009 AGI/AIPG Summer Intern; Mollie Pettit, 2009 AGI/AAPG Fall Intern; Maureen Moses, 2010 AGI/AAPG Spring Intern; Elizabeth Brown, 2010 AGI/AIPG Summer Intern; Elizabeth Huss, 2010 AGI/AIPG Summer Intern.

Please send any comments or requests for information to AGI Government Affairs Program.

Last updated on June 25, 2010

 

  Information Services |Geoscience Education |Public Policy |Environmental
Geoscience
 |
Publications |Workforce |AGI Events


agi logo

© 2014. All rights reserved.
American Geosciences Institute, 4220 King Street, Alexandria, VA 22302-1502.
Please send any comments or problems with this site to: webmaster@agiweb.org.
Privacy Policy