[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
H.R. 6258, THE CARBON CAPTURE AND STORAGE EARLY DEPLOYMENT ACT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY AND AIR QUALITY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
JULY 10, 2008
__________
Serial No. 110-134
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
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COMMITTEE ON ENERGY AND COMMERCE
JOHN D. DINGELL, Michigan, Chairman
HENRY A. WAXMAN, California JOE BARTON, Texas
EDWARD J. MARKEY, Massachusetts Ranking Member
RICK BOUCHER, Virginia RALPH M. HALL, Texas
EDOLPHUS TOWNS, New York FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey CLIFF STEARNS, Florida
BART GORDON, Tennessee NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois ED WHITFIELD, Kentucky
ANNA G. ESHOO, California BARBARA CUBIN, Wyoming
BART STUPAK, Michigan JOHN SHIMKUS, Illinois
ELIOT L. ENGEL, New York HEATHER WILSON, New Mexico
GENE GREEN, Texas JOHN SHADEGG, Arizona
DIANA DeGETTE, Colorado CHARLES W. ``CHIP'' PICKERING,
Vice Chairman Mississippi
LOIS CAPPS, California VITO FOSSELLA, New York
MIKE DOYLE, Pennsylvania ROY BLUNT, Missouri
JANE HARMAN, California STEVE BUYER, Indiana
TOM ALLEN, Maine GEORGE RADANOVICH, California
JAN SCHAKOWSKY, Illinois JOSEPH R. PITTS, Pennsylvania
HILDA L. SOLIS, California MARY BONO MACK, California
CHARLES A. GONZALEZ, Texas GREG WALDEN, Oregon
JAY INSLEE, Washington LEE TERRY, Nebraska
TAMMY BALDWIN, Wisconsin MIKE FERGUSON, New Jersey
MIKE ROSS, Arkansas MIKE ROGERS, Michigan
DARLENE HOOLEY, Oregon SUE WILKINS MYRICK, North Carolina
ANTHONY D. WEINER, New York JOHN SULLIVAN, Oklahoma
JIM MATHESON, Utah TIM MURPHY, Pennsylvania
G.K. BUTTERFIELD, North Carolina MICHAEL C. BURGESS, Texas
CHARLIE MELANCON, Louisiana MARSHA BLACKBURN, Tennessee
JOHN BARROW, Georgia
DORIS O. MATSUI, California
______
Professional Staff
Dennis B. Fitzgibbons, Chief of Staff
Gregg A. Rothschild, Chief Counsel
Sharon E. Davis, Chief Clerk
Bud Albright, Minority Staff Director
(ii)
Subcommittee on Energy and Air Quality
RICK BOUCHER, Virginia, Chairman
G.K. BUTTERFIELD, North Carolina, FRED UPTON, Michigan
Vice Chairman Ranking Member
CHARLIE MELANCON, Louisiana RALPH M. HALL, Texas
JOHN BARROW, Georgia ED WHITFIELD, Kentucky
HENRY A. WAXMAN, California JOHN SHIMKUS, Illinois
EDWARD J. MARKEY, Massachusetts JOHN B. SHADEGG, Arizona
ALBERT R. WYNN, Maryland CHARLES W. ``CHIP'' PICKERING,
MIKE DOYLE, Pennsylvania Mississippi
JANE HARMAN, California ROY BLUNT, Missouri
TOM ALLEN, Maine MARY BONO MACK, California
CHARLES A. GONZALEZ, Texas GREG WALDEN, Oregon
JAY INSLEE, Washington MIKE ROGERS, Michigan
TAMMY BALDWIN, Wisconsin SUE WILKINS MYRICK, North Carolina
MIKE ROSS, Arkansas JOHN SULLIVAN, Oklahoma
DARLENE HOOLEY, Oregon MICHAEL C. BURGESS, Texas
ANTHONY D. WEINER, New York MARSHA BLACKBURN, Tennessee
JIM MATHESON, Utah JOE BARTON, Texas (ex officio)
DORIS O. MATSUI, California
JOHN D. DINGELL, Michigan (ex
officio)
------
Professional Staff
Sue D. Sheridan, Chief Counsel
John W. Jimison, Counsel
Rachel Bleshman, Legislative Clerk
David McCarthy, Minority Counsel
C O N T E N T S
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Page
Hon. Rick Boucher, a Representative in Congress from the
Commonwealth of Virginia, opening statement.................... 1
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 17
Hon. Mike Doyle, a Representative in Congress from the
Commonwealth of Pennsylvania, prepared statement............... 18
Hon. Ed Whitfield, a Representative in Congress from the
Commonwealth of Kentucky, opening statement.................... 19
Hon. John D. Dingell, a Representative in Congress from the State
of Michigan, opening statement................................. 20
Prepared statement........................................... 21
Hon. John Shimkus, a Representative in Congress from the State of
Illinois, opening statement.................................... 21
Hon. Doris Matsui, a Representative in Congress from the State of
California, opening statement.................................. 22
Hon. Joe Barton, a Representative in Congress from the State of
Texas, opening statement....................................... 23
Hon. Edward J. Markey, a Representative in Congress from the
Commonwealth of Massachusetts, opening statement............... 24
Hon. Marsha Blackburn, a Representative in Congress from the
State of Tennessee, opening statement.......................... 25
Hon. Tammy Baldwin, a Representative in Congress from the State
of Wisconsin, opening statement................................ 26
Hon. Jay Inslee, a Representative in Congress from the State of
Washington, opening statement.................................. 27
Hon. Jim Matheson, a Representative in Congress from the State of
Utah, opening statement........................................ 28
Hon. G.K. Butterfield, a Representative in Congress from the
State of North Carolina, opening statement..................... 28
Witnesses
Michael G. Morris, Chairman, President, and Chief Operating
Officer, American Electric Power............................... 30
Prepared statement........................................... 32
Answers to submitted questions............................... 217
Edward S. Rubin, The Alumni Professor of Environmental
Engineering and Science, Carnegie Mellon University............ 51
Prepared statement........................................... 53
Answers to submitted questions............................... 223
Steven Specker, President and Chief Executive Officer, Electric
Power Research Institute....................................... 106
Prepared statement........................................... 108
Answers to submitted questions............................... 225
James Y. Kerr, II, Commissioner, North Carolina Utilities
Commission..................................................... 117
Prepared statement........................................... 120
Eugene M. Trisko, Counsel to United Mine Workers of America...... 142
Prepared statement........................................... 144
Michael Goo, Climate Legislative Director, Natural Resources
Defense Counsel................................................ 159
Prepared statement........................................... 161
Submitted Material
H.R. 6258........................................................ 4
``The Energy Challenge: Mounting Costs Slow the Push for Clean
Coal,'' Matthew L. Wald, The New York Times, May 30, 2008,
submitted by Ms. Blackburn..................................... 212
``More Power Cuts Loom in China This Summer,'' Sherry Su, The
Wall Street Journal, July 10, 2008, submitted by Mr. Upton..... 216
H.R. 6258, THE CARBON CAPTURE AND STORAGE EARLY DEPLOYMENT ACT
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THURSDAY, JULY 10, 2008
House of Representatives,
Subcommittee on Energy and Air Quality,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:05 a.m., in
room 2123 of the Rayburn House Office Building, Hon. Rick
Boucher (chairman) presiding.
Members present: Representatives Boucher, Butterfield,
Barrow, Markey, Doyle, Harman, Inslee, Baldwin, Matheson,
Matsui, Dingell (ex officio), Upton, Whitfield, Shimkus,
Myrick, Blackburn, and Barton (ex officio).
Staff present: Bruce Harris, Laura Vaught, Ben Hengst,
Chris Treanor, Rachel Bleshman, Alex Haurek, Erin Bzymek, David
McCarthy, Amanda Mertens-Campbell, Andrea Spring, and Garrett
Golding.
OPENING STATEMENT OF HON. RICK BOUCHER, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF VIRGINIA
Mr. Boucher. The subcommittee will come to order.
Our hearing this morning focuses on H.R. 6258, the Carbon
Capture and Storage Early Deployment Act, which I introduced in
June along with a bipartisan group of members of this
committee. I want to acknowledge and thank our colleagues, Mr.
Upton, the Ranking Member of this subcommittee, Mr. Barton, the
Ranking Member of the full Commerce Committee, Mr. Doyle, Mr.
Matheson, Mr. Shimkus, Mr. Whitfield, Mr. Hill, Mr. Towns, and
Mr. Terry for their patronage of the measure.
The bill creates a non-governmental fund operating under
the auspices of the widely respected Electric Power Research
Institute for the purpose of accelerating the early deployment
of carbon dioxide capture and storage technologies. It is a
response to recommendations from a broad range of individuals
and groups including the Advanced Coal Technology Working Group
that Congress create a Carbon Capture and Storage Early
Deployment Fund. The Advanced Coal Technology Working Group, to
which I previously referred, an advisory committee to the
Environmental Protection Agency, is comprised of a broad cross-
section of energy and environmental stakeholders and their
support of this measure is particularly noteworthy. Its final
report issued in January of this year unanimously recommended
the early creation of a CCS deployment fund and this
legislation is in part a response to that recommendation.
Carbon capture and storage is a two-step process for
reducing greenhouse gas emissions by capturing and injecting
underground the carbon dioxide that is emitted through the
combustion of fossil fuels including petroleum, natural gas,
and coal. It will have its most prominent application in the
electric utility sector where 72 percent of the Nation's
electric power is generated through fossil fuel use. Fifty-one
percent of electricity is coal-fired, 20 percent is reliant on
natural gas, and 1.6 percent on petroleum. Given our extensive
reliance on fossil fuels and the current unavailability of
sufficient alternatives to replace them, their continued use is
essential to our long-term economic security. The bill before
the Committee addresses this clear need by enabling facilities
that use fossil fuels to continue to do so when a mandatory
progress to reduce greenhouse gas emissions becomes law, and it
is this committee's intention to produce that mandatory control
measure.
Under its terms, power plants and industrial emitters of
greenhouse gases will be required to lessen their
CO2 emissions in accordance with a schedule that is
set in the statute. As CO2 constraints become ever
more severe, emitters will turn to CCS methods in order to meet
the CO2 reduction schedule while continuing to use
the fuels upon which they are reliant and for which in the
foreseeable future there will be little in the way of
affordable alternatives. The CCS Early Deployment Fund
therefore is a necessary first step for the passage and
implementation of a cap-and-trade program to address the
challenge of climate change.
When mandatory CO2 controls go into effect,
greenhouse gas reduction requirements will begin in the early
years. It is important that between the time when the first
controls apply and the time when CCS becomes widely available,
the reduction requirements be such that they can be achieved by
fossil fuel-based emitters without the necessity that they
abandon their existing fuel use. In those early years, prior to
the general availability of CCS, coal users in particular would
achieve CO2 reductions through approaches such as
achieving new efficiencies, making offsetting investments and
activities such as forest protection and expansion and the
shift to no-till agriculture by farmers as well as by
purchasing emission allowances from other emitters. As soon as
CCS technologies are forecast to be generally available, the
CO2 reduction requirements will become ever more
stringent since the larger reductions can then be achieved by
fossil fuel users without abandoning their fuel choice.
Therefore, the sooner CCS technologies are made available, the
sooner the more significant CO2 reductions can be
required under a cap-and-trade schedule.
The bill before the Committee will accelerate the time when
CCS becomes generally available. While there are some
commercial CCS projects in operation today, they are small in
scale and they are used for enhancing oil recovery. Further
research, development and demonstration projects are necessary
for the permanent storage underground of large quantities of
CO2 in storage media of various kinds in widely
dispersed geographic locations around the Nation. There are
simply not enough oil fields to meet the national need for
large-scale CO2 storage.
In order to accelerate the deployment of CCS technologies,
the Carbon Capture and Storage Early Deployment Act authorizes
the establishment of a Carbon Storage Research Corporation. The
Nation's fossil fuel-based electricity distribution utilities
would be authorized to hold a referendum for the creation of
the corporation. If the referendum results in approval by
representatives of two-thirds of the fossil fuel-based
electricity delivered to retail consumers, the corporation will
be established. It will assess fees on distribution utilities
for all fossil fuel-based electricity that is delivered to
retail customers. The assessment will be applied to electricity
generated from coal, natural gas, and oil and will reflect the
relative CO2 emission rates for each fuel. The
assessment will total approximately $1 billion annually and the
legislation specifies that distribution utilities will be
allowed to recovery the costs of that fee from retail customers
resulting in roughly a $10 to $12 annual increase in
residential electricity rates. That sum can be viewed as a
modest investment today by these electricity users in their
long-term ability to continue to purchase low-cost electricity.
I would like to thank my colleagues on both sides of the
aisle for working with us as we structure the legislation and I
look forward to our continued work together as we process it
through this committee and through the full House. The Carbon
Capture and Storage Early Deployment Act enjoys bipartisan,
industry, and labor support and will enable the continued use
of our Nation's most inexpensive and abundant resources for
fuel generation when a mandatory greenhouse gas emissions
reduction program is implemented for this country.
Today's witnesses will provide valuable testimony regarding
the legislation including some very productive comments on ways
that it can be strengthened as the bill moves through the
legislative process. I welcome their testimony and thank them
for being with us this morning.
[H.R. 6258 follows:]
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Mr. Boucher. At this time I recognize the ranking member of
the subcommittee and original cosponsor of the measure, the
gentleman from Michigan, Mr. Upton.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Well, thank you, Mr. Chairman. I certainly want
to thank you for holding this hearing this morning on the
Carbon Capture and Storage Early Deployment Act. This is
bipartisan legislation, as you noted, and is evidence that the
Republicans and Democrats indeed can work together towards
commonsense solutions to effectively combat climate change,
solutions that will both protect jobs and keep energy costs
down. I appreciate your willingness to work with members on our
side to draft this very important legislation and we certainly
look forward to more bipartisan cooperation on these important
issues down the road.
I see this legislation not as a first step but rather as a
building block on what we have already done to cut greenhouse
gas emissions. The bill is yet another component of a no-
regrets approach to tackle the problem of climate change while
simultaneously be mindful of our economy and domestic energy
security. Along with advancing a renaissance in nuclear power,
if you combine this legislation with what we have already done
on lighting standards, CAFE, appliance standards, building
standards, and others, we are talking about major emission
reductions without cap-and-trade.
Energy prices drive our economy. As the price of gasoline
has skyrocketed due in part to policies that limit access to
American energy resources, it is absolutely critical that
electricity rates do not follow suit. For decades, opponents of
American-made energy have fought to block domestic oil
production, and as a result, we import nearly 70 percent of our
oil and prices reach new highs almost every day. The new target
is coal, America's most affordable and abundant energy
resource, and if we block American coal like we blocked
American oil, our electricity rates will soon match and exceed
what we are paying for gasoline. Working American families
cannot afford such irrational policies. It is imperative that
we continue to take advantage of our Nation's vast coal
reserves which have the promise to produce clean and affordable
power for generations. In our quest to reduce greenhouse gas
emissions and protect the environment, we must promote exciting
new clean coal technologies that will not only keep costs down
for consumers but also foster new jobs in a strong economy.
These technologies exhibit great promise and encouraging
advancements in carbon capture will be able to responsibly
fortify our Nation's energy supply with American-made energy
and protect the pocketbooks of our Nation's consumers as well.
An added benefit of CCS is that it can be and currently is
being conducted for enhanced oil recovery. According to a DOE
assessment conducted in 10 known domestic oil basins, not the
entire United States, an estimated 89 billion barrels of
additional oil could be technically recoverable by applying
this state-of-the-art CO2 technology. This is truly,
I think, a win-win. Let us be honest: Our constituents are
interested in what we are doing in Congress to address record
oil prices and enhance our overall energy security. Global
warming is lower on that list yet the legislation we have
examined prior to this hearing would not only send energy
prices higher but also make the United States less energy
secure. This legislation, I think, will protest the environment
as well as our economy.
There are members of this committee who have introduced
legislation that would block any new coal-fired power plant
without CCS. My colleagues who are serious about reducing
emissions while keeping energy affordable, I would ask them to
join us in cosponsoring this legislation that we are discussing
today. Surprisingly, none of the 15 cosponsors of that bill
have cosponsored this bill, which would ensure CCS becomes
available. By ensuring carbon capture and storage, we won't
need to set arbitrary mandates that will send electricity rates
through the roof and American jobs overseas. By using the
legislative approach in this bill, we can avoid a costly cap-
and-trade regime that will have no impact on emissions from the
developing world. Instead, we will advance CCS technology that
will create U.S. jobs and provide the opportunity to export.
U.S. energy security will be strengthened and we will be able
to help China and India obtain clean and affordable energy and
working Americans will be better off. I would urge my
colleagues to cosponsor the legislation.
I again thank you for having this hearing today and I would
yield back.
Mr. Boucher. Thank you very much, Mr. Upton.
The gentleman from Pennsylvania, Mr. Doyle, is recognized
for 3 minutes.
OPENING STATEMENT OF HON. MIKE DOYLE, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Doyle. Thank you, Mr. Chairman.
I would like to begin my remarks by welcoming a constituent
who has traveled here to Washington to share his expertise with
us. Dr. Edward Rubin is a professor at Carnegie Mellon
University in Pittsburgh. He has done extensive work on carbon
capture and sequestration and we are all looking forward to his
insights as we try to facilitate the rollout of these critical
technologies.
As Congress moves forward to develop climate change
legislation, it is critical that we ensure that our energy
portfolio is as diverse as possible as we attempt to address
the dual concerns of global warming and energy independence. We
must develop new alternatives like solar, wind, and hydropower
but we must also work to ensure that we are able to use the
fuels that currently power our country in the most
environmentally sustainable way possible.
Today, Mr. Chairman, over 50 percent of the United States
and over 60 percent of the world is powered by coal.
Pennsylvania alone has a 250-year supply of this cheap
resource. However, despite its ample supply and cheap price
tag, the burning of coal as we use it today must be improved if
we are ever going to address the threat of global warming. Over
the past several decades, various improvements have been made
on carbon capture and sequestration technologies. These
technologies, which allow for carbon to be removed from our
smokestacks and instead injected back into the ground, are not
new. They have been in use for years in places such as Texas in
order to achieve enhanced oil recovery. However, these
technologies have not been used at the scale which will be
required if we are going to remove carbon from our industrial
transportation or utility sectors. Simply stated, the time is
now for Congress to act to encourage CCS advancement and
deployment.
For this reason, I am pleased to join Chairman Boucher and
Ranking Member Barton in cosponsoring the Carbon Capture and
Storage Early Deployment Act. While I have a few concerns with
the bill, especially as it pertains to what role the National
Energy Technology Lab may have in the program, I am strongly
supportive of this committee's efforts. I look forward to
working closely with Chairman Boucher to improve this bill so
that the final product we bring to the floor will be as
effective as possible in facilitating the wide-scale
demonstration of carbon capture and storage technologies.
Mr. Chairman, I applaud you for your efforts here. I will
continue to do all I can to ensure that this Nation continues
to move forward with our energy policies. I yield back the
balance of my time.
Mr. Boucher. Thank you very much, Mr. Doyle, and I very
much appreciate your copatronage of this measure and strong
support for it and the contributions you made to its
construction.
The gentleman from Kentucky, Mr. Whitfield, is recognized
for 3 minutes.
OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF KENTUCKY
Mr. Whitfield. Mr. Chairman, thank you. I also want to
commend you for introducing the Carbon Capture and Storage
Early Deployment Act, which is vitally important to the
economics and environmental health of this country.
We recognize that there has been a lot of talk by a lot of
different groups about the importance of developing carbon
capture and sequestration projections and to develop them, and
yet I think that in Dr. Rubin's testimony, he pointed out,
which I think is a fact, that not a single large-scale CCS
project at a coal plant anywhere in the world is in place
today, and as you well know, our government canceled its
FutureGen project in Illinois just 3 or 4 months ago because
the cost had escalated from $850 million to $1.8 billion. So
this legislation is vitally important. It may not be in its
perfect form but that is the reason we have hearings, to have
experts like this group of witnesses to help us look at ways to
improve this bill, and so we welcome their expertise and
advice. I might also say that it is my understanding in the
United States that from electricity we are producing about 1.5
billion tons of carbon dioxide a year and this bill, it is my
understanding, will provide about $1 billion a year to help
develop the project which is vitally important. Coal is our
most abundant resource. It does give us the best opportunity to
be competitive with other nations around the world for economic
development and maintaining relatively low energy costs
although obviously carbon dioxide capture will be quite
expensive. We know that.
But I look forward to working with you, Mr. Chairman, and
others as we continue our efforts in this area.
Mr. Boucher. Thank you very much, Mr. Whitfield.
The gentleman from Michigan, the chairman of the full
committee, Mr. Dingell, is recognized for 5 minutes.
OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
The Chairman. Mr. Chairman, first of all, thank you for
holding this hearing. It is most important, and I want to
commend you not only for that but for the exemplary work that
you continue to do on the issue of climate change and on your
leadership as chairman of this valuable subcommittee. I want to
welcome the witnesses and thank them for their testimony, which
I know will be of great value.
Throughout many of the climate change hearings that have
been held by this subcommittee over the past few months, a
number of key things have emerged but none more central than
the following: combating global climate change will require
that we make deep cuts in our greenhouse gas emissions even as
we meet our future energy demands. The United States currently
generates more than 50 percent of its electricity through the
use of coal, a fuel that must continue to be a part of our
energy mix, and I intend that that shall be so. For that to be
possible, however, in a carbon-constrained world, a robust
carbon capture and sequestration program is necessary on a
scale that does not exist today. A survey of current carbon
capture and sequestration, or CCS, technologies reveals that
constituent elements of an overall strategy are not yet fully
integrated or fully understood.
First, several promising capture technologies have been
demonstrated on a small scale but have yet to be deployed at
the commercial level because of concerns about costs and energy
penalties. Second, liquid CO2 is transported in
pipelines today but building the additional infrastructure
necessary for a national CCS pipeline program represents a
unique set of challenges. Finally, CO2 has been
sequestered underground for decades during enhanced oil
recovery and this is a valuable use for this resource but not
on the massive scale needed for continued use of coal as a fuel
source in a carbon-constrained environment. Clearly, a
comprehensive strategy with an adequate and appropriate source
of revenue is needed.
Today the Committee will examine one such idea put forward
by its chairman with bipartisan support. The CCS legislation
introduced by you, Mr. Chairman, closely follows the
recommendations of the Advanced Coal Technology Work Group, an
advisory panel to EPA. It could also help facilitate a
comprehensive CCS deployment strategy in time to make the
emission reductions that scientists have determined are needed
to prevent further damage to this planet.
Mr. Chairman, again I commend you for holding this hearing,
it is most timely, and I praise you for presenting a bold
solution to this challenge. I look forward to learning more
about the issue from our witnesses today, and I thank you for
your courtesy.
[The prepared statement of Mr. Dingell follows:]
Prepared statement of Hon. John D. Dingell
Mr. Chairman, thank you for holding this important hearing
and for the exemplary work you continue to do on the issue of
climate change. I welcome our witnesses and thank them for
their valuable testimony.
Throughout the many climate change hearings held by this
subcommittee over the last few months, several key themes have
emerged, but none more central than the following: combating
global climate change will require that we make deep cuts in
our greenhouse gas emissions even as we meet our future energy
demands.
The United States currently generates more than 50 percent
of its electricity through the use of coal, a fuel that must
continue to be part of our energy mix. For that to be possible
in a carbon-constrained world, a robust carbon capture and
sequestration (CCS) deployment program is necessary on a scale
that does not exist today.
A survey of the current state of CCS technologies will
reveal the constituent elements of an overall strategy that is
not yet fully integrated. First, several promising capture
technologies have been demonstrated on a small scale but have
yet to be deployed at the commercial level because of concerns
about costs and energy penalties. Second, liquid CO2
is transported in pipelines today, but building the additional
infrastructure necessary for a national CCS pipeline program
presents a unique set of challenges. Finally, CO2
has been sequestered underground for decades during enhanced
oil recovery, but not on the massive scale needed for the
continued use of coal as a fuel source in a carbon-constrained
environment. Clearly, a comprehensive strategy with an
appropriate source of revenue is needed.
Today the Subcommittee will examine one such idea, put
forward by its Chairman with bipartisan support. The CCS
legislation introduced by Mr. Boucher closely follows the
recommendations of the Advanced Coal Technology Work Group, an
advisory panel to the EPA. It could help facilitate a
comprehensive CCS deployment strategy in time to make the
emissions reductions that scientists have determined are needed
to prevent further damage to the planet.
Mr. Chairman, I commend you for holding this timely hearing
and for presenting a bold solution to this challenge. I look
forward to learning more about this issue from our witnesses
today.
----------
Mr. Boucher. Thank you very much, Mr. Dingell.
The gentleman from Illinois, Mr. Shimkus, is recognized for
3 minutes.
OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Shimkus. Thank you, Mr. Chairman, and I am proud to be
an original cosponsor of this bill. Thanks for your hard work.
The United States is basically electricity independent. We
can't say that about liquid fuels in this country and that is
really the current major debate we are having on the floor
about trying to decrease our reliance on imported crude oil,
but for electricity, we are basically independent, and when are
producing electricity and we are doing it independently, that
is American jobs, both in our coal mines and in our coal-fired
generation plants, and that has to remain. Fifty percent of all
electricity that we generate today comes from coal. That is one
of the concerns I have with the current House leadership. We
may do a lot of work here, but based upon a Hill brief on June
25, Bush-backed energy funds stalled by Frank and Pelosi,
citing concerns by House Speaker Pelosi that the International
Clean Technology Fund backed by the Bush Administration might
be used to build coal-burning power plants. House Financial
Services Committee Chairman Barney Frank postponed a markup on
the bill on Tuesday. So that is why it is very courageous of
you, Mr. Chairman, to work with us to bring a bill that ensures
a place for coal in the generation of electricity in this
country and the future, and for that you should be applauded
and that is why we are in support.
We also support all the above. We want to encourage with
wind and solar and renewables. But just to keep up with
electricity demand, by 2030 we are going to need 747 new coal-
fired plants, 52 new nuclear power plants, 2,000 new electric
generators, and also add 13,000 new megawatts of renewable
power. China is building a new coal-fired power plant every 2
weeks. In fact, there was a great announcement in my district,
Mr. Chairman. I had a coal mine that was closing. It is now
reopening to sell Illinois coal to China, just making a point
that I would rather have that coal be used cleanly in this
country to create low-cost power to keep manufacturing jobs in
this country.
So I thank you for holding this hearing. It is very
important that we do something and not nothing, and we move to
deploy technology now so that we are prepared to debate the
other options that we have to debate in the succeeding
Congress, and I yield back my time.
Mr. Boucher. Thank you, Mr. Shimkus, and thank you for your
copatronage of the measure as well.
The gentlelady from California, Ms. Matsui, is recognized
for 3 minutes.
OPENING STATEMENT OF HON. DORIS MATSUI, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Matsui. Thank you, Mr. Chairman, and I am very pleased
to be here today, and thank you for calling this important
hearing. I would also like to thank today's panelists for
joining us to discuss the important subject of carbon capture
and storage. I look forward to hearing all of your expert
opinions.
This committee heard only 2 weeks ago about the urgent
repercussions that we will face if we do not seriously address
the issue of climate change. We have also heard about the
daunting scope of that task. To tackle this enormous challenge,
we must have all the available resources at our disposal. This
is why I am encouraged that we are looking into a wide variety
of technologies to help us confront global warming from solar
to biomass to wind and today, carbon storage. This committee
needs to fully investigate what is available and what solutions
will best reverse this troubling course we are heading down.
Fossil fuels currently meet the vast majority of our energy
needs so we will not be able to abandon them immediately.
However, we know that burning these fossil fuels produces the
carbon dioxide at the heart of the climate problem. We must
begin to take steps to reduce the amount of energy we use,
reduce the amount of fossil fuels we burn, and to reduce the
amount of carbon dioxide those fuels emit. More research is
critically important in improving and perfecting the
technologies we will need.
Carbon capture and storage holds great promise for reducing
our emissions of greenhouse gases. It could afford us the time
we need to reduce our dependence on fossil fuels without
destroying our planet in the process and show other countries
the leadership that is direly needed on this issue. However, we
must use any new technology safely and effectively, and carbon
capture remains to be fully tested.
My home State of California has so many environmental
issues, from contaminated groundwater to severe smog, so I want
to ensure that any new technologies we use do not adversely
affect the health of our population. While we must embrace new
technologies, we cannot do so at the expense of clean water,
clean air, and our health. As a mother and grandmother, I am
constantly reminded of the importance of leaving a safe,
livable, and sustainable planet to future generations. That is
why I am so pleased with the active and constructive efforts
this committee has been taking and I look forward to learning
more about the issue of carbon capture and storage.
Mr. Chairman, I thank you for your leadership and your
commitment to these issues, and I yield back the balance of my
time.
Mr. Boucher. Thank you very much, Ms. Matsui.
The gentleman from Texas, Mr. Barton, the ranking member of
the full committee, is recognized for 5 minutes.
OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Barton. Thank you, Mr. Chairman. I appreciate having an
opportunity to be an original sponsor of this legislation.
It may surprise some people, but I do believe that we need
to develop the technology to capture and storage or capture and
convert CO2 regardless of the outcome of the global
warming debate. I am a believer in efficiency and technology
advance, and if we can use this vehicle to have the United
States of America and our private and public institutions
develop such technology, it can't be anything but a good thing
for the world community. So my guess is that this is the only
bill that might actually become law this year. We are still
engaged in a very vigorous debate about the overall global
warming issue but in the middle of this, your leadership,
Chairman Boucher, along with Mr. Whitfield and Mr. Shimkus, is
pointing a pathway forward that all members regardless of their
position or party affiliation can work together to do something
that is good for the country.
The bill before us sets up a corporation that the
stakeholders, based on their size and their operations,
participate in. It sets up an assessment fee schedule to assess
the consumers of electricity in this country a small fee,
similar to what we did on the nuclear waste fund 30 years ago
approximately, and use that money to develop the technologies
that would capture and storage or capture and convert, and I
think the word ``convert'' is very important because it appears
to me that conversion technology may be much more cost-
effective than storage technology. So in any event, this is a
small step forward. It would not have happened if it hadn't
been for your leadership, Chairman Boucher, and it would also
not have happened if Mr. Whitfield and Mr. Shimkus hadn't
worked hard, and Mr. Upton, to put this bill together.
So I hope we have a good hearing today. I want to commend
our witnesses, most of whom I know personally, for being here,
and hopefully this will result in a markup and a bill going to
the floor that can be supported and sent to the other body. I
have a formal statement I will submit for the record, but
again, I am proud to be a sponsor and I look forward to
perfecting the bill in open markup and moving it the floor.
Mr. Boucher. Mr. Barton, thank you very much and I truly
appreciate your copatronage and the many contributions you made
to constructing this measure as it was being discussed in its
early stages.
The gentleman from Massachusetts, Mr. Markey, is recognized
for 3 minutes.
OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF MASSACHUSETTS
Mr. Markey. Thank you, Mr. Chairman, and I thank you for
convening this hearing to talk about solutions to climate
change and for the excellent panel which you have put together.
I believe that with successful carbon capture and storage
coal can be an important part of our energy future. For that
reason, I support funding for carbon capture and storage as
part of a comprehensive strategy to combat global warming. But
I do have reservations about a piecemeal approach and whether
that is an effective way to achieve our shared goals of cutting
global warming pollution and growing our economy. We need to
provide a level playing field for all clean energy technologies
to compete and we need assurances that our investments will
curb global warming pollution. The best way to do this is
through economy-wide climate legislation with mandatory
emission cuts. Such legislation can fund investments in CCS,
renewable energy and other clean technologies while
guaranteeing environmental results and protecting American
consumers.
This bill raises a number of concerns. The bill imposes a
$1-billion-per-year tax increase on Americans for 10 years but
provides no guaranteed environmental benefit. Now, some of my
friends across the aisle who last month complained that global
warming bills will impose higher costs on consumers are now
sponsoring this $10 billion tax increase. That is fine, but it
is a different storyline than we heard just a month ago.
Second, I believe that we should advance CCS by reforming and
expanding the Department of Energy's existing programs, which
are subject to congressional oversight. Instead, this bill
takes $10 billion in taxpayers' money and hands it over as a
blank check to a new private corporation run by industry
representatives. It allows that corporation to spend this $10
billion however it wants with no benchmarks for success, no
review of costs, no public participation and no government
oversight whatsoever. I am not aware of any precedent for such
a program. CCS does have to be a big part of our future if we
are going to solve the problem of the relationship between coal
and global warming.
I look forward to working with Chairman Boucher, Chairman
Dingell, Ranking Members Upton and Barton on this legislation
but I think it should be part of a comprehensive approach. I
thank the gentleman.
Mr. Boucher. Thank you very much, Mr. Markey.
The gentlelady from Tennessee, Ms. Blackburn, is recognized
for 3 minutes.
OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TENNESSEE
Ms. Blackburn. Thank you, Mr. Chairman. I appreciate your
good work and for holding the hearing today. I appreciate the
work of the ranking member and I want to thank all of our
witnesses who are here today.
I am one of those that still has some pretty serious
concerns about Congress mandating this technology and then
spending lots of taxpayer money on developing it. First, the
liability and environmental hazards are issues that I think
still need to be addressed and currently scientists in Utah are
preparing to inject millions of tons of CO2 into the
ground and they state that carbon sequestration is low risk and
safe but they can't guarantee that for the long term, and then
if you have a natural disaster and it is released into the
groundwater or oil and gas reserves, then who pays for the
release and the contamination and the responsibilities there.
There is another issue that is of concern to us, and there is
research out of Columbia University that indicates the
possibility is real, and since carbon sequestration is likely
to be located near cities, that it could cause damage in case
of earthquakes and it could be an inducer of earthquakes, and
Memphis is in my district and of course that is near the New
Madrid fault, and if industries in that area have to use carbon
sequestration, then the concerns with something that would
precipitate an earthquake certainly are very valid concerns in
that fault zone.
Another issue is how fast carbon sequestration technology
can be developed and how its costs will be borne by the
marketplace, and Mr. Chairman, I have got a New York Times
study that talks about this, and rather than quoting from it, I
would like to ask unanimous consent to place the New York Times
article on those reports in the record with my statement.
Mr. Boucher. Without objection.
[The information appears at the conclusion of the hearing.]
Ms. Blackburn. Thank you, Mr. Chairman.
One of the most optimistic projections we have is that some
of this technology would be available by 2030, still a long way
away, that we are also seeing that this can lead to raising
electricity rates. Of course, we know that is going to be borne
by the American consumer, and if this country decides to cap
greenhouse emissions, Congress must avoid picking winners and
losers. There is available technology to capture CO2
and convert it to fuel for transportation and electric power
generation. Those deserve our consideration and deserve a
review.
I thank you for the hearing, and I am looking forward to
our witnesses and I yield back the balance of my time.
Mr. Boucher. Thank you very much, Ms. Blackburn.
The gentlelady from Wisconsin, Ms. Baldwin, is recognized
for 3 minutes.
OPENING STATEMENT OF HON. TAMMY BALDWIN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WISCONSIN
Ms. Baldwin. Thank you, Mr. Chairman. I appreciate your
holding this hearing and I know that a lot of your time and
hard work has gone into crafting the language of the Carbon
Capture and Storage Early Deployment Act, and for that I am
very appreciative.
It has already been established that climate change is real
and that it poses serious threats to our economy, our
environment, and our national security and clearly it is time
for us to act to address this growing crisis. One of the ways
that we can begin to lessen the effects of climate change is
through investments in research and development of carbon
capture and storage technology. A carbon capture and storage
program is key to addressing our reliance on coal to produce
electricity while finding a method for disposing of its harmful
emissions.
In Wisconsin we have begun to examine carbon capture
technology. We Energy's Pleasant Prairie power plant located in
Kenosha, Wisconsin, launched a $10 million pilot project
earlier this year to capture a portion of the CO2
produced as coal is burned. The plant is the first of its kind
in the United States and has the potential to capture 90
percent of the CO2 it emits from 1 percent of the
flue gas that they are currently capturing, but as we all know,
the problem is what to do with the CO2 once it has
been captured and certainly we need more research into this
issue.
While I appreciate the work that has gone into crafting the
Carbon Capture and Storage Early Deployment Act, I do have a
couple of concerns. First, as I believe some of our witnesses
will point out, I am concerned that the funds being collected
coming from our ratepayers are solely being used to back
industry for carbon capture and storage but not also
investments in renewable energy and energy efficiency, and I am
concerned about the added costs that will be placed on all
ratepayers, perhaps without State regulatory oversight.
Finally, I have some questions about exactly how the funds will
be used. For instance, will they apply to research into
transportation of CO2 and will they be used for
research into liability issues? My concerns essentially stem
from the knowledge that among other States, Wisconsin appears
to lack the geological formations necessary for storage. As a
result, we will likely need to transport CO2 by a
pipeline system to oil and gas fields, coal seams, and deep
saline aquifers found in the Illinois basin.
Mr. Chairman, I agree that a large financial investment in
carbon capture and storage technology is necessary to make its
full-scale deployment a reality. I appreciate your holding this
hearing today to examine your bill and the larger issues at
hand, and I look forward to hearing from our panel of witnesses
today.
Thank you, Mr. Chairman. I yield back.
Mr. Boucher. Thank you very much, Ms. Baldwin, for those
thoughtful remarks.
The gentleman from Washington State, Mr. Inslee, is
recognized for 3 minutes.
OPENING STATEMENT OF HON. JAY INSLEE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WASHINGTON
Mr. Inslee. Thank you, and I too want to add my
appreciation of the chair of moving a research and development
effort forward, and he has been most gracious working on this
and I have been talking to the chair about a couple other
issues that might dovetail if this bill advances, and I
appreciate him getting the Congress to focus on R&D. But I do,
with some of my colleagues, have some questions and I think the
most fundamental one I have as I was listening to my colleagues
from the other side of the aisle, who have expressed objections
to a cap-and-trade system, and I started thinking about this.
Even if we do this and if this is successful--and I support R&D
for carbon capture and sequestration-- I think it is
appropriate as one of the very large smorgasbord of
technologies that we hope will work. But if we do this and we
spend several billion dollars perfecting a carbon sequestration
technology for coal, but if we never adopt a cap-and-trade
system and there is never any price on carbon, nobody will ever
use this wonderful technology, and it is a little bit difficult
to justify the expenditure of billions of dollars of taxpayers'
money for technology that some of the supporters will
effectuate policies that will assure that it will never be
utilized. I remember talking to President Bush about this when
he was gracious enough to come to our retreat last year. He was
also pushing CCS research. I said this is great stuff but it
will just sit on the shelf and never be used unless there is
some price on carbon and a CO2 cap. In a word, I
think that we need to address these issues together.
I may also add that if we do a cap-and-trade system with an
auction, the revenue source from this research will come from
the polluting industries, not from the consumers. Now, there is
a pass-through to consumers, as we know, but I suspect given a
choice, our constituents would prefer an auction system where
the polluting industries contribute to the resource base to pay
for this. It is better than a surtax right onto the consumer's
bill.
So I hope that at some point we will address these things
together. I share my colleagues' concern that if we are going
to do a big R&D program, it by necessity has to include all of
the technologies involved including wind that DOE 3 weeks ago
concluded could provide 20 percent of our electricity, and if
are you watching CNN, you are seeing T. Boone Pickens running
ads saying we can do 20 percent of our system and more through
wind, solar thermal, solar photovoltaics, enhanced geothermal,
and the whole 9 yards. So I think we have some more work to do
on this, but again, I want to thank the chair for his
leadership on this. Thank you.
Mr. Boucher. Well, thank you very much, Mr. Inslee, and we
look forward to working with you also as we refine this measure
and hopefully we will earn your support. Let me just say for my
part, I certainly agree that we need to have a mandatory
control on carbon dioxide emissions and that will be a
necessary second step that will be taken as soon as is
possible.
The gentleman from Utah, Mr. Matheson, is recognized for 3
minutes.
OPENING STATEMENT OF HON. JIM MATHESON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF UTAH
Mr. Matheson. Well, thank you, Mr. Chairman, for your
leadership on this issue.
I am pleased to be a cosponsor of H.R. 6258. I believe that
one of the current challenges to implementing the cap-and-trade
system to address climate change is a lack of readily available
technology for carbon capture and sequestration among other
innovations we need to see. While I recognize that carbon is
already being captured and used in some circumstances in the
enhanced oil recovery process, there are clearly significant
challenges regarding the deployment of full-scale commercial
carbon capture and sequestration. I am also concerned we don't
know enough right now about the long-term implications of
storing all the carbon that we would need to house in a carbon-
constrained future. Geological variations across our Nation,
for instance, present significant challenges to storage. If
that is the case, we need to be thinking about what to do with
carbon emissions in parts of the country where storage isn't as
viable. Developing these technologies will be necessary for the
United States to meet long-term CO2 reduction
targets, and I believe we should start this intensive research
and development process sooner rather than later. However, I
also caution that this type of program must remain accountable
and I believe that as written, the bill might benefit from
stronger standards for ensuring that the public's money is
being well spent on truly promising projects.
One of the questions that I hope we answer today is, how
can Congress ensure that the public funds are used for projects
that would not otherwise receive private-sector funding? How do
we encourage the development of breakthroughs and novel ideas
instead of just subsidizing the easy projects that would
probably be funded by the private sector alone? I am also
concerned about ensuring that this program is seed money for
future technology development efforts. I think what we are
doing today should be part of a larger technology development
strategy. This program should not be duplicative nor should it
become a fund for pet projects. I see H.R. 6258 as an
opportunity to jump-start a necessary component of addressing
climate change.
And finally, I believe we should resolve issues such as the
question of who would control or won patent rights to the
technologies developed via this fund. This is particularly
important if trust fund money is matched or exceeded by
private-sector funding in key projects.
Those are some issues I would like to see addressed if we
could. Thanks, Mr. Chairman. I will yield back my time.
Mr. Boucher. Thank you very much, Mr. Matheson.
The gentleman from North Carolina, Mr. Butterfield, is
recognized for 3 minutes.
OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NORTH CAROLINA
Mr. Butterfield. Thank you very much, Mr. Chairman. First,
let me apologize for being late. I just left a meeting and was
unavoidably detained, but thank you very much for convening
this hearing today and thank you for your leadership on this
issue.
Mr. Chairman, despite what I view as irrefutable evidence,
there remains skepticism and doubt regarding the need for
immediate action on climate change legislation and this will
continue to delay us from our task of generating policies that
will signal the public and private world alike that a greener
future is indeed inevitable. Despite this, we can take
meaningful steps to ramp up technological innovation and
deployment such as the bill that we are considering today.
Further, the authors of this legislation wisely understand that
creating a greener future will require transition from our
current energy infrastructure to the next. Coal, which is
abundant and inexpensive in our country, must be a part of that
transition. Coal is responsible for over half of the
electricity generated in the United States, and is especially
critical to the Southeast. It is prolific in its utility and
carbon capture and storage will provide a useful tool in
transitioning coal into a greener fuel stock for years to come.
It is therefore imperative that we encourage its development as
well as its proliferation at a commercial level as soon as
possible.
I applaud my colleagues on both sides of the aisle for
their bipartisan support. I hope that we can see this type of
collegiality as we continue to address the important issue of
climate change policy. It will require an attitude of
compromise from all of us. I especially want to welcome all of
our witnesses today and extend a special welcome to my fellow
North Carolinian, James Kerr, who is a Commissioner with our
Utilities Commission in North Carolina. Jim was born in
Goldsboro, which is in my congressional district, and I am
pleased that he has taken the time to join us today to offer
his testimony on this legislation.
Thank you, Mr. Chairman. I yield back.
Mr. Boucher. Thank you very much, Mr. Butterfield.
The gentleman from Georgia, Mr. Barrow, is recognized for 3
minutes.
Mr. Barrow. I thank the chair. I too want to apologize for
being late, but as the chairman may know, I am bouncing back
and forth between two hearings. The Committee on Agriculture is
meeting on excessive speculation in the oil and natural gas
markets, which is a timely subject, and I haven't yet mastered
the art of bilocation, but I am working on it, Mr. Chairman.
I waive an opening. Thank you, sir.
Mr. Boucher. Or teleportation. Thank you, Mr. Barrow. We
will add 3 minutes to your time for questioning our witnesses
today since you waived an opening statement.
That completes the opening statements of the members
present, and at this time we welcome our panel of witnesses,
and I want to thank each of them for their carefully prepared
and thoughtful testimony. We welcome this morning Mr. Michael
Morris, the President, the Chairman and the Chief Executive
Officer of American Electric Power; Dr. Steven Specker, the
President and Chief Executive Officer of the Electric Power
Research Institute; Mr. Eugene Trisko, Counsel to the United
Mine Workers of America; Dr. Edward Rubin, the Alumni Professor
of Environmental Engineering and Science at the Carnegie Mellon
University in Pittsburgh; Mr. James Kerr, Commissioner of the
North Carolina Utilities Commission; and Mr. Michael Goo, a
former counsel to this committee, who is the Legislative
Director for Climate at the National Resources Defense Counsel.
Without objection, all of your prepared written statements
will be made a part of the record. We would welcome your oral
summaries and ask that they kept to approximately 5 minutes.
Mr. Morris, we will begin with you.
STATEMENT OF MICHAEL G. MORRIS, CHAIRMAN, PRESIDENT, AND CHIEF
OPERATING OFFICER, AMERICAN ELECTRIC POWER
Mr. Morris. Thank you very much, Mr. Chairman. It is an
honor to be here again to speak to this subcommittee,
particularly on a subject as important as this and seeing the
bipartisan nature of it that you and Ranking Member Upton
brought to this very important piece of legislation is
impressive, to say the least.
Having heard some of the comments of your colleagues on the
panel, however, I continue to be concerned about the likelihood
of us taking this most important first step. All of these
issues cannot be handled in a single piece of legislation and
the unknowns about what a single piece of legislation might
yield for the country surely ought to be in the back of our
minds. All we have to do is think of biofuels in a larger
sense.
So if we take this piece and think it through in a logical
way, you have heard from me before and many of my colleagues
testify to this committee and the larger committee, both here
and in the Senate, on the unavailability of the technology
today allowing coal to continue and the critical source or
electrical generation in this country. You don't need to look
very much further than our own shores to see what happens to an
economy when it runs out of baseload power generation. South
Africa's economy has been affected in all of 2008. China's
economy with a story today in the Wall Street Journal is being
affected now with a lack of baseload power generation. And it
is clear that these kinds of challenges are not that are off
for this country if we don't get about addressing the issue of
allowing coal to play near and long-term. The availability of
this carbon capture and storage technology will allow coal to
continue to play, and I don't know that I heard from any of
your colleagues any opposition to that because it is just plain
true. This country is 50 percent electrically fueled by coal.
The world, in fact, is 50 percent electrified by coal, and that
will continue no matter what we do in the halls of this
Congress. So seeing the bipartisan nature and the support of
what you put together is really quite impressive and we thank
you for that.
Does the bill have some points that could be addressed? I
am sure that it does but I thank my colleagues from the United
Mine Workers Association, the International Brotherhood of
Electrical Workers and the utilities who have volunteered to
come forward and employ this kind of an approach. I think this
is a logical way for us to go about doing it, and with all
respect, and I mean this from the bottom of my heart, but as a
participant in this democracy, keeping the money out of the
hands of the administrative arm of the Federal Government is
one way to ensure that something happens, and that is why you
are seeing so much strong support for this bill as it comes
forward. This is not tax money. This is a fee on top of the
electric rate that my 5.1 million customers pay and that quite
honestly the many millions of customers, the 300 million-plus
customers in this country pay intended to address this very
important issue in a very realistic way.
As I have said before, this is not the Clean Air Act
Amendments of 1980 and 1990 where technology was available; we
didn't want to do it. We as an industry, I surely standing here
on behalf of American Electric Power and our 20,000-plus people
and our 5 million customers are saying we would love to do
this, please let us. Pass this enabling legislation, handle
this very first piece so that we can bring you demonstrations
that show carbon capture and storage is a viable technology
because coal has to play in this endeavor as we go forward. The
Congresswoman from Wisconsin points to the We Energy project
that we are all part of, my company and many of my colleagues.
It is the very first and important step and it is a pure
research project that is being directed by EPRI, the Electric
Power Research Institute, which Steve will surely speak on
behalf of and will do so better than I will now, is a great
organization to do that work. The concept and the construct of
how this corporation will come together to allow these projects
to come forward is exactly what we need to do. It is pinpointed
toward carbon capture and storage. It not ought be pinpointed
at solar and wind and efficiency. We all believe in that and we
are all working on that. But you have created with your
colleagues a very workable piece of legislation that will help
us address this issue.
We can't solve whether we should go forward with carbon
capture and storage in a much larger bill of a cap-and-trade
program. That is a debate for another day. This is not a means
in any way, shape, or form to not have that debate and not see
that legislation passed, but all of that will be folly if we
don't know if this technology works. So I think for one time in
my career, we have the cart and the horse in the appropriate
alignment and we should go forward and pass this, get it to the
floor, get a companion piece like this out of the Senate and
have a piece of legislation that says to the world, to both
candidates for the presidential election this November, America
is ready to lead, and in fact, this piece of legislation will
allow us to do that.
I thank you very much for your creative activity and your
steadfast support of the concept of let us do something. Thank
you, sir.
[The prepared statement of Mr. Morris follows:]
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Mr. Boucher. Thank you very much, Mr. Morris.
Dr. Rubin.
STATEMENT OF EDWARD S. RUBIN, THE ALUMNI PROFESSOR OF
ENVIRONMENTAL ENGINEERING AND SCIENCE, CARNEGIE MELLON
UNIVERSITY
Mr. Rubin. Mr. Chairman, thank you very much for the
opportunity to appear here today. My name is Ed Rubin. I am a
schoolteacher from western Pennsylvania where I am a professor
in the Department of Engineering and Public Policy at Carnegie
Mellon University. My teaching and research focus on problems
of energy and the environment, especially issues related to
coal use, environmental technologies, and climate change.
Over about the past 3 years, I have also worked in a
consulting role with the Pew Center on Global Climate Change to
look at alternative policies for accelerating the deployment of
CO2 capture and storage, or CCS. That work appears
to have influenced the bill we are discussing here today and I
very much appreciate your invitation to comment on it. So first
let me say that I was extremely pleased to see this bill
introduced with bipartisan support following the Senate's
failure last month to tackle the issue of climate policy. It is
clear that progress on that issue will require considerably
more time no matter who the next President is. The great virtue
of H.R. 6258 is that it can still allow our country to make
urgently needed progress this year on a technology that will be
critical to whatever climate policy ultimately emerges in the
future.
So today I have three simple points to make. The first is
that CO2 capture and storage is a critical
technology for bridging the Nation's energy and environmental
objectives. It is the only way we know to reconcile the
realities and importance of coal use with the need to
dramatically reduce CO2 emissions linked to climate
change. Therefore, we should not delay demonstrating its
application in the electric power sector, which is the largest
source of CO2 in the United States today.
My second point is that several full-scale projects are
needed urgently to ensure that CCS can be used safely,
effectively and reliably in power plant applications. This need
for full-scale demonstrations is widely recognized but funding
for such projects has not yet been forthcoming. My estimate is
that the full cost of building a CO2 capture and
storage system at a nominal 400-megawatt power plant and
operating it for 5 years is somewhere between $700 million and
$1 billion per project. As best I have been able to tell, there
is today not a single large-scale CCS project at a coal-fired
power plant anywhere in the world with the full financing
needed to proceed at that scale. And so in the absence of a
strong policy mandate, H.R. 6258 would overcome this obstacle
in a very creative and efficient way by spreading the cost of
demonstrations over a broad set of stakeholders, all of whom
will benefit from the outcome of these projects. Ultimately,
all consumers of fossil fuel electricity would bear the cost
under this bill. But my estimate is that the cost to an average
residential customer will be no more than a penny a day per
household, or about $3 to $5 a year. That is an even smaller
amount than the Committee's estimate of $10 to $12 a year,
which in fact I believe is in error and I have provided details
of that to the committee staff.
My third point is that several changes to the current draft
bill are needed to make it both more effective and more
acceptable. In my written testimony, I have outlined six
specific changes I would recommend. Most important, I think, is
the need to define more explicitly and more narrowly the
mission of the corporation established by this bill. In a
nutshell, that mission should be to accelerate the deployment
of CCS by financing and overseeing the management of critically
selected CCS projects at new and existing power plants,
typically at a scale of several hundred megawatts each.
Given that mission, I would strongly urge that the language
in section 4(b) of the bill be deleted. That language muddles
and diffuses the purpose of this bill. It would put the
corporation in the same business as a variety of other
organizations whose mission is to support and carry out
research and development, principally the Department of Energy
and the Electric Power Research Institute. Unquestionably, R&D
is critical but it should not be the mission of this
corporation. Thus, I would also suggest that the word
``research'' be dropped from the proposed name of the
corporation. Instead, following the title of the bill, it
should be called something like the Carbon Capture and Storage
Deployment Corporation, or more simply, the CCS Deployment
Corporation.
Finally, I would recommend that the composition of the
board of directors of the corporation be modified to include
representatives of other key stakeholder groups. This is
necessary, I think, both to broaden the expertise and
perspectives of the board and also to strengthen its external
credibility and public trust. While most board members should
be drawn from electric power organizations, I believe at least
two members should be drawn from non-utility industries and at
least two from public organizations. For example, non-utility
industrial members might be drawn from segments of the oil and
gas industry, which today has the most experience and expertise
in CCS operations. The public members should include at least
one government representative such as from the Department of
Energy and one non-governmental member such as from an
environmental NGO or even an academic organization.
With these modifications, I believe H.R. 6258, if enacted
this year, will indeed be a critical piece of legislation that
will greatly facilitate future progress on climate policy,
energy policy, and the reduction of CO2 emissions
and so I am happy to offer my penny a day in support of this
bill. I have brought along some extra pennies in case anybody
else at the table would like to join me.
Thank you, Mr. Chairman, for your attention.
[The prepared statement of Mr. Rubin follows:]
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Mr. Boucher. Thank you very much, Dr. Rubin, and for your
endorsement of this measure.
Dr. Specker.
STATEMENT OF STEVEN SPECKER, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, ELECTRIC POWER RESEARCH INSTITUTE
Mr. Specker. Thank you very much, Mr. Chairman. I am Steve
Specker, President and CEO of the Electric Power Research
Institute, better known as EPRI. EPRI appreciates the
opportunity to be considered in the legislation as the
institutional home for the carbon storage research corporation.
I would like to begin by summarizing my testimony today in
three points.
First, EPRI's 35 years of experience as the collaborative
public interest research, development, and deployment
organization for the electricity sector makes us well suited to
house the Carbon Storage Research Corporation. It is the type
of role that EPRI is designed to perform. Second, our proven
governance and operating model will enable EPRI to promptly and
efficiently establish the needed structures and processes to
launch the Corporation. Third, our extensive experience in
helping lead large-scale technology demonstrations provides
confidence that we can successfully fulfill the objectives of
this legislation.
Let me briefly expand on several of these points. EPRI's
collaborative and governance model compares favorably to the
governance and management structure that is proposed in the
legislation. Our activities are shaped by advice from public as
well as different private sector and government viewpoints. Our
Board of Directors has 33 members including representation from
federal, municipal, cooperative, and investor-owned utilities.
We also have six external directors who are typically drawn
from academia and the broader business community. Our
management and our board draw upon the experiences and
viewpoints of our Advisory council, which consists of 30
leaders from the environmental, academic, labor, business, and
regulatory communities. Very importantly, our charter requires
that we include 10 State public utility Commissioners on our
Advisory council. Our Advisory council helps us consider the
impact of societal and public policy needs when we evaluate the
direction of our various programs.
It is also important to note that EPRI is not a trade
association. The IRS recognizes us as a 501(c)(3) tax-exempt
scientific research organization which is chartered to operate
in the public interest and for the public benefit, and we take
that obligation very seriously. We conduct our activities with
objectivity and scientific integrity. Our agenda is very
simple: find the most effective solutions to help solve the
most important challenges associated with providing the public
with reliable, affordable, and environmentally responsible
electricity.
Regarding our experience, we are recognized both in the
United States and internationally as an organization that can
successfully lead large-scale demonstrations. We work closely
with industry participants, governmental agencies, equipment
manufacturers, and utilities, and in doing this have helped
lead major programs. Let me give you a few examples. The Cool
Water program, an EPRI-led collaborative program in the late
1980s, was the first commercial-scale IGCC plant in the United
States. The Environmental Control Technology Center, which EPRI
constructed and operated from 1989 to 1999, demonstrated
technologies for controlling sulfur, nitrous oxide, and
particulate emissions from coal-based generation, and was a
very important facility. And the Advanced Light Water Reactor
program, a $1 billion public-private partnership that operated
for over a decade, was coordinated by EPRI in cooperation with
the U.S. Department of Energy, utilities and reactor suppliers.
Most recently in the carbon capture and storage area, we
have been providing collaborative leadership for several
important pre-commercial carbon capture and storage
demonstrations. As already has been mentioned, the first
chilled ammonia capture technology demonstration at the We
Energy's Pleasant Prairie plant in Wisconsin is an EPRI-led
collaboration and is the first of a kind, very important
facility. We are continuing moving forward with two planned 20-
megawatt CCS demonstrations on pulverized coal and several
planned CCS demonstrations on both existing and new IGCC
facilities.
I would like to close with a couple comments on the scale
of the funding proposed by this legislation. First, the amount,
$1 billion per year, is consistent with estimates that are
provided by a number of independent studies, done by the
National Coal Council, the Coal Utilization Research Council
and, very important, the MIT study entitled The Future of Coal.
All of those various studies' estimates are in the ballpark of
$1 billion per year. In addition, our own work supports a
number of somewhere from $700 million to $1 billion in that
range per year for CCS.
In summary, we support the need for a very focused
demonstration, and I will emphasize the demonstration part of
this. This is not research. It is some development, primarily
commercial-scale demonstration fund for the development of
large-scale projects to advance the commercial availability of
CCS. Very importantly, I agree with the previous speaker, there
is no R in this. This is not research. This is large-scale
commercial demonstration of this technology. We are honored to
be asked to play a role in its success and look forward to the
opportunity. Thank you.
[The prepared statement of Mr. Specker follows:]
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Mr. Boucher. Thank you very much, Dr. Specker.
Mr. Kerr.
STATEMENT OF JAMES Y. KERR, II, COMMISSIONER, NORTH CAROLINA
UTILITIES COMMISSION
Mr. Kerr. Thank you, Mr. Chairman, Vice Chairman
Butterfield, Ranking Members Upton and Barton. My name is Jim
Kerr. I am a member of the North Carolina Utility Commissioner
and immediate past president of NARUC, and I guess as a matter
of full disclosure, I am a member of the EPRI advisory council.
We thank the chairman and the sponsors for this important piece
of legislation and for the opportunity to provide the
perspective of the National Association of Regulatory Utility
Commissioners.
NARUC supports the policy goals of this legislation and the
need for broad-based funding mechanisms that match the
resources committed to the magnitude of the challenge. NARUC
also supports the policy goals of the legislation to expedite
the commercial application of carbon capture and storage as one
option to begin addressing the revolution in energy production
and delivery technologies needed if the United States expects
to make a serious effort to reduce emissions of greenhouse
gases in response to the threat of global climate change. We
strongly agree with the underlying assumption of the authors of
this legislation that a solution to the technological and
research and development challenges of greenhouse gas
mitigation is an off-budget mechanism that is supported by the
utility industry and its regulators. State Commissioners are
strong supporters of EPRI and I endorse the written testimony
of Dr. Specker. There are, however, three areas of concern that
we urge the subcommittee to address as this legislation
advances.
First, concerning the formation and governance of the CSRC,
we are troubled that there is no governmental role or
regulatory oversight involved in the formation of the
corporation or its ongoing operations, despite the fact that
the corporation is intended to be funded through rates paid by
retail consumers who have no alternative but to pay the fees.
We believe that there should be a duty on the part of EPRI
written into the legislation to consult with regulators and
other stakeholders before the referendum is conducted.
Specifically, the subcommittee could amend section 3(a) of the
bill to provide the distribution utilities voting in the
referendum in favor of establishing the corporation certify to
the independent auditing firm that their respective retail
regulators support their vote with the knowledge that the fees
imposed by the bill will be automatically passed through to
their customers.
Concerning the CSRC's operations once formed, we recommend
that the legislation be revised to specify a role for
representatives of regulators and consumers. This could be
accomplished by amending section 3(c) to include such
representation on the CSRC board in addition to the industry
representatives there listed or by creating a separate advisory
council for the CSRC modeled after the current EPRI advisory
council board of directors. We also recommend that the
legislation specifically provide that the CSRC consult with
representatives of regulators and consumers as it prepares its
budget and research agenda under section 4(e) and that the
legislation specifically require that the corporation provide
its annual report and audit to each State commission with
jurisdiction.
Second, we have strong reservations about the inclusion in
the bill of section 8(a) on the cost recovery of the fees. This
section is problematic for a host of reasons. As drafted, the
legislation would authorize utilities to vote to exempt
themselves from any regulatory oversight to recover costs from
captive ratepayers. This is unprecedented. While Congress has
preempted State authority in other areas of energy and
telecommunications policy and practice, we know of no other
example where it has given private entities the ability to band
together to exempt themselves from the lawful application of
otherwise applicable State law. In addition, H.R. 6258 treats
the consumer served by investor-owned utilities less favorably
than customers of publicly owned utilities such as municipal or
cooperative utilities. While section 8 of the bill appears to
apply equally to consumers served by all distribution
utilities, public and private, there is a significant
difference. Because the regulators of municipal and cooperative
utility systems are the publicly owned and managed utilities
themselves, their consumers have a say in how their utilities
vote in the referendum to establish the CSRC and thereby become
subject to the fees imposed by the legislation. By contrast,
neither the consumers nor the regulators of investor-owned
utilities have any say in whether their distributors will
subject their consumers to these same fees. It may well be
argued that because the fees established under H.R. 6258 only
amount to $10 to $12 per residential customer per year, section
8 is of little consequence. However, for retail regulators
charged under law to protect the interests of consumers who
remain captive to the distributors, this is an important matter
of principal. Regardless of the amounts in question, Congress
should not sanction a system where the monopoly providers of an
essential service agree among themselves to charge consumers
fees that they cannot avoid from any regulatory oversight at
either the State or federal level regardless of how worthy the
purpose. Moreover, we are deeply troubled by the precedent this
bill would establish for other utilities fees and charges for
other worthy purposes. We are aware of bills pending that would
mandate the recovery of costs for new investments in electric
transmission facilities compliance with greenhouse gas emission
reductions and power purchase from renewable technologies, to
name but a few. Both as a matter of principle and practical
application, we would strongly urge Congress to let retail
regulators do their jobs. The State Commissions understand this
responsibility and we last year passed a resolution endorsing
the timely recovery of reasonably and prudently incurred costs.
Frankly, we expect that State Commissions that would be most
affected by these fees established in the bill would support
recover of these costs and rates simply because of the benefit
they as large consumers of fossil-based electricity would reap
from this legislation. I would note, to our knowledge, no State
regulators have refused to pass through the costs that nuclear
utilities contribute to the nuclear waste fund, which operates
under a statute, the Nuclear Waste Policy Act, that notably has
no provisions mandating that costs be passed through to
consumers. Similarly, we have seen little evidence that
utilities that voluntarily contribute to EPRI's current
research program have suffered by virtue of disallowances of
their contributions.
Third, concerning the scope of the bill, as I have noted at
the beginning of this statement, NARUC strongly supports steps
to advance research, development, and deployment to meet the
climate challenge. Accordingly, while I understand the
interests the sponsors of H.R. 6258 have in carbon capture and
storage, there are clearly other areas in the utility sector
and beyond that cry out for greater commitment for research,
development, and demonstration. While it is not necessarily the
burden of the authors of this bill to address other
technologies, we look forward to working with this
subcommittee, our colleagues at EPRI, and other stakeholders to
fashion a research agenda that enables the Nation to reduce
carbon emissions as quickly, efficiently, economically, and
realistically as possible.
Thank you, and I will be happy to answer questions.
[The prepared statement of Mr. Kerr follows:]
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Mr. Boucher. Thank you very much, Mr. Kerr.
Mr. Trisko, we will be happy to hear from you.
STATEMENT OF EUGENE M. TRISKO, COUNSEL TO UNITED MINE WORKERS
OF AMERICA
Mr. Trisko. Thank you, Chairman Boucher, Ranking Member
Upton and distinguished members of the subcommittee. I am very
pleased to be here today to testify on behalf of the United
Mine Workers of America to support enactment of H.R. 6258.
This bill provides an essential foundation for national
climate change legislation by establishing a secure, non-budget
source of financing for demonstrating the technical feasibility
of carbon capture and storage technologies. CCS technologies
are the only means for assuring that domestic coal can continue
to supply the majority of our electric-generating needs in a
carbon-constrained environment. The UMWA supports national
climate change legislation. The union is mindful, however, that
imprudent climate change legislation potentially represents the
greatest threat to its membership and to the continued use of
coal.
More than half of our Nation's electricity is generated by
coal, principally in large baseload power plants. Intermittent
renewables such as wind energy cannot replace baseload coal and
usually are backed up with natural gas. At the margin, our gas
supplies are imported from Canada and from unstable foreign
markets in the form of LNG.
H.R. 6258 represents a major step forward in advancing the
technologies that will allow coal to be consumed in a carbon-
constrained environment. It will help us once and for all put
to rest the myth of dirty coal.
In January 2008, U.S. EPA's Advanced Coal Technology Work
Group, representing a broad array of stakeholders, including
the mine workers, unanimously recommended that Congress
immediately enact legislation to create an early deployment
fund to defray the additional costs and risks of CCS
technologies. This recommendation was not tied to or in any
manner contingent upon enactment of broader climate change
legislation. The Work Group recommended raising approximately
$1 billion annually through non-budget mechanisms such as
temporary fees on fossil-fueled electricity.
H.R. 6258 translates these recommendations to reality. It
calls for the creation of an industry-operated Carbon Storage
Research Corporation to assess modest fees on electricity from
coal, oil and gas, reflecting the relative CO2
emissions of each fuel type. In short, the bill embraces the
polluter-pays principle.
The bill directs that projects to be supported should be
geographically diverse, using a variety of coal and other
fossil fuel, and employing carbon capture technologies that
could be used on new or existing power plants. The bill also
provides for potential support to U.S. DOE and related
governmental and academic programs. The UMWA envisions an
active working partnership among the corporation, U.S. DOE and
its national labs and other research entities collectively
supporting major projects that have the greatest promise of
demonstrating the technical and economic feasibility of CCS.
Moreover, the United States must take the lead in
establishing the technical viability of CCS for use both here
and abroad. The world's ability to stabilize future global
CO2 concentrations depends upon the willingness of
major developing economies like India and China to accept
meaningful commitments to reduce their future rate of
emissions. Our leadership in CCS technologies is critical to
the world's ability to use coal in an environmentally
responsible manner.
As the EPA Work Group recognized, we cannot depend entirely
upon the appropriations process to deliver the magnitude of
financial support needed to commercialize these technologies.
By providing a more stable form of long-term support, this bill
can create the bases for independent private financing of coal-
based energy technologies that otherwise might never get off
the drawing board.
Mr. Chairman, the UMWA conveys its sincere appreciation for
the leadership that you, sir, have taken in moving this bill
forward to attract a broad bipartisan basis of support. The
union stands ready to work with you and the Committee to do
whatever it can to help make this program a reality. Thank you.
[The prepared statement of Mr. Trisko follows:]
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Mr. Boucher. Thank you very much, Mr. Trisko.
Mr. Goo.
STATEMENT OF MICHAEL GOO, CLIMATE LEGISLATIVE DIRECTOR, NATURAL
RESOURCES DEFENSE COUNSEL
Mr. Goo. Chairman Boucher and Ranking Member Upton, thank
you for holding this hearing on H.R. 6258, the Carbon Capture
and Storage Early Deployment Act. My name is Michael Goo. I am
the climate Legislative Director for the Natural Resources
Defense Council. We appreciate the opportunity to testify.
Chairman Boucher, the introduction of this legislation
marks yet another step forward in our search for the solution
to the urgent problem of global warming but we believe it must
be part of a comprehensive package of measures. I want to
commend you and Ranking Member Upton and the other members of
the Committee who have cosponsored this bill for taking on
directly one of the most important and toughest challenges in
the global warming arena, that is, the role of coal combustion,
and for trying to find ways to encourage the early deployment
of carbon capture and disposal technologies. To help us stop
global warming as soon as possible, we really need your
leadership in this area.
As the global warming debate has progressed, too often we
tend to focus on areas of disagreement and not enough on areas
of agreement, so I would like to begin by emphasizing some of
the things that I hope most or even all of us can agree on.
First, urgent action to combat global warming is required
immediately. Second, that emissions of CO2 from the
burning of coal are a major source of global warming. Third,
for some time to come, we will continue to use coal as part of
our energy mix. Fourth, since we will likely continue to use
substantial amounts of coal, we must ensure the deployment of
technologies to capture and dispose of CO2 from
coal. And fifth and perhaps most importantly, it will always be
cheaper to vent CO2 into the atmosphere than to
capture and store it. These are the things that I hope we can
agree on.
But turning to something that I expect there will be less
agreement, but which is still true, I wish to emphasize that we
have the technology now to start to deploy the first wave of
carbon capture and sequestration technologies. I don't want you
to accept that at face value from me, I am an environmentalist,
but I would also ask that you not accept positions from people
who have vested financial interest to the opposite in delaying
limits on carbon capture and storage. I don't expect you to
believe me but you should listen to the words of the president
and chairman of BP America, Robert Malone, in testimony before
Congress this year, and he said deploying CCS at scale is not
as much a question of technology availability but of economic
viability. CCS is available today to play a significant role in
reducing greenhouse gas emissions and addressing climate
change. Those are not my words, those are his words.
So what is needed then is an appropriate economic incentive
for deployment, not further research and development that will
serve as an excuse for delay. Many companies already, such as
NRG, Tenaska, and BP, are already acting now in anticipation of
caps on global warming pollution and are building facilities to
capture and dispose of their CO2 . They are not so
much worried about the technology as they are about the
economics. The single most effective thing that one could do to
encourage more early deployment of CCS technology is to enact
cap-and-trade legislation that will provide a price signal to
power producers using coal. There is an old saying: give a man
a fish, feed him for a day, teach a man to fish, feed him for a
lifetime. It is the same thing with CCS. If we give you a CCS
plant, there will be one, there will be two, there will maybe
be three CCS plants. Put a price cap in place, there will be
large, widespread deployment of CCS technology immediately. The
industry will learn how to produce electricity and capture and
control their carbon. Without a cap, pushing CCS into the
marketplace is like using a wet noodle to push a rock uphill.
It just doesn't work.
Now, even with a cap in place, we have some other
suggestions about ways to incentivize early deployment of CCS
that would provide even stronger incentive for deployment of
CCS, and these include a fixed feed-in approach described in my
testimony that would provide a substantial subsidy to the
earliest adopters of CCS, it would create a race to deploy CCS,
a low-carbon generation obligation that functions like a
renewable electricity standard, and a performance standard for
new coal-fired power plants like what has already been adopted
in California.
And with regard to the specifics of H.R. 6258, we have some
suggestions outlined in my testimony for further ways to
improve its efficacy, transparency, and fairness to consumers,
which we will be happy to discuss further.
Mr. Chairman, thank you again for your efforts in this
regard and for inviting NRDC to testify. We look forward to
working with you on comprehensive global warming legislation
and on specific proposals to encourage early deployment of CCS
technologies.
[The prepared statement of Mr. Goo follows:]
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Mr. Boucher. Thank you very much, Mr. Goo, and thanks to
all of the witnesses for your thoughtful testimony and also for
your recommendations on ways that the legislation pending now
before the committee can be strengthened. We will consider very
carefully all of those recommendations.
Dr. Specker, let me begin my questions with you, and they
are focused on your role as the chief executive officer of
EPRI. You have made recommendations with the level of funding
that would be required for the near-term deployment of CCS
technologies, and my first question to you is whether or not
the funding levels reflected in the legislation are consistent
with EPRI's recommendations.
Mr. Specker. Yes, they are consistent with our
recommendations. Our studies indicate $700 million to $1
billion a year is what is required to demonstrate CCS on a
large scale.
Mr. Boucher. And that would be over a 10-year period?
Mr. Specker. Yes, we actually looked out over 25 years, the
CCS in particular over the next 10, about $1 billion a year.
Also--
Mr. Boucher. And when would you anticipate if we expend $1
billion annually for 10 years that CCS would be generally
available, widely dispersed in various kinds of storage media
around the country and affordable for use by electric
utilities?
Mr. Specker. We have set the aggressive target of 2020 for
widespread deployment for all new coal plants beginning
operation after 2020. That is an accelerated schedule but we
think it is still doable.
Mr. Boucher. You mentioned all new builds after 2020. Would
that availability of storage also accommodate retrofits that
would be applied to existing coal-fired units?
Mr. Specker. That is certainly possible. I think in the
retrofit area, it is going to be a plant-by-plant situation.
The technologies that would be demonstrated for new plants
could certainly be applicable to retrofit but the circumstances
are going to be different at every plant.
Mr. Boucher. Well, understanding that, but let us assume
that the utilities decide they want to retrofit, perhaps to
overcontrol in order to achieve emission allowances that would
be tradable in the market, or in order to meet their
compliance, they would be free to make those decisions. Let us
suppose they decide to do that. Would the storage capacity that
is produced by a 10-year schedule at $1 billion annually by
2020 be sufficient to accommodate not only the new builds but
also a measure of retrofits on existing facilities?
Mr. Specker. I would have to look more specifically at the
data. My view right now would be that those storage locations
used for the major demonstrations would have capacity for some
use by retrofit but certainly could not--
Mr. Boucher. Let me move on to another question. Thank you.
You have an analysis that shows that the presence or absence of
CCS by the year 2050 would make a dramatic difference in terms
of what the retail electricity rates generally would be across
the country. Your analysis, as I read it, shows that with CCS,
the rate would be about 9 cents per kilowatt-hour. In the
absence of CCS, it would be about 21 cents per kilowatt-hour.
Does that study take into account the fuel shifting to natural
gas from coal that would occur in the event that electric
utilities are required by the law to reduce their emissions at
a time when CCS is not available and therefore would take the
obvious economic option of defaulting to the next least
expensive fuel, which would be natural gas? Is that phenomenon
accounted for in your analysis?
Mr. Specker. Yes, it is.
Mr. Boucher. And how much more natural gas capacity would
you anticipate being built if those events transpire in that
fashion?
Mr. Specker. Again, I don't have those exact numbers but it
is very significant expansion in the amount of natural gas and
LNG that would need to be used over the next 30 years.
Mr. Boucher. And it would be that switch from coal to
natural gas that would primarily account for this major
increase in electricity prices?
Mr. Specker. Yes, that is a primary driver of the increase.
Mr. Boucher. One of the things that I certainly would hope
would occur and I know many other members have commented on
this also is that assuming that the corporation contemplated by
this legislation is created and EPRI has a guiding role in
deciding how the investments of funds from this corporation
will be applied to specific projects, that the roadmap which
has been developed by the Department of Energy in collaboration
with its multiple regional partnerships be used in some fashion
as a guide and that at a minimum, DOE be involved in
consultations with the corporation to make sure that the work
that DOE has done, which I think most people would say has been
quite effective, is utilized and that the corporation take
those recommendations into serious account. Can you just talk a
little bit about what your relationship from an advisory
perspective with DOE would be?
Mr. Specker. Yes. We would certainly utilize and consult
with the Department of Energy. We work closely with them today.
We have worked with them on the roadmap. It is a consistent
roadmap with what EPRI has developed, and that would really be
the template for working with them as to how we decide the
matrix of potential projects that are needed. Again would be
very comfortable as we are today working closely with the
Department of Energy.
Mr. Boucher. Thank you very much.
Mr. Trisko, let me direct some brief questions to you. I
know that you were involved in the work of the EPA's Advanced
Coal Technology Work Group that recommended raising
approximately $1 billion annually through a non-budget fund.
Does the bill that is before us reflect that recommendation?
Mr. Trisko. Yes, Mr. Chairman, it reflects the
recommendation exactly. Moreover, the specific assessments that
are assigned in the bill for coal, natural gas, and oil
generation, that is, mills per kilowatt-hour, derived from a
work paper that was discussed within the EPA Advanced Coal
Technology Work Group and that work paper used emission rates
for the various fuels taken from a report by the International
Atomic Energy Agency.
Mr. Boucher. Thank you, Mr. Trisko. Can you speak to the
degree of consensus that existed among the Working Group at the
time its recommendations were adopted?
Mr. Trisko. Yes, sir. The Advanced Coal Technology Work
Group was like many EPA working group initiatives. It was a
part-time job.
Mr. Boucher. Well, Mr. Trisko, my time is actually expired.
I am looking for one word here and it starts with a U and it
reflects the number of votes that were provided. I am trying
not to ask a leading question.
Mr. Trisko. Mr. Chairman--
Mr. Boucher. The number of votes that were provided among
the working group members when the adoption of the
recommendation occurred. It starts with a U. It is pretty easy.
Mr. Trisko. You have led unavoidably--
Mr. Boucher. No, that wasn't the word I had in mind.
Mr. Trisko. You have led unavoidably to the recommendation
was made on a unanimous basis by all stakeholders.
Mr. Boucher. Thank you very much. I have one other
question, Mr. Trisko. Within that recommendation, was there any
linkage among the recommendations or between the
recommendations for this independent, non-governmental CCS fund
on the one hand and the recommendation that a mandatory program
to control greenhouse gas emissions be adopted on the other
hand? Were those two recommendations linked? Was one made in
any way contingent on the other?
Mr. Trisko. No, Mr. Chairman.
Mr. Boucher. One other question, Mr. Trisko. Was the
National Resources Defense Council a member of that working
group?
Mr. Trisko. Yes, Mr. Chairman.
Mr. Boucher. Thank you. Thank you very much. My time is
expired.
The gentleman from Michigan, Mr. Upton.
Mr. Upton. Well, thank you, Mr. Chairman, and again, I want
to thank particularly my colleagues on both sides of the aisle.
I look at Mr. Shimkus to my left and Mr. Whitfield and Mr.
Barton on our side that worked very diligently to get this bill
in shape that we could put our name on it and feel proud, and I
would just encourage you based on the testimony that I have
heard this morning that we have only 18 legislative days left
really probably in this session, and I would like to think that
with such broad bipartisan support, that you and Mr. Dingell
might be able to get together with the Speaker and see what we
can do to try and push this bill through because it really is
important to the future of the country. I have no bones about
it, that I am a supporter of increasing the supply of
electricity, whether it be nuclear, whether it be renewable,
whether it be clean coal. Our electricity needs, as many of you
know, are going to grow by nearly 30 to 40 percent by the year
2030, and we have to be prepared for that. Mr. Shimkus made the
point that to maintain coal electricity at 50 percent, 750 new
plants have to be online. Last year it was zero. Not one came
online. I think we just got a new permit for one in this area
of Virginia and Maryland in the last couple weeks, nuclear.
Hasn't happened in 25 years. We know that there are a couple
that are pending including one in Michigan that I would like to
see happen. But we are very troubled by the landscape. This USA
Today story just a couple weeks ago, utilities raising the
price of power, some increases around the country by 30 to 40
percent.
Mr. Morris, you raised the story that I missed this
morning. I didn't see it until you referenced it. I would like
to put it into the record, but today's Wall Street Journal
story about China. Power shortfalls this summer could be as
high as 10 gigawatts, 60 percent of the disparity in some of
the manufacturing hubs, inventories are way down, and in fact,
they expect a coal shortage that is likely to reach perhaps as
many as 20 million tons this year. Trouble for sure. The Sierra
Club, I think I read earlier this year, announced that their
number 1 target was to prevent any new coal-fired plants from
being permitted and they were successful last year. So I look
to you, Mr. Morris, with great production in 11 States through
the Midwest. What are your plans as you look to increase
production for the needs that we have, whether it is an
expanding population, the new utility needs that we have,
perhaps electric cars, HDTV sets, charging our BlackBerries and
phones, all those different things making up that 30 percent
growth? Can you move new coal-fired plants without this
technology? I know that when I was on Wall Street a couple
weeks ago, many of the big finance folks said we are not going
to do it, we are not going to provide the financing unless this
technology is in place. It needs to be proven. Where do you see
things coming in that regard?
Mr. Morris. Well, Congressman Upton, you have put your
thumb on the pulse of a very important issue to this country,
and quite honestly to the world. China and other countries are
facing these issues. And when we see that challenge in front of
us, we have four coal-based power plants that were in the
overall State regulatory process as all of this discussion
began some time in 2007. To date, we have received the
authority from three States, Texas, Arkansas, Louisiana, to
build an ultra-supercritical coal production facility in
Arkansas. We are still awaiting our air permit. You mentioned
the Virginia power plant but the air permit on the Virginia
power plant is unaccomplishable so our friends at Dominion
Energy still need to have another session to try to understand
that. Our integrated gas plant in West Virginia-Virginia at
Appalachian Power approved by the West Virginia commission, not
approved yet by the Virginia Commission, and we will continue
to try and open a dialog to see to it that that can happen as
well. Our ultra-supercritical coal plant in Oklahoma voted down
because they wanted us to look at natural gas, having heavy
lobbying from a natural gas supplier who shut his gas wells in
at $7 a million BTUs because he thinks he is going to sell it
for $3 tomorrow or $10 tomorrow. Our integrated gas plant in
Ohio, because of the legislative restructuring process in Ohio,
is caught up in the courts by some who would not like to see a
plant like that built. We are heading as a Nation toward an
electric shortage of baseload power that will change the
environment in this country for a long, long time. Shutting
malls down one or two days a week, shutting production
facilities down one or two days a week, as they are doing in
South Africa as we sit here today, as they are doing in China,
and you looked at it today. To the answer that was given on the
9 cents, 21 cents, look at what Germany did today. Again,
another Wall Street story. They are now delaying the shuttering
of their nuclear station so that they do not become more
dependent on imported natural gas from Russia, the world's
largest supply of natural gas in Russia. You would hate to be
at the end of the pipelines that serve the European Union when
Russia decides to show the Ukraine that they are not paying the
appropriate price for gas. So this bill, as I tried to say in
my opening comments, is so important. If we don't have this
technology, and I do not agree with my friend at the end of the
table, deploying carbon capture and storage technology at an
oil refinery is 1,000 times different than deploying it at a
power plant where you may lose as much as 30 or 40 percent of
the current gigawatts-hour production. That is the equation we
are trying to fill with the deployment that we are going
through at We Energy, ultimately that we will do at our
Mountain Air station, ultimately that we will do at our
Northeastern station in Oklahoma. Those are our challenges.
This funding, this bill, critically important to finally get
going and do something that is constructive. As I said at the
close of my comments, I hold you in high regard, you and your
colleagues, for this bipartisan bill.
Mr. Upton. I know my time is expired but let me just close
with one thought, and I say this with a smile to my friend, Mr.
Goo. I thought that was just the NRDC's effort to say that we
ought to drill more so that we can have more capacity elsewhere
around the country. They went through the troubling debate in
the Senate and failed to get the votes. Another 10 Senators,
Democratic Senators, came out and said that they would have
voted against it had it come to final passage. It is clear that
this debate is going to take a long, long time. This is a bill
that we can do now. We can have this in place within the next
several years and we can get it done perhaps even in this
Congress without waiting for the debate that comes at some
point down the line.
Mr. Morris. And I really believe it is disingenuous for
someone to compare $10 billion raised over 10 years by utility
charges on the delivered kilowatt-hour to a $7, $8 trillion tax
on the country, which is what Warner-Lieberman was. That is
disingenuous and really unfortunate to hear those kinds of
comments here this morning.
Mr. Upton. I yield back.
Mr. Boucher. Well, thank you very much, Mr. Upton.
The gentleman from Pennsylvania, Mr. Doyle, is recognized
for 5 minutes.
Mr. Doyle. Thank you, Mr. Chairman.
Dr. Rubin, welcome to the Committee. I have always said to
my colleagues from other parts of the country, if they would
just cede power to those of from Pittsburgh, we could solve all
these problems. I don't think Mr. Shimkus agrees with that
though. I have a question, Dr. Rubin. You heard me say in my
opening remarks that I have some concerns with the way this
program would work in regards to operations at DOE and more
particularly the National Energy Technology Lab, and my basic
concern is that we may end up duplicating or competing with
work that is already being done there. I noted in your
testimony, you recommend deleting section 4(b) of the bill
because, in your point, I think your words were, it puts the
program in the same business as the Department of Energy. What
do you see as the role the NETL would play in this program and
what values do you see NETL having as we work towards moving up
deployment of CCS?
Mr. Rubin. Thank you, Mr. Doyle. NETL and DOE have played
very critical roles in the carbon sequestration program and
have provided leadership not only in this country but globally.
The Regional Partnership Program has been a very important
effort. These efforts and the kinds of things that EPRI are
doing are the critical underpinnings of the longer-term
solutions. But my notion of this corporation and the purpose of
this bill is to do a job that is critically needed to break the
deadlock that we currently have and then go out of business in
10 years or so. I sure hope DOE and EPRI will not go out of
business in 10 years. And I think the key issue is to talk
about and clarify the division of labor between these different
organizations. So I see NETL as with EPRI doing the critical
job of advancing and developing new technologies, bringing it
to a stage where it is ready for that final step of scale-up to
a several-hundred-megawatt facility. That is the handoff I see
to this corporation. The kinds of projects certainly initially
that should go in place at large-scale need to be projects that
have already been vetted, tested, and in which there is
generally a high degree of confidence but you still have to
take that next step because surprises happen when you scale-up
an order of magnitude. So DOE is critical as is EPRI, I think,
in carrying that ball up to that point but I would hand it off
at that point to a different entity with a very focused
mission, and that is also the way we will know whether it
succeeds or not.
Mr. Doyle. One more question. You heard our friend Michael
Goo say that deployment of CCS technology, that this could be
deployed today, that it is not a question of technology, it is
a question of economics, and do you believe that we could today
deploy CCS technology that could successfully--on a scale that
could be used at a coal-fired utility plant?
Mr. Rubin. Thanks for the softball question.
Mr. Doyle. Since you are not an electric company, I wanted
to ask somebody that didn't have a vested financial interest.
Mr. Rubin. I am personally confident it can be done but we
need to do it to be sure. Again, surprises happen when you go
and scale things up an order of magnitude. But not very far
from where we are sitting is a coal-fired power plant that has
been capturing and sequestering CO2 using current
technology at the scale of about 40 or 50 megawatts, a plant in
Cumberland, Maryland. It is one of a couple of plants, coal-
fired power plants in this country which are doing this at
smaller scale. But until you go from 50 to 500 megawatts and
until you link the capture operation with the transport and
sequestration operations, you still do not have the confidence
that you need to start doing this at a larger scale. A lot of
the problems I think and the most critical ones that would be
facilitated and resolved by this corporation are downstream,
that last step. The sequestration step, the storage step is
perhaps where many of the issues that need to be resolved lie
most critically. I am personally much more confident we know
how to engineer and do the first step but there are legal and
liability and regulatory issues which are receiving a lot of
attention, and I don't know about your experience but in my
experience, deadlines and real projects help focus the mind and
bring decisions to fruition. I think that could happen here.
Mr. Doyle. Thank you. I see my time is expired.
Thank you, Mr. Chairman.
Mr. Boucher. Well, thank you very much, Mr. Doyle.
The gentleman from Texas, Mr. Barton, is recognized for 5
minutes.
Mr. Barton. Thank you, Mr. Chairman.
I want to ask Dr. Rubin and Mr. Morris to comment on carbon
conversion technology. All the testimony so far has been about
carbon capture, but I have seen some conversion technology on a
pilot program at a power plant in my district that looks very
promising, and the bill before us does allow for funding to
research the conversion technology also. So could you two
gentlemen discuss briefly your view of conversion technology as
opposed to the storage technology?
Mr. Rubin. Thank you, Mr. Barton. By that I assume you mean
taking CO2 and doing something with it, converting
it to something?
Mr. Barton. Yes, sir.
Mr. Rubin. I am afraid I am not going to be the bearer of
good news on that as far as my--
Mr. Barton. Tell the truth. That is all we ask.
Mr. Rubin. That issue received a lot of attention. I spent
a couple of years recently on a special report that the
Intergovernmental Panel on Climate Change, the IPCC, undertook
on CO2 capture and storage, and one of the issues
that was prominent in that study, and there is a chapter in
that report on it, is the utilization of CO2 . It is
an awfully appealing idea. God, if we could just do something
useful with it and keep it out of the atmosphere. And it
received a lot of attention because it had a lot of political
importance and attraction. But the bottom line is that if we
look at the amount of CO2 used today and potentially
useful, it is trivial in comparison to the amount of
CO2 we emit. There is a lot of CO2 being
used to make things like methanol and other chemicals and there
are other things that can be done, and there are processes
potentially that can convert it into minerals. But those
processes are all a long way from commercial reality, and if
you think normal capture processes have been characterized as
expensive, these processes today are many times more expensive.
Most of the CO2 that gets used today soon gets re-
emitted. A lot of CO2, like the plants that are
capturing it now in Maryland, sell it across the street--
Mr. Barton. I don't want to interrupt you too much, but--
Mr. Rubin. So I think--
Mr. Barton [continuing]. I am really talking about--I am
not talking about re-injection of CO2 . I am talking
about actually converting it to a different substance that then
has commercial value or is more easily disposed of.
Mr. Rubin. I do not foresee that being a significant player
in reducing CO2 emissions to the atmosphere. It is a
very appropriate and necessary thing to be going on at the R&D
scale.
Mr. Barton. OK. Mr. Morris?
Mr. Morris. Congressman Barton, a biologist/lawyer from
Eastern Michigan University and Detroit College of Law knows
better than to argue with an engineer from Texas A&M.
Mr. Barton. I am not a chemist though.
Mr. Morris. The fact of the matter is, I am encouraged by
the opportunity to do that kind of activity and I think it is
again just wrong for this country to think that we are going to
store CO2 underground for millennia without
understanding all of the legal ramifications. I would much
rather see more of these dollars go toward the research. Our
piece of this would be on conversion technology. We keep
hearing that our friends in Japan are doing something along
those lines in a fuel cell technology application. If that is
true, wouldn't it be great if we could also join--
Mr. Barton. The whole point of this bill is not to dictate
an outcome--
Mr. Morris. Absolutely.
Mr. Barton [continuing]. It is to actually do science-based
research to see what is possible.
Mr. Morris. Absolutely.
Mr. Barton. The bill allows it. It doesn't--we don't have a
preordained outcome. But I have seen a pilot project in my
congressional district that the proponents of claim is just the
greatest thing since sliced bread. Of course, they are the
proponents of it, so that is--
Mr. Morris. Well, I am with you. I really believe that we
ought to do that. We ought to add some of these dollars and
make sure they go to the conversion, understanding it is a much
better way than transporting and storing and dealing with all
those issues.
Mr. Barton. I want to ask Mr. Kerr a question. I believe
you represent NARUC. Is that correct?
Mr. Kerr. Yes, sir.
Mr. Barton. One of the things that I have reserved the
right to offer in the markup is an amendment that would require
some corporate contribution in terms of equity to the
corporation as opposed to financing it totally with ratepayer
surcharges. We don't have consensus on the subcommittee about
whether that is a good idea or a bad idea, but in the FutureGen
project, which is somewhat similar to what we are setting up
here, not totally but somewhat, we did require that
corporations put up equity money themselves that would be at
risk from the shareholders as opposed to the ratepayers. Does
NARUC have a position or do you have a personal position
whether we should require some sort of a corporate contribution
to the corporation, equity capital in addition to the ratepayer
surcharges?
Mr. Kerr. NARUC does not have a specific position on the
more discrete issue. I think our fundamental position has been
that technology is the key to the climate issue and the more
dollars available, the better. The support that we have given
to this legislation recognizes that ratepayers have a role to
play but we think there are other participants in our energy
economy that are potential sources. My personal view is that
that is something that ought to be considered, your amendment.
I think there are also other participants, whether they be the
coal production side of the business, the rail transportation,
there are many participants other than consumers, individual
ratepayers paying their $10 to $12 at the end of the line. I
think my comments about cost recovery go to this. It is not,
should we make the investment, it is not, is this bill a good
idea, but it is that there has got to be some level of
protection for those nameless, faceless consumers out there who
more and more in the name of climate change, more and more
ideas are going to be financed on the back of individual
ratepayers at the end of the line and so I think ideas like
yours are certainly worthy of discussion. This is my personal
view, but I also think that that is the point we are making
about some level of regulatory oversight before these fees are
just simply placed on the ratepayers. I appreciate your
sensitivity to that.
Mr. Barton. Thank you, Mr. Chairman.
Mr. Boucher. Thank you very much, Mr. Barton.
The gentlelady from Wisconsin, Ms. Baldwin, is recognized
for 5 minutes.
Ms. Baldwin. Thank you. I want to actually take up where
our ranking member left off here with Mr. Kerr. You had argued
in your testimony that NARUC had strong concerns about section
8(a) of the bill, because in essence it is allowing the
utilities to recover their costs by increasing rates for
consumers without any regulatory oversight. First, you seem to
think that the costs will amount to $10 to $12 per customer per
year in the residential sector. I wonder what estimates you
have about the cost impact in the commercial and industrial
sector.
Mr. Kerr. I don't have any. I think that the $10 to $12 per
residential was provided by the subcommittee and we accept that
subject to checking. Obviously it will be more than the $10 to
$12 per residential customer.
Ms. Baldwin. What sort of precedent are we setting if we
remove regulatory oversight for rate increases for monopolistic
entities such as utilities?
Mr. Kerr. Well, I think it is an important point to
distinguish, you know, and I feel like I am a little bit
throwing a wrench in the works here. It is not really a
question of should these costs be recovered. I mean, we think
they are reasonable and they are prudent we incurred and they
should be recovered under State law. What we are concerned
about, as I just mentioned in responding to Ranking Member
Barton, is that there will be more and more ideas that the
solution will be, well, let us just decree in Washington that
they be passed through in a rising cost environment. You know,
essentially you relegate State regulators to become the tax
collectors for federal ideas, and we think that that this is a
dangerous precedent. We think that in a rising cost
environment, you ought to have more scrutiny of the costs that
are incurred. Again, I have every expectation, just as with the
nuclear waste fund and the $300 million a year that EPRI
receives, which is largely ratepayer funding now, these costs
will be passed through in rates but we certainly think that
there needs to be State regulatory review of that to make sure
that these costs are reasonable, that they are going for the
intended purpose, that the program itself is yielding benefits
to ratepayers and under State law they will be recoverable. But
you ought not to decree as section 8(a) does that these costs
are deemed reasonable and necessary and therefore shall be
recovered because, frankly, I am not sure how would you know
that at this point.
Ms. Baldwin. And absent an amendment like the one that Mr.
Barton just described, the Commissions wouldn't have any
discretion to look at passing this onto shareholders versus
ratepayers?
Mr. Kerr. As written, I think it would preempt the States
from doing that.
Ms. Baldwin. Do you think that the purpose or intent of the
underlying bill would be diminished if the regulatory oversight
was not preempted?
Mr. Kerr. I am sorry. Ask the question again.
Ms. Baldwin. Would the purpose or intent of the underlying
bill that we are looking at be diminished if the regulatory
oversight were not preempted?
Mr. Kerr. No, not at all, and in my written testimony which
was provided for the record, we just last year as part of our
Task Force on Climate Change adopted a resolution at NARUC
doing just what this bill does, supporting these technologies
and decreeing that reasonable and prudent costs shall be timely
recovered. So there really isn't a disagreement. The question
is whether it is necessary to intrusively step in and preempt
States or whether you ought to go ahead and pass the bill and
then let the companies work with their regulators to ensure
that those costs are recovered, and I have every expectation
they will be, and similarly, I think that if this technology is
as important as it is being discussed today, and it is, and we
agree with that, the companies will support the bill without
this language in it. They should.
Ms. Baldwin. Turning to Mr. Goo, as I mentioned in my
opening statement, studies seem to conclude that in my home
State of Wisconsin, we lack the necessary geological formations
for storage. As a result, we would need to transport
CO2 by a pipeline system that currently does not
exist, and local experts looking at this presume that we would
have to transport it to either oil or gas fields, coal seams
and deep saline aquifers that are present in the Illinois
basin. Where are the concerns associated with transporting
CO2 and what are the possible liabilities during
transport and storage on site?
Mr. Goo. CO2 is currently being transported many
hundreds of miles. There is actually about 40 million tons of
CO2 that are transported today in the United States
and in North America and that CO2 is used for
enhanced oil recovery over thousands of miles of pipeline right
now. So that is a mature technology that is already in place.
Right now people are doing that. There is not a regulatory
structure or liability structure associated with that, and we
think that that can be done now immediately and we certainly
don't need to wait for a complex liability structure to be put
in place.
Ms. Baldwin. I understand that the currently existing
CO2 pipelines have quality standards that limit the
amount of substances such as hydrogen sulfide that can be mixed
with the CO2 . Are you aware of any movement or
desires to change these standards and is that an area where we
need to be careful?
Mr. Goo. It is certainly an area where we need to be
careful. I am not aware of movement to change or adjust those
standards but that is one of the things that we would do. EPA
is looking at a number of those issues and there can be
standards and rules set for that when it starts to happen on an
even more wide-scale basis than is happening today.
Ms. Baldwin. And one--
Mr. Boucher. Ms. Baldwin, we are going to need to move
along, but thank you.
The gentleman from Illinois, Mr. Shimkus, is recognized for
5 minutes.
Mr. Shimkus. Thank you, Mr. Chairman, and I appreciate the
panel. I think it has been very good, and I like the debate on
conversion because that should be a focus and that is what Joe
Barton held out for in our discussion because of these
colleagues that my colleague just addressed, the transportation
and recovery.
Mr. Goo, real quick. BP, British Petroleum, do they operate
any coal-fired power plants?
Mr. Goo. I am not aware that they do.
Mr. Shimkus. So it is a little disingenuous to talk about
the ability to capture and sequester carbon based upon a crude
oil petroleum liquid fuel model versus the three or four
different types of coal-fired power plants out there, isn't it?
Mr. Goo. I don't think so. I mean--
Mr. Shimkus. They are apples and oranges. We are talking
about pulverized coal. We are talking about supercritical. We
are talking about gasification plants. We are talking about
emissions into the air versus capturing and storage for
advanced oil recovery. We are all smarter than that. You can't
use British Petroleum in this debate and what they do on liquid
fuel to electricity generation.
Mr. Goo. Well, they are familiar with the basic
technologies to capture carbon.
Mr. Shimkus. In liquid fuels, in crude oil, in--
Mr. Goo. No, from petcoke, which is a solid fuel. But in
any event, let us not cite them. Maybe they don't know what
they are doing.
Mr. Shimkus. Don't cite them. I think it is bad--
Mr. Goo. Let us look at Tenaska. Let us look at NRG.
Mr. Shimkus. Reclaiming my time. Let me move to this fuel
switching debate, which is a critical debate because that is
what happened in the Clean Air Act. The coal mines in southern
Illinois closed. Instead of moving to scrubbers, we shipped in
western coal to meet the regulations, and you know, miners went
out of work. The United Mine Workers will testify to that. The
market for natural gas and cutter is probably $1.50 per cubic
feet. The United States, it is probably $15. If we fuel shift
to electricity generation, it will make the debate for more
drilling in the Outer Continental Shelf because we will need
massive more need for natural gas. Natural gas is used for
transportation. Natural gas is used for manufacturing. Natural
gas is used for farming and fertilizers and these costs--if you
want to understand what is driving up the cost of food, it is
energy costs, it is fertilizer costs and all these energy input
costs. So that makes the other part of this energy debate,
which is more supply, even more--if we fuel shift to natural
gas, drilling, exploration, and recovery is even more critical.
That is why this all above strategy I think is a good way to
good. Don't put all your eggs in one basket. Coal has to be a
major input in this whole debate. Now, it is only because of
the great leadership of the chairman that--it is hard to get
Republicans to agree, as Mr. Markey said, for additional costs.
But I do it for my friends in the coal industry and my mine
workers because we have to have the technology available if we
go down this route through climate change, and that is kind of
what this debate is about, large-scale, many megawatts, ability
to capture and sequester, or use conversion.
Mr. Trisko, I would much rather the United Mine Workers
take this position. Your position is, we support climate change
but we know there is a risk. I would rather you say like I say,
I don't support climate change until you show me there is not
going to be a risk in my members losing their jobs, and I am
waiting for you all. You guys are the guys who can make this
happen because of your connection with mostly--you have some
friends over on my side but you have a lot of friends on the
Democrat side and they are in charge, and so I would plead with
you and the other folks who are looking for expansion of energy
opportunities, the operating engineers, the electricians, that
they hold out for a good bill that they are not going to lose
their jobs. I am not for it. Chairman Boucher knows, I am not
for it. He is going to have to convince me that my folks don't
lose their jobs and my manufacturers don't lose their jobs by
high costs.
Mr. Chairman, I could go on, as you know.
Mr. Boucher. Yes, I know.
Mr. Shimkus. But I will yield back the balance of my time.
I had 8 seconds before she switched.
Mr. Boucher. And you generously conceded those. Thank you
very much. We will restore that to you at the proper time some
day.
The gentleman from Washington State, Mr. Inslee, is
recognized for 5 minutes.
Mr. Inslee. Thank you.
Dr. Specker, in your testimony, you made reference to when
you were addressing the issue of what the appropriate level of
R&D in this and sequestration. You made reference to a full
portfolio of R&D projects for the full portfolio of other
sources of energy. Could you tell us what your organization
believes should be a national R&D budget for the full portfolio
including solar, thermal, photovoltaic, engineered geothermal,
hydrokinetic, you name it? Can you give us any ballpark? In
your testimony, you said it would be about $1 billion seems in
the ballpark a year for this particular technology. Can you
give us any other ballparks for the remaining other sources
including wind?
Mr. Specker. We have done some looking at this and I
hesitate to put an exact number on it but--
Mr. Inslee. And I don't ask for an exact number.
Mr. Specker. Probably an order of magnitude more than the
$1 billion a year, at least $10 billion, and our $1 billion a
year is really incremental to the research and development that
is already going on on CCS. The $1 billion a year is very
focused on large-scale demonstration of CCS, but if you expand
that as to what additionally is needed for this full portfolio,
in effect the sky is the limit. I think to me the question is
much more around how do you effectively spend the money that we
collectively can afford. We have to be very selective. What I
like very much about this legislation, it is targeted. I think
we need to be very targeted, work the whole portfolio,
renewables, efficiency, nuclear, coal, but in targeted ways.
Mr. Inslee. Well, we like to be targeted too, each to our
own district. That is our targeting, of course. Your answer is
music to my ears because I share it. I share we have got to
have orders of magnitude and, you know, right now we are at
about $3 billion total national energy R&D for everything, the
whole portfolio. We spend $84 billion a year on R&D for full
portfolio of weapons systems. It seems to me we need to
increase this dramatically. We spent less than one-eighth of
what we did in the original Apollo project and we need to get
up in, in my view, to $15 to $20 billion a year investment that
I believe, at least my looking at it, that is in the range of
what can be usefully invested. And so I appreciate your
thoughts.
Having said that, is there any reason, if we know these are
good investments, if we are going to create a revenue source
for investment, is there is any reason to do it for just one
technology? To me, it seems very difficult to justify doing
any--we all have our favorites. You know, I have my favorite.
But is there any legitimate reason to restrict our investment
if we are going to create a revenue source to only one
technology?
Mr. Specker. Yes, I believe there is. First of all, at EPRI
we have no favorites. We work on all of them, every part of the
portfolio, but from my view, looking at the full portfolio of
technologies, the biggest gap we have by far is CCS. Our prism
analysis that is in my written testimony shows that CCS is the
biggest opportunity to slow, stop and reverse CO2
emissions in the electricity sector. We and others are working
very hard on all the other technologies and I could go through
all of those, but the fact is, today the one that we don't have
confidence we can do on a large-scale is CCS and it is the most
critical technology to slowing, stopping and reversing
CO2 emissions. So I think there is a good reason to
target CCS specifically.
Mr. Inslee. That is assuming we have only got $1 billion,
but if I tell you that we had a $10 billion increase in the
research and development budget of the federal, I assume you
are not suggesting we put all the $10 billion into clean coal?
Mr. Specker. No, absolutely not.
Mr. Inslee. You would suggest--and I want to make sure I
understand this because I think I am going to get an answer I
like but I will find out. I think you would like to urge us to
find a way to have a federal investment of somewhere on the
order of magnitude of $10 billion for research in a full
portfolio and allocated with as much wisdom as we can muster
amongst the various technologies. Would that be your
preferential course?
Mr. Specker. I certainly agree with that, yes.
Mr. Inslee. Thank you. I took a flier on that. You are not
supposed to ever answer a question you don't know what you are
going to get. I appreciate that, and that is something that is
a serious issue that we will be working on.
Just one other question. Since this technology will never
be used unless there is a cap-and-trade system or some price on
carbon, is there any reason people should advocate for this
unless they believe there should be some restraint on carbon
because if they did that, they would be advocating for a total
waste of taxpayer money. Would you agree that anyone who argues
for this investment, and I am arguing for an investment, should
also support restraints on CO2 emissions and some
price on carbon ultimately? That is an open question to the
whole panel.
Mr. Specker. My answer would be, we have to look at option
to option. This is an option we have to have.
Mr. Inslee. But should anybody support this option unless
they also support a cap on CO2 emissions? Why would
anybody anywhere in the U.S. Congress--forget Congress. How can
you justify an expenditure of $1 billion of taxpayers' money
unless you also support the conditions that will lead to its
usage, which is a need to restrain CO2 ? Is there
any answer to that? That is a rhetorical question, I think.
Mr. Morris. The fact of the matter is, it makes sense to
have this as a predicate to the larger debate of a carbon
capture or a cap-and-trade program as we go forward. The point
that surely I have been trying to make in front of this
committee on many occasions and my colleagues in the utility
business have been trying to make is dates and rates are
immaterial if you don't have this technology. So do A before
you do B or you are just creating something that won't happen.
It may feel good but it won't happen. It will simply be a
massive tax on the United States economy.
Mr. Inslee. But will this ever be used unless there is some
cap on CO2 ?
Mr. Morris. I don't know that it would and I don't know
that it won't. I think it is too premature to come to that
conclusion.
Mr. Inslee. Why would it be used?
Mr. Morris. We are capturing mercury at stations today and
there is no federal legislation that requires that. So there
are States that already have programs, the West Coast States. I
mean, it will be used. There is no question about that. And
again, this is very, very different. We keep talking about the
taxpayer. This is a fee on the electric customers of the
country.
Mr. Inslee. Thank you for the chair's indulgence.
Mr. Boucher. The gentlelady from North Carolina is
recognized for 5 minutes.
Ms. Myrick. Well, thank you, Mr. Chairman, and I thank all
the witnesses. This has been extremely helpful to me to hear
what you had to say this morning. Actually, all my questions
have been asked by Mr. Barton and Ms. Baldwin and Mr. Shimkus,
so I really don't have anything further to ask except to say
thanks and hopefully we will move forward.
Mr. Boucher. Thank you very much, Ms. Myrick.
The gentlelady from California, Ms. Harman, is recognized
for 5 minutes.
Ms. Harman. Thank you, Mr. Chairman. As I have said before,
it is a great pleasure to be part of a committee that tackles
big problems in a serious and comprehensive way. That is what
this House should be doing and one of the things I love about
this committee is that to a greater extent than most parts of
this House, we operate in a bipartisan manner. There are few
problems bigger than global climate change. The reductions in
greenhouse gas emissions that we must make to have a meaningful
impact on the problem are enormous. As everyone on this
committee knows and obviously these witnesses know, there will
be no silver bullets, no easy fixes. Turning the enormous
supertanker that is the U.S. economy is a monumental
undertaking and we will need all hands on deck. That means we
need to consider a wide range of technologies and a varied
collection of regulatory schemes to drive change in energy and
climate policy. In my view, a cap-and-trade system that puts
the costs of emitting carbon on the entities doing the emitting
must be part of the solution, and I surely hope that early in
the next term of Congress we tackle this effectively. But there
also need to be efficiency standards and incentives for the
development of new technologies, as we know, and I was very
pleased that we were able to get a good efficiency bill out of
this committee and it was signed into law late last year by the
President.
I agree with you and many of our colleagues that we cannot
afford to take coal off the table. Coal is, of course, a
notoriously dirty fuel but it is too plentiful and too deeply
enmeshed in our economy to ignore. Renewable sources of energy
may someday supplant coal as the central piece of America's
energy portfolio but it is not realistic to expect that day
will come any time soon. Coal is also the principal energy
source for much of the developing world, China in particular,
and that is not likely to change anytime soon. So coal will be
with us. We had better find a way to use coal in a clean
manner. That likely means spending some money, maybe a lot of
money, on research into carbon capture and storage
technologies. I think your bill is a good beginning and I
applaud you for getting the conversation started, but there are
many ways to incentivize technology development and I was
interested in listening to the questions from some of our
members about that and about where coal fits in the bigger
picture of a comprehensive energy strategy that dramatically
reduces carbon emissions so that hopefully we can save our
planet.
So in that spirit, let me thank you for what you are doing
here and let me just put a question to the witnesses, because I
do want to observe my time. That is, Mr. Inslee was just
asking, you know, if we had $10 billion that fell out of the
sky, which would be nice, and we could spend it on investments
in clean energy, would you think that coal would be part of
that picture. Obviously the answer to that was yes. But let me
ask you what else besides coal you think are the most promising
clean energy technologies and just give you all a little bit of
time to push some of those. I certainly hope you have that
point of view. If any of you disagree with me and think coal is
the only thing in our future, speak up, but I doubt that would
be your view. It surely isn't mine.
Mr. Morris. I think it is clear that to the utility
industry, we believe that energy efficiency is the first and
most cost-effective way for us to tackle this issue, but to the
larger comments that you made, the comments that I just made,
the world is going to burn coal, period. This country may be
one of the few countries that can develop this technology
appropriately so it should still stay center stage.
Ms. Harman. Well, I hear you, but what about other
technologies? What do you think are the most promising, let me
ask the rest of you, technologies other than coal that we
should be investing our pretend $10 billion in on a short-term
basis?
Mr. Rubin. Ms. Harman, I have just taken another penny out
of my pocket so I can get my 2 cents in on this one. I would
like to second Mr. Morris's comment about the importance of
energy efficiency. I don't think we hear enough about that.
Most of the discussion tends to be on supply-side issues. There
is not a single supply-side option, be it fossil, nuclear or
renewable that I know of that at very large-scale doesn't have
problems. The one relatively and maybe totally problem-free
solution is to do a more efficient job of using less energy to
get the goods and services we desire.
Ms. Harman. Thank you.
Mr. Rubin. We know how to do that. That is where I would
put a lot of that resource.
Ms. Harman. Other comments?
Mr. Specker. I would like to add, certainly in the written
testimony that I have, you have our full portfolio which has
all the technologies. One I would like to emphasize is electric
transportation, which is not often brought up in this context,
but to tackle CO2 , we must address transportation.
Tremendous advances in battery technology that are occurring
open up the opportunity to electrify certainly the light-duty
vehicles to a much greater degree and we think that is
essential, and it all links to having a low-carbon source of
electricity.
Ms. Harman. You bet. Well, this committee in our energy
bill did authorize investments in new battery technologies. We
agree with you.
Mr. Kerr. I just wanted to add too, you said it yourself, I
think, there is no silver bullet, and I think that is why Dr.
Specker's work and EPRI's work on the Prism analysis really is
the best work I have seen. It amounts to answering the question
of pursuing all available options and that won't satisfy any
purists, but in fact, I think it is the most prudent course and
it is the most comprehensive course that I have seen put
together for this country to move forward. But you have to
realize that there are regional differences in terms of the
availability of different sorts of generation. There are also
operational and reliability differences. I think in response to
Mr. Inslee's question about the need for the deployment
research in this bill, as a State regulator, one of my chief
concerns is reliability, and one of the reasons you need to
scale this up is to make sure that when you have to have it,
which we're getting more and more rapidly to that point, given
the growing demand, that you can count on it and so different
sorts of generation have different reliability and operational
characteristics, and that is another reason we need all of the
available options so the different regions can go in and tailor
service to the customers in those regions in a reliable and
effective manner.
Ms. Harman. Thank you.
Mr. Chairman, I have run over my time. I would just amend
that last comment by saying all the available clean resources
tailored to different regions. I thank you, and I yield back.
Mr. Boucher. Thank you very much, Ms. Harman.
Mr. Markey has just arrived in the nick of time to pose
questions and so he is recognized for 5 minutes.
Mr. Markey. Thank you, Mr. Chairman, very much. Mr.
Chairman, this bill imposes a $10 billion tax on American
consumers and gives the money to an industry-run private
corporation. That corporation has a vague mandate to develop
CCS technology but no requirement to deliver any specific
results, no strings attached and no meaningful government
oversight.
Can any of you identify any precedent for Congress taking
$10 billion from consumers and giving it to a private
corporation for a research fund without congressional
oversight? Mr. Trisko?
Mr. Trisko. Yes, Congressman Markey. In fact, one of the
design elements of this bill is that it is modeled specifically
upon the 1996 Propane Research Act. In that Act, Congress
authorized members of the Propane Association to vote to
establish a research corporation to pursue research related to
propane and natural gas and to impose a fee of 50 cents per
gallon on every gallon of propane sold in the United States.
Mr. Markey. So how much money has that wound up providing
in total?
Mr. Trisko. Less money than we are talking about here but
it was a smaller entity overall.
Mr. Markey. Yes, but what is the scale that we are talking
about?
Mr. Trisko. Maybe it is a couple hundred million,
something--
Mr. Markey. A couple hundred million?
Mr. Trisko. Yes, instead of a billion, something on that
order.
Mr. Markey. And--
Mr. Trisko. But there is a precedent.
Mr. Markey. And what was the oversight mechanism over that
$200 million?
Mr. Trisko. I don't believe there was a direct oversight
mechanism provided in the bill.
Mr. Markey. There was not. I see. We have a nuclear waste
trust fund funded through funds collected by the Federal
Government subject to congressional appropriations and
oversight and overseen by the Department of Energy. Doesn't
that make it different than what is being proposed here, Mr.
Kerr?
Mr. Kerr. It does make it different, and it is our position
that something off-budget would be preferable, given the
experience we have had with the nuclear waste fund. Customers
who receive part of their power from nuclear generation have
invested $27 billion in the nuclear waste fund, and
unfortunately, you have our money and we still have your waste.
Mr. Markey. Mr. Morris, last year you received about $20
million in the--the question that I have is, why not make the
funding for this effort a surcharge on coal since coal is the
main beneficiary?
Mr. Morris. Well, in essence, that is what you are doing by
having this as a fee charged to any carbon-based fuel so the
fee that coal pays is larger than the fee that natural gas
pays. Let us not forget, natural gas is also a carbon-based
technology and that is more than the fee that oil would pay and
it too is a carbon-based fuel. So I think that they have
addressed that in a most appropriate way, and again, this was
the recommendation that came out of the EPA and the work that
had been done a few years back supporting this kind of
recommendation. I think we have done exactly as you are
suggesting.
Mr. Markey. Mr. Goo, the Republicans in the Senate have
been blocking attempts to extend tax credits for wind and solar
and geothermal. Are we sending the right message by talking
about passing legislation to help coal technology while the
Republicans in the Senate are blocking the renewal of the tax
breaks for wind and solar and geothermal and also blocking the
renewable electricity standard that would also give an
incentive to the--and we know Senator McCain was the key vote
in the Senate, so does this make any sense in terms of balance?
Mr. Goo. In terms of balance, it does not make sense. In
terms of balance, we should be pursuing renewable energy and
these other types of technologies with equal, if not greater,
zeal and vigor than we are pursuing CCS. Nonetheless, in order
to solve the climate problem, we need to pursue CCS very
rapidly and very aggressively. So we need a dual path strategy,
as every one here has said.
Mr. Markey. And Mr. Morris, is the industry incapable of
putting together its own CCS funding?
Mr. Morris. That is exactly what this is. This was brought
to you by the United Mine Workers, brought to you by utilities
across this country who burn these fuels--
Mr. Markey. No, I mean--
Mr. Morris [continuing]. And want to get going.
Mr. Markey. I mean out of existing profits.
Mr. Morris. This is a way to get it done in a more creative
way in keeping with the first step of a carbon cap-and-trade
program. Again, Congressman Markey, or you weren't with us when
we had this conversation, but without this enabling technology,
you can make all the cap-and-trade bills you want. The world is
going to burn coal. It needs this technology.
Mr. Markey. Oh, I agree they need this technology.
Mr. Morris. This is a great way to go about doing it. It is
an excellent way.
Mr. Markey. I agree they need the technology. It is just
what is the mechanism by which we achieve that.
Mr. Morris. I would argue that utilities all across this
country have for years and years and years invested our
customers' money and invested it very wisely. I don't think we
need government oversight.
Mr. Markey. Well, I will say this: it does need government
oversight, and if anything is an example of something that is
in need of it, it is these energy projects. In the 32 years
that I have been in Congress, if you don't keep a close watch
on them, they tend to run on and on in costs and return less
and less in terms of a benefit to the public.
Thank you, Mr. Chairman.
Mr. Boucher. Thank you very much, Mr. Markey.
Again, I want to thank this panel of witnesses for what has
been a very thoughtful discussion. We have all learned a lot
from the testimony you provided and the excellent answers you
have posed to our questions.
I am going to conclude with one suggestion. I know that Mr.
Morris is concerned about making sure that whatever fees are
imposed through this legislation be recoverable through rates.
Mr. Kerr is concerned about making sure that utility regulators
have a measure of say in those decisions. And I would like to
suggest that the two of you perhaps have a conversation,
assuming you are both willing to do that, and see if a way can
be found to your mutual satisfaction to make sure that both of
your goals are met. I note from your testimony both of you have
suggested that potentially ways could be found to do it and
that is what leads me to make this recommendation. So Mr.
Morris and Mr. Kerr, would that be agreeable to you?
Mr. Kerr. Absolutely, Mr. Chairman.
Mr. Morris. I am always happy to leave with an assignment.
Mr. Boucher. Excellent. Thank you very much. Well, let us
know when you have something. With the Chair's thanks to these
witnesses and to the members of the panel, this hearing is
adjourned.
[Whereupon, at 12:35 p.m., the subcommittee was adjourned.]
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