[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

                              ----------                              
                                                                   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

                              ----------                              


                        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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