[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
STATE LEADERSHIP TOWARDS A LOW-CARBON ENERGY FUTURE
=======================================================================
HEARING
before the
SELECT COMMITTEE ON
ENERGY INDEPENDENCE
AND GLOBAL WARMING
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 14, 2007
__________
Serial No. 110-20
Printed for the use of the Select Committee on
Energy Independence and Global Warming
globalwarming.house.gov
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SELECT COMMITTEE ON ENERGY INDEPENDENCE
AND GLOBAL WARMING
EDWARD J. MARKEY, Massachusetts, Chairman
EARL BLUMENAUER, Oregon F. JAMES SENSENBRENNER, Jr,
JAY INSLEE, Washington Wisconsin
JOHN B. LARSON, Connecticut Ranking Member
HILDA L. SOLIS, California JOHN B. SHADEGG, Arizona
STEPHANIE HERSETH SANDLIN, GREG WALDEN, Oregon
South Dakota CANDICE S. MILLER, Michigan
EMANUEL CLEAVER, Missouri JOHN SULLIVAN, Oklahoma
JOHN J. HALL, New York MARSHA BLACKBURN, Tennessee
JERRY McNERNEY, California
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Professional Staff
David Moulton, Staff Director
Aliya Brodsky, Chief Clerk
Thomas Weimer, Minority Staff Director
C O N T E N T S
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Page
Hon. Edward J. Markey, a Representative in Congress from the
Commonwealth of Massachusetts, opening statement............... 1
Prepared statement........................................... 3
Hon. F. James Sensenbrenner, Jr. a Representative in Congress
from the State of Wisconsin, opening statement................. 5
Hon. Emanuel Cleaver II, a Representative in Congress from the
State of Missouri, opening statement........................... 6
Hon. John Shadegg, a Representative in Congress from the State of
Arizona, opening statement..................................... 6
Prepared statement........................................... 7
Hon. John Hall, a Representative in Congress from the State of
New York, opening statement.................................... 11
Hon. Jerry McNerney, a Representative in Congress from the State
of California, opening statement............................... 11
Hon. Marsha Blackburn, a Representative in Congress from the
State of Tennessee, opening statement.......................... 11
Hon. Earl Blumenauer, a Representative in Congress from the State
of Oregon, opening statement................................... 12
Witnesses
Hon. Elliot Spitzer, Governor, New York.......................... 17
Prepared statement........................................... 20
Hon. Janet Napolitano, Governor, Arizona......................... 25
Prepared statement........................................... 27
Submitted Materials
Letter of Governor Theodore R. Kulongoski of Oregon.............. 13
Testimony of Governor Deval L. Patrick of Massachusetts.......... 53
HEARING ON STATE LEADERSHIP TOWARDS A LOW-CARBON ENERGY FUTURE
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WEDNESDAY, NOVEMBER 14, 2007
House of Representatives,
Select Committee on Energy Independence
and Global Warming,
Washington, DC.
The committee met, pursuant to call, at 10:05 a.m. in room
2318 Rayburn, Hon. Edward J. Markey (chairman of the committee)
presiding.
Present: Representatives Markey, Blumenauer, Inslee,
Larson, Solis, Herseth Sandlin, Cleaver, Hall, McNerney,
Sensenbrenner, Shadegg, and Blackburn.
Staff present: Joel Beauvais.
The Chairman. Good morning. Welcome to the Select Committee
on Energy Independence and Global Warming.
Supreme Court Justice Lewis Brandeis famously called the
States laboratories of democracy, the places where innovative
solutions to the Nation's challenges are developed. Nowhere is
the States' pioneering role in our system more vital today than
in the area of energy independence and global warming.
While the Bush administration has its head stuck in the
sand on these critical issues, the States are in the vanguard
of a green energy revolution. Twenty States have now set
binding limits on global warming pollution, most of them more
stringent than the Kyoto Protocol targets. Ten northeastern
States have set up the Regional Greenhouse Gas Initiative,
known as RGGI, the first regional cap-and-trade system in the
country. Six western States have formed the Western Climate
Initiative, which calls for a 15 percent reduction in emissions
by 2020 and will establish a cap-and-trade system to achieve
that goal. And in the next 2 days the 12-State Midwestern
Governors Association is set to roll out yet another regional
initiative to combat global warming and energy dependence. With
each passing month it seems a new State joins this remarkable
nationwide movement.
This morning we welcome two Governors who have been
national leaders in the campaign, Governor Eliot Spitzer of the
State of New York and Governor Janet Napolitano of the State of
Arizona. In addition to their participation in RGGI and the
Western Climate Initiative, respectively, their States have
established aggressive targets for reducing global warming
pollution. Both New York and Arizona have adopted strong
renewable electricity and efficiency standards. And together
with 13 other States, both will soon adopt California's clean
car standards. Those standards can reduce tailpipe
CO2 emissions by 30 percent and dramatically curb
our dependence on foreign oil, but only if the Bush
administration gets out of the way by granting California's
waiver request.
Perhaps most important, these States are demonstrating that
the choice between protecting the planet and robust economic
growth is a false one. While continuing delay in addressing
global warming will have a terrible cost, prompt action can
save billions in energy costs, secure our energy independence
and open the door to vast new markets for clean energy
technology.
We have a great deal to learn from these leaders'
pioneering efforts, and I look forward to their testimony this
morning. And although the States have taken the lead on global
warming and energy independence, Congress must now put in
practice what it has learned in these laboratories of
democracy.
First, we must send a strong energy bill to the President's
desk in the coming weeks. By boosting fuel efficiency and
renewable fuel use the energy bill would by 2030 reduce our
demand for oil by nearly twice the amount we now import from
the Persian Gulf.
The best provisions of the House and Senate bills,
including CAFE, a renewable electricity standard, and a
renewable fuel standard, would achieve up to 40 percent of the
emissions reductions needed to save the planet from global
warming. With that down payment in place, we must then proceed
as quickly as possible to enactment of an aggressive cap,
auction and trade bill that will achieve the balance of the
reductions needed.
The States have shown us the way forward. On a bipartisan
basis they have listened to the warning of science, recognized
the looming danger to the people they represent, and acted to
fill the void left by an administration which to this day still
does not concede that CO2 emissions are a danger to
public health and the environment.
The State response has demonstrated that strong limits on
carbon emissions have broad public support and that they are
compatible with vigorous economic growth, and the States offer
a message for the President as well, and I hope that he will
listen.
Let me turn and recognize the ranking member of the select
committee, the gentleman from Wisconsin, Mr. Sensenbrenner.
[The prepared statement of Mr. Markey follows:]
[GRAPHIC(S) NOT AVAILBLE IN TIFF FORMAT]
Mr. Sensenbrenner. Thank you very much, Mr. Chairman, and I
want to thank you for holding this important hearing today. And
I welcome both Governor Napolitano and Governor Spitzer.
One of the purposes of this select committee, which does
not have legislative jurisdiction, is to help provide Congress
with additional guidance on how to address the sometimes
related issues of energy independence and global warming.
Therefore, I am very interested in what both the States and
what local governments are doing to address climate change.
So far the committee has twice heard from mayors of cities,
big and small, most recently when the committee held a field
hearing in Seattle to accompany a U.S. Conference of Mayors
meeting on global warming where New York City Mayor Bloomberg
called for a carbon tax. By watching and seeing what the States
and localities do to address this issue, Members of Congress
can get a sense of what works and what doesn't.
To me, policies that help promote competition and
technological change without driving up the cost of energy are
policies that will work and will be supported by the American
people. After all, what voter wants to see their energy bill
rise. And as members of this panel and our witnesses must
surely know, being on the opposite side of the voter definitely
doesn't work. As I have said many times before, any global
warming policy that costs jobs or hurts the economy doesn't
work for me or for my Republican colleagues.
Unfortunately, I believe that some of what I learned from
the cities and the States will be what not to do, especially
when it comes to using regulations to address this issue. These
regulations may work if everybody all over the world agreed to
them and then actually complied with them. Internationally,
this means that China and India must be part of the program.
Otherwise, for all the feel good, back patting that greenhouse
gas regulations might create here, it is unlikely that it would
actually lead to a worldwide reversal of greenhouse gas
emissions. Here these regulations will lead to some drop-off of
emissions here in the United States, but just look to China and
India and increases will be found probably from a manufacturer
who decided against making a big investment in the U.S. in
favor of a smaller price tag in Asia.
Additionally, without the transformational energy
technologies that will allow for energy production without
creating CO2 emissions, I seriously question whether
the voters of our States will show the patience or have the
resources needed for these regulations to work.
So with that in mind I watch with great interest the
States' efforts to regulate CO2. In the end the
question for our committee will be not whether New York or
Arizona lowered their emissions, but whether they also lowered
their standards of living in an effort to do so. Obviously the
Governors will do their best not to let this happen. It is my
hope that the States can be a laboratory of government policy
and help Congress learn what it will take to lower greenhouse
gas emissions while raising everybody's standard of living.
I thank the chair and yield back the balance of my time.
The Chairman. The gentleman's time has expired. The Chair
recognizes the gentleman from Missouri, Mr. Cleaver.
Mr. Cleaver. Thank you, Mr. Chairman. I will hold most of
my comments for the question and answer period. I am very much
interested in the regional system that has been implemented in
New York, and I would like to delve into that after you,
Governor Spitzer, speak to us. Thank you so much for coming.
The Chairman. The Chair recognizes the gentleman from
Arizona, Mr. Shadegg.
Mr. Shadegg. Thank you, Mr. Chairman. In the interest of
time I am going to ask unanimous consent to place my full
statement in the record and simply say at this point that I
appreciate your holding this hearing. I want to welcome both of
our witnesses.
I am especially pleased to welcome my Governor, Governor
Napolitano. While she and I may not agree on every dot and
tittle on this issue, I applaud her commitment to working on
public policy problems, her devotion to public service. She and
I had parallel careers before entering our current jobs. We
used to litigate cases against each other and learn a lot from
each other, and I enjoyed those days and I look forward to her
testimony.
[The statement of Mr. Shadegg follows:]
[GRAPHIC(S) NOT AVAILBLE IN TIFF FORMAT]
The Chairman. The gentleman's time has expired. The Chair
recognizes the gentleman from New York, Mr. Hall.
Mr. Hall. Thank you, Mr. Chairman. And welcome to both
Governor Spitzer from my home State of New York and also
Governor Napolitano. I would like to hold my time for question
and answer period and yield back. Thank you.
The Chairman. The Chair recognizes the gentleman from
California, Mr. McNerney.
Mr. McNerney. Thank you, Mr. Chairman. While I am proud of
the work that we have done in Congress, the States really are
leading the way on this issue.
Last year in my State of California we passed AB 32, which
requires greenhouse gases to be reduced by 25 percent by the
year 2020. This is landmark legislation. I am proud that my
State is the one that is doing it. This may seem like a
daunting task, reducing greenhouse gases by 25 percent. We are
making great progress. And in fact the State is rallying around
the need for change. And despite early opposition from
businesses and industry, especially the large utility companies
in California, they have now embraced this program and are
starting to profit from it.
Visiting businesses around the State, I can tell you I am
very inspired by what is going on. There is a broad level of
innovation and these companies are going to be making business
opportunities available for us throughout the State and
throughout the Nation.
I believe we are at the tipping point on this issue. And
the 30 States that have not adopted change are going to be
doomed to be left behind.
I want to thank the witnesses. I look forward to your
testimony. And with that, I yield back.
The Chairman. The gentleman's time has expired. The Chair
recognizes the gentlelady from Tennessee, Mrs. Blackburn.
Mrs. Blackburn. Thank you, Mr. Chairman. And I thank you
for the hearing, and I thank our witnesses for taking the time
to be with us today.
We are all cognizant that addressing the need for energy
independence and technological developments requires a
partnership. And in Tennessee we have done a good bit of work
on biofuels development and are using that as one of our
focuses to do our part to help move our Nation toward energy
independence. I fully believe that those are strategies where
we are all in agreement and where our focus should be; on
delivering that positive outcome.
Now, where we differ I think is that many people claim that
catastrophic climate change is imminent and will produce
apocalyptic effects, such as massive flooding of coastal
cities, extensive droughts, and the collapse of agricultural
markets, rampant disease, poverty and hunger. They also claim
that the only way to prevent these catastrophes is to eliminate
all CO2 emissions and switch to renewable energy
plans that do not produce greenhouse gases. These claims are
not supported by scientific literature and merely represent
alarmist views, views that will result in shifting economic
investment away from present day global challenges like disease
control, malnutrition and water sanitation. Mandating renewable
portfolio standards will only reduce investment in cheap
sources such as coal and nuclear and increase investment in
costly unreliable power generation.
Coal is a reliable low cost source of baseload power that
is abundant within the United States, and to shift funds to
more costly substitutes will significantly affect the economy,
reduce household income, and give the loss of millions of jobs.
Some estimates indicate that this reduced income and increased
unemployment will cause premature mortality death rates to more
than 150,000 annually.
In certain instances wind, solar and other renewable
energies can contribute to the energy mix of a particular
region or business, but it will take vast amounts of land for
renewable energy facilities to generate sufficient amounts of
electricity now provided by coal and nuclear plants. For
example, it would take 60,000 acres of wind turbines to
generate the same amount of electricity from a typical 1,000-
megawatt coal-fired plant.
Mr. Chairman, the United States has the resources to become
energy self-sufficient and renewable energy can and must play a
part in this plan. But nuclear and coal also must play a part
in this plan. And both Democrats and Republicans in Tennessee
know this and are aware of this. Just this past month our
former Lieutenant Governor, the longest serving elected
official in the State, he is now State Senator, State Senator
John Wilder, one of my constituents, a Democrat, wrote me a
letter asking me to support responsible energy proposals such
as coal-to-liquids and coal-to-gas because they will help
promote America's energy independence. But many of the policies
advocated by the witnesses today and items that we continue to
hear will do little to prevent warming or future harm from
CO2 emissions.
I certainly believe that this Congress needs to address
more immediate harms to national security, such as the pressing
problems and concerns of terrorism and the impact of illegal
immigration on our States and communities, and the need to push
for energy independence with American solutions, rather than to
focus on a problem that may or may not exist. We are still
waiting to hear the science on that.
I thank you, Mr. Chairman, looking forward to hearing from
our witnesses, and yield the balance of my time.
The Chairman. The gentlelady's time has expired. The Chair
recognizes the gentlelady from South Dakota, Ms. Herseth
Sandlin.
Ms. Herseth Sandlin. Thank you, Mr. Chairman. And I thank
the Governors for being here. But I too will forego my opening
statement and reserve the time for questions.
The Chairman. That time will be reserved. The Chair
recognizes the gentleman from Oregon, Mr. Blumenauer.
Mr. Blumenauer. Thank you, Mr. Chairman. And I deeply
appreciate the committee having extended the courtesy of an
appearance to my Governor, Ted Kulongoski from Oregon, who
unfortunately could not attend. I would like permission to have
his statement entered in the record if I may.
The Chairman. Without objection, it will be included in the
record at the appropriate point.
[The statement of Governor Kulongoski follows:]
[GRAPHIC(S) NOT AVAILBLE IN TIFF FORMAT]
Mr. Blumenauer. And I will work real hard to resist the
temptation for me to replicate what Ted would talk about if he
were here, about joining with the Governors in the West Coast
about a regional tailpipe initiative, clean cars corridor from
Baja to Canada. We have already established in Oregon a 10
percent target for reducing greenhouse gases. And the City of
Portland, Oregon, which I am proud to call home, has already
reduced per capita greenhouse gases 4 consecutive years. We
think we are on line to be the first city in North America to
be Kyoto compliant. We have got a portfolio standard of 25
percent by 2025.
And most important of what Ted would have talked about is
the linkage in our State between the land use planning, the
environment and energy. It has made us one of the few States
where we are actually, even though we are a rural state in the
main, we have been able to decrease the amount of per capita
vehicle miles traveled, which is absolutely critical, and it is
an important part of the success from the State of New York and
it is a challenge I know, a continuing challenge in Arizona,
having an opportunity to work there over the years.
But I am looking forward to hearing from our two witnesses,
to emphasize what our Governor would have emphasized; that this
is an opportunity to improve the economy. Nothing here is
talking about reducing quality of life. Indeed the status quo
doing business as usual is a prescription for economic
disaster, as we are seeing with spiraling energy prices. And I
know that there are great examples in both States about how
this is the future for not just energy security and a safer
environment, but one that is going to revitalize economies, and
I look forward to their testimony.
The Chairman. The gentleman's time has expired. And all
time for opening statements from the members of the Committee
has expired. We now turn to our panel.
Our first witness is Governor Eliot Spitzer of New York.
Governor Spitzer was inaugurated as New York's 54th Governor in
January of this year. Prior to being elected Governor he served
for 8 years as New York State Attorney General, where he won
national acclaim for protecting investors, consumers and the
environment. Governor Spitzer has made New York a national
leader in developing initiatives to combat global warming and
promote renewable energy.
Welcome, Governor Spitzer. Whenever you are ready, please
begin.
STATEMENT OF THE HON. ELIOT SPITZER, GOVERNOR, STATE OF NEW
YORK
Governor Spitzer. Thank you. Good morning, Mr. Chairman and
members of the committee. I commend you for the critically
important work you are doing to confront the threat of global
climate change. Let me begin by putting the effects of climate
change into real terms from my perspective as Governor of New
York.
Unless we take action now, by the end of the century New
York's countryside will be altered permanently. Change in
climatic patterns will push much of our State's agriculture
towards collapse. Our abundant fisheries and forest ecosystems
will be devastated. And the combined effects of rising sea
levels and violent storms will threaten the future of our
coastal communities. This is the path we are on. Unless we take
bold action now to reduce greenhouse gas emissions this will be
our future.
Right now we find ourselves at a decisive moment. The
Intergovernmental Panel on Climate Change predicts that between
now and the end of the century global temperatures will rise
between 2 degrees and 11.5 degrees Fahrenheit. That is the
difference between climate change that is manageable and
climate change that is catastrophic. The difference will be
determined not by fate, but by whether or not we can rise to
the occasion and make the sensible choices necessary to reduce
our own greenhouse gas emissions.
We must lead the global community in an effort to reduce
emissions worldwide. As part of this effort I believe that the
Federal Government must follow the State's lead in adopting a
cap-and-trade program to reduce greenhouse gas emissions from
power plants. Let me briefly describe this effort.
Along with nine other northeastern States, New York has
entered a historic cap-and-trade agreement known as the
Regional Greenhouse Gas Initiative, or RGGI. In New York we
will cap carbon dioxide emissions from power plants at
approximately 64 million tons. The cap will hold steady until
2014, but will then be reduced by 2\1/2\ percent per year until
2019, resulting in a total reduction of 10 percent.
Under the trade portion of the program New York will
auction allowances to generators. Each allowance will represent
one ton of carbon dioxide. Generators will be able to buy and
sell allowances in a secondary market. Generators that obtain
more allowances than their actual emissions will be allowed to
sell their excess allowances, and those who are short must buy
allowances.
Our draft regulations for the entire program were published
on October 24th and are now out for public comment. We expect
permanent regulations to be in place by the spring of 2008. We
hope that RGGI will ultimately serve as a model for national or
international cap-and-trade programs to reduce emissions from
power plants, which account for 40 percent of all greenhouse
gas emissions nationally. In anticipation of launching RGGI,
New York has aggressively pursued energy efficiency in
renewable energy policies.
With regard to energy efficiency we are implementing what
we call the 15 by 15 plan to decrease the demand for power by
15 percent from forecasted levels to efforts to increase energy
efficiency. And with regard to renewable energy New York has
adopted a renewable portfolio standard that requires at least
25 percent of electricity used in New York State to be produced
by clean renewable resources by 2013. Both programs will be
supported by the RGGI auction revenue.
There is another critical component in our strategy to both
address the threat of global climate change as well as meet our
energy needs. The government has the responsibility and
obligation to help develop cleaner ways to generate energy if
at the same time we impose new and stricter environmental
standards. That is why New York State is actively researching
the viability of carbon capture and sequestration in New York.
We believe this technology holds tremendous promise in our
fight against climate change and strongly urge the Federal
Government to increase its focus and funding on this effort.
Taken together, these efforts will ensure that New York
will achieve the RGGI cap while also meeting our energy needs.
Once again I strongly urge the Federal Government to follow
the lead of the States in developing a nationwide strategy to
reduce greenhouse gas emissions, a strategy that should include
a cap-and-trade program to reduce emissions from power plants
as well as incentives for energy efficiency, renewable energy
and carbon sequestration. The government of New York State
looks forward to working with you at the Federal level to make
this happen. We will stand with you and assist you in any way
that is needed.
Thank you, and I look forward to answering your more
detailed questions.
[The statement of Governor Spitzer follows:]
[GRAPHIC(S) NOT AVAILBLE IN TIFF FORMAT]
The Chairman. Thank you, Governor, very much.
Our second witness is Governor Janet Napolitano of Arizona.
Governor Napolitano was inaugurated in 2003 and reelected in
2006, and was the first woman in history to serve as the Chair
of the National Governors' Association. Prior to her election
as Governor of Arizona, she served one term as Arizona Attorney
General and 4 years as U.S. Attorney for the District of
Arizona. She has been one of America's top five Governors by
Time Magazine and one of America's top women leaders by
Newsweek.
We welcome you, Governor Napolitano. When you are ready,
please begin.
STATEMENT OF THE HON. JANET NAPOLITANO, GOVERNOR, STATE OF
ARIZONA
Governor Napolitano. Well, thank you, Mr. Chairman and
members of the committee. It is a pleasure to appear before
you. I especially appreciate appearing with my friend,
Representative Shadegg. It is nice to see you in a venue other
than a courtroom, and I look forward to the hearing today.
Mr. Blumenauer. Should she clarify that?
Mr. Shadegg. I did before you got there.
Governor Napolitano. We were litigants in Federal Court
many--several times actually.
Arizona and other western States now suffer from prolonged
drought and will continue to be particularly hard hit as the
decade moves along. With respect to the issue before the
committee, Arizona is the fastest growing State in our country.
Between 1990 and 2005, Arizona's net greenhouse gas emissions
increased nearly 56 percent. We are forecasted to increase by
148 percent from 1990 levels by the year 2020. By way of
comparison, national emissions are forecasted to rise by about
42 percent over the same period. So Arizona needs to take
aggressive action to reduce greenhouse gases.
It is a matter of climate change, but it is also a matter
of energy, energy independence and air quality, which is also a
large issue for our State.
In 2005, I established the Arizona Climate Change Advisory
Group via Executive order. This group developed 49 policy
recommendations which cumulatively could eliminate hundreds of
millions of tons of carbon dioxide and other greenhouse gases
by the year 2020. We estimate that by implementing the
recommendations the net economic benefit to Arizona will be
more than $5.5 billion. This of course involves new energy,
energy infrastructure, and the like.
I have accepted the recommendations of this group and we
have agreed via these recommendations to reduce Arizona
emissions to 2000 levels by 2020 and to 50 percent below 2000
levels by the year 2040. I have further directed that we
achieve as much of this goal as possible by the year 2012,
which is the year that Arizona turns 100.
In January 2007, I began moving the State fleet to low
emission vehicles such as hybrids, E85 flex fuel vehicles,
alternative fuel vehicles, and high mileage automobiles. Once
EPA grants the necessary waiver we will implement the State
clean car program to reduce greenhouse gases from new light
duty vehicles starting in model year 2011.
In February of 2006, the New Mexico Governor Bill
Richardson and I created the Southwest Climate Change
Initiative. And in February 2007 we joined with the Governors
of Washington, Oregon, California and New Mexico to establish
the Western Climate Initiative. As was mentioned, a number of
other States have joined that initiative, as well as two
provinces from Canada and the State of Sonora in Mexico.
This initiative has a two-fold purpose: One, to reduce
greenhouse gas emissions in the western region by 15 percent
below 2005 levels by 2020 and, second, to develop a western
regional cap-and-trade program for greenhouse gases. Each State
in the initiative has also committed to implement the
California greenhouse gas tailpipe emission standards, and we
urge Congress to demand that the Environmental Protection
Agency approve California's long-standing request for a Clean
Air Act waiver.
We also as a group of western States have laid out four
basic principles for legislation: First, to set strong national
goals; second, to have a comprehensive market-based approach to
climate policy; third, to act quickly; and, fourth, Congress
must support State programs and not preempt the leadership
given by the States.
Indeed, as was recognized by the ranking member, the States
are the laboratory of democracy and a number of initiatives are
under way that the Federal Government could take notice of. We
must leverage action now to ensure that we can maximize the
United States' competitive edge as we transition into a 21st
century economy. And while we face great challenges in reducing
greenhouse gases dealing with the effects of climate change, I
am optimistic as always that the United States will be
innovative and that we will meet these goals.
I could have one final suggestion for the committee to lead
by example, and that is to have hearings for those of us who
must travel a great distance by teleconference so that our
carbon footprint for attending these hearings does not have to
be offset.
I look forward to Congress' action and I look forward to
answering the questions of the committee. Thank you.
[The prepared statement of Ms. Napolitano follows:]
[GRAPHIC(S) NOT AVAILBLE IN TIFF FORMAT]
The Chairman. Thank you, Governor. And next year we are
going to try to do that because I think that is an excellent
suggestion.
So the time for opening statements from our witnesses has
expired. The Chair will recognize himself for a round of
questions. Let me begin with you, Governor Spitzer.
You have decided to auction 100 percent of the allowances
under RGGI. That has not been tried by any other cap-and-trade
system. Can you give us your rationale for it and how you will
deal with those who are protesting that it will not allow
proper relief?
Governor Spitzer. Our premise, and as you point out quite
properly, this has not been done before, so we acknowledge the
possibility that it will not play out precisely as we
anticipate. But we believe this is a better way to bring the
market to bear on the decisions that will be made by the
participants. The earlier we can create a market-based pricing
for essentially the right to pollute, a price that will then be
pushed back into the cost of the product that will create
incentives for those who pollute to be more efficient, to use
less energy, to generate less pollution, the more effective the
entire system will be.
Frankly, those systems in Europe where they gave away the
opportunity to pollute, as it were, did not work terribly well.
There was both an oversupply and there was no capacity to price
this opportunity. And so our belief is, and the economic
modeling suggests, that it will be a much more effective
mechanism if you go to the 64 million tons of polluters, the
power plants themselves, their owners necessarily, and say,
purchase this right, we have priced it out, we believe the
price will not be significant, and it will begin to send market
signals back into the process.
And to pick up on what my colleague said, this is an effort
to use a market-based system rather than a regulatory
framework. The market will push and create the incentives, and
that is what the auction will do.
The Chairman. Governor, have you had any ability to think
about this question of auctioning of the credits?
Governor Napolitano. In the Western Climate Initiative, Mr.
Chairman, we are going to have a cap-and-trade program. We are,
like you, looking at what is happening with RGGI to see how it
works. In other words, the States can be laboratories for the
Federal Government, but they can also be laboratories for other
States, so we are exploring that.
The Chairman. Could you, Governor Napolitano, talk to us
about this request from California and other States for a
waiver from the Federal Government you mentioned earlier? Could
you talk about why that is important to Arizona?
Governor Napolitano. Yes, Mr. Chairman. The waiver for
California would enable California to set a Clean Air Act
standard for emissions that is stricter than the EPA currently
allows. And Arizona and the other western States want to share
in that standard for a number of reasons. We estimate that
around 77 percent of the greenhouse gas emissions in Arizona
come from either cars or energy production. We also estimate
that if we could implement the California standard in Arizona
by the year 2020 we would significantly, by about a third,
reduce greenhouse gas emissions in our State.
And again, as a rapidly growing State, we want to be able
to implement some of these things now quickly so that as we
grow we have already taken these emissions into account.
The Chairman. Governor Spitzer, the States are acting even
though the Federal Government has yet to act. The argument that
is often heard is we shouldn't act as a nation until China and
India act. Could you give us some sense of why you feel it is
appropriate for the States to move even though the Federal
Government has yet to move and what lessons we might learn in
our relationship then with India and China?
Governor Spitzer. Certainly. It is a powerful question, and
I think there is no doubt it would be desirable. And at the end
of the day, indeed, it may be imperative that we seek and
obtain the participation of economies such as those of China
and India that are growing, that are an increasing percentage
of the international GDP, to participate in this if we will
reach our final targets in terms of greenhouse gas emissions.
Having said that, the absence of their participation is not
an excuse for our failure to act either at a moral level where
we believe we have indeed almost a moral obligation to begin to
confront what is very clearly an impending crisis. It is also
too easy an excuse for inaction when we wait for that
individual or entity who defines the lowest common denominator
to do anything. We must define a higher level of behavior and
lead by example, and also by leading generate the economic
progress that is created by saying to the marketplace when you
define products that are more efficient with lower emissions
you define products such as the Prius and energy systems that
will move us forward economically.
Indeed, some of the fastest growing economic areas of New
York State depend upon clean energy technology, where R&D is
generating thousands of jobs, high paying jobs, that are based
upon the innovative technical skills of New Yorkers to create
the economy of the next century.
And so at an environmental level, at an ethical level, in
terms of the experimentation of the famous quote of the States
as laboratories of democracy, we are the ones who can now begin
to set those examples to find new boundaries and accomplish
what is, in small steps initially but larger steps as we move
along, the critical objective of controlling our emissions.
The Chairman. Thank you. The time of the Chair has expired.
The Chair recognizes the gentleman from Wisconsin, Mr.
Sensenbrenner.
Mr. Sensenbrenner. Thank you very much, Mr. Chairman.
President Clinton signed the Kyoto Protocol in 1998, but did
not submit it to the Senate for ratification. Did he make a
mistake in failing to submit the treaty to the Senate for
ratification?
Governor Spitzer. I will rarely say this. I think that is a
question beyond the ken of my jurisdiction. That really relates
more to a political judgment that was made back then.
And I will say this. I wish we had an international accord
with respect to the issue of greenhouse gas emissions, one that
had as its membership and constituent members those very
nations that I know you will focus on by virtue of their size,
their hesitancy to participate right now. And I agree with your
opening statement that we will do well to persuade them to
participate as we go forward, and we need that.
Mr. Sensenbrenner. Two years before Kyoto the United States
Senate unanimously approved a resolution sponsored by Senators
Byrd and Hagel stating that they would not ratify a treaty that
was not worldwide in application and which hurt the United
States economy. Do you think the Senate made a mistake in
unanimously voting for that resolution?
Governor Spitzer. Again, I will answer it in a slightly
different way. I am not going to agree or disagree with the
precise resolution whose terms I haven't read and passed in a
context that maybe is different than that we face today. But I
will challenge the premise that resolutions of that sort or
behavior of that sort is harmful to our economy.
I think just the opposite. I think the experience that we
have seen is that energy innovation, moving towards greater
efficiency, moving towards energy sources that do not depend
upon greenhouse gas emissions, those types of actions and
behaviors stimulate our economic growth, push us into frontiers
where we have innovative products that we generate the sorts of
creativity that drive our economy, and so I think that is where
we want to go.
Mr. Sensenbrenner. Well, the bottom line in this debate is
whether there will be a cap and trade system or whether we
would rely on technology and innovation to reduce greenhouse
gases without the bureaucracy of cap and trade. Now, as you
have described, Governor Spitzer, cap and trade will require
certain electric utilities in your State to buy these offsets,
and thus I would presume fold the cost of the offsets into
their pricing mechanism on how much they charge consumers.
Nine years ago Clinton's own appointed Energy Information
Agency head testified before the Science Committee that this
type of scheme would result in an increase in electric rates
from somewhere between 14 percent to somewhere over 60 percent.
How do we justify this indirect tax, and wouldn't it be
better to go along with what Mayor Bloomberg said, if we are
doing this, to have a direct carbon tax because at least then
politicians are being honest to say that they are taxing
consumers?
Governor Spitzer. Well, let me answer you. You have a
couple of statements built in there, of course. First, the
percentage increases that you talk about are simply wrong based
upon our calculations. In fact, we think consumers will save
money because the efficiency savings that will result from our
comprehensive energy approach will mean that there will be less
energy consumed. And even if the unit price is stable or
increased marginally the consumption will be lower so the total
cost will go down.
I also think it is important to recognize that what we are
talking about here in our cap and trade system, and everything
I have been talking about, and this goes back to our joint--I
am not sure if Janet in Arizona were parties to this litigation
when we were both Attorneys General--litigations we brought
about the Clean Air Act. This is market economics. This is
eliminating an externality, a cost that is being imposed upon
us that is measurable, that has enormous impact upon us in
terms of health, in terms of quality of life that is not
measured that should be brought back into the unit cost of
production. And any economist who has an understanding of
welfare economics would acknowledge that. All we are doing is
capturing that cost, bringing it back into the cost of the
product so the consumer can actually see the total cost of the
product.
Mr. Sensenbrenner. I guess I would spin it a little bit
differently, Governor.
Governor Spitzer. Well, you acknowledge yours is a spin and
mine is not.
Mr. Sensenbrenner. Yeah. I think what you just described is
a politician's dream because it is a tax that no politician has
to vote for, and that is how you accomplish it. I will--I don't
agree with what the Mayor of New York told us a couple weeks
ago in Seattle. But what I will say is that at least he is
honest and direct in stating that there ought to be a tax on it
rather than this cap-and-trade system where the increased cost
of doing what you want to do ends up being folded into the cost
of the product that politicians can then scream and yell about
because utilities in most areas are regulated.
My time has expired, and thank you very much.
The Chairman. The gentleman's time has expired. The Chair
recognizes the gentleman from Oregon, Mr. Blumenauer.
Mr. Blumenauer. Thank you. I would just like to take up
where my esteemed friend from Wisconsin left off about taxation
and the burden that is being put on industry and consumers. Is
it not safe to say that right now business as usual is imposing
a huge tax in terms of the--and you mentioned the environmental
items, Governor Spitzer. There is also escalating costs of
doing business. I am just wondering if either of you would
comment on what will be the economic consequences in your
States if it is just business as usual, escalating energy
prices and ignoring this until we are forced to make a change.
Governor Napolitano. Yes, Representative. As I mentioned in
my testimony, we actually did an economic analysis of what our
program would be. And it showed a net positive effect to
Arizona of $5.5 billion between now and the year 2020. But
business as usual, as you comment, is really a silent tax as
well, because we have escalating energy prices, and it is
nonsustainable.
The ranking member mentioned Kyoto and the need to have
everybody participating. In a global climate change initiative,
that is the ideal situation. But recognize there are two other
domestic issues involved here as well. One is our own country's
energy independence and, secondly, air quality. And air quality
is a key concern for counties like Maricopa County in Arizona.
So there is a domestic aspect to this in addition to the
global climate change. But as your question is premised, yes,
right now business as usual is a silent tax on Americans and it
is nonsustainable.
Governor Spitzer. If I may add two thoughts. We have an
enormous asthma problem in the City and State of New York. And
that asthma problem we have has been reported the highest
asthma rates in our inner cities of any major cities in the
Nation. That is, we believe, a consequence of the emissions
from power plants outside of New York State. And I am not
saying that to cast blame, but to say this is one of the
enormous costs that is imposed upon us, the health cost, the
medical cost, the limitations upon development that accrues to
those who have the asthma, one of thousands of such costs that
are not measured that should be brought back into the cost of
the product that is being created.
And I would also say to Mr. Sensenbrenner, I think that we
really have a fundamental policy choice to confront. When we
simply say let us maintain the status quo without involvement
and we see the price of a barrel of oil having gone up to $100
a barrel, money that leaves this Nation, goes elsewhere and is
not used for any affirmative purpose here, and the alternative
that we face which is that we can reduce that demand in
multiple ways, increase efficiency and capture that money to
use it here to create alternative sectors and creative
products, I don't think anybody would rationally argue it is
better to have the money flown overseas.
Mr. Blumenauer. Terrific. There are some apologists for the
administration's foot dragging at EPA in not granting the
waiver saying, well, we can't have 50 State standards, the auto
industry can't cope with that. But I am hearing from your
testimony, Governor Napolitano, that there are a number of
States that would unite around the standard that is already
being argued for in California so that a major portion of the
market would be this. Is that correct? Do I hear that right?
Governor Napolitano. Yes, you are correct. Under the
Western State Climate Initiative we would all move to the
California standard, and that standard alone and the number of
States that are involved in that represent I think at least one
in four, maybe one in three automobiles sold in the United
States. So you could have the EPA standard and a California
standard and not 50 standards.
Mr. Blumenauer. My final point just deals with the
connection between land use and transportation, because we have
two States that are sort of the book ends. The transportation
efficiency for much of the State of New York is such that
people have choices and there is very little demand,
particularly in the Valley of the Sun until at least recently
with work that you have done with mass transit. There were very
few choices, and vehicle-mile standards were just going through
the roof. Some sense about how you folks are looking to connect
land use into this equation?
Governor Napolitano. I have created actually what I call
the Growth Cabinet, which is a subgroup of my own Cabinet
dealing totally with issues of growth, involving interlocking
issues of land use, transportation, environmental quality, and
water resources that go with being the fastest growing State in
the United States. We are, and I met yesterday morning actually
in my State capital with a number of legislatures and then a
number of representatives from power companies and the like,
looking at a transportation measure for our own ballot that
would include financing for rail, in addition to the light rail
that is being installed in Maricopa County right now, as well
as an aggressive road building program just to handle the
traffic that we have.
Governor Spitzer. I would just comment briefly. You are
correct that New York State, because we have several large
urban cities, in particular New York City, of course, is on a
per capita basis more efficient in terms of our emissions
because we have both more multiple dwelling units and a greater
percentage use of mass transportation. Having said that, we are
focusing on the construction, new construction in particular,
to make it green construction so that as we build new office
buildings and residential housing that those units will be more
efficient and that will have an enormous impact on the
emissions as we move forward.
The remainder of the State are suburban and more rural
areas. We have the same smart growth constraints and issues
that other States have. And we are trying to use smart growth
in planning to get us to the point where we will be more
efficient in terms of energy demand.
Mr. Blumenauer. Thank you very much.
The Chairman. The gentleman's time has expired. The Chair
recognizes the gentleman from Arizona, Mr. Shadegg.
Mr. Shadegg. Thank you, Mr. Chairman. And let me start with
a personal peccadillo, Governor. As you know, recently there
have been both news articles and editorials dealing with our
high occupancy vehicle lanes in Arizona. You and I, I am sure,
would agree that one way to reduce greenhouse gas emissions is
to encourage people to carpool. And yet these reports indicate
that Arizona has a very high rate of noncompliance. In some
instances during rush hour it is 20 percent, some others say 23
percent. Governor, I was driving to the airport in rush hour
yesterday and I swear that at least a third of the cars that
went by me had neither blue plates, which allow them to be in
that lane, nor two people in the vehicle.
I am anxious to hear if you are taking a lead, will push
Arizona to put up signs warning violators of the carpool lane,
and otherwise push our enforcement agencies, the DPS, which you
control, to stop people from cheating on that issue.
Governor Napolitano. The answer is yes. And I get as
aggravated as you when I am driving and see single drivers in
the high occupancy vehicle lane. So the answer is DPS is doing
what it can, recognizing that DPS is stretched already because
we have also been asked to help with the border situation and
we have also been asked to do a number of other things that in
an ideal world DPS would not be asked to do. But they are also
directed to do that. But the answer is yes.
Mr. Shadegg. We all go to California and we all see that in
California nobody cheats in HOV lanes, at least not that I can
see, and it frustrates me when I come home and see our people
cheating.
Governor Napolitano. Let me raise another point,
Congressman, and that is I did take the lead in asking the
Federal Highway Administration to allow us to put hybrid
vehicles in the high occupancy lanes and to get a waiver from
Federal regulations to enable us to do that so there would be
an incentive for people to buy those kinds of vehicles. It took
well over a year to get such a waiver, and to get a waiver to
allow certain other types of single vehicle drivers to get in
that lane I think would be doubtful.
So yes, we will focus on enforcement now.
Mr. Shadegg. I commend you for doing that. In the Arizona
Climate Change Advisory Group they put forward 49 policy
recommendations which you discussed in your testimony. I have
reviewed those. And one of them touches upon the problem that
we have here with this issue, and that was raised with Governor
Spitzer already. And that is enforcement in one jurisdiction
being taken advantage of by other jurisdictions. For example,
if we go to a cap-and-trade system here will other countries
not join in, and if so, and the Governor I think made a good
argument for why we should be doing it on any basis. One of the
49 recommendations to you was that we should set a maximum
speed for commercial vehicles. In the Commerce Committee last
winter when gasoline prices spiked I suggested that that was an
issue we ought to consider, and it fell to the ground with a
thud.
Have you proposed to the Arizona legislature such a
restriction on the speed limit for commercial vehicles because
they consume much more fuel and emit much more greenhouse gas
when they are running at high speeds? Question one, have you
proposed it? And question two, do you worry about that placing
Arizona at a competitive disadvantage with other States?
Governor Napolitano. I have not yet proposed it, in part
because the legislature hasn't been in session since many of
those recommendations have been developed. We are in the
process of developing an omnibus energy bill for this term of
the legislature, so I am in the process of considering whether
a segment of that bill will be a cap on speed limits.
Mr. Shadegg. This one I would certainly discuss with you
because it is something we could be doing, and it is something
we could be doing immediately rather than kind of this esoteric
out in the future.
Governor Napolitano. Yes. And it is something that can be
done at the State level, and again evidence as how the States
can be laboratories for the other States.
Mr. Shadegg. One small point. In your testimony at page 3
you say that as of, I believe it is 2010, the State will no
longer own any vehicle that is not a hybrid, alt fuel or low
greenhouse gas emitting. In a previous setting you talk about
few exceptions. Is it possible to achieve an absolute ban on
those? That is, for our large trucks at the highway department,
can we in fact have them fit in one of those three categories;
hybrid, alt fuel or a low greenhouse gas emitting for the big
trucks?
Governor Napolitano. Mr. Chairman, it is our goal to be
able to do that by 2010. Obviously if we can't, we can't,
because it depends in part on manufacturers. The other possible
exception is for certain law enforcement vehicles.
Mr. Shadegg. Fair enough. I appreciate it. You have been
very aggressive on this issue, and I commend you for it, both
in the Arizona Climate Change Advisory Group and also in the
Western--I forgot the phrase--Western Coalition. But I note
that in neither of their recommendations, in the 49
recommendations by the Arizona Climate Change Advisory Group,
and in nothing that I have seen about the western States'
effort is there an embracing or a recommendation of moving to
second generation nuclear. Arizona, as you know, has a very
large nuclear plant. We also produce a lot of hydroelectricity
in Arizona. People don't know that. But hydro is not mentioned
also. Some people believe that both hydro and nuclear are ways
to get quickly away from greenhouse gas emitting energy
production. Others have reservations.
I would like to know, are you a supporter of second
generation nuclear and are you willing to work on that or is
there a reason that Arizona Climate Change Initiative left out
nuclear and left out any recommendation on the hydro?
Governor Napolitano. Yes. The answer is that I am in favor
of second generation nuclear provided that we can get a better
handle on the nuclear waste issue. I differ with some of my
colleagues on that, quite frankly. But I believe our experience
in Arizona with nuclear is a good example for other places.
Even though our plant is an aging one it is overall well-
maintained and well-operated. And I think that the second
generation technology is feasible and is something that would
make a major impact on greenhouse gas emissions.
So the answer is that is something that I would favor.
Mr. Shadegg. Governor Spitzer, is that your position as
well or are you on the other side of that issue?
Governor Spitzer. We have a number of nuclear facilities in
New York State and we have a rather mixed record where some
were constructed at enormous cost and never began operation
because of construction issues and concerns about the capacity
to evacuate. And we have one in Westchester, which I think all
would agree and even point to, is poorly sited just from the
perspective of the potential need to evacuate in the event of a
disaster. Elsewhere in the State we have facilities in
communities who not only welcome but are encouraging
construction of additional nuclear facilities, and we are
looking at that.
Mr. Shadegg. He is tough with the gavel. Second generation
support or not?
Governor Spitzer. We support the possibility and continue
discussion of it. I share my colleague's concern about disposal
issues. Now, having said that, the disposal problem is so
enormous one can rightly say it is there regardless. And in the
context of greenhouse gases there is an argument for nuclear
expansion.
Mr. Shadegg. Is my time expired?
The Chairman. It has.
Mr. Shadegg. Mr. Chairman, if I might, I have a number of
other questions. I presume we won't get to a second round.
Might I submit those in writing?
The Chairman. Without objection, and would ask the
witnesses to answer them.
Mr. Shadegg. Thank you, Mr. Chairman.
The Chairman. The gentleman's time has expired. The Chair
recognizes the gentleman from Missouri, Mr. Cleaver.
Mr. Cleaver. Thank you, Mr. Chairman. Governor Napolitano,
Arizona has already joined the climate registry for tracking
greenhouse gas emissions. If Congress should move to establish
such a registry, what would the impact be on States that have
already done it? Or will it be a negative impact in your
opinion?
Governor Napolitano. It depends on how Congress acts.
Thirty-seven States have now joined the climate registry. So
there is a broad bipartisan and biregional--multiregional
participation already. And I would hope that should Congress
establish a national registry, it incorporate that which
already exists and certainly not go backwards.
Mr. Cleaver. So if we were to do a best practices kind of
legislation, which would require States then to conform to what
we did even though they have already moved ahead? I mean, the
States are the headlights and the Federal Government on this
issue is serving as the taillight. So what do you think the
response would be?
Governor Napolitano. Well, I think the Federal Government
should move to headlight status and then the States would meet
that.
Mr. Cleaver. So you would also agree--well, this--Governor
Spitzer came close to this, this whole issue of climate change
and our response to it, do you believe that it is a moral
imperative or a political or ideological issue?
Governor Napolitano. I think it is all. I think that I have
been convinced that the science is there for climate change. I
think there is some dispute about the rate with which that
change will occur, but is definitely occurring, and that the
sources of our energy production are a catalyst for some of
that climate change. And this is a short-term political issue,
but it is a long-term moral issue as well.
Mr. Cleaver. Governor Spitzer.
Governor Spitzer. I think my colleague got it just right.
As I said earlier, there is a moral imperative based upon the
science that we now understand and the political dynamics will
ebb and flow perhaps, but I think in the context of history,
when people look back 100, 200 years from now, they will be
mystified at our failure to respond more rapidly and probably
will blame the political backdrop but will conclude, no doubt,
that we must do something.
Mr. Cleaver. Thank you, Mr. Chairman. I yield back the
balance of my time.
The Chairman. The gentleman's time has expired. The Chair
recognizes the gentlewoman from Tennessee.
Mrs. Blackburn. Thank you, Mr. Chairman. And I, like my
colleague from Arizona, have several questions. I am going to
submit some of these in writing and request a response. As I
said, I like to focus on the areas where we agree. And working
for energy independence is something that I think we all agree
on.
And Governor Spitzer, I appreciate the plan that you gave
us as to how you all are looking at emissions and renewable
portfolio standards. And a question for each of you, since you
represent States that have started working on this, a lot of
our States have. In Tennessee, we are doing a good deal of work
with biofuels and we have a governor that has made that a
priority. So should the Federal Government come in now and
mandate a standard? You know, my colleague was just talking
about us kind of being the taillights on this. Should the
States be allowed to work toward finding solutions with what
they have? Should we just incentivize the work that they are
doing? Or should we override and come in and say, no, you need
to do it our way? So I would love to hear from each of you on
that.
Governor Spitzer. I think you stated as either/or
propositions that can be combined into something that is better
than either of the options you articulated because what--and I
think, and Governor Napolitano and I both dealt with this issue
of preemption when we were attorneys general and it is possible
for the Federal Government to articulate a standard that might
be a minimum threshold without preempting States that do more
without overriding more creative or alternative approaches that
States have adopted. I would not want to see the Federal
Government come in on a renewable portfolio standard, for
instance, and mandate a number that was lower than what we have
set out to do, nor would I want the government to----
Mrs. Blackburn. So you are saying, give us something that
will challenge us and will not condescend to the work that we
have in progress.
Governor Spitzer. And will set a threshold, but will not
preclude our surpassing that threshold, setting more rigorous
standards or doing it in a marginally different way.
Mrs. Blackburn. Okay. Anything to add, Governor Napolitano?
Governor Napolitano. Well, I would echo what Governor
Spitzer has said and also reiterate a point that is implicit in
your question, which is the flexibility of how that renewable
energy is met. Tennessee is biofuel. I believe Arizona should
be the Persian Gulf of solar energy by way of comparison. So
States have different resources available to them.
Mrs. Blackburn. Right. And in Tennessee we are doing a lot
with that second generation nuclear. We have two--TBA has two
nuclear reactors that have come online since the 2005 Energy
Act was passed and we are looking forward to having more of
those. There are answers there to questions that you all have.
And we think some shared work can be a good thing.
Governor Napolitano, you mentioned an omnibus energy bill
that you are planning before the end of the year. I would love
to know in that if you are doing things that are going to
incentivize clean coal, clean nuclear more on your renewable
standard? And also if there is anything in there working with
the educational community to incentivize the development of
some of the bioscientists and the nuclear engineers that we are
going to need to help solve this problem? Are you all
incorporating that into your omnibus plan?
Governor Napolitano. Yes. The answer is, we are looking at
different types of incentives for renewables and for people to
purchase renewables. For example, tax credits for the
installation of solar.
And the answer is, with respect to education, absolutely.
And we have been doing that; for example, at Arizona State
University, they have recently opened a whole college that is
focused on sustainability. And a big part of that of course is
our sustainable energy future. So we are working with the
academic communities as well as looking at pure public policy
on the ground level.
Mrs. Blackburn. Governor Spitzer, anything to add on any of
those initiatives?
Governor Spitzer. I would echo what Governor Napolitano
just said; we are trying to do the same thing in New York State
and focusing to a great extent in the context of clean coal on
the possibility of sequestration, whether it is going to be
technically feasible, whether it will be economically feasible
are two significant hurdles. So we need to overcome those, and
we are trying to work them through. We have a number of
projects we are examining right now that could be test
opportunities to see if the economics work out. But certainly,
clean coal is something we are looking at very, very seriously.
Mrs. Blackburn. Thank you. Mr. Chairman, I will yield back
and submit the balance of my questions.
The Chairman. The gentlelady's time has expired. The Chair
recognizes the gentleman from New York, Mr. Hall.
Mr. Hall. Thank you, Mr. Chairman. Thank you, Governor
Spitzer and Governor Napolitano, for your testimony. I just
wanted to pick up on my colleague from Tennessee's mention of
biofuels. We have heard testimony before this committee within
the last couple of weeks that there is a surplus nationwide
right now of biodiesel and ethanol because of a difficulty or a
lack of infrastructure to get it to market. One of our district
offices, my district office in Putnam County, New York, got a
call from a very excited lady saying, I just bought a flex fuel
vehicle. Where can I get some flex fuel? And we had to tell
her--she was disappointed to hear that there are two pumps in
New York State selling E85. So first off, I am curious,
Governor Spitzer, if you can tell us what plans you have in the
works and how we can help you in terms of getting that mixture
of ethanol up or the delivery of any biofuels to the pump.
Governor Spitzer. It is an excellent question you ask. The
infrastructure has to follow the production of the product
itself. So we are working with, for instance, the gas stations
along the throughway to see if we can ensure that it would be
possible to get ethanol mixed fuels at those gas stations. And
the problems arose when the vehicle in which I drive as
governor had a nice sticker on the side saying, ethanol
powered. I said, that is great. Where do we get the ethanol? It
turned out there were, as you point out, very few gas stations.
So I was a little worried. So we are working vigorously to make
sure pumps are accessible. And I think in due course--I can't
give you a date right now, but in due course, that will happen.
Mr. Hall. Governor Napolitano, you have done a quite a bit
of preferential purchasing of alternative fuel vehicles. Have
you had any success on getting more pumps for alternative
fuels?
Governor Napolitano. Like Governor Spitzer, we are working
on that infrastructure and in part, it will follow the number
of vehicles on the road because this is a market-driven system.
And as we increase demand via these vehicles, I think
infrastructure will be there as well. But yes, from time to
time, I have wondered where the gas pump is going to be.
Mr. Hall. Thank you. Both of you are governors of States
which lie within the so-called national interest electric
corridors, recently designated by DOE. With the mid-Atlantic
corridor, it is likely that transmission could rely on old coal
fired power plants. Would you be able to comment, Governor
Spitzer, first, I guess, about how the NIETC designations would
impact your efforts to formulate a regional response to
greenhouse gas emissions?
Governor Spitzer. You are exactly correct. It is something
we find problematic. It is one of several issues we have with
the designation because it will really lead to our perhaps
forced importation of energy that does not satisfy the
thresholds and the objectives we have laid out. It could be
dirty energy in the sense of sort of old traditional coal with
emissions we want to limit, and it would be beyond our power to
limit it because of the designation. So we are pushing back to
see if we can challenge the designation, and we are pursuing
various options.
Mr. Hall. Governor Napolitano.
Governor Napolitano. Yes. On behalf of Arizona, we have
serious questions about the imposition of those corridors with
respect to their interference not just with the initiatives on
greenhouse gases but with respect to the kind of infrastructure
that will be crossing Arizona without respect to some of the
land use issues that we all also have.
Mr. Hall. Thank you. I am just recalling how when seat
belts were first mandated and when airbags were first mandated
and when the Clean Water Act first came out, and Clean Air Act
first came out, that industry and certain representatives of
government cried that this was going to kill jobs and it was
going to kill industry, and it was going to cause economic
dislocation. And in each case, it actually caused the creation
of a new industry to create seat belts or to make scrubbers for
exhaust for power plants or to make airbags and so on. Have you
seen any evidence in your States so far of new industries being
created to meet these green initiatives you are working on?
Governor Spitzer. I would observe that one of the most
dynamic sectors we have and has led recently to a very
significant investment by General Electric in Schenectady is in
renewable energy, wind power. Wind power is moving and growing
at a remarkable clip, partly because of the incentives, partly
because of programs such as the ones we are talking about this
morning.
So rather than inhibit growth, they are creating new
products that are being engineered. And the wind turbines
themselves are on the cutting edge of technology. They are
being produced domestically and could not be more demonstrative
of what I believe our underlying point is, this will generate
economic growth and a better environment simultaneously.
Governor Napolitano. Likewise. And there was a question
raised about, well, what about China and India? They are not
incorporating some of these standards yet. In my view, we are
moving ahead on some of these technologies. They are new
markets within the United States. But I also view China and
India as possible huge markets for production of these
technologies from the United States.
Mr. Hall. Well, Governor Spitzer, in Westchester, as you
are aware, the county executive has recently changed their
fleet of hybrid buses in the county bus loop to hybrid bio-
diesel buses. And I am wondering when he is going to go to
plug-in hybrid biodiesel buses. And it seems to me that
pyramiding more new technology on top of the other is a way to
get even away from the amount of oil we are importing or
burning. Does that figure into your plans as well?
Governor Spitzer. We are trying to generate, as Governor
Napolitano mentioned, in terms of the State fleets, greater
efficiency, greater use of hybrids and County Executive Spano
is always on the cutting edge. So I will have to call him and
ask what the next addition to that litany of moves will be. But
we will certainly be seeking to do the same thing with the
State fleet and see if others also do it.
Mr. Hall. You have mentioned NYCERTA in your testimony.
NYCERTA, 35 years ago or so, had a study that showed that there
were low head hydro sites of small waterfalls and dams in New
York State that were not being used that were sufficient in
their view to power the entire City of New York's consumption
at that time. Of course, understanding that New York's
consumption of electricity has grown since then.
There was a study done by the Idaho National Laboratory
maybe 44 years ago that located approximately 4,000 low head
hydro sites in New York and said that they would combine if we
harvested them by putting a turbine where the water is already
falling and just capture that energy that is being lost every
day, that it was greater than 1,200 megawatts, which is more
than 60 percent of the Indian Point nuclear plant that you
referred to at peak output. So I just wanted to know if you are
planning on that as well. Is that part of your----
Governor Spitzer. Well, I have to confess ignorance of that
particular study. But I will tell you that obviously because of
our renewable portfolio standard has targeted 25 percent, we
are seeking to maximize our use of hydro. And this extends to
our use of hydro internationally in terms of accessing the
international market, hydro Quebec and Canadian generation as
well. So we are doing what we can do.
Mr. Hall. Thank you very much. I yield back.
The Chairman. The gentleman's time has expired. The Chair
recognizes the gentleman from California, Mr. McNerney.
Mr. McNerney. Thank you, Mr. Chairman. I want to thank you
for coming here today. And I hope to encourage my own governor,
Arnold Schwarzenegger, to come and testify sooner or later
because he brings a certain showmanship and a lot of flare to
the job. And it is something that it actually helps. Not to
denigrate you all, but----
Governor Spitzer. We understand what you are saying.
Mr. McNerney. I see global warming, as both of you do, as a
tremendous opportunity for growth. If we encourage innovation
and entrepreneurship, we will grow and broaden our economy not
only in terms of domestic issues but in terms of selling
American products to vast markets overseas. And my State and
your States will benefit from this. Industries in America that
resist this will be left behind. And I don't want to point too
many fingers. But I hope that the American auto industry
embraces this program for the sake of its own future and the
sake of its own profitability.
I will go into some questions here. I am very intrigued by
your RGGI approach and program, the idea of auctioning off
permits or--what was the word you used--allowances. In
California, we have had a fairly negative experience with the
sort of marketing of utility favors in the 2001 period. Do you
have a way to prevent gaming of that system or some way to
prevent that kind of outcome that we experienced in California?
Governor Spitzer. The answer--I don't think I can say more
than I think so. The regs are going to be finalized in the
spring of 2008 and the system will be effective not long
thereafter. We have created an auction system, spoken with all
the regulators and examined the history of these types of
markets. And so we think we have created a smooth and fairly
transparent operating marketplace.
And one other aspect of it that I didn't mention earlier
that I think bears mention is that the revenue that we derive
from the auction of these allowances will then be used to
support clean technology and clean energy research and
development. And so, instead of merely giving away the
allowances and giving that value to the utilities themselves,
we derive an opportunity here, have an opportunity to subsidize
and create new research opportunities.
Mr. McNerney. Well, I appreciate that. And I just caution
you to look at what happened in California in 2001, make sure
that that doesn't replicate itself there in some way. Because
it seems like auctioning does open up an opportunity for gaming
and problems like that. What is the plan in New York to
encourage automobiles to become more efficient other than just
making fuel available?
Governor Spitzer. Well, we are a party with other States to
the California standards. We are permitted to join with them
and we consequently have joined in seeking to have EPA grant
the waivers so the California standards can be embraced and
then define a greater and greater share of the marketplace. I
have long believed that the CAFE standards should be raised and
raised significantly. That will move us dramatically in the
context of efficiency. I agree with you, it will create new
markets, force technology, and R&D that will create the
products that the American consumer wants to buy, and I think
the history of the Prius over the last number of years
demonstrates that there is a real thirst in the marketplace not
only for environmentally friendly products, but automobiles in
particular with greater efficiency.
Mr. McNerney. Thanks. I think Governor Napolitano mentioned
some incentives that are in place or about to be in place in
Arizona. Could you elaborate on those a little bit in terms of
what consumers would benefit from buying a hybrid or more
efficient vehicle?
Governor Napolitano. Well, the incentive that I initiated
via executive order once I got a waiver from the Federal
Highway Administration was to allow hybrids to use the high
occupancy lanes. And if you have ever driven in rush hour in
Arizona, you will know what a value that is. Rush hour is sort
of an oxymoron right now in Arizona. So we have done that. But
we are also looking at other types of incentives, primarily
through tax policy that would help people, for example, install
solar in their homes.
Mr. McNerney. Thank you. One last thing about
sequestration. I know that sequestration is a technical hurdle.
One of the problems with sequestration is that when you burn
coal, you generate not only carbon dioxide but you generate a
lot of other gases, especially if you use air. If you use pure
oxygen then you just generate CO2. So you can have
not only to bury carbon dioxide, but NOX and
SOX, along with those which makes the problem a lot
more difficult.
You mentioned wind energy. I spent my career in wind
turbines. And most of the wind turbine production, it is not
baseload. It is intermittent. And so the intermittent energy
can be used to create hydrogen oxygen and the oxygen can be
used to burn with coal and then you get the clean
CO2. So there is a lot of opportunities out there.
And I am really anxious to see these things unfold in the
future.
Mr. McNerney. Thank you very much.
The Chairman. The gentleman's time has expired. The Chair
recognizes the gentlelady from South Dakota, Ms. Herseth
Sandlin.
Ms. Herseth Sandlin. Thank you, Mr. Chairman. Picking up on
where Mr. McNerney left off with wind energy. Governor
Napolitano, you mentioned that Arizona, in your opinion, and
perhaps many other Arizonans, is the Persian Gulf of solar
energy. In South Dakota, we viewed ourselves as the Saudi
Arabia of wind energy. And so I am curious as it relates to
your thoughts on transmission. In the Energy Policy Act of
2005, there were provisions that dealt with energy corridors,
dealt with FERC's authority to cite these authorities mostly
over Federal lands. That has been controversial in some parts
of the country.
But to get our energy, renewable energy resources to other
parts of the country, not just community-based and within the
State, we have to upgrade our transmission capacity in this
country and I am just curious to see your thoughts and Governor
Spitzer, yours as well, as it relates to our transmission
capacity in the country and what you think the appropriate
Federal policy should be in the future to enhance it.
Governor Napolitano. Yes, I agree with your statement that
the transmission issues are large issues particularly in the
western States. We would prefer to be able to work those out
regionally as opposed to having Washington, D.C. dictate where
the transmission corridors are to be located. Because in my
view, FERC, in particular, has a very limited perspective on
the western grid and how transmission can occur in the western
States.
Governor Spitzer. I would add merely that we have
significant transmission issues in the east as well in the
sense that we have just a geographic gap between where there is
access to hydro power, wind power, for instance, or some of the
clean coal facilities we are talking about, which might be
sited on one of the regions of the State, and the energy demand
may be elsewhere in the State. And siting transmission lines is
often a rather knotty issue because people are not often
thrilled to have the high tension wires proximate to their
property.
We are looking very hard at what rights of way the State
already has, whether it is through throughways or railways,
whatever it may be, to see if we can take advantage of those
existing rights of way and thereby not need to encounter the
very difficult problems of creating new rights of way.
Ms. Herseth Sandlin. Do either of your States have a
renewable fuel standard? Let me first clarify. You both have
renewable electricity standard? Both States do? Either State
have a renewable fuel standard, like the State of Minnesota and
other States have passed, that would require a certain
percentage of the gasoline sold to carry 10 percent, 15
percent, 20 percent of ethanol biodiesel?
Governor Spitzer. I am not sure.
Governor Napolitano. We have standards in order to meet
some ozone issues in the summer. So we have winter fuel and
summer fuel. But we don't have a standard such as Minnesota's.
Ms. Herseth Sandlin. I just raise that in response to Mr.
Hall's questions as it relates to one of the barriers for
biofuels being the infrastructure and the availability of the
distribution system across the country. Certainly, I commend
you for your efforts within the State and the throughways,
trying to address--I know they are doing this in Texas as
well--to get as many stations with E85 or biodiesel as possible
along the routes most widely traveled. But the other issue here
is that refiners, some refiners in the country are not blending
more ethanol than they are required to blend.
And this highlights the importance of the energy bill that
is pending in the Congress, both as it relates to incentives
for infrastructure and distribution as well as a more
aggressive renewable fuels standard. And so taking that along
with the renewable electricity standard, the issue of citing
transmission, we just don't have time to be sitting around,
waiting for refiners to decide they are going to blend more or
utility companies to decide that they are going to figure out a
way through efficiency and through other sources to meet these
standards. And we don't have time for the NIMBY problem to hold
us up for the importance of the next generation dealing with
the energy issues, energy independence as well as the
greenhouse gas problems of climate change.
So again, I commend you for what you are doing at the State
level. I hope that your Western Governors Association and the
eastern--is it the eastern governor's? North Atlantic? What is
your----
Governor Spitzer. I am not sure. Too many associations, I
lose track of them.
Ms. Herseth Sandlin. If you would encourage, in a
bipartisan way, support for the energy bill that is pending so
that we can get the momentum before the end of the year to pass
that legislation. Thank you both.
Governor Spitzer. Thank you.
The Chairman. The gentlelady's time has expired. The Chair
recognizes the gentlelady from California, Ms. Solis.
Ms. Solis. Thank you, Mr. Chairman. I want to thank both of
our witnesses for coming here today, and also to thank you for
joining in with California in our lawsuit against EPA. I really
do want to commend you for that. But I wanted to ask a
question, Governor Spitzer, that you kind of touched based on
in terms of what impacts this has negatively on communities.
And I am very concerned about low-income and underrepresented
communities. And you mentioned asthma as one factor. And I
wanted to read this if I could. I am concerned about climate
change. And recently as of October, the CDC limited their full
testimony and deleted very important material on information
and impacts of climate change on racial and ethnic minority
communities and recommended that public health preparedness for
climate change was somewhat minimized and that assessments
probably shouldn't take place.
I want to get your opinion and hear what you have to say
about that.
Governor Spitzer. Well, I think the point you were making
is a very valid one. The burdens of--the environmental burdens,
the health burdens of where energy plants are sited and the
consequential costs, the externalities I guess the economists
would call them, fall disproportionately on the lower end of
our economic spectrum and that often means on communities of
color and the minorities in our community as well.
So we need to think about this as a distributional issue.
There is a very potent environmental justice advocacy community
that argues with great merit that when we talk about siting
energy facilities, we have to think about it in the context of
environmental justice precisely because of the distributional
issues you raised.
Ms. Solis. Thank you. And for Governor Napolitano, thanks
for also being here. And I know that you have a number of
issues and challenges you face with respect to low-income
communities, particularly farm workers and those rural
communities that are also disadvantaged. And I wanted to hear
if Arizona is developing any plans to do outreach to those
communities to ensure that impacts, such as the ongoing
droughts, fires and things and persistent heat waves, how those
affect the community and what kind of efforts are you making to
help inform those communities about prevention, awareness and
what they can do?
Governor Napolitano. Well, there are a number of efforts
both at the State level primarily through the Department of
Environmental Quality and the Department of Agriculture and the
Department of Water Resources on the educational level and on
the variety of issues that you list and also localities and the
like. One of the things that we are really trying to now
instigate in Arizona as we grow are transit options other than
the automobile. And so, within for example, Maricopa County,
our most populous county, we will be opening 20 miles of light
rail by the end of 2008 with another 40 on the books to that.
And as I said earlier, we are also looking at the possibility
of rail, for example, between Phoenix and Tucson. In other
words, there are environmental reasons for doing it, but there
is also just pure transportation reasons to help people move
from one place to another.
Ms. Solis. One of the other issues I wanted to raise with
Governor Spitzer was with respect to the ports and pollution.
And of course, California just recently experienced a
tremendous oil spill. And that is going to damage much of our
ecosystem there. And I am wondering what is New York doing also
to look at the negative impacts that vessels, marine vessels
have on communities that are immediately affected by the air
pollutants that are so devastating and have a very, very high
negative impact on respiratory diseases, chronic illnesses and
the like.
Governor Spitzer. I will, with your permission, get back to
you to see what, in particular, the Port Authority which has
jurisdiction over the major ports in New York State is doing
with respect to that. I will tell you I recall from my days as
attorney general, we brought a number of cases with respect to
the dumping of bilge water by ships which they would do in
harbors and out in the oceans as well, which had accumulated
all sorts of environmental pollutants that should have been
handled different. So I know it is an issue we look at. I do
not know precisely what the Port Authority is doing with
respect to that issue. But I will get back to you.
Ms. Solis. I just raise that because in Los Angeles, one of
the largest points and Long Beach are both looking very
aggressively at how to curtail that negative footprint there
which has a tremendous impact on the entire region of Southern
California. Yes, Governor.
Governor Napolitano. I would like to add, that you also I
would recommend look at land ports because we haven't improved
the port infrastructure on the land ports between the U.S. and
Mexico for years. That results in truck and car waiting lines
that can be 5 or 6 hours long. They were 6 hours at the
crossing at Lukeville, Arizona 2 weeks ago. And as you might
imagine, sitting in an idling vehicle for that long is a
problem. The whole land port infrastructure I would hope would
be part of your recommendations.
Ms. Solis. Thank you.
The Chairman. The gentlelady's time has expired. The Chair
recognizes the gentleman from Washington State, Mr. Inslee.
Mr. Inslee. Thank you. You might sense there is tremendous
jealousy from this end of the table when we listen to governors
and mayors and see this spectacular progress and we haven't
made it here. We are envious of your great progress. And one of
the reasons is we have just got folks here in D.C. who are
afraid of moving, to really move into this clean energy
economy. I was hoping you might give our colleagues confidence
in our ability to do so both economically and politically. I
just wonder, if you could talk about the political lay of the
land on these issues in your States to the extent they are
bipartisan, to the extent there has been pushback or rollback
since you have adopted these. My sense is there is great
movement without great political risk, frankly, in your States
moving forward on these issues. So I was wondering if you would
address these issues.
Governor Spitzer. I thank you for your kind words, but I
would merely caution, that we have aspirational objectives that
are still years out. We have not yet accomplished these
thresholds. We certainly hope to and expect to. I would make
this observation, in New York at least, the move towards an
environmentally sound and environmentally conscious economy is
bipartisan. Mayor Bloomberg is taking now an independent, ran
as a Republican; my predecessor, Governor Pataki, a Republican
were certainly very aggressive in this area as well. I think
there is a bipartisan consensus that our economy will benefit,
our environment will benefit simultaneously when we move in
these directions in each of the various mechanisms through each
of the various mechanisms we have been discussing.
Governor Napolitano. I would note also that for example,
the Western Climate Initiative is joined in by States like Utah
which may be the most heavily Republican State by registration
in the country, certainly must be close. And in my view, in
Arizona, the politics have changed on this. As more information
has become available to people, they have become more engaged
in the issue and more concerned with the impact of greenhouse
gas emissions, not just as a global warming issue, but on
energy independence and on air quality overall.
And so while there is always some pushback, oh, you are
going to add to the cost of the car or this or that, it has not
certainly been overwhelming and indeed the contrary is what I
have been seeing is people really want to see that we are
taking action in this area and see the possibility and the
future and the opportunity for us to do so.
Mr. Inslee. Well, we hope that bipartisanship will be
coming in effect to Washington, D.C. too. And I know I have
taken a scientific poll in New York City of the mayor's efforts
to have hybrid taxis. Both taxi cab drivers--I was up there a
week ago talking to the Wall Street folks who are already
developing the infrastructure for national cap and trade
system. But both taxi cab drivers wholeheartedly supported the
move to hybrids. So that is a scientific poll.
Governor Spitzer. That is.
Mr. Inslee. Could you give us your thoughts about
decoupling? Some of us think decoupling the revenues of
utilities from the amount of electricity they sell immediately
creates an incentive to help them finance infrastructure
improvements and efficiency and conservation. I am told there
has been some action in your States about that. Could you
enlighten us at all?
Governor Spitzer. Sure. I agree with you entirely.
Decoupling so we actually create an incentive for the utilities
to sell less energy. It sounds counterintuitive. We say to
them, you can make more money by encouraging efficiency, which
is, of course, the policy we want, is something we have sought.
The Public Service Commission is studying that issue right now.
It is something I have encouraged them to move forward on so
the revenue of the utilities, the energy generators does not
depend upon merely selling more. But we can say, by promoting
efficiency, you will do better and the entire economy will
thrive.
Mr. Inslee. We have made efforts in our current energy bill
actually have a Federal requirement for local communities to
adopt energy efficient building codes. The first time ever the
Federal Government would have any entry into that field. It
does not have any sanction attached to it. It calls under local
communities under Federal law required to do this, but has
absolutely no sanction involved in it. If we do this, will that
be of assistance to local leaders to get them to move forward
to building codes or do we have to have a sanction associated
with it to actually make this an effective tool of national
policy?
Governor Napolitano. Well, I always find the ability--I am
a former attorney general--the ability of a sanction is nice
leverage to get communities to move in the right direction. We
are doing it voluntarily now and we are leading by example. And
my executive order in Arizona I have directed that State
buildings be built to lead standards in order to meet really
the environmental requirements of the age in which we live
moving forward.
And I have encouraged our cities to follow that example. I
have not mandated it. But if you are going to go and go vote
for a mandate, it seems to me there ought to be something
associated with it.
Mr. Inslee. Well, we are pushing it. I haven't got there
yet. Last question about auctions, some of us believe the
larger percentage of auction the sooner the better as far as
the real economic ramifications. Could you give us your
comments about them and how you decided on a particular
percentage of auction?
Governor Spitzer. We moved to 100 percent auction on the
theory that implicit in your statement, if you auctioned off
the allowances, then you create a greater incentive and greater
opportunity for the market to actually value the allowance, and
so we just think it will work better. As I said in my
testimony, I believe it has not been done elsewhere. So we will
have to wait and see how it works before we can state
definitively. But we believe theoretically, it is the right way
to go.
Mr. Inslee. Thank you very much.
The Chairman. The gentleman's time has expired. And all
time for questions has expired. Thank you, first of all for
your bold leadership. It is a real example to the country. We
do have an intention to bring an energy bill to the House floor
in the next 4 weeks. We will hopefully increase the fuel
economy standard to 35 miles per gallon, create 36 billion
gallons of renewable fuels and have a 15 percent electricity
standard for the whole country, in addition to having standards
for all appliances and buildings going forward in the country.
And that would have the effect of reducing by 40 percent the
greenhouse gas emissions of our country by 2030 in terms of the
goal for our country.
But we need your leadership. And without question, you are
driving this entire process. That is why the Congress is
responding. Your leadership is very much appreciated. We thank
you for it. And with that, this hearing is adjourned.
[Whereupon, at 11:35 a.m., the committee was adjourned.]
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