[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



   BLOWING IN THE WIND: RENEWABLE ENERGY AS THE ANSWER TO AN ECONOMY 
                                 ADRIFT

=======================================================================

                                HEARING

                               before the
                          SELECT COMMITTEE ON
                          ENERGY INDEPENDENCE
                           AND GLOBAL WARMING
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 6, 2008

                               __________

                           Serial No. 110-27

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



             Printed for the use of the Select Committee on
                 Energy Independence and Global Warming

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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, Ranking Member
JOHN B. LARSON, Connecticut          JOHN B. SHADEGG, Arizona
HILDA L. SOLIS, California           GREG WALDEN, Oregon
STEPHANIE HERSETH SANDLIN,           CANDICE S. MILLER, Michigan
  South Dakota                       JOHN SULLIVAN, Oklahoma
EMANUEL CLEAVER, Missouri            MARSHA BLACKBURN, Tennessee
JOHN J. HALL, New York
JERRY McNERNEY, California
                                 ------                                

                           Professional Staff

                     David Moulton, Staff Director
                       Aliya Brodsky, Chief Clerk
                 Thomas Weimer, Minority Staff Director
                 Jonathan Phillips, Professional Staff








                            C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Edward J. Markey, a Representative in Congress from the 
  Commonwealth of Massachusetts, opening statement...............     1
Hon. F. James Sensenbrenner, Jr., a Representative in Congress 
  from the State of Wisconsin, opening statement.................     5
Hon. Earl Blumenauer, a Representative in Congress from the State 
  of Oregon, opening statement...................................     6
Hon. John Shadegg, a Representative in Congress from the State of 
  Arizona, opening statement.....................................     6
Hon. Hilda Solis, a Representative in Congress from the State of 
  California, opening statement..................................     8
Hon. Emanuel Cleaver II, a Representative in Congress from the 
  State of Oregon, opening statement.............................     8
    Prepared Statement...........................................    10
Hon. Eliot Engel, a Representative in Congress from the State of 
  New York, opening statement....................................    11

                               Witnesses

Vic Abate, Vice President, Renewable Energy, General Electric....    11
    Written Testimony............................................    14
    Answers to submitted questions...............................    86
Blair Swezey, Senior Director, Solar Markets and Public Policy, 
  Applied Materials..............................................    22
    Written Testimony............................................    25
    Answers to submitted questions...............................    96
Bill Unger, Partner Emeritus, Mayfield Fund, Environmental 
  Entrepreneurs (E2).............................................    37
    Written Testimony............................................    39
Barbara D. Lockwood, P.E., Manager, Renewable Energy, Arizona 
  Public Service Company.........................................    55
    Written Testimony............................................    57
    Answers to submitted questions...............................    99
Bianca Jagger, Chair, The World Future Council...................    64
    Written Testimony............................................    67
Tom Buis, President, National Farmers Union......................    72
    Written Testimony............................................    74

 
   BLOWING IN THE WIND: RENEWABLE ENERGY AS THE ANSWER TO AN ECONOMY 
                                 ADRIFT

                              ----------                              


                        THURSDAY, MARCH 6, 2008

                  House of Representatives,
            Select Committee on Energy Independence
                                        and Global Warming,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:43 a.m., in 
Room 2175, Rayburn House Office Building, Hon. Edward Markey 
(chairman of the committee) presiding.
    Present: Representatives Markey, Blumenauer, Inslee, 
Larson, Solis, Herseth Sandlin, Cleaver, Hall, McNerney, 
Sensenbrenner, Shadegg, Walden, Sullivan, Blackburn and Miller.
    Also Present: Representative Eliot Engel of New York.
    The Chairman. This hearing of the Select Committee on 
Energy Independence and Global Warming is called to order. 
Yesterday, President Bush addressed the Washington 
International Renewable Energy Conference to once again say 
that the United States has to get off oil. But this 
administration's rhetoric does not match the reality that it is 
continuing to defend Big Oil at the expense of American 
consumers, our economy and the planet.
    After nearly eight years of this administration's backwards 
energy policy, the oil companies now have us over a barrel. 
Today, after OPEC refused to answer President Bush's plea to 
open the spigots, oil prices broke yet another all-time record, 
rising above $105 per barrel, up from $30 a barrel when 
President Bush took office. And consumers are paying the price 
at the pump. Gas prices have now reached a nationwide average 
of $3.18, more than doubling since the President took office. 
The prospect of $4 gas may be news to the President, but it is 
not news to the American people, who are being tipped upside 
down every time they fill up.
    Skyrocketing energy prices are also hurting the U.S. 
economy. The Department of Labor reported that the economy lost 
17,000 jobs in January, the first monthly decline in four 
years.
    But we have a new driver of economic growth and job 
creation waiting to be unleashed. We are on the cusp of a 
renewable energy revolution. Last year, we led the world by 
installing 5,244 megawatts of new wind power, roughly 30 
percent of all new electricity generation installed in the 
United States. Solar photovoltaic installation also grew by 
more than 80 percent in 2007.
    Transitioning to a green economy has the potential to 
create hundreds of thousands of green jobs, generating economic 
opportunity everywhere from the hearts of our cities to the 
heartland of our country. An analysis by the Clean Tech Venture 
Network estimated that as many as 500,000 new green jobs could 
be created by 2010. But the tax incentives that have driven 
this growth of renewable energy are poised to expire once 
again.
    In recent years when these tax incentives have been allowed 
to lapse, the impact has been dramatic. For example, new wind 
installation dropped between 77 and 93 percent each of the 
three times that the production tax credit expired since 2000. 
If we do not provide certainty to investors by extending these 
tax incentives early this year, we are likely to see the recent 
growth of renewable energy grind to a halt.
    Our economy and our planet cannot afford it. If the tax 
credits for solar and wind expire this year, it will lead to an 
estimated $19 billion in lost investments, and 116,000 lost job 
opportunities through 2009.
    Last week, the House passed legislation that would repeal 
unnecessary tax breaks for the largest oil companies and use 
those funds to extend those vital tax incentives for wind, 
solar and other renewable technologies. But rather than join 
the overwhelming bipartisan majority supporting this bill that 
would begin to restore the long-term health of our economy and 
our planet, the Bush administration is continuing to stand with 
Big Oil in opposition.
    In April of 2005, President Bush said, quote, ``with 55 
dollar a barrel oil, we don't need incentives for oil and gas 
companies to explore.'' Well, now, with that price nearly 
double, our economy on the brink of recession and our planet's 
thermometer rising, it is time for this administration to 
finally back up its rhetoric and support incentives for wind 
and other renewables that will reduce global warming pollution, 
not make it worse; create jobs rather than hurt consumers; and 
turn our economy green rather than push it deeper into the red.
    And now I would like to turn and recognize the Ranking 
Member of the Select Committee, the gentleman from Wisconsin, 
Mr. Sensenbrenner.
    [The prepared statement of Mr. Markey follows:]

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    Mr. Sensenbrenner. Thank you very much, Mr. Chairman. As 
I've said many times, promoting and advancing technology must 
be a key part of any global warming or energy security policy, 
and I am pleased that the chairman has scheduled this hearing 
today on renewable energy technology. This week people came to 
Washington from all over the world to talk about renewable 
energy.
    President Bush addressed the Washington International 
Renewable Energy Conference yesterday, not to mention the 
scores of other government and business leaders who were here 
to examine the future of worldwide renewable energy production. 
The reason that everybody's talking about renewable energy 
production is because its future role is a vital part of the 
world's economy.
    Traditional fossil fuels are and will remain a key source 
of worldwide energy production, but just like a strong 
investment portfolio that includes a diverse group of stocks 
and bonds, future energy portfolios should include a diverse 
array of energy technologies, including fossil fuels, renewable 
energy and nuclear power. On that point I am happy that the 
chairman has also scheduled a hearing for next week on nuclear 
energy technology. Nuclear power is safe, clean and produces no 
greenhouse gases. It, too, must be part of a diverse energy 
portfolio.
    But diversity is the key. When it comes to energy security 
or environment protection, different energy technologies work 
better in different places. Each has its benefits and each has 
its drawbacks. For example, wind energy is a promising source 
of clean, renewable power. But the wind doesn't blow 
consistently and some areas are better for wind power than 
others.
    As Interior Secretary Dirk Kempthorne noted at the 
conference yesterday, wind farms can hurt bird populations, 
some of which are already under stress. The Audubon Society has 
noted that the average population of common birds has declined 
70 percent since 1967. So placing wind farms in places that 
will harm bird operations, bird populations, does not advance 
the cause of renewable energy, Secretary Kempthorne said, and I 
agree.
    In the right places, wind farms will be a great source of 
renewable energy, but the shoe doesn't fit every footprint. 
Likewise, solar power is a great resource but mostly in areas 
where large tracts of land are available for use and the sun 
shines consistently. These should be just two options in a 
diverse energy portfolio.
    The Energy Information Administration recently reported to 
the Senate its projections for future energy production, and 
the use of renewables in the U.S. will nearly double by 2030. 
But even then, renewable energy won't produce as much 
electricity as nuclear power currently does. The nuclear power 
only accounts for about 20 percent of the nation's electricity 
production. That's why maintaining diverse energy resources is 
a top priority.
    By focusing on energy technologies like renewables and 
nuclear, combined with energy efficiency, the U.S. can meet 
many of the principles I believe are vital for any global 
warming policy. These technologies can help produce verifiable 
environmental benefits, and development of these technologies 
can help create jobs and improve the economy, which everybody 
agrees is a good thing.
    I thank the witnesses for coming to enlighten us about the 
status of these technologies. I look forward to hearing more 
about them and yield back the balance of my time.
    The Chairman. The gentleman's time has expired. The chair 
recognizes the gentleman from Oregon, Mr. Blumenauer.
    Mr. Blumenauer. Thank you, Mr. Chairman. In 319 days, the 
United States will begin a new era where we will, no matter who 
is elected president--Mr. McCain, Ms. Clinton, Mr. Obama--we 
will have a Federal Government that is no longer resisting 
working with the rest of the world on issues of climate change 
and global warming, and there's strong signals that we will be 
moving more aggressively into a carbon-constrained economy.
    There are those that talk about the future. I think our 
witnesses here today will demonstrate that that era is here 
now, in terms of not just the promise of renewable energy but 
its practice. And I had a chance to review some of the 
testimony. I'm familiar with some of what's going on. I think 
this is an important statement about where we are.
    It is interesting that the era is here. The Federal 
Government needs to catch up. The Federal Government can learn 
from some of our witnesses about how to be a more sophisticated 
customer for energy. The Federal Government, as the largest 
consumer of energy in the world, has an opportunity to change 
dramatically, not just our carbon footprint, but bring many of 
these things to scale. We need to have a broad policy framework 
like a renewable portfolio standard that would help accelerate 
this in a way that enhances the market.
    Last but not least, we need to realign our massive array of 
tax subsidies. The production tax credit you've referenced will 
be extended this year. It's outrageous that it has taken this 
long, and it is not something that is done on a multiyear basis 
rather than guessing year to year. We clearly do not need to 
give as much of a subsidy to the large oil companies that have 
found a way to make a profit, but there are some industries and 
technologies that are here today where a little bit of federal 
assistance could make a big difference with a fraction of that 
money.
    I look forward to the hearing and appreciate your arraying 
it in this way.
    The Chairman. I thank the gentleman. The gentleman's time 
has expired. The chair recognizes the gentleman from Arizona, 
Mr. Shadegg.
    Mr. Shadegg. Mr. Chairman, thank you very much for holding 
this hearing. I would like to start by welcoming a very 
important witness here today, Ms. Barbara Lockwood, who is the 
manager of Renewable Energy at Arizona Public Service Company. 
Barbara is here to talk about a new project that I'm very proud 
of that Arizona Public Service Company has just announced. It 
is the construction of the largest solar power plant in the 
world in my home state of Arizona. Barbara, thank you for being 
here.
    I can't pass up this opportunity to tout the advertising 
campaign that is making Arizonans aware of this project. They 
take a weatherman--he's not a real weatherman--put him on 
camera and say, you know, here's the forecast for the next 
three days. Sunny, hot. Sunny, sunny, sunny, hot. Next week 
it'll be sunny, hot, sunny, sunny, hot. And in June, it will be 
sunny, hot, sunny. If you're getting married in August, 
however, it'll rain. He pauses and says, no, just kidding. 
It'll be sunny and hot.
    The Arizona people are embracing that campaign, and I am 
very excited about this project. I want to compliment Arizona 
Public Service. Obviously, technology is a part of the path 
forward. Solar energy needs to be a part of the path forward. 
And Arizona is emblematic of this entire issue, because in 
Arizona we have tremendous growth. The state is the second 
fastest growing in the nation. The city in which I live and 
represent is one of the fastest growing in the nation, and I am 
thrilled that we are moving forward both with technology in 
every area, but also particularly with technology in 
renewables.
    In that vein, I'd like to point out something that has 
become at least a little bit of a trademark of my own, Mr. 
Chairman. I know yours is brilliantly funny opening statements. 
You may recall that years ago we did a hearing on renewables in 
the Commerce Committee, and I brought in the hydrologic cycle. 
And I want to point out, I took it out of a third grade text or 
a fifth grade text.
    We were discussing at that time the issue of renewable 
energy, and in that particular piece of legislation, hydro was 
not considered renewable energy. And so I brought--I went to 
one of my staffers whose wife taught grade school, and I said 
does she happen to have a copy of the hydrologic cycle in a 
textbook? And they said, sure. Let's see if we can find one. 
And they found this one. And of course it shows, you know, rain 
evaporating up out of the ocean, coming into the clouds, the 
clouds move over the land and then come back down.
    I would argue that we need to focus on the fact that 
hydropower needs to be an important part of this entire 
discussion. It is one of the single most efficient forms of 
renewable energy. Ninety percent of the available energy from a 
hydro power plant can be converted into electricity. It is 
emissions free, Mr. Chairman, so it addresses the issue of a 
carbon footprint. And I would urge my colleagues here as they 
look at renewable energy to focus on that.
    There are new possibilities of in-stream flow. In the old 
days when we thought about hydropower we thought about you have 
to build a dam and put a turbine in the dam and then let the 
water out of the dam, and there are environmental consequences. 
We've actually gotten better since then. We can now do in-
stream flow.
    I just want to conclude with one fact. Today in Arizona, 
Glen Canyon Dam is producing one-third less power than it is 
capable of because of environmental damage downstream. That is 
the equivalent of two coal or natural gas-powered plants and 
their carbon footprint. If we were more innovative, if we used 
technology to a greater degree, we could create a second 
downstream--downstream, a second dam, operate that solely for 
environmental purposes, operate Glen Canyon Dam for 
hydroelectricity purposes, and eliminate the need for those two 
coal-fired plants.
    I thank you, Mr. Chairman. I regrettably have another 
hearing that I'll have to attend and will miss part of this 
hearing, but I commend you for holding it. And, again, I 
commend Arizona Public Service Ms. Lockwood for her testimony.
    The Chairman. The gentleman's time has expired. The chair 
recognizes the gentlelady from California, Ms. Solis.
    Ms. Solis. Thank you, Mr. Chairman, and thank the witnesses 
for being here this morning as well. I, too, have another 
conflicting hearing that I'll have to leave to attend to. But I 
just wanted to touch on the economic crisis that we're facing 
across the country, but particularly in areas like mine.
    We just heard from the Department of Labor in their recent 
reports that we've lost about 17,000 jobs in January. In my 
district, in East Los Angeles and Southern California, 
unemployment has reached above 7.2 percent, and we still don't 
have an accurate figure for a lot of our youth that have also 
been unemployed.
    We've seen high levels of poverty, homelessness, and the 
last thing that people want to talk about is going to the 
gasoline station and having to fill up and putting in more than 
$50 to fill up half a tank. The prices there are outrageous, 
above $3.60 per gallon.
    A recent report that we know in the American Solar Energy 
Society estimated back in 2006 that renewable energy and the 
energy sector generated, however, 8.5 million jobs, nearly a 
trillion dollars in revenue to the United States. And jobs in 
these sectors, as we know, provide livable wages, above the 
minimum wage, and in many cases will not be outsourced. They 
will be jobs that can stay here on our shores.
    In this time of economic turbulence, it's important that we 
support those sectors of our economy that are providing that 
incentive. And I'm proud that last week the House passed the 
Renewable Energy and Energy Conservation Tax Act. I heard 
personally from many of our medium and small-sized businesses 
in Los Angeles at a recent event I held at the East LA Skill 
Center where we're finding that individuals are getting 
involved in training segments of our society that would 
otherwise not have an opportunity to get involved in placement 
and development of solar panels.
    And there were many people there as businesses that were 
pleading with me, ``Congresswoman, when is the Federal 
Government going to provide relief so we can provide the kinds 
of funds, the capital investment so that we can prolong these 
kinds of jobs?'' My answer to them is I will do whatever I can 
as a part of--a Member of Congress here and that serves on this 
committee, but also ask them to also talk to our President and 
to the other side of the aisle. Because indeed, this is 
something that affects all of us.
    I look forward to hearing from you. I know that we have a 
lot to do. Green collar jobs is an area that I've been working 
on. The President did sign a bill that would allow for $125 
billion to be spent to create at least at a minimum 3 million 
jobs. Again, those jobs are very important to us. Help us. 
Let's step up to the plate. And I look forward to hearing from 
each and every one of you. Thank you.
    The Chairman. The gentlelady's time has expired. The chair 
recognizes the gentleman from Missouri, Mr. Cleaver.
    Mr. Cleaver. Thank you, Mr. Chairman, and thank you for the 
hearing. I would like to express appreciation to our august 
panel today. Let me apologize in advance. I'm going to be 
running in and out. I'm on the Financial Services Committee, 
which is right around the corner, and it starts at ten, so I'll 
be shuttling in between.
    But I appreciate your presence here and I appreciate the 
fact that we are dealing with this energy, renewable energies 
issue, and the need to create green jobs. As the Federal 
Government becomes more and more sensitive, and I think Mr. 
Blumenauer is absolutely right--it doesn't matter who the 
president is. We're going to move deeper necessarily into the 
world that is becoming green-conscious. And we are going to 
need to create green jobs.
    The committee I'm on, which also deals with housing and 
oversight for the Department of Housing and Urban Development, 
we are now requiring that all new HUD housing contain or be 
built with architects--by architects who create green houses. 
And I think you're going to see more and more legislation 
containing components that will require the greening of however 
we are spending our federal dollars. And so if we're going to 
do that, it seems to me that we need to create people who can 
handle those jobs, people who can put in solar panels.
    I live in a city, one of the largest cities geographically 
in the country, 322 square miles with more circumferential 
highways than any other city per capita in the United States. 
We have one E-85 service station in that large area. And I'm 
told I drive an E-85 car that we are going to have a shortage 
of mechanics, for example, who can work on hybrids and E-85 
vehicles. And so we are going to move into this new era, and 
unless we make preparations now, we're not going to have the 
workers who are going to be able to do the jobs to sustain the 
era we're trying to create.
    And so, hopefully, you will be able to help provide us with 
some direction today that we might be able to use as we further 
sensitize Congress and the nation on the necessary changes that 
we've got to make as a nation.
    I yield back the balance of my time.
    [The prepared statement of Mr. Cleaver follows:]

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    The Chairman. Great. The gentleman's time has expired, and 
all time for opening statements by members of the Select 
Committee has expired, but we see that we have a guest here, 
Eliot Engel, a congressman from New York, and would the 
gentleman like to be recognized?
    Mr. Engel. Yes. Thank you. Thank you very much, Mr. 
Chairman. I'll be very brief. And thank you for letting me 
participate. And this is obviously very important. I look 
forward to hearing all the witnesses this morning, especially 
my friend Bianca Jagger, chair of the World Future Council. 
Bianca has fought for many years for human rights as a human 
rights activist, and in many ways, we're talking about human 
rights. Because if we do what we're supposed to do with 
renewable energy, it's certainly a win for everybody.
    I was looking at the notes that were passed out, Mr. 
Chairman, and one of the things that caught my eye is renewable 
energy tends to have higher construction and maintenance cost 
and lower or zero fuel cost, while fossil energy has the 
reverse cost structure. As a result, renewable energy 
technologies lead to a higher number of jobs per unit of energy 
generated compared to conventional fossil fuels. The 
construction, manufacturing, installation, operation and 
maintenance jobs produced by a megawatt of photovoltaic solar, 
for example, is 7 to 11 times greater than the number of jobs 
generated by an equivalent amount of coal or gas-generated 
electricity. So we're talking about clean air. We're talking 
about helping with global warming, and we're talking about 
creating new jobs and driving economic growth. It's certainly 
in my opinion the direction that our country should go in. We 
ignore global warming obviously at our own peril, and I believe 
that tax incentives for renewable energy is certainly the way 
to go. And I'm glad, as Ms. Solis said, that last week we 
passed a bill giving tax incentives, Renewable Energy and the 
Energy Tax Act. I really believe only government can drive 
this, and that's why this hearing this morning is so important.
    So I thank you for letting me participate, and I am eagerly 
awaiting the testimony of our witnesses. Thank you, Mr. 
Chairman.
    The Chairman. Thank you, and we welcome you, sir, to this 
hearing. And that completes the opening statements.
    We'll now turn to our very distinguished witnesses, and our 
first one is Mr. Vic Abate, who is the Vice President for 
Renewable Energy from General Electric. This has been an 
incredible growth story. We're looking forward to hearing more 
about it. You have five minutes, Mr. Abate, whenever you are 
ready.

   STATEMENT OF VIC ABATE, VICE PRESIDENT, RENEWABLE ENERGY, 
                        GENERAL ELECTRIC

    Mr. Abate. Thank you, Mr. Chairman and members of the 
committee. I appreciate this opportunity to testify on 
renewable energy, the economy, its potential to stimulate 
investment and job creation, and the critical importance of 
government policy in realizing this potential.
    GE Energy is a power generation technology leader with more 
than 100 years of industry experience. Our global team consists 
of 36,000 employees. We operate in over 700 sites and in more 
than 100 countries. Our power generation business is a diverse 
portfolio consisting of thermal, gasification, nuclear and 
renewable energy technologies such as wind, solar and biomass.
    With energy demand increasing dramatically and growing 
worldwide pressure to address greenhouse gas emissions, GE 
believes firmly that renewable energy must become an integral 
part of the 21st century energy mix. Supportive government 
policy has enabled the U.S. to become the global leader in new 
wind power installations. Last year the U.S. added over 5,000 
megawatts, over 25 percent of the world's total wind power, and 
that's up from 55 megawatts a decade ago, so tremendous growth.
    The U.S. installed over 45 percent--the installed base grew 
over 45 percent and now totals 16.8 gigawatts in 34 states and 
accounts for over 1 percent of the nation's electricity supply 
and powers over 4.5 million homes from this resource. Wind 
power accounted for 30 percent of all nameplate generation 
capacity added in the United States last year, second only to 
natural gas, and the U.S. is on pace to surpass Germany and 
become the nation with the largest installed base of wind power 
by the end of 2009.
    The growth in wind energy is creating real economic energy 
security and environment benefits. According to the American 
Wind Energy Association, last year the industry spurred $9 
billion in investment and created more than 50,000 new jobs. 
Much of this job growth has occurred in areas that have been 
hardest hit by manufacturing job losses. The installed base for 
wind power also displaces 3 percent of the natural gas 
consumption and avoids the emissions of 28 million tons of 
carbon dioxide from traditional power plants, the equivalent of 
taking 6 million cars off the road.
    Policy-driven growth of the wind industry in the U.S. has 
helped GE expand its wind business revenues from less than $1 
billion in 2004 to more than $6 billion this year. Over 8,000 
of GE's 1.5 megawatt wind turbines have been installed 
worldwide, a number expected to exceed 10,000 by the end of 
this year.
    Since entering the wind industry in 2002, GE has invested 
over $700 million in technology, increasing its wind turbine 
production six-fold and tripled its U.S. wind turbine assembly 
sites. We've expanded capacity from about 10 wind turbines per 
week to making 13 a day, and we've grown renewable energy jobs 
at GE to more than 2,700.
    GE has also tripled the number of its suppliers, who now 
account for in excess of 2,000 U.S. jobs and cover 15 states. 
We see significant future job creation potential from wind 
energy and estimate that sustaining the growth rate we've seen 
over the past five years for the next five would triple the 
size of the industry and of the associated jobs.
    To realize the potential for wind power we must meet three 
challenges: Technology, supply chain and policy. The cost of 
wind electricity has dropped 80 percent over the past 20 years, 
and GE's technology investments in efficiency, reliability and 
grid integration will continue to improve the competitiveness 
of wind power. GE is also driving supplier quality in wind 
industry through its Lean Manufacturing and Six Sigma 
processes.
    The most critical challenge facing the U.S. wind industry 
is policy uncertainty. Long-term stable, predictable incentives 
reward innovation and enable technology manufactures and 
suppliers to invest and expand capacity to keep up with the 
growing demand. The current growth of the U.S. wind market is 
underpinned by the repeated extensions in 2005 and 2006 of the 
federal production tax credit that's set to expire at the end 
of 2008. Expiration of the tax credit would have a devastating 
impact on the domestic wind industry. Prior expirations at the 
end of 1999, 2001 and 2003 reduced wind power installations in 
the following year by 73 to 93 percent. A report estimates that 
failure to extend the credit this year would cause a 90 percent 
drop in wind installations, resulting in $11.5 billion lost 
investment and 76,000 job opportunities in 17 states in 2009 
alone. Jobs that might have been created in the United States 
could shift instead to overseas areas like Europe and China, 
which are strengthening their wind policies.
    In summary, GE believes that the United States is well 
positioned to benefit from the growth of the renewable energy 
industry. However, continued growth of this industry is 
dependent on stable, predictable policy. We urge the U.S. 
Congress to act immediately and extend the exiting production 
tax credit for wind energy.
    Thank you for this opportunity to present this testimony, 
and I look forward to your questions.
    [The prepared statement of Mr. Vic Abate follows:]

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    The Chairman. Thank you, Mr. Abate, very much.
    Our second witness is the Senior Director for Solar Markets 
and Public Policy for Applied Materials, Mr. Blair Swezey. 
Whenever you're ready, sir, please begin.

 STATEMENT OF BLAIR SWEZEY, SENIOR DIRECTOR, SOLAR MARKETS AND 
                PUBLIC POLICY, APPLIED MATERIALS

    Mr. Swezey. Thank you, Mr. Chairman, and members of the 
committee.
    The Chairman. Could you turn on your microphone, please?
    Mr. Swezey. Oh, I'm sorry. Thank you, Mr. Chairman, and 
members of the committee, for providing us with the opportunity 
to testify today. We are very pleased to present our corporate 
perspective on the potential of the solar industry to create 
domestic jobs while at the same time providing an important 
solution to some of our most pressing energy and environment 
needs.
    Applied Materials is a Fortune 500 company headquartered in 
Silicon Valley that employs approximately 14,500 workers 
worldwide, including nearly 8,000 here in the United States, 
with additional production facilities--I'm sorry. Our primary 
manufacturing facilities are in Austin, Texas, with additional 
facilities in Germany and Israel. We sell more than 80 percent 
of our products outside the United States, making us an 
important positive contributor to the U.S. balance of trade.
    We recently celebrated our 40th year as a company and have 
a proud heritage of providing productivity-enhancing 
nanomanufacturing tools and equipment to the semiconductor and 
flat-panel display industries. We have now extended this 
technology and manufacturing expertise to providing the tools 
for production of solar electric photovoltaic or PV modules.
    We see considerable growth potential in the rapidly 
expanding solar market. Our technology and production scale 
helped reduce the cost of transistors by a factor of 20 million 
between 1974 and today. Similarly, the price of flat panel 
displays has dropped by a factor of 20 in the past decade.
    We fully expect to have the same impact on driving cost 
reductions for PV panel production by a factor of two to three, 
which will put solar electricity prices on par with grid power 
prices for large areas of the world. The key is getting to 
large-scale manufacturing by creating large markets.
    The sheer magnitude of our energy supply challenges--
meeting continued global demand growth while assuring economic 
prosperity, domestic energy security, and environmental 
quality--dictates that we accelerate the development of all 
available energy resource options. The question is not one of 
renewable resource availability, but of the economics of 
deploying the technologies to exploit these resources and how 
rapidly industry can ramp up the manufacturing capacity to 
produce the technologies.
    First to economics. Electricity generation from 
photovoltaics is currently anywhere from two to three times 
more expensive than electricity generation from conventional 
sources. Nevertheless, global PV production has been growing at 
a rapid clip, rising at a rate of more than 40 percent per year 
over the past decade. This growth is a direct result of 
governmental policies that have been established here in the 
United States and around the globe.
    In the U.S., the Energy Policy Act of 2005 established a 30 
percent investment tax credit, or ITC, for residential solar 
installations and raised the existing business energy ITC from 
10 percent to 30 percent. A reduction in the credit would 
absolutely send the wrong signal to the investment community 
that is so critical in providing the capital for solar industry 
expansion. And so we commend the House of Representatives for 
its recent action in passing H.R. 5351, which includes 
extension of these tax credits and other important changes.
    The other key element is domestic jobs and economic 
development. The solar industry creates manufacturing jobs with 
labor that is readily transferrable from other manufacturing 
industries. The United States is already a base for solar panel 
manufacturers and dozens of new startup operations. Applied 
Materials itself now employs about 900 employees in its Energy 
and Environmental Solutions group, which is just two-and-a-half 
years old.
    While overall U.S. manufacturing job numbers continue to 
decline, renewable energy industries offer a whole new 
generation of manufacturing job potential. However, the fact 
that companies develop the technology here in the United States 
does not guarantee that they will also locate the production 
here in the United States. Achieving the job creation potential 
of the solar industry depends on continuing policy support to 
build the market.
    The Solar Energy Industries Association, of which Applied 
Materials is a member, estimates that extending the current set 
of federal solar tax credits will create 55,000 new jobs in the 
solar industry and more than $45 billion in economic 
investment. Conversely, a recent study by Navigant Consulting 
estimated that failure to extend the credits will cost the 
country nearly 40,000 jobs and more than $8 billion of 
investment just through 2009.
    Industry will locate where production conditions are most 
favorable, and manufacturers are also likely to invest and 
locate close to where viable end markets exist. However, 
companies need to see a clear market growth pathway to commit 
the substantial resources needed to ramp production capacity 
and output.
    Unfortunately, in the case of PV manufacturing, many U.S. 
companies are increasingly looking abroad to expand their 
production, in part because of the uncertainty over future 
policy support. Speaking from our own corporate experience, 100 
percent of our solar factory orders have come from outside the 
United States. So while our domestic business is advancing, the 
opportunity for a much larger U.S. industry platform is idle.
    In summary, the PV industry is currently transitioning from 
one of component assembly operations to large scale 
manufacturing, which will dramatically increase the scale and 
throughput of PV module production in coming years. Solar 
photovoltaics is following a well documented pattern of cost 
decline, and with new technology approaches, is poised to 
create an accelerated cost reduction path. With our abundance 
of solar and other renewable energy resources, we are presented 
with the opportunity to manufacture our way toward domestic 
energy security and sustainability.
    As a nation, we need to seize this opportunity. Applied 
Materials will do its part to make America competitive in this 
important and growing industry, and we stand ready to work with 
policymakers to develop a sound policy framework that will 
enable us and other innovative U.S. companies to lead the way.
    This concludes my prepared remarks, and I look forward to 
your questions. Thank you again for the opportunity to speak 
before you today.
    [The prepared statement of Mr. Blair Swezey follows:]

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    The Chairman. Thank you Mr. Swezey.
    Our next witness is Mr. Bill Unger from the Mayfield Fund, 
and he is here representing Environmental Entrepreneurs. We 
welcome you, sir.

   STATEMENT OF BILL UNGER, PARTNER EMERITUS, MAYFIELD FUND, 
                ENVIRONMENTAL ENTREPRENEURS (E2)

    Mr. Unger. Thank you. I'm a Partner Emeritus at Mayfield 
Fund. We're a venture partnership.
    The Chairman. Could you move that microphone up a little 
bit closer, please.
    Mr. Unger. Okay. I'm part of a venture partnership that's 
invested in technology companies since 1970. I'm also a member 
of Environmental Entrepreneurs, which is an organization, a 
volunteer organization of 800 members across 25 states who 
believe that good environmental policy is good economic policy.
    I'd like to thank the chairman and members of this 
committee and the House for their work in passing the Renewable 
Energy and Energy Conservation Tax Act. The extension of these 
incentives that provides an even playing field for all 
technologies is vital for our nation. We also hope that the 
Senate and the President will cooperate and pass this into law. 
It's a critical step to solving our urgent and intimately 
related problems of dependence on foreign energy, our economic 
growth and climate change.
    For example, today, each ten gallon fill-up at the pump has 
been calculated as adding an additional $2.10 to as much as $11 
per gallon when the full cost of the tax incentives, the $50 
billion cost for protecting shipping lanes of oil, and health 
and environmental costs are fully loaded. And this is exclusive 
of the cost of the war. We add these dollars to our debt or pay 
in other ways to the tune of an additional $20 to $100 per 
tankful that is not evident at that particular point. Also, 
since the Energy Policy Act of 2005 was passed, which granted 
$6 billion of incentives to the oil industry, the oil industry 
has spent $112 billion repurchasing their shares on the open 
market. We would like to see a more even playing field.
    I appreciate this opportunity to discuss with you the 
benefits of investment in clean tech jobs, economic growth and 
an improved environment. The need to address climate change is 
immediate. Because of the magnitude of this challenge, this new 
industrial revolution, properly addressed, could create more 
jobs, more economic prosperity, more personal investor, 
corporate and public servant satisfaction than has ever been 
seen for any number of the exciting technological innovations 
of the past.
    The venture industry is proud of its role in job creation 
and bringing new technologies to market. In 2006, venture-
backed companies provided 10.4 million U.S. jobs, and these 
companies had revenues of $2.3 trillion, and we are excited 
about Cleantech. The analysis it sounds like most of you are 
familiar with from UC Berkeley concludes, ``the renewable 
energy sector generates more jobs whether it's measured on per 
megawatt of power installed per unit of energy produced, or per 
dollar of investment than the fossil-fuel-based energy 
sector.'' E2 estimates U.S. cleantech investment by 2010 will 
be $14 billion to $19 billion and will create an additional 
400,000 to 600,000 jobs.
    This is a big opportunity. How does it start? Often with 
the wealth of technologies generated at our own national 
laboratories and our universities. These are national 
resources. Really they're our treasures. DARPA and NIH play a 
crucial role nurturing technology development until the venture 
industry, which invests in product development, becomes 
interested. Our tax dollars paid for much of the pioneering 
work in solar and wind technology at our national labs. Much of 
the basic work for the hybrid engines on the road today was 
done at Stanford University, yet we are not the leaders in 
these fields. Germany, Denmark, Taiwan and Japan seized these 
opportunities and are prospering.
    Since the energy crisis of the '70s, federal energy 
research spending is down significantly. And is this important? 
The market caps of Ford and General Motors are $13 billion 
each, and they're encouraging their employees to find other 
work. Toyota has a $176 billion market cap, and they have 
record employment. With an even playing field in terms of 
policy and federally funded R& D in a variety of technologies, 
we can regain market leadership. The semiconductor industry in 
the 1980s regained world leadership from exactly this kind of 
public-private partnership.
    There's a high degree of technical knowledge spillover from 
the semiconductor and software industries to cleantech. Many of 
the entrepreneurs from these fields are now entering the 
cleantech industry. Their experience is an unmatched resource 
in the world. So this is a great story. Cleantech investors 
love it. In 2006, $2.9 billion was invested in cleantech, 76 
percent increase over the previous year. Cleantech is now the 
third largest venture investment segment. The barriers that 
keep cleantech from growing fast enough to head off the climate 
crisis are inconsistent policy, long-term subsidies for 
conventional industries and trade barriers. These have to be 
corrected.
    A mandatory, comprehensive national cap on greenhouse gas 
emissions, a national renewable energy standard and increased 
R&D funding are necessary. But these measures should not 
preempt states from going even further if they so choose. The 
Manhattan Project, the Marshall Plan, the space program, 
Roosevelt's rural electrification program and Eisenhower's 
interstate highway system are all examples of strong and 
visionary federal leadership. And unlike the Apollo program and 
the Manhattan Project, we can do this with existing 
technologies. We need to be the people the world have been 
waiting for. We need to be the people our children will say 
made the right decisions to give their children a safer, 
healthier and more prosperous place to live.
    I look forward to your questions.
    [The prepared statement of Mr. Bill Unger follows:]

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    The Chairman. Great. We thank you, sir, very much. Our next 
witness is Ms. Barbara Lockwood, who is the manager of 
Renewable Energy for the Arizona Public Service Company. 
Welcome.

  STATEMENT OF BARBARA D. LOCKWOOD, P.E., MANAGER, RENEWABLE 
             ENERGY, ARIZONA PUBLIC SERVICE COMPANY

    Ms. Lockwood. Thank you. Mr. Chairman and members of the 
committee, thank you for the opportunity to provide APS's 
perspective on the economic benefits of renewable energy. As 
Congressman Shadegg mentioned, Arizona is the second fastest 
growing state in the country, growing at three times the 
national average. APS has more than a million customers who at 
their peak consume over 7,000 megawatts of electricity. And 
that electricity demand is growing at a rate of hundreds of 
megawatts each and every year.
    In Arizona, our most abundant renewable resource is 
sunshine. And APS is looking for ways to put the sun to work 
providing electricity. APS is committed to making Arizona the 
solar capital of the world.
    The focus of my comments today are on a particular type of 
solar technology called concentrating solar power, or CSP, 
which is different than the photovoltaic systems or solar 
panels that you typically hear about. APS recently announced 
the Solana Generating Station. Solana is a 280 megawatt solar 
power plant to be located just outside of Phoenix, Arizona. APS 
has signed a long-term contract with Abengoa Solar, the project 
developer and owner, for all of the electricity generated by 
this plant.
    If operating today, Solana would be the largest solar power 
plant in the world. The plant will use nearly three square 
miles of parabolic trough mirrors, and operating at full 
capacity, the plant will provide enough electricity for 70,000 
homes. One of the most important aspects of this technology is 
its ability to capture and store energy for later use. By using 
large insulated tanks filled with molten salt, heat captured 
during the day can be stored and used to produce electricity 
when the sun is no longer shining.
    The value of this can't be underestimated. Because it can 
provide energy even after the sun has set, this technology 
provides the maximum value, and it also provides reliability 
for APS and its customers. Solana also provides significant 
economic benefits to the state of Arizona. The Solana 
Generating Station will provide 1,500 construction jobs and 85 
permanent operations jobs. But that's not the total economic 
impact. All totaled, Solana will result in over a billion 
dollars in economic development for the state of Arizona.
    Today the single biggest obstacle to the success of Solana 
is the potential expiration of the 30 percent federal 
investment tax credit. Without this tax credit, Solana is 
simply not affordable today. I also need to be clear that a one 
or two-year extension of the ITC is not sufficient. While it 
might not be preferable, it is usually acceptable for small 
scale solar projects and for wind projects. But large scale 
solar is different. It takes about three to four years to 
permit and construct a plant like Solana, and we can't begin 
building it until we know when it's finished it's going to be 
eligible for the 30 percent investment tax credit. If a long-
term extension of the investment tax credit is not granted, 
Solana will not be built.
    If the ITC is extended for a sufficient period of time, 
there will be many more plants like Solana in Arizona and in 
the desert Southwest developed in the next five to ten years. 
If not, the industry will lose its momentum and no large scale 
solar plants will be built. The future of large scale solar 
depends on getting those first few plants into operation.
    Thank you, Mr. Chairman and members of the committee for 
the opportunity to share this information with you.
    [The prepared statement of Ms. Barbara D. Lockwood 
follows:]

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    The Chairman. Thank you, Ms. Lockwood, very much. Our next 
witness is Ms. Bianca Jagger, who is the Chair of the World 
Future Council. Welcome. Could you move the microphone up a 
little bit closer and turn it on.

  STATEMENT OF BIANCA JAGGER, CHAIR, THE WORLD FUTURE COUNCIL

    Ms. Jagger. Thank you, Mr. Chairman, and thank you for 
organizing this very important hearing. It is an honor and a 
privilege to be here. I have heard some very important 
testimony about renewable energy and what has been done in the 
United States. Perhaps I'd like to talk about the threat of 
global climate disaster that is no longer out for debate, and 
therefore, renewable energy becomes a must and not just a 
question mark. The majority of scientists are in agreement.
    Governments have previously been reluctant to accept this 
reality. However, notwithstanding all this sobering 
information, the agreements reached in Bali were extremely weak 
and inadequate. And as you know, the role that the United 
States played in Bali was not the most encouraging.
    Climate change is the defining challenge of our age. How to 
meet that challenge while dealing with the already devastating 
consequences of floods, droughts and rising temperatures remain 
the great unanswered question, and the time to answer is 
running out. In its final report, the United Nations 
Intergovernmental Panel on Climate Change stated that the world 
must reverse the growth of greenhouse gas emissions by 2015 to 
avert a global climate disaster. If there is no action before 
2012, that's too late, said Rajendra Pachauri, who headed the 
panel, which shared the Nobel Peace Prize in October with 
former U.S. President Al Gore. What we do in the next two to 
three years will depend and will determine our future.
    But what should we do? I used to believe that reduced 
energy consumption was an important first step, accompanied by 
research and investment into energy efficiency and renewable 
energy sources. I used to believe that it would be enough to 
encourage more localized lifestyle, reducing the need for 
overburdened, polluting transport networks. But after reading 
the most recent scientific findings, I have come to realize 
that even if we begin each of these practices in earnest 
tomorrow, it is simply not enough.
    The time has come to expose the myth that we can avert 
climate catastrophe by small measures and sticky plaster 
measures. In the recent assessment by the highly respected 
climate scientist James Hansen of the NASA Goddard Institute 
for Space Studies, he suggested that the IPCC report, itself 
alarming reading, might even be ``absurdly optimistic.''
    For example, the often-touted ``safe'' figure of 3.6 
degrees Fahrenheit increase in average global temperatures is 
in fact not safe at all. We have already experienced a rise of 
1.31 Fahrenheit in average global temperatures. A rise of 3.6 
Fahrenheit is three times that. Agreeing to a 3.6 Fahrenheit 
target does not avoid the possibility of catastrophe. On top of 
this, the apparently bold target of reducing emissions by 50 
percent does not guarantee that the temperature increase will 
be limited to 3.6 degrees Fahrenheit.
    Hansen estimates sea level rises of 4 to 5 meters this 
century due to melting ice in Greenland and Antarctica. He 
describes how the IPCC report fails to take geological records 
into account and ignores the so-called ``albedo flip'' property 
of water: ``The `albedo flip' property of ice/water provides a 
powerful trigger mechanism . . . a climate forcing that `flips' 
the albedo of a sufficient portion of an ice sheet can spark a 
cataclysm.''
    Hansen is telling us that the poles do not melt in a linear 
fashion, but rather in bursts, and that if the globe warms up 
just a few degrees, it might be enough to trigger a 
catastrophic ice sheet collapse. Such a collapse would not only 
drown most of the world's centers of population, but would 
itself fuel further climate change, since less ice means less 
heat reflected back into space.
    ``The Earth's climate is remarkably sensitive to global 
forcings. Positive and `amplifying' feedbacks predominate. This 
allows the entire planet to be whipsawed between climate 
states. Recent greenhouse gas emissions place the Earth 
perilously close to dramatic climate change that could run out 
of control.''
    ``If we go beyond the point where human intervention can no 
longer stabilize the system, then we precipitate unstoppable 
runaway climate change. That will set in motion a major 
extinction event comparable to the five other extinction crises 
that the Earth has previously experienced.''
    This clearly demonstrates what the World Future Council, 
the organization I chair, is advocating. If we are serious 
about averting climate change catastrophe, we must think in 
revolutionary terms, and transform our way of life, restoring 
rather than destroying life on Earth. We must embark upon a 
global renewable energy revolution. If we are to achieve the 
necessary carbon reduction by 2020, we must replace our carbon-
driven economy with a renewable energy economy. There is no 
time to debate half-measures any longer. The period in which 
they may have been effective has long been passed.
    We have experienced an industrial revolution. We have 
experienced a technological revolution. It will take a global 
renewable energy revolution, similar in scale and consequence 
to those two, to avert catastrophe. As Hermann Scheer, a member 
of the German Bundestag and the World Future Council, said, 
``This cannot be achieved with the method of `talk globally--
postpone nationally,' but only with the method of `think 
globally--act locally, regionally and nationally.' ''
    The beginning of this movement may already be underway. 
Some nations have begun to act, even finding great financial 
opportunities along the way. In Germany, pushes toward energy 
efficiency and renewable energy sources are spurring the 
economy. By 2020, every building must meet high levels of 
energy efficiency. The Feed-In tariffs legislation, which 
guarantees a preferential price for energy produced, will 
create 250,000 jobs.
    The Chairman. Ms. Jagger, could you please summarize the 
statement?
    Ms. Jagger. Sure. It will be crucially important for the 
United States, perhaps led by individual states, to adopt Feed-
In tariffs as a significant way by which to accelerate the 
introduction of renewable energy. The U.S. cannot continue to 
rely on powering its cities, its industries, its farms and its 
transport systems, by energy resources for which there is ever 
greater global competition.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Ms. Bianca Jagger follows:]

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    The Chairman. Great. Thank you, Ms. Jagger, very much.
    And our final witness is Mr. Tom Buis, who is the President 
of the National Farmers Union. Welcome, sir.

               STATEMENT OF TOM BUIS, PRESIDENT,
                     NATIONAL FARMERS UNION

    Mr. Buis. Thank you, Mr. Chairman and members of the 
committee. I am President of the National Farmers Union. We're 
106 years old and represent a quarter million family farms and 
ranches around the country.
    We're here to say to you, Mr. Chairman, and the members of 
the committee that rural America is ready, willing and able to 
do its part to help our nation solve probably our biggest 
economic, national security and environment challenge that 
we've ever faced. We have some experience in renewable energy 
over the past three decades after the first oil embargo in the 
early '70s. A lot of people started talking about renewable 
energy and what we could do.
    We started out with a product called ``gasohol.'' It wasn't 
very efficient both economically or energy-wise, but it took 
about 30 years worth of investment in technology in the 
industry, mostly by farmers, mostly by local people. And we 
really didn't cross that threshold until the Federal Government 
stepped in with a renewable fuel standard, with a mandate which 
gave us certainty for a marketplace.
    We would hope that the same would happen in all types of 
renewable energy. We think a renewable portfolio standard is 
past due. Last year, we did a study on the potential benefits 
to rural America and our nation if you adopted a 20 percent 
renewable portfolio standard for renewable electricity 
generation. And the production of electricity from wind alone 
would result in about a half a billion dollars in payments to 
farmers in leases. Production electricity from renewable 
biomass would result in about $25 billion to farmers growing 
these new crops, and $43.5 to $66 billion in capital would be 
invested in these new clean energy facilities in rural America.
    The types of projects developed also play a critical role. 
A NREL study compared the benefits of local ownership versus 
outside ownership and found that locally owned wind projects 
generate 2.5 times more jobs and 3.1 times more rural economic 
benefits than those with outside ownership. Our policy strongly 
encourages that any federal policies should provide incentives 
and foster the development of locally owned projects.
    Unfortunately, tapping rural America's clean energy 
potential is not likely to occur without the support of 
governmental policies. Community-based wind energy projects 
face additional hurdles because of limited capital access. It's 
becoming increasingly difficult to produce wind generators and 
associated equipment for community wind projects due to the 
size of those projects and a shift towards large-scale 
development processes, not just in the cost but also in the 
infrastructure and access to the grid.
    Moreover, because the PTC can only be used against passive 
income, many community-based projects are not able to fully 
utilize this provision. Most interested parties in these 
community projects are farmers and local citizens that own the 
land with the potential for wind development yet do not have 
sufficient levels of passive income necessary to utilize the 
tax break. We believe it is critical for the federal policy to 
continue to foster the development of renewable electricity 
projects. We support the extension of the PTC. We would hope 
that it would be a longer term so we would get the market 
certainty and investment in the technology that's necessary.
    Thank you, Mr. Chairman. I would be glad to answer any 
questions.
    [The prepared statement of Mr. Tom Buis follows:]

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    The Chairman. Great. Thank you very much. All time for 
statements by the witnesses has expired, so now we'll turn to 
the question and answer period. The chair will recognize 
himself.
    Mr. Abate, you said how many new megawatts were installed 
for wind in 2007?
    Mr. Abate. In the United States, 5,244.
    The Chairman. Five thousand, two hundred and forty-four. 
And that represented 30 percent of all new electricity 
installed in the country last year?
    Mr. Abate. All new nameplate capacity 30 percent, correct. 
Second to only natural gas.
    The Chairman. Natural gas what was percent?
    Mr. Abate. It was first--I believe it was about half.
    The Chairman. About 50 percent?
    Mr. Abate. Yes.
    The Chairman. And I think it was about 10 percent was coal?
    Mr. Abate. Yes.
    The Chairman. And the rest came from all other sources. So 
what would you predict would happen in 2008, this year, if the 
production tax credit is extended?
    Mr. Abate. Well, in--that's a good question. And when you 
look at our view, we can see the next couple of years. The 
market is long on turbines right now with the full confidence 
that the production tax credit will be extended. The pro formas 
for these investors all have that in them. So in 2008, our 
production capacity, if you take what that's scaling to and 
doubling it, it will be between 7 and 8 gigawatts.
    The Chairman. Seven and eight thousand new megawatts?
    Mr. Abate. Yes.
    The Chairman. On top of only 5,200 this year?
    Mr. Abate. Right.
    The Chairman. So what would it project out to then for 
2009? In other words, what's the projection in terms of new 
wind power?
    Mr. Abate. If you just take our order book and what we're 
seeing as far as demand in the market, with a stable policy, by 
2010, this country could be well over 10 gigawatts.
    The Chairman. Ten thousand megawatts every year being 
produced?
    Mr. Abate. Yes.
    The Chairman. And how many new nuclear power megawatts will 
come online this year in the United States, do you know?
    Mr. Abate. None.
    The Chairman. How many next year, do you know?
    Mr. Abate. The same.
    The Chairman. How many in 2010, do you know?
    Mr. Abate. For some time it'll be zero.
    The Chairman. Zero.
    Mr. Abate. And the reason is capacity, to be able to pull 
that off and the investment and the long-term cycle of that 
technology.
    The Chairman. So in other words, if there's 10,000 new 
megawatts every year for 2010, 11, 12, 13, 14, 15, and it could 
actually get larger, huh? So there could be 100,000 new 
megawatts of wind installed in the United States before the 
first 1,000 megawatts of nuclear power comes online?
    Mr. Abate. That's a reasonable assessment, yes.
    The Chairman. Mr. Unger, do you think that's a reasonable 
assessment?
    Mr. Unger. You know, the market----
    The Chairman. Could you move in and turn on the microphone, 
please?
    Mr. Unger [continuing]. Sorry. I think the market will 
speak to that. One of the things that I look at is who is going 
to finance these projects? Public markets, investment bankers 
and the like are very willing to fund wind projects, very 
willing to fund geothermal projects, willing to find biomass 
projects. It doesn't appear to be an appetite today to fund 
nuclear projects. The French are building I think the most 
advanced nuclear technology plant in the world today. It's $2 
billion and it's already years behind schedule. So it's quite a 
bit of uncertainty in the construction cost before they can 
even come online, and the generating costs, which are higher 
than that of wind, certainly don't include what we do with the 
waste. So it creates uncertainty which investors are unhappy 
about.
    And as he says, if we have certainty about tax credits, 
then we have certainty about tying up our money. Venture 
capitalists tie up their money for ten years. And we'd like to 
have that kind of certainty.
    The Chairman. So you're saying that you agree with Mr. 
Abate's projection for how rapidly this is going to increase in 
the wind sector?
    Mr. Unger. Oh, completely. Completely.
    The Chairman. Or is he even being conservative?
    Mr. Unger. He may be being conservative. The nice thing 
about wind and solar is that, you know, we were having this 
conversation before--some states are blessed with a lot of sun. 
Some are blessed with a lot of wind. You can scale these 
plants. But the kind of commercial plants we're talking about 
here are very, very large. But in rural America where there's, 
you know, fewer access to generation lines and the like, you 
can also have smaller plants like this, which create a lot of 
local jobs around local economies. It's very difficult to do 
that with very large coal-fired or nuclear-fired plants.
    The Chairman. And Ms. Lockwood, what do you think is the 
potential in Arizona for solar power by 2015? How many 
megawatts do you think you can be producing?
    Ms. Lockwood. Mr. Chairman, I believe with a long-term 
extension of the ITC, you could see well over 1,000 megawatts 
of large-scale solar built in Arizona alone by 2015, probably 
even more than that.
    The Chairman. Probably even more than that?
    Ms. Lockwood. Mm-hmm.
    The Chairman. And, again, this is all before the first 
nuclear power plant comes online after 25 years. So that's 
pretty big news in terms of what is happening out in the 
marketplace with an extension of the production tax credit for 
renewable energy.
    And at this point my time has expired. I'll turn and 
recognize the gentleman from Wisconsin.
    Mr. Sensenbrenner. Thank you very much, Mr. Chairman. We've 
been on kind of a perpetual debate on tax credit extenders. The 
Ways and Means Committee doesn't want to make any of these 
things permanent, which I believe is a mistake. But that 
frankly is the way it is.
    We may end up getting to the business of prioritizing tax 
extenders to get something through the Senate. I'd like to ask 
each of you that's kind of in the business which two tax 
extenders would you prioritize as being the top two? And I 
would throw in the R&D tax credit as well in terms of 
incentivizing new technologies, so put that on the table. So 
let's start with you, Mr. Abate.
    Mr. Abate. Yeah. I think full value production tax credit 
would be number one for as long as that can work and get it 
through. And as I had said, because of the pro formas that our 
customers have counted on, that's what's in their model. So 
anything different than that would be a disruption, in our 
view.
    Second is investment tax credit for some of the large 
capital projects. You know, wind is more of a production-based. 
The investment tax credit would be number two.
    Mr. Sensenbrenner. Okay. Mr. Swezey.
    Mr. Swezey. Congressman, I'll go back to your original 
statement that I believe sincerely that we need a diverse 
portfolio of energy resources.
    Mr. Sensenbrenner. I'm asking for priorities. I know you 
want it all. We might not be able to give it to all.
    Mr. Swezey. From my company's perspective, we're very 
interested in extension of the solar credit, long-term 
extension to give security to the predictability----
    Mr. Sensenbrenner. And what's number two?
    Mr. Swezey [continuing]. And we're very interested in the 
R&D tax credit as well, because we have----
    Mr. Sensenbrenner. Okay. Mr. Unger.
    Mr. Swezey [continuing]. A very large R&D function at our 
company.
    Mr. Sensenbrenner. Mr. Unger.
    Mr. Unger. I think we would be looking for tax credits that 
would not select one industry over the other. We are 
specifically looking for a playing field that will allow a 
variety of solutions to compete.
    Mr. Sensenbrenner. Okay. Number one and number two.
    Mr. Unger. So if any of the tax credits exclude others, 
then I think we're trying to play economic policy. So R&D 
across the board would be good. You know, production tax 
credits across all technologies, not to consider one technology 
over the other.
    Mr. Sensenbrenner. Okay. Thank you. Ms. Lockwood.
    Ms. Lockwood. Congressman Sensenbrenner, our first priority 
would be long-term extension of the investment tax credit 
because of our solar resource in Arizona. Number two would be 
the production tax credit.
    Mr. Sensenbrenner. Okay. Ms. Jagger.
    Ms. Jagger. Congressman, I think that--I would like to talk 
about a proposal that was made yesterday.
    Mr. Sensenbrenner. I'm asking which tax credits were the 
top two priorities.
    Ms. Jagger. Well, I think an all-across technology tax 
credit, but I will support as well the fitting in tariff that 
was introduced yesterday by Congressman Jay Inslee.
    Mr. Sensenbrenner. Okay. Mr. Buis.
    Mr. Buis. Production tax credit. The PTC and also the 
VTECH, which helps the ethanol and biodiesel.
    Mr. Sensenbrenner. Okay. Thank you very much. I yield back 
the balance of my time.
    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. Mr. Buis, 
thank you for your testimony today and the study that the 
National Farmers Union has done. Chairman Markey and I have 
discussed the issue of the transmission capacity in getting 
these wind resources out of the Great Plains and other parts of 
the country, and we know how important that will be to fully 
maximize the benefits that the wind energy and the solar energy 
in certain areas across rural America have.
    But I entirely agree with you as well about the importance 
of the local ownership and the local use of wind energy rather 
than just exporting these renewable sources out of the states 
that have the most abundant source. So you have stated in a 
number of areas in your testimony the importance of that local 
investment, the importance of altering the PTC to serve as an 
incentive for that local ownership and investment and 
development community-based wind energy, the community-based 
energy development like we've seen in Minnesota.
    Could you talk in just a little bit greater terms about 
where we need to make changes in federal policy as well as 
working with our counterparts in the state legislatures, 
whether that's with net metering or other options available to 
assist farmers and ranchers and rural families not just in the 
lease payments they get for turbines on their land owned by 
larger wind farms and selling those to larger utilities, but 
how we can do more to benefit those rural economies based on 
some of the statistics you gave in job creation?
    Mr. Buis. Thank you, Congresswoman Herseth. I think you 
captured a lot of what's really going on in rural America. 
Every farmer, every rancher, every local person I've met in the 
past two years are so excited about the opportunity to help 
develop energy, not just ethanol, not just biodiesel, but wind 
and solar. And we have these obstacles.
    The state of Minnesota, as you referred to, has a 
community-based requirement for any renewable energy developed 
in that state. Ten percent has to be community owned. And 
that's to carve out some local ownership, you know. We've seen 
in the past in the production of farm commodities when that 
ownership goes away, the money follows. It's taken out of those 
communities. It's not reinvested in those communities. And the 
beauty about ethanol has been its been local ownership. The 
single largest owners and producers of ethanol today are not 
the big multinational grain companies. It's farmers and local 
communities. They own 40 percent of the ethanol production. 
That gets reinvested in the community. You see boards coming 
off the storefronts instead of going up.
    If we allow this, whether it's ethanol or wind or solar, to 
all be taken out of that local control where they're just 
paying for a footprint on a wind tower, I think we'll lose 
those jobs, we'll lose those benefits and we'll lose a 
tremendous opportunity.
    Ms. Herseth Sandlin. Thank you. And then the only other 
point I would make is the further work that we'll do with you 
and, Chairman Markey, if we can pursue this, the issue of the 
PTC, how it's structured because it's currently only against 
the passive income.
    The Chairman. Absolutely.
    Ms. Herseth Sandlin. Okay. Thank you. And thank you, Mr. 
Chairman.
    The Chairman. Thank you. The gentlelady's time has expired. 
The chair recognizes the gentleman from California, Mr. 
McNerney.
    Mr. McNerney. Thank you, Mr. Chairman. And as many of you 
know, I spent two decades of my career in the wind industry 
business, and I understand exactly how the production tax 
credit affects the industry and how the cyclical pattern has 
put us way behind the Europeans and other parts of the world.
    Mr. Unger, I have a question. What percentage of your 
production of new machines is being sold to overseas customers? 
Mr. Unger.
    Mr. Abate. Mr. Abate you said or Unger?
    Mr. McNerney. I'm sorry. Mr. Abate.
    Mr. Abate. Oh. About 30 percent.
    Mr. McNerney. And what percentage of those are produced 
overseas, of the 30 percent?
    Mr. Abate. Those are produced overseas.
    Mr. McNerney. So it's fair to say that in our opinion, if 
we extend the production tax credit, many more jobs will be 
created in the United States?
    Mr. Abate. Oh, yeah. Seventy percent are landing here in 
the United States, and a big part is, I think as you have a 
production tax credit here, more components, more machines will 
land here. If that changes, our customers who land these pieces 
of equipment are looking to go to other parts of the world.
    Mr. McNerney. So if you sell machines here, you both 
produce them here and you create jobs in the field with 
maintenance and installation?
    Mr. Abate. Right.
    Mr. McNerney. Most of the work that goes into producing a 
windmill, is that all work produced here in the United States, 
or do you import products from overseas?
    Mr. Abate. No. The assembly occurs here. Components we do 
source globally. But a lot of the components, due to their 
size, blades will be here, towers will be here. You know, 
components, electronic components can be global. But logistics 
make up about 20 percent of the cost of a wind project. So it 
really forces that technology to be local relative to where the 
equipment is going to land.
    Mr. McNerney. Thank you. And, Mr. Swezey, I think it was 
very illustrative that all of your production is being sold 
overseas now. And that's a terrific loss for the United States 
of America. How can we incentivize customers here to start 
buying your products and then selling them here in our country?
    Mr. Swezey. Right. All our customers for our thin film 
solar equipment line are overseas, and that has to do, as I 
explained both in terms of the incentives for locating 
production but also the end-use market. The panels that our 
technology produces are five point square meter panels. I mean, 
they're based on flat panel display technology on glass. These 
are very large panels, and it makes sense to try to locate 
these production facilities near the end-use load. And we 
believe that if we do have a clear, consistent, long-term 
policy towards solar in the U.S. that we'll see more--some of 
this manufacturing occurring in the U.S. for that reason, 
because it will build the market.
    The U.S. market today is only 10 percent of the entire 
global photovoltaic industry, yet we generate 25 percent of the 
global electricity. So there's a disconnect there between how 
much we're doing here in solar and what the rest of the world 
is doing.
    Mr. McNerney. Thank you. Ms. Jagger, what steps of European 
governments are most effective in your opinion in developing 
new energy technologies and implementing that?
    Ms. Jagger. I think that until now, the most effective has 
been Germany, and the Feed-In tariff that was introduced by the 
member of Parliament, Mr. Hermann Scheer. I think that had the 
most effect and they have been able to produce about 200,000, 
between 200,000 and 250,000 jobs.
    So that's what I was talking about with Congressman Jay 
Inslee together with the organization that I chair, yesterday, 
introduce the tariff legislation or policy in this country, and 
it will be really important that his policy be supported. I 
think it will make a big difference for this country. There are 
about 40 countries that have already, you know, embarked or 
embraced the Feed-In tariffs around the world.
    Mr. McNerney. Okay. Thank you. And I reserve----
    The Chairman. The gentleman's time has expired. We 
appreciate that. We have a series of roll calls on the floor, 
and we're trying to ensure that each member who is here gets a 
chance to ask some questions. Mr. Engel is here as a special 
guest of the Select Committee. We'll recognize him for the 
purpose of asking questions.
    Mr. Engel. Thank you, Mr. Chairman. It's good to be a 
special guest. Ms. Jagger, in your testimony, you said--I was 
struck by your remarks that you used to believe that reduced 
energy consumption was an important first step, and you used to 
believe that it would be enough to encourage more localized 
lifestyles, but you now say you realize that that's not enough.
    I also have come to that conclusion, as have many Members 
of Congress, and I think it's important to keep saying. I'm 
embarrassed that our country has not agreed to sign 
international agreements that would help with global warming. 
But countries like India and China, who have been exempted from 
these things, I really believe that if there are new 
international agreements that countries like India and China, 
which are now becoming more responsible for global warming, 
need to be included in these agreements as well. Would you 
agree?
    Ms. Jagger. What I will say, Congressman, is that it is 
vital that the United States realize that they need to sign 
onto the Kyoto Plus treaty. It is vital as well that the 
industrialized nations of the world realize that they need to 
come up with a reduction of CO2 emission that is 
realistic and not just simply what they think they can do, 
because otherwise, we will not be able to avert a climate 
change catastrophe.
    With regard to India and China, I think that it is very 
important that we supply and that we help them with providing 
renewable energy technology. What is important as well to 
understand for certain countries is that we cannot make them 
accountable for what we in the developed world have been 
responsible. Therefore, we have to keep that in mind, that it 
will be totally unfair if tomorrow we ask from China, India or 
Brazil to come up and sign the exact kind of agreement that 
would be required from the United States or from a European 
country.
    Mr. Engel. How about Brazil? Since you mentioned Brazil, I 
noticed in your testimony, you know, you said that ethanol and 
nuclear are not a solution. Yet I was just in Brazil and was 
amazed at the amount of--how much ahead they are of this 
country in terms of planning for the future and looking at 
alternative energy and weaning their country away from gasoline 
and things like that. Do you think we could learn something 
from Brazil?
    Ms. Jagger. Well, there are certain polices that have been 
implemented in Brazil that I will question. I mean, I think 
that we have to realize that the use of biofuels and 
bioethanol, some of those technologies can lead us to have a 
humanitarian catastrophe, because we will be using farm land 
that should be used for feeding people rather than for--be used 
as fuel.
    I mean, one thing that I'd like to mention is that 200 
times more surface area is required to produce energy from 
crops as compared with energy from photovoltaic cells.
    Mr. Engel. Thank you. I know, Mr. Chairman, we have votes, 
so I'll end my questioning and I thank you for letting me 
participate.
    The Chairman. I don't want the gentleman to miss the roll 
call. There's now under one minute left to go, to go 
approximately a quarter of a mile to make the roll call on the 
House floor.
    Mr. Engel. Well, it's good exercise. It'll contribute to--
against global warning I guess, you know, if we walk on our own 
and don't ride.
    The Chairman. Let's walk that walk then because we will 
miss the roll calls otherwise. But I think that it's pretty 
clear from the panel today that the extension of the production 
tax credits, the incentive to this industry is going to result 
by 2015 in 100,000 megawatts of renewable energy, electricity 
in our country, minimum.
    And by the way, there's only 100,000 megawatts of nuclear 
power in the United States today after 50 years of federal 
subsidies. So no one should be embarrassed about the fact that 
we are going to give a relatively modest break to the 
competition to nuclear and other energy resources.
    I think rural America is ready to go. We have to solve the 
transmission issues. If we get the tax issues right, then we 
can have a clean energy revolution that produces 15, 20, 25 
percent of the electricity in our country and sends a signal to 
the rest of the world that we are serious.
    We thank all of you. You're great leaders. With that, this 
hearing is adjourned. Thank you.
    [Whereupon, at 10:55 a.m., the select committee was 
adjourned.]

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