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





          OVERSIGHT OF THE BUSH ADMINISTRATION'S ENERGY POLICY

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

                                HEARING

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

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 22, 2008

                               __________

                           Serial No. 110-38








             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, 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

                   Gerard J. Waldron, Staff Director
                       Aliya Brodsky, Chief Clerk
                 Thomas Weimer, Minority Staff Director








                            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
    Prepared Statement...........................................     3
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.....................................     7
Hon. Jay R. Inslee, a Representative in Congress from the State 
  of Washington, opening statement...............................     8
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................     8
Hon. John Larson, a Representative in Congress from the State of 
  Connecticut, opening statement.................................     9
Hon. Hilda Solis, a Representative in Congress from the State of 
  California, opening statement..................................    10
Hon. Stephanie Herseth Sandlin, a Representative in Congress from 
  the State of South Dakota, opening statement...................    11
Hon. Emanuel Cleaver II, a Representative in Congress from the 
  State of Missouri, opening statement...........................    11
    Prepared Statement...........................................    13
Hon. John Hall, a Representative in Congress from the State of 
  New York, opening statement....................................    14
Hon. Jerry McNerney, a Representative in Congress from the State 
  of California, opening statement...............................    15

                                Witness

Hon. Samuel W. Bodman, Secretary, U.S. Department of Energy......    15
    Answers to Pre-Hearing Questions.............................    47
    Prepared Statement...........................................    18

 
          OVERSIGHT OF THE BUSH ADMINISTRATION'S ENERGY POLICY

                              ----------                              


                         THURSDAY, MAY 22, 2008

                  House of Representatives,
            Select Committee on Energy Independence
                                        and Global Warming,
                                                    Washington, DC.
    The committee met, pursuant to call, at 10:09 a.m. in room 
2175, Rayburn House Office Building, 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: Jonathan Phillips.
    The Chairman. Good morning. This is the Select Committee on 
Energy Independence and Global Warming. We welcome you all to 
this very important hearing with the Secretary of Energy, 
Samuel Bodman.
    Less than 3 months ago, when asked by reporters about 
predictions that gas prices would rise to $4 per gallon, 
President Bush admitted that he had not heard those forecasts. 
Well, for millions of consumers in New York and California, 
Chicago, all across America, $4 gas is now a reality. Gas 
prices have now reached a record nationwide average of $3.81 
per gallon, up more than 160 percent since President Bush took 
office, increasing on average by 34 cents a gallon each year of 
the Bush administration.
    The price of oil has also skyrocketed. A few years ago, 
people scoffed at the prospect of $100 oil. But American 
consumers have now seen an increase of $100 per barrel in the 
price of oil since President Bush took office.
    The incredible escalation of gas and oil prices is not an 
accident. It is the reality of more than 7 years of this 
administration pushing an energy policy solely focused on 
fossil fuels.
    One of the Bush administration's first major actions was to 
convene the secret Cheney Energy Task Force, comprised of 
Cabinet-level and other senior administration officials meeting 
in closed-door sessions with big oil and other industries. Not 
surprisingly, the recommendations from this clandestine group 
focused on more oil and gas drilling.
    On January 29, 2001, the day of the first meeting of the 
Cheney Energy Task Force, the price of oil was $32 per barrel. 
The Bush administration and the Republican Congress then passed 
an Energy Bill in 2005 that gave billions of dollars in tax 
breaks and subsidies to the oil, coal, nuclear and gas 
industries.
    On August 8, 2005, when President Bush signed the 
Republican Energy Bill into law, the price of oil was $64 per 
barrel; and over the last 7 years the Bush administration has 
offered big oil the rights to drill on more than 268 million 
acres of public land offshore. Oil companies now own the 
drilling rights to more land than they know what to do with. In 
fact, big oil currently holds more than 30 million acres both 
onshore and offshore that aren't even being used. But last 
week, on May 17, as the price of oil stood at $126 per barrel, 
President Bush once again echoed the tired refrain we have 
heard for the last 7 years, that we must increase our domestic 
oil exploration.
    The price of oil is now $135 per barrel. After 7 years of 
filling our tanks with record-high gas and filling the calendar 
with new records for the price of oil, it is time to stop 
giving gifts to big oil. In the last 16 months, since the 
Democrats took control of the Congress, we have passed 
legislation not only to provide consumers with immediate relief 
at the pump but also to reduce our oil dependence in the long 
term.
    Last year, the Democratic Congress passed an Energy Bill 
that by 2030 will reduce our consumption of oil by nearly 3 
million barrels per day. Last week, the Democratic Congress 
passed legislation that required the Department of Energy to 
stop purchasing oil at record prices to fill the Strategic 
Petroleum Reserve. But the Bush administration can and must do 
more to help American families right now.
    In a fire, you are supposed to stop, drop and roll; and 
when it comes to using the Strategic Petroleum Reserve to help 
the consumers in an energy emergency, the President should 
stop, swap and sell. The President must deploy, must sell the 
oil from the Petroleum Reserve, which has a proven track record 
of success in bringing down prices. Putting more oil into the 
global marketplace is the step which will send a signal that we 
are serious about reducing the price of oil globally.
    The administration has no problem deploying our National 
Guard Reserves to Iraq, but it continues to refuse to deploy 
our oil reserves to help consumers this summer. This weekend is 
the start of the summer driving season, but the Bush 
administration refuses to take any action that would stop 
driving up oil and gas prices. American families are begging 
for help from high energy prices, and it is time for this 
administration to finally heed that call.
    That completes the opening statement of the Chair.
    I now turn to recognize the gentleman from Wisconsin, the 
ranking member of the committee, Mr. Sensenbrenner.
    [The prepared statement of Mr. Markey follows:]



    
    Mr. Sensenbrenner. Thank you very much, Mr. Chairman.
    Now my hearing aid was on during your discussion, and it 
seems to me that, in our three branches of government, the 
Congress has got some responsibility, too. And with gas prices 
rising through the roof, signs that energy costs will rise even 
higher, now is the time for leadership.
    The Democrats today are calling for leadership from the 
administration, but it is Congress's job to set policy, to make 
important policy changes, and to make sure that those changes 
will result in lower fuel and electricity costs. So far, the 
Democratic leadership has not taken that job seriously, 
especially when it comes to gas prices. Instead of solutions to 
the Nation's high energy prices, the House leadership has given 
the American people the Pelosi premium. Since taking control of 
Congress in January, 2007, gas prices have risen more than 
$1.50 a gallon in Wisconsin under Speaker Nancy Pelosi's watch, 
despite her promise of a commonsense plan to lower gas prices.
    There has been a lot of talk from the Democratic leadership 
about windmills and solar panels, but those technologies are 
better suited for reducing greenhouse gas emissions, not energy 
prices. A recent report from Secretary Bodman's own Energy 
Information Administration shows that while solar power 
receives government subsidies totaling about $24 per megawatt 
hour and wind power receives about $23 in subsidies, coal power 
receives just 44 cents and natural gas just gets a quarter. 
While there are benefits to wind and solar power, coal and 
natural gas are the best options for expanding electricity 
production at reasonable cost.
    I think the American people's number one priority for 
Congress is lowering fuel and electricity costs, and 
Republicans are committed to doing that.
    When it comes to gasoline, Democrats have focused on fuel 
standards and ethanol. Higher fuel standards do have the 
potential to help lower fuel demand in the long run, but the 
American people need help now. Ethanol has caused more harm 
than good, as both food and gas prices continue to rise. That 
is why I am supporting legislation that will repeal the 
subsidies and tariffs for ethanol and end this boondoggle which 
I think--using a Democrat term--can best be described as 
corporate welfare.
    And while Democrats will blame energy costs on the 
President, the facts are clear. In the period between January, 
2001, and January, 2007, before the Democrats assumed 
leadership in Congress, gas prices rose 84 cents a gallon, 
which is a significant jump but nothing compared to the Pelosi 
premium of more than $1.50 in more than 18 months.
    With neither a commonsense plan in sight from the 
Democratic leadership or an end to high gas prices, House 
Republicans are hearing the cries of the American people and 
are putting forth our own plans which are truly common sense. 
We will expand production of American oil and gas and do so in 
an environmentally safe way. There are billions of barrels of 
untapped oil that can be recovered without harming the 
environment. Nearly 85 percent of the offshore oil and gas 
fuels are untapped because Congress has placed them off limits.
    Additionally, we must expand the refining capacity in the 
United States if we are going to continue to meet the surging 
demand for gasoline.
    The House Republicans' broad plan will also encourage the 
expansion of nuclear power, which is a technology that stands 
to greatly improve U.S. energy independence and greenhouse gas 
reductions. House Republicans will also push for greater energy 
efficiency by supporting conservation tax incentives to 
Americans who make their homes, cars and businesses more energy 
efficient. And despite their costs, House Republicans also know 
there are great benefits to solar, wind, hydroelectric and 
other sources of renewable energy and will continue to support 
further development of these technologies.
    The primary difference between Republicans and Democrats on 
the issue is that House Republicans want to explore all the 
options that are on the table, while the Democrats want to pick 
winners and losers. That plan hasn't worked in the past, and it 
won't work now.
    House Republicans are also pushing a plan that can help get 
energy costs under control. These are the kinds of policies 
that the Democratic leadership should be supporting, too. But, 
sadly, this kind of leadership is lacking in this 110th 
Congress and for the sake of all Americans, Republican and 
Democrat, that is a shame.
    I 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.
    I am a little vexed that we have my friend from Wisconsin 
concerned about a so-called Pelosi premium. When in fact what 
we are seeing is a culmination of the policies that have been 
put in place, a compliant Congress doing what the Republican 
administration has wanted to do over the course of the last 6 
years. And I particularly am interested in this canard that 
somehow we have got to open up some of the most pristine and 
delicate areas, like the Arctic Wildlife Refuge, when there are 
already, of the 42 million acres of American land currently 
leased by oil and gas companies, only about 12 million are 
currently drilled to produce oil and gas now.
    According to the Federal Government's own surveys, 82 
percent of the gas in the Outer Continental Shelf and 79 
percent of the oil is available for leasing; and this is before 
the Republican Congress opened more space in the Gulf of Mexico 
for drilling in 2006.
    The fundamental problem here is that the United States, 
with 2 percent of the world's oil reserves and using 25 percent 
of the world's oil, cannot continue to waste more oil than any 
country in the world; and we are not going to drill our way out 
of this problem. I think having a comprehensive energy approach 
as we have been looking at on this committee is part of it.
    I look forward to exploring with the Secretary as we move 
forward some of the trade-offs here in terms of the policies 
working and what the implications are for their success or 
failure. In the final analysis, it is not simply something that 
we are going to be able to do by ignoring the realities. We 
have a small amount of a declining resource. We are going to 
have to be able to be more efficient and give the American 
consumers more choices, not simply broaden the field for the 
oil companies that aren't already using the total amount that 
has been given to them that is at their disposal.
    The Chairman. The gentleman's time has expired.
    The Chair recognizes the gentleman from Arizona, Mr. 
Shadegg.
    Mr. Shadegg. Thank you, Mr. Chairman; and I thank you for 
holding this hearing. It is important to have this discussion.
    As you can see, we have quite a wide divide in views on 
this issue. I am very pleased that my colleagues on the other 
side of the aisle pushed to open the Strategic Petroleum 
Reserve and to not add additional oil to the Reserve at the 
moment and even, hopefully, to press to release some oil from 
that Reserve. I am also supportive of legislation that would 
say we should take--we should be replacing some of the heavy 
for light oil that we are putting into the Reserve. But I think 
it is very important to understand why that is so critical.
    Although the Strategic Petroleum Reserve represents only 1/
10 of 1 percent, some experts have pointed out that somewhere 
between 20 percent and 40 percent of the current cost of 
gasoline could be driven by speculation. And the argument goes 
that if we were to open the SPRO or stop putting oil in it, 
that might send a price signal to the speculators and they 
might stop speculating.
    The important part for that discussion is that it 
demonstrates that those who advocate that we don't put any more 
oil into the SPRO right now understand that there is a link 
between supply and price because their argument is, look, by 
putting oil into the SPRO, we are reducing the supply for 
public consumption, and that is driving up cost and increasing 
speculation. If there is a link between supply and price, then 
we have to examine the policies of this Congress.
    I have been a Member now for going on 14 years; and over 
that 14 years we have had vote after vote after vote after vote 
after vote on the issue of either increasing domestic supply or 
cutting off domestic supply, either opening further areas for 
exploration and production or restricting further areas for 
exploration and protection. And in vote after vote after vote, 
we have decided to not increase domestic production. We have 
decided to limit areas for exploration.
    Just I believe 2 years ago there was legislation 
contemplated to expand production off the Outer Continental 
Shelf. The idea was to give the States a voice in that issue 
and to place the drilling rigs at least 50 miles offshore where 
they couldn't be seen. And we not only didn't pass it for oil, 
we didn't enact it for natural gas.
    Just a few months ago, last summer, the majority party 
imposed a moratorium on oil shale. There is a fact here, and 
that is this Congress has created this crisis by restricting 
supply. Everybody agrees that in the long term we have to 
pursue alternatives. I would simply say that in the short term 
we cannot continue to restrict supply in the Outer Continental 
Shelf, in the inner mountain west, the oil shale, or for ANWR 
and expect prices not to go up.
    And I thank the chairman for holding the hearing.
    The Chairman. The gentleman's time has expired, and the 
Chair recognizes the gentleman from Washington State, Mr. 
Inslee.
    Mr. Inslee. Thank you.
    I was at a meeting in Napa, California, a couple weekends 
ago of a bunch of venture capitalists and CEOs and some really 
exciting American businesses that are developing really truly 
alternative energy sources. And there was some talk about this 
issue, that people thought this was such a silly debate back in 
Washington, D.C., about whether or not we could reduce gas 
prices by opening up some of the areas that we currently use 
for our pristine areas like the Arctic. And folks pointed out 
that it was really a kind of a silly debate because the fact of 
the matter is, is somehow our dinosaurs got planted under 
somebody else's sand. And I am not blaming the Bush 
administration for that.
    The fact of the matter is, the oil is just not there to 
have any appreciable impact on world oil prices. And no matter 
what we do, a barrel of oil is a worldwide market that is 
determined by worldwide supply and demand. We use 25 percent of 
the world's oil. We have less than 3 percent of the world's oil 
supply.
    Mr. Bodman in his testimony talks about if we opened up 
every spigot in Yellowstone, in the Arctic and Mount Ranier 
National Park, we could maybe increase our domestic oil 
supplies by 20 percent. That is a worldwide increase of .6 
percent increase of worldwide oil supplies. That will have 
virtually no impact on oil worldwide, barrel of oil prices. And 
the fact of the matter is we could drill on the National Mall, 
and the oil price of a barrel of oil is still going to be over 
$130 a barrel.
    Now there are some things we can do about the speculative 
market. What we really need to do is to get our cars to drive 
on something other than oil.
    I met a guy out in Napa named Shai Agassi, a young guy, he 
is about 35, 36 years old. Now here is a guy we ought to be 
listening to. He signed a contract to totally electrify all the 
cars in Israel and soon Denmark.
    This is what we should be thinking about. We have got to 
get off of oil ultimately in our cars. When we do that, then we 
will have a transportation system that is efficient. We have to 
think a lot bolder than we have been.
    Thank you.
    The Chairman. The gentleman's time has expired.
    The Chair recognizes the gentlelady from Tennessee, Mrs. 
Blackburn.
    Mrs. Blackburn. Thank you, Mr. Chairman. I appreciate the 
hearing.
    Mr. Secretary, thank you for joining us this morning.
    It is so interesting to sit here and think what the 
American people must think as they are listening to these 
opening statements. One of the things that we hear from 
constituents, they think that Congress doesn't have and the 
leadership in the Congress doesn't have an energy plan. They 
are looking at what has happened in the past 2 years to a 
barrel of crude when it has gone from $55 to $130 a barrel.
    As someone had mentioned earlier, the price of that 
barrel--and when I was preparing for the hearing, Mr. Chairman, 
we went back and looked; and the price on a barrel when 
President Bush took office was $30 a barrel. It varied very 
little until 2004, when we saw growth in the India and China 
economies. And then it really did not start to accelerate until 
early 2007, and the acceleration has been from that $55 mark to 
$130, and that has been in less than 2 years. So I do think 
that is noteworthy.
    Now when we were doing the Energy Policy Act of 2005, one 
of the items we discussed was getting that bill had taken a 6-
year period of time to come to agreement. And there have been 
many times that, this side of the aisle, that we Republicans 
have pushed to address the supply and the capacity issue. We 
did it in the 2005 Act. We had a bill that followed the 2005 
Act in October of 2005 that dealt with that issue. We had 
pressure from the Democrat side of the aisle to not address 
those capacity and supply issues.
    And what we know is that our constituents and the American 
people want to see this issue solved. To address the price at 
the pump today, we are going to have to talk about supply 
capacity, about energy exploration, about energy independence, 
and begin to look at what we do in the short term, the mid-
range and the long term on these issues.
    Americans want American solutions. We are the most 
innovative people. We certainly can figure this one out. We 
know that there are barriers that have been placed in front of 
extraction, in front of exploration. Mr. Chairman, we need to 
remove those barriers, get the price down at the pump and have 
a long-term plan.
    And I yield back the balance of my time.
    The Chairman. The gentlelady's time has expired.
    The Chair recognizes the gentleman from Connecticut, Mr. 
Larson.
    Mr. Larson. Thank you, Mr. Chairman. And I have to suspend 
belief when you listen to our distinguished colleagues on the 
other side. And I think it was called the Pelosi premium?
    The Chairman. Yep.
    Mr. Larson. I didn't realize that Nancy Pelosi was in those 
behind-closed-doors meetings with Dick Cheney as they were 
putting together the master plan for their energy strategy that 
is in its current eighth year. You know, I didn't realize she 
was in on those meetings. But perhaps I am wrong.
    Our colleagues, who used to be known as the Grand Old 
Party, are giving new meaning to GOP, primarily inasmuch as 
they have become to mean gas, oil and petroleum and protecting 
those interests at all costs.
    You have to suspend your belief, because I think our 
colleagues over here have been a little bit unfair. They do 
have a policy, an energy policy; and Thomas Friedman has talked 
about it frequently. It is called leave no moolah behind. 
Because what we end up doing is by the moneys that we are 
sending overseas that work their ways through the madrassas and 
into the hands of the very people that are assaulting and 
killing our men and women over in the Middle East. And 
meanwhile, as gas prices continue to go up because of policies 
that were made behind closed doors with no oversight and 
review, with speculators that are running unbridled and over 
the counter, with an invisible market where they are able to 
jack the price up minimally 10 to 40 percent so that people in 
my district who get their Social Security check have to sign it 
over to the oil dealer to pay for the heating of their homes--
this was the work of Nancy Pelosi, I am told.
    This is the work of an administration that hasn't had a 
policy and people on the other side of this aisle who continue 
to block initiatives that would otherwise lead to our 
independence and nonreliance on the Middle East for foreign oil 
and embrace the alternatives that we know will provide a 
greener environment, the jobs that we need and get away from 
this path that we have followed.
    And with that, Mr. Chairman, although I could speak for 
several more minutes, I reserve my time.
    The Chairman. That would be the Irish side of the 
gentleman, not the Swedish who like to speak longer. I 
appreciate it.
    The gentlelady from California, Ms. Solis, is recognized.
    Ms. Solis. It is going to be really hard to follow. But I, 
too, want to join my colleagues here and thank our Chairman 
Markey for having this important hearing.
    It is nice to have you here with us, Mr. Secretary. As you 
know, you can hear our frustration.
    And I guess my concern again is, in your testimony, you 
believed that we could do more here. We can actually cultivate 
more energy resources by drilling and opening up previous 
leases along our coast and what have you. Well, that is a no-
starter for many of us. So how can we really talk candidly and 
really talk about exploring renewable energies and investment 
in home resources here in the United States?
    Yesterday, most of my colleagues I think on the dais here 
supported, you know, renewing credits, tax credits so we can 
invest in solar energy and renewable energy. We need to do 
more. And I just am waiting to see what incentives and what 
innovative ideas that your office and through your leadership 
can provide.
    Every day that we go home to our districts, every weekend 
at least, that gas prices keep inching up. In my district now 
in Los Angeles it has been over--well over $4 for the last 3 
weeks, if not a month. And that doesn't even explain the other 
costs that are being applied to consumers when they go to the 
grocery store, because all the diesel fuel also has gone up 
dramatically.
    It hits very hard upon our low-income, working class, blue-
collar communities that right now we seem to be ignoring. And I 
am standing up for that little guy and that little woman out 
there that is trying to make it to school to take her children 
or to make it to her part-time job that really has no voice at 
this table. And I am hoping that there is something 
realistically that we can do other than just holding our hands 
up and saying, well, gee, we can't get the oil corporations to 
do anything about it and, oh, my God, we pay so much in taxes. 
Well, Jesus, when you talk to the regular Joe or Mary on the 
street, they are saying the same thing. And our frustration is 
very, very real.
    This economy, we don't have support by the American public. 
The direction is wrong. And one area of it hits home very 
clearly, and that is in our pocketbook when we go home to our 
districts, whether it is in California, whether it is in New 
York, Miami, Florida or in Texas. So I would just hope you 
could enlighten this committee with some innovative ideas.
    Thank you.
    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.
    Mr. Secretary, welcome.
    If you look at my district, the entire State of South 
Dakota from end to end, whether it is our vast fields of corn 
and soybeans on the eastern side of the State, wind across 
every part of the State, and the great forests of the Black 
Hills in the west, South Dakota embodies the idea that we need 
a diversified approach to our national energy policy and in 
particular we need to take advantage, as Ms. Solis is saying, 
of new opportunities for renewable energy.
    So as we strive to meet our national energy needs, we must 
continue to recognize I think that rural America has much to 
offer; and rural States should be at the center of the solution 
as our national energy policy shifts and adjusts in ways that 
can enhance our national and economic security, promote 
innovation and conservation and ultimately ease the strain on 
the budgets of families and businesses.
    With the passage of the original renewable fuels standard 
in 2005 and the aggressive increase included in last year's 
Energy Bill, we have already taken some initial key steps in 
the right direction as we seek to take advantage of the 
contribution of agricultural producers in rural States to 
reduce our dependence on foreign oil and the overall carbon 
emissions through an increase in the production of biofuels, 
wind and other types of renewable energy.
    I respectfully disagree with the ranking member, the 
gentleman from Wisconsin, on the impact of ethanol. Ethanol has 
kept gas prices from going even further, upwards of 15 percent 
higher than they are today. And the price of corn to make 
ethanol has very little to do with the increase in food prices 
when compared to other factors like the cost of energy and the 
processing and transportation of food.
    So I look forward to your testimony on these and other 
issues and in particular infrastructures for the transmission 
of wind energy. Thank you for being here, and I yield back.
    The Chairman. The gentlelady's time has expired.
    The Chair recognizes the gentleman from Missouri, Mr. 
Cleaver.
    Mr. Cleaver. Thank you, Chairman Markey and Ranking Member 
Sensenbrenner.
    I would like to welcome Secretary Bodman to the hearing.
    It is difficult to refute our current administration's poor 
record on environmental protection and renewable energy 
promotion. For example, the administration has consistently 
lobbied for drilling in the Arctic National Wildlife Refuge as 
if the oil there contains gold-plated gas which would solve our 
growing greed for gasoline. The administration has also 
continued to support the oil and gas industry in terms of 
subsidies.
    Alcoholics Anonymous does not encourage its participants to 
visit more bars as a means of reducing their dependence on 
alcohol. Likewise, the solution for our energy crisis is not 
more drilling. For this reason, Congress is attempting to 
change the course of American energy policy by passing 
meaningful and effective legislation.
    Just this week, the House passed H.R. 6049, the Energy and 
Tax Extenders Act of 2008. If it becomes law, this important 
bill will extend expiring tax provisions for renewable energy 
production and energy conservation. The progressive Pelosi 
policy has promoted renewable sources of energy efficiency and 
conservation, but we must have support from the current 
administration if we are to be truly successful.
    And I hope, Mr. Secretary, that you can offer some insight 
into the policies promoted by this administration and that we 
can work together to the extent possible to reach energy 
independence and achieve a cleaner environment for all 
Americans. Thank you for being here.
    I yield back the balance of my time, Mr. Chairman.
    [The prepared statement of Mr. Cleaver follows:]



    
    The Chairman. Great. The gentleman's time has expired.
    The Chair recognizes the gentleman from New York State, Mr. 
Hall.
    Mr. Hall. Thank you, Mr. Chairman.
    Mr. Secretary, thank you for being here.
    America is clearly at an energy crossroads, and one look at 
oil costs or conversations with families in my district or 
others around the country who are being forced to sacrifice in 
order to keep on the lights and the heat and the fuel in their 
vehicles is all the evidence one would need to come to that 
conclusion.
    It is our job in Congress to look at how we got here and 
what our government is doing to solve the crisis, and I am 
disappointed. When one looks back over the last 7 years, it is 
apparent the administration has pursued what I see as sort of a 
lose-lose-lose policy where we are shipping more and more of 
our dollars to unstable countries in unstable parts of the 
world where they are used, as one of the other members 
mentioned, to fund--in part, to fund madrassas or arming of 
these governments who we may have disagreements with about 
human rights or other foreign relations issues and then 
borrowing that money because we are running a deficit at the 
same time and a balance of trade deficit.
    We are basically borrowing the money from other countries 
and finding ourselves losing our sovereignty, so it is a lose-
lose-lose policy. And I would like to see us move to a win-win-
win policy where we are developing the new technologies that 
provide jobs here and keep our dollars here in this country 
and, at the same time, get us our sovereignty back.
    This is not an ideological statement. It is an empirical 
one, looking at oil prices that are breaking daily records, 
hitting $135 per barrel overnight. Gas prices have more than 
doubled since 2001. In New York, they are over $4 a gallon.
    Until recently, the administration had shown resistance to 
providing short-term relief through timely use of the SPR; and 
I am glad that the administration has chosen to agree with 
Congress on this issue and halt deliveries to the SPR to 
provide some relief on the demand side.
    However, the long-term solutions to our energy crisis 
remain somehow inexplicably tied to a ``drill first, ask 
questions later'' mentality. While private investment is 
driving renewables by wind and solar to grow by leaps and 
bounds, we are somehow being told that we really need to keep 
trying to bring them along and at the same time throw more 
money at the oil industry, as the Energy Act of 2005 did with 
subsidies that we have been trying to take back, tax breaks to 
an industry that is already claiming record profits. And also 
throwing more money down the nuclear rabbit hole. Dozens of 
years and billions of dollars in taxpayer-financed largesse.
    And I just would comment that I think the ranking member 
said we shouldn't be picking winners or losers. We have always 
picked winners and losers. The taxpayer is the insurance 
company that indemnifies the nuclear industry since the Price-
Anderson Act, for instance. So the question is not whether we 
pick winners and losers but whether we pick the right ones.
    The path we need to follow is one that has been advocated 
by this Congress, focuses on green, domestic, innovative 
solutions that will reduce our reliance on old forms of energy 
and drive rather than drain our economy.
    I remain an optimist, and I hope that even in its last 6 
months the Bush administration can turn a corner and join with 
Congress to realign the priorities that meet this vision.
    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; and thank you, 
Secretary Bodman, for agreeing to come to talk to us today.
    In this committee, we are taking a broad look at all our 
options to reduce our dependence on imported oil. We have seen 
the benefits of pursuing renewable energies and the startling 
savings that are available through energy efficiency measures.
    I am concerned that, despite the administration's rhetoric, 
the only action that we have seen is a push for more domestic 
drilling, including going to the length of preventing my State 
of California from requiring our vehicles in California to have 
more fuel efficiency.
    You know, I had a constituent literally yell at me in my 
face last weekend because he was so humiliated to see the 
President go hat in hand to Middle Eastern countries to beg for 
oil. I agree with that sentiment, and I implore this 
administration to take real steps toward attaining energy 
independence by allowing States to lead the way.
    Mr. Bodman, thanks again for coming. Let's stop the 
rhetoric and start working together to find solutions. And I 
look forward to your testimony.
    Thank you.
    The Chairman. The gentleman's time has expired.
    All time for opening statements from the committee members 
has expired; and we turn to our witness, the Honorable Samuel 
Bodman, who is the Secretary of the Department of Energy.
    Secretary Bodman has led the Department of Energy since 
February of 2005. He also served in the administration as 
Deputy Secretary of the Treasury and the Department of 
Commerce. He was also the CEO of Fidelity and also the Cabot 
Corporation, both up in Boston.
    We welcome you, Mr. Secretary. Whenever you are ready, 
please begin.

 STATEMENT OF THE HONORABLE SAMUEL W. BODMAN, SECRETARY, U.S. 
                      DEPARTMENT OF ENERGY

    Secretary Bodman. Congressman Markey, Congressman 
Sensenbrenner, members of the committee, I want to thank you 
all for providing me the opportunity to speak with you about 
America's energy and environmental challenges.
    These are very serious issues, in my judgment. They are 
deserving of serious consideration which in my judgment begins 
with the recognition that distinct energy challenges and unique 
constraints are creating a new global energy reality.
    Our response to this new reality is based on the 
fundamental premise that energy insecurity poses an 
unacceptable risk to the United States's national security and 
our economy. Implicit in the new energy reality is the 
recognition that energy issues must be assessed and addressed 
in a global construct.
    Today, coal produced in South America is used to generate 
electricity in Europe. Oil drawn from Africa is used to power 
cars in Asia. Liquefied natural gas from Trinidad powers homes 
and businesses in the United States. America can no longer 
consider its energy security as largely a domestic issue.
    To illustrate what I am talking about, consider this new 
reality's three underlying causes: one, an extraordinary surge 
in global energy demand; two, resource limitations coupled with 
increasing geopolitical instability; and, three, the likelihood 
that some type of carbon constraints are an eventual part of 
the world's energy future.
    The challenges that these underlying causes present are 
considerable; and the administration, in my view, has been 
quite vigorous in its efforts to address them. This 
administration has, since 2001, spent more than $22 billion to 
research, to develop and to promote alternative energy sources 
and to reduce energy demand. In 2006, the President proposed 
the Advanced Energy Initiative as a comprehensive plan to 
change the way that we power our homes, our businesses and our 
automobiles. The Department of Energy is moving ahead with a 
loan guarantee program that will assist in the development and 
commercialization of clean alternative energies by systems that 
are providing up to $42 billion in loan guarantees.
    These initiatives, coupled with our other efforts, have led 
us to an approach which I believe can be distilled into four 
principal areas of focus:
    One, the development of energy from a more diverse set of 
sources such as oil, shale and advanced biofuels, coupled with 
efforts to expand production on traditional forms of energy 
into areas such as the Arctic National Wildlife Refuge and the 
Outer Continental Shelf.
    The development and deployment of innovative technologies 
such as those pursued by the Department's vehicles technologies 
and building technologies programs. These programs provide 
producers and consumers with ways to substantially increase 
energy efficiency at all levels of economic activity.
    Three, the development and deployment of low carbon or no 
carbon energy technology such as carbon capture and storage, 
wind, solar and clean safe nuclear power.
    And, four, the development and deployment of an expanded 
U.S. energy infrastructure to include additional refineries, 
expedited siting for pipelines and improvements to the 
electrical grid in order to handle the need for increased 
capacity safely and securely.
    Any one of these areas that I named of those four areas 
requires considerable commitment. Together, they represent an 
opportunity for this Nation to excel and to lead.
    I continue to be confident that we are laying the 
groundwork necessary for investment and innovation to occur. 
The results are not going to be immediate, but our efforts 
eventually will come together to increase America's energy 
security and to provide economic relief to the U.S. taxpayer. 
In addition, they will provide environmental relief by changing 
the impact of our energy consumption and altering the ways in 
which we produce energy.
    To that end, between 2001 and 2008, this administration has 
invested more than $45 billion toward activities related to 
climate change science and technology.
    In April of this year, the President set a new national 
goal for stopping the growth of U.S. greenhouse gas emissions 
by the year 2025. But that reduction in emissions will take 
place only so long as the necessary technology continues to 
advance, which is an important mission for this Department. It 
will require the cooperation of the world's major economies, an 
effort that the President proposed and is leading, and the 
cooperation of Congress, State and local governments, 
businesses, entrepreneurs, investors as well as academia.
    In my judgment, there is considerable reason for optimism. 
Having spent many years in the Nation's financial sector, I can 
honestly say that for the first time in history we are seeing 
the venture capital community putting sizable amounts of money 
into entrepreneurial companies in the alternative energy 
business.
    One recent industry report showed that the so-called clean 
tech sector, which includes renewable energy and efficiency 
technologies, experienced record venture capital investment 
levels of $2.2 billion in the year 2007, up from just $500 
million in the year 2005. That by almost any measure is quite 
remarkable in terms of its growth.
    Mr. Chairman, each of us, in my view, has a part to play in 
increasing America's energy security. Developing new 
technologies is not enough. Implementing new policies is not 
enough. And it is not enough to simply devise new incentive 
schemes or to open new areas for production. All of these can 
and should contribute to increased U.S. energy security, and 
they must be done in concert with one another. They must be 
pursued with an understanding of the facts of the new energy 
reality. Our economic and national security future is largely 
dependent upon our energy future.
    Mr. Chairman, at this time, I would like to conclude my 
remarks by asking that my written testimony be--a copy of which 
I think has already been provided--that that be entered into 
the record; and I would be happy to respond to any questions.
    The Chairman. Thank you, Mr. Secretary; and, without 
objection, the Secretary's entire testimony will be entered 
into the record at this point.
    Secretary Bodman. Thank you.
    [The statement of Secretary Bodman follows:]



    
    The Chairman. The Chair now recognizes himself for a round 
of questions.
    Mr. Secretary, we know that swapping and releasing oil from 
the Strategic Petroleum Reserve has a proven historical track 
record of success. President Bush's father in 1991 deployed the 
Strategic Petroleum Reserve. Prices dropped by 1/3. When 
President Clinton deployed the Strategic Petroleum Reserve, 
prices dropped by 18 percent; and when President Bush deployed 
it after Hurricane Katrina, there was a reduction of 9.1 
percent.
    Why is President Bush refusing to answer this historical 
challenge by deploying the Strategic Petroleum Reserve, by now 
sending millions of barrels of oil out into the open 
marketplace that will have, obviously, looking at the 
historical record, a depressing effect upon the price of oil?
    Secretary Bodman. Look, the goal, Mr. Chairman, is to 
provide security for this country. That is what the purpose of 
the SPRO is. And the SPRO is there. It is meant to deal with 
matters where we have the physical delay, interruption of the 
flow of oil to our country. We don't have that issue today, and 
that is the reason.
    The Chairman. Well, we did not have that in 1991. We did 
not have that in the year 2000, when President Clinton deployed 
it. We did not have that, in fact, when the President deployed 
the SPRO after Hurricane Katrina.
    Secretary Bodman. Of course we did.
    The Chairman. In each one of those situations there was not 
an international crisis that was going to have some permanent 
effect upon our access to oil.
    You understand what I am saying here? What we have got here 
is last Friday President Bush asking the Saudis to please 
produce more oil because it would have an effect on reducing 
the price of oil for American consumers.
    Secretary Bodman. I understand.
    The Chairman. The Saudis said no. But we have 700 million 
barrels of oil stored that are ready to be deployed that will 
have the same effect if President Bush was willing to use it 
right now because of the speculation in the oil marketplace 
that nothing is going to happen.
    Why won't you recommend to President Bush that he deploy 
the Strategic Petroleum Reserve, given the historical, 
successful record?
    Secretary Bodman. I don't know how to be clearer with you, 
sir.
    First of all, there was in 2005--I don't know about the 
other cases, but there certainly was an interruption of supply 
that was caused by the hurricanes and that we had requests for 
the availability of oil, and we responded.
    The Chairman. Don't you believe that there is now rampant 
speculation going on now in the oil futures marketplace----
    Secretary Bodman. No, I don't.
    The Chairman [continuing]. That is artificially driving the 
price up exponentially almost on a daily basis?
    Secretary Bodman. No, I don't.
    The Chairman. You don't believe there is speculation right 
now?
    Secretary Bodman. Let me explain why, if I may.
    The Chairman. Sure.
    Secretary Bodman. If you look back over the history of oil 
production globally, it increased by about a million barrels 
per day per year. So that each year as you moved along, it 
increased by roughly a million barrels a day. Until you got to 
the year 2004. In the year 2004, we had almost an increase of 3 
million barrels a day of consumption. In the year 2005, 2006 
and 2007, we have had flat production. There has been no change 
in the global production of oil over that period of time.
    And the facts are that in the year 2004 we sopped up all 
the additional--all the available spare capacity in the system. 
And that has been the issue. That is the issue today. And it is 
clear to me that when you look at very little spare capacity in 
the system and you look at the ability of price to reflect the 
increase in demand, if you have a 1 percent increase in demand, 
my economics friends tell me, you have about a 20-fold increase 
in price. So that for every 1 percent increase in demand, I 
have got a 20 percent increase in price. It is easy to see that 
we have got that kind of situation going on at the current 
time.
    The Chairman. Well, we have seen over the years 1 percent 
increase in demand, but we have never seen a spike like we have 
seen over the last----
    Secretary Bodman. And that is because in the year 2004 we 
sopped up all the additional capacity of the system.
    The Chairman. Mr. Secretary, what you are testifying here 
today is that you are not going to recommend to President Bush 
that he use the Strategic Petroleum Reserve as a weapon against 
Saudi Arabia, against OPEC, to tell them we are not going to 
stand on the sidelines and that we are going to actively send 
more oil into the marketplace. That over the next 10 years you 
might have a plan to drill in wilderness areas in our country. 
But over the next 10 weeks, this summer, there is no plan that 
the Bush administration has to reduce the price of oil.
    Secretary Bodman. I don't believe----
    The Chairman. What one weapon you have, the Strategic 
Petroleum Reserve, a proven weapon of success against OPEC, you 
are not going to deploy, notwithstanding Saudi Arabia turning a 
deaf ear to President Bush's request last Friday.
    Secretary Bodman. First of all, Saudi Arabia did increase 
the production by some 300,000 barrels.
    The Chairman. But not in response to the President. They 
said that is something they had already done.
    Secretary Bodman. I assume that that is the case, but I 
don't know that. But the situation is that the Strategic 
Petroleum Reserve is meant to be there as a protection for the 
American people.
    The Chairman. The American people right now are being--Mr. 
Secretary, the American people are being tipped upside down at 
the pumps and having the money shaken out of their pockets. 
Ford just announced that they are going to cut 15 percent 
production in the manufacture of vehicles this year. Airlines 
are declaring that they are on the verge of bankruptcy. The 
American people are under assault from the skyrocketing price 
of oil, and the Strategic Petroleum Reserve is the one weapon 
in the short run we have to stop this bubble from continuing to 
ravage the American economy and the American people, and we 
must use it now.
    Secretary Bodman. I disagree with you, sir.
    The Chairman. Well, I think it is a disagreement that is 
really going to hurt our economy.
    My time has expired. I recognize now the gentleman from 
Wisconsin, Mr. Sensenbrenner.
    Mr. Sensenbrenner. Thank you very much, Mr. Chairman.
    There is another way I think we can reduce the price at the 
pump, at least those of us that have to buy gas that has 10 
percent ethanol in it, and that is repealing the tariff on 
imported ethanol, which is a protection for the U.S. ethanol 
industry that is reflected in the pump, at least for those of 
us who live in areas where there has to be this kind of a 
blend. Does the administration have any plans to reduce or 
eliminate that tariff?
    Secretary Bodman. I think that the administration would 
deal with the questions related to the tariff by working with 
Congress. We are happy to work with Congress on that subject.
    Mr. Sensenbrenner. Doesn't the administration have the 
power to do this administratively, however?
    Secretary Bodman. I don't believe so, sir.
    Mr. Sensenbrenner. Okay. So it does require an act of 
Congress?
    Secretary Bodman. I believe so. Yes, it does.
    Mr. Sensenbrenner. Well, if it does require an act of 
Congress, will the administration request that we consider 
legislation to repeal this tariff?
    Secretary Bodman. I don't have a good answer to that 
offhand, but I would be happy to get it for you.
    Mr. Sensenbrenner. Well, I would appreciate that.
    I will give Mr. Markey some of my time since he used a bit 
of it up in his round of questioning. But it seems to me that 
we ought to have everything on the table. And we hear an awful 
lot of ranting about big oil, and a lot of that ranting is 
deserved. But I also think that big corn has got an oar in this 
equation as well because of the protection against cheap 
ethanol coming into the market that is produced outside this 
country.
    I would just very strongly urge the administration to put 
out a full court press to reduce the tariff; and maybe, at 
least with the 10 percent of the petroleum that we get at the 
pump, we can reduce the cost of that, which will bring down the 
total cost.
    I thank the gentleman 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.
    Thank you, Mr. Secretary.
    Your phraseology here I think is important when you talked 
about new energy realities that I think we are all trying to 
adjust to. You have been clear in your testimony in prior 
comments that we are dealing with a global energy market that 
is being affected by things that are happening around the globe 
and that there is no one source. It is all sort of blended 
together. And you just finished saying that results won't be 
immediate, that there is certain lag time that is going to be 
required as these things work their way through the system and 
adjustments are made in production and what not. I am curious 
if you have a perspective on what that lag time is before there 
are things that ripple their way through the energy production 
system. Six months? Six years?
    Secretary Bodman. I think it varies, sir, according to 
which form of energy you are thinking about.
    On oil, we have already, I think, seen a turn where, for 
the first time, we have a turn in the percentage of oil that we 
import. For the first time in some years, it has declined; and 
I think that is an indicator that if the non-OPEC producers 
continue to do what they are intending to do that we will see a 
success there.
    Nuclear power, I would expect that we would see nuclear 
power and the licensing of and the proposals for nuclear power 
in a serious way. I think we now have four reactors that have 
been applied for.
    Mr. Blumenauer. My time is limited, and I want to get at 
this notion of, if we have a sense of lag time, are we talking 
months, years on an overall energy situation?
    Secretary Bodman. I think we are talking years. We are 
going to be talking a few years to see in biofuels, which is 
the whole question that the chairman raised the issue about. In 
biofuels, we are looking at, by the year 2012, that is 4 years 
out, that we are going to have cellulosic biofuels that will be 
cost competitive with corn.
    Mr. Blumenauer. Well, we are looking here from an historic 
perspective. In May of 2001, when your predecessor was on the 
Vice President's Energy Task Force, their vision was put in 
place, and at that time gas prices were $1.70. In 2005, you 
said that 95 percent of the administration's energy policy had 
been implemented. And now we are looking at $2.07 a gallon for 
gasoline. Then we have the Energy Policy Act in August of 2005, 
which the President claimed was going to make a big difference 
for every American. A year later, there was a big celebration 
in the Department of Energy celebrating the first anniversary 
of the passage of that.
    I am trying to get a sense now, we have had the 
administration in control since 2001. You had a Congress that 
in the main was very much in agreement with the administration, 
compliant, giving you what you wanted, and much of it was 
implemented, and it has been now 6, 7 years.
    Secretary Bodman. Right.
    Mr. Blumenauer. Are the $4 a gallon prices that we are 
seeing now a result of the success of the energy policy that 
has been in the pipeline now for some 7 years?
    Secretary Bodman. I would say not, sir. I would say, 
however, that when I--you quoted me as saying that 95 percent 
of the energy policy of the administration had been 
implemented. That is not correct, if that is the word you claim 
that I said. I don't recall having said that.
    Mr. Blumenauer. Then let me reframe that. It has been 7 
years. You have had an administration that has gotten virtually 
everything it has wanted from Congress. It has been in place. 
And I grant you that it takes a year or 2 or 3 to work its way 
out. Shouldn't we be seeing the results? Are we seeing the 
results of the energy policy?
    Secretary Bodman. Well, we are starting to see the results, 
yes. As I indicated, the percentage of oil that we are 
importing has started to turn.
    That the American public is fed up with the high prices, I 
recognize that. I am acutely aware of that. I hear about it 
every day. And it is something that you and I have in common, I 
am sure.
    But it is also something that I think--we are looking to 
decades. We have been 30 years without appropriate research 
having been done on renewable energy, on solar energy, on wind 
energy; and this takes a long time to accomplish. And so it is 
something that is years away, in my judgment.
    Mr. Blumenauer. Thank you very much.
    Just for your records, my understanding is that you did say 
that on March 9, 2005; and if I am in error----
    Secretary Bodman. I don't recall having said that. If I 
said that, I was dead wrong.
    Mr. Blumenauer. I am giving you a specific date. If I am in 
error, I will correct that, if you did not, in fact, say that 
on March 9, 2005.
    Secretary Bodman. Thank you, sir.
    The Chairman. The gentleman's time has expired.
    The Chair recognizes the gentleman from Washington State, 
Mr. Inslee.
    Mr. Inslee. Thank you, Mr. Secretary.
    I think you said several times that you expected the world 
to be operating in a carbon-constrained economy at some point 
in the future; and I want to ask, is that something you believe 
should happen? Do you believe that we should be taking actions 
to deal with global warming to restrain the growth of carbon 
dioxide and other greenhouse gases? Or are you simply stating 
that you are resigned to that happening and you can't stop that 
from happening.
    Secretary Bodman. Of course, it should happen; and we are 
doing everything we know how to do to accomplish that.
    Mr. Inslee. So you think we should be doing all we know how 
to be doing to accomplish a reduction in greenhouse gases?
    Secretary Bodman. Yes, I do.
    Mr. Inslee. Great. I do, too. I think we might disagree on 
whether we are doing that, however.
    I want to ask you about a cap-and-trade system, which we 
know how to do because we invented it in the United States. It 
has worked marvelously in sulfadoxine, with probably zero cost 
to the U.S. economy. Europe has now engaged in it on their 
second round that they have learned some lessons on, and they 
are now going to improve some of the stakes.
    We have an American system that we know works. We have a 
system that has been proposed in the Senate. I believe it has 
passed the committee over there. And we have a proposal many of 
us on this dais are supporting here for a cap-and-trade system. 
To me, it is real clear that, absent that, we won't be able to 
achieve the carbon constraint that you indicate is necessary.
    The last time you were here I asked if you had spoken to 
the President about the cap-and-trade system, and you indicated 
you had not. Could you tell us what the administration plans 
are if we send you a cap-and-trade bill this year, whether the 
President will sign it? And, if you can, describe the cap-and-
trade system that the President will sign. We are most anxious 
to receive some leadership from the White House.
    Secretary Bodman. The President laid out issues related to 
greenhouse gas control that he would be prepared to support: 
reasonable and achievable goals that encouraged the investment 
in new technology, that worked on nuclear power, that 
encouraged the use of coal, that all nations need to be 
included in the program, and that we remove trade barriers. As 
I recall it, those were his five or six different points; and 
he has laid that out.
    I will tell you, sir, that I have now been in this 
administration 7\1/2\ years, and I have spent a lot of my time 
at Commerce and then at Treasury and now at Energy negotiating 
with the Chinese over their exchange rates. And we have made 
this much progress. And I would tell you that I think it is a 
mistake for the President to unilaterally declare what he is 
prepared to do prior to undertaking this whole major economy 
meeting, series of meetings, which he has been doing; and it is 
my view that he is correct in the way he is going about dealing 
with it.
    Mr. Inslee. Well, that is very disappointing. Because, 
essentially, you just said that the President will not join us 
in embracing a carbon-constrained effort in the United States 
during his remaining term of office.
    Secretary Bodman. I didn't say that.
    Mr. Inslee. Well, obviously, we are not going to have a 
global agreement by June 20, 2009; and what you basically said 
is America is going to secede from its historic destiny of 
leading the world in these matters and taking a back seat and 
refusing to act until China agrees. And I think that is a huge 
mistake for several reasons.
    Number one, we didn't wait for China to develop democracy 
before we acted. We are the world's leader, we are the world's 
largest polluter, and we have got both the moral obligation to 
act but, more importantly, an economic opportunity here.
    I mean, I met people yesterday in my office that are 
signing solar thermal contracts for solar thermal plants. We 
have got great strides in solar photovoltaic. We have got great 
strides in enhanced geothermal. We got guys making all-electric 
cars starting in June. We have got the young man I talked about 
signing a contract to electrify the whole State of Israel. But 
those people can't get the help of the White House to send a 
signal to the markets that they need to invest in these new 
companies because there is going to be a price on carbon. It is 
very, very disappointing.
    And I just have to tell you that when the world looks back 
at all of our terms here, I just wish you could spend the next 
few months figuring out how to achieve a constraint on carbon 
in the U.S. economy that can drive investment into these new 
technologies. I think we are missing a huge opportunity here. I 
am very disappointed in your position.
    You can comment.
    Secretary Bodman. Well, I would just say that that 
particular company that you mentioned, to my knowledge, they 
have gotten a lot of investment and that they are pretty well 
fixed.
    Mr. Inslee. But the venture capital community, I met with 
12 of them here in an office, in fact, in this building, 2 
weeks ago and said, look, until--as long as the fossil fuel 
guys can put their pollution in the sky for free in unlimited 
amounts, we are not going to get this job done. You are letting 
the guys--it is like putting their garbage in a dump truck, 
back it up to the city hall parking lot and dump it all for 
free. As long as the fossil fuel guys can do that, we are not 
going to get the quantum leap we need so we lead the world and 
become the arsenal of clean energy like we were the arsenal in 
freedom. It is very disappointing. We are going to have to work 
starting in January.
    Thank you.
    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. Secretary, late last year, the results of a study co-
sponsored by your Department were released supporting the 
possibility of mid-range ethanol blends such as E-20 or E-30 
that can enhance fuel economy for some non-flex-fuel vehicles. 
In an update last month from the Department on its intermediate 
ethanol blends testing, it recognizes the urgent need for 
continued and expanded testing based on the new RFS and the 
anticipated saturation of the E-10 market. The update reports 
of the Department will have at least 160 test vehicles on line 
this month, and I am glad to see it is also evaluating the 
effects of higher ethanol blends on smaller engines such as 
pressure washers.
    So two questions. When do you expect definitive results on 
the effect of intermediate ethanol blends on most engine 
families, and has the Department considered evaluating higher 
ethanol blends over E-20?
    Secretary Bodman. To my knowledge, we have not considered--
to take your second question first, we have not considered 
above E-20, and we are testing various engines for E-15 and E-
20, and that would be enough to encourage the development of 
the ethanol industry.
    The concern is that with the concentration of the 
production of ethanol only in the Midwest that we will not 
encourage the nationwide adoption of ethanol, and we need to do 
that and that a way to stimulate that would be to increase the 
availability of E-15 and E-20.
    Ms. Herseth Sandlin. So what exactly--I am not sure I 
follow what the concern is about testing E-30 at the same time.
    Secretary Bodman. We can test anything. But the E-20 is 
enough to get us through the----
    Ms. Herseth Sandlin. Beyond the saturation of the E-10 
mark.
    Secretary Bodman [continuing]. Whole issue related to E-10.
    Ms. Herseth Sandlin. And then when do you expect those 
definitive results?
    Secretary Bodman. I don't have a quick answer for you on 
that, and I would be happy to get it for you.
    Ms. Herseth Sandlin. Okay. If you could.
    On wind energy----
    Secretary Bodman. On wind energy?
    Ms. Herseth Sandlin. Yes. Your Department released its 20 
percent report earlier this month concluding that wind energy 
could contribute as much as 20 percent of the Nation's 
electricity by 2030 while significantly reducing the carbon 
footprint, and Assistant Secretary Andrew Carson was quoted as 
saying that this can happen for less than half a cent a 
kilowatt hour. So what do you think are the key steps Congress 
must take this year and next to make this possible; and what do 
you think is key to facilitating the siting of a new 
transmission infrastructure, given that the report also states 
that transmission must be categorized with the interstate 
highway system?
    Secretary Bodman. Well, I think the issue related to 
transmission is something that we would encourage. I think we 
have enough tools to encourage that. We have the so-called 
Electricity Office of--I think it is Energy Reliability and 
Electricity Delivery. And that office, headed by Kevin Kolevar, 
is--I just had a session with them the night before last with 
an advisory committee that represents those from all over 
America dealing with this question. So I think we have--to my 
knowledge, we do not need work from Congress, but I would be 
happy to come back to you again if that proves to be otherwise.
    Ms. Herseth Sandlin. So you are confident that there is 
enough incentives that currently exist for private investment 
alone to move forward with the building of the transmission 
capacity?
    Secretary Bodman. I think so, based on my discussions with 
the participants in that industry.
    Ms. Herseth Sandlin. How about the production of tax 
credits? Would you favor the extension of the production of tax 
credits for wind energy production?
    Secretary Bodman. There again, we are happy to work with 
Congress to do that.
    Ms. Herseth Sandlin. Do you think that that is key in order 
to get to the point where we can meet the 20 percent?
    Secretary Bodman. It would appear that it is.
    Ms. Herseth Sandlin. Okay. Thank you.
    Thank you. I yield back Mr. Chairman.
    The Chairman. The gentlelady's time has expired.
    The Chair recognizes the gentleman from Missouri, Mr. 
Cleaver.
    Mr. Cleaver. Thank you, Mr. Chairman.
    Mr. Secretary, I just want to clear up something that I am 
not sure was clear earlier when you responded to Mr. 
Blumenauer. Are you saying or suggesting that Saudi Arabia 
agreed to increase production to 300,000 barrels a day as a 
result of the request from President Bush?
    Secretary Bodman. I do not know. I don't know that. I 
haven't been told that, so I don't have a quick answer for you. 
I do know that they did agree that day, apparently, according 
to, I guess, the chairman. That was something that they had 
already agreed on ahead of time. I don't know.
    Mr. Cleaver. That was my understanding, and so I just want 
to get that cleared up.
    Secretary Bodman. I don't know.
    Mr. Cleaver. The Saudis have responded to the request by 
the President by saying that the price of oil is impacted more 
by the weakened U.S. dollar than anything else. Do you agree 
with their assessment?
    Secretary Bodman. No, sir, I don't.
    Mr. Cleaver. Why not?
    Secretary Bodman. For the reasons that I just mentioned. 
That production has been flat for the last 3 years, having had 
a big jump up in 2004. Whenever you have a situation where we 
know that demand is increasing, demand from China, demand from 
India and even a small increase from here, that when you have a 
situation like that you can get the current kind of pricing 
environment where you have flat production and you have very 
little upside in terms of availability.
    Mr. Cleaver. It seems to me that the market is madly 
searching for any excuse to raise the price of oil.
    Secretary Bodman. I can't comment on that, sir.
    Mr. Cleaver. Well, I mean, you know, the price of oil 
appears to be raised on all events, you know, whether it is a 
hurricane, whether it is a loss by the Washington Nationals. I 
mean, whatever happens, it seems as if, you know, they raise 
the price of oil.
    Secretary Bodman. Unfortunately, the Nationals seem to be 
losing a lot.
    Mr. Cleaver. Yeah, they ran out of gas early. But I am 
just--I mean, you know--I mean, you mentioned Katrina earlier.
    Secretary Bodman. Right.
    Mr. Cleaver. You know, the administration seems to think 
that to solve the problem we just drill in the Wildlife Refuge. 
You know, the Saudis say it is the weakened U.S. dollar.
    Secretary Bodman. That is not what I said. I said that we 
need everything. We need not just--this isn't going to yield to 
drilling in ANWR or any other place. I think I acknowledged 
that in my opening remarks. We need everything. We need solar 
energy, we need wind, we need nuclear power, we need biofuels, 
we need coal, carbon capture sequestration, all of it in order 
to deal with this issue.
    Mr. Cleaver. Greater nuclear power?
    Secretary Bodman. Yes, sir.
    Mr. Cleaver. Do you have some suggestions on where we will 
store the waste?
    Secretary Bodman. We are working very hard on the whole 
Yucca Mountain program. And next--I guess it is 2 weeks, a week 
from next Monday or Tuesday or so, we are scheduled to file the 
application.
    Mr. Cleaver. So you are going to go ahead, in spite of the 
fact that all the Nevada Members of Congress and the Governor 
are all opposed?
    Secretary Bodman. I am going ahead because I am acting as 
the agent of Congress and the presidency. As best I know, 
Congress has opined on this matter, as well as the 
administration; and our job is to execute.
    Mr. Cleaver. But the point is--where are you from?
    Secretary Bodman. This is a filing of a license with the 
Nuclear Regulatory Commission.
    Mr. Cleaver. Does it--I mean, do you support the 
construction of new nuclear facilities?
    Secretary Bodman. Yes, I do.
    Mr. Cleaver. Where?
    Secretary Bodman. Where?
    Mr. Cleaver. Yes, sir.
    Secretary Bodman. That is something to be looked at on a 
State-by-State basis, wherever the States decide they want to 
put them.
    Mr. Cleaver. Including your State?
    Secretary Bodman. I am including--I am a resident of the 
District. I don't think that there is likely to be any being 
put in the District.
    Mr. Cleaver. You know, the preys of the Bengal tiger 
increases with the distance from the jungle.
    Thank you, Mr. Secretary.
    The Chairman. The gentleman's time has expired.
    The Chair recognizes the gentleman from New York State, Mr. 
Hall.
    Mr. Hall. Thank you, Mr. Chairman; and thank you, Mr. 
Secretary.
    A couple of observations. I think you said that the 
administration between 2001 and 2008 has spent about $45 
billion on measures to reduce greenhouse gas emissions.
    Secretary Bodman. It was on both the science and the 
technology.
    Mr. Hall. That is good. I just want to point out that it is 
a little bit less than 4 months of what we are spending in 
Iraq. I know this is off topic. I am not asking you to comment 
on that. But I just think in terms of national priorities it is 
important to say it.
    Secretary Bodman. I understand.
    Mr. Hall. And you also said at one point during your 
testimony that the results from many of these technologies we 
are looking at are not going to be immediate. You also said 
each of us has a part to play.
    Secretary Bodman. That's correct.
    Mr. Hall. And I would suggest that if each of us--perhaps 
you, as Secretary of Energy, might make a statement or, you 
know, the President in his position of bully pulpit can make a 
statement that it is patriotic, not just wise in terms of 
climate and the economy but patriotic to drive in the most 
fuel-efficient manner possible, drive the most fuel-efficient 
vehicle, buy the most fuel-efficient vehicle possible, try to 
use as little energy as you can. And that actually would have 
an immediate impact, would you agree?
    Secretary Bodman. I agree with that.
    Mr. Hall. So there are some things that can have an 
immediate impact. And even a short-term impact, like, for 
instance, the Idaho National Laboratory has done studies in low 
head hydro sites in, I believe, all the States. But in 
particular those States that have changes in elevation that 
lend themselves to it. In New York, the Idaho Laboratory's Web 
site shows 4,000 some low head hydroelectric sites, small dams 
and waterfalls that are currently not being used for hydro 
generation and estimates that greater than 1,200 megawatts of 
power could be harvested by putting turbines where water is 
already falling and wiring that into the grid. Something that 
would have a short-term effect.
    I would guess a serious effort, a top-priority effort to 
harness this unused hydro power, which, by the way, would hire 
mechanics and electrical workers and tradespeople to do the 
insulation and, of course, has the advantage of not being a 
single large point source but being a lot of small point 
sources that would be spread out over the grid would, in fact, 
hire a lot of people besides generating a lot of power.
    I just wanted to throw that out as something.
    Secretary Bodman. I agree with all that.
    Mr. Hall. So maybe we could work with the administration to 
try to make that happen.
    I don't know. I am sure there are liability issues with 
some of these dams that are orphan dams and so on. Some may 
need to be indemnified and repaired. But if we can indemnify 
the nuclear industry, I suggest we should put renewables on the 
same footing. Either none of them get indemnified or we look at 
helping the ones that need it.
    I wanted to ask you about--there is one aspect of the 
administration's budget that I was curious about. The committee 
has explored the potential to make massive improvements in 
efficiency and greenhouse gas emissions by making buildings 
more efficient.
    Secretary Bodman. Right.
    Mr. Hall. I actually commend my friend from California and 
his State's efforts to reduce electrical consumption. While the 
rest of the country has had this curve going upward, California 
has sort of wiggled around and kept constant, mostly constant, 
for the last 20 years because they have had stricter standards 
than the other States have had; and I think we should be 
emulating them rather than making them conform to a looser 
standard.
    But, at any rate, in the most recent budget deal we have 
zeroed out the weatherization assistance program----
    Secretary Bodman. Right.
    Mr. Hall [continuing]. Which would help those most in need 
by simultaneously boosting efficiency and cutting their energy 
costs and, by the way, employing a lot of people. 
Weatherization hires tradespeople to put in storm doors, storm 
windows, insulation, et cetera. So what is the deal, the 
rationale for eliminating funding for this program?
    Secretary Bodman. It is simple. I was the one that made the 
decision. So if there is a bad guy I am the guy.
    And the issue there was the--we are largely a technically 
driven science and engineering organization. That is what we 
know how to do. We are experts at that. We are very good at it. 
In all these national labs--two-thirds of all the employees of 
the Energy Department work in the national laboratory, and they 
are very good at this.
    The issue therefore gets to be, what kind of return do we 
get for our money? We make, as best we now know, the number I 
was given is that we have a 20-for-1 return on investments in 
technology. I got a 1.5 return for the weatherization program. 
It was strictly a financial matter.
    Mr. Hall. Well, you are very honest; and thank you for your 
candor.
    I would just close by saying that, 35 years ago, my next-
door neighbor in the Hudson Valley, a Vietnam veteran and 
entrepreneurial soul named Jan Ashwood, was lighting balloons 
full of hydrogen in his backyard and calling up the press and 
trying to get them to come and see it. He was making hydrogen 
from a barrel of water, a photovoltaic cell and two electrodes 
in the water and then collecting hydrogen--singeing the hair 
off his arm by lighting these balloons full of hydrogen. But as 
a demonstration that a renewable, any kind of renewable, 
combined with water could use hydrogen as a storage device for 
energy.
    And it seems to me that siting such a facility to both 
store hydrogen, which we now know how to handle much better 
than we did when the Hindenberg went down--that was sort of the 
Three Mile Island of the hydrogen era. I think we have the 
space shuttle powered by it. We know how to handle it much more 
safely.
    And it seems to me it would be much easier to site a 
hydrogen storage and generation facility that produces no waste 
except water when you burn the hydrogen than it would be to 
site a new nuclear plant. And, in fact, you are looking for the 
same site. You are looking for a place away from population on 
a body of water. So I am just curious how 35 years have gone by 
since I saw my next-door neighbor doing that and we haven't 
seen more of an effort in that direction.
    My time is up, so I yield back.
    The Chairman. The Secretary may answer the question, 
please.
    Secretary Bodman. The answer to that question is we have 
been through over the last 35 years a real dip in the fact that 
oil all of a sudden went from the outlandish price of $30 to 
$35, which it was in 1978, down to $10 or $8 or $9 something 
like that. All work in this area, in research area, stopped at 
that point in time. Everything. That is the issue we are 
dealing with.
    The Chairman. The gentleman's time has expired.
    The Chair recognizes the gentleman from California, Mr. 
McNerney.
    Mr. McNerney. Thank you, Mr. Chairman.
    I am going to follow up on an earlier question, although 
your question deserves following up, too, Mr. Hall.
    Ms. Herseth Sandlin mentioned that the Department had just 
issued a report a couple weeks ago that wind energy could 
provide 20 percent of our Nation's electrical needs by 2030, 
and yet the Department of Energy's proposed budget increases 
the wind energy research by only $3 million. Now, this is a 
budget that was decimated over the period between 2000 and 
2006. So what is the justification for such a low level of 
funding for such an important part of our Nation's energy 
supply?
    Secretary Bodman. To my knowledge, a lot of the work that 
has been done has already been accomplished in order to create 
electricity from wind. That is one answer. And, two, there 
continues to be a very substantial commitment in both 
Massachusetts, where Mr. Markey is from, and in Texas relating 
to new wind blade test facilities. And so there is work going 
on.
    I guess I would answer that research, where it needs to be 
done, that is what we are good at. That is what we do, is 
research, research and development. We don't fund new----
    Mr. McNerney. To go from 1 or 2 percent of our Nation's 
energy to 20 percent is a huge jump. I mean, that is as much 
more or maybe more than nuclear is producing. So I suggest that 
additional research is going to be needed to meet that level of 
demand or that level of production.
    My second question would be, do you agree that there are 
tremendous gains to be made with energy efficiency.
    Secretary Bodman. Yes, I do.
    Mr. McNerney. Then would you agree to work within the 
administration to allow States to lead the Nation in efficiency 
legislation even though it may exceed Federal standards, 
especially referring to vehicle efficiency?
    Secretary Bodman. I can't commit to that because I don't 
understand all the details of it. I would be happy to study 
that particular question.
    Mr. McNerney. Well, what I am asking is would you advocate 
that? Because California, Massachusetts and other States have 
had trouble getting the administration to allow that sort of 
legislation to go forward. And, honestly, if you don't agree to 
that, then, by association, the administration stands in 
opposition to the most--I believe the most effective tool we 
have to lowering gas prices in the long run.
    Secretary Bodman. Okay.
    Mr. McNerney. All right. Good. I like that kind of 
agreement.
    Now, you had mentioned to Mr. Blumenauer that you don't 
remember mentioning a 95 percent success in implementing the 
administration's energy policies.
    Secretary Bodman. That's correct.
    Mr. McNerney. But on the White House Web site it shows that 
you have said that, over the past 4 years, we have implemented 
95 percent of those recommendations, 100 recommendations that 
are made. So that indicates in my mind that the 
administration's policies are flawed. Because they have been 
implemented to a large degree, and the success in terms of 
keeping gas prices low, for whatever method, by increasing 
efficiency or by increasing supply, haven't been as successful. 
Do you have a response to that?
    Secretary Bodman. Well, I think the response is that we 
clearly have a long-term research program in solar energy, 
wind, nuclear power, biofuels, carbon capture, sequestration; 
and it is going to take a number of years to dig ourselves out 
of the hole that we are in. And so the fact that I am quoted as 
having said that this is 95 percent done, if I am quoted 
correctly by the congressman, I am wrong.
    Mr. McNerney. Okay. Thank you. I yield back. Thank you for 
your testimony, Mr. Bodman.
    The Chairman. The gentleman's time has expired.
    There is going to be a series of roll calls in a few more 
minutes, and I think what might be advisable is if we can 
continue to question the Secretary until that time has arrived. 
So the Chair will recognize himself for another round of 
questions.
    Mr. Secretary, last Friday, the President was in Saudi 
Arabia; and at that time he and Secretary Rice reached an 
agreement in a memorandum of understanding which is--and I 
quote here from the agreement--intended to cooperate on the 
issue of appropriately sized light water nuclear reactors and 
fuel services arrangements for the Kingdom of Saudi Arabia, 
promoting the establishment of arrangements that would allow 
future civilian light water nuclear reactors deployed in the 
kingdom of Saudi Arabia with access to reliable nuclear fuel 
supplies and services.
    Now, I don't understand, Mr. Secretary. Three years ago, 
Vice President Cheney said that--and I quote--here is what he 
said, talking about Iran's deeply questionable nuclear program. 
He said, Iran is already sitting on an awful lot of oil and 
gas. No one can figure why they need nuclear as well to 
generate energy.
    So if that is true for Iran, why are we in the United 
States introducing yet more nuclear technology into the Middle 
East when we know that has been a source for much of the 
friction that exists in that region? Because, ultimately, any 
country can pull out of the nuclear proliferation regime, hold 
on to the uranium, hold on to the plutonium and have a nuclear 
weapons program with the very same light water reactor 
materials. Why, Mr. Secretary, is the President----
    Secretary Bodman. I don't know. I wasn't there, so I can't 
respond to that, other than saying I presume that the President 
has a good deal of confidence in the King and in the leadership 
of Saudi Arabia.
    It is also true that it is going on in the United Arab 
Emirates where they have expressed a lot of interest in nuclear 
power, in solar energy.
    The Chairman. Well, that is the point, Mr. Secretary. Saudi 
Arabia is three times the size of Texas.
    Secretary Bodman. Yes.
    The Chairman. It is one big desert. It is sunny almost 
every day of the year.
    Secretary Bodman. Right.
    The Chairman. Why aren't we having a Saudi solar 
cooperation agreement with the United States? Why would we 
introduce more dangerous nuclear materials into that region 
when solar energy should be the basis of our partnership with a 
country that says it wants to diversify from oil and gas? 
Although Mr. Cheney would say if Iran has plenty of oil for 75 
million people, Saudi Arabia has twice as much for a third of 
the population. Why would we introduce more nuclear power? Does 
that make any sense, given the volatility of that region and 
the ability to have solar become the future for Saudi Arabia if 
they want to end their oil and gas era?
    Secretary Bodman. I can't answer that, Mr. Chairman. I 
don't know. I wasn't there.
    The Chairman. You know, I know this sounds--I'm 
incredulous. I can't believe that the President's Secretary of 
Energy doesn't have a view or have knowledge about the nuclear 
agreement that the United States is implementing with the Saudi 
Arabians. Given the fact that it is your agency that is touting 
new research in solar, new research in renewable energy 
resources, that you seem to be out of the loop in terms of then 
what is the energy policy for what our agreement should be 
around the world.
    Secretary Bodman. That is true.
    The Chairman. It is true?
    Secretary Bodman. Yes.
    The Chairman. I just find that hard to believe. It seems as 
though the Secretary of State can use nuclear power plants as a 
short-term diplomatic tool for her use, knowing that solar 
energy is a better alternative for Saudi Arabia for sure, and 
that our long history with transfer of nuclear materials into 
these Middle Eastern countries almost inevitably results in the 
compromise of that program and the use of those materials for a 
nuclear weapons program.
    Secretary Bodman. I am sure that Secretary Rice was not 
contemplating the fact that this program would be compromised. 
I mean, you are assuming that it is going to be compromised.
    The Chairman. I am saying to you that if you look at----
    Secretary Bodman. I am assuming that it is not.
    The Chairman. If you look at Saudi Arabia, you have to say 
that solar should be the first resort of that country; and, 
instead, we are sending them more nuclear power plants, the 
same way that the world sent Iraq and Iran and North Korea 
nuclear power plants that ultimately turned from energy sources 
into weapons programs.
    We know the tension that exists between the Saudis and the 
Iranians. We know that they are trepidatious about the nuclear 
weapons program in Iran. I don't understand why we would be 
fueling this tension in the Middle East by providing the 
beginnings of a program where we will send nuclear materials to 
Saudi Arabia under the guise of an energy exchange when my real 
fear here is that the Bush Administration knows that this 
program is likely to be compromised in the future by the 
Saudis.
    Secretary Bodman. I don't believe that, sir.
    The Chairman. Well, they should know it.
    Secretary Bodman. We have a difference of view.
    The Chairman. Well, how about this? Can we have an 
agreement that this should be a Saudi solar agreement with the 
United States and that we should be sharing our solar 
technology with the Saudi Arabians?
    Secretary Bodman. If Saudi Arabia would like to have a 
solar agreement, they certainly can ask us and we would be 
happy to respond.
    The Chairman. But aren't you suspicious that the Saudis 
don't want a solar agreement? Saudi Arabia is the Saudi Arabia 
of solar. There it is. It sits there as a desert with sun 12 
months a year, blistering hot. Why wouldn't this administration 
be suspicious that they are asking for nuclear rather than 
solar power exchange in order to meet their long-term energy 
needs?
    Secretary Bodman. There are a lot of good reasons to use 
nuclear power. It is less expensive than solar energy right 
now. We don't have solar energy that is cost competitive.
    The Chairman. Do you personally believe that Saudi Arabia 
needs nuclear power plants?
    Secretary Bodman. I believe that it is wise for them to 
diversify their sources of energy away from oil and gas, yes.
    The Chairman. You know, here is the problem, Mr. Secretary; 
and I don't think the Bush Administration is ever going to 
understand this. That every nuclear power plant is a generator 
of electricity, yes, it is, but with a by-product of nuclear 
materials that can be used for a nuclear bomb program. And that 
is what is going on in Saudi Arabia.
    Secretary Bodman. That is your opinion, sir.
    The Chairman. I know it is my opinion. But all Middle 
Eastern history points in that direction. And the Bush 
administration should be touting the dramatic breakthroughs 
that have been made in solar energy over the last couple of 
years and encouraging the Saudis to move in that direction, 
given their geographic location, the desert nature of their 
population and the leadership role that we can play in 
partnership with them in pointing the world in that direction 
and away from this nuclear fuel cycle which is ultimately going 
to come back and haunt the world once again.
    Let me turn and recognize the gentleman from Oregon, Mr. 
Blumenauer.
    Mr. Blumenauer. Thank you.
    The Vice President famously said in 2001 that conservation 
may be a sign of personal virtue, but it is not a basis, a 
sufficient basis for a sound comprehensive energy policy. Is 
that still the administration's view, that conservation is a 
personal virtue and is not a cornerstone?
    Secretary Bodman. It is certainly not my view.
    Mr. Blumenauer. I was curious, as you moved forward early 
in your tenure to implement the recommendations of Mr. Cheney's 
national energy policy-- and, again, our understanding is that 
the assertion was that much of those recommendations were, in 
fact, implemented, which, as my colleague mentioned a moment 
ago, you were quoted as saying on the White House Web site. 
Yet, according to the GAO, the Department of Energy has missed 
34 of the 34 congressionally mandated deadlines for setting new 
efficiency standards for appliances and electrical equipment. 
Why was meeting those efficiency standards such a low priority 
of the Department of Energy that they missed 34 out of 34?
    Secretary Bodman. I can't answer that. I can tell you that 
one of the things that I have focused on during my 3-plus years 
of work in that Department had been management and has been the 
issue of trying to run things better. And we have--I think have 
turned that around and have that entire program now in better 
shape. It is still going to be a number of years before we get 
caught up, but we now have it on a program that I think makes 
sense.
    To write an appliance standard is a much more difficult 
task than it appears to be on the surface, and it takes time. 
You have got to then get agreement of both the manufacturing 
community and the regulatory community and others that are 
involved.
    Mr. Blumenauer. Well, that is your choice, to get the 
agreement of the manufacturing community. I mean, the 
administration stepped in and stopped some of the stronger 
standards that were already under way by the Clinton 
administration.
    Secretary Bodman. Not to my knowledge. I don't know about 
that. I can't speak to it.
    Mr. Blumenauer. Air-conditioning standards, you don't know 
that your Department stopped the implementation of more 
rigorous air conditioning standards?
    Secretary Bodman. Do I know that? No, I don't.
    Mr. Blumenauer. Okay. I mean, I would think that that would 
be part of--if you are getting a handle on the management and 
you were concerned that we missed 34 out of 34 standards, that 
there might--and it is so hard to get agreement, that these 
would be things that would be pretty high priority for you to 
know.
    Secretary Bodman. I don't happen to know about air 
conditioning standards. I don't happen to know about that.
    Mr. Blumenauer. Well, what are your priorities for 
efficiency? I mean, air conditioning I think is number one or 
number two in every area of the country.
    Secretary Bodman. Furnaces. They are very important in the 
South. They are less important in the North. Furnaces are very 
important. There are all kinds. Dishwashers, refrigerators. I 
mean, it is a long list of things.
    Mr. Blumenauer. Air conditioning is number one or number 
two in every major region of the country, is it not?
    Secretary Bodman. Not to my knowledge. I don't happen to 
know that offhand.
    Mr. Blumenauer. Okay. Thank you.
    Thank you, Mr. Chairman. Thank you, Mr. Secretary.
    The Chairman. The gentleman's time has expired.
    The Chair recognizes the gentleman from Washington State, 
Mr. Inslee.
    Mr. Inslee. Thank you.
    Mr. Secretary, I want to ask you again about this cap-and-
trade system. Many if not most of the investment community, the 
cap organization, which are several Fortune 500 companies that 
have been urging your administration to embrace a cap-and-trade 
system, they believe it is necessary both from an environmental 
and an economic standpoint. And the people I am listening to 
are the people in these cutting-edge companies who are 
developing advanced solar photovoltaics, enhanced geothermal, 
wave power, solar thermal plants, a whole host of new 
technology, the electrification of the automobile.
    What they tell me is that we are missing an economic 
opportunity by not adopting a cap-and-trade system. And what 
they tell me is that we are in a race--we are in a race against 
Germany, Denmark, Spain to see who is going to be developing 
these technologies to sell to China and India.
    India, when I was there, they have 400 million people that 
don't have access to a light bulb. They are going to want 
electricity. The question is, who is going to provide them the 
clean energy technologies to do that? Is it going to be us or 
is it going to be Spain or Germany? And, right now, we are 
losing out to those countries because they have policies that 
drive investment into these clean energy technologies.
    That is what the clear energy CEOs and the investment 
community is telling me. Why do they get this and this 
administration not get this as seeing this as an economic 
opportunity for us and why we should lead the world? Why do 
they understand that and your administration does not 
understand that?
    Secretary Bodman. I don't know how to answer it any 
differently than I have already answered it, Mr. Inslee. I 
think the question gets to be how do we bring all of the 
countries of the world together. And the President has I think 
wisely developed a program for getting the largest--I think it 
is the largest 17 or 18 economies, the major economies of the 
world, to get them together to make an agreement on what the 
approach, what the world's goal ought to be and what each 
country's goal ought to be. And he will be prepared to commit 
to that at that point in time.
    And there is a G-8 meeting that is supposed to occur I 
think in early July. And if there is successful--if we are 
successful in getting a response from the other countries, this 
country will respond accordingly.
    Mr. Inslee. Well, clearly, we all have a stake in this; and 
everybody needs to act at some point. But there is two major 
flaws with that.
    Number one, if we had adopted the Bush administration model 
of democracy, we would still be trying to reach a global goal 
of everybody becoming a democracy before--we just went ahead 
and did it in 1776 because we decided to lead the world. And I 
think that is the policy of America, that we ought to be 
leading the world.
    But, secondly, and just as more importantly, this strategy, 
if you call it that, of the administration is we don't do 
anything until Bangladesh signs onto an agreement. This is a 
huge, huge economic failure, because we are not going to 
develop the clean energy technologies to sell to the world if 
we wait for the entire world to get on board.
    I look at this as losing an economic opportunity while we 
wait for the rest of the world, and I just don't know why the 
administration cannot understand that, of what it is to lose 
economic opportunity. Why don't you agree?
    Secretary Bodman. I don't know how to be any clearer than 
it was. These are the major economies of the world. I think 
there are 17 or 18 of them. They include places like China, 
India, Brazil, Mexico; and we are making some progress, good 
progress forward.
    Mr. Inslee. So you are willing to give away a market to 
sell China clean energy technology? You are willing to give 
that away to Spain and Germany, who are now taking advantage of 
our failure to act on this?
    Secretary Bodman. Not in my view.
    Mr. Inslee. Well, that is what is happening. Germany--we 
used to be the leader in solar photovoltaic. Now Germany is. 
The reason is they have adopted a cap-and-trade system, they 
have adopted a feed-in tariff, something I will be introducing 
shortly, and we have dropped back to number five or six. And 
now they are leading in selling product to China because this 
administration has failed to act and are giving away those 
markets.
    Thank you.
    The Chairman. The gentleman's time has expired.
    The Chair recognizes the gentleman from New York State, Mr. 
Hall.
    Mr. Hall. Thank you, Mr. Chairman; and, Mr. Secretary, 
thank you for this conversation.
    Our office in Putnam County, New York, in the 19th District 
received a call lately from a woman who was all excited about 
buying a flex-fuel vehicle; and she asked my staff, where can I 
get some flex-fuel? And we had to tell her there were only a 
couple of pumps in New York State, even though there are more 
than 200,000 vehicles, I believe, sold by Ford and GM.
    We have sort of induced people to build vehicles that can 
burn E85, allowed them to advertise it on TV as a green thing 
to do. You can help the environment by buying an E85 car. And 
allowed the oil companies to continue to not provide that kind 
of blend.
    In fact, when the oil executives, the top CEOs of the top 
five companies, came before this committee, I asked them in my 
brief questions, now that you have made the biggest profit in 
the history of the world, of any corporation of the world, 
would you commit to putting at least one biofuels pump at every 
station that you own, not franchise stations, but stations that 
you actually own? And every one of them said, no. And I said, 
why? And they said, we don't know if the demand will be there. 
And I said, haven't you heard of flex-fuel vehicles? Haven't 
you heard of advertising?
    I think they may need some help from your Department.
    And I know that you are all Ph.D.s and researchers and that 
things like this or efficiency weatherization may be far below 
the level of interest of a lot of people who work at the 
Department of Energy, but we have a situation where last week--
I checked on the Internet--ethanol was selling for $1.97. It 
has gone up a little bit this week, but it is still somewhere 
between a half and a third the price of gasoline.
    So if we have got these vehicles on the road, we have 
incentivized production capacity, some of which, by the way, is 
in danger of going bankrupt and new ethanol or cellulosic 
ethanol projects are in danger of not being built because they 
are seen as weakening in the market, what can we do or what can 
your Department do to make sure that the infrastructure exists 
to bring that fuel to market? Because that would have an 
immediate impact on the price of oil.
    Secretary Bodman. We can work and are working with the oil 
companies as well as the auto companies to get more flex-fuel 
vehicles made and to get the oil companies to include an E85 
pump and/or other pumps available.
    Mr. Hall. Thank you, sir. I hope that works as fast as 
possible.
    And I am proud to say that West Point in my district, after 
some discussion with the commander of the post and his staff, 
have decided to put in a 5,000 gallon E85 tank underground and 
to sell that fuel to flex-fuel vehicles in their motor pool and 
at the commissary where the faculty in the West Point community 
buy fuel.
    And the more we can do to especially have these large 
facilities that move large quantities like school bus fleets 
that might be able to burn a blend of biodiesel or UPS or big 
shipping companies and so on to pull the string through the 
tube so that there is more demand to help create more 
production on the other end--and I would encourage you to do 
everything you can to try to make that happen.
    Secretary Bodman. Thank you very much.
    Mr. Hall. I thank you, and I yield back.
    The Chairman. The gentleman's time has expired, and all 
time has expired.
    Mr. Secretary, we thank you so much for coming here today. 
We know that you have an unenviable task. You are the 
President's principal energy advisor, and you have the 
responsibility of defending indefensible positions which are 
created by President Bush and Vice President Cheney. And we 
recognize the difficulty of the position which you are placed 
in here because those positions are indefensible.
    Again, in conclusion, on the issue of deploying the 
Strategic Petroleum Reserve beginning this Memorial Day 
weekend, you are arguing that there is no natural disaster. 
President Bush argues that there is no international crisis in 
the Middle East; and, therefore, the conditions do not exist 
that would require the deployment of the Strategic Petroleum 
Reserve. I could not disagree more. I think we are in an 
economic crisis right now. It is largely fueled by high oil 
prices that are affecting consumers, affecting business all 
across our country.
    You are right. It is not a natural-disaster-created oil 
spike. It is a Bush-administration-driven price spike in oil 
and gas.
    Secretary Bodman. I disagree with you.
    The Chairman. I know you disagree. But all evidence points 
to the fact that oil has gone from $30 a barrel to $135 a 
barrel during the 7\1/2\ years that President Bush and Vice 
President Cheney have been implementing their secret energy 
plan; and that secret energy plan is one that has not included 
the robust investment in renewable energy resources, wind and 
solar. The administration is still opposing the extension of 
the wind and solar energy tax breaks.
    And even as we hit the Memorial Day weekend the Bush 
administration is still refusing to sell oil from our Strategic 
Petroleum Reserve as a way of sending a signal to the 
marketplace that we are not going to stand on the sidelines; we 
are going to actively intervene to protect consumers and 
businesses.
    And I understand your position. You are in a difficult one 
as the Secretary of Energy when the President and Vice 
President are committed to ending their administration as they 
began it, without a real energy policy. And it is bad news for 
our economy.
    But I think drivers should expect, as they head to gas 
stations across the country today and tomorrow to get ready for 
the Memorial Day weekend, to pay the highest prices that any 
American has ever paid for oil at the pump; and I think it is 
the responsibility of the Bush administration to deploy the 
Strategic Petroleum Reserve in order to protect them.
    Again, Mr. Secretary, I thank you for being here.
    With that, this hearing is adjourned.
    [Whereupon, at 12:00 p.m., the committee was adjourned.]





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