[Senate Hearing 110-685]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 110-685
                    CLEAN ENERGY AND ``GREEN'' JOBS



                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION


                              THE ECONOMY


                           DECEMBER 10, 2008

                       Printed for the use of the
               Committee on Energy and Natural Resources

                     U.S. GOVERNMENT PRINTING OFFICE
46-256 PDF                 WASHINGTON DC:  2008
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512�091800  
Fax: (202) 512�092104 Mail: Stop IDCC, Washington, DC 20402�090001


                  JEFF BINGAMAN, New Mexico, Chairman

DANIEL K. AKAKA, Hawaii              PETE V. DOMENICI, New Mexico
BYRON L. DORGAN, North Dakota        LARRY E. CRAIG, Idaho
RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            RICHARD BURR, North Carolina
MARY L. LANDRIEU, Louisiana          JIM DeMINT, South Carolina
MARIA CANTWELL, Washington           BOB CORKER, Tennessee
KEN SALAZAR, Colorado                JOHN BARRASSO, Wyoming
ROBERT MENENDEZ, New Jersey          JEFF SESSIONS, Alabama
BLANCHE L. LINCOLN, Arkansas         GORDON H. SMITH, Oregon
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
JON TESTER, Montana                  MEL MARTINEZ, Florida

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
              Frank Macchiarola, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel

                            C O N T E N T S




Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Book, Kevin, Senior Vice President, Energy Policy, Oil & 
  Alternative Energy, Friedman Billings Ramsey Capital Markets 
  Corporation, Arlington, VA.....................................    18
Domenici, Hon. Pete V., U.S. Senator From New Mexico.............     7
Galvin, Denis, Trustee, National Parks Conservation Association..    76
Hauser, Steve G., Vice President, Gridpoint, Inc., Arlington, VA.    37
Hendricks, Bracken, Senior Fellow, Center for American Progress..    10
Limbaugh, Mark A., Former Assistant Secretary for Water and 
  Science, Department of the Interior............................    70
Loper, Joe, Senior Vice President, Policy and Research, Alliance 
  to Save Energy.................................................    32
Moseley, Cassandra, Ecosystem Workforce Program, Institute for a 
  Sustainable Environment, University of Oregon, Eugene, OR......    64
Woolf, Malcolm D., Director, Maryland Energy Administration, 
  Annapolis, MD..................................................    23

                               Appendix I

Responses to additional questions................................    93

                              Appendix II

Additional material submitted for the record.....................   113

                    CLEAN ENERGY AND ``GREEN'' JOBS


                      WEDNESDAY, DECEMBER 10, 2008

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:35 a.m. in room 
SD-366, Dirksen Senate Office Building, Hon. Jeff Bingaman, 
chairman, presiding.


    The Chairman. OK, why don't we go ahead and get started. 
The hearing will come to order.
    With the economy now in recession, many economists have 
urged that the Congress get busy early in the new Congress and 
adopt an economic stimulus package that focuses on spending for 
infrastructure and other goods and services that will maximize 
job create over the short term, and also a return on our 
investment over the long term. President-elect Obama also 
favors such a strategy; and, particularly, he had called for a 
stimulus bill that focuses on investments in clean energy 
programs and infrastructure and conservation projects that 
create green-collar jobs.
    The stimulus bill is expected to be taken up early in the 
new Congress. Although there's no final decision about the size 
or scope of the stimulus package, all reports are it will be 
    The purpose of today's hearing is to discuss a range of 
energy and natural resource programs that should be considered 
as part of an economic stimulus package. I'm glad that we have 
the excellent witnesses we have today on the subject.
    Clearly, there are a number of important energy measures 
that can be implemented quickly and that will provide green 
jobs and will result in significant energy savings, and will 
enhance the incorporate needed to move to a clean energy 
economy. Those, in my view, should be a central part of any 
stimulus package. I'm very glad that the President-elect has 
made this a priority.
    I also hope that the package will include a substantial 
investment in the critical infrastructure needs facing the land 
and water management agencies under this committee's 
jurisdiction. These agencies face many billions of dollars in 
deferred maintenance of roads, trails, dams, and buildings, 
much of which is in very great need of repair at this time.
    In addition to this physical infrastructure, we need to 
invest in restoring our natural infrastructure; that is, our 
forests, wetlands, rivers, and rangelands. For example, 
national park and forest restoration, water reuse, and 
abandoned mineland reclamation projects can be as good an 
investment, in the context of an economic stimulus strategy, as 
our other public work projects. I hope we can see a significant 
amount of the funds in a new stimulus bill devoted to land and 
water resource management agencies in the Department of the 
Interior and the Forest Service to restore the physical and the 
natural infrastructure that they manage for the American 
    I'd also like to note that, in addition to the stimulus 
package, I do believe--and I've said this publicly several 
times--that we have a real opportunity in the new Congress to 
make progress on comprehensive and forward-looking energy 
policy. I look forward to working with all my colleagues, both 
Democrat and Republican, on this committee to get people's best 
ideas for what ought to be included in that proposed energy 
    Soon after the new Congress convenes, I hope we're in a 
position to put forward draft legislation, for the committee to 
consider, that is bold and, I hope, broadly supported.
    Today, our first panel will discuss clean energy proposals, 
and our second panel will discuss how we can stimulate the 
economy through projects related to land and water management.
    Before going to the first panel, let me call on Senator 
Domenici for any opening comments that he'd like to make.
    [The prepared statements of Senators Salazar, Cantwell, 
Murkowski, Sessions, and Bunning follow:]

   Prepared Statement of Hon. Ken Salazar, U.S. Senator From Colorado

    Thank you Chairman Bingaman and Ranking Member Domenici for holding 
today's hearing on investments in clean energy and natural resources 
projects and programs to create green jobs and to stimulate the 
economy. We all know how critical these issues are, and I am pleased to 
have the opportunity to explore solutions that will not only create 
jobs for the hard-working people of America, but that also lay a 
foundation for a clean and secure future. I would like to thank our 
witnesses for being here today to share their expertise with us.
    I believe each of our witnesses and many members of this committee 
are driven by a common insight that renewable energy will enhance our 
energy, environmental, and economic security. In Colorado I have 
witnessed firsthand the economic potential of clean energy, where our 
citizens' commitment to a renewable electricity standard has attracted 
thousands of new jobs to the state. In the Denver metro region alone, 
the number of renewable-energy sector jobs tripled between 2004 and 
2007. This economic growth, through clean energy and natural resources 
projects can be expanded throughout our nation. We can invest in 
projects on public lands that protect our water resources, decrease 
wild-fires, and improve our aging infrastructure and we can invest in 
our energy infrastructure, incorporating new high-tech solutions that 
help us to curb our usage and improve energy efficiency. These jobs can 
reach out to all sectors of our economy, helping blue-collar workers to 
research scientists, and providing jobs to folks in our rural areas as 
well as in our cities.
    We have taken great strides over the past few months in advancing 
our energy policy and I hope today's hearing will help us understand 
the how to maximize the benefits of the work we have already done in 
order to make even greater strides. Our nation holds the technological 
potential and the workforce to implement these green initiatives, now 
we must restart the economic system in order to capitalize on it. Time 
and again throughout our history Americans, their hard work and 
ingenuity have risen to meet our greatest challenges.
    I believe that implementing homegrown solutions to our energy and 
economic problems will not only help us here at home, but open new 
economic opportunities to export these technologies to the rest of the 
world. Clean energy will be an economic driver for the 21st century, 
and I believe it is what we need to turn to now to put our nation on a 
path to a clean and secure future. I look forward to hearing the 
testimony and would like to thank the Chairman and Ranking member once 
Prepared Statement of Hon. Maria Cantwell, U.S. Senator From Washington

    Thank you, Mr. Chairman, for calling this timely and important 
    I feel we have finally reached a national consensus on something 
most members of this committee have long known--to remain a world 
economic leader and military superpower we urgently need to transform 
and revitalize our nation's energy system to be cleaner, more diverse, 
and more distributed.
    I'd especially like to welcome Bracken Hendricks here today. 
Bracken and I worked first worked together in 2003 to launch the Apollo 
    Back then the notion that a significant multi-billion dollar 
investment in clean energy could be an engine of economic growth and 
competitiveness, and create millions of high-wage manufacturing jobs 
that could not be outsourced, was not well appreciated.
    Today the need for this investment has been recognized and embraced 
by both sides of the aisle and really the rest of the world so I look 
forward to hearing Bracken's specific ideas.

                       A GENERATIONAL OPPORTUNITY

    While some may argue that our current economic crisis makes it 
harder to be bold and make the necessary investments, I believe this is 
actually a generational opportunity to invest in America's long 
neglected energy infrastructure.
    A generational opportunity to repower America and end our 
debilitating and costly over reliance on fossil fuels.
    A generational opportunity to reestablish America at the forefront 
of technological advancement and leadership.
    A generational opportunity to harness our nation's manufacturing 
prowess to make the trillions of dollars of new clean energy 
technologies our world will need.
    A generational opportunity to establish a robust clean energy 
export market.
    A generational opportunity to get serious about tackling and 
slowing down global warming.


    Our nation's electricity grid is one area in particular I believe 
suffers from a lack of public investment. While America's grid has been 
called the most complicated machine on earth, with age and strain it's 
grown a little creaky--and I'm afraid it's never been very smart.
    Today's grid is based on outmoded technology that makes it less 
reliable and requires greater generation resources than it should.
    And with electricity demand predicted to grow by 17 percent in the 
next decade, this is an urgent problem that will only get worse.
    Now is the time to make the long neglected investments necessary in 
our nation's electricity grid to increase its efficiency and 
reliability and to meet future demand growth by integrating more 
renewable and distributed sources of energy.
    According to a recent report by the Department of Energy, 20 
percent of the United States could be powered by wind energy by 2030. 
But, we must commit approximately $60 billion in new transmission 
capacity over the next 20 years to reach that target.

                        BPA BORROWING AUTHORITY

    In the Northwest, we are blessed to have a more centralized 
authority, the Bonneville Power Administration, which historically has 
ensured our region has sufficient and reliable transmission capacity.
    However, future demand growth and the need to accommodate vast new 
wind farms threatens to overwhelm BPA's current infrastructure and 
limit the deployment of green energy and green jobs.
    That's why I plan to work with the Northwest delegation to push for 
an additional $5 billion in Treasury borrowing authority that will 
allow 4,700 megawatts of renewable resources to come online in the next 
two years.
    This green power investment means 50,000 green jobs--including high 
wage construction jobs and economic multiplier spinoffs that benefit 
local communities.
    And unlike many stimulus measures, taxpayers are all but guaranteed 
to get paid back with interest. BPA has a consecutive 25-year record of 
making its annual payment to the U. S. Treasury.


    Besides giving BPA access to the capital it needs, I look forward 
to hearing from our witnesses on other measures we can enact in the 
upcoming stimulus bill to build the transmission lines we need.
    What we need to do to ensure our grid has the capacity and 
flexibility to incorporate a diverse range of new renewable generation 
    And to make sure we are simultaneously infusing intelligence into 
America's electric power grid to make it more efficient and dependable.

                       INVESTING IN A SMART GRID

    Making our electricity grid smarter has been one of my top 
priorities, and I'd like to welcome Steve Hauser, a long time 
collaborator on this issue.
    Steve played an important role in helping me draft the smart grid 
legislation that became the Smart Grid Title of the 2007 Energy Bill.
    Steve and the many members of the Gridwise Alliance know 
revitalizing our nation's grid will take more than just putting more 
steel in the ground and copper wires in the sky. Any new grid 
investments must incorporate smart grid technologies that are able to 
record and communicate valuable information on condition of supply, 
consumer loads, or system performance.
    We need to make the investments necessary to take our two-lane dirt 
road electricity grid and turn it into the superhighway with on-ramps 
for all sorts of new clean energy sources.
PNNL Smart Grid Study
    In a groundbreaking study earlier this year, the Pacific Northwest 
National Laboratory in my state of Washington reported on the results 
of a year-long effort to put the power grid in the hands of consumers 
through technology.
    By enabling consumers to be active participants in improving power 
grid efficiency and reliability, consumers who participated in the 
project saved approximately 10 percent on their electricity bills
Plug in Electric Vehicles
    Making our electricity grid smarter and more flexible is key not 
only to making our grid more reliable and efficient, but also to making 
distributed generation sources and plug in vehicles work for America. 
Without smart grid technologies that can help ensure all these new 
generation sources are managed wisely, we will potentially have future 
peak demand problems during the day and underutilized grid capacity at 


    There are immense technical and logistical issues involved in 
transitioning to a clean energy system, but the benefits are clear.
    The history and the strength of our nation lie in our ability to 
continually invent new and better ways of doing things.
    Whether it is building the most reliable electric system in the 
world, laying down a massive interstate highway system, or creating the 
Internet, Americans have marched forward making breathtaking 
    These achievements and investments have historically provided us 
with immense prosperity as a nation and a quality of life we cherish.
    The upcoming stimulus bill is a once in a generation opportunity to 
ensure we have the infrastructure we need to reinvent, repower, and 
revitalize America.
    I look forward to working with my colleagues and the stakeholders 
here today to find the right mix of investments to achieve our shared 
    Thank you.
  Prepared Statement of Hon. Lisa Murkowski, U.S. Senator From Alaska

    Mr. Chairman, Thank you for holding this hearing on this important 
topic. Let me start by thanking Senator Domenici for his kind words. It 
is hard to believe that this is truly the senator's final hearing of 
his 36-year career. We all will miss him terribly, and the country will 
miss his wisdom, integrity and his commitment to sound public energy 
and land use policy. He leaves giant shoes to fill, which is not lost 
on any of us on our side of the aisle as we look to the next Congress.
    As Senator Domenici said about this hearing, given that our economy 
is now officially in the recession we have all assumed has been 
underway for months, it is important that we work to find a way to 
stimulate our economy. Clearly this month and early next year the new 
Administration of President-Elect Obama, and in fact, all of Congress, 
will want to work quickly on efforts to lessen the length and severity 
of this economic downturn.
    Given last week's jobs report where we lost an unexpectedly large 
number of jobs in November--533,000 of them--bringing the total to 1.9 
million jobs so far this year--we need to do more than our action 
during the first lame duck session last month of extending unemployment 
insurance compensation for an additional 13 to 26 weeks.
    But given that our national debt as of today is $10.66 trillion 
dollars, meaning each citizen's share of the debt is now nearly 
$35,000, and that our debt is increasing by about $3.8 billion a day, 
and given that we could face a trillion dollar budget deficit for FY 
`09 even if we don't pass a second stimulus bill; I will want to be 
very certain that a new stimulus bill is not just a glorified 
supplemental appropriations bill.
    I will want it to contain projects that will jumpstart our economy 
by both creating jobs, AND also result in useful capital stock that 
will stimulate both the economy and the productivity of American 
workers for decades to come.
    When every dollar we are spending is going to have to be borrowed, 
admittedly at this moment at low interest rates, this bill is going to 
have to make America's economy more productive in order for us to 
afford to pay this money back in the future without diminishing our 
standard of living and harming our way of life.
    I certainly believe that spending money for improvements in our 
energy infrastructure can meet that definition. As I said recently, I 
believe that the sharp record increases in energy prices of this summer 
were a key trigger to the financial/mortgage meltdown that we have seen 
this year.
    While oil and natural gas prices currently are plummeting, oil 
today costing just 28% of what it did five months ago, if we don't 
improve our energy system and increase our production of domestic 
energy, Americans will be right back to paying unsustainable prices for 
energy as soon as the global economy improves. Even worse, if OPEC 
nations are successful at drastically cutting back their oil 
production, we may be paying high prices again even before the global 
economy fully bounces back.
    We still need a balanced national energy policy that promotes 
renewable energy and energy efficiency, but also an expansion of 
domestic fossil fuel production--the three-legged stool that I have so 
often talked about in this committee.
    Thus I am supportive of additional funding in a recovery bill for 
weatherization--only if we can effectively spend more than the $487 
million that is now proposed through past spending and the $250 million 
more we added to the continuing resolution Sept. 30th (Section 130).
    I support additional spending for electric vehicle battery 
development--especially for aid to get such batteries made in the 
U.S.--provided it does not overlap the $25 billion in loans to U.S. 
auto manufacturers we approved in the Energy Independence and Security 
Act (EISA) just a year ago this week.
    But rather than just copying President Roosevelt's Civilian 
Conservation Corps program and building more parks--even though I like 
parks--I will want to see a significant amount of any stimulus spent to 
help fund renewable, alternative and technological upgraded energy 
projects, conventional energy projects on Native and Indian lands, and 
national electricity transmission grid development that is so vital to 
get new power from where it is generated to where it is needed.
    I agree with the criteria that is rumored to likely be imposed on 
all projects funded through a new stimulus: that they be already 
authorized at least broadly, that they involve significant job 
creation, that they can start construction, preferably within three to 
six months, at least within 24 months, and help lead to the creation of 
2.5 million new jobs within the life of the 111th Congress, and that 
when they are completed, they will do ``double duty,'' both providing a 
stimulus during construction; and making our economy more efficient and 
making us more productive over their design lives.
    I happen to believe that providing financial incentives NOW in a 
stimulus for appropriate alternative energy projects and improvements 
to conventional fuels will pay big dividends later.
    For example, my home State of Alaska, is in the process of awarding 
$100 million in state aid for renewable energy projects. Alaska has 
identified 120 projects needing $311 million, from small hydro 
projects, to geothermal, from biomass co-generation to solar electrical 
generation, that could be under construction within a year--more than 
20 of the projects could be under construction by this spring.
    All of these projects would have the advantage of cutting 
electricity costs in their local communities by between 20 and more 
than 50 cents per kilowatt hour compared to the cost of diesel-
generated power currently used. And many of the projects would create 
jobs, both during construction and operation. And the projects for 
Alaska were authorized in Section 803 of EISA and the geothermal 
projects were authorized by Section 625 of EISA in both Alaska and 
across the country.
    I'm sure Alaska is not unique. I'm sure utilities across the 
country could suggest in short order renewable energy projects that 
would help them to diversify their sources of power, while reducing 
carbon emissions, and projects that might be economically competitive 
with fossil fuels, especially after the receipt of this grant 
incentive. These projects can all help make green energy companies 
viable by improving their economies of scale, thus helping our economy 
    High voltage transmission funding is another area that should be 
included. Many here have spoken to T. Boone Pickens who wishes us to 
help expand wind generation from the Great Plains. But his plan only 
works if the nation's transmission grid is rapidly expanded. Given 
justified concerns about brownouts in both the Northeast and California 
in the near future, spending money now on transmission makes vital 
    In the Energy Policy Act of 2005 in Title 5 we authorized $2 
billion of grants to help get energy projects going on Native lands and 
Indian reservations--all intended to help the resource owners and make 
America less dependent on foreign energy sources. We have actually 
funded about $1 million of those grants. There is a lot of pent up 
demand for such aid. In my home State of Alaska, Cook Inlet Region Inc. 
Native Corporation could start work on a huge Fire Island wind farm to 
supply power to Anchorage, Alaska's largest city, if such money were 
appropriated to help with the project.
    And there are a host of carbon capture and storage projects, many 
involving coal gasification technology , that are also ready to 
proceed. There are nuclear projects also awaiting loan guarantees and 
in some cases for new designs grant aid. We could quickly assemble a 
list of such projects, if money were likely to become available.
    I just hope that as we and staff work with the President-Elect to 
settle on the details of a new economic recovery bill, that we keep an 
open mind and include funding for a wide variety of clean-energy, 
alternative energy and improved conventional energy projects and 
    That is the way that we will improve American productivity and get 
our economy back on track most quickly. Spending more on energy 
infrastructure truly will be the gift that keeps giving to this nation, 
long after the holiday decorations are put away.
    I hope the witnesses when they recommend spending comment on the 
number of jobs such spending may produce, whether the jobs are short 
term or likely long-term in nature and provide any specific information 
they have on the stimulative benefits of their proposed spending. I 
look forward to the testimony of our witnesses and especially to 
getting a chance to question them. Thank you Mr. Chairman.
  Prepared Statement of Hon. Jeff Sessions, U.S. Senator From Alabama

    I favor reducing our dependence on imported oil and I strongly 
support any viable program that will reduce the amount of money that we 
export to unfriendly foreign nations for oil. It is a sound policy to 
redirect that money towards creating wealth and jobs here at home in 
the United States, and we need to increase our domestic energy supply.
    I also support effective policies that will reduce pollution and 
CO2. We have the potential to move forward with a productive 
Energy Plan, but the tendency of Congress has been to overreact and 
throw money at programs that do not work or which are not cost 
    There needs to be a realistic approach that will benefit American 
citizens and the American economy, and at the same time lower gasoline 
and electricity prices and reduce pollution and CO2 
    In a December 5th , Washington Post article by the able and liberal 
columnist, E.J. Dionne Jr. he states that ``Obama's luxury is that the 
economic demands of the moment almost perfectly coincide with his 
political interests. With even conservative economists urging Obama not 
only to cut taxes but also to spend and spend and spend some more, he 
has an opportunity to keep a whole raft of political promises all at 
once.''\1\ Dionne goes on to say that ``what we should fear most is not 
that Obama will get to keep some of his campaign pledges but that the 
stimulus will fall victim to classic logrolling. With so much cash on 
the table, the temptation will be enormous to lard the package with a 
slew of unproductive projects and all manner of narrow tax breaks for 
interests that probably never knew existed.''\2\
    \1\ http://www.washingtonpost.com/wp-dyn/content/article/2008/12/
    \2\ Id.
    There is truly a chance to reach a political consensus on programs 
that we all know will work. Let's get busy and do those things and do 
them quickly. On matters that are more dubious or more questionable, 
let's get busy and follow our chairman as he seeks the most accurate 
and up to date information concerning best priorities for action. It is 
plain to me that the expanded use of nuclear power for electricity 
generation must be a part of any serious program for clean energy.
    Creating jobs in clean energy programs can work. By redirecting our 
transfer of wealth abroad to purchase energy, mainly oil, to cost 
effective American energy production, we in effect, create these jobs 
with the wealth we were transferring abroad. Count me in on this 
    Still, I believe that not every program is worthwhile. Not every 
program is as good as another. Thus, this country and this Congress 
should take great care to not waste a single dollar and to ensure that 
supported programs are the best bang for the buck.
   Prepared Statement of Hon. Jim Bunning, U.S. Senator From Kentucky

    Thank you Mr. Chairman. At a time when the average American's 
pocket book is getting tighter and tighter, it is imperative that we 
carefully consider each new government spending initiative.
    Whether it is in the form of a bailout or a stimulus, spending is 
still spending and it is all ``green.''
    When looking at how to best promote economic growth within our 
nation's energy sector, we must be careful not to pick winners and 
losers. All too often through overregulation or open-ended subsidies, 
American taxpayers pay the price for the government's political 
    I have long supported market-based initiatives to improve energy 
efficiency and lower emissions through new technology. I have authored 
bills and fought for provisions in the 2005 and 2007 energy bills to 
expand Clean Coal Technology.
    I believe that carbon sequestration technology is an integral part 
of the future of coal.
    Over half of our nation's electricity comes from coal power plants. 
Without cheap energy from coal, Americans would pay much higher 
electricity bills and our country would lose more manufacturing jobs to 
foreign countries.
    While the coal industry is important to our nation's economy, they 
also have obligations to our environment. The future of coal must be 
clean coal. Through the adoption of new technologies we can reduce 
emissions and clean up the coal power process.
    When considering any new green energy initiatives we must consider 
all initiatives--including clean coal. Until alternative forms of 
energy and renewable are more technologically sound, it is important 
not to turn our backs our nation's most abundant resource.
    A true energy policy needs only a light touch from Washington and 
must be technology neutral and based on free markets.
    Thank you Mr. Chairman and I look forward to questioning the 


    Senator Domenici. First, Senator Bingaman, I've been 
treated harshly most of the time, in New Mexico--my next-door 
neighbor hasn't come down to visit me. I mean, I've had at 
least ten events that I thought Salazar would come down to, but 
I look around, I called his name, and he never came.
    Senator Salazar. Your staff forgot to invite me.
    Senator Domenici. No, you were invited. I mean, it may be 
that we didn't do it right. Anyway, I look forward to seeing 
you there.
    I thought that I had finished with hearings, because I was 
already celebrating my departure. Now you called a meeting, and 
you said it was urgent, and so, I came. I'm glad I came, except 
I can't do anything except try to be part of the party, here, 
because I'm not going to have any votes next year. But, I do 
think your idea of getting started early and quick and putting 
good people on this issue of what things in the energy area--
call them ``green,'' call them whatever you would like--that 
we've already authorized but one still waiting. Which ones can 
we do? Which ones might be part of a big deal? If we don't do 
something, rest assured, they won't be there.
    The second thing that I wanted to comment on, and I hope 
you will not consider this to be trying to dump on 
environmental rules and regulations, but I believe one of the 
things you're going find most difficult about this is that 
almost anything you do in this area is going to be subject to 
long delays up front because of NEPA rules and regulations and 
the kinds of things that are going to be required to approve 
the projects. I even thought, as I reviewed this package last 
night, that maybe if I were doing it and had enough time, I 
might even do the crazy thing of suggesting an expedited 
process for all of the environmental rules for these projects 
that you are going to try to get done as part of the stimulus 
package. Now, that may turn a lot of people off immediately, 
because, when you talk about that, that's the end of the world, 
right? I mean, I'm free to say these kind of things now that 
I'm not running.
    Senator Domenici. But, I used to say them before, too.
    In any event, my statement, which I'm going to put in the 
record, I believe is important, but there's too many Senators 
present, and they want to participate. But, I did outline what 
this committee did regarding the energy crisis. I, frankly, 
believe, under your leadership for 2 years, my leadership for 2 
years, and the other time that you've had it when we weren't in 
control, that we have done more in 6 years than has been done 
in 30 years or more to move America ahead in the energy crisis. 
Many of the things being talked about by this administration as 
things we ought to do because they'll help with the energy 
crisis, we've already authorized them. There's billions of 
dollars authorized in programs that will, indeed, fit the bill 
that you're talking about.
    We did three main bills that changed the energy face of 
America, and probably the next people that look at it are going 
to build on them and not even whisper that we already did them. 
I hope you all will build on them because that wasn't easy 
work. The passage of the big bill was difficult, and it's 
filled with good things that we can do under Chairman 
Bingaman's leadership. Filled with them. You know, they're 
talking about green buildings. We have all the authorization 
for green buildings in the Federal Government already 
authorized. I mean, 2, 3, $4 billion worth is already in there. 
We aren't doing anything with it. Nobody's putting any money 
    So, I'd just like to put my statement in the record.
    [The prepared statement of Senator Domenici follows:]

    Prepared Statement of Hon. Pete V. Domenici, U.S. Senator From 
                               New Mexico

    Mr. Chairman, thank you for convening this important hearing today. 
Obviously, these are extraordinary times. Congress is in session this 
week to consider a bailout package for the Big 3 automakers, but our 
country's economic woes go far beyond the domestic auto industry. We 
have seen a rapid rise in unemployment and a distressed housing market. 
A credit freeze threatens our nation's largest financial institutions. 
And we have seen record declines in the stock market wipe away 
literally trillions of dollars of wealth.
    In response, President-elect Obama is contemplating the largest 
public works program since the 1950s. The purpose of today's hearing is 
to explore ideas within this Committee's jurisdiction for inclusion in 
the expected stimulus package in January.
    After 36 years in the Senate, it is difficult to leave this great 
institution--but even more so with our country facing such tremendous 
challenges. However, I can say with pride that we have all worked 
hard--and in a bipartisan manner--to address the nation's energy and 
natural resource needs in the 2005 Energy Policy Act, the 2006 Gulf of 
Mexico Energy Security Act, and in the 2007 Energy Independence and 
Security Act.
    Indeed, in the last four years we've done more to advance energy 
policy than had been achieved in the past 30 years, including:

   Codifying, in 2005, the most extensive amendments to the 
        U.S. energy tax laws in over a decade, with $15 billion in 
        energy tax incentives--$4.5 billion of which was dedicated to 
        renewable energy incentives;
   Opening 8 million acres on the Outer Continental Shelf to 
        access 1.25 billion barrels of oil and 6 trillion cubic feet of 
        natural gas resources;
   Promoting the construction of clean energy projects through 
        the establishment of a Loan Guarantee Program. While I have 
        been disappointed with the Administration's implementation of 
        this Loan Guarantee Program, we now have applications for about 
        30 new nuclear units before the NRC. This program has never 
        been more important than it is now when it is so difficult to 
        secure the necessary funding to build clean energy projects. It 
        is my hope that the Obama Administration can realize the 
        promise of the Loan Guarantee Program we created in a 
        bipartisan fashion;
   Directing the Federal Government to lead by example by 
        purchasing electricity generated from renewable resources, 
        ``greening'' their substantial building stock through increased 
        energy efficiency measures, and imposing federal fleet 
        conservation requirements;
   Increasing the production of biofuels through the 
        establishment of a Renewable Fuels Standard; and
   Increasing the Corporate Average Fuel Economy Standards for 

    Of course, this is in no way a complete list of the numerous policy 
advancements promoted by these bills. In fact, many of the suggestions 
we will hear today are not new ideas at all. Instead, the witnesses 
will ask that funding be provided for the programs this Committee has 
already authorized. It is unfortunate that partisan politics has 
prevented the handling of the appropriations process pursuant to 
regular order as perhaps some of these important programs would have 
already received needed funding.
    For purposes of today's hearing though, we must make sure that we 
are not simply throwing money at the problem. Instead, any 
Congressional action must have a demonstrable impact on jobs in the 
near-term, meaning within the next 12 to 24 months.
    With regard to natural resource issues, there is great potential 
for physical infrastructure projects, such as maintenance, restoration, 
and reclamation projects, to provide jobs and stimulate the economy. 
However, as we all know, such major projects undertaken by our federal 
land management agencies are more often than not subject to legal 
challenges over environmental issues. This begs the question of whether 
any natural resource-related jobs will be available within the desired 
two-year timeframe unless waivers or an expedited NEPA process are 
addressed in the stimulus package. One only has to look at the anemic 
progress made on the Healthy Forest Restoration Act to understand how 
slowly the wheels of progress turn.
    This will be, of course, my last hearing as a member of this 
prestigious Committee. I leave it in the capable hands of our Chairman 
and the incoming Ranking Member, Senator Murkowski. I have no doubt 
that they will provide outstanding leadership on energy and natural 
resource issues while continuing the Committee's well-deserved 
reputation for bipartisanship.

    Senator Domenici. In summary, I think there are many things 
already included in the energy bills and energy laws that we 
have passed, that we could look at them carefully and get a 
very good, powerful basketful of things that you should spend 
money on if you're going to spend it. I'm not sure how much we 
should spend, because I'm not sure that this kind of money has 
gotten us out of recessions in the past, but maybe our new 
President knows something I don't know, and maybe we can get 
out of it with spending money on new projects.
    We used to do it, when I started here, until they sent a 
team out, and, for two consecutive recessions, they measured 
them and found that the jobs came on 36 months after the 
recession was over. That wasn't a very good plan, right? So, we 
stopped that, we didn't put that kind of program in. Now, it's 
here again. I think the new President is very worried. So, 
we'll see.
    Thank you, Senator. Thank you very much.
    The Chairman. All right. Let's go ahead and hear from our 
first panel. Let me just introduce them, and then we'll hear 
each of them take 5 to 6 minutes to summarize the main points 
we need to know, and then each--I'm sure each member here on 
the panel, each Senator, will want to ask some questions.
    First is Mr. Bracken Hendricks, who is a senior fellow with 
the Center for American Progress here in Washington; next, Mr. 
Kevin Book, who is senior vice president and senior analyst 
with Friedman Billings Ramsey & Company, in Arlington, 
Virginia; next, Mr. Malcolm Woolf, who is a director of the 
Maryland Energy Association; Mr. Joe Loper, who is the vice 
president for policy and research with the Alliance to Save 
Energy; and Mr. Steve Hauser, who is vice president of 
GridPoint, in Arlington, Virginia.
    So, thank you all for being here, and please go right 

                       AMERICAN PROGRESS

    Mr. Hendricks. Thank you very much, Chairman Bingaman, 
Senator Domenici, members of the committee. It's an honor to 
speak before you today. I do want to commend you for your 
    I couldn't agree with you more, Senator Domenici, that many 
of the things that need to be done today have already been 
moved forward in energy legislation, but there has been a lack 
of commitment to actually appropriate and to put the funds 
forward to make the sort of investments that we need to steer a 
clean energy future and to move our country onto a low carbon 
path that reduces our dependence on oil. But, most importantly 
for today, doing all of those things will jumpstart our 
economy. It will create a tremendous new investment in the 
foundation of our economy, in productive infrastructure, and, 
very critically, in job creation.
    I'm a senior fellow with the Center for American Progress. 
We are a nonpartisan, multi-issue think tank. But, 
interestingly, we have come back to the position that clean 
energy is at the foundation of all of the elements of our 
policy. It really is at the root of our national security 
strategy. It's at the root of our plans to invest in the 
domestic economy. It's at the root of our plan to rebuild 
cities and create jobs.
    So, I want to talk to you briefly today to set the context 
of why a green stimulus--why investing in a clean energy 
strategy a the core of an economic recovery package makes sense 
as economic policy, not only as environmental policy. I think 
that your committee is positioned to lead in this critical 
conversation around what an economic recovery package will look 
    We stand at a unique moment in American economic history. 
This is one of the deepest and longest recessions that we've 
faced in a generation. The decline in GDP in the third quarter 
was the biggest since the recent recession of 2001. Job losses 
in 2008 are almost 2 million, half a million in November alone. 
Household income is lower now than it was in 1999. One in 11 
mortgages is delinquent or in foreclosure. Credit-market 
borrowing has dropped by about 45 percent. This is a very 
serious contraction. It's a contraction that's lasted for over 
a year. The resulting loss of demand in the economy is not 
going to go away within 3 to 4 months.
    I could impress upon you one thing in this conversation, it 
would be that we need a recovery package, and that the 
traditional rules of stimulus, while they are critically 
important in a V-shaped, short-term downturn, in a U-shaped 
recession, which has a prolonged trough with sustained job 
losses, needs not only an infusion of capital, an infusion of 
demand and new borrowing, new spending in that very short 3- to 
4-month window, but it critically needs it over the course of 
12 and 18 months, as well.
    So, we've put forward a 12-month economic recovery package 
at the Center for American Progress. We feel that it's 
important that it be balanced. It's about split equally between 
short-term impacts that will use tax credits and immediate 
spending to increase demand, but also longer-term projects that 
will be released a little bit more slowly--investments in 
transit, investments in energy infrastructure, like the 
electrical grid, investments in green buildings, schools, and 
critically needed projects that have been neglected that will 
produce a long-term legacy, as well.
    I also want to impress upon you that the size of the 
recovery package matters, as well. There's a unique convergence 
right now. The Chamber of Commerce and the Center for American 
Progress stand side by stand in calling for significant 
investments in infrastructure. Paul Krugman, a progressive 
economist, has called for a $600-billion recovery package, 
about 4 percent of GDP. Interestingly, Goldman Sachs has come 
to almost the same number: 500 million.
    So, the Center for American Progress is putting forward a 
call for a $350-billion first-year recovery package, with the 
possibility of a 2-year plan. That's over 2 percent of GDP. 
We've called for about a third of that package being focused on 
critical needed energy investments.
    I want to stress for you that these investments will create 
vitally important jobs. We did a job study, starting in the 
summer, when we could see that a recession was looming and that 
a recovery package would be needed, and we found that $100 
billion invested in smart grid, green building, manufacturing 
job creation would be critically important to jumpstart the 
economy. Very interestingly, it would create 2 million jobs.
    When we compared that to spending on a traditional 
consumption-based stimulus that would simply give tax breaks or 
rebates to people to encourage immediate household consumption, 
we found that 22 percent of that spending would leave the 
economy immediately in purchasing imported goods, where, if you 
invest in infrastructure, in capital projects that have been 
backlogged, that are ready to go, only 9 percent, 9 cents on 
the dollar, would leave the economy; fully 91 cents would stay 
within local communities and create jobs.
    We also compared that package to what it would mean to 
invest the same amount of money in oil in a traditional energy 
economy, and we found that investing in these green projects 
that create efficiency and encourage renewable energy 
deployment, encourage new markets, new skilled labor--it takes 
dollars that would be spent on waste energy, and, instead, we 
put it into the skills of working people, new construction, and 
new manufacturing jobs, and you get four times the number of 
jobs from investing in green clean-energy projects than you 
would from investing in traditional energy, and three times the 
number of jobs earning above $16 an hour.
    So, this is not only green stimulus, but it's good 
stimulus. It's fiscally sound, it's economically prudent, it's 
smart government. We need to be, not only getting our economy 
moving, but we need to be getting it moving in the right 
    So, let me just very quickly touch on broad categories that 
I think are essential to have significant pots of spending on 
in the near term to stimulate growth. Energy efficiency and 
conversation programs, like the block grant, will drive 
critical investment into States and cities who are hurting 
right now and create spending on construction jobs. Programs 
like weatherization will save consumers money, and green school 
construction will put money into communities. Similarly, we can 
invest in manufacturing and create jobs, as well. So, 
infrastructure, construction, and manufacturing, and then 
investing in the training and skill-building provisions that 
will make that possible.
    So, thank you very much. I look forward to answering 
specific questions as we move forward.
    [The prepared statement of Mr. Hendricks follows:]

  Prepared Statement of Bracken Hendricks, Senior Fellow, Center for 
                           American Progress

    Chairman Bingaman, Senator Domenici, and Members of the Committee, 
thank you for the invitation to discuss how investments in clean and 
efficient energy and environmental improvements to our nation's 
infrastructure can create jobs and economic stimulus during this time 
of tremendous challenge for working families.
    Today we urgently need immediate stimulus and near term recovery 
investments; yet we must also use our resources wisely, not only to get 
our economy moving but to get it moving in the right direction. A green 
recovery plan will create more jobs, and more good jobs at higher 
wages, and it will create new markets for American business while 
reducing the overall cost of addressing our climate and energy crises. 
This is smart public policy and good government, and I applaud your 
leadership in seeking this path forward for the nation.
    I am Bracken Hendricks, Senior Fellow at the Center for American 
Progress Action Fund, a non-partisan multi-issue think tank focused on 
developing innovative policies that build a more broadly shared 
prosperity. At CAPAF, we have come to believe, through deep research on 
the matter, that smart strategic investments in climate solutions can 
help to rebuild the underpinnings of our economy and create significant 
numbers of good jobs.
    Built on the foundation of efficient and low-carbon energy sources, 
this transition can be a source of increased business opportunity and 
competitiveness, stronger communities, improved national security, and 
increased prosperity. We call this approach ``the Energy Opportunity,'' 
and we believe that it must be at the center of both America's energy 
policy and our economic policy as we confront the interrelated 
challenges of a sagging economy, rising energy prices, and a growing 
climate crisis.
    In this testimony, the Center for American Progress Action Fund 
offers some thoughts on: 1) the current economic downturn and the 
urgent need for an aggressive stimulus package that extends well into 
the coming year; 2) why clean energy should be a major centerpiece of 
any such recovery plan, possibly constituting from one quarter to one 
third of a larger stimulus package; and 3) priority measures that will 
not only create jobs and growth in the short term, but help rebuild the 
foundation of the U.S. economy over the long term on the platform of 
renewable and efficient low-carbon energy.


    The U.S. economy is facing the most serious difficulty we have 
experienced at any time in a generation. Long-run problems of stagnant 
or falling wages and incomes are no longer hidden by artificially 
inflated asset values. The effects of the financial crisis have moved 
from Wall Street to the daily operations of business and the daily 
lives of families.
    Consider that:

   The 0.5 percent decline in gross domestic product in the 
        third quarter of 2008 was the biggest since the last recession 
        in 2001.
   Total job losses in 2008 have hit over 1.9 million, 
        including 530,000 in November alone.
   Median household income is lower than it was in 1999.
   The values of homes fell by 2.5 percent, or $351 billion, in 
        the second quarter of 2008.
   One in 11 mortgages is delinquent or in foreclosure, and 
        credit card defaults rose to 5.5 percent of all credit card 
        debt by the second quarter of 2008.
   Credit-market borrowing financed 35.2 percent of fixed 
        investment by non-financial corporate businesses in the second 
        quarter of 2008, down from 80.1 percent a year earlier.

    In this climate, there is an urgent need for federal policies 
designed to provide stabilization, stimulus, recovery, and growth to 
address these huge problems. Without action, there is too great a risk 
of further collapse and an ever-worsening spiral of job loss and 
economic decline. In addition to action aimed at stabilizing the 
extremely shaky auto industry and financial and housing markets, 
Congress should act quickly to pass measures to stimulate the broad 
economy and commence the road to recovery.
    Stimulus policies should be designed to offer an immediate boost 
throughout the economy by spurring demand. Their purpose is to quickly 
stall a downward spiral in the economy and give confidence to 
businesses to invest and hire by restoring demand for their products. 
But the consequences of the current downturn are not likely to be 
reversed quickly by traditional, fast-moving stimulus measures. Also 
needed is a recovery program to accelerate the creation of a strong 
labor market and restore lost jobs over the next two years.
    There is a growing consensus that stimulus and recovery spending 
should be on the order of 2 percent to 4 percent of GDP. Nobel Prize-
winning economist Paul Krugman concludes that, ``the stimulus package 
should be at least 4 percent of GDP, or $600 billion.''\1\ Goldman 
Sachs calls for a stimulus of $500 billion.\2\ CAP Senior Fellow Gene 
Sperling, former director of President Bill Clinton's National Economic 
Council and Clinton's national economic advisor, says, ``The breadth 
and potential depth of that demand crisis require us to undertake a 
bolder `Powell Doctrine' on stimulus in which $300 billion to $400 
billion--or at least 2 percent of GDP--should be the starting point 
with an understanding that more could be needed and that we will need 
to call for a coordinated global stimulus.''\3\
    \1\ Paul Krugman, ``Stimulus math (wonkish),'' ``The Conscience of 
a Liberal,'' November 10, 2008, available at http://
    \2\ Brian Faler, ``Democrats Set to Take on Stimulus Bill as Price 
Rises,'' Bloomberg.com, November 4, 2008, available at http://
    \3\ Gene B. Sperling, Testimony before the House Energy and 
Commerce Subcommittee on Health, November 13, 2008, available at: 
    Beyond the immediate challenges, the economy has long-standing 
fundamental problems that must be addressed by major changes in our 
nation's approach to energy, education, infrastructure, scientific 
research, innovation, and other areas as described in the Center for 
American Progress report ``Progressive Growth.''\4\ Stimulus and 
recovery measures aimed at the immediate crisis should be designed, as 
a matter of good governance, to serve double duty by providing a 
jumpstart in the investments needed for the country's long-term growth. 
A green recovery strategy can meet both of these objectives.
    \4\ John Podesta, Sarah Rosen Wartell, and David Madland, 
``Progressive Growth: Transforming America's Economy through Clean 
Energy, Innovation, and Opportunity.'' Center for American Progress, 
November 2007. Available at: http://www.americanprogress.org/issues/
    The Center for American Progress has outlined a plan to invest $350 
billion (greater than 2 percent of GDP) in a one-year stimulus and 
recovery package that will jump start economic demand and stimulate job 
creation while making a significant down payment on meeting these 
broader public policy challenges, making efficient use of taxpayer 
funds. In broad categories, the $350 billion package includes 

   $55 billion to spur demand and assist those most in need.
   $70 billion aid for state and localities.
   $175 billion for infrastructure investments in stimulus and 
   $50 billion for tax cut stimulus.

    Within the infrastructure section, this plan identifies over $100 
billion of clean energy and environmentally beneficial projects and 
programs that could help direct new investment rapidly into deploying 
energy efficiency and low-carbon technology. This approach will drive 
new investment in construction and manufacturing jobs, create new 
markets for technology and skilled labor, and help cut consumer energy 
costs, all while leaving a legacy of productive infrastructure and 


    Working in partnership with the University of Massachusetts' 
Political Economy Research Institute, the Center for American Progress 
recently released a report entitled, ``Green Recovery: A Program to 
Create Good Jobs and Start Building a Low-Carbon Economy.'' The report 
outlines a program of investment that would rapidly inject $100 billion 
into the domestic economy through near-term spending on energy 
efficiency and renewable energy.
    This analysis found that a strategy for economic recovery that 
invests in new energy alternatives and smart public infrastructure 
provides superior improvements in economic performance and job creation 
when compared to either rebates or comparable spending on traditional 
energy sources. A program of investment in deploying new clean energy 
technology and improving building efficiency is good short-term 
economic policy. It would drive immediate spending into some of the 
hardest hit sectors of the domestic economy in construction and 
manufacturing. Put simply, a green recovery package creates more jobs 
and more good jobs than any other strategy. It deserves strong 
consideration at this time.
    There are many ways in which government spending can stimulate the 
economy and create jobs as part of a recovery program. Public spending 
directed toward a green recovery, however, would result in more jobs 
than spending in many other areas, including, for example, on rebates 
for increasing household consumption, which was the primary aim of the 
April 2008 $168 billion stimulus program. Near-term investments in 
energy efficiency and renewable energy also have the added benefit of 
moving the country toward the low-carbon future that is necessary to 
increase our international competitiveness and national security, and 
avoid the devastating social, economic, and environmental effects of 
global warming over the long term.
    A green recovery program is more effective as an engine of job 
creation than spending the same amount of money within the oil industry 
or on household consumption. Increasing spending by $100 billion on 
household consumption along the lines of the April 2008 stimulus 
program would create about 1.7 million total jobs, or about 16 percent 
fewer jobs than the green recovery program. In addition to creating 
more jobs, targeting an economic stimulus program at increasing green 
investments also creates more good jobs at higher wages than either a 
conventional stimulus or comparable spending in the traditional energy 
sector. A green recovery strategy also offers longer-term benefits: 
reducing home energy bills to provide consumer savings; stabilizing the 
price of oil, natural gas, and other non-renewable energy sources 
through reduced demand and increased energy diversity; and, of course, 
building over time a low-carbon economy.
    While it is not proposed as an option for economic stimulus, 
spending on current fossil fuel-based energy offers a useful comparison 
to demonstrate the substantially increased economic benefits of 
investing in renewable energy and efficiency. Spending $100 billion 
within the domestic oil industry, for example, would create only about 
542,000 jobs in the United States. A green infrastructure investment 
program would create 2 million jobs, or nearly four times more jobs 
than spending the same amount of money on expanding oil energy 
resources. And again, spending on oil offers no benefit in 
transitioning the U.S. economy toward a low-carbon future, and it 
perpetuates the economic and national security vulnerabilities of 
continuing to rely on oil for the lifeblood of our economy.
    A green recovery strategy will help to improve the overall 
efficiency of the U.S. economy, which currently uses nearly twice the 
energy for every unit of GDP when compared to many of our European and 
Asian competitors.\5\ If the Bush administration had pursued an 
aggressive package of energy-efficiency measures across the economy 
starting in 2001, with implementation beginning in 2002, the cumulative 
savings to the economy today would be a remarkable $206 billion in 
avoided energy costs.\6\ These energy cost savings can increase the 
purchasing power of American families for more productive purposes. In 
addition, it will generate new markets for American manufactured goods 
and advanced technology. But for the purposes of a near-term economic 
stimulus package, two features of a green recovery are critical: it is 
relatively more labor intensive than other investments, and the jobs 
that it creates are more concentrated on domestic workers.
    \5\ Center for American Progress and the Worldwatch Institute, 
``American Energy: The Renewable Path to Energy Security'' (2006) 
available at http://www.americanprogress.org/issues/2006/09/
american_energy.html/AmericanEnergy.pdf (last accessed October 2007).
    \6\ American Council for an Energy Efficient Economy, data supplied 
by Dr. John Laitner, September 2008.
    Green jobs are more labor intensive. Relative to spending within 
the oil industry, the green investment program utilizes far more of its 
overall $100 billion in spending on hiring people than it does on 
purchasing machines and supplies. Renewable energy and energy 
efficiency create more jobs per dollar invested than traditional fossil 
fuel-based generating technologies by putting money directly into 
advanced technology manufacturing, modern infrastructure expansion, and 
developing the skills of people. This is money that would have been 
previously spent on wasted energy and imported fuel. These investments 
substitute dollars spent on pollution and waste and redirect that 
investment into the skills of workers and the infrastructure of 
    Green investments have more domestic content. A green investment 
program relies much more on goods and services made within the U.S. 
economy and less on imports when compared to spending either within the 
oil industry or on household consumption. In general, about 22 percent 
of total household expenditures flow toward imported goods. With the 
green recovery investment program, only about 9 percent purchases 
imports.\7\ Another critical benefit of a green economic recovery 
program is that infrastructure upgrades, building efficiency retrofits, 
renewable energy installations, and other components of green 
investment all involve work that cannot easily be outsourced. Moreover, 
the diffuse nature of these programs ensures that spending on goods and 
services is spread widely across regions of the country and stays in 
the local economies where these services are rendered, as compared to 
large, centralized energy or infrastructure projects. The economic 
spillover and indirect job creation effects of this phenomenon help 
explain why green investments create more jobs and more good jobs than 
the alternatives.
    \7\ Robert Pollin, Heidi Garrett-Peltier, James Heintz, and Helen 
Scharber, ``Green Recovery'' (Washington: Center for American Progress, 
2008), available at http://www.americanprogress.org/issues/2008/09/pdf/
    Public investment is important to private markets. In considering 
the viability of spending on large-scale public investment projects, 
one of the major issues that is often raised is whether such 
expenditures absorb the limited amount of total investment funds in the 
economy, and thereby ``crowd out'' private sector investment 
activities. In fact, the weight of evidence examining the impact of 
public investment on the U.S. economy does not point to a crowding-out 
effect. It rather finds that, on balance, higher levels of public 
investment will promote private sector productivity and higher rates of 
return for business. As such, the evidence suggests that many kinds of 
public investments in the United States generally crowd in private 
investment by establishing the enabling conditions for sustained growth 
in private sector investment and business formation. As a result, the 
crowding-in benefits of public investments are also associated with 
higher rates of private sector employment and job creation. For this 
reason, it is important to recognize that while in a green recovery 
strategy the public is priming the pump for new economic growth, new 
private sector activity is the real engine of jobs and growth.


    Green investments are especially effective job and growth creators 
because they stimulate new demand by moving the economy to advanced 
technology, modern infrastructure, and skilled labor.\8\ Many of the 
green investment projects, such as building retrofits and 
weatherization, are labor intensive in construction and manufacturing 
where unemployment is high. CAP has recommended that one-quarter to 
one-third of a larger stimulus package be dedicated to the green 
components of a plan. ``A Strategy for Green Recovery'' from the Center 
for American Progress Action Fund describes in greater detail some of 
the proposals outlined below. The following energy-related investments 
can start stimulating the economy relatively rapidly, driving new 
investment directly into communities. Some near-term opportunities for 
driving new smart energy investments include:
    \8\ Bracken Hendricks and Benjamin Goldstein, ``A Strategy for 
Green Recovery: Stimulating the Economy Today by Rebuilding for Future 
Prosperity,'' Center for American Progress Action Fund, November 10, 
2008, available at http://www.americanprogressaction.org/issues/2008/

   Transit fare reductions and service expansions: Provide $2 
        billion in assistance to transit agencies to reduce transit 
        fares and expand services.
   The Weatherization Assistance Program: Fully fund the 
        Weatherization Assistance Program at $900 million, the amount 
        Congress is authorized to spend on the program in fiscal year 
        2009, and build toward a goal of weatherizing 1 million homes.
   The Federal Energy Management Program: $1.3 billion to fully 
        fund energy-efficiency programs.
   Workforce investment in the Green Jobs Act: Appropriate $250 
        million for the Green Jobs Act, authorized in the Energy 
        Independence and Security Act of 2007, to provide job training 
        and workforce investment in energy efficiency and renewable-
        energy installations.
   Refundable residential energy efficiency tax credits: 
        Increase funding for refundable residential energy efficiency 
        tax credits to $5 billion and raise the maximum credit for 
        household efficiency upgrades to $2,000.
   Solar roofs on federal buildings: Provide $3.5 billion to 
        install 2,000 megawatts of solar power on federal rooftops, and 
        amend federal electricity contracting to allow for 30-year 
        power purchasing agreements.
   New Starts Transit project investments: $5 billion to 
        partially bridge the anticipated shortfall in federal transit 
        capital funding for fixed-guideway projects approved in the 
        Federal Transit Administration New Starts pipeline.
   Smart grid federal matching funds: Fund the Smart Grid Title 
        of the Energy Independence and Security Act of 2007 to support 
        $1.3 billion for infrastructure investment and demonstration 
   Green jobs restoring the land. Expand existing programs by 
        $800 million to restore parkland, forests, wetlands, wildlife 
        refuges, and rural ecosystems.
   The Manufacturing Extension Partnership: Expand the capacity 
        of domestic manufacturing modernization efforts by increasing 
        MEP funding to $200 million.
   Greening affordable housing: As proposed by the Center on 
        Budget and Policy Priorities, provide $5 billion for both 
        public housing and federally subsidized, privately owned units. 
        This could be distributed through public housing agencies and 
        the HOME program, and used to increase energy efficiency, 
        reduce energy operating costs, and bring empty homes back into 
   Green school construction and renovation: Immediately 
        support state and local school modernization, renovation, and 
        repair at a cost of $7.25 billion.
   Water and wastewater infrastructure: $10 billion for cities 
        to address issues with water and wastewater treatment.

    In addition, some slightly less fast-acting, but still near-term, 
recovery proposals can drive new investment into our energy 
infrastructure within the next year to create needed jobs. A well-
balanced recovery plan will include proposals that are concentrated in 
the first few months, as well as a range of structural investments that 
will create significant growth over the course of the coming year. Some 
of these proposals include:

   Building retrofits: New authorization and funding of $10 
        billion to provide the initial financing for a public revolving 
        loan fund--tax exempt, with credit guaranteed by the federal 
        government, available for packaging with private capital--to 
        spur the national building retrofit effort, with the principal 
        to be repaid at the end of a five-year period.
   Energy efficiency and conservation block grants: Appropriate 
        $5 billion to fund states, cities, and counties pursuing clean 
        energy projects.
   ``Cash for Clunkers'' rebates for older cars: Initiate a 
        $2.5 billion annual program to purchase and scrap older, more 
        polluting cars, in exchange for an owner agreement to acquire a 
        more efficient vehicle or use alternative transportation.
   Clean Renewable Energy Bonds: Increase CREB funding by $3 
        billion to finance renewable energy projects by electric 
        cooperatives, government entities, Indian tribal governments, 
        and others.
   Advanced coal technology to capture carbon: Invest $1.1 
        billion to deploy demonstration carbon capture-and-storage 
        technology at a coal-fired power plant.
   Electric transmission grid: New authorization for a $10 
        billion outlay for a new Federal Trust Fund for transmission 
        and smart-grid build out through direct spending and grants to 
        states and municipalities.
   Manufacturing: $15 billion in grants to states to support 
        manufacturing plant retooling to produce clean and energy-
        efficient technologies and advanced batteries for electric 
   Advanced technology vehicle manufacturing and retooling: $25 
        billion in additional loans for automobile manufacturers. The 
        budget cost will be $7.5 billion.
   Replacing aging buses and acquire rail cars: $4 billion on a 
        competitive bid basis for mass transit agencies to replace 
        aging buses with efficient, low-emission vehicles, acquire new 
        rail cars to meet the surging demand for transit services 
        across the nation, and perform needed and backlogged 
   Local transit infrastructure: $8 billion to fund 559 
        ``ready-to-go'' public transportation capital projects that 
        could begin within months of federal funding being made 
        available. The funding would include the oldest and largest 
        rail transit systems that face increasing maintenance and 
        upkeep costs.
   Capital assistance to states: $10 billion to fund and 
        dramatically expand the Intercity Passenger Rail Service 
        Program for a federal-state partnership to promote intercity 
        passenger rail development. This will include helping the 
        states and Amtrak acquire new and rehabbed passenger rail 
        rolling stock.
   Clean Energy Corps: $3 billion for a national CEC, a 
        combined service, training, and job-creation effort to combat 
        global warming, grow local and regional economies, and 
        demonstrate the equity and employment promise of the clean 
        energy economy. The funding could be distributed through the 
        Corporation for National and Community Service and the 
        Department of Labor to administer CEC-related programs.
   The Industrial Waste Recovery Program: $410 million to 
        provide incentives for industrial facilities to generate 
        electricity from recovered waste heat, as authorized by the 
        Energy Independence and Security Act.

    Together these investments can readily drive over $100 billion into 
near-term spending that not only provides benefits for our energy 
security, but promotes stimulus by providing assistance to states and 
cities, encouraging new investment in housing and the construction 
industry, increasing consumer savings, expanding opportunities for 
training and national service, providing direct relief to low-income 
Americans, and reinvesting in our manufacturing jobs base.
    Investing in a green recovery is not a replacement for a more 
comprehensive climate strategy, nor does it obviate the need for other 
forms of fast acting stimulus that help consumers with health care, 
education, child care, unemployment insurance, or other pressing 
economic needs. Instead, a green recovery program is a powerful 
complement to a larger stimulus effort that is strategically targeted 
to steer the economy where we need to go over the long term. Such a 
plan represents an opportunity to make a significant down payment on 
the sort of economic activity that will be required to fundamentally 
transition our economy away from carbon-intensive and imported energy 
sources, and to begin the process in earnest of moving toward more 
efficient, domestic, and renewable energy as a solution to global 
    In addition to the recent report on Green Recovery, the Center for 
American Progress has outlined a critical path for the long-term 
transition to an economy that seriously takes on the challenge of 
advancing climate solutions. The CAP report ``Capturing the Energy 
Opportunity: Creating a Low-Carbon Economy''\9\ identifies 10 steps to 
a low-carbon economy that will be critical to moving our country toward 
reliance on low-carbon energy. This strategy involves a mix of direct 
investment, smart regulation, and administrative solutions. The near-
term investments outlined in the Green Recovery program are wholly 
consistent with this longer-term vision for change.
    \9\ Report available at: http://www.americanprogress.org/issues/
    Given the magnitude of coming challenges in building a vibrant, 
competitive, and low-carbon economy, it is essential that Congress, as 
the guardian of public trust resources, seeks to make any short-term 
investments in stimulus with an eye toward coming long-term public 
challenges. In addition, our research with the University of 
Massachusetts shows that as well as providing long-term benefits, a 
Green Recovery is good economic policy because it provides more jobs 
and more good jobs for the American people. As such, a green recovery 
represents good government by anticipating challenges and investing in 
healthier communities, a more robust economy, and a safer world.
    Thank you for your leadership on these pressing issues facing the 
U.S. economy.

    The Chairman. Thank you very much.
    Mr. Book.


    Mr. Book. Thank you, Chairman Bingaman, Ranking Member 
Domenici, and distinguished members of this committee, for the 
privilege of contributing to the discussion today.
    The views I present today are my own and don't represent 
those, necessarily, of my employer.
    As Bracken mentioned in his remarks, this is no ordinary 
time. Dramatic job losses, collapsing commodity prices, and a 
slowdown in the pace of clean energy investment are symptoms of 
an economic crisis that is neither typical nor trivial. We have 
the third-largest annual job losses since Labor Department 
records started, in 1939. Since 1950, there have only been 
three significant down years in U.S. electric power demand. 
2008 appears poised to be the fourth.
    Some power utilities tell me that demand will be lower next 
year, as well, in all likelihood. EIA says September oil 
consumption fell 2.6 million barrels per day, year on year, a 
contraction unseen since the early 1980s.
    Master Card reported lower year-on-year gasoline demand for 
32 consecutive weeks that ended last Friday. Approximately 40 
States are draining their budget balancing funds due to lower 
receipts and higher costs. State regulators are balking at 
high-cost power projects, and private developers' wind projects 
around the country are posting delays and cancellations.
    Our historically abundant and low-cost energy sources have 
been essential to past economic expansions. Investment in 
energy capacity and efficiency gains will support recovery and 
ongoing growth.
    Clean energy is more expensive than conventional sources, 
and virtually all new energy infrastructure is more expensive 
than paid-for existing capital stock. It may seem hard to spend 
money on energy of any kind, when economic contraction requires 
less energy, especially when lean years leave less money for 
higher efficiency infrastructure. This could be a mistake. Low 
fossil energy prices will disappear with renewed economic 
growth. Under-investment today increases the odds that 
tomorrow's price spikes will be steeper, swifter, and more 
    After demand fundamentals, credit may be the biggest 
challenge facing clean energy. Even before the downturn, 
lenders and underwriters were cautious about backing projects 
that could cost as much, or more, as the market value of some 
of the companies sponsoring them. Tighter scrutiny of borrowers 
and greater regulatory capital requirements in the future could 
mean higher debt costs. High interest rates mean higher 
marginal costs for clean energy producers. Conversely, cheap 
credit improves the relative cost profile of clean energy, 
improving odds that a risky project will succeed. This 
heightens the importance of government loan guarantees as a 
mechanism for facilitating credit and lowering borrowing costs.
    By itself, low-cost debt may not be sufficient to provoke 
clean energy infrastructure during periods of tangible energy 
demand contraction, but few projects are likely without it.
    Then there's tax equity. Tax credits for clean energy, 
rather than blind subsidies, encourage investment in 
profitable, and therefore taxable, enterprises. But, not every 
project sponsor needs to offset taxable income. Especially this 
    Financing structures that shift project ownership to third-
party investors until tax credits are exhausted work poorly 
when private firms have fewer taxable profits. Making credits 
tradable would allow project sponsors to monetize credits in 
small batches, rather than transferring the entire project. 
Making credits refundable would turn credits into above-the-
line payments for sponsors without tax liability. Neither 
approach will have the impact of long-term declining payments 
for clean energy at a premium to market prices, an approach 
which has been very successful at providing clean energy 
investment in Europe. However, free money plans have many 
takers, and costs add up fast. Moreover, surplus payments do 
nothing to encourage clean energy technologies to aggressively 
compete for price parity with conventional sources. This can 
preserve entrenched disadvantages, especially if governments 
withdraw their payment streams, as has happened in Europe 
    President-elect Obama has called for a transformation of 
our energy infrastructure through green jobs. At minimum, this 
could spark small and large business investment. At best, 
government-funded workers could build high-performance schools 
in low-loss smart electrical transmission grids.
    But transformations have long lead times and many pitfalls. 
We should not crowd out opportunities for incremental gains. 
For example, plug-in hybrids are a transformation. Different 
cars using different fuels. First-general hybrids offer 
incremental gains by making every mile driven more economically 
and environmentally efficient. It may be possible to hybridize 
coal-fired generating capacity in a similar fashion, pairing it 
with wind and solar installations to incrementally improve 
greenhouse gas emissions on a combined per-megawatt-hour basis, 
while managing costs. Likewise, relatively low-cost, low-
technology environment improvements, furnace upgrades, and 
electric appliance or lighting retrofits to homes and 
commercial buildings, policies this committee has already 
authorized, offer incremental and enduring efficiency gains. In 
the words if the President-elect, this work is shovel-ready, in 
that it can begin almost immediately, even as broader strategic 
plans develop.
    Ultimately, the solution cannot start and end with 
government alone. Fiscal, monetary, and labor policy actions 
may require--may provide short-term relief, but complete 
economic recovery will require private investors to commit 
capital on a long-term basis to new, innovative, and productive 
use. These clean energy investments must ultimately prove 
economically viable. Technologies that cannot survive on a 
long-term basis without ongoing government support can lead to 
inefficiency and inefficient investment decisions, potentially 
saddling governments with high, rising, and inflexible cost 
burdens, and diminishing international competitiveness.
    Mr. Chairman, this concludes my prepared testimony. I look 
forward to any questions, at the appropriate time.
    [The prepared statement of Mr. Book follows:]

Prepared Statement of Kevin Book, Senior Vice President, Energy Policy, 
  Oil & Alternative Energy, Friedman Billings Ramsey Capital Markets 
                       Corporation, Arlington, VA

    Thank you, Chairman Bingaman, Ranking Member Domenici and 
distinguished members of this Committee, for the privilege of 
contributing to your discussion concerning clean energy investment and 
economic stimulus programs.
    As a macro-level energy analyst for an investment bank, I interpret 
domestic and global economic and policy trends for institutional 
investors, including crude oil prices, alternative energy economics, 
climate mitigation costs and the energy policy decisions taken by 
governments. My testimony reflects lessons learned in this capacity as 
well as observations I have drawn from ongoing discussions with 
industry contacts and financial investors. The views I will present 
today, however, are my own, and do not necessarily represent those of 
my employer.


    Dramatic job losses, collapsing commodity prices and a slowdown in 
the pace of clean energy investment are symptoms of an economic crisis 
that is neither typical nor trivial. This is the time for a well-
considered policy response. Measures that restore economic vitality at 
the same time that they diminish energy-related environmental impacts 
could satisfy immediate cash flow needs while setting the stage for 
long-term strategic gains. After all, this nation's tremendous natural 
resource wealth and historically abundant and low-cost energy sources 
have been essential components of past economic expansions. Investment 
in energy production capacity and energy efficiency gains will support 
recovery and ongoing growth.
    However, the solution cannot start and end with government alone. 
Fiscal, monetary and labor policy actions may provide short-term 
relief, but complete economic recovery will require private investors 
to commit capital on a long-term basis to new, innovative and 
productive uses. These clean energy investments must ultimately prove 
economically viable relative to competing sources. Technologies that 
cannot survive on a long-term basis without ongoing government support 
can lead to inefficient energy use and investment decisions, 
potentially saddling governments with high, rising and inflexible cost 
burdens and diminishing international competitiveness.
    The summary figures presented on the next several pages frame these 
opportunities and challenges.


    Figure 1* presents annualized changes in nonfarm payrolls since 
February 1939. 2008 is on pace to be the third-worst year from a 
job?loss perspective during this 70-year period. Only the 1982 
recession and structural changes to the U.S. economy in 1945 at the end 
of World War II exceeded this year's likely declines in employment 
rolls. This is the most poignant, human element of the current economic 
    * Figures 1-5 have been retained in committee files.
    Figure 2 presents the annual change in U.S. electric power demand 
between 1950 and 2007. The U.S. economy today produces goods and 
services that differ markedly from economic output a half?century ago. 
In this context, it is striking that only three years within the survey 
period show significant (approximately 0.5% or more) annual decreases 
in electric power demand. This is a very flattering statistic: 
inexpensive, reliable and readily-available electricity enables 
widespread diffusion of laborsaving and productivity-enhancing 
technologies. By the same token, early data suggest that 2008 will 
probably bring the fourth significant contraction of electric power 
demand on record; in the absence of observed efficiency improvements, 
the implications for quality of life are nothing to celebrate.
    Figure 3 presents the annual change in U.S. petroleum demand 
between 1950 and 2007. During the first two decades of the data set, 
demand increased each year with only one exception. During the decades 
following the 1973 Arab oil embargo, petroleum demand oscillated 
between annual increases and decreases. In my view, this illustrates 
how a combination of government-imposed efficiency standards and an 
economic ``reality check'' can change the nature of energy consumption. 
Although U.S. energy use patterns shifted markedly in the wake of the 
1979 Iranian Revolution, I would suggest that the demand trough in 1981 
reflects more than power generators switching away from oil-fired 
boilers or consumers adaptively responding to sustained high prices. A 
component of the demand retracement throughout the early 1980s resulted 
from U.S. drivers' rapid shifts out of old, large, low-efficiency cars 
and into new, small, higher-efficiency vehicles. Adaptive responses 
come and go, but changes in capital stock can enduringly shape energy 
use behaviors.
    There is a strong positive correlation between economic security, 
energy security and environmental security. Generally speaking, energy 
demand increases with economic activity because growing economies 
require more fuels of all kinds, and virtually all industrial 
activities have environmental consequences. Prosperous economies use 
more energy, but they can also afford to invest in highefficiency 
capital stock. As a result, they tend to use energy more cleanly and 
efficiently on a marginal basis than less-developed nations. The 
opposite is also true. Slower economic growth, or economic contraction, 
demands less energy, but lower economic output during lean years leaves 
less money for higher-efficiency infrastructure. As a result, the 
poorest nations resort to the lowest-cost sources of electric power and 
transportation fuels. Put another way, efficient growth is cleaner and 
more valuable than inefficient growth, but it also tends to be more 
    Figure 4 contrasts the absolute and proportional levels of 
greenhouse gas (GHG) emissions from key sectors of the U.S. economy in 
2006, the most recent year for which robust data are available, with 
1990, the baseline year established by the Kyoto Protocol. Although 
energy intensity and emissions intensity of U.S. GDP declined between 
1990 and 2006, and GHG emissions from industrial, agricultural, 
commercial and residential sources decreased on an absolute and 
proportional basis, emissions from electric power and transportation 
increased. In short, throughout the greatest period of wealth creation 
in U.S. history, Americans consumed more, drove more and manufactured 
less. It may be challenging for the nation to consume less, drive less 
and manufacture more during a severe downturn.


    Three primary forces appear to be depressing clean energy 
investment today, all of them a function of the economic downturn. 
First and most obviously, low commodity prices tend to widen the spread 
between low-cost conventional sources and higher-cost alternatives, 
rendering many newer technologies uneconomic (or more uneconomic) on a 
relative basis. Second, limited access to, and higher costs of, credit 
can make it difficult for project sponsors to source funding for new 
initiatives. Third, unlike nations that provide explicit surplus 
payments to encourage clean energy investment, the U.S. structures its 
investment incentives as tax credits that can have little or no value 
to project sponsors who do not need to shield taxable income.
    Low fossil energy prices.--The ``problem'' of low fossil energy 
prices is likely to disappear with renewed economic growth. Fundamental 
scarcity has not gone away, and likely underinvestment in energy 
infrastructure due to today's economic challenges increases the odds 
that tomorrow's price spikes will be steeper, swifter and more 
devastating than this year's peaks. Nor, by any objective measure, is 
new energy infrastructure cheap in any case. Although short-run price 
weakness may dampen recent land, labor and materials price inflation, 
the next barrel of oil and the next megawatt hour of power will still 
cost substantially more than the installed capacity, if only because 
incumbent producers have already paid for the existing infrastructure.
    Limited access to credit.--The second problem may persist even 
after recovery begins. Credit challenges are unlikely to abate once 
seized-up credit markets resume operation because lending is not likely 
to resume until lenders can command higher interest rates. Higher 
interest rates mean higher marginal costs for clean energy producers. 
Even before the downturn, commercial lenders and debt underwriters were 
unlikely to offer project sponsors low-cost debt without explicit 
guarantees from the federal government. If coming reforms include 
tighter scrutiny of borrowers' creditworthiness and greater regulatory 
capital requirements for lenders, debt costs for risky projects could 
be higher and approvals could be fewer and further between. It's easy 
to see why: with ``overnight'' capital costs of between $4,500 and 
$7,000 per kilowatt for some renewable sources and nuclear power 
technologies, a single 1,000 megawatt installation would cost between 
$4.5 and $7 billion--more than the market value of the common equity, 
and a significant portion of the enterprise value, of many investor-
owned utilities.
    For this reason, loan guarantees under Title XVII of the Energy 
Policy Act of 2005 provide a powerful mechanism for improving the 
financial return profile of clean energy projects at little or no cost 
to taxpayers, provided, of course, that commercial lenders and federal 
government guarantors sufficiently vet candidate projects for financial 
viability. It may be possible to improve upon the Title XVII program, 
which must be funded through Congressional appropriations, with 
legislative proposals for a perpetually-funded ``Clean Energy Bank of 
the United States'' chartered to provide project sponsors with low-cost 
debt. By itself, low-cost debt may not be sufficient to provoke clean 
energy infrastructure investment during periods of tangible energy 
demand contraction, but few projects are likely without it. Moreover, 
cheap credit improves the relative cost profile of clean energy, 
improving odds that a risky project will succeed.
    Diminished appetite for ``tax equity''.--Giving companies tax 
credits for clean energy investment provides development incentives at 
minimum explicit cost to the federal government while simultaneously 
encouraging investment in profitable, and therefore taxable, 
enterprises. But not every investor who might sponsor projects needs to 
offset taxable income (especially not this year). This has led to 
complex financing structures that shift project ownership to third-
party financial investors until the tax credits are exhausted, at which 
point ownership reverts back to the project's sponsor, developer or a 
designated third party. Fewer taxable profits within the U.S. economy 
mean fewer dollars theoretically available for clean energy investment 
in this fashion.
    Legislative changes that make tax credits tradable (discrete, 
transferable units of value that project sponsors can sell on a per-
unit basis to taxable entities, rather than transferring producing 
assets as a whole) or refundable (credits that become explicit payment 
streams for recipients without tax liabilities) might awaken some 
investor enthusiasm for clean energy, but only if low-cost financing is 
available. Long-term, declining surplus payments for clean energy that 
offer a premium to market prices on a per-unit basis (like European 
``feed-in-tariffs'' for electric power) have successfully encouraged 
investment in high-cost, clean energy technologies by project sponsors 
eager to capture a guaranteed rate of return in excess of capital 
costs. However, this approach has two drawbacks. First, unless 
governments limit the amount they are willing to spend, a ``free money 
plan'' tends to have many takers, and costs add up fast. Second, 
surplus payments do nothing to encourage developers and providers of 
clean energy technologies to aggressively compete for price parity with 
conventional sources and this can potentially preserve entrenched 
disadvantages, particularly in the event that governments facing 
financial strictures withdraw all or part of these surplus payment 


    There are many ways to address energy infrastructure needs with 
programs explicitly directed at alleviating economic malaise. Stimulus 
spending can offer a band-aid by giving cash-strapped consumers and 
local governments necessary working capital. To extend the metaphor, 
policies that promote efficiency gains offer strong medicine for an 
intermediate-term cure, but the inevitable growth of energy demand 
above and beyond conservation-induced or recession-diminished levels 
means that this medicine can eventually lose its efficacy. Last, 
incentives to build economically viable new infrastructure are 
tantamount to transplant surgery, but surgeries can be last-resort, 
high-cost, highrisk interventions.
    President-elect Barack Obama has called for a new works program to 
transform U.S. industrial and energy infrastructure. At minimum, a 
``green jobs'' campaign may be a necessarily hopeful vision that 
inspires small and large businesses to renew their investments in the 
faltering economy. At best, a workforce of government-sponsored green 
jobs could implement a strategic roadmap to 21st century municipal 
infrastructure, including high-performance schools and low-loss, 
``smart'' electrical transmission infrastructure capable of 
interconnecting with, and balancing, a growing number of renewable, 
intermittent power sources. But transformations can also have long lead 
times and many potential pitfalls. As a result, it may be prudent to 
consider opportunities for incremental gains, particularly if these 
incremental changes can get dollars into the U.S. economy on a short-
term basis.
    Figure 5 compares theoretical ten-year discounted returns on plug-
in hybrid electric vehicles (PHEV, via retrofit) with first-generation 
(unmodified) hybrids and typical, light-duty passenger vehicles (LDV) 
at two different long-term oil prices. At $115/bbl, the first-
generation hybrid has a 4% rate of return relative to the LDV and the 
PHEV barely breaks even, and this assumes the driver never exceeds the 
35-mile useful range of the on-board battery. At $80/bbl, the 
conventional hybrid does 2% worse than the conventional LDV--close 
enough to break even in another year's time--while the PHEV does 5% 
worse. In theory, a new car purchaser should be willing to buy a hybrid 
(the incremental change) with a government subsidy of as little as 
$400, but it would take as much as $3,000 to encourage the same buyer 
to consider a PHEV via retrofit (the transformational change). Notably, 
neither theoretical scenario counts the costs associated with 
generation, transmission and distribution capacity to support PHEVs. 
The outcome of this analysis would be different if ready-made PHEVs 
existed today at price points at, or below, the prices of first-
generation hybrids and conventional LDVs but, today, dollars spent on 
incrementalism may go seven times further than dollars devoted to 
    In a similar fashion, it may be possible to encourage ``hybrid'' 
investments that pair new coal-fired generating capacity with wind or 
solar installations in order to incrementally improve GHG emissions on 
a combined, per-megawatt-hour basis while minimizing increases in 
blended average capital costs. This pairing could also potentially take 
advantage of the complementary relationship between coalfired base-load 
generation and the use of alternative power to satisfy peak demand.
    Last, there are ample opportunities for incremental (and enduring) 
efficiency gains within homes and commercial buildings that can be 
obtained through relatively low-cost, low-technology envelope 
improvements, furnace upgrades and electric appliance or lighting 
retrofits. This work is, in the words of the President-elect, ``shovel-
ready'' in that it can begin almost immediately, even as broader 
strategic plans are developed to address longer-dated infrastructure 
strategies. Mr. Chairman, this concludes my prepared testimony. I will 
look forward to any questions at the appropriate time.

    The Chairman. Thank you very much.
    Mr. Woolf, let me just correct the record here. As I 
understand it, you are the head of the Maryland State Energy 
Office, work for Governor O'Malley, in that position, instead 
of what I had said before. So, welcome. Go right ahead.


    Mr. Woolf. Thank you, Mr. Chairman and members of the 
committee. My name is Malcolm Woolf, director of the Maryland 
Energy Administration. I'm appearing here today on behalf of 
the National Association of State Energy Officials. These are 
the folks who head the State energy offices and serve as 
Governors advisors on energy matters.
    I'm pleased to have this opportunity to discuss, today, the 
immediate steps that Congress could take to accelerate energy 
solutions to promote affordable, reliable clean energy, and, at 
the same time, help address our immediate economic challenges.
    It's hard to overestimate the promise of clean energy. Like 
roads and bridges, clean energy investments immediately create 
new jobs, ranging from attic insulators to solar installers. 
Such jobs cannot be outsourced overseas. These investments will 
continue to pay dividends in the years to come by reducing our 
monthly energy bills, increasing generation of clean renewable 
power, and accelerating our Nation's transition to a more 
sustainable and secure energy future. For these reasons, I 
agree that major new investments in clean energy should be part 
of any emerging economic recovery package.
    To be successful, however, we need to leverage the Federal 
Government's resources with the ability of States to develop 
innovative new strategies and implement programs on the ground.
    Currently, State energy offices and research institutions 
manage approximately $3 billion in program funding annually. As 
such, energy offices offer a ready-made 50-State delivery 
mechanism for rapid deployment of energy infrastructure 
investments. For example, under Governor O'Malley, Maryland, 
earlier this year, enacted one of the Nation's most ambitious 
energy efficiency goals, to reduce electricity consumption 
statewide, 15 percent by 2015. As part of our energy 
infrastructure investments, the Maryland Energy Administration, 
since 1991, has made 63 loans to overhaul State buildings, 
resulting in an estimated annual savings of $2.7 million, with 
total cumulative savings, thus far, exceeding $20 million. We 
also have hundreds of residents currently seeking State grants 
to partially offset their investments in solar, geothermal, and 
wind projects at their own homes. While every State has a 
slightly different set of tools, there's no other existing 
vehicle that can coordinate implementation of clean energy 
investments across all 50 States.
    We recommend that the clean energy component of the 
economic recovery package include the following four elements, 
each of which utilizes existing delivery mechanisms to allow 
for immediate implementation.
    First, we urge Congress to launch a major energy-efficiency 
building retrofit program. With 70 percent of electricity 
consumed in buildings, minimizing the amount of energy that 
literally goes out the window or through a leaking air duct is 
a great investment.
    In addition, numerous studies have documented the 
significant number of jobs created by energy efficiency 
programs. For example, for every million dollars spent in 
energy performance contracting, 20 new green-collar jobs are 
created. The key, as this committee has already noted, is rapid 
    I've attached, to my written testimony, draft legislative 
language proposing $5 billion be disbursed to the States within 
30 days of enactment, utilizing the existing State energy 
program formula.* A second $5 billion could be dispensed the 
following year, based on actual results, based on how well the 
States do in reducing kilowatts on the grid.
    * Document has been retained in committee files.
    Secondly, we support efforts by the Conference of Mayors to 
fund the Energy Efficiency and Conversation Block Grant 
Program. The mayors have already identified a long list of 
projects that are ready to go. In Maryland, for example, the 
city of Annapolis is seeking funding for its Easy Annapolis 
Project to provide low-interest loans secured through a 
voluntary property lien to promote residential energy 
efficiency and renewable energy. This is a project that's ready 
to go, if only we had money to fund it. There's a lot of 
projects like that at both the State and local level. We 
caution, however, that DOE needs to streamline the block grant 
implementation process so funds can be disbursed quickly.
    Third, Congress should expand funding for proven programs. 
A study--this includes, of course, State energy offices--a 
study conducted by--a few years ago, by the Oak Ridge National 
Laboratories concluded that, for every dollar invested, over $7 
in direct energy savings is achieved, and almost $11 in non-
Federal funds are directly contributed to energy programs and 
projects. We also urge additional funding to low-income 
weatherization to assist those most vulnerable to stay warm 
this winter, funding to better implement energy efficiency 
building codes, to make long-term improvements in the Nation's 
building stock, and EPA's ENERGY STAR Program, which has 
achieved remarkable success in promoting a wide array of energy 
efficiency projects--products.
    Finally, one of the simplest steps Congress could take to 
promote long-term job creation and in--new energy investments 
is to increase the energy tax incentives. We have two specific 
suggestions. First, employers are more likely to hire new 
workers if they know that the tax incentives will last for more 
than 1 year. Second, to boost job creation in homeowner 
building retrofits, the energy efficiency tax credit should be 
increased to 50 percent for materials and labor, up to $2500. 
Contractors would take those incentives, market it directly. It 
would not need government implementation and could create real-
world jobs without delay.
    In sum, clean energy investments, such as incentives for 
attic insulation and solar panels, offer the ability to 
stimulate the economy and create green-collar jobs, while, ask 
the same time, reducing home--household energy bills, advancing 
the Nation's energy security, and addressing our climate 
challenges. States are uniquely positioned to jumpstart real-
world programs in weeks, not seasons.
    We urge Congress to leverage the Federal Government's 
resources with the States' ability to innovate and quickly 
implement energy projects on the ground.
    Thank you, and I look forward to your questions.
    [The prepared statement of Mr. Woolf follows:]

   Prepared Statement of Malcolm D. Woolf, Director, Maryland Energy 
                     Administration, Annapolis, MD

    Mr. Chairman and members of the Committee, my name is Malcolm Woolf 
and I am Director of the Maryland Energy Administration. I am appearing 
today on behalf of the National Association of State Energy Officials 
(NASEO). NASEO represents all of the state energy offices in 
Washington, D.C., and helps coordinate the work of the energy offices 
throughout the United States. We are pleased to have this opportunity 
to discuss immediate steps the federal government can take to 
accelerate energy solutions that will promote affordable, reliable and 
clean energy, and also help address our immediate fiscal challenges. 
Prior to joining the Maryland Energy Administration, I served as Staff 
Director of the Natural Resources Committee of the National Governors 
Association, counsel on the U.S. Senate Environment and Public Works 
Committee and in private legal practice.


    It is hard to overestimate the promise of clean energy to stimulate 
the economy, create green collar jobs, advance energy security and 
address our climate and environmental challenges. To be successful, 
however, we need to re-establish a true partnership between the states 
and the federal government on energy matters. We need to leverage the 
federal government's resources with the ability of states to experiment 
with innovative new strategies and implement programs on the ground. By 
building a more meaningful partnership, we can achieve our ambitious 
energy goals.
    Major new investments in clean energy should be a critical part of 
the emerging economic recovery package. Like roads and bridges, such 
investments immediately create new green collar jobs, ranging from 
attic insulators to solar installers. Such jobs can't be outsourced 
overseas. And these investments will continue to pay dividends in the 
years to come by reducing our monthly energy bills, increasing 
generation of clean, renewable power, and accelerating our nation's 
transition to a more sustainable energy future.
    For many years we have discussed the need to achieve significant 
increases in energy efficiency in order to strengthen our economy and 
reduce dependence on foreign imports. We are now facing an historic 
opportunity where Congress and the Administration are committed to this 
    States are uniquely positioned to immediately implement major new 
energy investments. Currently, state energy offices and research 
institutions manage approximately $3 billion in program funding 
annually. As such, energy offices can provide a ready-made, 50-state 
delivery mechanism.
    These proposals would strengthen the Federal, state and local 
partnerships and create the opportunity for significant success. Many 
states and local governments are already setting ambitious goals and 
the funds that we are requesting would help establish a real 
partnership, not just one based on platitudes.
    For example, under Governor O'Malley, Maryland enacted earlier this 
year one of the nation's most ambitious energy efficiency goals to 
reduce consumption 15% by 2015. We already have a list of pre-approved 
energy performance contractors ready to overhaul state buildings, as 
well as programs for energy efficiency grants and low interest loans to 
local governments, non-profits, and private businesses, and workforce 
training to create qualified contractors that can improve home 
performance. While every state has a slightly different set of tools, 
there is no other existing vehicle that can coordinate local 
implementation in all 50 states.
    For the proposed stimulus package, we recommend the following 
immediate actions, which utilize existing delivery mechanisms:

          1) Provide $10 billion for an energy efficiency buildings 
        retrofit program, utilizing existing delivery mechanisms (Draft 
        Legislation and Appropriations Language attached as Appendix 
          2) Provide $6 billion for the Energy Efficiency and 
        Conservation Block Grant (Authorized in the Energy Independence 
        and Security Act of 2007 [``EISA'']);
          3) Expand funding for proven programs, including:

                  (a) $125 million for the State Energy Program 
                (Reauthorized in EISA);
                  (b) $1 billion for the Low-Income Weatherization 
                Assistance Program (Reauthorized in EISA);
                  (c) $100 million for Energy Efficiency Building Codes 
                (consistent with the authorization contained in the 
                Energy Policy Act of 2005 [``EPACT 2005'']);
                  (d) $100 million for the EPA ENERGY STAR program 
                (consistent with the authorization contained in EISA);
                  (e) $250 million for Green Jobs (Authorization 
                contained in EISA);
                  (f) $250 million for the REAP program at USDA, 
                authorized in the 2002 Farm Bill, and reauthorized in 
                the 2008 Farm Bill, to provide energy efficiency and 
                renewable energy funds for farmers, ranchers and rural 
                small businesses; and
                  (g) $2.5 billion for the Low-Income Home Energy 
                Assistance Program (``LIHEAP''), in addition to the 
                $5.1 billion in FY'09 appropriation.

          4) Provide 8 year extensions for the energy efficiency and 
        renewable energy tax provisions (including e.g., Production Tax 
        Credit [``PTC''], Investment Tax Credit [``ITC''], CREBS, 
        energy efficiency commercial buildings deduction, etc.) to 
        ensure long-term job creation, and expand the energy efficiency 
        tax credits to create immediate incentives for home energy 
        efficient makeovers.


            1) Launch Energy Efficient Buildings Retrofit Program 
                    (``Direct Install'')
    With seventy percent of electricity consumed in buildings, 
minimizing the amount of energy that literally goes out the window--or 
through a leaking air duct--is a great investment. In addition, 
numerous studies have documented the significant number of jobs created 
by energy efficiency programs. For example, for every $1 million in 
energy performance contracting, twenty green collar jobs are created. A 
massive new investment in energy efficiency building retrofits should 
therefore be a central part of an economic recovery package, as long as 
is implemented quickly.
    Let me suggest four fundamental principles essential to success. 
First, we need aggressive standards in all types of buildings--
residential, industrial, commercial, institutional, state and local 
government. This is important because, once a building is in place, it 
lasts decades. Second, we should focus on upgrading infrastructure as 
this will generate energy cost savings, help households as well as 
businesses, and produce sustainable high quality jobs. Third, rapid 
deployment of energy efficiency measures is important to reduce the 
costs of climate change mitigation measures to all consumers. Energy 
efficiency reduces regulated air pollutants and greenhouse gas 
emissions, and will be a critical step in any climate bill that is 
developed. Finally, and perhaps most importantly, speed requires a 
deployment mechanism utilizing existing deployment routes, i.e., 
    The recommended approach for this new program is quite simple, and 
we have attached the draft legislative language and associated 
appropriations language (Appendix A). This proposed $10 billion plan 
would have $5 billion disbursed to the states within 30 days of the 
date of enactment, utilizing the existing State Energy Program formula. 
The existing authorization for SEP is quite broad and the only 
modification necessary would probably be to increase the authorization 
level. The states would disburse the funds utilizing all deployment 
routes, including energy service companies, utilities, contractors, 
community action agencies, etc. The savings would have to be monitored 
and verified. Within three months of the date of enactment, DOE would 
be required to publish guidance on metrics for the remaining portion of 
the funds. Within ten months of the release of funds, the states would 
provide a report on implementation of the energy efficiency buildings 
retrofit measures, and within twelve months of the release of the 
initial funds, the remaining $5 billion would be disbursed in 
accordance with performance. This is a highly aggressive schedule. It 
will require speed from DOE, which has not generally been a hallmark of 
their efforts. Leadership from Congress and the new Administration will 
    A number of complimentary proposals have been suggested, including 
efforts in schools and creating a residential energy efficient 
buildings retrofit program. These suggestions from groups such as the 
Center for American Progress, the Energy Future Coalition, ACEEE and 
NRDC should be quickly and closely examined. We have worked with these 
other groups on these proposals A melding of these ideas is possible as 
well. From our perspective, the key element is speed, which can only be 
achieved utilizing a deployment mechanism which exists in all the 
states, territories and the District of Columbia.
            2) Appropriate Funds for Energy Efficiency and Conservation 
                    Block Grants
    Sections 541-548 of EISA established a new Energy Efficiency and 
Conservation Block Grant (``EECBG''). This is a strong priority of the 
U.S. Conference of Mayors, other local governments and the state 
governments. If implemented quickly, it could provide critical near-
term investments in clean energy technologies.
    We support the efforts of the U.S. Conference of Mayors and others 
to streamline this process, so that the funds can be disbursed to local 
governments quickly. If the EECBG funds wait for DOE to go through a 
normal rulemaking process, followed by a competition among the local 
governments, the funds could take years to distribute. That is 
absolutely contrary to the intent of the incoming President and, I 
expect, this Congress.
    We recommend that the state portion of these funds be released 
within thirty days in accordance with the existing formula for the 
State Energy Program. NASEO recently wrote to Energy Secretary Bodman 
to implement these measures urging DOE to take certain administrative 
steps immediately to avoid delay in the distribution of funds early in 
the Obama Administration. There is sufficient statutory and legal 
authority to act in this manner. In short, the state energy offices are 
committed to sharing best practices with the local governments and 
ensuring regional coordination so that we actually can increase the 
leverage and the success of these programs.
            3) Expand Proven Energy Programs
              a) State Energy Program
    The State Energy Program (``SEP'') provides funds to the state 
energy offices through the Department of Energy to fund energy 
efficiency and renewable energy programs impacting every sector of the 
economy. A study conducted a few years ago by Oak Ridge National 
Laboratory concluded that for every federal dollar invested, over $7 in 
direct energy savings is achieved and almost $11 in non-federal funds 
are directly contributed to energy programs and projects. As noted, 
this study was conducted several years ago when energy prices were 
substantially lower, thus the projected savings today are even higher.
    If Congress and the new Administration are serious about addressing 
energy efficiency and renewable energy, the state energy network will 
be crucial to achieving any of these goals quickly, if at all. This 
network is robust and the energy offices generally serve as the program 
implementers as well as energy policy advisors to the Governors. A 
comprehensive energy effort must be coordinated, both at the federal 
and state levels. There is no other existing vehicle that can do the 
coordination. This funding allows the states to improve the energy 
efficiency of homes, schools, hospitals, small businesses, local 
governments, and the agricultural sector and to help the poor, elderly 
and disabled. Funds are utilized to promote ENERGY STAR products and 
work with energy service companies, utilities, local governments and 
others on all types of energy projects. Aggressive implementation of 
alternative fuels programs, as well as hybrid and plug-in hybrid 
vehicle initiatives, is also part of this effort. States promote the 
use of energy service performance contracts and implement these 
projects, which reduces energy costs for all types of public and 
private facilities, while keeping capital costs lower. States utilize 
these funds to support new and innovative ``Green Jobs'', including 
training programs, workshops, etc. States utilize these funds to 
implement more aggressive building energy codes and conduct training 
for code officials, builders, local building inspectors, architects and 
contractors. States facilitate all types of energy financing programs 
for projects. States also utilize these funds to conduct energy 
emergency preparedness and to respond to energy emergencies.
    The FY'07 Energy and Water Development Appropriations Bill provided 
$50 million for this program. The FY'08 Appropriations were $44 
million, including $10 million for competitive programs ($4 million of 
these funds were siphoned off to other uses determined by the 
Department of Energy). The FY'09 Appropriations Bills would have 
provided $50 million, though the House bill would have provided one-
half of these funds for a ``competitive'' program between the states 
and the Senate version would have provided $50 million for base 
funding--an approach we supported.
    We recommend $125 million for the stimulus package for SEP and an 
additional $125 million for the FY'09 Energy and Water Development 
Appropriations Bill. If the energy portion of the stimulus package is 
going to succeed, Congress and the Administration will require a 
coordinating function at the state level as well as the federal level. 
Making this program ``competitive'' between the states fails to support 
the laboratories of innovation and the collaborative model of best 
practices. After all, many of the nation's most successful energy 
programs, including the precursor to the Federal Energy Management 
Program, the Renewable Portfolio Standard, the Renewable Fuel 
Standards, and performance contracting programs, were created through 
state innovations and would never have occurred in response to a DOE-
issued ``Request for Proposals.''
              b) Weatherization Assistance Program
    The President-elect stated that he wanted to weatherize one million 
homes per year for ten years. The FY'09 Continuing Resolution (``CR'') 
provided for $477 million for the DOE Weatherization Program, up from 
$227 million in FY'08. The stimulus package should provide at least $1 
billion for Weatherization, in addition to the FY'09 CR. The FY'10 
appropriations should be $1.4 billion, and the ramp-up should continue 
beyond that. While the ramp-up will be a challenge, especially in the 
training area, it can be achieved. To ensure success, we strongly urge 
that tens of millions of dollars from these funds be allocated to 
worker training to get the community action agencies, local contractors 
and local agencies qualified to perform high quality energy efficiency 
              c) Energy Efficient Building Code Program
    EPACT 2005 authorized an expanded program to promote energy 
efficient building codes, training and technical assistance. The states 
are working to upgrade energy efficient building codes, but more is 
needed. A massive new effort at training local building inspectors, 
code officials, contractors, builders, utility personnel and architects 
is needed to get these upgrades accomplished. We have worked with 
congressional staff to create a national model standard with minimum 
energy efficiency levels. We were greatly disappointed that the 
International Code Council (``ICC'') process led to energy efficiency 
gains of less than twenty percent at the ICC meeting in September, when 
the higher codes were examined. This is insufficient and far too slow. 
Those who have opposed increased building energy efficiency codes have 
generally argued that it is never a good time to increase codes. This 
is a mistake. Congress should take two steps: a) increase funds from 
the pitiful $3.9 million presently provided for energy efficient 
building codes to $100 million for this effort; and b) move forward on 
legislation to upgrade the energy efficient building codes on a 
national level. This will require a commitment, not only this year, but 
for a number of years.
              d) EPA ENERGY STAR Program
    The EPA ENERGY STAR Program, within the Climate Protection Division 
of the Office of Air and Radiation, is an exemplary program. The FY'08 
funding contained in the Interior and Environment Appropriations Bill 
should be doubled to $100 million in the stimulus package, and should 
increase in base FY'09 funding and thereafter. The program works with 
states, utilities and others to promote energy efficiency, saving 
billions and reducing both electricity demand and natural gas demand. 
This effort is absolutely a joint activity with the states and it needs 
to expand.
    A specific set of ENERGY STAR program expansion measures (totaling 
$50 million) should be instituted as part of the stimulus package:

          1) Energy efficient existing homes (+$12.5 million), 
        including Home Performance with ENERGY STAR (which is a joint 
        activity between the states, EPA and DOE). This promotes whole-
        home retrofits. We are working with contractors, utilities and 
        others to bring the transaction costs down. We have instituted 
        a pilot program in the Mid-Atlantic States. Additional training 
        should be started promoting quality installation of heating and 
        cooling equipment. For example, air conditioning units are 
        frequently oversized and improperly installed, leading to more 
        peak demand and inefficiencies.
          2) Expanded energy performance ratings systems for the 
        nation's buildings (+$7.5 million), should be instituted. Ten 
        percent of U.S. building space has already utilized the EPA 
        metrics (energy use/square foot). This performance rating could 
        apply to 60 percent of U.S. commercial building space. 
        Additional funding would allow the program to be expanded to 
        the vast majority of the nation's buildings and would allow EPA 
        to partner with states, local governments, builders and others.
          3) Expanded small business programs would allow greater 
        technical assistance to this sector (+$10 million), including 
        small and medium-sized manufacturers and others. Again, the 
        focus would be the proper installation of high efficiency 
        services and products.
          4) Expanded outreach (+$10 million) to states, utilities, 
        local governments, elementary and secondary schools and other 
        energy efficiency program sponsors in the implementation of 
        energy efficiency programs. The ENERGY STAR ``platform'' can 
        assist these emerging program sponsors in developing programs 
        quickly, based on existing best practices for overall greater 
          5) Expanded outreach to state and local governments (+$10 
        million) could help these entities serve as a ``force 
        multiplier'' in achieving stated goals and monitoring and 
        verifying energy savings. This includes technical assistance, 
        sharing of best practices and programs, alternative financing 
        approaches and matching funds for innovative state programs. 
        This could also serve as a vehicle for identifying efficiency 
        measures in water and wastewater treatment facilities, though 
        the direct funding for the infrastructure improvements could be 
        provided through other elements of the stimulus package.
          6) Exploring new technologies and practices (+$5 million) 
        could help EPA and DOE work together in their efforts to 
        partner with the states, and local governments and would also 
        help establish the ``feedback loop'' with the federal agencies 
        to ensure that federal laboratory and other spending is 
        sufficiently connected to the real world and programs that 
        might be used by the population.
              e) Green Jobs
    In addition to the additional training requirements noted in the 
Weatherization section and the building codes section, of this 
testimony EISA authorized a new ``Green Jobs'' program. While it is 
authorized at $125 million, the funding should be $250 million in the 
stimulus package, and it should be increased over time.
    To successfully address the nation's energy challenges, a wide 
range of new workers will be needed, including insulation installers, 
air sealers, HVAC professionals, plumbers, renewable energy installers, 
energy auditors, etc. The unions have established extensive 
apprenticeship training efforts, which should be supported. Training is 
also needed for local code officials, contractors, building inspectors, 
and architects. In the industrial area, an expansion of the Industrial 
Assessment Centers should be an important priority, along with expanded 
coordination with the state energy and economic development officials. 
Community colleges, technical colleges, manufacturing extension 
services, cooperative extension activities (through USDA and state 
agricultural agencies), are also key elements of a training regime. 
This will require not only stimulus funds, but also persistent funding 
over a period of years. Recent initiatives in Arizona, Maryland, 
Massachusetts and New York could be excellent models for other state 
and federal initiatives.
    In addition, we recommend a new assistant secretary for ``Green 
Jobs'' or workforce development be established. This could be at DOE or 
DOL, or both. The key will be coordination.
              f) ``REAP'' Program
    While technically not jurisdictional to this Committee, we strongly 
urge Congress and the Administration to expand the renewable energy and 
energy efficiency program for farmers, ranchers and rural small 
businesses, which was authorized in the Energy Title of the 2002 Farm 
Bill, and reauthorized and expanded in the Energy Title of the 2008 
Farm Bill. This program has been successful thus far, but could be a 
more important lynch pin of federal energy and agricultural policy. 
This program should be funded at a level of $250 million in the 
stimulus package and an additional $250 million in FY'09. There is an 
existing competitive program operated by USDA, with cooperation from 
the state agricultural agencies, the state energy agencies and the 
agricultural extension agents. Recent proposed changes by the present 
Administration is pushing more funds towards loans and less to grants. 
This is a mistake; especially in a faltering economy. The focus should 
be on grants, with reduced match requirements, as well as technical 
assistance programs. In addition to the stimulus package, we would 
recommend base program funding in FY'09 of $250 million, with 
increasing amounts in the future.
              g) Low-Income Home Energy Assistance Program (LIHEAP)
    In the FY'09 CR, Congress doubled the LIHEAP program to $5.1 
billion. The funding is still inadequate to the task. Energy prices 
have dramatically increased in the past five years and low-income, 
elderly and disabled consumers are paying up to 20-30% of their net 
income for energy costs. This includes not only natural gas and 
electricity, but also heating oil and propane, which have experienced 
extreme price volatility. The state level energy organizations support 
a funding level of $7.6 billion, which would serve between one-third 
and one-half of the eligible population. As you know, even at these 
higher funding levels, LIHEAP funds provide only a share of energy 
costs. Recent surveys by the National Energy Assistance Directors 
Association (``NEADA'') have shown that shut-offs of utility service 
have increased substantially in 2008. Recent oil price decreases have 
not saved poor consumers from these price increases. Again, a 
consistently higher funding level for LIHEAP is critical to serving the 
poor. The energy efficiency building retrofit program discussed 
elsewhere in this testimony would not duplicate either LIHEAP or 
              4) Boost the Energy Tax Incentives
    One of the simplest steps Congress could take to promote long term 
job creation and new energy investments is to increase the energy tax 
incentives. Recent congressional action to extend a number of the 
energy efficiency and renewable energy tax provisions for a period 
ranging from one year to eight years was a positive step. We recommend 
that these provisions uniformly be extended to the eight years 
established for the solar investment tax credit to provide stability to 
this industry. This includes the PTC, ITC, CREBS, energy efficiency tax 
credit for new and existing homes, and the commercial buildings energy 
efficiency deduction (which should be expanded from $1.80/square foot 
to $3/square foot, in accordance with the proposal from the American 
Institute of Architects)
    Several additional tax changes could also make a significant 
impact. First, in light of the credit crunch and the desire to deploy 
these technologies, a refundable tax credit should be instituted. These 
credits also should be transferable. In addition, state tax benefits 
should not be offset against the federal tax benefits for energy 
efficiency and renewable energy.
    Second, to boost job creation in homeowner building retrofits, the 
energy efficiency tax credits should be increased from 10% of materials 
(up to $500 per home) to 50% for materials and labor (up to $2500 per 
home). Contractors would promote such an incentive directly, ensuring a 
real world impact without government implementation or delay.
    Finally, the new tax credit for plug-in hybrid and electric 
vehicles should also be extended.
              1) White House Energy Council
    We support creation of a White House National Energy Council. 
Coordination of DOE, EPA, USDA, DOI and other agencies should be a high 
priority of this new position. In the 1990s, through 2001, the state 
energy agencies, the state utility commissions, the state air program 
administrators and the state environmental commissioners (with support 
from the federal government) met to coordinate policies, programs and 
initiatives. The state agencies have begun meeting again to 
reinvigorate this effort. The support of the new White House National 
Energy Council and the Council on Environmental Quality would be 
critical to this effort.
              2) Energy Efficiency and Renewable Energy Office
    Sadly, over the past few years, the Department of Energy has become 
largely irrelevant to the real energy challenges facing the nation. 
First, the procurement process for the Department of Energy's Energy 
Efficiency and Renewable Energy Office is not working. It has gotten 
slower and has become more distant from the states, local governments 
and other governmental and private initiatives.
    Second, with the elimination of DOE's regional offices a few years 
ago, the substantive connection between the federal government and the 
states has been washed away. The state energy offices pledge support to 
new regional efforts and we have numerous suggestions on DOE 
    Third, the ``stovepipes'' remain at DOE, where the technologies are 
not meshing. A bright spot has been the industrial energy efficiency 
program, with increased levels of cooperation between the federal 
government and the states. We are hopeful that with the recent new 
management in the state and local program office, and a new commitment 
from the incoming Administration, successful joint programs could be 
    We also recommend the creation of Senior Deployment Coordinators in 
each of the end-use offices at the Energy Efficiency and Renewable 
Energy Division. These individuals would help work with states, local 
governments, and the private sector to help get the work of the 
national laboratories and these offices into the marketplace. There is 
a fundamental lack of understanding at DOE about the connection between 
R&D and deployment. The deployment function is not seen as important 
and there is no institutionalized feedback mechanism between the states 
and DOE on what works and what does not work. R&D cannot be done in a 
vacuum. New efforts at commercialization have been a useful start.
    We would also recommend expansion of the Technical Assistance 
Program (``TAP'') coordinated by the National Renewable Energy 
Laboratory (``NREL''), which utilizes federal laboratory expertise and 
other DOE contractor resources to assist the states in implementing 
innovative policies, based upon best practices.
    The Federal Energy Management Program (``FEMP'') now has strong 
leadership. However, there is approximately $1.3 billion in Energy 
Service Performance contracting projects in the pipeline. Leadership 
from the White House is needed to order agencies, including DOD, to 
expedite these projects. A separate proposal being considered by the 
President-elect and Congress to add significant funding to FEMP 
projects would also expedite federal energy efficiency measures.
              3) Office of Electricity and Energy Reliability
    This office does an excellent job with very limited resources--but 
they need more resources. First, NASEO supports expanded efforts to 
make the transmission and distribution grid more robust and reliable 
and creating a ``Smart Grid''. Second, DOE must do more to help prepare 
the country for energy emergencies. Many in Washington, D.C. do not 
appreciate that DOE has significant responsibilities for energy 
emergency preparedness and response, and that these efforts are often 
done in conjunction with state governments. Funding has been cut for 
energy emergency preparedness and it has significantly impaired our 
nation's ability to respond to energy emergencies. For example, the 
National Infrastructure Protection Plan (``NIPP'') needs to be upgraded 
and more regional energy emergency exercises need to be conducted. 
Finally, increased funding for the basic OE function should be 
provided, as should increased funding for the energy emergency 
function. Enhanced coordination with FERC, the state energy agencies, 
and the state utility commissions should be encouraged. Recent efforts 
to create Clean Renewable Energy Zones should be expanded.
              4) Energy Information Administration
    The Energy Information Administration (``EIA'') needs more 
resources to do its job more effectively. While not necessarily part of 
a stimulus package, there are a number of items that are falling 
behind. Section 805 of EISA required EIA to develop a plan and identify 
additional measures. Just as the state programs have been cut, so has 
EIA. This agency has not had enough funds to make investments required 
to ensure its surveys accurately track rapidly changing markets. EIA 
data is relied upon and, of course, inaccurate data can distort energy-
related decisions. For example, EIA's natural gas storage report, 
released in November 2005, erroneously showed a substantially larger 
than expected withdrawal. As a result, December futures on the NYMEX 
immediately jumped sixty cents, costing consumers an additional (and 
unnecessary) $100 million--$1 billion. FERC's Office of Market 
Oversight concluded that this incident illustrates the need to make 
more supply and demand information available to the public. EIA's $97.8 
million budget in FY'08 will not allow the agency to update needed data 
sets, provide critical data on carbon emissions to help the country 
address climate change, provide more state-level data information (and 
in a more timely manner), provide more data on ethanol and biodiesel 
use and penetration, update data on demand response, expand the heating 
oil, propane and natural gas program operated in coordination with the 
states and provide more accurate data on state-level programs 
(especially using comparable data from different states), etc.
              5) Office of Policy
    DOE's Office of Policy had previously been involved in more 
discussions among offices at DOE and with the states and other 
interested parties. This function has been substantially diminished in 
the past few years. We strongly urge DOE to aggressively enhance the 
involvement of this office in developing energy policy, working with 
the states and with the proposed White House National Energy Council.
    Beyond some of the stimulus measures and administrative changes 
discussed above, Congress and the new Administration will be 
considering important new policies including, but not limited to, a 
Renewable Portfolio Standard and an Energy Efficiency Resource 
Standard, expansion of authority to set multiple performance standards 
for appliances, building labeling models, energy efficient mortgages, 
expanded grants and programs for multi-family and manufactured housing, 
etc. One program that has not been widely discussed, but should be, is 
a national effort to provide rebates to the owners of the 2 million 
pre-1976 manufactured housing units in the country. These are terrible 
energy wasters for people who are generally very poor. This rebate 
program could be modeled after examples in Maine and New Hampshire and 
would encourage people to upgrade to ENERGY STAR homes.


    Clean energy investments, such as incentives for attic insulation 
or solar panels, offer the ability to stimulate the economy and create 
green collar jobs, while at the same time reducing household energy 
bills, advancing the nation's energy security, and addressing our 
climate and environmental challenges. The states are uniquely 
positioned to jump start real world energy projects in weeks, not 
seasons. We urge Congress to leverage the federal government's 
resources with state's ability to innovate and quickly implement energy 
projects on the ground. We also hope to have the opportunity to work 
with DOE, EPA, USDA, DOI and the possible White House Energy Council, 
in addressing a set of coordinated policy measures.

    The Chairman. Thank you very much.
    Mr. Loper.


    Mr. Loper. Good morning, Chairman Bingaman and Ranking 
Member Domenici. My name is Joe Loper. I'm senior vice 
president for the Alliance to Save Energy. Thank you and this 
committee for the opportunity to discuss how we can use energy 
efficiency to stimulate the economy while creating jobs, 
lowering energy costs to the consumers, making our country more 
energy secure, and start addressing a looming climate 
    Energy efficiency is the cleanest, easiest, and least 
expensive energy and carbon abatement resource, but fully 
tapping the potential of energy efficiency will require 
significant government leadership and a combination of public 
and private investment.
    We all know the economy is in serious trouble. Over the 
last year, we lost 2 million jobs, and about $10 trillion worth 
of wealth in homes and stocks has evaporated. Economic news 
suggests we are in for a longer and deeper slump than we have 
seen for at least a couple of--at least the last couple of 
decades. We need to do something, now and over time.
    Given the sharply rising Federal deficit, we should make 
sure that stimulus spending yields long-term benefits, that we 
use the stimulus to invest in the Nation's future, not just 
invite immediate gratification. By using the stimulus as a 
downpayment on a new energy economy and to prepare for climate 
legislation, we can pass something besides debt on to our 
children. The value of a stimulus package in boosting short-
term economic confidence can be enhanced if it is seen as a 
part of a larger and forward-thinking clean-energy strategy.
    In anticipation of an economic stimulus bill, the Alliance 
has been working with a coalition of more than two dozen 
organizations and companies to develop recommendations that 
will simultaneously stimulate the economy and provide a 
downpayment on a cleaner and more secure energy future.
    In developing the recommendations, we were guided by the 
following principles. The recommendations must be timely. We've 
been thinking in terms of a 2-year funding cycle for the 
recommendations, that I'll discuss in a minute. We've tried to 
rely, where possible, on existing programs or institutions and 
existing authorities, where they're available. We've emphasized 
training and infrastructure development, thinking that this is 
a short--this is a downpayment on the future. We've targeted 
the activities, where--tried to give a significant amount of it 
toward low-income and the unemployed, and providing direct 
assistance to reduce their energy bills, as well as training 
for future employment. We've tried to make sure that our 
recommendations will have lasting benefits, that the benefits 
to the economy and the environment, as well as short-term 
economic stimulus.
    The Coalition's recommendations, I should be clear, are 
still a work in progress. We've tried to be responsive to what 
are now daily requests from the Hill for new ideas, and going 
back and forth with different people on the details of the 
various recommendations. We're meeting again this afternoon, 
and I suspect we'll be meeting for a couple of days, so the 
details will change, but today I can give you an overview of 
the various recommendations that we have.
    The recommendations from the Coalition comprise about $18 
billion in stimulus funding. These are increases over and above 
existing program funding. The $18 billion in stimulus funding 
would create about 150,000 jobs over the next 2 years, 
including construction and manufacturing in the industries that 
supply them. I want to emphasize that we have been very 
conservative with the job numbers, and not counted recycling 
through the economy over time. So, we're looking at what we 
think are the job impacts in the short term.
    The different categories, I'll just quickly run through, 
for the--our recommendations include $8 billion for public 
buildings. That's improvements in Federal, State, and local 
government buildings, including schools. The potential for 
energy efficiency investments in the public sector is estimated 
at between 35 and 70 billion, many of which are projects that 
are already lined up. So, this would go a long way toward 
kickstarting those projects.
    We'd provide about $5 billion for energy efficiency in 
homes. That includes $2 billion to the weatherization 
assistance project, and another $3 billion for State-
administered programs to help weatherize middle-income homes.
    On commercial buildings, we have proposed $3 billion for a 
national program to encourage improvements in commercial 
buildings. We'd provide $2 billion to public transit, $100 
million to the ENERGY STAR Program to expand the home 
performance with ENERGY STAR, which is a residential retrofit 
program. We would provide building--$100 million to DOE to 
support training of building-code officials at the State and--
State and local building-code officials. We provide additional 
funding for the manufacturing assistance project at the 
Department of Energy.
    The Alliance to Save Energy appreciates the opportunity to 
testify and the committee's and chairman's interests in using 
the stimulus package to provide bridge funding to a clean 
energy economy. We welcome future discussions on long-term 
reform of the economy and addressing the looming economic 
challenge. But, the recommendations that I've laid out here 
will meet the objectives of fiscal stimulus and start us down 
that road.
    Thank you.
    [The prepared statement of Mr. Loper follows:]

  Prepared Statement of Joe Loper, Senior Vice President, Policy and 
                   Research, Alliance to Save Energy

    Good Morning, Chairman Bingaman and Ranking Member Domenici. My 
name is Joe Loper and I am the Vice President for Policy and Research 
at the Alliance to Save Energy. As you are aware, the Alliance mission 
is to promote energy efficiency worldwide. The Alliance works closely 
with a broad and diverse group of stakeholders, including suppliers of 
energy efficient equipment and services, electric utilities, oil and 
gas suppliers, large and small energy consumers, environmental 
organizations and federal, state and local government agencies.
    For 30 years, the Alliance has promoted federal policies to 
increase the nation's energy efficiency. There has never been a more 
important moment than now to initiate a serious and aggressive energy 
efficiency program for this nation. I want to thank you and the 
Committee for the opportunity to discuss the critical need to use 
energy efficiency as a means to stimulate the economy, while creating 
jobs, lowering energy costs to the consumer, and making our country 
more energy secure.
    The economy is in serious trouble. We lost 2 million jobs lost last 
year, the worst since the oil crisis of 1974. More than $10 trillion 
worth of wealth in homes and stocks has evaporated since this time last 
year.\1\ Economic news suggests we are in for a longer and deeper slump 
than we have seen for at least the last couple decades. We need to do 
    \1\ More than $8 trillion of stock valuation decline between Jan 
and October 2008 according to Wall Street Journal Oct. 11, 2008, p.1. 
Home prices in September had fallen by one-fifth from prior year to 
$162 thousand. See Standards & Poor's, ``National Trend of Home Price 
Declines Continues Through the Third Quarter of 2008 According to the 
S&P/Case-Schiller Home Price Indices,'' Press release, November 25, 
2008. There are roughly 75 million single-family homes in the US, thus 
20% drop in value represents roughly 2.5 trillion in housing value.
    But given the sharply rising federal deficit, it is all the more 
important to make sure that any incremental spending seen as essential 
for economic recovery also yields long term value. The ability of the 
stimulus package to increase confidence of businesses and consumers and 
banks will be enhanced if it is perceived as being part of a grander 
strategy.\2\ If the stimulus is used as a down payment on a new energy 
economy or to prepare for climate legislation, our children will 
inherit something more than debt.
    \2\ The best approach to stimulating the economy is a point of 
contention among economists. Some argue that stimulus should be 
``timely, temporary and targeted.'' The notion is that the economy just 
needs a ``shot in the arm,'' and that care should be taken to ensure 
the stimulus occurs when the economy is in a downturn and not after it 
has already rebounded. Other economists argue that stimulus should be 
``permanent, pervasive and predictable,'' that people spend based on 
their expected income over their lifetime and that the April 2008 
stimulus had little or no effect on consumer spending. John B. Taylor, 
``The State of the Economy and Principles for Fiscal Stimulus, 
Testimony before the Committee on the Budget, United States Senate, 
November 19, 2008.

    Energy efficiency is the cleanest, easiest and least expensive 
energy and carbon abatement resource. It is widely seen as the first 
response to climate change, energy security and other energy 
challenges. The US Chamber of Commerce, in a report released in 
September, said ``the next best source of new energy is the energy we 
can save every day.''\3\ Energy efficiency is unique among energy 
resources. It is a low-cost resource. It has few carbon emissions. And 
there are no battleships are required. The energy we save is a domestic 
resource, a secure one that we control, and most importantly, one that 
produces jobs here in America.
    \3\ U.S. Chamber of Commerce, Blueprint for Securing America's 
Energy Future, Institute for 21st Century Energy, September 30, 2008, 
    Energy efficiency is already a big part of the nation's energy 
economy--a silent partner in meeting the nation's demand for energy 
services. If not for energy efficiency improvements made since 1973, 
America's energy bill and related carbon emissions would be 50 percent 
higher (150 quads instead of 100 quads).
    Energy efficiency can contribute even more to the nation's energy 
economy--McKinsey estimates that base case demand in 2020 can be 
reduced by 21% of using technologies and practices available today.\4\ 
But that doesn't mean it's free or always easy. Significant barriers to 
wider acceptance of EE must be overcome, including lack of consumer 
awareness and know-how, split incentives (e.g., where the landlord buys 
the appliances, but the renter pays the energy bill), and lack of up-
front investment capital.
    \4\ McKinsey Global Institute, Wasted Energy: How the U.S. Can 
Reach Its Energy Productivity Potential, July 2007 
    Fully exploiting the potential of energy efficiency will require 
significant government leadership and a combination of public and 
private investments. It's a familiar story--When the economy is good, 
there's no time, when the economy is bad, there's no money. The 
stimulus package offers a rare (perhaps unique) opportunity to overcome 
this ``cycle of complacency.''


    Several years ago the Alliance brought together a coalition of two 
dozen organizations and businesses (see attached list) and businesses 
to advocate for robust energy efficiency appropriations. For the past 
five weeks the coalition has been working on developing a list of 
stimulus program activities. In developing these recommendations, the 
coalition was guided by the following five principles:

   Timely.--Recognizing that one of the major objectives of the 
        fiscal stimulus is to move money into the economy, we selected 
        activities suitable for a two-year funding cycle.
   Existing programs or institutions.--The coalition looked for 
        existing programs and institutions that can effectively absorb 
        and spend the funds in a short time. This will help to ensure 
        that the rapid expansion of programs not be allowed to 
        undermine the effectiveness of those programs.
   Emphasis on training and infrastructure development.--The 
        energy efficiency deployment infrastructure can build up fast, 
        especially in time of high unemployment, but it requires 
        training and infrastructure development. This should be a major 
        focus of a green stimulus package.
   Targeted.--The coalition has directed a significant amount 
        of activity toward low-income and unemployed people, providing 
        direct assistance to reduce their energy bills as well as 
        training for future employment.
   Lasting benefits.--Finally, we focused our recommendations 
        on activities that will provide real and lasting benefits to 
        the economy and the environment, as well as short-term economic 

    The coalition's recommendations are for funding increases over and 
above existing program funding and would create more than 100 thousand 
jobs over the next two years, including construction and manufacturing 
and the industries that supply them.\5\ The recommendations include:
    \5\ A ``job'' equals one job for one year. For example, ten 
thousand jobs could equal ten thousand jobs for one year, five thousand 
jobs for two years, or two thousand jobs for five years. Job numbers in 
include direct and indirect jobs, but not induced jobs (i.e., the 
``multiplier effect''). Job calculations based on multipliers developed 
by Karen Ehrhardt-Martinez and John A. ``Skip'' Laitner, The Size of 
the U.S. Energy Efficiency Market: Generating a More Complete 
Picture,'' American Council for an Energy Efficient Economy, Report 
Number EO83, May 2008, p.9.

   State and local government buildings.--$4 billion to 
        Department of Energy (DOE) for grants for energy efficiency 
        projects in state and local facilities. The potential for 
        energy efficiency investments in the public sector is between 
        $35 and $70 billion, and that fewer than 25 percent of all 
        state buildings have had comprehensive energy-efficiency 
        retrofits.\6\ This recommendation would create roughly 24 
        thousand jobs.
    \6\ Personal correspondence, Don Gilligan, National Association of 
Energy Services Companies, December 2008.
   Schools.--$3 billion to the Department of Education for 
        grants for the repair, renovation, and modernization of public 
        schools, with the requirement that a percentage of funding be 
        used for improvements that make use of specified energy 
        efficiency and green building standards. This recommendation 
        would create roughly 18 thousand jobs.
   Federal buildings and facilities.--$1.2 billion to DOE to 
        fund existing requirements (under EPACT 2005 and EISA 2007) to 
        conduct facility audits, install advanced metering and make 
        energy efficiency improvements in federal buildings. An 
        additional $1.3 billion of economic activity could be induced 
        by freeing up the existing backlog of energy services 
        performance contracts held up at the DOE General Counsel--this 
        would require no additional federal spending. Combined, these 
        two recommendations would create roughly 15 thousand jobs.
   Weatherization Assistance.--$1.9 billion over two years to 
        the Weatherization Assistance Program. These funds would be 
        used to increase the number of homes reached by the program and 
        provide training and investment necessary to meet President-
        Elect Obama's goal of one million homes weatherized annually. 
        Initial spending would involve significant on-the-job training 
        for unemployed carpenters and trades people to weatherize homes 
        with at least tacit understanding that this is an employment 
        opportunity for the future. With twelve training centers and 
        hundreds of agencies already in place, the program can expand 
        rapidly. This recommendation would create roughly 11 thousand 
   Home energy retrofits.--$2.8 billion to EPA for state-
        administered programs intended to weatherize 1.5 million homes 
        over two years. The programs would provide rebates or low-
        interest loans for homes that achieve at least 10%, 20%, or 30% 
        energy savings through combinations of measures with assumed 
        energy savings, Home Performance with Energy Star, or 
        comprehensive retrofits based on before and after energy 
        audits. This recommendation would create roughly 22 thousand 
        jobs based on federal funding alone.
   Public transit.--$2 billion to transit agencies to reduce 
        fares and for expansion, rehabilitation and modernization of 
        transit systems.
   Manufacturing Assistance.--$50 million to DOE Industrial 
        Assessment Centers--An existing network of universities provide 
        free energy audits for local small and medium sized 
        manufacturers. Students actually conduct the audits with 
        supervision from professors, thus offering both training and 
        energy savings opportunities.
   Building Code Support.--$100 million to DOE to support 
        training of builders and state and local building code 
   ENERGY STAR.--$100 million to EPA to allow the ENERGY STAR 
        program to expand state and local programs, including Home 
        Performance with ENERGY STAR, label new categories of efficient 
        products, and increase public outreach.
   Federal Appliance credit.--Make the federal tax credit 
        manufacturers of high-efficiency appliances refundable for 2 
        years. This will require a minor legislative change and will 
        drive investment and employment in manufacture of appliances at 
        the highest efficiency levels by providing cash-strapped 
        manufacturers with funds to invest in improved efficiency. The 
        score should be minimal as it mostly enables this year tax 
        credits that were already scored when extended in September 
        (most of the credit is capped for each manufacturer). This 
        provision will benefit consumers by increasing production and 
        decreasing cost of very high efficiency refrigerators, 
        dishwashers, and clothes washers.

    Specific language is available for many of the recommendations.

                          SUSTAINING MOMENTUM

    At least a few tens of billions of dollars could be effectively 
absorbed over the next two years to expand energy efficiency programs 
that already exist or that could be initiated quickly with immediate 
energy savings and job creation. This would be a major increase in 
public sector spending, which currently totals about $5 billion, and 
would represent a major share of total private and public spending on 
    \7\ Public sector spending for efficiency includes federal, state 
and local government spending as well as required spending by electric 
and gas utilities. Estimates based on data from the Consortium for 
Energy Efficiency (2008). The Alliance estimates total current spending 
for energy efficiency is about $40 billion: 2007 EE Quads was 1.35 
higher than 2006--50.05Q vs 48.7Q. Assuming 10-year average life of EE 
measures and $40/million Btu cost of conserved energy (consistent with 
4 cents/kwh), the spending for that 1.35Q annual energy saving equals 
    The proposed stimulus package offers one source of funding to start 
the job--but additional action will be needed well beyond the next two 
years, both to sustain these programs and to create a price for carbon. 
The ability to use stimulus funds to address our energy and climate 
challenges is constrained by restrictions that they be spent within a 
very short window of time. Lack of consensus about best approach for 
fiscal stimulus argues for some diversity in the policy portfolio. A 
longer-term stimulus package presented as part of a broad and credible 
strategic vision for the energy economy could build greater confidence 
in the country's overall economic prospects.
    The Alliance to Save Energy appreciates the opportunity to testify 
and the Committee's and Chairman's interest in using the stimulus 
package to provide bridge funding to a clean energy economy. The 
recommendations we have provided will meet the objectives of fiscal 
stimulus and start us down the road toward a cleaner, more secure and 
less volatile energy economy.

    The Chairman. Thank you very much.
    Mr. Hauser.

                         ARLINGTON, VA

    Mr. Hauser. Thank you, and good morning, Chairman Bingaman 
and Senator Domenici and distinguished members of the Senate's 
Energy Committee on Natural Resources.
    On behalf of the rapidly growing smart-grid industry, I 
want to thank the Chairman and all of the members of the 
committee for your support in passing the Energy Independence 
Security Act of 2007, and, in particular, title 13 on Smart 
Grid. Together, your leadership on these issues has clearly had 
a positive impact on the country, and I applaud your continued 
vision and action.
    I appreciate the opportunity to testify before you today on 
behalf of the rapidly increasing number of smart-grid 
professionals across the country. I'm specifically speaking, 
representing more than 80 member companies of the Gridwise 
Alliance and the Smart Grid Policy Center. I won't take time to 
name all the members of the Alliance that include many of 
America's leaders, both utilities and technology companies. I 
have provided your staff with brochures that summarizes our 
vision and purpose, and has a list of our members included.
    I'm also pleased to represent the other managers and more 
than 100 staff members of GridPoint. GridPoint is a rapidly 
growing clean-tech company with offices in nearby Arlington, as 
well as in Seattle, Washington. We are proud to be a leader in 
the smart-grid industry, developing and deploying smart-grid 
solutions in several States, cities, and utilities around the 
    Building a smart grid must be a national priority. The 
funding we've requested to be included in the stimulus package 
you're considering today is the necessary next step. It is 
critical to enabling the vision you have for a cleaner and more 
efficient energy system. While much of the technical and policy 
discussions focus on energy efficiency, renewable energy, 
storage, and electric vehicles, we have too often under-
emphasized the critical need for a smarter grid, the 
infrastructure required to achieve both scale and true cost-
    I don't have enough time in the next few minutes to tell 
you about all the exciting recent developments in our industry. 
Suffice it to say there are projects underway in many States--
Washington, Colorado, California, Texas, Vermont, Illinois, and 
many other States. They're all exploring new and better ways of 
deploying smart-grid solutions, with huge benefits to consumers 
and utilities--improved efficiency, higher reliability, 
improved environmental benefits--and at a cost below that of 
traditional infrastructure.
    I'd like to refer you to my written testimony for more 
details on the impact that a smart grid will have immediately 
on creating new jobs, and, over the longer term, by 
revitalizing this industry and the economy.
    Smart grid may still be new to some of you, so, in the next 
few minutes, let me explain it this way. What would happen if 
we reduced the lighting in this room, right now, by 20 percent, 
or even 50 percent? Would it affect our ability to continue the 
meeting? I think not. What if we changed the temperature by 2 
or 3 degrees for the next hour or two? Do you know what impact 
would--this would have on the energy use in this building? What 
if we had the ability to make these changes anytime, based on 
the availability of power from the grid. What would be the 
impact on the local substation operation, on PEPCO's operations 
here, on PGM's regional operations? What if every building and 
every consumer had the ability to automatically control their 
major loads, where the impact to their lifestyle and business 
needs is minimal, but the collective impact on the local 
utility in the region is positive and significant? What if we 
measured every kilowatt and every kilowatt hour, and could 
clearly show the benefit of the savings to our economy? How 
many power plants could we not build, and how much carbon could 
we save? What if our roofs had solar systems and our garage 
contained--garages contained plug-in electric vehicles? What if 
our basements contained an inexpensive battery storage system? 
What if these devices were networked together to optimize their 
value to both consumers and to the utilities' operation of the 
grid? How many additional power plants could we not build, and 
how much carbon could we save? What if Federal facilities 
across the country had this capability? What if every school 
could respond in this way? What if we built an infrastructure 
where it was easy for homes and businesses to better understand 
their energy use, reducing the unnecessary use of energy and 
optimizing the distributed production of clean energy, and, 
when networked together, they need much less energy to meet our 
needs and we need fewer power plants to produce the energy we 
    This is a smart grid, and more. It is more renewable 
energy. It's more efficient loads. It's more electric 
transportation. It's higher reliability, and at an affordable 
price. It truly is the backbone of our clean-energy future.
    Let me summarize by saying that I believe, and the 
companies I represent believe, that creating a smart grid is 
one of the most important investments you can make to 
revitalize our economy and build for the future. These 
investments must start right now.
    Europe and other countries are already moving ahead quickly 
on creating a smart grid. It is critical that we also move 
quickly. We are faced with challenging times in our country--
challenges to our economy, challenges to our energy security, 
and challenges even to our continued leadership in the world. 
Making transformative changes, such as these, will not only get 
us through the current crisis, but will build toward a cleaner, 
more productive and secure future.
    Thank you very much for your time and attention. I'll 
welcome questions.
    [The prepared statement of Mr. Hauser follows:]

Prepared Statement of Steve G. Hauser, Vice President, Gridpoint, Inc., 
                             Arlington, VA

    Good morning Chairman Bingaman and distinguished members of the 
Committee on Energy and Natural Resources. I'd like to specifically 
thank Senator Bingaman, Senator Dorgan, Senator Cantwell, and Senator 
Salazar for the interest and support you have provided in recent years 
for policies supporting smart grids. I want to also thank all the 
members of the committee for your support in passing the Energy 
Independence and Security Act of 2007 and in particular Title XIII on 
Smart Grids. Together your leadership on these issues has clearly had a 
positive impact on the country and I applaud your continued vision and 
    I appreciate the opportunity to testify before you today on behalf 
of the growing number of smart grid professionals. I'm specifically 
representing more than 80 member companies of the GridWise Alliance and 
the Smart Grid Policy Center, most of whom are in Houston today for our 
annual members meeting. IBM, Sempra, Battelle, PJM, AREVA, and Rockport 
Capital founded this group with me five years ago with a vision to 
transform our electricity system based on innovative information and 
energy technologies. Our goal was and still is to substantially improve 
the efficiency, reliability and affordability of electricity in this 
country while reducing its environmental impact. I won't take time to 
name all the other members of this Alliance that include many of 
America's leaders; both utilities and technology companies. I have 
provided each of you a brochure that summarizes our vision and purpose 
with a list of members included.
    I am also pleased to represent the other managers and more than 100 
staff members of GridPoint. GridPoint is a rapidly growing cleantech 
company with offices in nearby Arlington as well as in Seattle, 
Washington. We are proud to be a leader in the smart grid industry; 
developing and deploying smart grid solutions in several states, cities 
and utilities around the country.
    Senators Cantwell and Dorgan may remember the last time I testified 
before this committee. It was late in the summer of 2001 and strange 
things were happening in the electricity industry, especially on the 
West coast, where a field hearing was held to explore alternatives to 
traditional power systems and technologies. I explained then the 
growing interest and understanding of how information based 
technologies and tools could provide solutions to revolutionize the way 
we delivery electricity. Providing a system for measuring and 
communicating more detailed and accurate information on how electricity 
is produced and consumed would create the ability to optimize and 
control energy use with significant benefits. Sitting next to me that 
day was Steve Hikock from Bonneville Power who described Bonneville's 
concept for an Energy Web; a complex ecology of distributed resources, 
optimized to maximize their benefit to consumers and the economy. 
Together we offered a picture of a future utility infrastructure where 
every electricity generating device, big or small, and every energy 
consuming device could communicate; providing a system for integrating 
more renewable energy, enhancing the efficient consumption of energy, 
and enabling consumers to have the ability to actively contribute to 
reducing both their use of energy and their resulting carbon footprint.
    Now, seven years later I'm pleased to say that we've made 
substantial progress toward reaching that vision. As you know, smart 
grids are being talked about across the industry as a critical part of 
the changes we need to make in our electricity industry. DOE's 
electricity advisory committee is about to release a report on their 
findings and recommendations that will include a major section on smart 
grids. The Federal Energy Regulatory Commission and the National 
Association of Regulatory Commissioners have established a smart grid 
task force committed to study policies to promote smart grid 
deployment. The Edison Electric Institute, the American Public Power 
Association and the National Rural Electric Cooperative Association all 
have newly active groups looking at smart grids to better understand 
how they apply across their utility members. Generally they all agree 
with a statement made recently by Steve Specker, the President of the 
Electric Power Research Institute that ``Smart grids represent the 
biggest opportunity for the utility industry in the next decade''.
    Many of our member companies have testified before this committee 
in the past few years on the importance of smart grids and I encourage 
you and your staff to refer back to their previous comments. What we as 
Alliance members and these other stakeholders, I believe, want me to 
communicate to you today is that building a smarter grid must have top 
priority both in your energy policies and in your spending plans in 
2009 and beyond. While I don't presume to speak for all of them 
explicitly, I do talk with them regularly and believe that I understand 
their views and concerns, and have sought to reflect their ideas into 
my comments today. Before I articulate some of the specific ideas I'm 
offering today, I'd like to quickly review the context, drivers, and 
issues facing our industry today.
    For over a century we've systematically built a complex 
infrastructure of power plants, regionally connected with transmission 
lines to load centers where distribution lines crisscross roads and 
neighborhoods to provide power to every home and business. This power 
grid ensures not only our safety and security, but is vital to our 
continued growth in productivity and prosperity. This ``public good'', 
an infrastructure built and maintained on our behalf, is aging and 
overstressed. While it has served us remarkably well, it is now 
incumbent upon us to upgrade it to meet the changing demands of our 
21st Century economy and society. We must build a cleaner, more 
efficient grid; one that meets the needs of a digital and highly 
interactive economy; and one that maintains affordability, reliability, 
safety and security for every consumer. Building a smart grid is the 
first critical step of many; bringing new tools, techniques and 
technologies in a network of devices aligned for supreme performance.
    The benefits of this new approach, a smart grid, are myriad and 
enduring. At its core is a sophisticated information system that allows 
grid operators much greater visibility into the complex inner workings 
of this large machine. With greater visibility comes the ability to 
quickly make decisions to optimize performance, reduce emissions, and 
improve reliability. A smart grid provides the capability of 
integrating an increasing amount of clean distributed energy resources 
accelerating the growth in these important technologies. While much of 
the technical and policy discussions focuses on energy efficiency, 
renewable energy, storage, and electric vehicles; we have too often 
underemphasized the critical need for a smarter grid to achieve both 
scale and true cost effectiveness.
    A smart grid also provides the ability to measure and verify the 
energy savings realized as we accelerate our investments in these 
important technologies in federal facilities, schools and in homes and 
businesses around the country. By carefully measuring these savings, we 
better understand the value of our investments and proactively identify 
and even greater efficiency opportunities going forward.
    This same smart grid information system provides customers with a 
window into their own energy use, giving them the tools to change their 
behavior according to their own values and needs. Many studies have 
shown that better information alone results in consumers reducing their 
energy use by 10-20%. A smart grid will provide all consumers with the 
option for not only reducing their energy use and their cost of energy, 
but also will allow them a new flexibility to add cleaner and more 
efficient appliances and equipment. Some of the exciting new 
developments in advanced vehicles and electricity storage devices offer 
huge potential to not only have a positive impact on the environment by 
reducing tailpipe emissions, but can also substantially improve the way 
we operate the grid. A smart grid is critical to ensuring that these 
new technologies are integrated safely and reliably to maximize their 
benefits. Together the power providers and the power users work to 
create the best possible ``pubic good'' at the least cost to the 
economy and the least impact on the environment; creating a new 
paradigm for involving every consumer in the solution.
    GridWise Alliance member companies are actively deploying smart 
grids around the country already. One of the truly pioneering 
demonstration projects was completed earlier this year in Washington 
State. Known as the Olympic Peninsula project, this project proved many 
of expected benefits across more than 100 homes participating in the 
project. Reductions in both KW demand and KWh energy use were shown to 
range from 5% to more than 20%. But more importantly, the consumers 
were thrilled with their own participation in the project showing how 
well designed consumer information and control can have big impacts.
    Another project was started earlier this year and is actively 
deploying new technologies and systems right now. Known as 
SmartGridCity, this project promises to push the edge of the possible 
with a smart grid, capturing more than 70 different unique benefits and 
ultimately deploying to several thousand homes and businesses in 
Boulder, Colorado. Last week, the City of Austin announced their new 
smart grid deployment called the Pecan Street Project, with the city 
pledging to create a virtual 300MW clean power plant with a combination 
of efficiency and clean power. Many other utilities around the country 
have launched similar efforts in the past year to explore the potential 
of a smart grid.
    As we close out 2008 and head into 2009 we have the opportunity 
with new leadership in the White House and support from Congress to 
greatly accelerate the creation of a smart grid and become a global 
leader once again in providing clean, reliable and affordable 
electricity to our citizens. A substantial new federal investment in 
this smarter grid will accelerate and leverage planned investments by 
cities and utilities around the country resulting in rapid job growth, 
stronger and more reliable infrastructure, and more affordable 
electricity. Consumers of all types will benefit through greater 
information, tools to understand and manage energy use, and greater 
access to green power. Schools, for example, will not only benefit from 
greater visibility and control of their energy use, but will be able to 
use the equipment and information to educate and involve students in 
better energy decisions; embedding a greater understanding for 
    Federal facilities can be an early success story if investments in 
clean energy and energy efficiency are supported by a smarter 
infrastructure that not only measures and verifies the impacts of these 
near term investments but actively monitors the ongoing benefits and 
identifies new opportunities for future investments.
    An explosion of new technologies is emerging into the market that 
must be part of this new, smarter power system. For example, electric 
vehicles and electric transportation in general are about to 
revolutionize the way we travel and in doing so change the power system 
forever. The new high performance batteries in these vehicles will also 
revolutionize power delivery by enabling cost effective storage. 
However, a smart grid network is essential to manage these new 
technologies in a way that optimizes the overall performance and cost 
of the grid.
    A smart grid is the cheapest option for meeting our growing need 
for electricity, expanding high-tech businesses and manufacturing, 
giving homeowners the tools to control their cost of power, and 
reducing the carbon intensity of our power infrastructure. Properly 
implemented a smart grid can substantially reduce the need for new 
traditional power plants and transmission and distribution 
infrastructure. A recent study by the Brattle Group on behalf of the 
Edison Electric Institute says that ``energy efficiency and demand 
response as part of a smarter grid can significantly reduce the need 
for new generation capacity''. In addition, nearly $100 Billion is lost 
by consumers every year due to power outages and poor power quality; 
and every time the power goes out our security and safety is at risk. 
It is an investment in today's economic health and tomorrow's 
productivity, safety and security.
    Finally, on behalf of a rapidly growing smart grid industry, I 
would like to present the following specific recommendations to this 
committee today. This funding request totals $1.3B for 2009 
representing the first year of several years of funding that we expect 
to increase in future years as the value of these solutions, 
technologies and systems are proven.

                   SECURITY ACT OF 2007 (PL 110-140)

          Research and Development of Information Technology, Section 
        1304 ($200 million).--Advanced technology research and modeling 
        will be critical to deploying smart grid technology that works 
        with our current utility grid. In addition, research training 
        programs at universities, laboratories, utilities, and labor 
        organizations are particularly important for providing well-
        trained employees for an industry where the average age is over 
        50. The authorization level under EISA was for ``sums as are 
        necessary'' which we propose should be funded at $200 million 
        annually starting in 2009 with the stimulus package.
          Regional Demonstration Initiative, Section 1304 ($100 
        million).--Because of the diversity across the nation of our 
        electric grid system, it is critical to fund a variety of 
        regionally targeted demonstration projects focused on refining 
        our national performance goals and best practices. The results 
        of these projects can quantify costs and benefits, verify 
        technology viability, and validate new business models at a 
        scale that can then be replicated throughout the country. EISA 
        authorized $100 annually for five years and we propose that 
        this level of funds be provided as part of the stimulus 
          Federal Matching Fund for Smart Grid Investment Costs, 
        Section 1306 ($1 billion).--This matching grant program would 
        provide reimbursement of 20% of qualifying smart grid 
        investments. At this rate, federal funding is leveraged into $5 
        billion of infrastructure investment in 2009. For $1 billion, 
        more than one million houses and businesses could be integrated 
        into a smart grid. These funds allow for economic investment 
        and growth, including new jobs for employees in the electricity 
        sector. Authorization level under EISA was for ``sums as are 
        necessary'' rather than a specified amount. We believe that 
        this is one of the most powerful economic tools in the title 
        and should be funded at no less than $1 billion.

                              (PL 110-185)

          The Economic Stimulus Act of 2007 (PL110-185) contained a 
        provision to provide a 50% first year bonus depreciation for 
        business assets contracted for in 2008 and placed in service in 
        2008. ``Long lived assets'' (defined in the Act as those with 
        tax lives of 10-20 years) could be placed in service 2008-2009. 
        An extension of one year in the contracted for and date and two 
        years in the placed in service dates is needed to get these 
        assets in production. This provision has not been taken 
        advantage of because of the lead time for regulatory approval. 
        As an accelerated deduction, this can provide substantial short 
        term stimulus benefits without long term deficit impacts.

                              (PL 110-140)

          The Green Jobs Act of 2007 authorizes $125 million each year 
        to provide job training and workforce investment in the energy 
        efficiency and renewable energy sectors. Since smart grid 
        technologies enable increased energy efficiency and deployment 
        of renewable energy technologies, these jobs should be added to 
        the list of industries eligible to receive this funding. We 
        recommend that the Act be fully funded and that language 
        revisions be made.

    Let me summarize by saying that I believe and the companies I 
represent believe that creating a smart grid is one of the most 
important investments you can make to revitalize our economy and build 
for the future; and the investments must start now. We are faced with 
challenging times in this country; challenges to our economy, to our 
energy security and to our continued leadership in the world. Making 
transformative changes such as these will not only get us through the 
current crisis, but will build toward a cleaner, more productive and 
secure future.
    Thank you very much for your time and attention.

    The Chairman. Thank you all very much for your testimony. 
We have lots of members here who want to ask questions. Let me 
start. We'll do a 5-minute round of questions first, and then 
see if members still need to ask additional questions after 
    On this smart-grid issue, obviously we agree with the point 
that Mr. Hauser was making, that we need to move ahead with 
investments in developing a smart grid. We did put a provision 
in the legislation, that was passed last year, to accomplish 
that. We authorized $200 million per year for 3 years for 
grants for a smart-grid demonstration program. We also 
authorized a grant program for investments in smart 
manufacturing and installation. Are those the right numbers? I 
guess I'd ask you, Mr. Hauser. I mean, we used those numbers, 
of course, long before we knew we were going to be presented 
with the opportunity to make suggestions for a stimulus 
package. Is $200 million right, or should it be something 
substantially larger?
    Mr. Hauser. Two hundred million dollars, I think, is the 
right number for doing demonstration programs, but we need to 
also move to deployment. The grants that you authorized last 
year are really focused on deployment, on rapid deployment. 
Those haven't been funded. Actually, none of it's been funded. 
But, there weren't specific funds authorized in the bill last 
year for the grants or the research and development. So, what 
we've proposed in our stimulus package is $1.3 billion. The 
$300 million would go toward research and development, as well 
as demonstration, to demonstrate best practices for a smart 
grid, and the billion dollars would go to the grant program, 
which would be highly leveraged with investments that the 
industry's making to rapidly deploy these systems.
    The Chairman. Mr. Woolf, let me ask you. I think you sort 
of alluded to this. One of the realities is that, no matter how 
much taxpayer dollars we put into these kinds of activities and 
projects, in weatherization or whatever, it will pale in 
comparison to what ought to be invested by the private sector. 
We've adopted this Energy Saving Performance Contract, the 
mechanism, at the Federal level. You indicated that various 
States have different ways of trying to encourage private funds 
to be spent on these kinds of projects. What more could we do 
in a stimulus package that would result in more private funding 
coming into this--to do these projects, rather than just 
concentrating on what public funds can do?
    Mr. Woolf. Thank you for your question, Senator.
    Energy performance contracts are a really powerful tool to 
achieve the goals we're talking about today, both new jobs and 
investing in our energy future. Basically, you get a loan to do 
an energy retrofit of a building--a new HVAC system, lighting 
upgrades, whatever it is. You pay for that loan with the energy 
savings. Your decreased energy bill, year after year, pays for 
that investment, so you end up having no capital expenditures. 
The problem--we've used it in Maryland. A number of other 
States have used it in both public buildings and private 
buildings. But, you need more up-front capital. We've got a 
long list of State buildings and private buildings that want to 
do energy performance contracting. They need a little bit of 
additional investment. They can then leverage that with private 
dollars and do the projects they need. For every million 
dollars we loan, we're doing a $50-million project with the 
University of Maryland system.
    So, what Congress can do are essentially the 
recommendations from the panel today. If we can put more money 
either through the Energy Efficiency Building Retrofit Program 
that I suggest and/or the Energy Efficiency Community Block 
Grant Program, we could get more money out to the existing 
infrastructure of energy service companies--Johnson Controls, 
PEPCO Energy Services. They can do this right now.
    The Chairman. Mr. Loper.
    Mr. Loper. Yes. I'd just add that energy service 
performance contracts are a great vehicle for financing 
projects, but they're a second-best solution in government. The 
reason that you have had such an emphasis on performance 
contracting over the last decade is because there was 
insufficient appropriations for these projects. Performance 
contracts, while they're great, they're not free. There's a 
transaction cost with negotiating the contracts, as well as 
fees that you pay for those contracts. So, if we have an 
opportunity to make appropriations available for the projects, 
maybe we should do that.
    The Chairman. All right.
    Senator Domenici.
    Senator Domenici. Thank you very much, Mr. Chairman.
    I'm hoping that I will just stay on one subject, even 
though I had a few others.
    Mr. Book, I want to speak with you, because you mentioned, 
in your testimony, loan guarantees. I happen to think that loan 
guarantees, which we adopted in the Policy Act, have been slow 
to implement because we've had an administration that was 
bickering, between the OMB and the DOE, for long periods of 
time. But now, my understanding is that, as far as nuclear is 
concerned, the argument's over with and the process is on its 
    You're aware that we have a very large number of 
applications for nuclear power plants pending before the 
Nuclear Regulatory Commission--something like 31 units. That 
means that we went from zero--none--before we passed this 
Policy Act, to 31 units of 100,000 megawatts or more that have 
applications at various stages, with three or four of them 
moving rather rapidly. From what I understand, they will move 
more rapidly and get some of them started and turn the shovel 
if, in fact, the first two or three participate in the $1 and a 
half billion that is currently authorized for these loan 
    As I understand it, the loan guarantee program that we have 
adopted ends up not costing the taxpayer, because it is really 
a guarantee, not a loan. Right? The government's money gets put 
into a pot by the borrowers, who pay off the top, and then that 
reserve is used in the case of default or the like. That's the 
scheme. It appears to be rather well received.
    From what I understand, there is a major study now. An 
Oxford economic study says that if the nuclear power plants 
that are pending before the Nuclear Regulatory Commission--now, 
this is a very big ``if''--but if they were all put into 
operation and we started constructing them, that that would 
create 150,000 of the highest-paid jobs we've seen in modern 
times. That would give 150,000 jobs to American ironworkers, 
steelworkers, and the like. Does that sound reasonable to you?
    Mr. Book. Senator, there's a 38,800 megawatts of discussed 
nuclear capacity pending in--at least in the numbers NEI has 
released--which is actually quite a lot, when you compare it to 
what else is pending in the power plant queue. There is neither 
the appropriations for loan guarantees for all of those plants, 
nor the work force currently capable of delivering them, were 
they all appropriated. So----
    Senator Domenici. Oh, of course. That would----
    Mr. Book. You have----
    Senator Domenici. [continuing]. Take time.
    Mr. Book. [continuing]. To get started somewhere. I think 
that those numbers sound absolutely right. You should be able 
to create a whole value chain from the start. Anytime you move 
something that big, with that kind of duration, through the 
system, whether or not it's 150,000 right away or over time, I 
wouldn't be able to say.
    Senator Domenici. Before I leave the Senate--it's my last 
day, again--I want to use this opportunity, first, to 
congratulate you for working in the area of loan guarantees, 
because I think they're very important and can be used in this 
recession period if we make them available to ourselves. But, I 
also want to say, to the President-elect, that if you want to 
see something that will produce high-paying jobs, just push the 
program which we currently have. Don't let it stall, don't let 
it be delayed. Get three or four of these nuclear power plants 
started--or two--and you will see each one employing 2,300 to 
2,500 full-time workers as they build this plant, and then the 
people that have to maintain it. It probably takes a little 
longer than you would like--in terms of the first three or 
four, it would be 2 years longer than you would want for an 
interim program--to stimulate the economy. But, if you had them 
going, you would send such a signal, in terms of what's coming 
up--you could start training people, couldn't you, with these 
jobs? In fact, you would have to. They would be very high-
paying, from what I understand. The unions would be partners in 
training them, if it's done the way it is now. I just wanted to 
make that statement, using you as my front man, and make sure 
that it's in the record, and that my friend Senator Bingaman 
hears it and my fellow Senators on this committee; in 
particular, the one who's going to take my place. She's from 
Alaska, but she says she likes nuclear power plants also.
    Senator Murkowski. I do, absolutely.
    Senator Domenici. Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Senator Salazar.
    Senator Salazar. Thank you very much, Senator Bingaman.
    Let me ask the panel just to respond in terms of the size 
of the energy component of the stimulus package. It seems to me 
we're all assuming there is going to be a stimulus package, and 
the question is, How much of that stimulus package really 
should go into this new energy frontier?
    In my mind, when you look at the energy challenges that we 
face, I think we look at electricity--and many of you have 
talked about the smart-grid system, for example--and you can 
also look at transportation, which is interconnected in what we 
do with hybrid plug-ins. So, if we were, as part of our efforts 
to take the moon shot, if you will, to energy independence, 
take an opportunity, with whatever economic recovery package we 
put together with respect to electricity and with respect to 
transportation, how big should that package be? Mr. Hendricks, 
you've testified one-third of, I think, $650 or $700 billion, 
so probably about $200 billion. So, give me just--I want you to 
come up a figure. You know, think transportation, think 
electricity, which also, I think, deals with some of the 
efficiency issues that you've been talking about for commercial 
buildings, government buildings, homes, weatherization. So if 
you were just to say--what should that gross number be, as we 
try to deal with this energy package? I want a number from each 
of you as we go through.
    Mr. Hendricks.
    Mr. Hendricks. Sure, let me just start.
    I did mention a benchmark of a quarter to a third of the 
entire stimulus package being toward these energy-related 
projects. I think that's a reasonable number. The Center for 
American Progress has put forward $350-billion package for year 
1, of an immediate program. I think it's important to look at 
the balance of how the money is spent, and then to recognize 
that energy is really a sector of the economy that can 
    Senator Salazar. I got your number, $350 billion----
    Mr. Hendricks. Excellent.
    Senator Salazar. [continuing]. Over 2 years. So, you'd----
    Mr. Hendricks. Three hundred fifty billion dollars is the--
is--would--is the stimulus package that we put forward, $100 
billion. But, then it's actually about $122 billion, because it 
also represents spending for infrastructure and cities. I mean, 
it appears in many places.
    Senator Salazar. I want a simple answer here.
    Mr. Hendricks. A third of the budget, $120 billion.
    Senator Salazar. $120 billion, OK.
    Mr. Book.
    Mr. Book. I won't presume to name the size of the budget, 
but I think $75 to $100 billion is a reasonable number, if it 
incorporates additional funding for something like the title 17 
program. You probably can spend----
    Senator Salazar. OK, so----
    Mr. Book. [continuing]. Thirty or $40 billion on 
infrastructure buildings, retrofits, right away.
    Senator Salazar. OK.
    Mr. Woolf.
    Mr. Woolf. I can't comment on the transportation side, but 
we could spent $15 billion or more on energy efficiency 
retrofits for schools and all of our buildings.
    Senator Salazar. OK.
    Mr. Loper.
    Mr. Loper. I'll go one up and say that--we're at $18 
billion with our package that we think are reasonable--and that 
we could probably, from talking to people, get another 10 on 
the energy efficiency component alone.
    Senator Salazar. OK.
    Mr. Hauser.
    Mr. Hauser. I'll defer to Bracken. I think the number is in 
the $100- to&50-billion range. But, I will add that it's 
important to think long term, as well, that that's the first 
year of what will be a many-year investment.
    Senator Salazar. OK. So, we have somewhere between--I mean, 
just energy efficiency, $15 billion, up to $100, $150 billion.
    Let me ask you this question, getting down to a specific 
question here. Part of what I think we're going to be looking 
at is renewable energies, with a huge investment in that. Part 
of what comes with that--the incentives, you've talked about 
already, but part what comes with that is also transmission. It 
doesn't do any good to produce a lot of electrons out in the 
Arizona desert if you can't get them to where they're going to 
be used, in Denver or San Diego or L.A. So, if you were to 
invest in the transmission system of our electricity grid, and 
if you were to bring in the smart-grid systems that are now 
being piloted, in a demonstration way, in places like Boulder, 
Colorado, how much would we need for those transmission and 
smart-grid capacities? I don't know which one of you is most 
qualified to answer that, but, whoever is, can you give us the 
    Mr. Hendricks. Let me just speak, just immediately, to the 
question of transmission. There's two components to the 
transmission grid that both deserve very urgent near-term 
attention. One is interstate transmission lines, high-tension 
lines. We've called for $10 billion not flow in that direction. 
That is on the outerbound of the longer-term timeframe that we 
look at in our package. But, there are opportunities to move 
money in two places in that area. One would be to public 
entities, like WAPA, entities that could actually move money to 
spend on moving particular interstate transmission projects, 
building renewable corridors, specifically. Then, another place 
would be adding information technology, to create a smart grid 
that moves from the home all the way back up to the point of 
    Senator Salazar. Could we do both of those things with $10 
    Mr. Hendricks. You could do both of those things. In 
addition, we have another line item that we----
    Senator Salazar. How long----
    Mr. Hendricks. [continuing]. Call for, $1.3 trillion----
    Senator Salazar. [continuing]. Would it take to do it with 
$10 billion?
    Mr. Hendricks. I think that that would be on the 
outerbound, but we would try and get projects moving within 
that first year. Then, the money would start to flow at the----
    Senator Salazar. Any other----
    Mr. Hendricks. [continuing]. Outer end.
    Senator Salazar. [continuing]. Quick responses?
    Mr. Woolf. Yes, we've got three or four transmission 
projects currently going through regulatory review--proposed, 
sited, the whole bit. It would cost several billion dollars 
just for the Mid-Atlantic region alone.
    Senator Salazar. Thank you, Chairman Bingaman.
    The Chairman. Thank you very much.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman. I appreciate 
the opportunity to have this hearing this morning and talking 
about what's the potential for this economic stimulus package 
that we're looking at.
    I think it's important that, as we talk about the projects, 
we make sure that we're really looking to the cost benefit of 
the various projects. I don't think any of us want this to be 
kind of a glorified supplemental bill that is just kind of that 
one term--one-time shot in the arm. We're looking for that 
longer-term investment. We want it to be the gift that keeps on 
giving. So, it is important that we're talking about real 
investments that will make a difference.
    I appreciate the focus that you gentlemen have placed on 
the efficiency side of the equation, a little discussion about 
weatherization. I was telling the chairman, in Alaska we've 
made a great effort to put more money into the weatherization 
projects that we had, and realized that we didn't have the 
trained energy auditors to conduct it, so we had money sitting 
there that we couldn't put into place because we hadn't done 
the groundwork in advance. A couple of you have mentioned the 
training that needs to occur.
    In terms of the renewable projects that are out there, in 
my State we've got about 60 different projects that would be 
shovel-ready--whether it's geothermal or wind or hydro, smaller 
projects. But, I'll tell you, we're looking at them now, and 
with the price of oil dropping down to where it is, all of a 
sudden they don't look as enticing as they did, this summer.
    I guess the question to you all, as we try to advance these 
longer-term projects that will make the difference, not only in 
the jobs and the stimulus now, but in really moving this 
country forward to greater energy independence, are these types 
of projects, these smaller initiatives--and Mr. Woolf, you've 
talked about the State energy programs--are these where we 
should be looking to invest, when it comes to the economic 
stimulus package? Should it be the bigger vision of the 
transmission? I really appreciate the question from Senator 
Salazar. We can do all the renewable energy projects, but we 
can't move it, what good have we really done, in terms of our 
energy policies? So, if you can kind of speak to--is it big, or 
is it little, or is it a combination of both? What needs to be 
in this package?
    Mr. Hendricks.
    Mr. Hendricks. Sure. I think you've touched on exactly the 
right questions. We need a balanced portfolio. We need to be 
investing in the infrastructure, and we need to be investing in 
market transformation. The infrastructure enables private-
sector activity. So, these are smart investments now; they get 
people working, using public funds, but they enable new private 
enterprise to come online, new businesses to be created. I 
think Director Woolf's number, of $10 billion going toward 
energy efficiency, is very, very important. We need a large pot 
of funds that will start to help contractors develop the 
skilled work force, exactly what you were talking about. We 
need the energy auditors. We need people in the construction 
trades who have the skills to do green-building. This 
investment can do double duty. We need it to do immediate 
investments to stimulate the economy, jumpstart projects, but 
we always need to have an eye on the long term, because we are 
heading into a period of fiscal constraint. If we don't spend 
the stimulus money wisely now, it will tie our hands, down the 
road. But, if we spend it in a smart way--and that's why the 
green and energy efficiency projects are so important--if you 
we spend it in a smart way, we can save consumers money, create 
new businesses, and enable cities to be more competitive by 
investing in their infrastructure.
    Senator Murkowski. The obvious--I think, Senator Domenici 
pointed to nuclear, which is a great way to advance many, many 
jobs. I appreciate the training challenges that we have, in 
terms of getting a skilled workforce. In Alaska, we're looking 
to bring our natural gas down to the Lower 48. A major 
construction project, but one that would yield a long-term 
benefit, in terms of access to energy and those job creations. 
Can you speak a little bit to the bigger projects? To nuclear? 
To something like a natural-gas pipeline coming down from 
    Mr. Book.
    Mr. Book. Senator, I think perhaps the biggest question 
here is, yes, you can't do everything all at once.
    Senator Murkowski. Right.
    Mr. Book. You are going to have a problem with efficiency 
when it starts to undermine the value of a 10-year project that 
you undertook at a different price expectation.
    It's inevitable that demand will grow. Our society will 
become bigger and want more. But, if you start predicating your 
expectations, like many economies in the world did, on high 
commodity prices, and then you undermine those prices with 
efficiency, you might be going in the wrong order. In many 
ways, it's efficiencies which you can start with, it might be 
the cheapest way to not end up spending too much money too 
    The long run, though, you have to build an expectation of 
strategy, because you're going to need more power, more fuel, 
and more infrastructure. The central station model for power is 
still what powers industry. The distributed generation model 
for power, and the smart grid that enables it, is going to be 
what moves a lot of the consumer and the business side--the 
small-business side--potentially into the next register of GDP 
    So, I think you can do both. We just want to go in the 
right order.
    Senator Murkowski. My time's up, Mr. Chairman. Thank you.
    The Chairman. Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman.
    Federal policy consistently favors consumption over 
investment. You saw that in the stimulus last year, in the 
spring, when I and others tried to put the focus on 
infrastructure. In effect, the decision was made just to send 
out the rebate checks, and clearly the country didn't get the 
maximum value out of that. That is also true in the energy 
area; consumption is favored rather than conservation. You 
know, for example, because the country doesn't invest in 
weatherization, we've got to then play catchup ball with the 
Low-Income Home Energy Assistance Program to keep people from 
freezing in their homes.
    So, what I hope will come about in this second stimulus is 
a dramatic departure from the old way of doing business and 
putting a focus on smart investments. It seems to me, listening 
to all of you, it ought to start with weatherization and these 
investments in improvements for businesses and others, 
efficient lighting systems, and that kind of thing.
    Now, here's my question. Virtually all of these programs 
are means-tested. I think that's sensible, because it is a way 
to show taxpayers we aren't going to waste their money and 
people aren't going to walk away and say, ``This is some green 
pork drill, where billions of dollars is being wasted.''
    But, the problem today is, a lot more people are needier 
than they were a year and a half ago. So, how would you, in 
effect, keep the idea of targeting the dollars in areas like 
weatherization and conservation and still make sure that you 
address the need? Because the need is clearly greater today 
than it was 18 months ago.
    So, I think what I'd like to do is start with you, Mr. 
Book, and then you, Mr. Hendricks. Direct investment, 
weatherization, conservation, sensible areas for homes and 
businesses, but still allow us to keep a means-tested kind of 
focus, so that taxpayer money, which is scarce, isn't wasted.
    For you, Mr. Book.
    Mr. Book. Senator Wyden, I think that's an important thing 
to look at, because you have working-capital-constrained poor 
families who would love to make efficiency changes, and can't. 
So, if you can get them over that hump, you've solved that 
problem. But, then the question is, What do you do about the--
sort of, the middle ground, where someone would do it if they 
just had a few extra dollars? You don't have to buy the whole 
thing, you can just give them a little. Graduate the benefits. 
Prorate them by income. Make them phaseout progressively. I 
think you have a sensible policy.
    Your key question is identifying where you can make the 
biggest bang for your buck. I think it is, again, in sort of 
the building envelope improvements and the least infrastructure 
we already have. But, by finding those folks who are most 
likely to make the change in the next tranche, the ones who 
are--the refrigerator is 9 years old, and you're about to buy a 
new one--find those guys, and you'll make a big change right 
    Senator Wyden. Mr. Hendricks.
    Mr. Hendricks. I think you're asking exactly the right 
question. We need to be investing in structural change.
    In the short term, there are a number of very important 
opportunities. You know, the statistics that we were laying out 
at the beginning are critically important to understand, how 
badly the American people are hurting right now. There are 
opportunities to put money in the hands of people who need it 
and who will spend it, through unemployment insurance, through 
COBRA payments, through just basic investments. In the energy 
sector, we do have the LIHEAP program, and it's critically 
important to put money there, and to recognize that, as we're 
entering a heating season, there will be increased demands, 
especially, you know, in cold parts of the country, that have 
very substantial equity payments. But, there's another point 
that we have to understand, which is that energy costs, in any 
form, are some of the more regressive costs. They hurt low-
income people the most. So, investing in energy efficiency and 
in energy diversity to reduce the spikes in energy prices over 
time is very targeted at those folks.
    Senator Wyden. Are you in favor of Mr. Book's idea of, in 
effect, graduating the payments? Because that strikes me as an 
attractive way to ensure you target dollars, but you also 
address the fact more people are needy today. Are you in favor 
of that, Mr. Hendricks?
    Mr. Hendricks. I would be speaking off the top of my head. 
I think the notion of having some means-testing, but having 
something that's broadly shared, is a good strategy. I do think 
that there is a very incredibly broadbased need for energy 
efficiency across the economy. We should be focusing on it in 
every sector.
    One other point I want to make is the role that public 
funds can take in priming the pump for a broader market 
transformation. The sorts of investments that we make in green 
schools, in weatherizing public buildings, are actually helping 
to build the skilled work force and changing the market for 
construction practices on the ground. They're critically 
important for building the sorts of----
    Senator Wyden. Thank you, Mr. Chairman.
    Mr. Hendricks. [continuing]. Energy efficiency----
    The Chairman. Senator Bunning.
    Senator Bunning. Thank you, Mr. Chairman.
    It's my understanding that the purpose of this hearing is 
to look at energy-efficient initiatives that can stimulate 
growth while also reducing dependency on foreign oil. As many 
of you know, I am a supporter of coal-to-liquid fuels 
technology. Through the use of clean coal initiatives and the 
Department of Energy loan guarantee program, we have the 
opportunity to create American jobs, cut our dependency on 
Middle Eastern oil, and substantially reduce emissions.
    Just yesterday, thank God, a New York electric power-plant 
developer announced plans to build, not with Federal money, but 
private capital, a $3 billion coal-to-liquids plant capable of 
refining an estimated 6.5 million barrels of gasoline annually 
in West Virginia. Thank God it's close to Kentucky. In fact, 
it's 10 miles up the road from two of my counties. The plant is 
expected to employ 200 people and create 3,000 jobs during 
    Mr. Book, in your opinion, would it not be wiser to spend 
money on funding grant programs that could provide for similar 
facilities, as opposed to subsidizing government programs that 
have proven to be inefficient?
    Mr. Book. I think that the big infrastructure spending that 
you're talking about here--the size of the project you just 
described is $3 billion----
    Senator Bunning. Yes.
    Mr. Book. [continuing]. A lot of the companies who would 
like to build them have market values of $3 billion, or 
sometimes less. Without the sort of loan guarantee that gives a 
commercial lender comfort, you can't do those projects.
    Senator Bunning. This company is doing one.
    Mr. Book. This one, you can. Of course. You can do it 
without loan guarantees. But, the point is that I think, not 
only should you encourage it, you should encourage it more 
broadly, because there are technologies that are--coal-to-
liquid is 80 years old. It's been improved a lot over 80 years. 
The carbon-capture-and-sequestration technologies will probably 
be pioneered in smaller size before they're expanded to large 
size for power plants. So, coal-to-liquids is an excellent test 
bed to take us to the next stage in clean coal power. I think 
it's a very sensible way to spend the money.
    Senator Bunning. Other than spending it on unproven or 
inefficient programs that we now have in operation.
    Mr. Book. The programs that get big things built are the 
future. The things that get us efficiency gains now are there 
right now. You have to----
    Senator Bunning. We have to look at this thing like--you 
know, $44 a barrel, presently, this morning on the mercantile 
exchange, compared to $148-plus a barrel just--as recently as 
last spring. We have to do things now to prevent the $150 or 
$180 a barrel that might be coming down the street.
    The American people spoke better than our Federal 
Government by saying, ``No, we're not going to drive our cars 
at $4 a gallon. We are not going to do it. We are going to 
consume less.'' So, I am for programs that will stimulate the 
ability of us to continue to supply, not only our American 
people, but for our military, for diesel and for aviation fuel, 
which we know coal-to-liquids can do. Carbon capture is now 
guaranteed up to about 75 percent. This one plant that they're 
talking about, they've guaranteed 90 percent, but that's a 
little different; they've got a lot of beds to bury the carbon. 
We're talking about a 10-percent use of carbon. I think we can 
bottle it and sell the 10-percent carbon that is still left 
that we need to capture. In other words 100 percent of capture, 
which is something that we all shoot for. If there's anybody on 
this panel that is against clean coal with 100-percent carbon 
capture, speak up.
    Mr. Hendricks. I'm not. I would like to speak briefly, 
though, to clean--to carbon----
    Senator Bunning. I want you to speak up if you're--what I--
answer my question.
    [No response.]
    Senator Bunning. There is not. So, we are for clean coal 
initiatives if we can capture the carbon.
    Mr. Woolf. We need to get there, Senator, yes.
    Senator Bunning. OK, thank you.
    Mr. Hendricks. I'd like to make one distinction between 
coal-to-liquids, where carbon is released when it's combusted, 
and integrated gasification and combined-cycle IGCC clean-coal 
technology, where you're producing electricity. For mineworkers 
in this country, I think the IGCC electrical technology is a 
very compelling technology, because you can combine that with 
electrification of the car, which allows you to pursue 
strategies like the plug-in hybrid electric vehicle, which also 
introduces another strategic technology, which is the lithium 
ion battery, advanced battery technology. Currently, all of 
those--all of those batteries are being imported. This is 
probably one of the most critically important strategic 
resources that we need to develop now for storage onsite, for 
distributed generation, but also for mobile sources, so we can 
get off oil and liquid fuels altogether.
    Senator Bunning. I gave up my time. May I just respond to--
    The Chairman. Go right ahead.
    Senator Bunning. Thank you.
    For one of the major auto manufacturers to say that one of 
the salvations they have is a car that will run for 50 miles 
without using gasoline, on a battery, and that be the 
centerpiece of this so-called infusion of money into the big-
three autos, and that being the centerpiece of their sales, is 
there any American person in this country willing to pay $30- 
to $40,000 to plug in an automobile for--overnight--40-mile-
driving the next day? I doubt it.
    Senator Sanders. Mr. Chairman, if I could just respond to 
my friend and say, I've driven in an electric car which has a 
range of 200 miles today. Two hundred miles.
    The Chairman. Senator Tester.
    Senator Tester. Thank you, Mr. Chairman. I was beginning to 
wonder if I was going to get aced out there for a second, so I 
appreciate it.
    Senator Tester. From my perspective, at least, investment 
in clean technologies, clean renewable energy, we've been 
lagging at long before this recent economic turndown. I was 
curious to know, from your perspective--and I'll address this 
to Mr. Book and Mr. Hendricks; either one of you can answer 
it--why has this country been unable to sustain a clean-energy 
economy, even before the economic turndown? Is it because of 
cheap fossil fuels? Is it because we have failed at the Federal 
level? What's your perspective on that?
    Mr. Book. Senator, my perspective is that there has been, 
historically, private actors charged with carrying out economic 
decisions, and they've said, ``Well, things are cheaper if I do 
it another way.''
    There's two things that happen when you have too much 
money. The first is that you spend it on the wrong things, and 
the second is that you don't actually innovate, because you 
don't have to. Necessity provoked a lot of soul-searching this 
summer. I have a feeling that the next investment cycle, 
whether it's vehicles or electric power, is going to show a 
greater attention to clean energy.
    What I think is also, though, is, we have to look at the 
real economics. Because when you startup--Germany just 
discovered, Spain just discovered--when you start out paying 
for something that's not economic, and you make it economic, 
people use it, and they use it like crazy. Eventually, you keep 
paying for it.
    Senator Tester. OK
    Mr. Book. But, we have to do both.
    Senator Tester. Mr. Hendricks.
    Mr. Hendricks. Sure, I would echo that we have failed to 
create a sustained program of investment and policy that will 
help transform the market to bring these technologies online.
    Senator Tester. So, at the Federal level, we haven't done 
what we've needed to do to push forth progressive agendas in 
    Mr. Hendricks. There's both a regulatory policy failure and 
an investment failure.
    Senator Tester. Thank you.
    Mr. Woolf.
    Mr. Woolf. I'd agree. Energy efficiency can be produced for 
about 2 to 3 cents per kilowatt, best practices around the 
country, but families don't have that 2 to 3 cents to pay for 
it, so they don't make the investments that would reduce their 
monthly bills, and, instead, they pay 10, 15 cents for new 
generation a few years down the line. It's a----
    Senator Tester. OK.
    Mr. Woolf. [continuing]. Time problem.
    Senator Tester. Mr. Loper.
    Mr. Loper. The stimulus can send signals that the Federal 
Government supports certain activities and technologies, but it 
doesn't provide lasting market reforms that will provide 
investment certainty. I'm surprised, frankly, that the coal-to-
liquid plant is going on right now----
    Senator Tester. Yes.
    Mr. Loper. [continuing]. Given oil prices are so low and 
there's no--and there's no certainty about what kind of carbon 
price you're going to have, going----
    Senator Tester. That's right.
    Mr. Loper. [continuing]. Forward. So----
    Senator Tester. I mean, and it was pointed out to me that 
the--that, after the first energy crisis, it was also followed 
by a recession. So, I mean, there are--to help make the economy 
somewhat recession-proof, it makes sense to do this.
    I've got two other questions, and I hope I've got time to 
get to them. It appears to me that you've got electrical 
countries that generate electricity and want to sell it. The 
same thing can go for transportation fuels. We're trying to 
grab the low-hanging fruit, with grabbing all the conservation 
methods we can. Do you see that as a conflict? Do you see that 
as a conflict that can be resolved? Or is this just something 
that somebody's got to get run over? Bad choice of terms, but--
    Mr. Woolf. In Maryland, we actually decoupled, for most of 
our utilities, so that utilities can make money, regardless of 
how many kilowatts they're selling.
    Senator Tester. How did you do that?
    Mr. Woolf. There's a process whereby, basically, they're 
paid to serve the load, and if the load goes down, they still 
make money.
    Senator Tester. Who pays them?
    Mr. Woolf. It gets rolled into rates.
    Senator Tester. OK. So, the ratepayer still pays it.
    Mr. Woolf. The ratepayers pay, but the ratepayers will be 
paying--there's no disincentive for the utilities--the 
utilities aren't penalized if they achieve energy----
    Senator Tester. I understand that. I appreciate that. But, 
if you're trying to--OK, I see. So----
    Mr. Woolf. That's----
    Senator Tester. [continuing]. The greater good is saving 
the electrons.
    Mr. Woolf. It removes an obstacle. It doesn't encourage 
energy efficiency.
    Senator Tester. OK.
    Mr. Woolf. We need to do more.
    Senator Tester. I believe it was Mr. Book spoke about the 
impacts that WAPA, Tennessee Valley Authority, BPA--are you the 
one that spoke on that?--could have on transmission--or was it 
Mr. Hendricks?
    Mr. Hendricks. I mentioned it, in----
    Senator Tester. Sorry. But, could you just kind of explain 
what your vision would be, what we would need to do at this 
level to help--because they're a huge player in the Northwest, 
and I know they're a huge player around the country, depending 
on which one you're dealing with--what we would need to do to 
make them a part of the equation, so that we could get the 
transmission in a reasonable way?
    Mr. Hendricks. I think the first point is that, moving into 
the next Congress, it's critical that there be a broadbased 
strategic policy for transforming the electrical sector, and it 
has to have a very serious commitment to interstate 
transmission, and the commitment that is linked to renewable 
energy generation.
    In the near term, in the stimulus, I think that that is one 
place where public investment can move toward particular 
transmission projects, toward improved planning, toward 
accelerating the process of doing the siting, doing the 
integrated planning, and to move specific projects forward. I 
think, on the smart-grid component, there is also the 
opportunity to invest in advanced technology, basically turning 
the transmission grid into a information technology 
infrastructure that's going to share information, and those 
investments can also be facilitated.
    Senator Tester. OK. Thank you, Mr. Chairman. I want to 
thank all the participants here. I appreciate your perspective 
on this important issue.
    The Chairman. Senator Cantwell.
    Senator Cantwell. Thank you, Mr. Chairman.
    I'd actually like to continue this discussion about 
transmission, because I certainly plan to push, with the rest 
of the Northwest delegation, for more borrowing authority for 
BPA so that we can get transmission capacity moving there. I 
think there's--as much as 4700 megawatts of renewable resources 
could come online in the next couple of years if we could just 
get the transmission capacity going.
    So, Mr. Hauser, thank you, first of all, for your work on 
the Alliance in support of the smart meter language and grid 
language in the last energy bill. It really was helpful.
    Mr. Hauser. You're very welcome.
    Senator Cantwell. How can the additional access to capital 
there, both at BPA and across the country, help on this 
renewable resource demand and actually making that a reality? 
Should we go back and look at the--you know, we gave a 10-
year--we went from 10--down from 20 to 10 on a accelerated 
depreciation. Shouldn't we look at going to 5, if we were----
    Mr. Hauser. Sure.
    Senator Cantwell. [continuing]. Looking at trying to get 
this technology deployed in a more rapid fashion?
    Mr. Hauser. Sure. There's a couple of questions there. One 
is, you know, if you look at the grid, you've got the 
transmission-level grid, the distribution-level grid. Both of 
them need to be smarter, and we need investments in both of 
them. You have renewable generation that can be local, and you 
have renewable generation that's more centralized. The more 
centralized generation certainly needs more attention paid to 
transmission capacity. The more focus we pay toward central 
renewables, the more focus we need to have on transmission in 
order to get those electrons, those clean electrons, to the 
loads where they need to be.
    Senator Cantwell. I should have just mentioned, when I'm 
saying ``renewables,'' I mean distributed generation, in 
    Mr. Hauser. Yes.
    Senator Cantwell. I don't mean just--the notion that 
renewables are giving us the----
    Mr. Hauser. Sure.
    Senator Cantwell. [continuing]. Ability to do distributed 
    Mr. Hauser. One of the advantages with doing local 
distributed generation, as opposed to more centralized 
renewable energy, is that you don't have deal with the 
transmission; you deal with it at a distribution level. One of 
the real benefits of making the grid smarter at the 
distribution level is to be able to integrate those renewable 
resources, deal with the intermittency issues, and what I say--
what I call operationalize those assets, so that a utility can 
really plan and count on those assets to be available. The 
smarter grid allows you to do that. It really becomes kind of a 
no-regrets strategy to do that, if you have the capability to 
integrate those renewables, really take advantage of those. 
Then, if you want to, you know, do renewables that are more 
centralized--like, wind farms is a good example--then you 
certainly need to do transmission to get access to those, and 
you can do transmission operations smartly, as well, and make 
sure that you've minimized the amount of capital infrastructure 
build that you have to have in order to get the access to that 
clean energy.
    Senator Cantwell. As I listened to all the panelists--thank 
you, Mr. Hauser--I listened to all the panelists about this, 
and your testimony, and I look at, Mr. Book, some of the things 
you said about tradable tax credits--I mean, you know, good 
news, since we finally get the tax credits extended in some 
areas for a robust period of time, and then obviously the 
economic situation. So, I think we do have to look at issues 
like transferrable or traded on credits. But, I also am very 
concerned, too, just about the amount, the lack of capital in 
the marketplace and the--I don't know how--what's the 
appropriate word to say this--but, the, I guess, lack of speed 
at which the loan guarantee program has functioned to date. So, 
should we be looking at more creative solutions to getting 
capital into the market in a more rapid fashion?
    Mr. Book. Yes, in a word. I think you have a strong couple 
of precedents out there right now--the Export-Import Bank, the 
Overseas Private Insurance Corporation. You also could even 
look at things that are more creative than that, like the 
Universal Service Fund, aggregating a pot into a separate 
corporation and disbursing it for high-cost projects.
    The competency of the Department of Energy is its 
unparalleled commitment to research science. They have been 
extraordinary. They are not the place I would go to get a 
mortgage, however, or a commercial loan. I think that's 
probably true of most of our Cabinet agencies. So, perhaps it's 
time to explore a new financing vehicle that has the speed, as 
you say, to get this done.
    Senator Cantwell. Anybody else want to comment on that?
    Mr. Hendricks. Yes, let me just add one point on that, 
which is, you know, it was a very hard-won fight to get the 
extension of the production tax credit, which is so important 
in driving new private-sector financing for these large-scale 
wind projects. It happened just at the moment--with the 
collapse of the financial industry, the loss of firms like 
Lehman Brothers. These are the folks who actually can make use 
of those tax credits. There are some fixes to the tax credit, 
in addition to extending it for a longer time period, that will 
enable more capital to flow into those markets, making it 
refundable, and then also extending the time period. It may 
seem counterintuitive that adding a couple of outer years would 
be stimulative in the near term for the renewables industry, 
but if there was certainty that you could create financeable 
projects for the next 2, 3, 4 years within the wind industry, I 
think you would see a very immediate increase in capital 
flowing into large-scale wind and large-scale solar projects.
    Senator Cantwell. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Lincoln.
    Senator Lincoln. Thank you, Mr. Chairman. Thanks for 
jumpstarting our efforts here and making sure that we're 
working hard on something that's going to be critically 
important in stimulating the economy, but also, I think, near 
and dear to the hearts of many Americans, that we move forward 
in a new energy economy.
    We appreciate all of you all and your great ideas. We hope 
that you're going to stick around and make sure that, as we 
continue this debate in the stimulus package--but, beyond that, 
I think, to Mr. Hendricks' last comments, there's got to be 
certainty in this marketplace. It's not just a stimulus 
package, it's not just to create immediate jobs, but it's a 
long-term, dedicated project that we have in this country to 
move ourselves to a renewable energy source and to a new energy 
    So, I hope that there'll not only be the immediate impacts 
of a stimulus package, but we'll also see a long-term 
dedication. Certainly, serving with several of the other 
Senators on this panel, or in this committee, on the Finance 
Committee, we understand that certainty is a critical part of 
whether that capital's going to be there and whether it's going 
to stay.
    I've got three windmill-blade factories in Little Rock, and 
to be sure that keeping those jobs is--it's essential that 
those companies know that they're going to have the capital 
they need. It's a great thing.
    Just a couple of things. Mr. Loper, you mentioned, as a 
part of your weatherization assistance and home-energy 
recommendations, one of the things I have concerns about is the 
deployment of technologies. We know that conservation is--
probably makes the most immediate impact, in terms of our 
energy economy and our ability to do better in that. Do you 
plan on implementing any kind of an education program? Just 
from having lived through the consolidation of the part D 
prescription drugs into Medicare, educating people is a 
critical part of what we have to do. Somebody mentioned LIHEAP 
a minute ago. LIHEAP's a great program. I support it 
wholeheartedly. But, it only reaches about 17 percent of the 
people that are eligible for it. Is there any----
    Mr. Loper. Yes. Education and training is a critical 
component, pretty much, of every one of the recommendations 
they gave. Weatherization assistance, the amount of money that 
we're recommending would basically double, this year, what the 
weatherization assistance funding is, and then double it again 
next year. It would have to be doubled again just to get on 
track to meet the--President-elect Obama's 1-million-homes-
weatherized-a-year schedule or target. But, we've got--from--in 
fact, I have the numbers here, and we can send them to you, if 
you'd like--the number of employees that would be needed in 
offices and the number of auditors, and the number of 
installers that would be required. From talking back and forth 
with the Association for the Community Action Programs field, 
that there's----
    Senator Lincoln. What about the education of the consumer? 
I mean, I know that, just with the rebate check, I had a 
tremendous number of Social Security recipients that didn't get 
the rebate check, because they didn't--I did unbelievable PSAs 
about getting them out there, making sure they filed an 
income--a tax return, in order to get that rebate check. I 
    Mr. Loper. That's a challenge with all--and that's what I 
say, I think that that's an--if you're talking consumer 
awareness, generally, that could be part of any of these, 
with--for tax incentives, for example, there was--had to be a 
major initiative of the advocacy groups to go out and let 
people know that these--those tax incentives were available, 
because people weren't using them. The uptake was slow. So, the 
same thing goes for any of these programs. I hope I'm 
    Senator Lincoln. A little bit. I mean, when you talk about 
training, I assume you're talking about training both----
    Mr. Loper. No----
    Senator Lincoln. [continuing]. Technicians and a whole host 
of other things. But, there's got to be a lot more training, in 
terms of reaching out to individuals. Because going into my 
next question, which is, you know--I think Mr. Hendricks, in 
his testimony, suggested that green recovery strategy will 
generate all these new markets for American manufactured goods, 
advanced technologies. These are green investment programs 
intended to spread across regions and benefit local economies. 
As a Senator from a tremendously rural State, tremendously low-
income population that are, in some instances, undereducated, 
you know, what strategies are you--would you all recommend for 
implementing these green programs, particularly in rural 
communities that I represent? I mean, you've got to have 
education, you've got to have deployment, you've got to have--
and there's--it's a whole different ball of wax, deploying that 
stuff to rural America than it is to, you know, making a couple 
of government buildings in an urban area green.
    Mr. Loper. Can I try to respond again?
    Senator Lincoln. Sure.
    Mr. Loper. Because, I mean, I didn't want to dismiss 
awareness as being a big part of it. I'm saying it's part of 
all of these things. But, I mean, you've got to--first, you've 
got to let people know that there's an opportunity, and then 
you've got to show them how to take advantage of that 
opportunity, and then you--they have to have incentive in the 
marketplace, and then they have to have resources so that they 
can be responsive to the incentives. So, there's a lot of 
ingredients that go into getting people to take action on this 
    I'd just--there's a cycle in--on the energy efficiency 
side, there's the cycle of complacency that's existed, you 
know, all 20 years I've been in Washington working on this 
issue, and that is that when things are good, when the economy 
is good and prices are--and prices are low, people are too busy 
and--to deal with it; and when the economy is bad, they can't 
afford it--and when prices are high. So, all of these policies 
are--the intent is to try to break that cycle of complacency.
    Senator Lincoln. Thank you, Mr. Chairman. Appreciate it.
    The Chairman. Thank you.
    Senator Sanders.
    Senator Sanders. Thank you, Mr. Chairman.
    I think there's widespread agreement that, as a Nation, we 
have not done particularly well in terms of energy efficiency, 
and that is what we call the low-hanging fruit. I gather that 
we're all in agreement that we need to massively increase 
weatherization in this country. Let me also ask, in terms of 
job creation, are we producing, in the United States of 
America, the kind of appliances that are energy efficient? How 
close are we to major breakthroughs, say, in LED light bulbs, 
that will also consume perhaps 10 percent of the electricity 
than an incandescent light bulb? Are we manufacturing those in 
the United States? When we talk about job creation, we prefer 
it to be in the United States, not in China. I'm assuming we're 
in agreement on massive increases of weatherization. What about 
appliances? Can we be creating jobs making energy efficient 
appliances, light bulbs, et cetera?
    Mr. Hendricks, you want to start off on that one?
    Mr. Hendricks. Sure. First of all, let me thank you for 
your leadership on the Green Jobs Act. I think that's a 
critically important piece of legislation that should be 
included her, and expanded. Clearly, we have an aging work 
force in the energy sector, and we need to invest in it. We 
also need to invest in a whole set of programs that can help 
support American manufacturing, broadly. We can both retool 
plants, we can retrain workers, but we can also position 
American factories to succeed in these growing markets, as they 
are beginning to grow.
    Senator Sanders. My question is----
    Mr. Hendricks. Yes.
    Senator Sanders. [continuing]. In the United States today, 
if I wanted to buy an energy-efficient washing machine, dryer, 
or other type of appliance, are we manufacturing them in the 
United States?
    Mr. Hendricks. We are in danger of losing our manufacturing 
sector, broadly. We've lost 4 million jobs.
    Senator Sanders. Right.
    Mr. Hendricks. This is a critical opportunity to recognize 
the importance of this sector, to reinvest in plants and in 
workers, and to do it as we are positioning the economy, 
overall, to serve these markets.
    Senator Sanders. I----
    Mr. Hendricks. We need to retain washing machine 
manufacturers. Also, the smart grid creates a potential place 
to plug in those appliances.
    Senator Sanders. Right.
    Mr. Loper.
    Mr. Loper. Yes. Certainly not all appliances or light bulbs 
are manufactured in the United States, but a significant amount 
are. One of the--Whirlpool is a part of our coalition looking 
for these recommendations, and they're very concerned about 
this coming year and their ability to--one, to--that there's 
going to--whether there's going to be a market for energy 
efficient products, and whether they can take advantage of it. 
That's where I go--they're--the refund--making the tax 
incentives for appliances to manufacturers be refundable is a 
big deal for the appliance manufacturers.
    Senator Sanders. It would seem to me to be an extraordinary 
positive thing to create jobs in rebuilding our manufacturing 
sector by making energy-efficient products that we desperately 
need. I have heard some discussion this morning on nuclear 
energy and clean coal, but I have not heard a lot of 
discussion--I apologize, Mr. Chairman, for coming in late--on a 
technology that I think has extraordinary potential, and that 
is solar thermal plants, and utilizing the southwestern part of 
our country, which some people regard as the Saudi Arabia of 
solar energy. I've been out in Arizona and Nevada, New Mexico. 
Everybody there seems to think there's huge potential. There is 
virtually no greenhouse gas emissions. Why are we not hearing a 
whole lot of discussion on solar thermal plants?
    Mr. Book.
    Mr. Book. I mean, Senator, part of the problem is that you 
have to transmit that power from the solar farms----
    Senator Sanders. Right.
    Mr. Book. [continuing]. Low-density areas to high-density--
    Senator Sanders. Right.
    Mr. Book. [continuing]. Population density areas. The 
virtue of the distributed-generation model is that you're 
comparing an apple to an orange. If your power customer is 
paying 16 cents for delivered electricity, then you don't have 
to talk about generation costs, you just talk about what it 
costs on the roof. If you talk about a solar farm, that solar 
farm has to compete with fossil energy farms. So, if solar 
thermal is about 12 cents, 11 and a half cents per kilowatt 
hour generation cost right now, coal is 4. So, if you're 
putting a solar panel on the roof, you'll be closer to parity 
than you will if you try to make the solar farm as the----
    Senator Sanders. As somebody who has introduced legislation 
for 10 million solar rooftops in America, I'm not unsympathetic 
to that proposal. But, I don't think it's a question of 
photovoltaics versus solar thermal. The beauty of--we've talked 
to people at Pacific Gas & Electric who now have plans on--who 
are drawing up plans right now for a 25-year contract--you 
know, the price of solar, unless Exxon buys the sun, probably 
is not going to go up too much. So, having long-term solar 
thermal that could produce, in one plant, almost as much 
electricity as a small nuclear power plant seems to be a 
technology that (a) can create a whole lot of construction 
jobs, that--but, who wants to say a word on that?
    Yes, please, Mr. Hauser.
    Mr. Hauser. I'm a huge fan of solar thermal. The one thing 
you have to be real careful of is, it requires a lot of water. 
So, there are limitations, in terms--especially in the 
Southwest. Chairman Bingaman may know this better than I do. 
But, you know, the--you have to be careful where the plant's 
located, because of, not only the solar access, but--and the 
transmission access--but the water availability.
    Senator Sanders. Right.
    Yes, sir.
    Mr. Woolf. As part of our effort to, not only create 
immediate jobs, but sustainable jobs, I think we need that 
balance. So, a lot of the conversation today has been things 
that we can deploy in the next 6 months to create jobs now. 
When we talk about solar thermal, which is an exciting 
technology, or new nuclear plans or new transmission, I think 
that's part of our long-term plan and should be part of the 
balance, but it's not--these projects aren't shovel-ready in 
the next--you know, in the next months.
    Senator Sanders. All right. My last question. We heard a 
little bit about the electric car. Some of us have seen the 
movie, ``Who Killed the Electric Car?'' General Motors and 
others. Why have--I did drive in a car, which has a 200-mile 
range, which could solve--serve the needs of, just--a whole lot 
of people in this country. Why have we been so slow in 
producing those cars and getting them on market? Or is the 
technology simply not there?
    Mr. Book. Senator, the price point for the marginal driver 
is a problem. When you created hybrids rebate in the Energy 
Policy Act you gave a rich-man's rebate, because most of those 
cars were outside the price range of the people who are price 
sensitive to gasoline. So, you need--you have, essentially, a 
market problem here, where the cars have to either get cheaper 
    Senator Sanders. Right.
    Mr. Book. [continuing]. The people have to feel pain----
    Senator Sanders. But, is there any technical reason right 
now why we can't produce an electric car and put it on the 
market for $25--$30,000?
    Mr. Hendricks.
    Mr. Hendricks. I just want to say, I have tremendous faith 
in the innovation--the innovative power of American industry, 
of American workers. I think we've had misaligned incentives 
for many years. There is a regulatory failure, as well as an 
investment failure. We've had a structure that encouraged 
wasteful use of polluting energy over the long-term, and it 
didn't position American communities, American workers, or 
American business well to succeed in the future. We have not 
had the policies to invest in strategic areas of new 
technology, whether it's batteries, whether it's advanced 
solar, whether it's, you know, the state-of-the-art wind 
technology. We have a long tradition of inventing those 
technologies here. Some of the most advanced battery technology 
is coming out of places like MIT. But, the commercialization of 
the technology--it's not happening in the Third World because 
of low wage or low environmental standards, it's happening in 
other industrialized nations that have a strategic energy 
policy, where they're investing in these longer-term 
technologies as a way of stabilizing costs, stabilizing 
community impacts, and really managing for greater prosperity 
over time.
    So, I think you're asking the right question. We need to 
own those industries.
    Senator Sanders. Mr. Chairman, thank you.
    The Chairman. Thank you.
    Senator Barrasso.
    Senator Barrasso. Thank you very much, Mr. Chairman.
    Following up with Senator Sanders' comments on the cars and 
the electric cars, Thomas Friedman, I think, today had an 
editorial about the bailout of the automobile companies, but 
along the lines of what's coming down the line, what's going to 
be the new innovation there, and kind of compared where we are 
with automobiles now to the coming electric car to where we are 
with bailing out a typewriter company at the time of the advent 
of the personal computer. So, the innovations are coming, as 
Senator Sanders said.
    I want to follow up also what he had to say about the solar 
thermal, the wind. You talk about being in the Southeast--the 
Southwest United States. In Wyoming, we are--clearly have 
world-class wind. But, our problem is transmission lines, just 
as it with the solar, as Mr. Book was talking about. I think T. 
Boone Pickens sat in the same chair that you're in, Mr. Book, 
not that many--not that many weeks ago, and said his biggest 
concern is the transmission lines. He knows what it's going to 
cost to put up the wind turbine and then--and move things. Even 
yesterday, in The Hill, ``Renewable energy expansion could 
hinge on Federal role in transmission.'' So, even if the money 
is there, what do we need to do to make sure that the 
transmission capacity is there? All of you can address, if 
you'd like.
    Mr. Book. Part of the problem is structural, Senator. You 
have--section 7 of the Natural Gas Act is about 70 years old, 
and it was written in a different time. You could have stronger 
Federal controls, maybe. You're going to need to wrestle with 
the 10th amendment and--sort of a constitutional crisis here, 
because a lot of this is controlled by local regulators. You 
can match the funds, you can encourage things, you can promote 
standards, but ultimately, they have to want to spend the money 
and agree.
    Senator Barrasso. Anyone else want to comment on that? 
Because you talk--and this--articles talk specifically about 
local folks, ``Industry represents say the authority that State 
and local officials have to block transmission products, serve 
as a disincentive to investors. So----
    Mr. Woolf. Senator, I'd suggest that that problem may have 
already been fixed by Congress. You created a backstop 
authority, whereby FERC can override State and local decisions, 
if that's blocking transmission, if the local folks haven't 
acted. Since that authority was enacted, in 2005, it's never 
been invoked. I think that authority--speaking at least for 
Maryland, we take it seriously. We're acting promptly on all 
the transmission lines that are proposed. I think we need to 
give it some time to see if that law works before deciding that 
the system is still broken.
    Senator Barrasso. Yes.
    Mr. Hauser. It's certainly not just a Federal issue. I 
mean, if you look at Texas itself, that's not a Federal issue, 
where the wind's in the west and the loads are in the east, 
they don't have the transmission to get from one place to the 
other. But, it's also--you have to remember, it's not just 
transmission. I'm not as familiar with the Wyoming wind, but in 
West Texas----
    Senator Barrasso. It's a great wind.
    Mr. Hauser. In West Texas, the wind blows at night, when 
you don't need the electricity as much. So, you have a double 
problem of the diurnal nature of the wind, plus the lack of 
transmission access.
    Senator Barrasso. Mr. Hendricks, you had talked about, kind 
of, the V of an economic downtown, as opposed to the flatter 
shape, and how you have to continue with incentives and 
investments. I mean, that's the concern, is, how do you, you 
know, carry that forward? Because it sounds like you're trying 
to get started sooner rather than later, and I'm concerned with 
some of these delays.
    Mr. Hendricks. Absolutely. I think that grid investment--
infrastructure investments around a clean energy infrastructure 
coming online--is a very smart place to look immediately beyond 
the horizon of the short-term stimulus. Let me just say that, 
particularly in the case of renewable energy, there are some 
misaligned incentives, where there's actually a positive 
benefit that's external to the decision to bring that power 
online. So, to the extent that transmission is managed and 
regulated at a smaller regional level, but the benefits accrue, 
in terms of climate, you know, managing the costs of responding 
to climate, bringing new clean technology that improves our 
national security online, those are benefits that accrue to the 
country as a whole. So, I think we need to think about where 
that situation is present, particularly in renewable energy and 
renew--generation and transmission, we do need to think about 
planning, siting, financing, a number of these issues, and just 
really take a close look at how the incentives are aligned to 
make sure that we have a national strategy.
    Senator Barrasso. Looking at----
    Yes, Mr. Loper.
    Mr. Loper. It seems to me that in a stimulus package, that 
we should diversify our portfolio, also, that there's--that 
some people--that maybe this is going to be a short-term 
economic crisis, maybe this is going to be a very long-lived 
one. I think, increasingly, the thinking is going toward the 
latter. So, the two thought--lines of thought on stimulus are 
that you do lasting, permanent things. That's what some--John 
Taylor was here earlier this year, arguing for that. Some would 
say you do temporary, fast things so that you're timing it, you 
know, so that you're not doing the stimulus after the recession 
is over. But, I think, given that we really don't--that we're 
in very uncertain territory here, that it's an argument for 
thinking more long term.
    We've come to the table with very short-term stuff. But, 
frankly, for--at least for me, it's not a total comfortable 
position, because I'm afraid, you know, we're just going to, 
you know, throw a whole lot of money out there, then there's 
not going to be money available in the future, and then that 
could be damaging, as well. So, I like to think of a 
diversified portfolio in this context.
    Senator Barrasso. Thank you.
    Thank you, Mr. Chairman, my time's expired.
    The Chairman. All right. Why don't I thank this panel, at 
this point. I think this has been useful testimony, got a lot 
of good ideas out here. We'll take the ideas in your written 
testimony, as well, and do all we can to urge that they be 
considered. So, thank you very much for being here.
    Why don't we call forward the second panel. I'll introduce 
the second panel as they come to the table. On this second 
panel, which is to deal with our public lands and the 
opportunity we have to make investments to benefit our public 
lands as part of this stimulus package, we have Dr. Cassandra 
Moseley, who's director Ecosystem Workforce Program at the 
Institute for a Sustainable Environment at the University of 
Oregon. Thank you for being here. We have Mr. Denis Galvin, who 
is the--a board member with the National Parks Conservation 
Association and former deputy director of the National Park 
Service. We have Mr. Mark Limbaugh, who is the former Assistant 
Secretary of Water and Science in the Department of the 
    So, thank you all very much for being here. Why don't we 
just start with you, Dr. Moseley, and then you, Mr. Limbaugh, 
and you, Mr. Galvin. If each of you could take about 5 minutes 
and summarize your testimony for us, then I'm sure we'll have 
some questions.
    Senator Wyden. Mr. Chairman.
    The Chairman. Yes, Senator Wyden.
    Senator Wyden. Mr. Chairman, I won't take but 30 seconds.
    I just wanted to welcome Dr. Moseley. She has been doing 
good work in these vineyards for a long, long time, and we're 
very pleased to have her, and appreciate all of her leadership.
    Thank you, Mr. Chairman, for scheduling her to be part of 
this panel.
    The Chairman. No, thank you for suggesting it.
    Dr. Moseley, why don't you go right ahead.

                           EUGENE, OR

    Ms. Moseley. Thank you. Mr. Chairman and distinguished 
members of the committee, thank you for this opportunity to 
speak before you today.
    As the Chairman said, my name is Cassandra Moseley, and I 
direct the Ecosystem Workforce Program at the University of 
Oregon. So far this morning we've heard a lot about one key set 
of green jobs, those related to energy conservation and 
renewable energy development. What I want to do today is talk 
about another key dimension of the green economy: the 
restoration and stewardship of our Nation's forests, 
grasslands, and watersheds.
    As with investments in energy, the restoration and 
maintenance of our public lands offer significant opportunities 
to stimulate the economy in the short term, and, by making 
these investments today, we can create the foundation for a 
sustainable economy in which our public lands and rural 
communities play a vital role in providing our Nation with 
carbon sequestration, clean air, clean water, resilient 
ecosystems, and renewable energy.
    With $8.5 billion, the Forest Service and BLM estimate that 
they, together, could create something like 127,000 jobs over 
the next 1 to 3 years, undertaking land stewardship, wood-based 
energy development, and the greening of their buildings.
    In the area of land stewardship, there's a huge array of 
activities that could create jobs in the short term: fire 
hazard reduction, restorations of watersheds and wetlands, road 
decommissioning and maintenance, wildlife habitat, urban tree 
planting. The list could go on and on.
    But, in addition to these immediate job benefits, the 
investments in land stewardship would help maintain the 
business capacity to care for our Nation's forests and 
grasslands through these difficult economic times.
    There are other long-term benefits, as well. Fire hazard 
reduction in places that are at most risk to wildfire could 
create significant cost savings to the Government and reduce 
greenhouse gas emissions. Road and river restoration can 
increase commercial and tribal fisheries and reduce risks to 
drinking water supplies.
    In addition to restoration, we also need--just as some of 
the panelists were talking about earlier, we need to develop 
businesses and markets that can use the byproducts of fire 
hazard reduction to create heat, electricity, and value-added 
wood products. These investments can help lower the costs of 
fuels treatments, reduce our dependence on fossil fuels, and 
create substantial cost savings for hospitals, schools, and 
other public buildings, particularly in rural communities.
    So, is this Forest Service/BLM job estimate of 127,000 
jobs--is this accurate? I think it's really easy to get caught 
up in the details of predicting how many jobs which particular 
initiative will provide. I think, more important than the exact 
number of jobs, what is essential in a stimulus package is that 
we provide well-paying jobs for working families, we provide 
these jobs to the hard-hit regions and sectors of our economy, 
particularly rural public-lands communities, and that these 
investments will have long-term benefits to the economy and 
taxpayers so that when our children pay the bill, the 
investment will have been worthwhile.
    So, regardless of the exact costs of the job, public-land 
stewardship, the greening of public-lands facilities, and 
woodbased energy development fit the bill. They will employ 
large numbers of people working in activities that will have 
lasting effects: the building of the foundation of a green 
economy, the addressing of climate change, and reducing of 
government expenses.
    So, one might ask, So can we get this done? Can the 
agencies do this work quickly? I think the building blocks are 
    First, they can do all this work with existing authorities 
and programs. In addition, I think the agencies can, and will 
need to, move quickly to work without delay to transfer the 
spending authority down to the field level, where they can 
actually get shovels in the ground quickly. I think they'll 
need to prioritize projects with their environmental analysis 
complete or projects where there is limited environmental 
analysis needed. Finally, I think that they'll need to spend 
the bulk of the funds using contracts and agreements which they 
can award relatively quickly.
    So, just to conclude, I would recommend that Congress 
include in this larger stimulus package a public-lands--public-
land management agencies for the Forest Service and the BLM, 
something like $2 to $3 and a half billion per agency in ways 
that prioritize restoration and stewardship activities that 
provide green jobs immediately and long-term improvements in 
ecosystem services, sustainable economic development, and 
reduced cost to the government, that the stimulus package 
prioritize actions that will benefit those who are going to be 
most hardest hit, and those are going to be the people, many of 
them, who are dependent on public lands, and who live in 
communities near public lands, who are not likely to benefit 
directly from the larger stimulus package. Finally, this 
package should prioritize activities that will reduce 
greenhouse gas emissions, increase carbon sequestration, and 
increase the ecological resilience in the face of climate 
    Thank you, and I look forward to your questions.
    [The prepared statement of Ms. Moseley follows:]

 Prepared Statement of Cassandra Moseley, Ecosystem Workforce Program, 
Institute for a Sustainable Environment, University of Oregon, Eugene, 

    Mr. Chairman and Members of the Committee:
    Thank you for the opportunity to speak before you today about the 
critical issue of how the public land management agencies can use green 
job development to stimulate the economy today and create the 
foundation for a strong, sustainable economy in the long term.
    I am on the faculty of the University of Oregon, where I direct the 
Ecosystem Workforce Program in the Institute for a Sustainable 
Environment. The Ecosystem Workforce Program (EWP) was founded in 1994 
to help retrain displaced forest workers and build a green economy in 
the Pacific Northwest. Today, EWP seeks to build ecological health, 
economic vitality, and democratic governance in rural natural resource 
communities in the American West. It is a partner in the Rural Voices 
for Conservation Coalition, which promotes balanced conservation-based 
approaches to the ecological and economic problems facing the West.
    Today, I want to argue that the restoration and maintenance of our 
nation's forests and grasslands, acceleration of wood-based energy 
development, and the greening of federal facilities offer significant 
opportunities to stimulate the economy in the short term by providing 
jobs in regions and sectors that are likely to be hit particularly hard 
by this deep recession. With $8.5 billion, the Forest Service and 
Bureau of Land Management (BLM) estimate that, together, they could 
create approximately 127,000 direct jobs over the next one to three 
    \1\ ``Green Jobs: Economic Stimulus through Training and Land 
Restoration, United States Forest Service'', Memorandum from Doug 
Crandall, USDA Forest Service to Scott Miller, U.W. Senate Energy and 
Natural Resources, December 2, 2008; ``BLM--Potential Economic Stimulus 
Projects within a 2.5 year timeframe'', December 8, 2008.
    In addition, by making these investments today, we can create the 
foundation for a sustainable economy, in which our public lands and 
rural communities play a vital role in providing our nation with a wide 
array of ecosystem services ranging from carbon sequestration, clean 
air and clean water to wood products and renewable energy.


    It is clear that we are in a severe recession, which economist 
Nouriel Roubini predicted in October would last at least two years, 
with some risk of it lasting a decade.\2\ We need a large infusion of 
government spending to stimulate the economy to dampen the effects of 
the rapidly contracting economy on families, businesses, and 
communities and to prevent a prolonged (e.g. decade-long) recession. It 
is critical that Congress act now by focusing on spending that can 
employ workers quickly.
    \2\ Nuriel Roubini, Written Testimony, Hearing on Faltering 
Economic Growth and the Need for Economic Stimulus, the Joint Economic 
Committee, U.S. congress, October 30, 2008.
    Despite the constant barrage of news stories about the economy, 
there has been much less news about how the economic crisis is 
impacting rural America. Even before this current economic crisis, 
rural America faced significant economic challenges. Over 90% of the 
nation's 200 poorest counties are rural. Now, in the rural West, 
conditions are deteriorating rapidly. For example, sfrom October 2006 
to 2008, Oregon lost 17 percent of its wood products manufacturing jobs 
and logging jobs, most of them in the last 12 months.\3\ Unemployment 
rates in many Western and Southern rural counties are above 9 
    \3\ Oregon Employment Department, Current Employment Statistics, 
http//www.qualityinfo.org/olmisj/CES, accessed 12-3-2008.
    \4\ Bureau of Labor Statistics, Local Area Unemployment Statistics, 
Unemployment Rates by County, Ocotber 2007-September 2008, http://
www.bls.gov/lau/maps/twmcort.pdf, accessed 12-7-08. http://
www.qualityinfo.org/olmisj/AllRates, accessed 12-7-08.
    In addition to the rapidly worsening economic situation, we are 
facing a longer-term decline in the conditions of our public lands. For 
more than a decade, the budgets of the land management agencies have 
been flat or declining while fire suppression costs have increased 
dramatically.\5\ This budget squeeze has meant that the land management 
agencies have fallen farther and farther behind in addressing problems 
such as fire hazard, the spread of noxious weeds, degraded wetlands and 
wildlife habitat, and decaying roads, trails, and recreation sites. 
Today, we face expensive wildfires, growing risk of road failure, and 
reduced capacity to provide a wide variety of ecosystem services. If we 
are to create green jobs today and build the foundation of a 
sustainable economy long into the future, we must address the 
conditions of our nation's forests and grasslands.
    \5\ USDA Forest Service, Agency Transition Document, November 5, 
    Moreover, the United States needs to rapidly reduce greenhouse gas 
emissions and increase carbon sequestration. The federal land 
management agencies, as the managers of vast amount of carbon, must 
play a central role in reducing emissions, increasing sequestration, 
and restoring and maintaining ecological resilience in the face of 
climate change.


    There are three strategies that the Forest Service and BLM could 
use to create significant number of jobs immediately while investing in 
the long-term economic future of America. These strategies are: 
restoration and stewardship of our nation's forests, grasslands, and 
rivers; sustainable wood-based energy development; and the greening of 
federal facilities.
    Land stewardship.--There are broad-reaching and diverse activities 
that the land management agencies could pursue to create jobs in the 
short term, including fire hazard reduction, restoration of watersheds 
and wetlands, road decommissioning and maintenance, wood bridge repair 
and construction, wildlife habit improvements, control of noxious weeds 
and invasive species, range restoration, remediation of orphaned wells, 
abandoned mine reclamation, trail and recreation site maintenance, 
wildlife surveys, and the planting and maintaining of riparian and 
urban trees.
    Several billion dollars per agency is a major commitment, and yet 
it would only begin to address the ecological and infrastructure needs 
of the public land management agencies. One 2002 Forest Service and 
Department of Interior team estimated, for example, that the agencies 
may need at least $1.4 billion in additional funds annually to make 
significant inroads into reducing ecological and community risks to 
wildfire.\6\ Similarly, the Forest Service alone has close to an $8 
billion road maintenance backlog.\7\
    \6\ GAO, Wildland Management: Important Progress Has Been Made, but 
Challenges Remain to Completing a Cohesive Strategy, GAO-05-147, 
January 2005.
    \7\ USDA, Forest Service, Fiscal Year 2005 Forest Service Budget 
Justification, sec. 10, p.33, 2004.
    In addition to the immediate jobs benefits, investments in land 
stewardship would help maintain the business capacity to care for our 
nation's forests and grasslands in the long term. Moreover, significant 
investments in fire hazard reduction in places that are at most risk to 
wildfire could create significant cost savings to the government and 
reduce greenhouse gas emissions. Two recent studies in the Southwest 
find net benefits from fuels reduction in the range of $240 to $1,400 
per acre in reduced suppression costs and avoided losses.\8\ Similarly, 
a recent study estimates that fire hazard reduction can reduce net 
carbon emissions from forests by as much as 98 percent.\9\ Other kinds 
of restoration can also create considerable long-term economic 
benefits; river and road restoration, for example, increase commercial 
and tribal fisheries and reduce risks to drinking water supplies.
    \8\ C. Larry Mason, et al., ``Investments in Fuel Removal to Avoid 
Forest Fires Result in Substantial Benefits.'' Journal of Forestry, 
104(1):27-31,2006. See also, Gary Snider, P.J. Daughtery, and D. Wood, 
``The Irrationality of Continued fire Suppression: And Avoided Cost 
Analysis of Fire Hazard Reduction Treatments Versus No Treatment,'' 
Journal of Forestry, 104(8):431-7,2006.
    \9\ Matthew D. Hurteau, George W. Koch, and Bruce A. Hungate, 
``Carbon Protection and Fire Risk Reduction: Toward a Full Accounting 
of Forest Carbon Offsets,'' Frontiers in Ecology and the Environment, 
6(9):493-498, 2008; Matthew D. Hurteau and Malcolm North, ``Fuel 
treatment Effects on Tree-Based Forest Carbon Storage and Emissions 
under Modeled Wildfire Scenarios, Frontiers in Ecology and the 
Environment, 7, 2009.
    Wood-based energy development.--In addition to conducting fire 
hazard reduction, we need to develop businesses and markets that can 
use the woody material that is the byproducts of these treatments to 
create heat, electricity, and value-added wood products. By expanding 
the existing Forest Service woody biomass grants program, we could 
create jobs in the short term conducting feasibility studies and 
constructing wood heat and co-generation facilities. More 
significantly, these investments can help lower the costs of fuels 
reduction treatments over time. They would also reduce our dependence 
on fossil fuels and increase our use of renewable energy. In addition, 
conversion to wood heat can create substantial cost savings for 
schools, hospitals and other public buildings, thereby saving public 
dollars. For example, a small high school in Enterprise, Oregon, 
recently-installed a wood heat boiler that is expected generate annual 
savings equivalent to maintaining 4-8 percent of their teaching 
    \10\ Resource Innovations, Wood Heat Solutions: A Community Guild 
to Biomass Thermal Projects, 2008. Nils Christoffersen, Wallowa 
Resources and Enterprise School Board, Personal Communication, 12-8-08.
    Greening facilities.--Land management agencies could invest 
significant funds in greening their facilities. They have a stock of 
aging buildings that could be upgraded to reduce their carbon footprint 
through weatherization, conversion of heating, cooling, and electrical 
systems to wood or other renewable energy sources, and installation of 
energy-efficient lighting. In addition to providing jobs via 
contracting and job training programs, this strategy would have 
critical long-term benefits including reduced greenhouse gas emissions 
reduction and costs to the taxpayers.

                             JOBS ESTIMATES

    The Forest Service estimates that it could spend $5.5 billion over 
the next one to three years on land stewardship, wood-based energy 
development, and the greening of its facilities and could create as 
many as 90,000 jobs.\11\ Similarly, the BLM estimates that it could 
spend roughly $3.0 billion over the next two and a half years, creating 
over 37,000 direct jobs and nearly 22,600 indirect and induced jobs 
performing a wide variety of landscape restoration and stewardship 
    \11\ ``Green Jobs: Economic Stimulus through Training and Land 
Restoration, United States Forest Service'', Memorandum from Doug 
Crandall, USDA Forest Service to Scott Miller, U.S. Senate Energy and 
Natural Resources, December 2, 2008.
    \12\ Bureau of Land Management, ``BLM--Potential Economic Stimulus 
Prljects within a 2.5 year timeframe'', December 8, 2008.
    There is little empirical research or analysis about the costs of 
creating one full time equivalent restoration or stewardship job. Part 
of the challenge of creating accurate jobs estimates is the huge 
diversity of activities involved in restoration and stewardship. 
However, assuming Service Contract Act wage rates, it seems reasonable 
to assume that restoration-based green jobs costs between $60,000 and 
$150,000 per direct full time equivalent job, depending on the type of 
    It is easy to get caught up in the numbers game of predicting how 
many jobs a particular initiative would provide. It is tempting to 
assume that more jobs are necessarily better. However, it is important 
to keep the issue of job quality\13\ in mind. More jobs per billion 
dollars often means that these jobs are lower paid. Although low wage 
jobs may be appropriate for youth entering the workforce for the first 
time, these sorts of jobs will not help keep children and families fed, 
clothed, and in their homes. More important than the exact number of 
jobs that will be created, what is essential, is that this stimulus 
package provide jobs for working people and families who will spend the 
money they earn on essentials, creating a significant multiplier 
    \13\ The Ecosystem Workforce Program defines a quality job as one 
that provides family-supporting wages and compensation, a safe and 
health workplace, long duration employment, structured training, 
opportunity for advancement, and the ability to work close to home.
    \14\ Rubini, Written Testimony.
    Regardless of the exact cost per job, public lands steward, 
greening of public lands facilities, and wood-based energy development 
all fit the bill. While extremely varied in types of activities, they 
will all employ large numbers of working people in activities that will 
have lasting effects by building the foundation of a green economy and 
reducing government expenses in the future.

                            GETTING IT DONE

    Clearly, one central consideration has to be whether the federal 
land management agencies can spend this money quickly--much of it in 
the next several months, and all of it in the next few years. There are 
a number of factors in place that suggest that they can do this.
    First, all of the activities proposed here can be accomplished 
using existing authorities and programs. Although spending these funds 
effectively will require the focus and coordination at all levels, the 
agencies will not need to develop new rules, regulations, or programs.
    Second, it will be critical for the Office of Management and 
Budget, the departments, and agencies budget staff to work without 
delay to transfer funds and spending authority to field units. While 
traditional allocation processes often take months, simply by 
prioritizing fast action on stimulus funds, the process could move much 
more quickly.
    Third, the agencies will have to prioritize projects with complete 
environmental analysis or limited analysis requirements, at least 
initially. However, the agencies appear to have a reasonable shelf 
stock of restoration and stewardship projects for the first year. For 
example, the Forest Service estimates that it has 5 million acres of 
NEPA-ready fire hazard reduction projects.
    Fourth, the land management agencies have a wide array of 
implementation tools that can get money to the businesses and workers 
quickly. The land management agencies should spend the bulk of the 
funds via service contracts, stewardship contracts, and cooperative 
agreements, which they can offer and award relatively quickly. To do 
so, however, they will probably need to increase contract and 
agreements staffing to write new and amend existing contracts and 
    In addition, the agencies have significant capacity to hire 
temporary and seasonal employees and use the Economic Action Program, 
AmeriCorps, Youth Conservation Corps, and Jobs Corps to combine job 
training with stewardship activities. Appropriately mixed with service 
and stewardship contracts and agreements, these programs can train 
young workers and get projects done quickly. The Forest Service 
estimates, for example, that they would create 5,000-7,000 jobs using 
these sorts of training programs. If this training done in partnership 
with local community organizations, as was done in the Jobs in the 
Woods and Hire the Fisher programs, the economic effects would be 
greatly enhanced.

                        SUMMARY RECOMMENDATIONS

          1. Act immediately to provide economic stimulus in the range 
        of $2.0 billion to $3.5 billion per agency for Forest Service 
        and the BLM, to remain available until September 30, 2010. The 
        focus of spending should be on building a rural green economy. 
        Priority activities should include:

                  A. Restoration and stewardship activities that will 
                provide green jobs immediately and long-term benefits 
                of improved ecosystem services, sustainable economic 
                development, and reduced costs to the government.
                  B. Actions that will benefit segments of society that 
                are likely to be hardest hit by the recession and are 
                most dependent on public lands, especially those 
                workers and businesses that live and work in isolated, 
                rural public lands communities who are not likely to 
                benefit from the larger economic stimulus package.
                  C. Expansion of the Forest Service grants programs 
                that support the development of woody biomass 
                utilization, including for renewable heat and power.
                  D. Projects that have the potential to reduce green 
                house gas emissions, sequester carbon, or increase 
                ecological resilience to climate change. Land 
                management activities could include, for example, fire 
                hazard reduction, urban and riparian tree planting, and 
                range restoration. Facilities improvements could 
                include, for example weatherizing buildings and 
                replacing aging heating and cooling systems with more 
                efficient wood heat boilers, solar panel insulation, 
                and energy efficient equipment and lighting.
                  E. A wide range of forest, watershed, wildlife and 
                fisheries restoration projects that are NEPA-ready now 
                or could be NEPA-ready within a year.
                  F. Land stewardship activities that require little or 
                no NEPA analysis, such as plant, wildlife, cultural 
                resource surveys, and boundary line delineation, and 
                other technical activities.
                  G. A wide range of recreation, trails, and roads 
                projects that would reduce risk of catastrophic road 
                failures and reduce stream sedimentation, which are 
                NEPA-ready now or could be NEPA-ready within a year.
                  H. Increasing the number of contracting officers and 
                agreements coordinators to help award contracts and 
                agreements more quickly.
                  I. Funding for the Department of Labor and the land 
                management agencies to increase oversight of 
                contractors to ensure that they comply with safety and 
                labor laws, especially in the areas of thinning and 

          2. Address basic needs.--Over the coming months, more 
        families will struggle to meet basic needs such as food and 
        heat. Ensure that communities surrounded by public lands have 
        adequate access to fire wood and non-timber forest products for 
        subsistence use. This may require temporarily increasing the 
        staffing to set up designate sale areas, process permits, and 
        ensure that resources are managed sustainably.
          3. Prohibit guest workers from employment on contracts using 
        economic stimulus funds.--Inviting guest workers into the 
        country to perform these activities would likely reduce the 
        stimulating effect, as wages may be spent abroad. If 
        contractors cannot find domestic workers to perform particular 
        activities, these activities should be included in job training 
          4. Halt administrative actions that would worsen economic 
        conditions in rural and other distressed areas.--The Forest 
        Service has been selling buildings, consolidating units, and 
        moving staff away from rural areas over the past 15 years. 
        Continuing these activities is not appropriate in this economic 
        climate. The Forest Service and DOI should, for example, place 
        a moratorium on the sale of buildings so as to not further 
        depress commercial building prices and forego the consolidation 
        or relocation of units or staff that would lead to a net 
        transfer of federal personnel out of rural or other 
        economically distressed areas.

    The Chairman. Thank you very much.
    Mr. Limbaugh.


    Mr. Limbaugh. Chairman Bingaman, members of the committee, 
thank you very much for having this hearing today, and thank 
you for the invitation to testify on the need for further 
Federal investment in water management and supply 
infrastructure as part of a proposed economic stimulus 
    My comments today are my own, and I'd appreciate it if my 
written testimony would be submitted for the record.
    The Chairman. It will. Everyone's testimony will be 
included in the record.
    Mr. Limbaugh. Thank you.
    In many areas of the West in the Nation, there is a pent-up 
demand for new water management infrastructure. This 
infrastructure includes surface and groundwater storage, it 
also includes efficient--more efficient water-delivery 
management infrastructure.
    Much of this infrastructure will have to be built soon, 
some with Federal financial assistance, in order to meet the 
future challenges and adapt to expected impacts of climate 
change and global warming, while allowing water managers to 
meet the growing and, many times, competing demands for limited 
water resources.
    But, my testimony today is focused on five areas within the 
Bureau of Reclamation programs and authorities where I believe 
construction projects exists that are ready to be implemented 
through stimulus spending. Those five areas are aging Federal 
facilities, rural water development, water conservation 
recycling and reuse projects, environmental mitigation and 
restoration infrastructure, and water-related renewable energy 
    I have identified, within these groups, projects ready to 
be constructed within the next 2 years, and where Reclamation 
can quickly provide funding through Federal economic stimulus 
    Looking at the broader picture, however, construction and 
reconstruction of water infrastructure projects, not only 
provide jobs in the related economic activities in the short 
term, these projects provide the basic foundation of a vibrant 
economy in the long term, a reliable source of clean, 
affordable water to communities, farms, businesses, and the 
environment. In my opinion, these investments are just as 
important, if not more important, to growing our economy as are 
roads, bridges, and other infrastructure. Not including funding 
for water infrastructure in a stimulus bill would be a 
regrettable oversight and a huge mistake, in my opinion.
    Stimulus spending on water infrastructure should include a 
mix of direct appropriations and other innovative financing 
tools that could be used to leverage Federal funds to provide 
maximum impact to our economy, but minimizing the impacts to 
the Federal budget and mitigating for the recent credit crisis 
impacting our municipal bond markets.
    In my testimony, I have outlined construction projects that 
are excellent candidates for economic stimulus spending, but 
have stalled due to lack of Federal funding and financing tools 
for some of the non-Federal shares that I'll talk about in a 
    Shovel-ready construction projects within Reclamation 
include rehabilitation of existing federally owned water 
infrastructure that is aging and in need of major upgrades 
outside the scope of routine maintenance. If stimulus dollars 
are appropriated to these construction projects, congressional 
direction will be necessary for Reclamation to fund and finance 
the non-Federal share of construction costs, similar to the 
canal-safety language that currently is included in the Omnibus 
Public Land Management Act.
    Reclamation Safety of Dams Program has planned, designed, 
and ready-to-construct projects that correct design 
deficiencies impacting the safety and security of federally 
owned dams. There are currently also about ten congressionally 
authorized rural water construction projects that Reclamation 
provides Federal funding for. Construction activities managed 
by local tribal and nontribal construction entities, with a 
total of about $1.3 billion in Federal shares, are still 
available for appropriation.
    In addition of stimulus funds would help meet the optimal 
construction capacity to build these projects on an economical 
scale, and would provide additional construction jobs.
    There are also many water management and conservation 
infrastructure projects in need of Federal matching funds that 
would help stretch existing water supplies to meet unmet needs. 
While I was at Interior, I worked to establish the Water 2025 
Challenge Grant Program, and we always received tens of 
millions of dollars more in project requests and grant requests 
than we had funding to award.
    Dedicating stimulus funding for Reclamation water 
conservation grants would accelerate the construction and 
implementation of these projects, creating jobs, while solving 
problems in the process.
    There is a very large backlog of water reuse and recycling 
projects authorized under Title XVI program, with unfunded 
Federal share to the extent of almost $600 million. These 
projects are ready to begin construction, but yet, are awaiting 
Federal funding.
    Collaborative environmental restoration programs have 
planned and designed green fish and wildlife projects, such as 
fish greens on diversions of water, and additional fish and 
wildlife habitat that are ready to construct with substantial 
local and State funding already committed, but are in need of 
the additional Federal dollars to make these things work.
    Finally, there are many opportunities to develop new 
renewable energy sources on some western water projects, 
including hydroelectric, solar, geothermal, and wind. With 
enhanced Federal funding incentives and financing 
opportunities, developing these green energy sources would 
create jobs and new energy sources for water management 
activities in the future.
    In conclusion, spending additional Federal dollars on 
shovel-ready water infrastructure in these five areas will, in 
my opinion, not only meet the short-term needs for jobs and 
economic growth, but will provide long-term returns on the 
Federal investment by rehabilitating and upgrading existing 
water supply infrastructure, increasing the availability of 
water in areas experiencing shortage, improving the environment 
for fish and wildlife, and providing green sources of water, 
energy, and jobs for the future. Such investments will be 
necessary sooner rather than later, and using a portion of the 
Federal economic stimulus spending is an ideal opportunity to 
provide the much-needed Federal funds for important projects.
    Thank you, Mr. Chairman. I would be happy to answer 
questions the committee may have.
    [The prepared statement of Mr. Limbaugh follows:]

Prepared Statement of Mark A. Limbaugh, Former Assistant Secretary for 
             Water and Science, Department of the Interior


    Good morning Chairman Bingaman, Ranking Member Domenici, and 
Committee Members. My name is Mark Limbaugh, and I have served as the 
Assistant Secretary of the Interior for Water and Science, Deputy 
Commissioner for the Bureau of Reclamation, state watermaster for the 
Payette River Basin in Idaho and fourth-generation Idaho family farmer. 
I am here at the request of this Committee to give my personal thoughts 
on the need for further federal investment in water management and 
supply infrastructure as part of any proposed economic stimulus 
    First, I must disclose that I currently work as a natural resource 
consultant and lobbyist, with clients who are involved in the 
management and delivery of water in many areas of the country. While 
these clients and their communities would benefit from additional 
federal spending on water infrastructure, I am not representing them 
here today. My remarks today are my own, and have been derived from my 
28-plus years of experience as a water user, water manager, and public 
    I am prepared to offer my opinion on the immediate need for and 
subsequent economic benefits from further public investment in water 
infrastructure through proposed federal spending legislation to 
stimulate the U.S. economy. There currently is a pent-up demand for new 
and rehabilitated water infrastructure across the Nation. This includes 
new surface and ground-water storage facilities and more efficient 
water delivery mechanisms, as well as water management and conservation 
improvements that include the requisite water management infrastructure 
needed to take advantage of conserved water savings. Such 
infrastructure must be built in the future to meet the challenges and 
uncertainties of climate change and the growing competing demands for 
limited water resources to meet unmet needs. In this testimony, 
however, I have chosen to narrowly focus on five areas within the 
Bureau of Reclamation (Reclamation) programs and responsibilities--
aging federal water facilities, rural water development, water 
conservation, recycling and reuse, environmental mitigation and 
restoration infrastructure, and water-related renewable energy sources. 
This narrowed approach is due to the immediate nature of projects in 
these areas that are ready to be constructed within the next two years 
and the direct federal Reclamation nexus to providing support and 
funding for these projects through a federal economic stimulus spending 
    It appears obvious to me that the economy (both locally and on a 
national scale) benefits from increased investment in construction of 
projects by providing jobs and generating economic activity during the 
construction phase itself. A recent report by the Congressional 
Research Service estimates that each million dollars in new spending on 
infrastructure construction, direct and indirect employment is 
projected to increase by 8.1 to 12.6 jobs (depending on the model and 
assumptions used). However, looking at the broader picture, 
construction and reconstruction of water infrastructure provides not 
only the construction and related jobs and activities in the short 
term, these projects provide the basic component of any vibrant economy 
in the long term--a reliable source of clean, affordable water to 
communities, farms, and businesses. In my opinion, these investments 
are just as, if not more important to growing the economy in both the 
short and long terms as transportation and other public infrastructure 
projects, and not including such investments in water infrastructure in 
an economic stimulus package would be a regrettable oversight and a 
huge mistake.
    Also, when these projects are built, they will be designed and 
constructed using the latest environmental engineering standards for 
water development and management--protecting important environmental 
values in water quality and conservation, fish and wildlife habitat, 
and providing many opportunities for new ``green jobs'' in the water 
sector of the economy.
    Stimulus spending on water infrastructure should include a mix of 
direct appropriations, low-interest and no-interest loans, and other 
innovative financing tools that allow for limited federal funding to be 
leveraged for maximum impact on our economy. Loan guarantees and other 
federally-backed loan instruments, such as tax-credit bonds, are 
necessary to meet local requirements for workable public financing 
tools, mostly due to the current credit crisis which has all but dried 
up traditional municipal bond funding mechanisms. Attracting private 
capital to water project financing will continue to be a challenge and 
our economy will depend on these funds for financing public water 


    Over the past 100 years, the Bureau of Reclamation has built 
important water management and delivery infrastructure still relied 
upon today for important water supplies and the economies built around 
those supplies. These federal water projects resulted in a massive 
migration to the West in the early 1900's (my relatives among them) and 
transformed the West by providing water for farms that now provide the 
nation with the multitude of fresh fruits, vegetables, nuts, dairy 
products, grains, and other staples too often taken for granted by 
consumers. Communities rose out of the sage, local economies were 
created and blossomed with the crops produced from these water sources. 
Today, these projects are more important than ever originally 
    Water developed by Reclamation projects is now used to produce not 
only crops, but is also relied upon for recreation, for fish and 
wildlife, for hydroelectric power production, and for important 
municipal and industrial uses. Yet these important facilities are 
aging, and many are in need of rehabilitation to continue to reliably 
meet current and future demands for water and meet today's 
environmental standards. In most cases, Reclamation projects have been 
or are being repaid by project beneficiaries--the users of the water. 
Much like a mortgage on a house, repayment of the initial project 
construction costs were amortized over many years in order that these 
project users could afford to pay these costs back to the Federal 
government. These project beneficiaries also pay 100% of their allotted 
share of operation and maintenance costs, with the government paying 
the allotted federal share. As these projects continue to age, routine 
maintenance cannot possibly keep up with the demand for the major 
rehabilitation needed in order to extend their service life to meet the 
needs of present and future generations.
    Reclamation has systematically planned such rehabilitation, and 
there are many large projects ready to be reconstructed, some requiring 
extensive construction activities to rebuild this large, complex water 
infrastructure. Reclamation's Safety of Dams program has continued to 
meet the construction needs to maintain the safety and security of 
large federal dams and infrastructure that fails to meet today's 
engineering standards. These projects are not rehabilitation, as only 
design flaws that impact project safety and security are repaired under 
this program. There are many projects in this program that are in need 
of additional federal appropriations in order to begin construction, 
and would be excellent candidates as economic stimulus projects. 
However, construction of the other rehabilitation projects has stalled, 
with the non-federal share of the huge costs associated with such 
construction activities simply added to the project beneficiaries' 
annual operation and maintenance bills, creating a financing crisis for 
project beneficiaries by exponentially increasing their non-federal 
annual costs. As an example, I recall one Reclamation water district 
annually paid O&M costs in the neighborhood of $500,000, only to be 
confronted with a three year rehabilitation project (still not started) 
that increased the water district's annual O&M costs to over ten 
million dollars with no financing program to extend repayment over a 
reasonable period of years. Even if Reclamation were appropriated 
additional dollars through a stimulus spending bill to fund these 
improvements, with no financing program or direction from the Congress, 
the agency would still require repayment from the non-federal project 
users in the year the funds were expended. The Omnibus Public Land 
Management Act considered in this Congress contains legislation that 
would provide Reclamation with additional authority to extend repayment 
of such costs, with interest, over a more reasonable timeframe based on 
the life of the rehabilitation project.
    In addition to proposed stimulus spending, innovative financing 
tools are needed to assist with the updating and rehabilitation of 
water infrastructure. The 109th Congress provided Reclamation with 
authority to develop a loan guarantee program. While this program has 
yet to be offered to Reclamation customers, I believe it will provide a 
cost-effective financing program for such projects. Besides direct 
loans and loan guarantees, another innovative federal financing tool 
currently being considered for authorization is the tax-credit bond, 
where federal income tax credits are offered in lieu of interest 
payments on private loans made to public agencies, financing their 
long-term water infrastructure needs interest-free and costing the 
federal government only a fraction of the total amount borrowed. Such 
financing instruments will be essential in leveraging limited federal 
funds to attract the private financial capital necessary to meet the 
needs of tomorrow's water infrastructure projects.

                              RURAL WATER

    The need for a reliable source of clean, potable water is no more 
apparent than in many rural areas of this country. Many Tribes still 
deal with inadequate and unsafe water supplies on their reservations, 
and small communities across the Plains states and in the Southwest are 
in dire need of such infrastructure. There are currently about ten 
congressionally authorized rural water projects that Reclamation 
participates in providing federal funds for construction activities 
managed by local construction entities (both Tribal and non-Tribal 
entities). In my experience, there has not been adequate funding made 
available to the various local construction entities to meet the 
capacity to build these projects on an economical scale, with 
approximately $1.3 billion in funding needed to complete these 
projects. Additional funding provided in a stimulus spending bill to 
meet the construction capability of these entities would advance the 
construction phases of these authorized projects, providing additional 
construction jobs and vital economic activity in the process in both 
the short and long terms.
    The Rural Water Supply Act of 2006, introduced by Senators Bingaman 
and Domenici, provided the authority for Reclamation to develop a rural 
water program that could ensure the best future rural water supply 
projects were advanced to Congress for authorization and construction 
funding. Reclamation recently released an interim rule to develop such 
a program and is currently seeking comments. Funding is authorized at 
$15 million annually to provide for appraisal and feasibility studies, 
as well as program administration. Such studies will be necessary to 
determine the viability of a project and provide recommendations to 
Congress for further authorization to construction. Funding provided in 
a stimulus package could help establish this program and provide 
additional projects that could be quickly ready to construct if 
authorized for federal funding. The Act also provided Reclamation with 
authority for a loan guarantee program to assist in financing a portion 
of construction costs for these projects, however the program has not 
been offered by Reclamation at this time. Congress may need to provide 
direction and guidance to Reclamation in developing a loan guarantee 
program to meet the financing needs of rural water and other water 
infrastructure projects in the future.


    Water conservation and improved water management has been at the 
forefront of meeting unmet needs in the West. There are many 
opportunities for new water conservation activities that could help 
stretch existing water supplies, but many of these projects must wait 
for available funding so they can be moved forward for construction. 
While at Interior, I worked to establish the Water 2025 challenge grant 
program, and we always received millions of dollars more in requests 
for grants than we had funding to award. Integrated regional water 
management planning, automated water control structures, SCADA systems, 
improved water measurement devices, system optimization planning 
analyses, canal and ditch lining and piping, and other water 
conservation measures are needed today and are ready to be installed at 
many locales across the Reclamation states, but local funding alone has 
not been adequate to meet the demand for such infrastructure. 
Additional federal funding for water conservation matching grants 
through Reclamation in an economic stimulus spending bill would assist 
these local and state entities in accelerating the construction and 
implementation of these projects, creating jobs and associated economic 
activity in the process. This water management infrastructure continues 
to be vitally important to the advancement of voluntary state-
sanctioned water banks and transfers that allow water to flow to meet 
unmet needs for people and the environment while protecting the state-
based water rights so important to Western water users, and providing a 
cost-effective, collaborative process in providing for unmet water 
supply needs.
    Title XVI of P.L.102-575 provided Reclamation with the authority to 
develop a demonstration and grant program for water reuse and recycling 
projects. Currently there is a very large backlog of projects, 
requiring almost $600 million in federal cost share, which are ready to 
begin construction but are waiting for the federal funding necessary to 
finance these projects. These projects would provide new water supplies 
to communities in dire need of additional water sources. Many of these 
authorized projects are in the Southern California region, but there 
are some in other areas of the Southwest and West. As this Committee is 
very aware, California is experiencing court-ordered restrictions and 
other extreme pressures on their water supply as legal issues 
surrounding competing uses for water in the state are sorted out, with 
endangered species, environmental requirements, growing populations, 
and mounting drought conditions all contributing to the current state 
of affairs. Millions of people in Southern California rely on imported 
water from the Colorado River and from the Central Valley, and both of 
these sources have been reduced in the past several years. The need to 
develop in-basin water supplies in these areas has never been greater, 
and water reuse and recycling projects would dramatically help in this 
effort. There are other projects, either congressionally authorized or 
waiting for such authorization that could help divert flood flows into 
groundwater basins and desalinate water from impaired groundwater or 
the sea, and these projects need to be moved forward to construction as 
well. Again, innovative federal financing tools are needed to attract 
private funding for the non-federal share of these projects, as the 
municipal bond market have been severely restricted in the current 
credit crisis. Such financing programs should also be considered in an 
economic stimulus package to spur investment in constructing these 
important public works projects.


    As water has been developed in the West over the last century, our 
nation's environmental standards have evolved into new laws and 
standards that drive the need to mitigate water-related impacts to the 
environment and restore habitat important to the survival of both 
endangered and threatened species, while preserving important fish and 
wildlife populations treasured by generations of Americans. The results 
of our successful water development and use in the West have also 
resulted in some negative impacts to our environment, and there are 
many infrastructure projects that have been designed to mitigate and 
restore natural systems while protecting the important use of water for 
people. Currently, there are many robust collaborative environmental 
restoration and protection programs that have infrastructure ready to 
construct, but are in need of additional federal dollars to implement 
these projects. Programs like the Upper Colorado River Recovery 
Implementation Program, the Platte River Recovery Program, the Middle 
Rio Grande Silvery Minnow Collaborative Program, the Lower Colorado 
River Multi-Species Conservation Program, the Columbia-Snake River 
Salmon Recovery Programs, the Grand Canyon Adaptive Management Program, 
and the fisheries restoration and passage improvement programs in 
Central Valley of California are all well established and would benefit 
from focused stimulus spending that would begin construction on shovel-
ready projects that are needed for environmental restoration and 
fisheries habitat improvement. Projects such as fish screens on 
existing water diversions, integrated regional water management and 
conjunctive groundwater/surface water management projects, selective 
withdrawal temperature control devices, habitat restoration and 
mitigation projects, wetland water treatment facilities and green 
stormwater infrastructure are but some of the many projects in need of 
immediate federal funds and/or financing to begin construction. Most of 
these projects have substantial local and state funding committed and 
are ready to move forward as federal dollars become available, making 
them ideal candidates for economic stimulus spending.


    Hydro-electric power sources do not produce greenhouse gases and 
are a reliable source of energy in the West. Yet there are many 
opportunities to improve existing or provide additional sources of 
hydropower across the West that are in need of immediate funding. 
Providing federal funding opportunities for new, smaller hydroelectric 
plants where local water delivery systems provide adequate conditions 
for operating these plants would increase the use of renewable sources 
of energy and take advantage of existing water infrastructure in 
developing these new sources of energy. Other renewable energy sources 
are available on some Western water projects include solar, geothermal 
and wind and with enhanced federal funding and financing opportunities, 
developing these ``green'' energy sources could be accelerated.


    In conclusion, spending additional federal dollars on ``shovel-
ready'' water infrastructure in these five areas will, in my opinion, 
not only meet the short term needs for jobs and economic growth, but 
will provide long-term returns on the federal investment by 
rehabilitating and upgrading existing water supply infrastructure, 
increasing the availability of water in areas experiencing shortages, 
improving the environment for wildlife and fishery habitat, and 
providing ``green'' sources of water and energy for the future. Such 
investments will be necessary sooner rather than later, and using a 
portion of a federal economic stimulus package is an ideal opportunity 
to provide much needed federal funds to these important projects. Thank 
you for allowing me to provide my personal views to the Committee, and 
I would be happy to answer any questions you may have.

    The Chairman. Thank you very much.
    Mr. Galvin, you're our final witness. Go right ahead.


    Mr. Galvin. Senator Bingaman, thank you for holding this 
hearing, and thank the other members of the committee for their 
interest in national parks.
    Today, I represent National Parks Conservation Association, 
a citizen advocacy group founded in 1919 in support of national 
parks, and today a group of more than 340,000 members. 
Previously, for almost 40 years, I was a career employee of the 
National Park Service, ending as deputy director, but also 
spending a fair amount of my career in planning, design, and 
    The subject of today's hearing has deep roots in the 
history of the Nation. We think about the Civilian Conservation 
Corps and Mission 66 as major infusions of capital into the 
national park system. They were really the only historic 
infusions of capital into the national park system. Of course, 
Mission 66 ended nearly 50 years ago. So, the stimulus package 
can easily address a pent-up demand for rehabilitation and 
refurbishing our Nation's park facilities.
    The program I come to you today with is not a program of 
new construction, but, rather, substantially a program of 
rehabilitation and refurbishment. Almost half is roads, over 
$400 million of roads that the Federal Highway Administration 
has certified as ready.
    There are also opportunities in cultural resources. The 
Park Service has a great backlog in curatorial activities. More 
than half of its collection is uncatalogued and cannot be used 
by the public, as a result of that. This can be done through 
contract services, and can be done expeditiously.
    There is an opportunity in Natural Resources--the Natural 
Resource Challenge, which has been funded to the level of $72 
million by the Congress, was originally $100-million 
initiative. There is a need for more research in parks that 
would be done through a network of universities, called the 
Cooperative Ecological Studies Unit, over 200 universities 
around the country.
    The Natural Resource Challenge established several teams of 
individuals who remove invasive species in national parks. That 
could easily--it's currently a $5-million program, could be 
expanded to $20 million.
    Creating green energy projects in parks has the advantage--
making parks carbon-neutral, in essence--has the added 
advantage of providing educational opportunities to the 
traveling public.
    By the way, Mr. Chairman, I read a press release from the 
Park Service the other day that indicates that visitation to 
parks last--this year will only be down about one-half of 1 
percent, which is rather remarkable, considering that most of 
the year featured $4-a-gallon gas prices. So, it's a remarkably 
resilient system.
    We can and should expand on-the-ground work on parks 
through the creation of a national park service corps. This can 
be done under existing legislative authorities through the 
AmeriCorps authority, so that we would recommend putting 
thousands of Americans to work in the parks, under the 
AmeriCorps authority, but naming it the National Park Service 
Service Corps. This could include skilled and unskilled labor 
throughout the United States, many in rural areas.
    By the way, almost all construction work done in parks is 
small business. The provisions of the small-business set-aside 
and the size of National Park Service projects virtually assure 
that all the contract work will be done by small businesses.
    Finally, the proposed National Park Service Centennial 
Challenge, which we have discussed in the authorizing 
committees, has been well vetted by the National Park Service. 
It's a long list of projects that require matching funds from 
friends groups and other nonprofits, and that could easily be 
expanded, and would provide a multiplier of matching funds--50-
percent Federal, 50-percent matching. I'm heartened, Mr. 
Chairman, that the program is--looks at an 1- to 2-month time 
sequence, because these programs, these--the execution of these 
programs are generally linear. You need design before you can 
do construction. It's important to recognize that the design 
money gets out there right away and employs United States-based 
engineers, architects, and landscape architects. Within a year, 
then you move into construction. So, this 1- to 2-month time 
period, I think, is very realistic.
    The total of this program is about a billion dollars, Mr. 
Chairman, and we think it would create about 23,000 jobs.
    Thank you very much. I appreciate the opportunity and am 
prepared to answer any questions the committee may have.
    [The prepared statement of Mr. Galvin follows:]

      Prepared Statement of Denis Galvin, Trustee, National Parks 
                        Conservation Association

    Good morning, Chairman Bingaman, Ranking Member Domenici, and 
Members of the Committee. I am Denis Galvin, Trustee of the National 
Parks Conservation Association. Prior to joining the Board of Trustees, 
I served as Acting Director and Deputy Director of the National Park 
Service and served a full and satisfying career managing the nation's 
parks within that agency. Thank you for inviting me to testify at 
today's hearing on the important issue of economic recovery.
    Since 1919, the National Parks Conservation Association (NPCA) has 
been the leading voice of the American people on behalf of our national 
parks. Our mission is to protect and enhance America's National Park 
System for current and future generations. On behalf of our more than 
340,000 members, we ask that you and your congressional colleagues 
seize this tremendous opportunity to foster economic recovery for our 
nation, in part, through investments in jobs that restore, renew and 
protect our national parks. The National Park Service has approximately 
$1 billion of projects that clearly are ``ready to go'', and are 
focused on restoring historic structures, repairing national park 
infrastructure, greening park facilities, and fixing trails. We 
estimate these projects would produce upwards of 22,000 jobs. There are 
also significant opportunities to provide jobs through science and 
service-related projects in an economic recovery plan. Through this 
stimulus effort, we have the opportunity to make employment-producing 
investments now in things that we must ultimately pay for anyway, in a 
way that protects our national treasures.
    Mr. Chairman, our national parks are home to some of the nation's 
most iconic and sacred landscapes, monuments, and historic sites. They 
are among the most recognizable places in the world. The parks provide 
a mirror of the soul of America, and are the physical embodiment of the 
collective experience and spirit we value as Americans. The national 
parks provide a unique opportunity to help the nation toward economic 
recovery and stability. With 391 units in 49 states and 4 territories, 
national parks employ 20,000 workers in some of the most remote and 
economically hard-hit areas of the nation. In the areas directly 
adjacent to the parks and communities many miles distant, parks are the 
focus of tourism spending. With 275 million visitors in 2007, local 
economies benefited from nearly $12 billion in visitor investment in 
recreation, lodging and general consumer spending. Furthermore, 
economic studies have demonstrated that for every federal dollar, the 
parks generate $4 of benefit to local and regional economies. There are 
few other areas of the American economy that reach as far and generate 
benefits as deeply into communities in jobs and revenue as the national 
    Historically, the national parks have demonstrated themselves as 
areas that create rippling economic benefits and add to the stability 
of the nation in times of economic crisis. This year marks the 75th 
anniversary of the Civilian Conservation Corps (CCC). Created by 
President Franklin Roosevelt through the Works Progress Administration, 
the CCC set an anchor to add stability to the American economy as the 
nation was buffeted during the Great Depression. The Roosevelt 
Administration invested $3 billion over the lifetime of the program 
($47.5 billion in current dollars) to put 3 million men to work on 
projects in the national parks and elsewhere building bridges, trails 
and structures that stand today and in many areas define the look and 
feel of the national parks.
    Seventy five years later, an equally significant opportunity 
presents itself: the National Park Service had nearly $1 billion in 
road and related infrastructure projects ready to go within the year, 
many of which could start within a matter of weeks or months. 
Investment in this area will immediately put to work hundreds of 
architects, landscape architects, design engineers and other 
contractors necessary to prepare the ground for construction projects. 
Virtually all of this work likely would be performed by small 
businesses on contract to NPS, distributed in communities large and 
small across the country. An infusion of this kind would provide 
support to highly skilled workers and the communities where they live 
and work very quickly.
    But the opportunity provided for and by the national parks is 
broader than road and related construction projects. Dozens of natural 
and cultural, resource protection projects are similarly prepared and 
ready for productive work as soon as an investment is made--projects 
that have been carefully thought out as a part of the Natural Resource 
Challenge planning process and its cultural resource counterpart. 
Similarly, the parks have long provided an opportunity for meaningful 
investment in science. As with the planning and design work performed 
by architecture and engineering contractors for construction projects, 
resource and science projects are supported by a broad network of 
universities across the nation, the Cooperative Ecosystem Study Units, 
or CESUs. Investments here inject funding unto university contractors 
that in-turn support surrounding communities.
    Two additional areas provide targeted opportunity for investments 
that will create ripple effects throughout local economies. Parks have 
long been observed for their potential as showcases for environmental 
(green) design. As the nation becomes more serious about climate 
change, the parks provide a prime opportunity to display design 
techniques, test-bed projects and carbon-saving green practices that 
will educate many of the 275 million visitors per year. The economic 
recovery plan that Congress and the hew administration produce would 
provide an opportunity to push toward a goal of making national park 
facilities carbon neutral by the 2016 centennial through retrofits to 
existing facilities, Finally, just as President Roosevelt launched the 
CCC to put men to work for the lasting benefit of the parks, a 
significant investment in national service in our national parks, 
including an investment in additional resources through the Corporation 
on National and Community Service to create a National Parks Service 
Corps, will engage young (and older) workers in gainful, productive 
employment renewing our national treasures at a time when they are 
likely to have difficulty finding jobs. Like the contributions of the 
CCC, they can produce the next generation of renewal in our national 
parks and produce lasting, modern-day contributions, following the 
precedent set in the 1930's through the CCC. These jobs and their 
associated training and education benefits can provide enormous 
opportunities to a diverse array of inner-city and rural youth, target 
those at risk of dropping out, and restore our national parks at the 
same time.
    Below, I have broken down the areas that we see would benefit most 
from targeted investments through an Economic Recovery plan as it is 
developed by Congress. The project areas will not only set the parks on 
a better footing as they approach their 2nd Century, they will delivery 
much needed support into the gateway and regional economies, many of 
which are carrying the brunt of impact from the current economic 


    When designed in 1999, the Natural Resource Challenge was estimated 
to require $200 million per year in increased funding to fully 
accomplish its goals. Due to budget restrictions in the Department of 
the Interior, the funding goal was cut back by one half, to $100 
million, of which the National Park Service was able to realize 
approximately $78 million in its highest year. Projects that were side-
lined or truncated as due to funding concerns include the following:

   Exotic Plant Management Teams--funded at about $5 million 
        currently, this program can easily be resized as a $20 million 
        program, with funding delivered to partners outside of park 
        boundaries to affect cross-boundary eradications/control 
        efforts. This program would result in hiring locals, youth, 
        etc. with positive economic impacts.
   Exotic Animal Management--a natural and highly necessary 
        companion to exotic plant management efforts, this effort is 
        well designed but unfunded and critical for the control of non-
        native pigs, rats, snakes, mongoose, etc. that cause 
        significant damage to the parks.
   Forest Health--eastern deciduous forests are under attack 
        from a host of woolly adelgids, ash borers, sudden oak death, 
        Asian long horn beetle and other invasive exotics. NPS is 
        positioned to become a leader in exotic control, forest 
        restoration (and chestnut restoration), etc. Western forests 
        are similarly under attack. Ready programs would easily support 
        an investment of $20 million to 30 million with a significant, 
        localized economic and employment benefits.
   Species restoration--NPS has a broad variety of key species 
        missing in parks that it can restore to improve the health of 
        federal lands and the national park experiences. This effort 
        would support an investment of $10 million per year easily.
   Oceans--Vast areas under the care and management of NPS are 
        virtually unknown, unmapped and uninventoried. Precious ocean 
        resources are also underrepresented in the National Park 
        System. Overfishing and inappropriate use that damages the 
        resource base are significant problems that require strong 
        action. Programs to zone fishing and monitor the recovery of 
        highly impacted ocean national parks are already 
        conceptualized. Funding these efforts at a level of $20 million 
        to $30 million per year would enable recovery and sustainable 
        fishing that is in everyone's interest.
   Migratory species--funding in migratory research would spur 
        a rebirth of ecosystem thinking, shaping invasive control 
        priorities, forestry priorities, grazing and mining in a 
        cohesive strategic fashion--for long term genetic viability, 
        movement, and replenishment of isolated populations of native 
        plants and animals. Funding of research through CESUs and other 
        cooperative grants would `deliver significant improvement at a 
        programmatic cost of approximately $15 million per year.
   Mitigation of Borderlands impacts--restoration of illegal 
        immigration impacts in border protected areas in support for 
        CONAMP's effort to build roadless protected areas on the 
        Mexican side of border. Programmatic cost is estimated at $5 
        million per year.
   International Program leadership--for some years NPS has 
        been hobbled in its ability to teach resource preservation 
        abroad and learn emerging.and new techniques tested elsewhere 
        in the world. NPS should be repositioned to provide 
        international environmental leadership and to open itself to 
        learning the lessons of others. We have much to offer in 
        programs that are already designed (e.g., international short 
        course, international training in general, outreach expertise, 
        exchanges), but where the reach is severely truncated due to 
        funding. Programmatic cost for correction is approximately $7 
        million per year.


    Less well known than the maintenance backlog, the Park Service is 
similarly burdened by an equally imposing museum collections backlog 
comprised of an estimated 56 million uncataloged items. These pieces, 
roughly 45 percent of the total NPS collection, lack the basic 
documentation and accountability means and measures to ensure their 
continued safe preservation, much less their retrieval.
    Possibly incorporated as a part of the National Park Service Corps 
described below, the parks could well utilize a significant number of 
well-trained, highly-skilled professionals, whose sole mission would be 
to assist with the reduction or elimination of the current museum 
collections backlog. A report by the National Academy of Public 
Administrators (NAPA) entitled ``Saving Our History: A Review of 
National Park Cultural Resource Programs,'' cited Yellowstone National 
Park as a poster child for the daunting scope of the museum collections 
backlog. Although recognized by the National Archives and Records 
Administration as an ``affiliated archives,'' the park reportedly has 
100,000 items in its history, biology, and paleontology collections 
that have not been cataloged. Yellowstone has been without an archivist 
since May 2007 and recently lost a museum technician position. The NAPA 
report tersely concludes that ``as a result Yellowstone's important 
cultural collections are at risk.''
    In 1933, the Historic American Buildings Survey (HABS) program was 
established. HABS provided employment for draftsmen, architects, and 
historians, who were put to work documenting the design and condition 
of some of the most significant historic structure on the American 
landscape. Current plans to use our national parks as vehicles for job 
creation and economic stimulus should take a cue from the New Deal and 
ensure that job opportunities will be provided widest possible array of 
Americans in need of such relief.

                              PARK SCIENCE

    As with other resource--related opportunities, investments in park 
science will carry benefits in job creation or preservation that ripple 
outward to local communities. A major setback to the future success of 
the NPS was the loss of the agency's self-directed research program in 
1994 when much of the capacity to pursue hard science was shifted from 
the agency and placed in the hands of the new National Biological 
Service. While this was a good plan and resulted in additional 
efficiencies across several agencies, the plan has come at a cost. Over 
time, focus on parks has gradually slipped more and more. Site fidelity 
and long term focus on complex systems that have wide annual 
variability plus the veneer of changing climate are irreplaceable 
requirements for prudent decision making in parks and critical for 
strong progress in a broad variety of areas. Reestablishment of a 
science program based in NPS--but delivered through contracts with 
CESUs and other entities at a level that existed 15 years ago--$20 
million per year--would reestablish this capacity and deliver 
additional security to communities across the United States.
    Hand-in-hand with the reestablishment of NPS's own science capacity 
should be the rehabilitation of the Research Learning Center program 
(RLC). RLCs are usually adaptively-rehabbed historic structures (that 
would otherwise be unused but still require ongoing maintenance/
repair). RLCs support researchers (with lab, bunk, meeting, seminar 
space) from academia and could be tweaked to provide constructive 
retraining for out placed workers on specific targeted projects. RLCs 
enhance the amounts of research done in parks (often for free) and 
provide forresearcher/visitor contact opportunities and educational 
events for park visitors and classrooms. Approximately $4 million 
would:finish the, system of 32 RLCs and provide a strong base for the 
decisive role parks could play in place-based education. Messages about 
energy conservation, climate change and individual behavior, 
sustainability of biodiversity and quality of life messages, etc. would 
be positive outcomes linking the recovery efforts to other important 


    Although it is not their primary purpose, our national parks play a 
significant role in the economies of many communities. As much as $440 
million worth of road projects in our national parks are ready to go to 
construction, and can rapidly produce as many as 7,000 jobs while also 
renewing our national heritage and helping to revitalize our national 
parks for our children and grandchildren. Another $500 million in 
transportation-related infrastructure investments could be similarly be 
ready within another year.
    To enable visitors to experience these national treasures without 
unduly imposing adverse impacts on the natural, cultural, historical, 
and archeological resources inside the parks, the people of the United 
States have made very substantial investments in park infrastructure. 
Those investments have occurred over many years, but have been meager 
in recent years. Two times in our history, America made substantial 
investments in our national parks. Both were at times when our nation 
was investing in new infrastructure and jobs--one in a time of national 
economic crisis and the other during strong economic times.
    It is more than half a century since the last of those significant 
investments were begun, and the lack of sufficient reinvestment since 
that time is evident from examining the condition of park roads today. 
The lack of investment, along with the popularity of the national 
parks, unfortunately has placed tremendous strains on national park 
infrastructure. For example, in Redwoods National Park one of the 
original segments of Highway 101 has not had its asphalt replaced since 
the 1960s. It is among the 53% of national park roads that are in poor 
condition. The road is in a constant state of disrepair, and is a 
safety hazard to vehicles and bicycles utilizing the road. The 
condition of the road is so poor that normal maintenance methods will 
no longer be effective without complete rehabilitation. The road 
parallels Richardson Creek which provides habitat for Coho salmon, a 
federally listed species, and is a tributary to the Klamath River, an 
important salmon fishery. Numerous deteriorated galvanized culverts 
that are well beyond their serviceable life span drain large runoff 
flows through very large road fill areas. Failure of these culverts 
would result in significant sedimentation of Richardson Creek and the 
Klamath River, and would likely have an adverse impact on the native 
salmon. Fortunately, the Park Service does have a project to 
rehabilitate the Redwoods road that is ready to go. The project has 
received environmental clearance and all it needs is funding. The 
project would not only benefit the park, but would provide jobs to the 
surrounding Del Norte County which is one of the poorest in California.
    The poor condition of national park transportation infrastructure 
is in large part due to decades of insufficient funding. The National 
Park Service has documented a total transportation investment need of 
more than $5 billion, comprised of $4.7 billion for roads, $220 million 
for bridges, and $508 million for front country trails that connect 
transportation nodes. We now have an opportunity to begin reinvesting 
in critical park infrastructure in a way that puts Americans to work in 
unnerving economic times while meeting our stewardship responsibilities 
to our children.
    NPCA understands that the National Park Service has more than $270 
million in 18 transportation infrastructure improvement projects that 
are ready to go to construction. When ready-to-go road projects that do 
not receive FLHP funding are included, the system-wide estimate exceeds 
$440 million. All these projects have obtained environmental clearance 
and can be contracted out within 180 days.
    Perhaps the most dramatic example of the desperate state of 
national park infrastructure and of the importance of park roads to 
local communities is the Going-to-the-Sun Road in Glacier Park, 
Montana. Ascending over the continental divide at Logan Pass, the 
Going-to-the-Sun Road is rated as one of the ten best scenic drives in 
America. As such it is a significant attraction generating over one and 
a half million visits per year making it an economic anchor for the 
tourism industry in the northwest portion of Montana. Yet, 75 years of 
rockslides and avalanches, severe weather, heavy traffic, and 
inadequate maintenance have left the road in urgent need of repair. 
Reconstruction began in 2007, but the funding has not kept pace with 
the project. More than $20 million in work is ready to begin if funding 
could be made available. There are many such examples of ongoing road 
work that could be accelerated for the benefit of both park visitors 
and the local economy.
    In some instances, the project being proposed is not to replace 
deteriorating infrastructure, but instead to reduce infrastructure's 
impact upon irreplaceable natural resources and systems. For example, 
the Tamiami Trail project in Florida will raise a key section of the 
roadway to allow more water to flow from Lake Okeechobee through 
Everglades National Park to Florida Bay to improve ecosystem function, 
reduce harmful discharges to northern estuaries and increase water flow 
to water-starved areas. Unemployment in South Florida has risen 
dramatically with this economic downturn in particular because of the 
reduction in construction jobs. For a modest investment, this two-to 
three year project could produce dividends that are truly immeasurable 
both for the local economy and the environment.
    As already noted, investment in park transportation infrastructure 
will bring immediate benefits to local communities and the national 
economy. Transportation projects will first create high-paying 
construction jobs that support local families. Using a standard public 
lands construction impact assessment model, as many as 7,000 jobs could 
be created through these projects. The secondary effect of these jobs 
upon the communities surrounding the parks--many of them in rural 
areas--would increase the benefit many times over as the income of 
these families is pumped back into the local economy. NPCA recently 
commissioned a study that found that every federal dollar invested in 
our national parks generates at least four dollars in direct economic 
benefit to state and local economies, with significant additional 
indirect benefits. This study was conservative and the true benefit for 
these projects is probably closer to the construction industry standard 
of 6 to 1.

                          GREEN INFRASTRUCTURE

    Two notable proposals are being made to the Transition Teams 
organizing for the Obama Administration. These include a proposal for 
$24 million being submitted to the DOI Transition Team directed 
specifically to NPS in support of clean energy projects over the next 
24 months, and a $150 million to $200 million proposal for developing 
net zero energy consumption park visitor centers to be submitted to the 
DOE Transition Team. NPCA supports both of these proposals, as park 
construction projects of all kinds have proven themselves time and time 
again as job creators for local communities and sound investments that 
showcase issues for the millions of visitors that come to the national 
parks year after year.


    An additional opportunity exists that would significantly expand 
the capacity of the National Park Service in the short term, and 
provide cost-effective employment opportunities in a manner that helps 
reduce the national park system maintenance backlog and address other 
critical NPS needs. We believe that creation of a National Parks 
Service Corps, as a component of the expansion of national and 
community service, presents an opportunity to address the NPS operating 
deficit and construction/maintenance backlog, while engaging more 
Americans in productive work at a time of dislocation to preserve 
historic and cultural resources, maintain trails and common areas, help 
promote tourism and recreation at a time when our economy needs it 
most, and strengthen educational efforts to connect park history 
with'the next generation. Like 1933, when President Franklin Roosevelt 
married two foundering resources--jobless, young men and public lands 
that were subject to soil erosion and deforestation, the National Parks 
Service Corps can marry three foundering or idle resources--some of the 
15 million young people at risk of reaching productive adulthood, the 
tens of millions of Baby Boomers who feel they are leaving the world in 
worse condition than they inherited it and want to serve, and our 
national parks that are in need of more full-time, part-time and 
traditional volunteers to meet urgent needs.
    This proposal fits within existing proposals to expand Americorps 
through the Serve America Act, and can easily be implemented quickly 
through additional appropriations to the Corporation for Community and 
National Service. We propose placing 10,000 new paid volunteers in our 
national parks to dramatically increase the capacity of the parks to 
resolve backlogged construction and maintenance needs, while providing 
functionally useful training to a workforce in need.
    Programmatic cost for this proposal is anticipated to be $200 
million, allocated as follows:

   $60 million for 5,000 National Park Service Corps positions 
        based on the Americorps National Civilian Community Corps model 
        ($12,000 each),
   $50 million for 5,000 National Park Service Corps positions 
        using the AmeriCorps Federal and State grant model the 
        remaining 5,000 volunteers ($10,000 each),
   $50 million for a $5,000 educational award for all 10,000 
   And $40 million for placement of full-time volunteer 
        coordinators in the parks, and for administrative expenses.

    Spending on this program can begin expeditiously, allowing for 
recruitment and initial training of both workforce and NPS management. 
Operationally, the National Park Service would administer the Corps and 
deploy new volunteer coordinators in national parks, and the new 
positions would be funded with living stipends and education awards 
through the Corporation for National and Community Service.
    The new NPCC can build on two successful programs at the 
Corporation for National and Community Service. The Corporation's 
national service program called AmeriCorps currently operates in two 
ways. The AmeriCorps State and National program provides financial 
support through grants to public and nonprofit organizations that 
sponsor service programs around the country. AmeriCorps State and 
National members can volunteer part-time or full-time; many receive a 
modest living stipend based on the minimum wage; and most receive a 
``Segal education award'' of $4,725 at the conclusion of their service.
    The other AmeriCorps model is called the National Civilian 
Community Corps (NCCC). In contrast to the State and National grant 
program, NCCC is a full-time 10-month residential program. Members live 
on one of four regional campuses, receive intensive training, and are 
deployed as teams for projects that range from disaster response to 
environmental protection. As with the State and National program, NCCC 
members receive an education award at the end of their service. The 
creation of a new parks-focused program would provide both stimulus to 
the communities in which the work took place and job creation for young 
and outplaced talent that is perhaps faster than any other programmatic 

                          CENTENNIAL CHALLENGE

    Another opportunity for parks to help create jobs is the National 
Park Centennial Challenge. This program, the proposed authorization for 
which was included in the Senate's proposed economic recovery package, 
received a downpayment of funding from congressional appropriators this 
past fiscal year. Those projects generated approximately 350 jobs. If 
the Congress provides additional funding and a broader authorization 
for the Challenge, it would be quite easy for the National Park Service 
to issue a request for proposals that maximizes job creation 
opportunities of the next year to two years. Because many of the 
projects would be matched by private dollars, there would also be a 
doubling impact of any federal investment, thereby doubling its 
potential stimulative effect. I recommend that you seize the 
opportunity to get this important program launched.
    Mr. Chairman, my intent in this testimony has been to demonstrate 
the variety of ways that investments in the national parks can deliver 
benefits in job creation and financial improvement to communities 
across the United States. Such investments would be long-lived, not 
ephemeral, as we see today with the lasting improvement the Roosevelt 
Administration provided with the CCC and the Eisenhower Administration 
provided with Mission 66. Americans love our national parks, and this 
kind of investment in them as part of an economic recovery package will 
have outsized benefits. By funding ready-to-go projects in America's 
favorite places, the Committee can both foster the creation of good, 
needed jobs, and renew the nation-al inheritance we have a collective 
responsibility to pass to our children in at least as good as condition 
as we received it. An investment in our national parks is both an 
investment in today and in our future.
    This concludes my testimony and I will be happy to answer any 
questions you may have.

    The Chairman. OK. Thank you all for your testimony.
    Let me ask about this issue of regulatory requirements, 
NEPA compliance issues. We've talked about everything being 
shovel-ready. Is all of this NEPA-ready, in the sense that the 
projects we're talking about there--are there substantial 
additional requirements that have to be dealt with under NEPA 
that will delay all of this, or are we talking about projects 
that have already done the necessary NEPA analysis? Or are we 
talking about projects that don't require a NEPA analysis?
    Mr. Galvin. In the case of the National Park Service 
projects, many of them--as I said, more than half of them would 
be in the category of rehabilitation, refurbishment. So, the 
NEPA requirements are not major. These are not--they're not new 
sites, they're not new construction. They would probably mostly 
be done on findings of no significant impact or with an 
environmental assessment.
    The Chairman. What about the water projects?
    Mr. Limbaugh.
    Mr. Limbaugh. Mr. Chairman, thank you. There are some--the 
rehabilitation of existing infrastructure, as Mr. Galvin 
mentioned, are subject to NEPA, but they're subject to--not as 
an extensive analysis, because the facilities are already 
there; it's just a matter of the impacts of the construction. A 
lot of that, NEPA is done, or can be done very quickly, 
depending on what stage Reclamation is in, in their planning 
and design efforts on these. There are many that are in that 
    As far as the other projects, the environmentally--
enhancement projects, the water conservation projects--those 
are all--can be very--NEPA can be very quickly completed, or is 
completed on some of these projects, such as the Title XVI 
projects that are just simply awaiting funding or that are--or 
the rural water projects, that have been getting funding over 
the years, but not enough to economically move forward quickly 
to get those projects finished.
    The Chairman. Dr. Moseley, do you have any comment on----
    Ms. Moseley. Sure, let me add a couple of things. You know, 
obviously the Forest Service and BLM public-lands forest 
management often gets entangled up on NEPA. This committee and 
others have had huge amounts of debates about what level of 
NEPA is appropriate, do we--should we have categorical 
exclusions, that sort of thing. But, I think, in this case, 
it's sort of asking the wrong question. The question is really, 
What can the agency do, given what they would--you know, sort 
of, in this 2-year timeframe to help stimulate the economy? If 
I have my numbers right, the Forest Service estimates it has 
1.5 million acres NEPA-ready to--for fire-hazard reduction, 
which would cost something like $850 million to implement. 
That's no small amount of acres, and it's no small amount of 
money. They also--I--as I understand it, estimate that would 
have another 5 million NEPA-ready in the short term, which 
suggests that they have a pretty substantial pipeline. 
Certainly, in addition, you know, the NEPA projects involving 
trees seem to be the things where we get hung most on the 
Forest Service, and BLM in the West. I think there are a whole 
bunch of other kinds of activities that require--are very 
noncontroversial, there is some pipeline in the place, or they 
don't require much in the way of analysis that can be used--you 
can use categorical exclusions. Then, there's a whole bunch of 
things that aren't--don't have environmental impact--wildlife 
surveys, boundary-line marking, those sorts of things--which 
are--can provide critical technical jobs with absolutely no 
NEPA analysis.
    The Chairman. Mr. Galvin, let me ask you one other 
question. You talk about the recommendation of having a 
National Park Service Corps. We already have the Youth 
Conservation Corps in the Park Service, and sort of separate in 
other land management agencies, and I've been advocating 
increased funding for that over a long period. How do you see 
this National Park Service Corps relating to the existing Youth 
Conservation Corps programs?
    Mr. Galvin. It would simply expand it. That would be one of 
the authorities we would use, along with the AmeriCorps. Some 
of the AmeriCorps authorities allow State grants that would 
in--then, in turn, the States would finance workers in the 
parks. But--it could easily use the Youth Conservation Corps--
but, we're also thinking of more sophisticated, more 
professional kinds of work than traditionally has been done by 
the Youth Conservation Corps. For instance, I used the 
curatorial problem; we could use the National Park Service 
Corps, as an example, to hire curators on contract to--for 
instance, Yellowstone has 100,000 items in its collection that 
are uncatalogued; hence, unusable by the public. If we could 
get trained professional staff in there, either under contract 
or as part of the National Park Service Corps, we could 
probably wipe out that uncatalogued backlog in 2 years.
    The Chairman. Thank you.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Mr. Galvin, you've mentioned, a couple of different times 
now, the possibility of contracting--in specific areas, 
whether--you just mentioned the curative aspect of it now or 
possibly in improving infrastructure, and reducing the invasive 
species. Are there any internal changes that would need to be 
made within the Park Service in order to implement these kinds 
of contracting services?
    Mr. Galvin. No. Almost all of planning, design, and 
construction work, both roads and infrastructure in the Park 
Service, are done through contracting out right now. In fact, 
the Park Service has--and I'm sure all the other agencies do, 
too--something called ``indefinite-quantity contracts'' in 
which private firms--private design firms and planning firms 
are already engaged. When you--they're engaged competitively, 
but they're onboard right now. So, when jobs come, either in 
their region or in their area of expertise, you simply write a 
work directive to them, and they can begin design.
    Senator Murkowski. OK.
    Mr. Galvin. So, at least with respect to the infrastructure 
side of this, I would say the contracting capacity is there.
    Senator Murkowski. Mr. Limbaugh, you spoke, in your 
comments, a lot about the financing side of what needs to be 
done with regards to the water infrastructure projects. As we 
talk about energy and how we're going to advance renewables, 
just about everything that we're talking about, maybe with the 
exception of, you know--no, I don't think there's exception--we 
need more water. We recognize that we can and should be doing 
more with some of our water projects that are very close to 
being ready. The loan guarantee program that exists currently 
within the Bureau of Reclamation, helping to facilitate 
existing water projects and to create new ones, how good of a 
job are we doing with implementation of the program? Are there 
possibly any fixes that we might want to include in a stimulus 
package, that could better to enhance the loan guarantee 
program? Then, you mentioned, a couple of different times, the 
terminology ``innovative financing tools.'' Do you have any 
suggestions for us as to what they might be, in the context of 
water infrastructure projects?
    Mr. Limbaugh. Sure, Senator. First of all, I'm very 
disappointed that the loan guarantee program is not moving 
forward under the current Administration. We worked very 
closely with this committee to get that through, and it would 
provide a very cost-effective way to leverage Federal dollars, 
you know, get private financing attracted to these projects, 
and have the project beneficiaries pay them over time, pay 
their share of these large rehabilitation costs over time, with 
interest. So, they make a lot of sense. The problem has been 
with--and how much support within the management of the 
executive branch. I would hope that we can move forward with 
this program very quickly in the new administration.
    I think congressional direction may be necessary to get 
this program going, to solidify the basic concepts for a loan 
guarantee program within Reclamation. But, at this stage, there 
is no program. We have the authority, and there is no program.
    Senator Murkowski. OK.
    Mr. Limbaugh. As far as other innovative financing tools, 
there are some that are being considered by the Congress now. 
One of them is tax credit bonds, that I've heard about, that 
basically--or, it's my understanding that the interest--the 
return on the investment is through tax credits that are 
provided by the government, with no interest being paid by the 
local entity--many times, a local government or a municipality. 
That would be a huge cost-saving to them, spur investment and 
not cost the Federal Government the--you know, 100 percent, but 
it would be more of a smaller percent, leveraging Federal 
dollars, again, to provide that working capital necessary to 
get some of these projects done.
    Senator Murkowski. Thank you.
    Ms. Moseley, in your response to the Chairman on some of 
the projects that are NEPA-ready--it's my understanding that 
there's some discussion as to how much Forest Service land in 
the fire-hazard reduction projects is actually ready. We don't 
need to argue over whether there's 57,000 acres that are ready, 
or over a million. The numbers are what they are. You've 
mentioned that we need to prioritize, clearly, as we try to 
move projects forward in this 2-month period. If, in fact, the 
Forest Service and the Bureau of Land Management actually have 
a very few number of projects that are NEPA-ready, to move out 
tomorrow, do we not move forward because they're not ready? Do 
you have any suggestions for us as to how we might include them 
in the mix? Because I think it would be a significant stimulus 
for us and something that we should be looking to. Any 
suggestions there?
    Ms. Moseley. I think that the strategy might be to--
essentially for the agencies to make some strategic decisions 
about how they stagger their work plan, so that they think 
about doing--you know, putting into the pipeline--and, you 
know, sort of, make shovel-ready those things that are shovel-
ready, and make--do, parallel to that, those things that are--
could be ready in 12 months, could be ready in 18 months. In 
doing so, I think that creates opportunity to do some things 
that have been so far off, that have been so underbudgeted in 
the last decade, that they haven't even had the ability to do 
NEPA planning, because there's been no money to even do 
planning, much less implementation. So, it would be a shame I 
think, in this context, to leave those entirely off the table.
    That may mean, given the, sort of, complicated budget line-
item system of the Forest Service, some pretty close attention 
in the appropriations process to spread the money adequately 
across a bunch of line items or to do something that gives them 
some fairly general opportunity to be flexible about where they 
spend their money.
    Senator Murkowski. Thank you, Mr. Chairman.
    The Chairman. Senator Salazar.
    Senator Salazar. Thank you very much, Chairman Bingaman.
    Let me start with you, Mr. Limbaugh. You describe what you 
say are shovel-ready projects in the five areas in your 
testimony about aging water facilities, rural water 
development, water conservation, recycling and reuse, 
environmental mitigation--and I think it's actually six, 
because you have water-related renewable-energy projects. Do 
you--part of what we will struggle with here, I think, in the 
next 2 months or so, or maybe even less than that, is what the 
quantum is that we're going to put into an economic recovery 
package. Frankly, I think one of the responsibilities that we 
have is not to be arbitrary with numbers. You know, I may 
look--I look back at the $700-billion economic recovery 
package, and I have the same question that a lot of people 
still have, you know, Where did that number come from? So, my 
question is going to be a question I'm going to ask all three 
of you, but I'm going to start with you, because I know Bureau 
of Reclamation facilities, I know rural development--water 
development projects in my State, many of which have been in 
front of this committee, I know--I know the project--I know the 
kinds of things that you talk about. If you were President for 
the day, what part of the--how much money would you put into 
this component related to Bureau of Reclamation in water 
projects? Give me a number.
    Mr. Limbaugh. Mr. Senator, it's just an estimate that I've 
kind of tallied up on the back of an envelope, but I'll give 
you a range, so you don't nail me down on a number, here. I 
would say, on the low side, probably 500 to 600 million within 
a 2-year timeframe. It could be higher than a billion if 
projects were made available that are ready to go, but just 
simply in a pending authorization bill or something like that, 
from what I've seen.
    Senator Salazar. You know, Mr. Limbaugh, with all due 
respect, it, frankly, seems to me that there's arbitrariness 
even in those numbers that you give to me, because, I mean, I 
know of one project which this committee has had a hearing on 
to do a pipeline that would take water from Pueblo Reservoir 
all the way down to the Kansas line in Colorado. It's been 
authorized since 1965, never has been funded. Legislation we 
have here is an 80-20 cost share, the kind of thing that, 
frankly, could get done very quickly, and it would provide jobs 
and deal with the real water problem for many rural communities 
in my State, which has been a challenge for a very long time. 
That project, by itself, if we're looking at that project, is 
somewhere around a $200-million project. So, when you come up 
with a number of $500 to $600 million to a billion dollars, and 
I know that it--there are lots of those kinds of projects all 
around the State--all around the States, the 50 States--you 
know, I look at the number of dams in my State, reservoirs 
which are on the dam safety restricted list because of 
spillways that don't have the capability in those spillways, 
and I know what the cost is of fixing each one of those--
frankly, it seems to me that a billion-dollar figure is a 
little spit in the bucket. So, one of the things that I hope 
we're able to get from Reclamation and from Interior are some 
real numbers on what the real needs are there, because I think, 
frankly, the number you're talking about isn't sufficient. I 
mean, I don't--do you want to respond to that?
    Mr. Limbaugh. Senator, I agree totally. My parameters that 
I set to make that estimate were a 2-year timeframe and in the 
categories that I talked about. When you start talking about 
the needs out there of the larger projects, they're in the 
multiple tens of billions of dollars. I don't know that you 
could get all those spent in 2 years, so, you know, my thinking 
was, you know, if we're going to have a stimulus package that 
has parameters set----
    Senator Salazar. Yes.
    Mr. Limbaugh. [continuing]. We need to be realistic.
    Senator Salazar. Let me just say, I mean, I think about the 
Rio Grande restoration efforts within Senator Bingaman's State, 
in New Mexico, and what's happening on the middle Rio Grande 
there, the huge dollars that are needed there, I look at the 
Abiquiu dams in the upper part of New Mexico. I mean, the 
numbers, I think, are staggering, in terms of what could go 
into these water projects that have been essentially delayed 
for such a long time, and where the needs have been building 
up. I mean, it's really no different than what's happened to 
the interstate transportation system. It's just that people 
don't see it as readily as they do transportation.
    Mr. Galvin, and Dr. Moseley, too--I only have 30 seconds, 
so give me a quantum.
    Mr. Galvin. OK.
    Senator Salazar. National parks and the different----
    Mr. Galvin. The----
    Senator Salazar. [continuing]. Initiatives that you 
    Mr. Galvin. I mentioned previously that up-front ready-to-
go work is about a billion dollars and would create about 
23,000 jobs. The other programs that I mentioned in my 
testimony--the expansion of the science program, the cultural 
resources components--are probably another $500 million, so 
about a billion and a half dollars over a 2-month period. By 
the way, that first billion dollars----
    Senator Salazar. Does that include the centennial----
    Mr. Galvin. That would include the----
    Senator Salazar. [continuing]. Project?
    Mr. Galvin. [continuing]. Centennial Challenge, yes.
    Senator Salazar. Centennial Challenge.
    Mr. Galvin. Yes. Yes.
    Senator Salazar. OK.
    Dr. Moseley.
    Ms. Moseley. I think, if you think about the Forest Service 
alone having something like a $10-billion road maintenance 
backlog and maybe needing $1 and a half billion more for fire 
hazard reduction--those are two things--the number--I mean, I 
couldn't even add up the number, but I think, though, also the 
question is----
    Senator Salazar. Just between----
    Ms. Moseley. [continuing]. Short term and long term. So----
    Senator Salazar. [continuing]. Road and fire mitigation 
you're talking about 11.5 billion.
    Ms. Moseley. Yes. I mean, the thing is, you can't do $10 
billion worth of roadwork in 2 years, so you have to take small 
chunks. But, let's say you take small chunks and you spend a 
couple of billion a year or 18 months per agency, I think, is, 
you know, on the low end.
    Senator Salazar. OK. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Senator Wyden.
    Senator Wyden. Thank you very much, Mr. Chairman.
    Ms. Moseley, I knew you'd be good, but as far as I'm 
concerned, you've been one of the best witnesses we've had in a 
long time, and I've chaired this subcommittee--Forestry 
Subcommittee, for a while.
    I think the key point you're making, that healthy forests 
equal a healthy economy, is the message that has got to come 
out of this stimulus program as it relates to forestry, because 
it's obvious that the rural communities feel like they've been 
hit by a wrecking ball. They also feel that there's a double 
standard, that there's $700 billion for Wall Street, and 
they're just kind of waving and trying to get somebody to pay 
    I think we made a downpayment on the effort with the Secure 
Rural Schools bill that we passed last session--had a lot of 
help from the Chairman, Senator Murkowski, a whole host of 
people. But, there's obviously a lot more to do.
    Let me ask you about two very specific questions. Senator 
Cantwell and I, every time we're home and have town meetings 
and the like, hear from frustrated folks in rural areas about 
the definition of ''biomass`` as it relates to these Federal 
lands. This was an area where this committee, in effect, in the 
middle of the energy bill, went back in that room for a 
substantial length of time, pulled together timber people and 
environmental people, and got a good definition of what would 
constitute biomass as related to Federal lands good for the 
environment, good for the timber sector. Then it went off to 
the other body. So be diplomatic, it just didn't survive.
    We're going to try and get this changed. We're going to try 
and get it changed on every single vehicle--the stimulus 
package, Chairman Bingaman will have an energy bill. Obviously, 
we have to deal with appropriation jurisdiction issues for the 
stimulus package.
    But, I'd like to have your thoughts, for the record, on how 
important it would be to get this definition of ''biomass`` 
right, because it seems to me it is a huge opportunity for 
clean energy, exactly what you're talk about: healthy forests 
for a healthy economy. Senator Cantwell and I are going to be 
doing everything we can on every vehicle to change that. But, 
your thoughts there first.
    Ms. Moseley. Yes, I think that's--you've hit on a critical 
issue. I think it's important to keep in mind that when you are 
a community and you're surrounded--and your county is 70 
percent public lands, and you can't get credit in--for material 
that comes from a public land, you're out of luck, basically, 
because there aren't other choices. So, I think what's critical 
is that we have definitions of biomass that are, you know, 
sensitive, environmentally, but also reflect the reality of 
western--many western communities that want to be doing small-
scale heat projects that, for example, transform their rural 
school from oil to woody biomass. But, if they can't take 
advantage of government assistance because of a definition that 
excludes their landscape, we have a real problem.
    Senator Wyden. I can only say, we need to turn you loose on 
the House, because under the leadership of Chairman Bingaman 
and Senator Domenici, back in that room, we found common 
ground, and then it disappeared. We're going to get it back. 
We're going to be calling on you to help us in that effort.
    One other question, just very briefly. With respect to the 
hazardous fuels work--and you talked about the fact that 
there's close to a billion dollars worth of projects that have 
already, kind of, cleared the NEPA, kind of, process and the 
like--tell us a little bit about what you think is the best way 
to get the value out of that work. Are you for the stewardship 
contracting or--in terms of actually getting the work done, 
what are the kinds of approaches that you think get it done 
most quickly and get us the most value for the dollar?
    Ms. Moseley. I think that we--it will probably--we'll 
probably need a whole basket of tools. I think that stewardship 
contracting has proven to be extremely effective for--in two 
different kinds of ways. One is that when you have fuels 
treatment that involves some material that can be removed and 
taken down the road to a mill, or--and you have some material 
that is low value, you don't really know what the market is--
it's something that could be biomass at some point, maybe, and 
a whole bunch--and some material that's just--we've got to get 
piled--the stewardship contracting mechanisms allow us to 
efficiently, effectively get all that work done in one context. 
I think those are also proving to be the kinds of contracts 
that tend to be awarded locally to business--small businesses 
in public-lands communities. I think that creates another, sort 
of, dual jobs and efficiency opportunity. I think, you know, 
more broadly, we'll have to continue to use service contracts 
in large ways when the removal of materials doesn't make any 
sense. You know, there's some--there'll continue to be some 
need and opportunity to use in-house crews, as they do now, 
often sending their fire--their crews--or will be fighting 
fires, but aren't yet--to do those fuels reduction--all those 
things make a lot of sense.
    Senator Wyden. Thank you, Mr. Chairman.
    Thank you for all the good work that you do, Dr. Moseley.
    Ms. Moseley. Thank you.
    The Chairman. Senator Cantwell.
    Senator Cantwell. Thank you, Mr. Chairman. Thank you for 
having both panels today, but particularly this panel, because 
of the, I think, importance--there are so many issues that each 
of you have already discussed in your testimony today that 
really are about resources and priorities that we wish we would 
have been able to fund in the past. So, now if we're talking 
about stimulus, we should obviously look here to these 
important areas, taking care of our natural resources and 
improving the ecosystem.
    So, Dr. Moseley, I guess I'd start with you. I've been a 
big supporter of the roadless area rule. One of the reasons I 
was a big supporter of codifying that was because I wanted to 
spend more money on the backlog of road maintenance that we 
already had instead of creating new roads. What are your 
thoughts about taking care of that backlog as part of a 
activity of stimulus and creating better--clean water systems, 
other things that are so important for our public lands?
    Ms. Moseley. I think roadswork is really important, for at 
least two reasons, maybe three. One is, we had this--you know, 
the Forest Service--you know, we could go to the moon and back, 
basically, on their roads. A lot of those roads, we don't need 
anymore. In the West, as we--and Pacific Northwest, in 
particular--those roads mean--and they're unused roads--mean 
that we're putting sediment in our streams, we are endangering 
our clean water supplies. So, there's this enormous long-term 
    The short-term opportunity, economic stimulus opportunity, 
is that roadswork, heavy equipment work, backhoe operators, 
excavators, all this kind of work, these are really good jobs, 
and these are really good jobs that go to local people, to 
people in rural communities who used to be making driveways, 
but we're not making driveways anymore; they can go help with 
streams and--stream restoration and road maintenance and 
decommissioning. I think it's an enormous opportunity.
    Senator Cantwell. Do you have a number?
    Ms. Moseley. I think that, you know, in--the number I have 
heard turned around--you know, tossed around, is that the 
Forest Service has something like upwards of 150,000 miles of 
unneeded roads. Obviously, we can't even begin to look at that 
number in the next 2 years. I would defer to experts, that 
aren't me, to get the number of what we could do in the next 2 
years. I don't know. But, I'd be happy to follow up with you, 
if that would be helpful.
    Senator Cantwell. Thank you.
    Mr. Galvin, a similar question as it relates to the 
maintenance issues in our national parks. Obviously, we have 
had big challenges in the Pacific Northwest because of storm 
damage and everything else. You may have covered this in your 
testimony. But, aren't there specific opportunities in dealing 
with some of those? I don't think people realize the economic 
revenue just that Mount Rainier alone generates to the State. 
But, when you have park opening--park openings that have been 
impacted by storm damage, in effect, tourism and tourism 
activity, what about using the stimulus to improve those areas?
    Mr. Galvin. Actually, there's nothing in our proposal 
specifically related to storm damage. The proposal does 
essentially go to facilities that have not been invested in 
adequately over the last 50 years, but there's nothing 
specifically in here about storm damage.
    I would say, since you mentioned the economic impact--
again, that recent press release--parks generate about four 
times as they are appropriated, so that these jobs--these jobs, 
in the sense of projects, you know, include rehabilitation of 
things like the Paradise Lodge, which has--some work has been 
done in, but it's not complete, so that they--I think they--in 
the sense that they refurbish park infrastructure, they help 
with the economic arguments for parks.
    I started my testimony by referring to the CCCs. There are 
many parks in the system that have had no investment since the 
CCC. Senator Bingaman knows Bandolier. I would characterize 
Bandolier as a civilian conservation park. The roads were built 
during the Civilian Conservation Crew era, the buildings were 
all built. It's now a charming historical--historically 
protected landscape, but it needs reinvestment. I would say 
Skyline Drive, has--which is on the list here, is another 
thing, built, by the way, for $29,000 a mile during the 
Depression. You couldn't paint the center stripe down the road 
for $29,000 a mile now. But, what an asset. I mean, I think one 
of the--one of the great arguments for this kind of economic 
stimulus is, it's going to create something that our 
grandchildren are going to enjoy. I mean, if--you can just go 
down Constitution Avenue and look when those buildings were 
built. They're all--you know, the Federal Trade Commission, the 
Archives, all built during the Depression, when we were trying 
to stimulate the economy. So, it's not just stimulating the 
economy that has this long-term--we're creating assets for the 
Nation. I think it's a great argument for this program.
    Senator Cantwell. I would say that there are true capacity 
issues at some of our national parks, where they have continued 
to grow in their economic activity and tourism, but we are 
limited, because we haven't continued to make the upgrades that 
have been necessary.
    So, I thank you for your----
    Mr. Galvin. Absolutely.
    Senator Cantwell. [continuing]. Testimony.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Murkowski, did you have additional questions?
    Senator Murkowski. I don't have anything.
    The Chairman. Let me thank this panel very much. I think 
you've given us good testimony, and we will do our best to see 
that it is considered in whatever winds up being enacted.
    Thank you very much. That concludes our hearing.
    [Whereupon, at 12:10 p.m., the hearing was adjourned.]



                               Appendix I

                   Responses to Additional Questions


       Responses of Kevin Book to Questions From Senator Domenici

    Question 1. This year, Chairman Bingaman and I introduced separate 
pieces of legislation to create a federal bank for clean energy 
projects with the authority to make loans, issue loan guarantees, and 
offer other financial products. As we all know, it is very difficult 
for alternative energy projects to access low-cost, long-term debt 
financing because of the perceived risks associated with new 
technologies. These bills seek to address this hurdle and realize the 
positive energy security, economic competitiveness, and climate change 
benefits of a thriving domestic clean energy industry.
    In the context of the global credit crisis, but also in light of 
the developments at Fannie Mae and Freddie Mac, do you believe that the 
creation of such an entity remains an appropriate federal undertaking 
at this time? In what ways would the difficulties encountered in the 
DOE loan guarantee program be remedied by the approach laid out in 
these Clean Energy Bank bills?
    Answer. Senator Domenici, the notion of a Clean Energy Bank is very 
well-timed to address the very real problems energy companies, 
developers and financial sponsors encounter obtaining loans for new 
projects amid a dramatic slowdown in lending. In fact, loan guarantee 
program under Title XVII of the Energy Policy Act of 2005 was an 
appropriate undertaking even before the onset of the current economic 
crisis. Loan guarantees enable developers of new technologies to source 
capital on favorable terms despite short (or non-existent) operating 
histories and limited (or non-existent) cash flows. Cash for operations 
is necessary for innovative technologies to compete for market share 
with mature, incumbent technologies in capital-intensive sectors like 
high-capacity batteries, clean power and low-emissions liquid fuels.
    Low-cost loans don't just provide an opportunity for new players--
they also improve the prospects that new players will succeed. This is 
because debt service represents a significant portion of the 
``levelized'' cost of energy production (the total financial cost, 
inclusive of interest, fuel and operating costs over the life of the 
asset, divided by the energy produced over the life of the asset).
    In short, access credit gets new players in the game, and cheaper 
credit can make a difference between success and failure at the margin. 
With proper vetting of applicants, the federal government is in a 
position to create value through loan guarantees by lowering marginal 
costs at virtually no additional taxpayer cost beyond program 
administration, an actual ``win-win'' outcome.
    As well conceived as the Title XVII program was, it is not 
altogether clear to me that the Department of Energy represents the 
best natural fit for a project finance mechanism, particularly given 
the exigencies of the moment. Not only do big loans require heightened 
scrutiny by qualified specialists during a downturn, but cash-strapped 
sponsors of clean coal, nuclear power and farm-scale renewable 
generation facilities are likely to be more vulnerable than ever to 
costs incurred through administrative delays.
    Question 2. You testified that ``technologies that cannot survive 
on a long-term basis without ongoing government support can lead to 
inefficient energy use and investment decisions.'' Are there any 
proposals that you've heard here today that fall into this category as 
an unwise use of federal dollars?
    Answer. Clean energy has three challenges to overcome. First, 
transforming matter from one form to another--which is a big part of 
the fuels and power industries--is a messy business. Second, energy is 
a commodity business where small cost differentials can add up to big 
competitive disadvantages at production scale over decades-long project 
lifetimes. Third, economic incentives cannot overcome physical 
realities, no matter how much some policymakers may wish it so, and it 
generally costs more to transform large volumes of matter from one form 
to another while emitting fewer pollutants. As a result, when 
governments subsidize inefficient energy technologies, they can end up 
making large and long-lived mistakes.
    In general, it may be unwise to spend big on energy technologies 
that are too far ahead of their time. I would suggest that the federal 
government might prefer to direct research and development spending 
towards highest-cost technologies and direct explicit subsidies towards 
technologies that are closer to economic parity with incumbent sources. 
High-cost technologies often are high-cost because the related and 
supporting infrastructure may not be sufficiently developed. Or, 
feedstock, fuel or components may be in short supply because the 
industrial value chain is immature. This doesn't get much bang for each 
buck, and piling big demand on small supply tends to only drive prices 
up very quickly (consider recent demand-side price inflation associated 
with corn, polysilicon, wind gearboxes, etc.).
        Response of Kevin Book to Question From Senator Lincoln
    Question 1. I represent a state with a large number of hard-
working, low-to-middle-income families. It concerns me that green 
technology that allows customers to leave less impact on the 
environment, whether it's fuel efficient vehicles or energy saving 
appliances, is often more expensive. For the future stimulus package, 
in what ways can we make sure that low-income families are able to 
access these advanced technologies?
    Answer. Senator Lincoln, one of the cruelest ironies of energy 
technology tends to be that energy users who are the most price 
sensitive tend to be the most vulnerable to price increases and have, 
as a consequence, the least capacity to pay a premium in the short term 
for enduring economic and environmental benefits, especially when fuel 
or power price spikes deplete their disposable income. I think it makes 
sense for the government to assist these families.
    On the other hand, it's not obvious to me that advanced 
technologies are always the best choice in every case. I think it makes 
sense to try to target subsidies towards efficiency changes that 
correspond to energy use patterns.
    Consider the amount of electric power and heating fuel that 
literally goes out the window in a poorly-insulated home. For a low-
income family that is watching every penny and can't afford to spend on 
their home, even relatively modest weatherization retrofits (caulking 
windows, insulating walls, replacing furnace filters) can deliver 
enduring dividends. Moreover, these small savings matter more, at the 
margin, to lower-income households. Would expensive, high-efficiency 
lighting and appliances make a big difference in these homes? Perhaps, 
but I would suggest that most lower-income homes already tend to be 
keenly aware of the benefits associated with turning the lights off and 
turning the thermostat down--economic forces tend to provoke 
conservation behaviors because lower-income families can't afford to be 
    Higher-income families tend to be bigger users of power and fuel 
because they are bigger buyers of appliances and cars and less likely 
to watch every kilowatt-hour and gallon. When was the last time you 
bought a new refrigerator? I suspect, if you're like me, you didn't buy 
one until the last one broke, or unless you moved into a new house. For 
middle-class families, appropriate policies might include subsidies 
that encourage early replacement of inefficient appliances--with a 
proviso that that the old appliances get scrapped. It doesn't help to 
buy a new fridge that's 50% more efficient than the old fridge if the 
old fridge goes into the garage as a beer fridge--that's a 50% 
increase, not a 50% savings. Likewise, programmable thermostats and 
high-efficiency lighting matter more in richer homes that can afford to 
run hotter and keep the lights on more.
    I realize this is somewhat counterintuitive and I want to be clear 
here: I am not suggesting that we should pay more money to rich people 
than we should to poor people. Ultimately, subsidies should generally 
phase out progressively with income or they will just perpetuate 
blameless waste because the government picks up the tab. No, what I am 
suggesting instead is that policy address the problem that makes the 
biggest difference per dollar in energy use patterns, and the 
government shouldn't pay a dollar more than is necessary to spur the 
first investment that yields significant energy efficiency gains.
    Responses of Mark A. Limbaugh to Questions From Senator Domenici

    Question 1. Based on your experience with rural water projects and 
the Bureau's rural water program, please describe the costs associated 
with operating and maintaining these systems. Have project 
beneficiaries been able to pay for their share of the O&M costs 
associated with these projects? Will targeted federal dollars for 
needed O&M work in rural communities result in new jobs--particularly 
since these areas often have limited economic opportunities?
    Answer. Based on my previous experience with rural water projects 
constructed or funded by Reclamation, in general, the costs associated 
with O&M of typical rural water projects (municipal water supply) are 
paid by the project beneficiaries. An exception is for Tribal water 
systems, where the Federal government pays most if not all of the 
Tribal share of annual O&M costs for the system. These arrangements are 
typically established in the project authorizing legislation enacted by 
the Congress. It has been my experience that project beneficiaries have 
been able to pay their share of annual O&M costs of these rural water 
systems. For the most part, this is also true of the traditional 
Reclamation irrigation projects across the West. While it is my 
understanding that rural water systems currently under construction 
still require substantial federal construction dollars (as opposed to 
O&M dollars) to complete these projects, it is my opinion that the 
rural areas of the country served by these water projects would benefit 
from new jobs if additional federal dollars are targeted to fund either 
construction or major O&M activities associated with these projects. 
Funding sources for the construction or extraordinary maintenance of 
water projects (both municipal and irrigation) in rural areas are very 
limited, and the funds needed to accomplish this work, along with the 
jobs associated with such projects, are not likely to materialize 
without federal funding and the subsequent long-term financing of any 
required repayment of funds by non-federal entities.
    Question 2. Please describe the impact the Title XVI program has 
had on developing water resources in water scarce regions. Are you 
aware of any studies that have addressed the impact of these projects 
in encouraging new economic development in these regions?
    Answer. Title XVI projects that manage, reuse, and recycle water 
that would normally flow out of the basin (usually to the ocean or 
other terminal water body) and/or is not of usable quality have 
increased usable water supplies in areas of the West where conditions 
warrant such projects, such as where the cost of additional water 
supplies are extremely high or unavailable at any price. These projects 
have typically been developed in basins where water supplies can be 
completely exhausted without harming other water rights, such as in 
coastal areas like Southern California that are dependent on water 
supplies imported from other basins, but there are other Title XVI 
projects that better manage and treat impaired source waters, such as 
groundwater sources, to increase potable water supplies in areas of 
water scarcity. Most of these projects depend on the federal 
construction grant funding under the Title XVI program in order to make 
these new water supplies an affordable option.
    I am aware of one study on the economic impact of funding Title XVI 
projects. The House Committee on Natural Resources Subcommittee on 
Water and Power recently requested such a study from the Congressional 
Research Service. On November 4, 2008, Linda Levine, Specialist in 
Labor Economics at the Domestic Social Policy Division of CRS 
transmitted a study entitled ``The Number of Jobs that Might Be Created 
by Appropriating $300 Million for the Title XVI Water Reuse Program'' 
to Subcommittee staff. The report establishes that jobs would be 
created if total spending increased for Title XVI water reuse projects; 
however, the levels of expected job creation differ depending on the 
model and assumptions used in the analysis. One shortfall in this 
study, in my opinion, is that it only focuses on the short-term 
economic impacts of an immediate influx of funding to construct these 
projects and does not mention or identify the long-term economic 
benefits of producing new water supplies through Title XVI projects in 
water short areas, such as creating the water supply certainty needed 
for future economic investment to occur, thereby creating a more stable 
economy in the longer term. I have taken the liberty of attaching this 
CRS report to these answers for your review.
    Question 3a. Please describe the difference between the loan 
guarantee program offered through the Department of Agriculture and the 
recently authorized loan guarantee program within the Bureau of 
Reclamation. Should these two loan guarantee programs be implemented 
    Answer. The Department of Agriculture loan guarantee program that I 
am familiar with is under the Rural Utilities Service (RUS), and it is 
my understanding that it has functioned successfully for many years. 
This program provides loan guarantees to banks loaning funds to 
eligible public works projects for rural communities across the 
country. The calculated federal subsidy for these guarantees is equal 
to the estimated default rate on these loans, which is very small (1%-
2% of the loan principal in most cases) and in the past has been funded 
through up-front fees paid by the borrowers at loan origination. These 
payments make the program ``appropriation-neutral'' to the Federal 
government. The problem is that the RUS program has only been available 
to rural municipal and industrial water supply systems, as well as 
water and wastewater treatment facilities in rural areas, and not to 
federal irrigation projects or to the non-federal project beneficiaries 
in need of additional financing tools. Congress recently authorized the 
Bureau of Reclamation to develop a loan guarantee program, and 
encouraged the agency to work with the USDA-RUS in administering the 
program in a similar fashion under an interagency agreement. These two 
programs should not function much differently from each other, in my 
opinion, yet the Office of Management and Budget (OMB) considers the 
Reclamation program to be different, mostly due to a misinterpretation 
of federal fiscal policy. OMB currently determines that if Reclamation 
guarantees a loan to a non-federal project beneficiary to finance the 
non-federal share of major rehabilitation of federally-owned water 
infrastructure, the federal subsidy is calculated at 100% of the 
guarantee and not the estimated default rate (typically calculated at 
1%-2% of the loan). This is a misinterpretation of the policy, and is 
due to OMB considering this financing as ``third-party financing'' of 
an ``inherently federal obligation''. This interpretation is incorrect 
due to the nature of the ``arms-length'' contracts between Reclamation 
and non-federal project beneficiaries to pay for their non-federal 
share of any O&M and replacement costs associated with operating 
federally-owned water infrastructure. I believe the mischaracterization 
of ``third-party financing'' by OMB is now holding up Reclamation's 
rulemaking for the program, and delaying loan guarantees to finance 
even non-federal infrastructure eligible under the new authorities 
provided by Congress. Further Congressional action may be required to 
correct this problem and complete the development of the program.
    Question 3b. Has the loan guarantee program, within the Department 
of Agriculture, increased economic development? If yes, what types of 
projects have been pursued using the program?
    Answer. Yes, the USDA--Rural Utilities Service (RUS) loan guarantee 
program, in my opinion, has spurred economic development in many rural 
areas of the country. Typically, there are few sources of funding for 
the major construction of public works water infrastructure--projects 
that are absolutely necessary to produce economic development in rural 
communities--and today there are even fewer sources of public 
financing, in my opinion mostly due to the credit crisis and lack of 
liquidity in the municipal bond markets. RUS loan guarantees, along 
with the grants and direct loans also available under the program, have 
provided the critical funding and financing necessary to build these 
projects. The types of projects pursued in the past under the RUS loan 
guarantee program, as I recall, have included wastewater treatment 
plants, rural municipal and industrial (M&I) raw water treatment and 
supply projects, and other basic infrastructure projects deemed 
eligible for program funding and benefits. In the case of Reclamation 
projects, a Reclamation loan guarantee program would finance the non-
federal share of the rehabilitation of aging water infrastructure 
either owned by the federal government or associated with a Reclamation 
project. They would also be available to finance non-federal share of 
rural water projects under the new Rural Water Program within 
Reclamation. Usually, rehabilitating aging federal facilities involves 
major construction activities that would provide additional jobs and 
economic activities that would help rural communities in this economic 
downturn, but also would provide much needed certainty for future water 
supplies that are necessary for continued economic recovery and growth 
within these communities.
    Question 4. Within your testimony you indicate other innovative 
financing tools that may further investment in new water supplies. 
Please describe these financing tools, and how quickly they could be 
used to further investment.
    Answer. There are several financing tools that could spur further 
investment in rehabilitating aging water infrastructure or create new 
water supplies through infrastructure construction, but are currently 
unavailable to either Reclamation project beneficiaries or other non-
federal water providers.
    The first is direct federal loans--Reclamation currently has 
authority to provide direct no-interest loans for rehabilitation and 
betterment of federal water facilities or to small water reclamation 
projects, but has mothballed these programs and does not provide 
funding for these loans as a matter of policy. If Reclamation were 
appropriated funds under an economic stimulus bill, the agency does not 
have the direction or authority to provide a simple repayment of 
reimbursable costs of project rehabilitation or extraordinary 
maintenance over a reasonable period of time with interest. Such direct 
financing would eliminate the federal subsidy by charging Treasury 
interest rates and allow federally appropriated funds to be expended on 
priority rehabilitation projects without the need for the non-federal 
component to be repaid in the same year of expenditure, as is currently 
the case for these projects. Direct loans are the simplest financing 
instrument, but the funding must be fully appropriated in the year 
expended and new authority must be enacted to allow Reclamation to 
charge treasury-rate interest. For your information, this authority is 
provided in canal safety legislation in the Omnibus Public Lands bill 
currently before the Congress.
    The second financing tool is a federal loan guarantee through a 
Reclamation loan guarantee program. As discussed in my answers above, 
this program would leverage federal appropriated dollars to provide 
guarantees to private lenders in financing the non-federal share of the 
cost to rehabilitate existing aging water supply infrastructure, or 
build new water supply infrastructure associated with a Reclamation 
project. Typically the private lending institutions filter out the bad 
credit risks, reducing the default rate on these loans. Only the 
federal subsidy is appropriated by the Congress, and is calculated 
through establishing the expected default rate on these types of loans 
and appropriating that amount into a fund to cover any possible 
defaults on the guaranteed portion of the loans--usually a small 
percentage (1-2%) of the total loan guaranteed.
    Another tool could include the combination of a loan guarantee and 
a municipal tax-exempt bond. Currently, the Federal government provides 
no guarantee on municipal bonds, nor do they have authority to 
guarantee such tax-exempt bonds. A Federal guarantee would attract 
private investors by offering a federally guaranteed tax-exempt 
municipal bond, an approach that would, in my opinion, substantially 
reduce the interest rate, reduce risk, and leverage a small federal 
investment in attracting additional private capital to finance water 
infrastructure improvement projects. This approach would require 
appropriations for only the subsidy rate of the guarantee, and directed 
spending to fund the income tax credit of the municipal bond, possibly 
requiring an increase in municipal bonding authority limits. In 
addition, new legislative authority would have to be provided by the 
Congress for this tool to be developed.
    Finally, another financing tool would be a tax-credit bond. This 
financing tool is currently used to fund and finance renewable energy 
projects, but has yet to be made available to finance water 
infrastructure. This financing tool works as a no-interest loan to the 
borrower, but the investor receives federal income tax credits as 
interest on the funds invested. The federal subsidy is the tax credits 
offered to the investor, which is usually a small percentage of the 
total funding provided, depending on the rate of return on the private 
investment, and would not require an appropriation, but could be 
determined to be directed spending and subject to PAYGO rules. New 
legislative authority would need to be provided by the Congress for 
this tool to be developed, although I believe pertinent legislation was 
introduced in the 110th Congress to create such an instrument.
    In summary, direct loans would be the simplest and quickest way to 
fund and finance water infrastructure improvements, but would require a 
100% appropriation of the dollars to fund the loan as well as enacting 
new authority to allow Reclamation to charge interest on the loan. The 
last three innovative financing tools leverage federal dollars to 
attract private capital to fund and finance water infrastructure, 
requiring federal appropriations or directed spending equal to only a 
fraction of the total investment financed. But, these tools are not 
currently available, either as a matter of policy or lack of 
Congressional authorizations, and it could be several months to several 
years before these financing tools could be offered to water providers 
in the future.
   Responses of Cassandra Moseley to Questions From Senator Domenici

    As I look at a crash program to provide economic stimulus in a 
timely manner, and read your testimony, I am wondering how it can be 
accomplished if all the federal land management environmental laws and 
procedures, as well as the labor and worker safety laws, are strictly 
adhered to.
    Question 1. Given the past history of enforcement by the federal 
land management agencies of these labor and worker protection laws, and 
the time it takes them to make changes, is there any work that could 
actually produce pay checks to a large number of employees within the 
two year time-frame suggested by President-elect Obama?
    Answer. The enforcement of worker protections laws has certainly 
been a long-standing problem on public lands, particularly for workers 
performing labor-intensive activities such as tree planting, hand 
thinning, brushing, and the like. The conditions of these workers need 
on-going attention by Congress, the land management agencies, and the 
Department of Labor. At the same time, workers performing other types 
of restoration activities, especially those involving technical or 
equipment-intensive activities (e.g. road maintenance and 
decommissioning, culvert replacement, facilities improvements, 
engineering, biological survey) do not seem to have faced the same 
sorts of abuses.
    Although there is much work to still be done to improve the 
conditions of workers performing labor-intensive activities, the 
Department of Labor and the Forest Service have increased coordination, 
inspections, and enforcement actions over the past couple of years. To 
ensure that all workers performing restoration and maintenance are 
treated fairly and have safe healthy work environments, the Department 
of Labor and the land management agencies will need resources and 
oversight to increase inspection and enforcement. For the Forest 
Service and Department of Labor, this is matter of expanding existing 
efforts. The Bureau of Land Management and other Interior agencies, 
which have not increased inspections with Department of Labor, will 
need to coordinate with the Department of Labor and adopt procedures 
similar to the Forest Service.
    Given the groundwork that the Forest Service and Department of 
Labor have laid over the past few years as well as the large number of 
restoration activities where workers abuse does not seem to be a major 
problem, an economic stimulus package that includes a wide variety of 
activities as well as resources for labor law enforcement can create 
quality jobs in the short term.
    The agencies could further improve job quality by using more 
effective evaluation criteria for awarding best value contracts, so as 
to reward contractors that perform high quality work, have a track 
record of treating their workers well, and provide local jobs in 
particularly distressed rural communities. Congress could assist by 
providing explicit authority to consider benefit to local and 
economically distressed communities in the evaluation and award of 
economic stimulus contracts, much as it has with the National Fire Plan 
and other restoration-related appropriations over the last several 
    Question 2. A number of environmental groups have submitted a 
document to President-elect Obama's transition team calling for the 
undoing of the forest planning and Categorical Exclusion regulations, 
many of the Healthy Forest Restoration Act regulations, and for ending 
all road-building on federal lands. The Forest Service tells us that 
30% of the million to 1.5 million acres of projects they can quickly 
have NEPA-ready would rely on categorical exclusions and that they 
really only have 57,500 acres of projects that already have signed EA's 
    If they prevail in their request, how might it complicate getting 
some of the work you are calling for in your testimony accomplished in 
the next year or two?
    If the next Administration is convinced by the requests of the 
environmental groups to rescind the Categorical Exclusion regulations I 
think you would agree it would complicate getting much of the work you 
are calling for in your testimony accomplished in the next year or two.
    Should or should not Congress address this potential problem when 
it writes the economic stimulus bill? And if so, how should it address 
this potential problem?
    Answer. As you suggest, the Forest Service has made use of NEPA's 
categorical exclusions and the Health Forest Restoration Act 
authorities to prepare fire hazard reduction projects. In the short 
term, eliminating these strategies could present a challenge for the 
Forest Service in its efforts to implement fire hazard reduction 
    I would not recommend, however, that Congress address this 
potential problem by waiving part or all of NEPA. Doing so would create 
conflict and reduce trust in the land management agencies which would 
only serve to slow implementation. The keys to getting projects done 
expeditiously are: collaboration with locals and stakeholders, trust, 
and transparency in agency decision-making. Consequently, I would 
recommend that the stimulus package support land management units that 
have engaged in collaborative processes that have built trust and 
reached agreement on restoration activities. In addition, some of the 
stimulus funds could be allocated to the Resource Advisory Committees 
authorized as part of the Secure Rural Schools and Community Self-
Determination Act. Many of these committees have found themselves with 
far more NEPA-ready restoration projects than they can fund on public 
and adjacent private lands.
    Instead of attempting to address the conflicts and challenges 
associated with NEPA in the stimulus package, I would recommend that 
Congress, the new Administration, and wide range of stakeholders engage 
in a larger-scale consideration about environmental analysis, NEPA, and 
its implementation. NEPA was created in an era when we believed that: 
we could fully understand environmental impacts prior to taking action; 
and our actions would degrade, rather than improve, the environment. 
When we are trying to restore ecosystems function, we need a system of 
environmental analysis that acknowledges environmental benefits and the 
environmental and social costs of inaction, discloses known impacts, 
incorporates learning and experimentation, and gets better value for 
money than the current processes.
    Question 3. Many of the types of projects you suggested could be 
included in the natural resource section of the economic stimulus 
legislation are little more than traditional woods-jobs that have 
existed for decades in the land management and timber management 
programs. Could you explain why a landline surveying job would be a 
``Green'' job under the economic stimulus, while it once was just 
considered part of the forestry profession?
    As you suggest, many of the types of jobs associated with 
sustainable forest and watershed restoration and maintenance have 
existed for decades. However, these jobs need to be reinvented to 
support a sustainable economy, just as in other sectors of the economy. 
There have long been manufacturing jobs; a green economy will still 
have manufacturing jobs, but those jobs will manufacture different 
kinds of products in different ways. Similarly, forest and watershed 
management jobs are still needed; however, they need to be directed at 
a different range of activities and performed in different ways.
    This economic stimulus package presents an opportunity to help 
create natural resource management for the 21st century and stem the 
loss of resource management capacity in rural communities. By focusing 
part of the economic stimulus on forest and watershed restoration, we 
can build on existing skills of forest workers and technicians, 
loggers, and heavy equipment operators and allows them to focus these 
skills on natural resource restoration and maintenance. With the long 
decline of the timber industry in the American West and the under 
funding of the land management agencies over the last decade, we have 
lost and are continuing to lose the business and workforce capacity to 
manage our lands. If we are going to take care of our forests, 
grasslands, and watersheds long term, it is critical that we not lose 
more of this capacity.
    While boundary surveying may appears mundane, it is crucial at this 
time when fire and other ecological processes knows no bounds, but land 
management activities do. When ownership boundaries are unknown, 
agencies do not know where to put their treatments and when to expect 
the landowners to pay for treatments. There are a number of other 
technical jobs such as engineering, wildlife, plant, and archeological 
surveying and monitoring that are also of critical importance to the 
restoration and maintenance of our public lands.
    Question 4. Could you provide the Committee with a good working 
definition of what a ``Green Job'' is?
    Answer. Green jobs are high quality jobs that improve environmental 
quality by restoring ecosystem function, reducing carbon emissions, or 
otherwise reduce our impact on the environment while increasing social 
equity. In the context of natural resource management and energy 
conservation and development, these jobs are wide ranging, and include 
all sorts of ecosystem restoration and sustainable natural resource 
management as well as those involved in energy conservation, 
alternative energy development, and carbon emissions reductions. A high 
quality job provides family supporting wages, long duration employment, 
training and a career path, safe and healthy workplace, and the 
opportunity to work near where one lives.
     Response of Cassandra Moseley to Question From Senator Lincoln
    Question 1. In your testimony, I agree with your assessment that we 
haven't seen much in the news about how the economic crisis is 
impacting rural America. What role do you see rural America playing in 
a shift to a green energy economy that could help boost our economy?
    Answer. Rural America must play a central role in building a green 
economy because rural communities are the stewards of our natural 
resources, farms, rangelands, and energy sources. Urban and suburban 
America has a major role to play in reducing consumption and creating 
systems that make efficient use of goods and services. But, our 
nation's ecological, social, and economic sustainability depends on 
healthy rural communities, businesses, and workers. Rural communities 
must be central to managing landscapes and watersheds in ways that 
increase ecological resilience while offering a sustainable supply of 
natural resources, energy, and food.
    Distressed rural communities are limited in their ability to 
contribute productively to our nation's economy and their economic 
desperation strains forests, soils, and rivers. We need to redefine our 
economic systems so that rural communities can have increased capacity 
to steward our nation's natural resources. Doing so requires that we 
retain and develop green rural businesses that enable workers to 
support their families and communities.
    In the area of green energy more specifically, with support, rural 
America can: (1) come to produce food and natural resources in ways 
that use less energy; (2) increase the use of renewable energy in the 
production of food and natural resources; and (3) contribute to the 
nation's supply of renewable energy. It is easy to neglect energy 
efficiency in rural America because of the dispersed nature of rural 
populations. But, it is no less critical in rural areas. This would not 
only contribute to reducing the nation's overall energy consumption, 
but also create much-needed cost savings for struggling rural families 
and businesses. Because rural America is so diverse, the strategies to 
reduce energy consumption and increase renewable energy production will 
need to vary considerably. In some places, for example, local energy 
needs can be met with wind turbines or solar panels while in other 
places, micro-hydro, woody biomass, or other strategies will make 
better sense.
    Thank you for the opportunity to answer these questions. Please 
feel free to contact me if you would like additional information.
    Responses of Steve G. Hauser to Questions From Senator Domenici

    Question 1. You testified that there are a number of Smart Grid 
projects already in development. How will investment in the Smart Grid 
by the federal government lead to more jobs in the near term? What 
types of jobs are associated with Smart Grid technology and deployment? 
Are you able to find skilled workers or must we look at job-training?
    Answer. Indeed, various utilities around the country are developing 
and beginning to implement smart grid projects. A substantial amount of 
Federal funding in 2009 will create jobs by incentivizing more rapid 
deployment of smart grid systems. Attached is a report recently 
released by The GridWise Alliance describing the potential impact of 
federal smart grid investments. It outlines both the number and types 
jobs that will be created.
    Question 2. In the 2007 energy bill, we directed the federal 
agencies to develop a Smart Grid interoperability framework that 
includes protocols and model standards. Interoperability standards will 
allow different devices from different vendors to exchange information. 
These standards are still under development.
    Given that we do not yet have this interoperability framework in 
place, how do we know that any Smart Grid funding won't result in 
obsolete equipment in a few years? Do you have any specific ideas or 
approaches that would help to support the integration of new equipment 
in the short-term?
    Answer. Standards and protocols for interoperability continuously 
evolve as necessitated by market development, innovation and technology 
changes. Standards typically follow markets and don't drive them. Both 
utilities and vendors are very careful not to select technologies and 
approaches that can rapidly become obsolete; demanding the market to 
create standards as appropriate to ensure long term value. The federal 
government should provide additional funding for DOE and NIST to 
accelerate their efforts to monitor these needs, identify gaps and 
facilitate quicker refinements and adoption of any framework and 
standards required.
    Question 3. Decisions about Smart Grid investments, like most 
decisions regarding electricity infrastructure, are overseen by state 
electricity regulators--which can be a time consuming process. What 
assurances do we have that any Smart Grid investments in the stimulus 
package will actually occur in the near-term, meaning in the next 12 to 
24 months?
    Answer. While state regulatory processes by nature are public 
processes requiring time for deliberation, regulators can also move 
quickly when needed on single issues. Many states have already 
authorized smart grid projects of varying scope and others are actively 
reviewing and considering similar investments. Both utilities and 
regulators in many states are highly engaged and motivated to respond 
appropriately if federal investments are made in the near term.
    Question 4. Has any utility made the business case for Smart Grid 
investment? If so, under what conditions and what technologies were 
    Answer. Yes, dozens of utilities have developed very specific 
business cases for implementing various smart grid strategies. These 
are typically internal documents, not publically available. The types 
of technologies included vary widely based on local factors such as 
marginal capacity price, energy rates, age of existing equipment, etc. 
The most compelling business cases include a comprehensive suite of 
software and hardware technologies addressing multiple benefits for 
both utilities and consumers. The Edison Electric Institute is 
currently preparing a report on the business case for smart grid 
investments that will be publically available in a few weeks.
    Question 5. Regional demonstrations were an important aspect of the 
2007 EISA legislation. Can you describe your vision for how these 
demonstration projects would take shape, and the resources necessary to 
bring them to fruition? Would these demonstration projects focus on 
renewables such as wind? HEV integration? What would you identify, in 
order of priority, as the critical technology aspects that would need 
to be demonstrated?
    Answer. These demonstration projects should be large enough in size 
to address and answer some of the lingering questions about scale. The 
projects should also be broad enough in scope to understand the 
potential benefits and impacts of the synergies among multiple smart 
grid technologies including demand response, energy efficiency, 
distributed storage, distributed renewable projects, electrified 
transportation, etc. The primary goal of these regional demonstration 
projects is to analyze and quantify performance metrics and best 
practices that can be generalized to the rest of the country. While 
every project will have unique conditions, constraints, and solutions, 
the Department of Energy must structure the projects in a way that the 
results can be clearly understood and used in creating a shared set of 
goals and metrics for successful smart grid deployment. Ideally, all 
proven technologies would be implemented in hundreds and thousands of 
end points at a scope and scale to build a foundation of data and 
information for future implementations.

      Response of Steve G. Hauser to Question From Senator Lincoln

    Question 1. I represent a state with a large number of hard-
working, low-to-middle-income families. It concerns me that green 
technology that allows customers to leave less impact on the 
environment, whether it's fuel efficient vehicles or energy saving 
appliances, is often more expensive. For the future stimulus package, 
in what ways can we make sure that low-income families are able to 
access these advanced technologies?
    Answer. In a free market economy, the price and cost to consumers 
often is determined by a variety of both rational and irrational 
factors. Green technologies are often more expensive because they are 
produced in smaller quantities. As markets expand the cost/price can 
and often does come down. Solar PV is an example of a technology that 
is now being produced in large enough quantities that cost/prices are 
coming down. As more and more fuel efficient vehicles are produced, the 
cost/price is likely to come down as well. Deploying a smart grid gives 
us the opportunity to give all consumers the appropriate tools for 
understanding their energy needs and managing them more effectively; 
resulting in both less energy used and less cost to the consumer. 
Specifically for low income families, one could consider offering both 
low-cost, long term financing and ``free'' electricity to those 
consumers who have a qualified smart grid system in their home and a 
qualified electric vehicle. The federal government should also actively 
educate these consumers and provide simple tools for them to make 
better energy decisions.
      Responses of Denis Galvin to Questions From Senator Domenici

    Question 1. During the past 6-8 years, we've been told repeatedly 
that the National Park Service faces a major maintenance backlog. A lot 
has been done during that time, but what are the highest priorities 
that remain for major projects in national parks that can be completed 
in the next 24 months if funds are made available? Will these projects 
face legal challenges on environmental issues?
    Answer. The projects put forth as part of the stimulus initiative 
are drawn from an information system that monitors the condition of the 
infrastructure of the national park system. The Facilities Management 
Software System (FMSS) covers all the assets in the system, providing 
them with a Facility Condition Index (FCI). It is that system that 
produces the backlog figure you refer to.
    From that total inventory the service develops priority lists for 
maintenance and construction programs that cover anticipated programs 
for the near future, approximately a five year period.
    The projects presented for the stimulus package have passed an 
additional test; it includes only those projects achievable in a two 
year period and free from a reasonable expectation that they could be 
challenged on any grounds, environmental or otherwise.
    Question 2. Looking beyond bricks and mortar, what conservation 
programs would you recommend to enhance our national parks for future 
    Answer. There are many highly deserving conservation programs that 
have been sitting on the shelf, awaiting the time that funds will come 
available. Top among them is the continuation of the Natural Resource 
Challenge that elevated the capacity of the agency to analyze, track 
and manage natural resource conditions in the parks. The work is not 
complete and must be viewed as a very high priority if the agency is to 
continue to build its capacity to do its fundamental work of conserving 
the parks for future generations, and interpreting that mission to the 
visiting public. No less important is the imperative to launch a 
complimentary Cultural Resource Challenge. On a different scale, 
additional vital conservation activities include exotic animal and 
plant management, and a renewed investment in agency-centralized basic 

       Responses of Denis Galvin to Questions From Senator Akaka

    Hawaii has several National Parks located on the coastline. These 
parks contain many structures and artifacts with much ancestral 
heritage and cultural significance.
    Question 1. I am concerned about global warming, and the impact of 
rising sea levels on Parks adjacent to coasts. National Parks in other 
states may have different impacts because of climate change. Does the 
Park Service have a program that looks at the impact of climate change 
on its natural resources? Will protecting Park resources from the 
future impacts of global warming be a priority for restoration and 
repair projects?
    Answer. According to the National Park Service, building the 
capacity to respond to climate change involves identifying, 
prioritizing, and implementing a range of short and long term 
objectives. The initial approach is to define the overarching goals of 
the program and to create a series of Working Groups designed to 
explore and articulate specific needs and issues.
Climate Change Response Program Goals
   Develop and implement a coordinated strategy for 
        understanding, communicating, and coping with the effects of 
        climate change to park natural and cultural resources, resource 
        values, and infrastructure
   Collaborate with partners in other agencies and entities, 
        and across NPS programs, to build understanding and coordinate 
        landscape-scale adaptation and mitigation actions
Climate Change Response Working Groups
    Six Working Groups have been created to foster communication, 
explore the needs and issues of parks, and begin to define both 
servicewide and park level strategies for moving forward on this 
critical issue. The six groups are: 1) Law & Policy, 2) Planning, 3) 
Science, 4) Resource Stewardship, 5) Greenhouse Gas Mitigation & 
Sustainable Operations, and 6) Communication.
    Representatives from parks, regions and national programs are 
participating in the Working Groups, which are outlined in more detail 
in the documents attached to this response. Climate change will impact 
all operations in the NPS and the interdisciplinary structure of the 
Working Groups is meant to encourage collaboration and leadership at 
all levels of the organization. The ideas that emerge from this process 
will be brought together to form a Climate Change Response Strategy, 
the implementation of which will be guided by an intra-agency Steering 
    Background papers describing NPS's climate change response are 
    * Documents have been retained in committee files.
    Question 2. I am pleased that you cited the ``museum collections 
backlog'' that exists at many of our parks, of which you estimate 56 
million items remain to be catalogued. Because they have not been 
appropriately accounted for, these irreplaceable artifacts are in 
danger of being misplaced and forgotten forever.
    I am also concerned by the challenges that Parks have in preserving 
and maintaining these pieces of historical significance. Restoring 
cultural and historical items, structures, and artifacts must be done 
properly and accurately by skilled conservators. The meticulous work is 
performed carefully and often slowly to ensure accuracy. The materials 
used must be appropriate for the timepiece that is being restored and 
withstand environmental factors to last many more years. These factors 
make restoration and repair very expensive and unaffordable for many of 
the Parks. As a result, repairs are either deferred indefinitely, or 
done piecemeal using substandard material. In your opinion, can we 
continue to defer restoring these artifacts and historical structures? 
Shouldn't preserving these legacies for future generations be a 
    Answer. The preservation of our cultural legacy is not simply a 
priority, but a mandate established by Congress that the Park Service 
must fulfill. Unfortunately, the quality of cultural resource 
preservation in our national parks has suffered for decades from acute 
staffing and funding shortfalls, which have burdened the Park Service 
with both a burgeoning museum collections backlog and a growing list of 
deferred cultural resource preservation needs. Both of these combine to 
create a very real and present danger to the long term well being of 
the artifacts that constitute the very fabric our national heritage. 
Deferring the restoration of these artifacts and historic structures is 
not a viable option if we intend to support the Park Service's mission, 
as expressed in the Organic Act of 1916, to ``conserve the scenery and 
the natural and historic objects . . . by such means as will leave them 
unimpaired for future generations.''
    According to a report released in October 2008 by the National 
Academy of Public Administration (NAPA), 2,811 historic structures in 
the National Park System are listed as being in ``poor'' condition. A 
structure is regarded as being in poor condition when significant 
features no longer perform their intended purpose, are altogether 
missing, or when the structure shows signs of imminent failure or has 
significant damage or deterioration over 25 percent (or more) of its 
surface, fabric, or framework. The total price tag for the deferred 
maintenance backlog on historic structures in national parks exceeds 
$1.9 billion.\1\ This is approximately 22 percent of the overall $8.7 
billion maintenance backlog for national parks.
    \1\ National Academy of Public Administrators: ``Saving Our 
History: A Review of National Park Cultural Resource Programs'' 
(October 2008) p. 45
    Included in the backlog are small structures such as the Sweeney 
Prizery at Appomattox Courthouse in Virginia. A one story loft built in 
the 1790s the Prizery served as both a residence and storage place for 
tobacco, and therefore, should have a role to play in assisting the 
Park Service in recreating the look and feel of the 19th century 
village that served as the surrender site for the Army of Northern 
Virginia in April 1865. Instead, the structure has been stabilized and 
``mothballed'' since 1975.
    We might count ourselves and our parks lucky if the maintenance 
backlog for historic structures was comprised only of tobacco barns. 
Unfortunately, the list includes more iconic structures such as 
Independence Hall Tower in Philadelphia. The current tower, constructed 
in 1828 (to replace an earlier version built in the 1750s) is a prime 
example of a significant historic structure ``at risk.'' Independence 
Hall Tower suffers from a host of preservation related maladies 
including fungal infestation, cracking of the clock face, and moisture 
infiltration, all of which combine to create a significant loss of 
structural integrity.
    NAPA estimates that Independence Hall Tower requires major cyclical 
maintenance once every ten years, but concludes that the last full 
restoration effort took place in 1993. The Park Service has determined 
that the total cost of rehabilitating the tower is $3.7 million. The 
agency has budgeted $2.5 million towards that project for FY 2011, and 
initiated a survey to determine the extent of the damage, but time has 
never been an ally in the fight to preserve historic structures.
    The longer it takes to begin stabilizing and restoration work on 
Independence Hall Tower, the greater the likelihood that more of the 
historic fabric will be lost. This will, turn, drive up the cost of 
preserving the tower, and lead to more projects being placed on the 
deferred maintenance backlog. In the meantime, NAPA reports that pieces 
of decorative wooden trim have already begun peeling off from the 
structure and plummeting down into Independence Square.
    For its part, the Park Service is addressing the troubling state of 
historic structures through goals and performance measures. At the end 
of FY 2007, 53.4 percent of NPS structures were in ``good'' condition. 
The NPS Government Performance & Results Act (GPRA) goal for FY 2012 
would raise that number to 56 percent. The Park Service also intends to 
raise the percentage of historic and prehistoric structures on the List 
of Classified Structures (LCS) from 80 to 100 percent by FY 2012.\2\
    \2\ Saving Our History p.31
    What's telling, however, is that the Park Service goal for the 
physical condition of all its historic buildings, an average measured 
by the Facilities Condition Index (FCI), will remain the same, at 0.21 
in FY 2012, as it is today. According to NAPA, FCI ratings of less than 
.10 signify a structure in ``good'' condition, while a rating of 
.11-.14 equals ``fair'' condition, and anything in the in the range 
between .15 and .49 is regarded as being in ``poor'' condition. 
Essentially, the Park Service, mindful of its limited resources, has 
determined that it can make no substantial improvement to the overall 
physical condition of the historic buildings in the National Park 
System over the course of the next five years.
    When park managers hedge performance and accountability measures in 
this fashion, they do so because their vision of the future for 
cultural resource preservation remains bleak. No one, in any 
profession, likes setting themselves up for failure. Inadequate budgets 
may make this decision practical, but we should never regard it as 
    The preservation of our cultural legacy also depends upon the 
ability of the Park Service to reduce its museum collections backlog. 
Simply put, the job of cultural resource preservation is made much more 
difficult (if not impossible) when parks cannot accurately determine 
what artifacts are in their collections. The 56 million uncatalogued 
items that make up the NPS backlog have not been documented and cannot 
be retrieved. And when artifacts and papers go unprocessed or remain 
inaccessible, they become useless.
    Such is the case at the Thomas Edison National Historic Site in New 
Jersey's, where the inventor's personal files from the 1920s until his 
death in 1931, have not yet been processed. Although Edison remains a 
widely recognized icon of American history, little is known of the last 
ten years of his life. The files containing his correspondence, in-
house memos, and letters from the public during his last decade, could 
provide meaningful insights to scholars about Edison's creative process 
and further define his place in American history. But not if they 
remain sequestered in cabinets or storage boxes.
    Over the past six years, researchers from NPCA's Center for State 
of the Parks (CSOTP) have examined the condition of cultural resources 
at a variety of national parks. Their findings confirm those of the 
National Academy of Public Administration and highlight the role of the 
museum collections backlog as a key component in the poor state of 
cultural resource preservation in our national parks. CSOTP research 
has found the following:

   At Grand Canyon National Park, of the 859,473 items in the 
        collection, 42 percent have not yet been catalogued. The park's 
        curator left in 2000 and the position remains lapsed. The park 
        is challenged by a lack of adequate storage space and has no 
        museum management plan.
   At Glacier Bay National Park, 87 percent of the museum and 
        archival collections has yet to be catalogued. Storage space is 
        lacking and although the park does have a full time museum 
        technician and collections manager, the size of the park's 
        collection, as well as additional job responsibilities, have 
        prevented these employees from keeping up with the massive 
   At Hawai'i Volcanoes National Park, 56 percent of its museum 
        and archival collections have not yet been processed. Because 
        of the large backlog, collections are largely inaccessible and 
        finding aids are inaccurate. The park's storage facilities are 
        also inadequate and, as a result, the collections of kappa 
        (fragile, traditional bark clothing) are generally stored in an 
        inappropriate manner that may contribute to their destruction.

    According to NAPA, a number of NPS employees engaged in museum 
management described the collections backlog as problem ``greater than 
recognized.'' NAPA has also concluded, after conducting interviews with 
NPS staff, that the policies, procedures, and standards for museum 
management put in place by the Park Service are ``sound.'' The 
fundamental challenge is that inadequate staffing levels have impeded 
the ability of museum managers to keep pace with their growing 
    The solution to the museum collections backlog is multi-faceted. 
Park superintendents must be held accountable for the condition of 
their facilities and for meeting basic, service-wide preservation and 
protection attainment standards. And the Washington Administrative 
Support Office (WASO) goal of cataloging 5 percent of the backlog each 
year should be far more ambitious. Yet, without adequate funding and 
staffing, the ability of NPS to take control of its museum collections 
backlog will remain elusive, and the uncataloged cultural resources in 
our National Park System will remain this country's best kept secret.
    In conclusion, it is worth reiterating that time has never been an 
ally of historic preservation. The longer we wait to provide the 
resources the Park Service needs to reduce or eliminate the cultural 
resource preservation backlog, the greater the risk of losing 
irreplaceable parts of our shared heritage and national legacy, while 
adding new, more pressing needs to the deferred maintenance list. The 
successful preservation of these resources unimpaired for future 
generations depends upon the steps we take today. The job of ensuring 
the preservation of cultural resources in our national parks must begin 

       Response of Denis Galvin to Question From Senator Lincoln

    Question 1. In your testimony, you state that an economic recovery 
plan in this next administration could provide an opportunity for 
national park facilities to be carbon neutral by 2016 through efforts 
to retrofit existing facilities. I believe that our national park 
system could set a great example in reducing our nation's carbon 
footprint. What do you see as the greatest challenges in achieving this 
    Answer. National Parks want to raise awareness of global warming 
and showcase sustainable solutions like energy conservation, renewable 
power, and clean vehicles. With their ability to engage millions of 
visitors, national parks could play a major role in building support 
for solutions to climate change. NPS has responded by initiating a 
``Climate Friendly Parks'' program which seeks to make parks national 
leaders in the deployment and promotion of clean energy technologies 
and other sustainable practices that can help us combat global warming. 
See www.nps.gov/climatefriendlyparks.
    Unfortunately, due to chronic underfunding, most parks can't afford 
solar panels, energy efficiency upgrades, hybrid vehicles, and new 
visitor outreach programs. If Parks can't lead by example, they'll be 
less effective at influencing public behavior.
    There are a number of proposals for stimulus spending that could 
speed up clean energy investments in the parks, including:

          1. EnergySmartPARKS, a collaboration between U.S. DOE and NPS 
        to bring clean energy technologies to the parks. The program 
        currently is funded on a pilot project basis at $1 million for 
        FY09. NPCA has recommended $100 million in stimulus spending to 
        give this program real impact. www.nps.gov/energy
          2. Net-Zero Energy Visitor Centers, also a collaboration 
        between U.S. DOE and NPS to upgrade over 600 NPS visitor 
        centers with energy efficient and renewable energy technologies 
        so they draw no power from the grid. NPS estimates this program 
        will cost $173 million, and NPCA has also recommended this 
        program as part of the stimulus package. (see attached NPS fact 
    * Document has been retained in committee files.
       Responses of Joe Loper to Questions From Senator Domenici

    Question 1. In your testimony, you've proposed roughly $16 billion 
dollars for energy efficiency projects which you say will create more 
than 70,000 jobs over the next 2 years. Will your proposal also serve 
to displace existing jobs?
    Answer. Our job creation estimates are based on a study conducted 
by the American Council for an Energy Efficient Economy (ACEEE) and 
reflect direct gross jobs created by investment in energy efficiency. 
Most studies conclude that investing in energy efficiency helps create 
more domestic jobs than investing in the energy supply sector does. The 
ACEEE study estimates that the job creation ratio of investments in 
energy efficiency to the supply sector is 3:1.\1\ A Center for American 
Progress study, which takes into account direct, indirect and induced 
job creation impacts of investments, estimates that their clean energy 
recovery package would create four times as many jobs as investment in 
the oil industry would. \2\
    \1\ American Council for an Energy Efficient Economy, Karen 
Ehrhardt-Martinez and John A. ``Skip'' Laitner, The Size of the U.S. 
Energy Efficiency Market: Generating a More Complete Picture, May 
    \2\ Center for American Progress, University of Massachusetts-
Amherst, Robert Pollin et al., Green Recovery: A Program to Create Good 
Jobs and Start Building a Low-Carbon Economy, September 2008 http://
    Another important impact of the energy efficiency investments is 
the reduction in demand for energy which would likely result in 
decreased employment levels in the supply sector compared to business 
as usual. However, spending directed away from energy will likely be 
channeled into other sectors in the economy, creating and supporting 
further jobs.
    Moreover, we expect that a substantial portion of these new jobs 
will be created in the construction sector which recently experienced 
considerable job losses. Coupled with tailored training programs, the 
new and expanded energy efficiency programs would provide employment 
opportunities for these experienced workers at a similar capacity to 
their former positions.
    Question 2. You noted in your testimony that significant barriers 
to energy efficiency must still be overcome. How, then, do you 
penetrate the existing home market? In these troubled economic times, 
people are more interested in holding onto some cash, rather than 
having their windows replaced, increasing their attic insulation or 
replacing a 10 year old 80% efficiency furnace with a 90% one.
    Answer. Many of the policies we propose and the programs that we 
support further funding for aim to overcome these barriers. 
Weatherization Assistance Program (WAP), for example, provides lower 
income families free or low-cost energy efficiency services, energy 
efficiency grants to public buildings and schools would help bear the 
cost of energy efficiency projects and making the federal tax credit 
for manufacturers of high-efficiency appliances refundable for 2 years 
would help decrease the cost of highly efficient appliances. Increased 
government spending on energy efficiency RD&D would also help decrease 
the cost of new, efficient technologies.
    Question 3. In creating a large-scale economic stimulus with 
``energy as a cornerstone,'' what programs have the potential to 
substantially shift the economy?
    Answer. In my testimony, I have presented a set of recommendations 
which we believe have a high potential for shifting the economy. The 
Alliance, along with other organizations (NRDC, EEI and EFC) has 
prepared further and more detailed recommendations.
    Question 4. How can we lower the cost-volume curve--also known as 
``the valley of death''--for emerging technologies?
    Answer. Due to various reasons, private investment in energy 
efficiency RD&D is below the optimum level. Therefore, government 
investment in RD&D is important to help push the emerging technologies 
into the market and lower their cost for the consumers. The Alliance 
encourages the government to put more emphasis on energy RD&D by 
increasing the current funding and creating new agencies to coordinate 
and support such efforts.
    The role of the federal government is substantial in 
commercialization of advanced energy-saving technologies. Federal 
government, the single largest consumer of energy and energy consuming 
products, has a large market influence, which can be used to create an 
entry market for promising new technologies. The government can also 
help measure and document the performance of these new technologies and 
encourage broader market acceptance. An Alliance report examining the 
role of new technologies in increasing energy savings in the federal 
government recommends establishing agency-level teams to lead 
technology validation and implementation as well as an interagency 
coordinating team to provide consistency to federal efforts.\3\
    \3\ Alliance to Save Energy, Nils Petermann and Jeffrey Harris, 
Deploying New Technologies to Increase Energy Savings in the Federal 
Sector, April 2008 http://www.ase.org/content/article/detail/4789
    Question 5. There has been great discussion of creating a ``Clean 
Energy Corps'' to train young people for jobs in the renewable and 
efficiency sectors. Additionally, existing jobs are being transformed 
as industries transition to a clean energy economy. How do we best 
invest in creating new training programs and retool existing training 
programs to meet the demand?
    Answer. The Alliance recommends expansion of effective training 
programs such as DOE's Industrial Assessment Centers (IAC), an existing 
network of universities that provides free energy audits for local 
small- and medium-sized manufacturers. This program offers both 
training and energy savings opportunities. A set of parallel 
institutions could be created, to be known as the Building Energy 
Analysis and Diagnostic Centers (BEADCs), also to be housed at 
universities. The BEADCs would be led by the Buildings Program and 
focus on commercial and multifamily buildings, including public and 
institutional buildings.
    Department of Labor has several training programs that could be 
expanded and extended to incorporate or focus on energy efficiency. 
Youthbuild which trains disadvantaged youth in construction skills and 
Youth Corp are examples to such programs. Other existing programs 
include those coordinated by Northwest Environmental Education Council 
and Association of Energy Engineers. In addition, DOE, in partnership 
with the industry, could create and support internship programs for 
college students to be placed at companies which provide energy 
efficiency services or manufacture efficient appliances.

        Responses of Joe Loper to Questions From Senator Lincoln

    Question 1. I represent a state with a large number of hard-
working, low-to-middle-income families. It concerns me that green 
technology that allows customers to leave less impact on the 
environment, whether it's fuel efficient vehicles or energy saving 
appliances, is often more expensive. For the future stimulus package, 
in what ways can we make sure that low-income families are able to 
access these advanced technologies?
    Answer. As mentioned above, many of our recommendations aim to 
overcome the initial-cost barrier to energy efficiency, especially for 
low and middle income consumers. Due to sustained under-pricing of 
energy and lack of information however, many families have invested in 
over-sized appliances and cars. It will be important to help educate 
the consumers about ``right-sizing'' which would both cost less 
initially and require less energy to operate.
    Question 2. In your testimony, you indicate that additional action 
will be needed beyond this next stimulus package in order to sustain 
momentum and provide long-term advances in green jobs and energy 
savings. You state that ``lack of consensus about the best approach for 
fiscal stimulus argues for some diversity in the policy portfolio.'' 
Would you care to elaborate on your vision on green investments for the 
    Answer. Many experts suggest that we need increased and fast 
spending in order to revitalize the economy. It is important to 
recognize however, that the current downturn in the economy can be a 
long term problem which fast spending alone cannot effectively solve. 
Energy efficiency investments can help revitalize the economy by 
creating jobs as well as by bringing returns on the money spent today, 
for years to come.
    However, in determining the amount that can be effectively spent on 
these projects, the capacity of the current energy efficiency 
infrastructure needs to be assessed carefully. Investments to increase 
this capacity are highly warranted, so is the need to sustain funding 
for these programs over the years in order to most effectively utilize 
this increased capacity in the future.
            National Association of State Energy Officials,
                                  Alexandria, VA, January 18, 2009.
TO: Rosemarie Calabro

FROM: Jeff Genzer, NASEO Counsel

RE: Responses to Questions from 12/10/08 Hearing

    These answers are being submitted on behalf of the National 
Association of State Energy Officials (NASEO) in response to questions 
presented to Malcolm Woolf, Director, Maryland Energy Administration, 
from the hearing on December 10, 2008.
    Responses of Malcolm D. Woolf to Questions From Senator Domenici
    Question 1. You've provided the Committee with a long list of 
authorized programs that could receive funding in the upcoming Stimulus 
package. From that list, what programs would actually result in the 
creation of new jobs? What are your top three priorities?
    Answer. The programs NASEO proposed at the hearing will all result 
in the creation of jobs. The top three priorities are the energy 
efficiency buildings retrofit programs (implemented through the State 
Energy Program), the Weatherization Assistance Program and the Energy 
Efficiency and Conservation Block Grant.
    Question 2. What is the return on investment on the Weatherization 
Assistance Program in comparison to the R&D work being done to advance 
technologies to make homes more energy efficient?
    Answer. According to numerous studies, including work by Oak Ridge 
National Laboratory, the Weatherization Program generally produces 20-
25% of energy savings. As energy prices have increased in recent years 
the dollar value of these savings have increased. New technologies, 
developed through R&D, are first used (in many cases) in both the 
Weatherization Assistance Program and the State Energy Program (SEP). 
An Oak Ridge study also concluded that for every federal dollar 
invested in energy efficiency through SEP, over $7 is saved almost $11 
is leveraged. NASEO sees great value in both energy deployment/
demonstration programs and energy R&D programs. It is difficult to make 
comparisons. R&D without deployment of these technologies is of limited 
    Question 3. With the many authorized programs you listed for 
funding, I was surprised to see you advocate for the creation of a 
brand new program for energy efficiency retrofits in existing 
buildings. While this would require new authority, and doesn't appear 
to qualify for inclusion in the stimulus, what kinds of "shovel-ready" 
projects are out there that could result in the creation of jobs in the 
near term?
    Answer. The energy efficiency buildings retrofit program discussed 
in the testimony can be accomplished through the State Energy Program, 
which is an authorized program. We look forward to working with the 
Committee to ensure all appropriate authorization language is 
satisfied. A number of examples* of state ``shovel-ready'' energy 
projects are attached to this email. We will be happy to provide more 
information as needed.
    * Information has been retained in committee files.
     Response of Malcolm D. Woolf to Question From Senator Lincoln

    Question 1. I represent a state with a large number of hard-
working, low-to-middle-income families. It concerns me that green 
technology that allows customers to leave less impact on the 
environment, whether it's fuel efficient vehicles or energy saving 
appliances, is often more expensive. For the future stimulus package, 
in what ways can we make sure that low-income families are able to 
access these advanced technologies?
    Answer. We are also concerned that low-income and middle-income 
Americans benefit from ``green technology'' and a variety of energy 
programs. The states are committed to reducing the cost of energy as 
well as the environmental impacts. NASEO strongly supports funding for 
the Weatherization Assistance Program, which reduces energy costs for 
low-income Americans and has introduced the use of newer ``green 
technologies'', such as blower doors. The State Energy Program, and the 
state energy offices generally, is focused on introducing newer 
technologies into general use for homeowners. For example, the energy 
offices work very hard at promoting and facilitating the use of Energy 
Star products by all Americans, including low-income Americans. If 
enacted, many of the proposals contained in the draft version of the 
stimulus package, released by the House Appropriations Committee on 
January 15, 2009, will help reduce the costs of energy and energy 
technologies for all consumers, including low-income and middle-income 
    We would be happy to answer any follow-up questions.
   Responses of Bracken Hendricks to Questions From Senator Domenici

    Question 1. How many new jobs will your $100 billion clean energy 
proposal create? Will those new so-called ``green collar'' jobs 
displace existing jobs, such as jobs in the oil and gas industry? Is 
the Center for American Progress taking those job losses into account 
with its job creation estimates?
    Answer. The $100 billion clean energy investment outlined in our 
Green Recovery report represents new spending in the context of an 
economic stimulus and recovery program, and therefore does not redirect 
existing investments away from oil and gas or other sectors of the 
economy. The use of new spending to stimulate demand in a slack economy 
is a fundamental principle of any such stimulus or recovery plan. It is 
entirely appropriate in an economic analysis of a stimulus driven 
proposal, such as the scenario discussed in the Green Recovery report, 
to look at jobs created as a result of the new spending without 
attempting to net out reductions of spending elsewhere in the economy. 
The Center for American Progress is also undertaking at this time, a 
broader study of our ten year plan for advancing energy independence. 
In this long-term study we are looking closely at net job impacts that 
will result from any substitution across technologies and sectors of 
the economy that will be involved in the transition to clean energy 
from our current energy mix. We would be glad to present this analysis 
to the committee as we complete that study.
    In the Green Recovery report CAP finds that a $100 billion clean 
energy investment plan focused on renewable energy and energy 
efficiency will create nearly 2 million new jobs over two years. These 
jobs are the result of direct, indirect, and induced effects.

          a. Direct Effect (935,000 jobs): Construction or 
        manufacturing jobs resulting as a direct result of demand and 
        stimulus plans such as housing retrofits
          b. Indirect Effect (586,000 jobs): Jobs created to support 
        the direct activities of workers in implementing the plan 
        (lumber, steel, transportation, etc)
          c. Induced Effect (496,000 jobs) Jobs in in the broader 
        economy created as a result of the new economic activity that 
        is generated by these investments

    Question 2. In the Energy Policy Act of 2005, Congress authorized a 
loan guarantee program. Unlike outright loans, loan guarantees focus on 
reducing financing rates for the construction of new clean energy 
capacity, including nuclear and wind power, by providing government 
backing. Furthermore, the loan guarantee program is designed so that 
taxpayer support is not required even in the case of defaults. As we 
contemplate a massive stimulus package, shouldn't we also be discussing 
the expansion of this important loan guarantee program?
    Answer. The Center for American Progress supports expanding loan 
guarantee programs to catalyze growth in clean energy. According to the 
Department of Energy, as of April 2008, our government has committed 
$10 billion in loan guarantees for energy efficiency and renewable 
energy. In our Green Recovery report, we recommend the federal 
government budgets an additional $4 billion to expand the loan 
guarantee program. We estimate that this investment would leverage $20 
billion in private sector green infrastructure investments. In today's 
credit markets, where access to capital has been constrained, loan 
guarantees represent a useful complement to direct government spending 
to stimulate the economy and ``crowd-in'' private sector capital. 
Because loan guarantees shape private investment decisions and choices 
made in the credit market, it is important in looking at job impacts, 
to assess carefully where new economic activity is being created rather 
than simply redirecting investments that would otherwise have been 
made. In our analysis, we have attempted to be very conservative in our 
assessment of the jobs impacts of loan guarantees. We believe that in 
the current climate where lending has been constrained, expanding 
access to capital through guarantees that reduce the risks and costs of 
borrowing, could be an effective tool for both economic recovery and 
clean energy transition.
    Question 3. We're looking to stimulate the economy and create jobs 
within the next 12 to 24 months. Does the American workforce have the 
necessary training to step into government-subsidized green jobs? Also, 
does the country have the manufacturing ability to produce clean energy 
project components, such as solar panels and wind turbines?
    Answer. The jobs created through a strategic investment in 
renewable energy and energy efficiency will be largely concentrated in 
the construction and manufacturing sectors, which have been hardest hit 
by the recession. Over the last two years we have lost over 800,000 
construction jobs, on top of millions more manufacturing jobs lost 
within the last decade. Thus, there are many qualified individuals 
waiting for the opportunity to return to work, and a green recovery can 
drive new labor market demand. Building the market for green jobs will 
effectively stimulate demand for the skills of these familiar 
professions within the construction and manufacturing sectors. However, 
as we look to the future, constraints on the available labor force to 
do the work of building a low carbon economy is a significant concern 
to industry analysts. In the utility sector for example, in many parts 
of the country the average worker is nearing retirement age. Because of 
the graying workforce in the existing energy sector, coupled with 
dramatic predicted increases in demand for workers in these fields, job 
training and workforce issues could become a significant bottle neck in 
the growth of this area of the economy, without specific policy 
attention to our training and apprenticeship needs. In addition, 
because a goal of this recovery program is to reach those individuals 
who have been hardest to engage in the existing economy, additional 
supportive training and pre-apprenticeship services will be required to 
ensure that those who most need work can get jobs doing the work that 
most needs to be done. To prepare these workers for green jobs and to 
ensure rapid growth in the clean energy sector, CAP recommends doubling 
funding for the ``Green Jobs Act,'' to at least $250 million a year. 
This Act provides grants to both public and private programs to train 
workers for skills in energy efficiency and renewable energy. More 
broadly, we support a systematic approach to workforce investment and 
training, backed by dedicated resources, as a component of all climate 
and energy policies moving forward. We also strongly support policies 
to build the capacity of manufacturing establishments to retool their 
production to produce strategic clean energy technology like advanced 
batteries, highly efficient building materials and appliances, and 
renewable energy technology.

    Responses of Bracken Hendricks to Questions From Senator Lincoln

    Question 1. In your testimony, you suggest that your green recovery 
strategy will generate new markets for American manufactured goods and 
advanced technology. These green investment programs are intended to 
spread across regions and stay and benefit local economies. As a 
Senator from a rural state, what strategies would you recommend for 
implementing these green programs particularly in rural communities, 
such as those in Arkansas?
    Answer. Rural communities can benefit enormously from the 
production of renewable energy (from solar, wind, and biofuels) as well 
as from the modernization and expansion of our electricity grid and 
rail (freight and passenger) transit infrastructure. Rural 
electrification stands as one of the greatest rural economic 
development strategies that we have undertaken as a nation, and our 
rail infrastructure is essential for connecting farmers and rural 
communities to ports and urban markets. The transition to clean energy, 
including the reconstruction of our electrical grid to bring more 
renewable energy on line, can serve a similar function, as an engine of 
growth and opportunity in rural America.
    Renewable energy policies can be structured to promote locally-
owned, mid-sized production facilities for bio-fuels and wind energy 
that foster economic development by encouraging broadly distributed 
investment in new production facilities within rural economies. In our 
report, ``Energizing Rural America,'' we outline numerous suggestions 
to enhance the structure of wind and biofuel incentives to best serve 
rural populations, including: a two-tiered, indexed production payment 
that favors local ownership; eliminating the high minimum production 
capacities required for a cellulosic ethanol facility to receive 
federal funding; and expanding the local capital pool available for 
financing wind turbines by allowing the tax credit to be taken against 
ordinary income rather than only against passive income. Within the 
current economic recovery package, there are numerous provisions to 
enhance the growth of the renewable energy industry, especially in wind 
and bio-fuels, and to restore our electrical and rail infrastructure, 
that will flow directly to farm communities and to rural manufacturing 
job opportunities. With expanded investment in infrastructure projects, 
contractual provisions that require a certain percentage of local hires 
ensuring that construction benefits flow to local communities, can also 
provide opportunities for enhanced economic development.
    Question 2. I represent a state with a large number of hard-
working, low-to-middle-income families. It concerns me that green 
technology that allows customers to leave less impact on the 
environment, whether it's fuel efficient vehicles or energy saving 
appliances, is often more expensive. For the future stimulus package, 
in what ways can we make sure that low-income families are able to 
access these advanced technologies?
    Answer. A primary focus of the clean energy investment proposals 
outlined in Green Recovery is creating good jobs that expand earnings, 
while lowering energy costs for American families by increasing 
affordable transportation options, diversifying our energy supplies, 
and increasing the efficiency of our buildings. In no way are these 
proposals expected to raise energy costs or make goods or services more 
expensive. In fact, increasing the diversity of our energy supply 
through expanded use of renewable energy, and expanding the efficiency 
of our energy use, will reduce demand pressures in the market for 
existing energy sources like coal and natural gas, helping to lower 
energy prices and reduce price volatility. Moreover, increasing public 
investment and production of advanced clean energy technologies will 
lower their costs by achieving economies of scale, from solar panels to 
advanced vehicle technology, ultimately making them more accessible to 
the general public. And, because the stimulus money will be channeled 
towards programs that put working families back into good jobs, this 
clean energy transition will result in higher employment and more 
economic growth, even as it lowers the cost of energy. The Center for 
American Progress believes strongly that the shift to a low carbon 
economy must provide greater opportunity and mobility for all 
Americans. We believe that clean energy can be an engine for new jobs 
and lower costs for all Americans, and that these benefits will 
especially be felt by low and moderate income families.

   Responses of Bracken Hendricks to Questions From Senator Sessions

    Question 1. You have made a number of recommendations for 
investments; however what can you tell us about any research that could 
demonstrate the economic viability on such proposals?
    Answer. Our report, Green Recovery--A Program to Create Good Jobs 
and Start Building a Low-Carbon Economy, was conducted by leading 
economists from the Political Economy Research Institute at the 
University of Massachusetts, Amherst. This report revealed that 
investments in green infrastructure have higher net economic and social 
benefits than the alternatives, for several reasons which we outline 
    First, clean energy and energy efficiency are more labor-intensive 
than traditional fossil-fuel technologies. They create twice as many 
jobs per unit of energy and dollar invested by redirecting money 
previously spent on imported fuel, pollution, or wasted energy towards 
skilled labor and high-tech manufacturing.
    Second, green investments have high domestic content. By their very 
nature, money spent on building retrofits, renewable energy 
infrastructure, and public transportation is heavily concentrated on 
spending that will stay within the U.S. economy, thereby boosting local 
economic growth and creating local jobs. Currently, about 22 percent of 
total household expenditures flows to the purchase of imported goods; 
however, with a green infrastructure investment program, only 9 percent 
of spending goes toward the purchase of imports, resulting in greater 
domestic economic benefits. By focusing investments primarily on 
improving and expanding domestic infrastructure, manufacturing, and 
construction, a green economic recovery program ensures that the impact 
on both local markets and the national economy will be greater in the 
    Because of the characteristics mentioned above, green jobs have a 
high multiplier effect. Jobs and investments that stay in local 
economies boost spending on a variety of goods and services, inducing 
job creation in the retail and service sectors. In addition, private 
sector investment in clean energy and green technology is very high, 
representing some of the fastest growing areas for new capital 
investment across the entire economy. Yet despite this growth, the 
failure to set clear and predictable energy policy has slowed the 
growth of these industries, relative to their potential. With a strong 
commitment in public policy, backed by public investment in supporting 
infrastructure such as smart electrical grid enhancements, the 
potential for growth in clean technology is tremendous. Building 
America's capacity to compete in the markets is smart long term growth 
    Question 2. In your testimony you state that if we spend $100 
billion dollars in energy efficiency and renewable technology, it would 
create 2 million jobs. How did you arrive at that number? More 
specifically what analysis or studies have been conducted to support 
your conclusion?
    Answer. In 2008, the Center for American Progress commissioned a 
report by the Political Economy Research Institute at the University of 
Massachusetts, Amherst (PERI), which demonstrated that a targeted $100 
billion investment over the next two years would create two million 
jobs by investing in six green infrastructure investment areas: 
retrofitting buildings to improve energy efficiency, expanding mass 
transit and freight rail, constructing ``smart'' electrical grid 
transmission systems, wind power, solar power, and next generation 
    The report, Green Recovery--A Program to Create Good Jobs and Start 
Building a Low-Carbon Economy, outlines the three sources of job 
creation associated with any expansion of spending--direct, indirect, 
and induced effects. To illustrate how a $100 billion investment would 
create 2 million jobs, consider these categories in terms of 
investments in building efficiency retrofits. The direct effects of an 
investment in home retrofitting would be those construction jobs 
created by making buildings more energy efficient; the indirect effects 
would be manufacturing and service jobs created in corresponding 
industries that supply the goods necessary to retrofit buildings, such 
as lumber and transportation; and the induced effects would be those 
retail and service sectors benefitted by the increased economic 
activity. Together, the indirect, direct, and induced job total for the 
entire $100 billion investment amounts to nearly 2 million

     Total Job Creation through $100 Billion Green Stimulus Program
Direct jobs                                                      935,200
Indirect jobs                                                    586,000
Induced job                                                      496,000
Total job creation                                             1,999,200
 Source: U.S. Bureau of Economic Analysis and authors' calculations.

    Question 3. In your testimony you mention that the ``green recovery 
strategy'' has several energy proposals that will stimulate the economy 
and over time will reduce our CO2 emissions. However, when 
discussing clean energy and reducing CO2 emissions you did 
not list nuclear power as possible source of energy. Why is that? And 
does the Center for American Progress Action Fund have a position on 
    Answer. Due to the fact that nuclear is a low-carbon source of 
reliable power, it has received renewed interest as efforts increase to 
reduce greenhouse gas emissions. We believe that in the face of a 
mounting climate crisis it deserves serious consideration. However, the 
Center for American Progress Action Fund also recognizes that there are 
several structural concerns that are likely to limit the contribution 
that nuclear power can play in offering solutions to our current energy 
crisis. Senior Fellow, Joseph Romm, sheds light on the economic and 
physical barriers to large scale expansion of nuclear power in his June 
2008 report, ``The Self-Limiting Future of Nuclear Power''. According 
to Romm, nuclear will not likely play a dominant role in the national 
or global effort to reduce carbon emissions for five main reasons: 
First, the cost of nuclear is prohibitively high, and escalating. 
Second, there are numerous production bottlenecks in key components 
needed to build the plants, which only adds to their already lengthy 
construction time. Third, there are significant concerns about uranium 
supplies and importation issues. Also unresolved are issues concerning 
the availability and security of waste storage. Fourth, nuclear plants 
are large-scale water users. Lastly, the cost of electricity from new 
nuclear plants is high compared to other generating sources, including 
renewable energy. The Center is supportive of continuing research to 
overcome these barriers, however in the near term, we believe that a 
strategy which focuses principally on dramatically increasing the 
deployment of energy efficiency and renewable energy will be America's 
first line of defense in the war on climate change. Further we believe 
that these green economic investment strategies represent significant 
opportunities for expanding growth and increasing our competitiveness.
    Question 4. Does the CAPAF have any analysis or studies on how many 
and what jobs are going to be eliminated by the higher costs of energy 
spending with this green jobs initiative?
    Answer. There is no reason to believe energy costs will rise with 
this new investment in green infrastructure; in fact, energy costs will 
likely decline as we increase energy efficiency and diversify our 
energy sources. Please see our response to question #1, posed by 
Senator Domenici.
    Question 5. A key questions is how long will it take for these 
``investments'' to pay for themselves, if ever? What energy price 
points does that assume? Have you calculated with specificity and 
provided calculations?
    Answer. As stated in our Green Recovery report, green investments 
would pay for themselves relatively quickly through returns on energy 
efficiency in both the public and private sectors. For instance, better 
insulated schools would allow administrators to spend more on teachers, 
textbooks, and other learning materials, and companies could invest 
more in new production and services facilities, thereby raising 
productivity. Green investments such as building retrofits also have a 
relatively quick payoff period for homeowners. According to the 
Department of Energy, a $2,500 investment in home retrofitting can 
reduce average annual energy consumption by 30 percent. A 30 percent 
cutback on the average $3,000 household energy bill would amount to a 
substantial savings of $900 per year. Many of the green building and 
energy efficiency technologies we discuss, such as more efficient 
motors, lighting, or pumping equipment have a payback period of less 
than a year, others like solar panels or geothermal heat pumps may take 
several years for operational cost savings to pay for the capital 
investment, but in all cases the green investments we discuss here 
involve near term spending on quality construction and manufactured 
goods that reduce ongoing operations and maintenance costs enabling 
significant long term cost savings.
    It is important to note that these monetary benefits are in 
addition to the larger economic and societal gains brought about by the 
2 million jobs the green infrastructure investments would create over 
the next two years. Our green infrastructure program guarantees that 
the federal government will receive a long-term return on its 
investment through increased tax revenues from the jobs created, while 
also profiting from the social benefits of decreased unemployment and 
the environmental, public health, and national security benefits of 
reduced carbon emissions.
    Furthermore, as we consider future energy policies, this investment 
of $100 billion could be repaid to the Treasury from revenues generated 
by the auction of allowances under a comprehensive greenhouse gas cap-
and-trade system. Overall, investing now in the infrastructure and 
technology deployment that will be required to reduce our national 
carbon emissions, will be highly beneficial in helping American 
companies to compete in emerging clean energy markets, even as it 
lowers the long term cost of transitioning away from more carbon 
intensive sources of energy.
    Thank you very much for the opportunity to testify and for your 
thoughtful questions. The Center for American Progress Action Fund 
looks forward to the opportunity to further engage with your committee 
in the future.

                              Appendix II

              Additional Material Submitted for the Record


  Statement of Bart Ruth, Chairman, Policy Committee, National 25x'25 
                       Renewable Energy Alliance

    Chairman Bingaman, Ranking Member Domenici and other distinguished 
members of the Senate Committee on Energy and Natural Resources, thank 
you for the invitation to present you with recommendations the National 
25x'25 Alliance Steering Committee believes can best address our 
troubled economic times. As congressional leaders and the new, incoming 
administration look for ways to bolster a sagging economy, the 25x'25 
Steering Committee believes that now is the best time to implement 
renewable-energy and energy-efficiency initiatives that can drive and 
maintain economic recovery. In support of those initiatives, the 
Steering Committee today offers Congress and the incoming 
administration a package of new recommendations that will bolster the 
U.S. economy, create new jobs and insure a clean energy future.
    The 25x'25 Steering Committee, which provides leadership for a 
coalition of nearly 800 agricultural, forestry, energy, environmental, 
business, labor, civic and community groups that call for 25 percent of 
our national energy needs being met with renewable resources by 2025, 
believes that our recommendations are the backbone of a strategy that 
will address our troubled economic times. These recommendations 
underscore the longstanding 25x'25 position that a renewable-energy and 
energy-efficient future will not only boost our economy, putting 
hundreds of thousands of people back to work, but also enhance our 
national security and improve our environment.
    These recommendations for economic recovery from the 25x'25 
Steering Committee are underscored by a national study undertaken by 
the University of Tennessee Department of Agricultural Economics that 
shows that if America's farms, ranches and forestlands are empowered 
with the policies and incentives needed to meet 25 percent of the 
nation's energy needs with renewable resources--biofuels, biomass, wind 
energy, solar power, geothermal energy and hydropower--an estimated 
$700 billion in new, annual economic activity would be generated, and 4 
million to 5 million new jobs would be created.
    The University of Tennessee study, commissioned by 25x'25, presents 
just one scenario among many in meeting the 25x'25 vision. And while 
the analysis includes forest residue from hazard-reduction programs and 
mill residue, there are numerous resources that are not taken into 
account--woody biomass from managed forests, crop residue (other than 
corn and wheat) and urban wood waste--suggesting the economic benefits 
of a 25x'25 future could be even greater. Furthermore, while the 
analysis includes the production of dedicated energy crops, some 
varieties of feedstocks currently under research in laboratories and 
universities, including energy cane, Miscanthus and hybrid willow, may 
not have been fully evaluated in the analysis, indicating even greater 
economic returns.
    Another strong indicator of renewable energy development's 
potential to strengthen the economy comes from the Department of 
Energy, which looked at just wind energy and concluded that it is 
capable of becoming a major contributor to America's electricity supply 
and economy over the next three decades.
    The DOE says that achieving a 20-percent wind contribution to the 
U.S. electricity supply would increase annual revenues to local 
communities to more than $1.5 billion by 2030 and support roughly 
500,000 jobs in the United States.
    The 25x'25 economic recovery recommendations will lead to long-
term, comprehensive energy development that will accelerate the 
production of all forms of renewable energy and create new renewable 
energy markets.
    The recommendations developed by the National 25x'25 Steering 
Committee for a nationwide, clean energy economic recovery initiative 

          Increase funding for the Rural Energy for America Program 
        (REAP).--The Rural Energy for America Program, authorized under 
        Section 9007 of the Energy Title of the 2008 Farm Bill, 
        provides grants or loan guarantees for renewable energy systems 
        and energy efficiency improvements for agricultural producers 
        and rural small businesses. The program is currently funded at 
        $255 million over four years, with additional annual 
        authorization of $25 million. The limit on the maximum amount 
        of the combined loan and grant is 75 percent of the funded 
        activity and the grant portion cannot exceed 25 percent of the 
        cost of the activity. The program, in existence since 2002, is 
        continuously oversubscribed and many valid projects are 
        rejected because of limitations on USDA funding. Increasing 
        funding for REAP will generate temporary construction jobs in 
        rural America along with permanent jobs operating and 
        maintaining renewable energy facilities. As an example, a 104 
        megawatt wind power project in Oregon, financed through REAP, 
        generated over 30 permanent jobs in Gilliam County, Oregon.
Proposed funding for REAP: $250 million annually, $500 million over two 
          Increase funding for the Repowering Assistance Program.--The 
        Repowering Assistance Program, authorized under Section 9004 of 
        the Energy Title of the 2008 Farm Bill provides loans and loan 
        guarantees to help biofuel plants convert their heating and 
        power fuel supply to biomass and reduce their dependence on 
        fossil fuel-powered boilers. Payments would be made for 
        installation of new systems that use renewable biomass or for 
        new production of energy from renewable biomass. The program is 
        currently funded at $300 million over four years, with 
        additional $25 million in annual authorization. According to 
        the Renewable Fuels Association 172 biorefineries are in 
        operation today. Installation of renewable biomass boilers will 
        generate construction and maintenance jobs and contribute to 
        cleaner air and environment.
Proposed funding for Repowering Assistance: $150 million annually, over 
        two years
          Broaden the authority and increase funding for the 
        Biorefinery Assistance Program.--The Biorefinery Assistance 
        Program authorized under Section 9003 of the Energy Title of 
        the 2008 Farm Bill provides loans and loan guarantees to 
        construct commercial-scale advanced biofuel facilities. Loans 
        may be up to 80 percent of the cost of the project not to 
        exceed $250 million. It also provides grants for demonstration-
        scale advanced biofuels plants. Despite existing federal grants 
        and loan guarantees, the collapse of the credit markets has 
        stalled construction of the nation's first commercial-scale 
        cellulosic biorefineries. Of six projects selected by the U.S. 
        Department of Energy in 2007 to receive up to $385 million in 
        federal support, only one has begun construction. It also has 
        slowed the conversion of existing grain-based ethanol plants to 
        dual feedstock biofuels production facilities. The economic 
        recession may therefore delay progress toward meeting 
        cellulosic and advanced biofuels targets in the Renewable Fuels 
        Standard and slow progress toward curtailing greenhouse gas 
          Additional funding for the Biorefinery Assistance Program 
        will reduce investor risk and provide construction and 
        operations jobs in rural communities. Consideration should be 
        given to broadening the authority to utilize direct federal 
        grants to expedite the construction of first generation 
        advanced biorefineries and to modify or retrofit existing 
        grain-based ethanol plants to convert cellulosic biomass to 
        biofuels. Knowledge gained and experience with these operations 
        would rapidly drive down costs associated with second-
        generation cellulosic biofuel plants and result in private-
        sector investment in their construction.
Proposal for Biorefinery Assistance Program: increase and fully fund 
        mandatory and discretionary levels, at $500 million in year one 
        and $1 billion in year two, and consider expanding the use of 
        the grants to facilitate the construction of first generation 
        cellulosic biofuel plants
          Fund the Bioenergy Crop Assistance (BCAP).--The Bioenergy 
        Crop Assistance Program was authorized under the 2008 Farm Bill 
        to support the establishment and production of eligible crops 
        for conversion to bioenergy, and to assist agricultural and 
        forest landowners with collection, harvest, storage, and 
        transportation of these crops to conversion facilities. The 
        rules for the program have not been developed, and no mandatory 
        funding is provided in the authorizing legislation. Twenty-one 
        cellulosic biorefineries are in the planning stage of 
        construction, to begin operations by 2010, but without full and 
        immediate funding of BCAP to provide incentives to farmers to 
        grow dedicated energy crops, feedstocks may not be available, 
        jeopardizing investments and threatening the commercial scale 
        production of advanced biofuels.
Proposed for Bioenergy Crop Assistance Program: implement BCAP in 2009; 
        fund at $250 million annually, $500 million over two years
          Invest in Biofuel Infrastructure Projects.--A comprehensive 
        federal initiative should be developed and funded to address 
        biofuel infrastructure, distribution and delivery issues. A 
        coordinated plan should be developed and significant federal 
        funding provided for biofuel distribution infrastructure 
        projects. Biofuel pipeline feasibility studies need to be 
        completed. The federal government should help finance the 
        construction of new pipelines, as well as address rail capacity 
        for biofuels. Funding for E-85 Corridor programs should be 
        expanded and funding should be made available to facilitate the 
        manufacturing and deployment of blender pumps. The federal 
        government should promote the use of flex-fuel vehicles, by 
        creating a federal FFV fleet and increase funding for battery 
        technology development. In addition, advanced biorefineries, 
        most of which are in planning stages, often await permitting 
        for long periods of time. The processing of these permit 
        applications must be expedited.
Proposal: Increase federal investments in biofuel distribution 
        infrastructure, including financing to expand rail capacity, 
        pipeline construction, and strong incentives for E85 and 
        blender pumps, the number of which should grow as more flex -
        fuel vehicles are registered in a region. Provide strong 
        incentives to speed up commercial use of flex fuel vehicles and 
        their use by federal entities. Expedite permitting for advanced 
          Fund the Community Wood Energy Program.--The Community Wood 
        Energy Program authorized under the Food, Conservation, and 
        Security Act of 2008, provides grants to state and local 
        governments and communities to develop wood energy plans and to 
        acquire and upgrade community wood energy systems in communal 
        facilities, such as schools, town halls, libraries. The program 
        would use woody biomass as a primary fuel for such projects.
Proposed funding for the Community Wood Energy Program: 20 million 
        annually, for two years
          Increase funding for and extend Clean Renewable Energy Bonds 
        (CREBs).--The Energy Policy Act of 2005 provides electric 
        cooperatives and public power systems with the ability to issue 
        Clean Renewable Energy Bonds (CREBs). The CREB is a renewable 
        incentive for not-for-profit utilities, comparable to the 
        Production Tax Credit (PTC) that is available to investor-owned 
        utilities. Not-for-profit utilities that serve 25% of the 
        nation can not access the PTC. CREBs support a wide variety of 
        projects, including wind, biomass, geothermal, solar, municipal 
        solid waste, small irrigation power, and hydropower. CREB funds 
        would support both large-and small-scale projects, and would 
        generate jobs both in installation of renewable energy 
        technologies and in manufacturing of the required component 
        parts. The program is already over-subscribed, at $800 million 
        in current mandatory spending.
Proposal for CREBs: extend the program through 2010 and provide 
        additional bonding authority of $2.5 billion
          Restructure the Production Tax Credit and Investment Tax 
        Credit for renewable energy electricity sources.--Currently, a 
        PTC or an ITC is given in a form of a tax credit to be claimed 
        against income for developers of and investors in renewable 
        electricity projects utilizing biomass, solar, wind, hydro, 
        marine, landfill gas, geothermal and other clean sources of 
        energy. The credit is currently non-transferrable. Furthermore, 
        in many cases other incentives reduce the amount of the 
        Production Tax Credit or an Investment Tax Credit. For example, 
        a biomass Production Tax Credit is reduced by half when a 
        Combined Heat and Power (CHP) Investment Tax Credit is also 
        used for the same project. State and government financing also 
        reduces the PTC amount a renewable energy project can receive.
          According to recent analysis by the American Wind Energy 
        Association, the failure to restructure the PTC and provide a 
        rapid long-term extension could result in the loss of 89,000 
        jobs and $16 billion in investment in the wind energy industry 
        alone. Renewable energy development relies upon transactions 
        with major financial industry players, because renewable 
        electricity is a capital intensive industry. The current 
        economic crisis has removed many major financial investors from 
        tax equity markets, dramatically reducing the ability of many 
        renewable power developers to realize the intended benefits of 
        available tax incentives.
          Thousands of megawatts of new renewable energy power capacity 
        for 2009 could be cancelled or delayed as a result, unless the 
        tax credit system is restructured, and PTCs are extended over 
        five years. In addition, equity strapped industries may not be 
        able to increase investments in geothermal, biomass, solar and 
        hydropower projects. According to the National Renewable Energy 
        Laboratory, if the PTC were transferable to lending 
        institutions, or if it were applicable as prepayment on any 
        loans, the wind, solar, biomass, geothermal, hydro and other 
        renewable energy industries could fully utilize the PTC and the 
        ITC. In a time of economic downturn, full use of the ITC and 
        the PTC is essential for the renewable energy sector to 
        continue attracting investment and prevent job loss
Proposal: Restructure the federal Production Tax Credit and Investment 
        Tax Credit for all sources of renewable electricity to allow 
        for accelerated depreciation, refundable credits and transfers 
        between persons/entities, and enable projects to utilize other 
        financial incentives without a reduction in the amount of ITC 
        and PTC that an entity can claim.
          Extend the Production Tax Credit and Investment Tax Credit 
        for five years.--Production and investment tax credits serve as 
        primary incentives for investors to develop wind, solar, 
        geothermal, hydro, marine and other forms of electricity from 
        renewable sources. Wind industry developers, for example, are 
        eligible for a production tax credit of 2.1cents per kilowatt 
        hour generated in the first 10 years of operation. 
        Manufacturing of both wind turbines and solar panels is growing 
        in the United States, bringing jobs to rural areas. More than 
        50 new or expanded wind industry manufacturing facilities have 
        been announced or opened since January of 2007, creating tens 
        of thousand of high paying jobs while providing clean and 
        reliable energy. However, an unstable PTC/ITC policy serves as 
        a disincentive to investors, particularly in this time of 
        economic distress. The solar industry, for example, estimates 
        that if PTC were not extended in 2008, the solar PV sector 
        alone would have lost $8.1 billion in investment and a net 
        39,800 jobs in 2009.
Proposal: Extend the Production Tax Credit and Investment Tax Credit 
        for renewable electricity sources for five years
          Increase the Production Tax Credit for renewable electricity 
        produced from biomass, hydro, green gas and other renewable 
        sources of energy.--Currently producers of renewable 
        electricity from wind and geothermal sources of energy receive 
        a Production Tax Credit of 2.1 cents per kilowatt hour. Other 
        producers of renewable electricity receive half this amount. 
        Additional renewable electricity could be generated in the 
        United States if developers who produce renewable electricity 
        from biomass, hydro, renewable gases and other sources of 
        energy received the same credit as is currently allowed for 
        wind and geothermal electricity developers.
Proposed funding: Create a level playing field for producers of 
        renewable electricity by increasing the Production Tax Credit 
        for biomass, marine, hydro, marine, green gas, waste and other 
        renewable energy sources of electricity to a level equivalent 
        to that received by wind and geothermal energy producers
          Improve tax incentives for Community Wind.--Community wind is 
        a type of wind development that focuses on investment from 
        local communities, rather from an outside investor. The 
        National Renewable Energy Laboratory (NREL) estimates that 
        smaller community wind projects contribute twice as many jobs 
        and income to a local community than a larger wind plant 
        financed by outsider investment. An average community wind 
        plant of 20 MW can provide up to 41 jobs and $4 million in 
        local income, as opposed to an outside-investment 40 MW plant's 
        18 jobs and $1.3 million in income for the community. However, 
        community wind investors' income off the plant is often 
        passive. Under current regulations passive income has to be 
        quite large to fully use the credit. Regulations should be 
        changed to allow for local wind investment projects to count 
        against active income of the local investors. Such a change 
        will generate more interest in, and investment by communities 
        in local clean electricity sources.
Proposed: Allow community wind developers to count tax incentives 
        against active income
          Fund Smart Grid and improve electricity transmission.--The 
        Federal government should appropriate funds for the Smart Grid 
        Investment Matching Grant Program created under Energy 
        Independence and Security Act of 2007. The program provides 
        reimbursement for 20 percent of qualifying Smart Grid 
        Investments. Within two years, the stimulus effect of this 
        provision will become apparent, through significant new job 
        creation in renewable energy electricity sector, as more 
        electricity sources will be able to capitalize on a better grid 
        system. 300GW of wind power are awaiting grid connection. In 
        order for the wind industry to expand, 12,000 miles of new 
        transmission lines are needed, as well as a smart grid 
        management system. The Department of Energy reports that 
        transmission is the number one barrier preventing rapid long-
        term expansion of wind energy use. Without adequate 
        transmission capacity, the nation risks losing existing jobs in 
        wind turbine manufacturing and installation. A more efficient, 
        reliable transmission grid will also reduce electricity costs 
        to consumers in states with high peak rates.
Proposed funding for Smart Grid: $1.3 billion for smart grid investment
 Statement of Donna A. Harman, President and Chief Executive Officer, 
                  American Forest & Paper Association

    The nation's economic downturn has had a dramatic effect on the 
health and vitality of the forest products industry. The protracted 
downturn in the housing market and the ensuing financial crisis have 
resulted in lost markets for forest-based manufactured products such as 
wood building materials and pulp, paper, and packaging materials, 
forcing many manufacturing facilities to close. In addition, the 
financial crisis has led to lack of available credit and the loss of 
many jobs across the industry we represent.
    AF&PA is the national trade association of the forest, pulp, paper, 
paperboard, and wood products industry. The industry employs more than 
a million people and ranks among the top 10 manufacturing employers in 
48 states with an estimated payroll exceeding $50 billion. Forest 
product mills are often the economic hub of their communities, making 
the industry's health critical to the economic vitality of countless 
communities and every region of the country.
    As the Congress and new Administration consider policy initiatives 
to help the national economy recover, we urge you to consider the 
following initiatives for inclusion in broader stimulus plans. Each of 
them fits with the priorities of the Congress and the new 
Administration to promote sustainable business and environmental 
practices and would help ensure that the economic recovery also extends 
to the forest-based sector of the manufacturing economy.

          Expand Section 45 Credit for Electricity from Renewable 
        Energy Sources to Self-Generated Biomass Power to Operate 
        Manufacturing Facilities.--The Section 45 credit for biomass 
        facilities should be strengthened by expanding the credit to 
        on-site use of electricity produced from biomass. Credit for 
        on-site usage would promote further expansion and use of 
        biomass as a reliable, stable energy source.
          Extend TREE Act Provisions.--Extending the TREE Act 
        provisions included in the Food, Conservation, and Energy Act 
        of 2008 (P.L. 110-234) will promote U.S. competitiveness and 
        encourage growth in the forest products industry. The existing 
        provision is set to expire in May, 2009 and should be made 
          Pension Plan Recommendations.--The drop in the value of 
        pension plan assets combined with the credit crunch has placed 
        defined benefit plan sponsors in a difficult position. Congress 
        should enact the Worker, Retiree and Employer Recovery Act of 
        2008, which makes critical changes to the Pension Protection 
        Act of 2006 to help companies address the current unprecedented 
        financial crisis.
          Housing Industry Provisions.--Congress should enact the 
        following provisions that would provide immediate relief to the 
        ailing housing industry: enhance the Home Buyer Tax Credit to 
        stimulate purchases of new and existing homes, provide low-rate 
        mortgages for future home purchases, and extend the net 
        operating loss (NOL) carryback from two to five years.
          Corporate AMT Reform.--Congress should enact provisions 
        similar to those passed in the Job Creation and Worker 
        Assistance Act of 2002, whereby the 90 percent limitation on 
        the utilization of AMT NOLs would be temporarily suspended for 
        losses generated or taken as carry forwards for tax years 
        ending in 2008, 2009, and 2010. This would help alleviate the 
        current financial burden on companies struggling from cash flow 
        and tight credit problems.

    We urge you to include these provisions in future economic stimulus 
legislation that Congress considers.
Joint Statement of Ken Brown, Executive Director, Climate Communities, 
           and Michelle Wyman, Executive Director, ICLEI USA

    Thank you for convening the December 10 hearing to address the 
inclusion of clean energy projects in upcoming economic recovery 
legislation. Our growing coalition represents more than 375 local 
elected officials in 39 states who are taking action in their 
communities to reduce energy use and greenhouse gas emissions. We are 
pleased to submit this statement for the record.
    We commend you for holding this important hearing and we strongly 
encourage you to make investment in energy efficiency, clean energy, 
and green jobs a cornerstone of your strategy as the Congress begins to 
craft economic recovery legislation. Our coalition of local governments 
looks forward to playing our part in the ``Green Economic Recovery'' by 
working in partnership with the federal government to put people back 
to work through local building efficiency retrofit programs, 
installation of community-scale renewable energy projects, investments 
in local mass transit equipment and infrastructure, and local economic 
development strategies that reduce vehicle miles traveled.
    Our message to you today is simple.

          1. Cities and counties across America have thousands of 
        ready-to-go projects that will help achieve three critical 
        national objectives--create new jobs, decrease our dependence 
        on foreign oil, and reduce the greenhouse gas emissions that 
        cause climate change.
          2. Local governments are uniquely suited to implement job 
        creating programs and projects that will reduce energy 
        consumption in commercial and residential buildings and in the 
        transportation sector by improving transit and reducing vehicle 
        miles traveled.
          3. The federal government should invest $10 billion in the 
        Energy Efficiency and Conservation Block Grant program and $18 
        billion to upgrade transit infrastructure and transit equipment 
        as an efficient and effective way to create jobs and empower 
        local climate action.
          thousands of ready-to-go local clean energy projects
    As you know, about two million jobs have been lost in the United 
States in 2008 and more losses are forecast. Creating local green jobs 
that will last for years to come and cannot be outsourced will 
contribute significantly to the country's economic recovery. Across the 
nation, local governments have thousands of local government ready-to-
go clean energy projects that could be implemented with federal 
economic recovery assistance. This week the U.S. Conference of Mayors 
released a nationwide survey of local governments, citing approximately 
1,600 ready-to-go clean energy and transit projects that could create 
about 120,000 new jobs--in just 427 cities that participated in the 
survey. (See http://www.usmayors.org/mainstreetstimulus/) We have 
attached a list of dozens of local ready-to-go clean energy projects 
from some of our coalition. We want to emphasize that not only will 
these projects create new jobs and spur economic revitalization; 
additionally, these local projects will help set our nation on a course 
for energy independence and reduce greenhouse gas emissions. Examples 
include the following:

   With economic recovery assistance, Montgomery County, MD 
        would establish a Home Retrofit Revolving Fund to provide 
        energy audits and low interest loans for residential energy 
        retrofits. This program would reduce consumer energy costs, 
        increase home values, and produce significant new green jobs in 
        the construction and building trades. In Montgomery County, a 
        $35 million annual investment would result in $47 million in 
        energy savings benefits to consumers. In addition, a 30 percent 
        participation rate has the potential to reduce nearly 200,000 
        tons of CO2 emissions annually.
   With economic recovery assistance, the City of El Paso, TX 
        would provide energy retrofits at 53 facilities and at more 
        than 600 intersections. The retrofit project would create jobs, 
        save more than 10,000 kilowatts per year, save an estimated 
        $1.743 million annually in energy costs, and reduce annual 
        emissions by 11,300 tons. It will cost an estimated $15 
        million. The energy retrofits include heating and cooling 
        system replacements, installation of energy efficient lighting 
        systems, and other projects.
   With federal assistance, the City of Gainesville, FL would 
        launch a new Low income Energy Efficiency Program (LEEP) that 
        will assist 336 low income customers in upgrading their homes 
        with energy efficiency measures to reduce energy use, improve 
        comfort, and save money. The proposed project will save 537,936 
        kWh per year and will eliminate 457 metric tons of CO2 
        annually. Job creation will include three full time employees 
        and increased demand for hundreds of contractors, i.e., HVAC 
        installers, insulators, electricians, plumbers and general 
        contractors. The project will cost $1 million annually.
   With federal assistance Westchester County, NY would install 
        photovoltaic systems in four county office facilities and use 
        the renewable energy generated to run each complex. The 
        proposed project would cost $3.5 million, save 989,000 kwhr per 
        year and $150,000 annually in energy costs, cut greenhouse gas 
        emissions by 415 tons per year, and create 20 new construction 
   With federal assistance, Loudoun County, VA would build the 
        Brambleton Geothermal Fire Station. The new facility will 
        incorporate the latest renewable energy design features such as 
        a 30,000 gallon cistern on site to store rainwater, geothermal 
        wells, ground source heat pumps, and many others at a cost of 
        $7.2 million. It will save 1,179,806 gallons of water per year 
        from rainwater collection, 86,400 gallons of water per year 
        from water efficient fixtures, and will reduce energy 
        consumption by 30 percent annually. The project will employ 20 
        full time employees when completed and require multiple 
        construction personnel during construction.
   With federal recovery assistance, the City of Spokane, WA 
        would implement SmartRoutes, an $11 million transportation plan 
        to make road and trail improvements to facilitate bike and 
        pedestrian travel. When completed, the project will reduce 
        vehicle miles traveled by 91 million miles annually, reduce CO2 
        emissions by 58,000 tons a year, and create hundreds of new 


    Local governments are at the forefront of the movement to promote 
clean energy and address climate change in the United States. For 
years, local governments have served as laboratories for innovation, 
developing new approaches to reduce energy use and greenhouse gas 
emissions, including the conversion of municipal fleets to hybrid 
vehicles, the design and construction of energy-efficient buildings, 
the installation of renewable energy, and the development of 
communities that reduce vehicle miles traveled.
    Local governments are especially well-suited to improve building 
efficiency and reduce energy used in the transportation sector. In 
addition, local governments are well-positioned to implement community-
scale renewable energy projects that create jobs and reduce carbon 

Reducing Energy Consumed in Buildings
    According to the U.S. Energy Information Administration, commercial 
and residential buildings account for well over 40 percent of the 
energy consumed in the United States. Experts estimate that three-
fourths of America's residential and commercial buildings will be 
replaced or renovated by 2038. EPA estimates that well-designed 
building codes implemented and enforced in conjunction with appliance 
standards can lock in cost-effective energy savings of 30 to 40 percent 
at the time of building construction compared to standard practices.
    Local governments are best suited to improve and enforce building 
codes and create other programs to reduce energy use in commercial 
buildings and homes. Following are examples of local innovative energy-
smart building approaches that could be supported and replicated with 
national leadership and resources.

   Nassau County, NY launched its ``Green Levittown'' 
        initiative, a public-private partnership to help the 17,000 
        households of America's first suburb conduct home energy 
        audits, replace old boilers, and make other home energy savings 
        improvements. The project goal is to reduce carbon emissions by 
        10 percent. Thousands of households are participating and the 
        changes being made are resulting in a significant reduction in 
        greenhouse gas emissions.
   Santa Barbara, CA passed an ordinance in 2007 to become the 
        nation's first city to reduce the fossil fuel standard for all 
        new buildings in order to accomplish carbon neutrality by 2030 
        by enacting building regulations exceeding state standards for 
        energy use among other measures.
   Montgomery County, MD recently passed legislation that 
        promotes energy efficiency in new buildings. The bill requires 
        most new commercial, multi-family residential and single family 
        residential buildings to meet certain Energy Star standards, 
        and requires a building owner to pay an Environmental 
        Sustainability Fee if the building does not comply with the 
        energy efficiency and environmental design standards. The 
        legislation also requires the Director of the County Department 
        of Public Works and Transportation to develop an energy 
        baseline, energy unit savings plan, and energy cost savings 
        plan for each County building.

Reducing Energy Consumption From Transportation
    The U.S. transportation sector accounts for a third of all energy 
use and within this share, 60 percent comes from personal vehicle use. 
While cleaner vehicles and fuels standards are important, increases in 
vehicle fuel efficiency have not been and are not predicted to be 
sufficient to keep pace with increases in driving associated with more 
sprawling development patterns and lack of adequate public transit. 
Numerous studies show that given the option to live in a less 
automobile dependent location, people will indeed drive less. According 
to the recent book Growing Cooler: The Evidence on Urban Development 
and Climate Change, residents of more compact neighborhoods drive 20-40 
percent less on average.
    Reducing vehicle miles traveled (VMT) and increasing transit use 
are important ways to significantly reduce energy use and emissions 
from the transportation sector. Since local governments are responsible 
for land use and transportation planning, local leadership is essential 
to address this problem. In addition, local governments are playing an 
important role in purchasing low-emission vehicles and using 
alternative fuels. Examples of effective local transportation programs 
include the following:

   Sacramento County, CA and the Sacramento Area Council of 
        Governments, CA have established a blueprint for the 
        metropolitan region that links transportation investments to a 
        vision of sustainable future growth and development served by 
        public transit, walkability measures, and other approaches to 
        reduce VMT in the region by 27 percent by 2050.
   Envision Utah is a collaboration of several public-private 
        stakeholders in the Salt Lake City/ Greater Wasatch Area 
        focused on protecting the environment and maintaining economic 
        vitality and quality of life as they accommodate anticipated 
        growth in the region. The collaboration focuses on several key 
        strategies to reduce emissions, addressing VMT though creating 
        more walkable communities; preserving critical lands and park 
        space; developing a region-wide transit system; and fostering 
        transit-oriented development.
   The City of Stamford, CT is undertaking a 20-year initiative 
        to improve regional transportation and promote smart growth and 
        economic development through multi-modal transportation 
        investments and transit-oriented development. The initiative 
        encompasses everything from expanding the hub of their 
        transportation infrastructure (the Stamford Transportation 
        Center), building a new multimodal center, and connecting these 
        transportation centers to the new Stamford Urban Transitway, to 
        construction of an urban light rail loop to connect key urban 
        locations through public transit.
   In 2007, King County, WA committed to purchase 500 new 
        hybrid buses manufactured by New Flyer and General Motors over 
        a five year period. The buses will be added to a fleet that 
        already has over 200 hybrid buses in service. Hybrid buses use 
        considerably less fuel and reduce some exhaust emissions by up 
        to 90 percent. There are currently over 2,000 hybrid buses in 
        use nationwide.
   Since 2001, the City of Keene, NH has powered their 
        municipal fleet of 68 vehicles and other city owned equipment 
        with B-20 biodiesel. City operators have stated that the 
        headaches they would get from operating equipment with 100 
        percent diesel have gone away while operating equipment with B-
       local initiatives to increase the use of renewable energy
    Large, utility-scale renewable projects like wind farms and solar 
plants are critical to America's energy future, but community-scale 
renewables are vital as well. Solar photovoltaic panels on elementary 
schools, biomass generation at local landfills and sewer plants, wind 
turbines powering targeted neighborhoods, town halls heated and cooled 
with non-polluting geothermal energy and other projects help localities 
become self-reliant and better able to manage the risks of increasing 
energy costs, blackouts, and other challenges.
    The following local government renewable energy projects 
demonstrate the kinds of innovation that could be spurred across the 
nation with federal assistance.

   Wyandotte Municipal Utilities, MI is installing the first-
        in-the-nation utility-scale wind power project on an urban 
        brownfield. Wyandotte is also considering renewable energy 
        projects including woody biomass generation, river hydrokinetic 
        power systems, combined photovoltaic-concentrated solar 
        technologies, hybrid public utility fleets, and green roofs 
        infrastructure to reduce emissions in a community that has 
        historically relied on petrochemical manufacturing and coal-
        fired power to fuel the local economy.
   The Department of Energy and the U.S. Environmental 
        Protection Agency are now working with the City of Stamford, CT 
        on an innovative wastewater-to-energy project that will convert 
        dried sewage sludge into clean, renewable energy. This first-
        ever application of biomass gasification technology is free of 
        air and carbon emissions and will use a renewable resource 
        available in nearly every locality. If deployed nationally, 
        this waste-to-energy technology could produce 100 times the 
        electric energy needed to serve U.S. domestic demand, and could 
        reduce 1.1 billion metric tons of greenhouse gases by 2030.
   In 1999, Story County, IA constructed Iowa's first county-
        owned building to use a geothermal heating and cooling system. 
        The geothermal system reduces energy consumption by 40 percent, 
        costs less to maintain, and cuts air-borne pollutants. The 
        County is currently converting other buildings to geothermal 
   Sacramento County, CA plans to install 16 megawatts (MW) of 
        solar community-wide each year for the next nine years so that 
        two percent of the community's energy would come from solar by 
        2017. This residential incentive program would supplement 
        existing federal tax credits and utility incentives in order to 
        help transform the solar market and assist Sacramento County in 
        achieving its goal. The project would save 80 million KWh and 
        $8 million per year. GHG emissions would be cut by 25,000 
        metric tons per year. Meeting the state goal of adding 16 MW 
        per year of solar in Sacramento County would create 600 direct 
        permanent jobs and three to four times as many indirect jobs 
        per the U.S. Department of Energy.

    We are attaching two documents* that we request be included in the 
hearing record:
    * Documents have been retained in committee files.

          1. Empowering Local Government Climate Action: Blueprint for 
        President Obama and 111th Congress and the list of 375 plus 
        local elected officials who have endorsed the blueprint thus 
          2. A list of local Green Recovery projects that could be 
        implemented with federal assistance.

    Again, we urge the federal government to invest $10 billion in the 
Energy Efficiency and Conservation Block Grant Program and $18 billion 
in transit infrastructure and equipment as part of national economic 
recovery legislation. These critical investments will enable local 
governments across America to do what they do best--implement pragmatic 
community-based solutions that will reduce create jobs, revitalize the 
economy and preserve our planet.
    Thank you very much for your consideration.
                Statement of Equitech International, LLC

    We are most grate ful for this opportunity.
    Our collective mission here is, as in life, to celebrate and 
implement the Buckminster Challenge:

          We are called to be the architects of the future, not its 
        victims ... [Our challenge is to] make the world work for 100% 
        of humanity in the shortest time possible through spontaneous 
        cooperation without ecological offense or the disadvantage of 
        anyone. --R. Buckminster Fuller

    The first ever 300kW solar academic building, the first candidate 
for Solar Fuel Cell Regeneration (SFCR), at Georgetown University as an 
important element of the university's master advanced renewable energy 
systems (ARES) plan, was developed from 1982-1990. This plan was the 
first stand-alone sustainable ARES design developed as a National 
Exemplar Integrated Community Energy System (NE/CES) per U.S. 
Department of Energy federal program guidelines and funding. The solar 
PV building is still functioning very well after 20 years. It has paid 
back very well.
    Importantly the words of the celebrated paleontologist Rev. Pierre 
Teilhard de Chardin SJ are inscribed on the galleria of the solar PV 
academic building:

          The Age of Nations is passed. What remains for us now, if we 
        do not wish to perish, is to set aside the ancient prejudices, 
        and build the earth.

      candidate paradigm: advanced renewable energy systems (ares)
    This consortium of scientists and design science architects 
proposes a Comprehensive National Energy Policy (CNEP) based on 
infinite renewable sources and provides proven solutions. The 
breakthrough is green hydrogen direct from waste (with no burning) that 
supports current thinking toward decentralization of power production 
REQUIRED because of the following reasons:

          1. SECURITY: Millions of small self-sufficient sustainable 
        distributed energy generation centers are superior over fewer 
        large, dangerous, and vulnerable power production centers as 
        easy access for terrorists. ARES military applications are 
          2. EFFICIENCY--COST REDUCTIONS: It places energy generation 
        at the source of its consumption, minimizing inefficient energy 
        distribution services over long distances. ARES have very low 
        operating costs.

                   Waste on the land is continuously 
                accumulating and always will, plus Nature continuously 
                provides some of its own waste on land;
                   Waste produced by Nature is in the seas as 
                BIOMASS, and;
                   Vast waste by humankind exists everywhere 
                and can be recovered and utilized.

          4. WEALTH PRODUCTION FOR ALL CITIZENS: The means of producing 
        ``Premium Power'' with its valuable by-products enables:

                   distributed ownership of ARES for reducing 
                overall poverty
                   tax revenue incomes to small and large 
                   support for stand-alone remote residential 
                   ARES component manufacturing for export,
                   distributed job creation, and
                   the ability to reduce transportation 

          5. SERVICE to EXISTING GRID: All distributed Premium Power E-
        Macro and E-Micro Systems can sell wholesale individually and 
        collectively to the power companies mitigating the need for 
        construction of new power plants.

    Waste provided by nature and the contributions of pollution by 
humans, such as those contributing to global warming, form an unending 
source of METHANOL--by processing carbon dioxide and hydrocarbons with 
waste--to produce fuel for fuel cells forever. Methanol technology is 
proven and can be deployed immediately. ALL forms of waste, including 
industrial and toxic waste, and the sun--are the only energy sources 
A comprehensive solution to providing clean energy for all needs
    The Advanced Renewable Energy System (ARES), based on Complex Waste 
to Total Energy Solar Methanol Hydrogen Fuel Cell Regeneration System, 
is a decentralized approach to producing clean and secure energy for 
all needs using sun and all types of waste available everywhere. A 
transition using the current power grid is understood, but power 
production would occur everywhere and not be dependent on the grid 
during collapses and will be able to serve all structures and vehicles 
independently when fully implemented.
Investments to Date
          1. Two proofs of concept completed--the basis of the proposed 
        E-Macrosystem, a 7.5 MW ARES power plant and manufacturing 
        center--Solar Fuel Cell Regeneration (SFCR) and Waste Steam 
        Reforming System, 1987-1995 . . . $55 million
          2. First two 30 ft. heavy-duty fuel cell buses (designed at 
        Georgetown, 1983-1995 www.equitechllc.com/projectgraphics/
        fuelcellbus.html) . . . $21 million
          3. International Consortium by NASA/JPL at Edwards Air Force 
        Base worked with Georgetown's National Exemplar of Integrated 
        Campus Energy System (NEICES) to develop stand-alone power 
        system (for lunar colony), 1982 . . . $30 million
          4. Georgetown University NEICES built integrated solar 
        building, 1982 . . . $23 million
          5. Clean coal technology breakthrough, abandoned for 
        emissions-Free ARES leaving coal to be developed for highest 
        and best use as nanotechnology solution in complex Thermal 
        Composite Materials (TCM) for solar structures, 1979 . . . $14 

                                        Total: $143 million
Current Status of constructing the national exemplar E-Macrosystem
          1. Final Design (Program of Requirements & Design Build 
        Engineering) . . . $ 4.3 million
          2. Design-Build Construction . . . $60.0 million

                                       Total: $64.3 million

    It is proposed that a national exemplar green research project that 
is ready for final design engineering and construction be funded and 
built in an area of extreme poverty, to demonstrate the new technology, 
ARES component manufacturing, job creation, skill development, and 
broad ownership by using a new mechanism called Community Investment 
Corporations. Multiple by-products including premium power demanded by 
pharmaceuticals and the computer chip industry, pure water, medical 
oxygen and other products provide 2 to 3-year quick turnaround on the 
replications' debt-service.
    The turnkey project is ready for final design and construction 
under the professional oversight of Equitech International LLC and 
Whiting Turner Construction Co on land provided by the City of East St. 
Louis and 10 surrounding communities through the for-profit Metro East 
Citizens Land Cooperative on behalf of all residents, the MECLC 
shareholders. East St. Louis has experienced a prolonged unemployment 
rate of 23% and overall the poverty rate is 31% in the 11 communities.
    The Congress needs to fund the national exemplar E-Macrosystem 
manufacturing center and its breakthrough technology ($64.3 million) to 
make it available for public and private rapid deployment. The initial 
investment will provide proofs of concept for a second phase, E-
Microsystem ($80 million), for smaller public and commercial building 
solutions including comprehensive residential development at affordable 
prices ($400 - $500 rents with all utilities included, including water, 
sewer, electric, and fuel for the fuel cell car).
Job Creation from National Exemplar E-Macrosystem
    The initial green energy research project, the E-Macrosystem, will 
provide: . . . 2461 jobs
    The jobs include construction, operation, and product development 
in work centers within the structure. Products that will spin out of 
the E-Macrosystem to develop a manufacturing center first in the Metro 
East area include: steam reforming systems, fuel cell manufacturing, 
electrolyzers, photovoltaics, E-Microsystems (SFCR components), 
composite systems manufacturing, and TCM (complex thermal composite 
materials made from coal to build light-weight, solar structures) 
manufacturing.   Each E-Macrosystem replication can expect to produce: 
. . . 800 jobs
Technology Comparisons
    Extensive land coverage is not required as in the wind energy 
approach. ARES are integrated into the buildings and vehicles they 
power and use the sun and all waste as fuel.
    Extensive use of water needed for nuclear power is not necessary. 
ARES produces pure water. A comparison of investments showed that the 
$10 billion proposal at Calvert County, MD if spent on ARES instead, 
would provide power to 250 cities.
 Statement of Bruce W. Heine, Director, Government and Media Affairs, 
                          Magellan, Tulsa, OK

    Magellan Midstream Partners, L.P. owns and operates the longest 
refined petroleum pipeline in the United States, which crosses thirteen 
states and over 8,500 miles of pipeline. We have partnered with Buckeye 
Partners, LP, which owns and operates nearly 5,400 miles of refined 
petroleum pipeline. Our collective goal is to develop the first ever 
``dedicated ethanol pipeline,'' which we call the ``Independence 
Pipeline.'' The Independence project is a 1,700 mile, $3.5 billion 
renewable fuel pipeline project, which originates in Iowa and ends in 
New York Harbor. The project would create hundreds of construction jobs 
in the next few years and over 100 operating jobs over the life of the 
project, and would safely and efficiently deliver more than 10 million 
gallons of ethanol per day to millions of northeastern motorists.
    This large-scale renewable fuel pipeline project is dependent on a 
federal financing option through a new loan guarantee program at the 
Department of Energy. We would encourage you to consider the inclusion 
of a renewable fuel pipeline loan guarantee program as you prepare new 
legislation designed to stimulate our economy. These important 
infrastructure jobs will peak in 2-3 years which wilt help sustain the 
economy as other parts of the stimulus package wind down.
    This project meets the criteria for new investment that will help 
build a new clean energy economy and advance the next generation of 
biofuets and fuel infrastructure.
    Congress has indicated renewable fuels will have an increasingly 
important role in our domestic energy policy and the growing national 
demand for renewable fuels will create potential opportunities to 
construct more efficient transportation infrastructure across the 
United States. We believe the necessary long-term solution for 
efficient renewable fuel transportation is a large-scale pipeline 
    We urge you to include a new loan guarantee program for a dedicated 
ethanol pipeline system in the upcoming economic stimulus package. I 
look forward to discussing this issue with you and other Senators in 
greater detail.
Statement of Alvin Parks, Mayor and President, Metro East Citizens Land 
                Cooperative (MECLC), East St. Louis, IL

    On behalf of the citizens of the Metro East Communities we would 
like to introduce you to a new and exciting economic enhancer called 
the E-Macrosystem that we are working hard to deliver to our region. We 
are asking you to support our efforts as we work to build our 
communities, establishing hope and bringing real change to America from 
the grass roots.
    First, thank you once again for your inspiring message of hope and 
change you delivered to the U.S. Conference of Mayors on Saturday, June 
21st 2008. Your points of being a partner with American cities and 
making everyone understand that American cities are the solution and 
not the problem help us to know that you will do what it takes to 
strengthen our communities.
    You have also discussed that green energy is an economic enhancer 
and builds hope for families. We are working with an exciting new 
economic enhancer for our communities that needs your support. Here are 
the key benefits that the E-Macrosystem brings to our regional 

          1. Green Energy
          2. Environmental clean up of medical, industrial, 
        agricultural and municipal waste streams
          3. Creation of 2,300 jobs per system
          4. Citizen Ownership

    The Mayors listed in the left hand column of this letter have been 
working together to form the Metro East Citizens Land Cooperative 
(MECLC). I presently serve as the President of MECLC with the support 
of the Mayors of Granite City, Cahokia, and Brooklyn serving as 
officers with me on the Executive Board.

                     MECLC 2008 BOARD OF DIRECTORS

    Mayor Alvin Parks; City of East St. Louis; Mayor Ed Hagnauer, City 
of Granite City; Mayor Randy McCallum, Village of Alorton; Mayor Frank 
Bergman, Village of Cahokia; Mayor Nathaniel O'Bannon, Village of 
Brooklyn; Mayor Mark Jackson, City of Centreville; Mayor William Moore, 
Village of Hartford; Mayor Avery Ware, City of Venice; Mayor John Hamm, 
City of Madison; Mayor Alex Bregen, Village of Fairmont City; Mayor 
John Thornton, Village of Washington Park; Col. Michael Morrow, Ret., 
Morrow Group USA, Inc.

    The MECLC has been working to develop a demonstration model of 
advanced renewable energy systems that will be owned by our community 
residents as citizen-owners. This exciting national demonstration of 
advanced renewable energy will generate 2,300 new jobs in our community 
that is currently experiencing 31 % poverty.
    The renewable energy systems we are working with are called the E-
Macrosystem. The E-Macrosystem is an integration of two proven 
technologies in Solar Fuel Cell Regeneration and Waste Steam Reform 
Systems combined to create a stand-alone, emissions-free 7.5 MW power 
plant and manufacturing center. The MECLC E-Macrosystem national 
exemplar can be replicated and exported for national and world-wide 
use, solving problems of waste clean-up (e.g. agricultural, industrial, 
medical and municipal waste streams), contributing emissions-free power 
to power grid systems or remote locations where electricity is not 
available, and fostering development of clean energy industry 
everywhere. Utilizing the E-Macrosystem's capacity for marine 
applications will be beneficial for military and domestic uses such as 
delivering green power to hospitals.
    We are requesting your support for our project. We are excited 
about your vision for America's future; and we support you in your 
pledge to bring our nation's leaders together to join us in our efforts 
to effect real, meaningful change in our communities. I look forward to 
discussing how we can bring these innovations to fruition to serve the 
residents of Illinois and our nation.
 Statement of John Huber, Secretary, National Association for Oilheat 
                         Research and Education

    Chairman Bingaman and Ranking Member Domenici, on behalf of the men 
and women who deliver heating oil to consumers throughout the country 
and our colleagues who continue to work to develop new more efficient 
furnaces and boilers, we appreciate the opportunity to share our views 
for clean energy and natural resources projects and programs that can 
create green jobs and to stimulate the economy. Unlike many of the 
suggestions you are likely to hear today, our recommendation can be 
accomplished without any federal money, but will continue to provide 
major benefits to consumers.
    Next year, as part of a comprehensive energy bill, we urge this 
Committee and the Congress as a whole to include the provisions of S. 
3442, a bill introduced by Senators Reed and Snowe to reauthorize the 
National Oilheat Research Alliance Act of 2008.
    Congress enacted the National Oilheat Research Alliance Act of 2000 
to authorize the heating oil industry to conduct a referendum to create 
the National Oilheat Research Alliance (NORA) and to permit a small 
fraction of the wholesale price of home heating oil to be set aside to 
fund important research and development, energy conservation, safety, 
training, and consumer education initiatives. Since its enactment in 
2000, the Act has benefited millions of American consumers of home 
heating oil, at no cost to the federal government. Some examples:

          Energy Eficiency Improvements.--Working with Peerless Boilers 
        in Pennsylvania, NORA created the first American condensing 
        boiler, which is rated at 93 Annual Fuel Utilization Efficiency 
        (AFUE), seven points higher than the typical boilers found in 
        American homes, which have a rating of 86 AFUE. In cooperation 
        with Adams Manufacturing, NORA developed the Spartan condensing 
        furnace, which has a rating of 95 AFUE. Typical American 
        furnaces are rated at 84 AFUE.
          Potential Annual Savings.--In cooperation with the New York 
        State Energy Research and Development Authority, NORA developed 
        a seasonal rating system for boilers. This system is designed 
        to show typical operation over the season, instead of at peak 
        operation. This research and the calculator developed from it 
        shows that many homeowners could reduce their consumption 
        substantially, saving between $20,000 and $40,000 over a 
        twenty-year period.
          Education and Safety.--No energy efficiency improvements can 
        make it to the consumer without a strong push. To that end, 
        NORA developed an energy efficiency certification, the Gold 
        Certificate, that is designed to train technicians on how to 
        provide comfort, a safe system, and improve the energy 
        efficiency of the home. To date, over 1000 technicians that 
        have been certified.

    In addition, NORA has developed a simple test for evaluating the 
safety of tanks based on EPA's tests for commercial systems. With this 
simple inventory test, tanks can be inspected and evaluated for $80-100 
versus the current norm of $400-500.
    NORA conducted testing with Underwriters Laboratory to determine 
whether biofuels could be safely used in heating equipment. This study 
has encouraged manufacturers to extend warranty coverage to systems 
using biofuels, and will be used to redefine heating oil as containing 
    The Reed-Snowe bill would improve the operation of NORA and ensure 
that the heating oil industry and consumers can continue to reap the 
benefits of the check-off program. First, the proposed legislation 
would eliminate the sunset provision, which otherwise will require that 
the Act be reauthorized every five years. Eliminating the sunset 
provision will ensure continuity of contracts, and allow for long-term 
planning and initiatives, without the uncertainty caused by the need 
for frequent reauthorization measures. Second, the definition of 
oilheat would be expanded to include blendstocks used for home heating, 
including new cleaner biofuels. Third, the funding mechanism would be 
modified to bring it into conformity with the propane check-off 
program. Finally, the bill makes technical changes to address problems 
identified since 2000 (e.g, establishing a mechanism for additional 
States to join).
    The Reed-Snowe bill would provide the best means for enabling the 
heating oil industry to finance R&D, training, safety, and consumer 
information without the use of federal tax dollars. We thus urge you to 
include the provisions of S. 3442 as part of a comprehensive energy 
bill next year.
 A National Proposal for a National Forest Watershed Restoration Corps


    Congress once again is considering an economic stimulus package. As 
part of this package, Congress has the opportunity to put people back 
to work while accomplishing comprehensive restoration of our national 
forest watersheds. Public investment in restoration can sustain 
American families whose lives and work are tightly connected to our 
national forests; restore needed natural infrastructure and reclaim 
unneeded roads; make forests more resilient and adaptable to the 
unknown consequences of climate change; and assist the Forest Service 
and other federal natural resource stewards to meet basic environmental 
responsibilities, which has been increasingly difficult due to severe 
budget cuts over the last eight years. In sum, investing in forest 
watershed restoration will have tangible, long-term human and 
ecological benefits.

                              THE PROPOSAL

    Create a Forest Watershed Restoration Corps within the Forest 
Service funded at $500 million over the next two years to decommission 
forest roads, repair fish culverts and maintain forest roads used for 
recreation and administration. A Forest Watershed Restoration Corp can 
provide jobs in communities adjacent to national forests through 
contracts to local community members to complete restoration work and 
also create staffing opportunities within the Forest Service, such as 
term appointments that may be made permanent if the Forest Service's 
budget is restored in subsequent years.
    The Forest Watershed Restoration Corps could be analogous to a 
small-scale Civilian Conservation Corps (CCC), the most popular program 
of the New Deal, also referred to as Roosevelt's ``Tree Army.'' The 
economic situation today isn't as dire as it was in the thirties when 
the CCC employed a half million young men. Nevertheless, the creation 
of jobs in rural areas is urgently needed. Providing funds for rural 
businesses and workforce development over several years creates 
economic stability in an important but often overlooked part of America 
during an economic downturn that may to last for a decade or more.\1\ A 
short-term, quick payout stimulus package does not necessarily provide 
the type of support that will bolster rural families and communities 
adjacent to our national forests during these difficult times.
    \1\ Phillips, Kevin. 2008. Bad Money: Reckless Finance, Failed 
Politics and the Global Crisis of American Capitalism.

    Healthy forests are essential to rural communities, biotic 
communities and our planet. Large intact and functioning forest 
ecosystems provide clean drinking water for more than 60 million 
Americans; habitat for fish and wildlife; recreational opportunities 
for the public; and a place of solace and inspiration to those who 
visit. Healthy, restored forest watersheds are better able to adapt and 
respond to climate change, ensuring clean water for the long term. 
Further, forests are critical for sequestering carbon and they aid in 
the moderation of temperature.
    One of the most significant threats to forest watersheds and their 
biotic communities is failing forest roads. Deteriorating, unmaintained 
and poorly designed national forest roads harm fish through the chronic 
contribution of sediments into forest streams. Many of these fish are 
threatened and endangered under the Endangered Species Act. The same 
sediment fouls drinking water and increases the need for communities to 
build expensive water filtration systems. Unmaintained roads, 
especially in mountainous regions, are more likely to fail in severe 
storm events, contributing massive amounts of sediment to streams. In 
2006 and 2007 alone severe storms in the Pacific Northwest led to 
massive road failures and road-triggered landslides, resulting in tens 
of millions of dollars of damage to public and private lands. Storms 
such as this are becoming more common because of climate change, even 
further bolstering the need for an investment in restoration now.
    When undermaintained roads fail, outdoor enthusiasts and even 
citizens with private in-holdings lose access to the forest until those 
roads are repaired. It costs far more to fix the roads after they fail, 
and to clean up the damage (much of which is irreparable), than to 
address problems prior to road failures. Roads spread invasive pests, 
plants and pathogens, fragment important wildlife habitat and 
dramatically change hydrologic and aquatic conditions.
    Currently, at best, only 36%\2\ of the twelve western states' 
national forest roads are maintained to ``standard.'' These twelve 
states contain more than 85% of the entire National Forest road system. 
The Forest Service never planned for or assessed the impact of this 
extremely limited maintenance capacity on forest and water resources, 
and the impact becomes exponentially more significant each year. In 
2001, the Forest Service estimated that it could remove nearly half of 
its entire road system\3\ (up to 186,000 miles out of the total 380,000 
mile system), while still meeting the resource and recreational needs 
of forest users. Many of these roads were built for obsolete logging 
systems and now are heavily overgrown and prone to landslides from 
heavy rains or snowmelt. This year the Forest Service determined that 
approximately 25,000 miles of existing Forest Service roads suitable 
for passenger vehicles are necessary to access developed recreation 
sites, key trailheads, visitor centers, and state or private land 
developments. There is ample opportunity to put people to work 
restoring watersheds and remediating road problems.
    \2\ United States Department of Agriculture, Forest Service. 2006. 
U.S. Forest Service Annual Road Assessment Reports.
    \3\ National Forest System Road Management Rule and Policy. May 
    Removing unneeded, ecologically damaging roads is the first and 
most critical step towards watershed restoration. Repairing culverts to 
restore fish passage, in combination with performing critical 
maintenance, is imperative for those roads that we need to keep. We 
have an obligation to restore watersheds to provide the resiliency and 
adaptability necessary to respond to the impacts of climate change and 
the associated increase in storms and flooding.

                          THE ECONOMIC CONTEXT

    The Forest Service estimates their road maintenance backlog at 
nearly $8 billion\4\--although when administrative and indirect costs 
are included the backlog actually totals closer to $10.3 billion.\5\ 
Shrinking budgets have ensured that each year the Forest Service slips 
further behind in its responsibility to maintain its road system.
    \4\ United States Department of Agriculture, Forest Service. 2004. 
Fiscal Year 2005 Forest Service Budget Justification. sec. 10, p.33.
    \5\ Taxpayers for Common Sense. March, 2004. Road Wrecked: Why the 
$10 billion Forest Service Road Maintenance Backlog is Bad for 
    Over the last twenty years timber sales--which used to provide much 
of the revenue for road maintenance--have declined. But even when 
timber receipts were at their highest, the Forest Service was not able 
to fully maintain its road system. Road obliteration can be extremely 
costly, with medium-sized and major roads ranging from $40,000-$70,000 
and $100,000-$250,000 per mile respectively.\6\ Costs are even higher 
in the Pacific Northwest due to high rainfall and the steep grade of 
the land. That said, many forest roads are small-sized and numerous 
forests have been able to reclaim roads for approximately $10,000 per 
    \6\ United States Department of Agriculture, Forest Service. 2000. 
Forest Service Roadless Area Conservation: Final Environmental Impact 
    National forests were and are an important source of jobs in rural, 
resource-dependent communities but declining timber harvests cause 
challenges for rural economies. A recent report from the Western Wood 
Products Association predicts the decline in timber jobs will continue 
in the upcoming years as housing starts stall. The Association points 
out that over the last three years demand for lumber has declined by 20 
billion board feet--the amount that all the western mills produced in 
2005 alone. The current financial crisis will hit these communities 
very hard.
    Investing in a comprehensive watershed restoration program can 
provide people in rural, resource dependent communities with the same 
high-wage, high-skill jobs derived in the past from building roads or 
extracting timber. Since these jobs require the very same heavy 
equipment needed to build roads, and since that machinery is expensive 
to transport, the jobs are most likely to go to local workers. Local 
workers will spend the bulk of their paychecks directly in their own 
communities. Furthermore, this work will encourage local contractors 
and workers to make long-term investments in equipment and training.
    An infusion of $250 million a year can create 3500 direct jobs in 
the rural West, in addition to any other jobs that are sustained or 
created through multiplier effects. We believe such a program could be 
viable for decades to come as it will take decades, at minimum, to 
address the backlog of maintenance needs and road decommissioning 
projects to restore functioning, dynamic, resilient watershed 
conditions on our national forests.
    With the decline in the forest products industry, many of the 
skilled workers required to restore the forest have been or soon will 
be lost to emigration or attrition. In order to maintain an essential 
skilled workforce we suggest that all contracts require some portion of 
the workers to be enrolled in a state recognized apprenticeship 

                         PROGRAM IMPLEMENTATION

    The Forest Watershed Restoration Corps program would need to 
immediately hire staff to begin planning and implementing projects. 
While there are numerous remediation and reclamation projects that have 
already undergone environmental review under the National Environmental 
Policy Act (NEPA) and other applicable resource protection statutes, 
there is also a significant need to increase planning capacity to 
ensure a steady supply of NEPAready projects over the long-term. Lack 
of fully planned and reviewed projects is currently one of the main 
impediments to building a strong restoration program in the agency, 
while the second primary impediment is a lack of restoration funding. 
This proposal could directly address both of those challenges.
    As part of the immediate job creation opportunity of this economic 
stimulus, we believe the Forest Service will need to staff up to 
implement a Forest Watershed Restoration Corps and that each of the 
approximately 150 national forests, proportional to their need, will 
need to hire at least one of each of the following:

   a trained contracting specialist
   an individual capable of overseeing NEPA project planning
   a geoengineering, hydrologist, geomorphologist or soils 
        engineer for contract implementation oversight
   either a fish or wildlife biologist

    Furthermore, we recommend that since these projects are entirely 
restorative in nature that the NEPA process can be facilitated for most 
projects by the appropriate use of categorical exclusions for project 
    The 600 Forest Service positions referenced above could be filled 
as temporary, professional appointments that could be converted to 
permanent if funds become available. Forest Service jobs would consume 
less than a fifth of the $250 million requested annually from an 
economic stimulus package and still provide an extensive infusion of 
funding for local contractors and rural workers.
    While all forests can immediately take advantage of planning funds 
to hire new staff, implementation funds could be prioritized based on 
climate and elevation depending on when a stimulus package is adopted. 
Forests in the south, for example, will be able to engage in 
remediation and restoration projects in the winter, while more northern 
or high elevation forests will be required to wait until spring to 
begin implementation.
    The program will provide real jobs to former road builders, 
primarily excavator and bulldozer operators and qualified on-the-ground 
inspectors. These types of workers have not only been displaced by the 
timber industry, but they are also feeling the pinch from the decline 
in housing starts, as many excavator operators also work in that arena. 
But even experienced heavy equipment operators will need some 
retraining in both the science and art of road reclamation, so there 
will also be opportunities to develop watershed restoration training 
and certification programs that can ensure that this work is done 
effectively and efficiently on the ground--guaranteeing that the 
results are beneficial for watersheds. Companion funding could also be 
provided to develop a systematic, comparative area monitoring program 
through the agency's research branch or through universities to ensure 
that new technologies are being tested and monitored for effectiveness. 
A timely infusion of funding through the stimulus program could help 
kick start new careers in watershed restoration while simultaneously 
bolstering the growing restoration economy.
     building on the legacy roads and trails remediation initiative
    The Interior portion of the Fiscal Year 2008 Consolidated 
Appropriations bill provided $40 million ``for urgently needed road 
decommissioning, road and trail repair and maintenance and associated 
activities, and removal of fish passage barriers, especially in areas 
where Forest Service roads may be contributing to water quality 
problems in streams and water bodies which support threatened, 
endangered or sensitive species or community water sources and for 
urgently needed road repairs required due to recent storm events.''
    Legacy Roads funding was distributed nationally and as a result a 
new watershed restoration program began last year within the Forest 
Service. At that rate of funding it will take 100 years for the Legacy 
Roads program to work through the $10 billion road maintenance backlog. 
We need a new approach to restore our watershed and assist people in 
rural, resource dependent communities and the economic stimulus package 
could provide the impetus to solve these problems.


    The Forest Watershed Restoration Corps provides both an economic 
and ecological solution to pressing problems in our forests and near-
forest communities. As with the CCC, the Forest Watershed Restoration 
Corps has the potential to provide employment in nearly every state of 
the nation and as importantly, to enable people to feel good about the 
work they are doing and the positive difference they are making to 
forests and streams. The need to restore our national forests is 
critical at this time of global uncertainty, and people will be proud 
of the contribution they make to protect our drinking water, fish and 
wildlife, recreational opportunities and climate.
    The undersigned* strongly urge you to provide $500 million over two 
years to create a Forest Watershed Restoration Corps to provide jobs in 
rural communities and improve the health of our forest watersheds. We 
request that this proposal is included in the final economic stimulus 
package developed in 2009. We appreciate your consideration of this 
    * Additional signatories have been retained in committee files.
                                               Jim Furnish,
               Retired Deputy Chief, USDA Forest Service, Maryland.
                                              John Horning,
               Executive Director, WildEarth Guardians, New Mexico.
                                                Dan Miller,
            Executive Director, Bear River Watershed Council, Utah.
        Statement of the National Conference of State Historic 
                         Preservation Officers

    The National Conference is the association of the gubernatorially 
appointed State officials who carry out the National Historic 
Preservation Act (16 USC 470) for the Secretary of the Interior and the 
Advisory Council on Historic Preservation.
    Historic preservation makes important contributions to energy 
efficiency by encouraging people to live and work in existing, historic 
buildings supporting an energy conserving life-style. Historic 
preservation is the stewardship of the built environment that uses 
historic buildings and communities to achieve environmental, economic 
and cultural sustainability. Historic preservation's tax credit 
stimulates the economy at a rate of $4 billion in private investment 
annually, development that meets the needs of the present without 
compromising the ability of future generations to meet their own needs.


    Reusing and retrofitting historic buildings, and reinvesting in 
older and historic neighborhoods, offers a sustainable way to reduce 
waste and carbon emissions and bring back prosperity to once thriving 
neighborhoods. Research suggests that many historic and older buildings 
are actually more energy efficient than more recent buildings because 
of their site sensitivity, quality of construction and use of passive 
heating and cooling. While there is still room for improvement, recent 
historic rehabilitation projects are demonstrating that energy 
efficient retrofits can be done in ways that are sensitive to the 
historic nature of the building.
    The historic preservation community is working with the U.S. Green 
Buildings Council to better recognize preservation and reuse in their 
Leadership in Energy and Environmental Design (LEED) rating system. The 
common mantra of ``new is better'' continues to be a challenge to 
overcome. However, the SmithGroup of Detroit decided to challenge that 
way of thinking when it renovated the Lansing, Michigan-based Christman 
building--the first building to earn dual LEED Platinum certification 
for both construction and for its interior. Built in 1928 and siting on 
a brownfield site, the former Mutual Building is listed on the National 
Register of Historic Sites. This stately historic building is now a 
``green'' building suited for modern office use.
    The National Conference has a two part agenda for historic 
preservation's role in a clean, green, stimulus.

                            IMMEDIATE AGENDA

    Within four months of passage of an economic stimulus bill, 
generate 15,000 jobs and over $50 million in private investment for the 
rehabilitation of historic buildings in every State across America 
through a $50 million withdrawal from the unobligated balance of the 
Historic Preservation Fund. Amendment of Section 108 of the National 
Historic Preservation Act would allow direct funding.
    It is well documented that building rehabilitation outperforms new 
construction in creating economic activity. For example, if a community 
is considering spending $1 million in new construction or $1 million 
for a building rehabilitation project, the rehabilitation choice would 
have several advantages:

   $120,000 more dollars will initially stay in the community;
   Five to nine more construction jobs will be created;
   4.7 more new non-construction jobs will be created;
   Household incomes in the community will increase by $107 
        more than they would under the new construction project;
   Retail sales in the community will increase by $142,000 as a 
        result of the $1 million rehabilitation expenditure--$34,000 
        more than they would under the new construction funds; and
   Real estate companies, lending institutions, personal 
        service vendors, and eating and drinking establishments will 
        all receive more monetary benefit from the rehabilitation than 
        the new construction. (Rypkema, 1998)

    State Historic Preservation Officers have a solid track record of 
quickly turning grant programs into construction projects. It took the 
SHPO three months from the date of the National Park Service notice to 
initiate Katrina recovery grants (grant announcement, ranking and 
review of applications, grant awards), a far quicker turn around than 
other federal agencies.

                            LONG TERM AGENDA

    The historic preservation community including the NCSHPO, The 
National Trust for Historic Preservation, The National Association of 
Preservation Commissions and Preservation Action has identified a 
legislative agenda, combining sustainability and historic preservation 
principles, that will create green jobs, stimulate the economy and 
preserve our nation's heritage. The key policy principles include:

   Improve energy efficiency in buildings include historic 
        preservation through a homeowner federal income tax credit for 
        energy retrofits and through manufacturer's incentives for 
        energy efficient product development.
   Maximize the contribution of a skilled historic preservation 
        labor force historic preservation to the green economy through 
        job training in historic rehabilitation crafts.
   Global climate change causes natural disasters that require 
        in-place response mechanisms for historic community recovery 
        including identification of where the historic sites in at-risk 
        places are and an in-place mechanism for restoration recovery 
   Infrastructure rehabilitation is critical to the 
        sustainability of our historic urban and rural communities.
   Expand resources for the National Historic Preservation 
        Program. Increasing resources is critical to providing 
        infrastructure support needed for the stewardship and 
        sustainability of the built environment.

    The NCSHPO looks forward to working with the committee to pass 
legislation based on the above listed sustainable preservation 
policies, which will benefit our nation's economy, environment, and 
historic heritage.
    Thank you.
  Statement of Fred Mondragon, Cabinet Secretary, New Mexico Economic 
                  Development Department, Sante Fe, NM

    Thank you for your tireless leadership on behalf of New Mexico's 
citizens and our national energy needs. This letter provides input on a 
possible green jobs component of the economic stimulus package being 
formulated in Congress.
    New Mexico has many assets in the areas of renewable energy. energy 
efficiency and the ``green grid'' that can be leveraged to create jobs. 
The New Mexico Economic Development Department is developing a Clean 
Energy Economic Development Strategy, and considers this sector to be a 
critical area for stimulus, as well as for long term economic growth 
for the state. As you know, New Mexico has:

   The second best developable solar resource in the country, 
        5th best inland wind resource, and significant geothermal 
        potential located on abundant open land. As a small state, New 
        Mexico has the potential to be a power exporter which will 
        strengthen our national energy independence and generate jobs 
        for our citizens:
   The New Mexico Renewable Energy Transmission Authority, 
        which will help deliver our renewable electricity to market;
   An existing cluster of solar and other clean technology 
        manufacturing firms,
   World-class renewable energy and ``smart grid'' research 
        capabilities at our national labs and universities, an 
        established venture capital conmmnity, and an emerging focus on 
        commercialization that can generate new startup companies;
   The Southwest Biofuels Association and leading research 
        capabilities on biofuels from feed stocks that can be grow on 
        arid lands.
   A WIRED workforce grant, nationally recognized solar and 
        wind training programs, and an emerging statewide, cross-sector 
        Green Jobs Partnership that will coordinate green workforce 
        development efforts;

    Below are opportunities for investment in New Mexico's Clean Energy 
Economy that I encourage you to consider for inclusion in the stimulus 
bill and upcoming energy legislation.


    The State of New Mexico has organized a consortium of national 
laboratories, universities. utilities and companies involved in ``green 
grid'' solutions across the state. This consortium is preparing a 
proposal for state and federal funding to make New Mexico a national 
research and demonstration center for the technology and systems that 
modernize our grid, ensuring reliability, creating efficiencies and 
supporting the presence of significant renewable generation sources, 
both utility-scale and smaller distributed sources. Solutions developed 
in New Mexico can be deployed across the country and will generate 
high-wage jobs for our state.


    As a state with nation-leading renewable energy resources and a 
small population, New Mexico has the potential to be an exporter of 
electricity to other states. Exporting New Mexico's electricity is a 
win-win proposition: other states get the renewable energy they need, 
our nation becomes more energy independent, and New Mexico gets 
valuable jobs that can never be sent overseas. Across the region, we 
are working with the Western Governors' Association to identify Western 
Renewable Energy Zones that will identify high-value areas in need of 
new transmission capacity. Federal transmission investments are needed 
to connect these Renewable Energy Zones to load centers. I encourage 
Congress to consider investments in our transmission infrastructure to 
bring renewables to market. The federal government can also play an 
important role in removing regulatory impediments to the development of 
renewable resources and associated transmission lines.


    New Mexico has already demonstrated leadership in promoting 
renewable energy by establishing to state-level Renewable Portfolio 
Standard. I encourage you to establish a national RPS. Such a standard 
would dramatically increase demand for renewable electricity and 
provide a greater market for New Mexico's clean energy resources.
        funding for energy efficiency and clean energy projects
    State and tribal grants for energy efficiency and clean energy 
projects would be well spent in New Mexico. Energy efficiency and 
weatherization funding, particularly targeting low-income citizens, 
creates jobs and ensures our citizens are living in homes that are 
safe, comfortable and affordable in the face of rising energy prices. 
The U.S. Department of Energy estimates that 52 jobs are created for 
every $1 million spent on energy efficiency and weatherization.
    Furthermore, funding should be included for clean energy projects 
including solar thermal and solar photovoltaic projects, wind projects, 
geothermal projects and Combined Heat and Power systems. The Renewable 
Energy Policy Project has calculated that both solar and wind power 
create 40% more jobs than coal power for an equivalent amount of power. 
Investing federal dollars will produce jobs, foster energy 
independence, and drive system costs down.

                        COMPONENT MANUFACTURING

    The Renewable Energy Production Tax Credit (PTC) and the Solar 
Investment Tax Credit (ITC) have been effective tools for supporting 
New Mexico's growing clean energy industry. In the solar industry 
alone, the Energy Industries Association has estimated that extending 
the ITC through 2016 would create 19,000 new jobs in New Mexico, This 
is the highest employment gain from an ITC extension in the nation as a 
percentage of state population.
    New Mexico has a state Alternative Energy Product Manufacturer's 
Tax Credit has that has been instrumental in attracting world-class 
companies like Schott Solar to New Mexico. A similar federal credit 
would facilitate their expansion and create new high-wage jobs.
    Very recently, we have heard from some utility-scale renewable 
energy developers active in New Mexico that the recession has reduced 
the appetite of companies for tax credits which has made financing 
these projects more challenging. Please take this into consideration 
when determining how best to incentivize additional renewable energy 


    A Green Jobs Partnership is forming in New Mexico to ensure that 
our state has the prepared workforce it needs for a low-carbon economy. 
Leveraging the investment and learning from the federal WIRED grant 
that the state received, this Partnership will expand this model and 
adopt it statewide. New Mexico plans to meet the needs of employers by 
providing a workforce with nationally recognized certifications like 
WorkKeys, MSSC-Certified Production Technicians, NABCEP certified solar 
installers and certified wind technicians. Our state colleges will also 
work to develop customized training programs for employers on a just-
in-time basis.
    In order for New Mexico to truly benefit from the jobs created by a 
federal stimulus package, a proportional federal investment in 
workforce training will be needed. Furthermore, the creation of a 
national Green Jobs Corps would help to expose our young people to 
these jobs of the future and provide them with needed skills and 

                         RESEARCH & DEVELOPMENT

    Congress should support a substantial long-term federal investment 
in basic and applied research and deployment of renewable energy, 
biofuels, and low-carbon technologies. New Mexico's labs and 
universities are well positioned to participate in this research.
    New Mexico looks forward to working with you to ensure federal 
investments have a maximum positive impact on New Mexico's economy and 
our nation's energy independence. Thank you again for your leadership 
at this important time.
                      Statement of Peabody Energy

    Thank you to Chairman Bingaman, Senator Domenici, and the Members 
of the committee for the opportunity to submit comments on how the 
buildout and continuing support of substitute natural gas (``SNG'') 
production can also help stimulate the economy and provide 
environmental and national security benefits.
    In comparison to oil and gas, coal is abundant both worldwide and 
in the United States, Worldwide coal reserves are 4 times greater than 
oil and gas reserves combined. Perhaps more importantly, although the 
U.S. has less than an estimated 3% of the world's oil and gas reserves, 
it has 27% of the world's coal reserves, revealing an obvious national 
security advantage for the domestic consumption of coal. The Energy 
Information Administration has estimated that the United States has a 
coal reserve that will hold out, even in the face of growing energy 
demands, for 250 years.
    We now have the capability of transforming this vast domestic 
resource into SNG, a product that is fungible with our current natural 
gas supply, thus immediately ready to be put into pipelines and shipped 
to heat homes, warm our water, prepare our meals, create clean 
electricity, and serve any of the other purposes of natural gas. The 
process in which SNG is transformed from coal to this versatile gas 
also is capable of capturing more than 90% of the carbon dioxide that 
ultimately could be permanently stored or used for enhanced oil 
recovery, creating a superior environmental product. Notably, the 
technology used to capture the carbon dioxide in the SNG process is a 
tested and proven technology and does not carry risks sometimes 
associated with other generations of carbon capture technologies. And 
with natural gas demand expected to grow more than 10 percent over the 
next two decades, SNG production also has immeasurable national 
security benefits by providing a domestic source of energy which would 
likely otherwise be procured from abroad. It is projected that about 
75% of the increase in demand over this time will be met with foreign 
sources of natural gas as the domestic production is at or near its 
peak. (See slides in first addendum for more information regarding the 
high cost of natural gas.)*
    * Addenda 1-2 have been retained in committee files.
    The economic benefits of incentives for SNG production are 
manifest. Generally speaking, although certain policies and significant 
startup costs have hampered SNG production, long term increases in high 
oil and natural gas prices, along with environmental concerns have made 
buildout of SNG production facilities a reality. Peabody Energy, along 
with ConocoPhillips, has just announced plans to build the world's 
premier SNG facility in Muhlenberg County, Kentucky. (See press release 
and project overview in second addendum.) This project will create 1200 
construction and 500 long term jobs in the region. In addition, it will 
provide up to $100 million annually in local and state economic impact 
through wages, taxes and other benefits. Several other similar projects 
have been planned and, if given a stimulus-related benefit, could 
likely come to fruition relatively quickly. Fundamentally, SNG 
production is a boon to the economy as it takes low-value feedstocks 
and converts them into high value products.
    So how does it work? During the gasification process, coal is 
ground into small particles and mixed with water. This mixture is 
injected into a pressurized vessel along with a controlled amount of 
pure oxygen. The heat inside the gasifier converts the coal, water and 
oxygen into synthesis gas comprised primarily of hydrogen and carbon 
monoxide. After removing any sulfur and carbon dioxide from the 
synthesis gas, the hydrogen and carbon monoxide react to create 
methane, or substitute natural gas. Specific environmental benefits 

   The process captures over 90 percent of the feedstock carbon 
        dioxide that ultimately could be permanently stored or used for 
        enhanced oil recovery.
   The process can cost-effectively remove 90-95 percent of the 
        mercury in coal.
   Over 99 percent of the sulfur from the process can be 
        recovered and marketed for use in the fertilizer industry.
   The gasification process produces no ash and recycles 
        byproduts into useful products including road construction 

    In order to capitalize on the many benefits that SNG can bring to 
this country's energy portfolio, we recommend:

   Specifically including SNG production and investment in tax 
        credits such as the section 45 production tax credit and the 
        section 48B investment tax credit for advanced coal 
   Additional tax credits for carbon capture and storage as 
        well as credit for the use of captured carbon dioxide for 
        enhanced oil recovery operations.
   Incentives for additional investment in carbon capture and 
        storage infrastructure in order to allow such capture and 
        transportation to storage.
   Timely creation of workable regulatory and legal schemes for 
        carbon capture and storage as well as enhanced oil recovery.

    Thank you very much for your attention to these critical issues and 
your willingness to consider how this revolutionary technology can 
create jobs, provide an environmentally sound energy resource, and 
increase our national security.
               Statement of the Water Resources Coalition

    Mr. Chairman, Ranking Member Domenici, and members of the 
Committee, the Water Resources Coalition is submitting this statement 
for inclusion in the record of your December 10, 2008 hearing on how 
infrastructure investment will lead our economy down the road to 
recovery through the creation of green jobs.
    The Water Resources Coalition was established in 2007 to promote 
the development, implementation and funding of a comprehensive national 
water resources policy. With member organizations representing state 
and local governments; conservation, engineering, and construction; 
ports, waterways, and transportation services, the Coalition works to 
ensure that a comprehensive, national water resources policy is 
developed, implemented, and funded to provide a sustainable, productive 
economy; healthy aquatic ecology; and public health and safety. Because 
of the breadth of the Coalition's membership, many of our members have 
extensive experience with various types of federal, State, and local 
water resources projects ranging from water supply to environmental 
restoration, to storm damage reduction and navigation. At the federal 
level, each of us works closely with both the Corps of Engineers and 
the Bureau of Reclamation.


    The Water Resources Coalition believes investment in water 
infrastructure projects is an investment in our economy and in the 
protection of our environment. The Coalition believes in comprehensive 
water solutions, rather than solutions that are aimed exclusively at 
protecting environment or water supply. Protecting one or the other 
exacerbates both as they are repeatedly in conflict with one another. 
Protecting only one aspect of our water system is not sustainable and 
threatens, rather than improves, our economy. Investments in 
sustainable infrastructure projects will not only immediately stimulate 
our economy through job creation in the construction sector, but will 
also provide reliable, long-term water supplies. Additionally, many 
projects are designed to reduce stressors on our natural resources and 
ecosystems, working to protect our environment from drought and 
protecting threatened species. The pending water crisis in California, 
which has set in opposition California water supply versus the 
endangered delta smelt, provides an example of how relying on outdated 
infrastructure sustains conflict and demonstrates the need for new, 
sustainable infrastructure for the protection of the environment and 
reliable water supply.

                          STATE OF THE ECONOMY

    The recent financial crisis has hampered the ability of state and 
local governments and public agencies to borrow short term, delaying or 
eliminating various infrastructure improvement projects. At the state 
and local level, budgets have declined significantly because of the 
decline in home values, resulting in lower property tax collections. 
The recent financial crisis has also hampered the ability of state and 
local governments and public agencies to borrow short term, delaying or 
eliminating various infrastructure improvement projects. According to 
Municipal Market Advisors, a consulting firm that specializes in 
municipal bonds, $100 billion of new infrastructure projects have been 
delayed because of the constricted credit markets.
    The impact of fewer contracts being bid is reflected in increasing 
nationwide unemployment numbers. Non-residential construction 
employment peaked in January 2007 and has steadily decreased over the 
past 24 months. There was more than a four percent decrease in these 
jobs over that period, which equates to 180,000 construction employees. 
It is estimated that an additional loss of 10 to 15 percent nationwide 
is possible if the economy does not turn around. That could add another 
27,000 more lost jobs to the 180,000 lost over the last 24 months.
    It is estimated that every $1 billion invested in infrastructure 
projects would create or sustain over 28,500 new direct and indirect 
jobs. Each billion invested would add about $3.4 billion to the Gross 
Domestic Product (GDP) as it ripples through the economy and about $1.1 
billion to personal earnings.

                         BUREAU OF RECLAMATION

    Within the Bureau of Reclamation, there continues to be an unmet 
need for federally funded projects to meet and maintain reliable water 
supply throughout the West. The Coalition suggests the Economic 
Recovery program include additional funding into Reclamation's drought 
and water conservation programs: the Title XVI Water Reclamation and 
Reuse Program; its authorized Rural Water Projects; and the Colorado 
River Salinity Control Program. We believe there should also be a 
greater emphasis to drought preparedness and the expected challenges 
from climate change with regard to the Reclamation program and the role 
of the existing projects constructed by Reclamation. Though not 
directly related to greater job generation at this time, we feel this 
Economic Recovery is an important opportunity to be forward thinking 
with regard to preparing for the future.
    We see an unmet need for greater integrated resource planning and 
water resource planning in the West. The Bureau has played an important 
role in the development of the 17 western states over the past one-
hundred years. We were greatly concerned with the almost $200 million 
reduction in the FY 2009 Reclamation program as proposed by the 
administration. When the Water and Related Resources (construction) 
account of the Bureau is examined, 51 percent of the funding is now for 
facility maintenance and rehabilitation. The Coalition recognizes the 
importance of such investment given the aging of the infrastructure and 
the harsh climatic conditions of the western United States and the ease 
of using Economic Recovery funds to address maintenance. Nevertheless, 
that funding only leaves about $250 million for the construction work 
in the water and energy component of the program--a program with a 
significant backlog of authorized work that holds the potential for 
meeting critical water needs in the West.
Title XVI
    The Coalition also supports the increased fusion of funds for the 
Bureau of Reclamation's Water Recycling and Reuse Program, known as 
Title XVI. This program funds recycling and reuse projects throughout 
the West. In the Western U.S., drought, population growth, increasing 
climate variability, and ecosystem needs make managing water supplies 
especially challenging. Water reuse projects provide a valuable source 
of water and help alleviate conflicts. These projects are a sound and 
critical investment in creating jobs, addressing drought concerns and 
helping local economies.
    In California, water recycling projects throughout the state help 
to reduce dependence on imported water from both the Lower Colorado 
River and Sacramento/San Joaquin Delta. In the San Gabriel Basin and 
elsewhere, these projects are also designed to clean up contaminated 
groundwater. There are an estimated $500 million worth of projects 
throughout the State that could begin within 120 days of receiving 
funds. Nationally, the Bureau of Reclamation estimates a $655 million 
backlog in funding for 45 projects across nine western states. 
Estimates indicate these types of water construction projects generate 
between 30,000-40,000 jobs per billion invested.
Rural Water
    There continues to be an unmet need for reliable water supply in 
rural areas across the United States, particularly in the Great Plains 
states and throughout the Southwest. The Coalition supports the 
Economic Recovery package providing funding for the existing authorized 
projects in the Bureau's construction program, especially those 
associated with meeting the needs of the Native American community.
Colorado River Basin Salinity Control Program
    The Coalition would also request that additional funding for the 
Colorado River Basin Salinity Control Program be provided to further 
advance this important program for meeting water quality needs in the 
seven Basin states and Mexico. Salinity damages to municipal and 
agricultural water users of Colorado water are currently over $300 
million per year. Municipal users in southern California are being 
particularly hard hit because salinity limits their ability to reuse 
wastewater to meet increasing demands on water supplies. The salinity 
program is designed to meet the Colorado River Basin Water Quality 
Standards. These standards include a plan of implementation to mitigate 
further degradation of water quality in southern California, Arizona, 
Nevada, and deliveries to Mexico. The goal of this program is to seek 
cost-effective, regional solutions to the program.
    Thank you for this opportunity to comment. The Water Resources 
Coalition looks forward to working with the Committee on this critical 
Statement of the Interstate Mining Compact Commission and the National 
              Association of Abandoned Mine Land Programs

    This statement is submitted on behalf of the Interstate Mining 
Compact Commission (IMCC) and the National Association of Abandoned 
Mine Land Programs (NAAMLP) concerning the issues addressed by the 
Senate Energy and Natural Resources Committee at a hearing on December 
10, 2008 regarding proposed investments in clean energy and natural 
resources projects and programs designed to create green jobs and 
stimulate the economy. The states and tribes represented by our 
organizations are prepared to work with Congress and the Administration 
to put moneys made available under an economic stimulus package to work 
on the ground to address the cleanup of abandoned mine lands, an 
investment that will not only create green jobs but will also 
significantly improve the environment, protect public health and 
safety, and stimulate local economies. We appreciate the opportunity to 
submit this statement.
    The Interstate Mining Compact Commission (IMCC) and the National 
Association of Abandoned Mine Land Programs (NAAMLP) are multi-state 
governmental organizations that together represent some 30 mineral-
producing states and Indian tribes, each of which implements programs 
that regulate the environmental impacts of both coal and hardrock 
mining. Many of these programs involve delegations of authority from 
the federal government pursuant to national environmental laws such as 
the Surface Mining Control and Reclamation Act, the Clean Water Act and 
the Resource Conservation and Recovery Act. Under these statutes, the 
states exercise primary responsibility for the permitting and 
inspection of the affected mining operations, for the enforcement of 
applicable environmental performance standards, and for the protection 
of public health and safety.
    The development of our Nation's mineral resources is a critical 
component of our national well-being and security. Our manufacturing 
activities, transportation systems and the comfort of our homes depend 
on the products of mining. At the same time, it is essential that an 
appropriate balance be struck between the need for minerals and the 
protection of the public health and safety and the environment. Over 
the past 40 years with the passage of sweeping national environmental 
laws, the states and Indian tribes have taken the lead in fashioning 
and then implementing effective programs for the regulation of mining 
and its impacts, including the cleanup of inactive and abandoned mine 
lands. As we face new challenges associated with homeland security, 
climate change and alternative energy sources, the importance of 
mineral development will be heightened, as will the role of state and 
tribal regulatory authorities.
    Another significant opportunity in which the states and tribes can 
play a major role is the development of projects and programs to create 
green jobs and thereby stimulate the economy, which is the subject of 
the Committee's hearing. As we will explain in further detail below, 
the cleanup of inactive and abandoned hardrock mines across the country 
presents an opportunity to create jobs that will directly improve the 
environment in many ways. The states and tribes have a plethora of AML 
projects ``on the shelf'' that could benefit from immediate funding and 
that would generate jobs for America's work force. We believe that 
nationwide, upwards of $250 million could be spent over the next 18--24 
months to address hardrock AML sites and thereby benefit the 
environment and stimulate the economy.
    Nationally, abandoned mine lands continue to have potentially 
significant adverse effects on the environment. Some of the types of 
environmental impacts that occur at AML sites include subsidence, 
surface and ground water contamination, erosion, sedimentation, 
chemical release, and acid mine drainage. Safety hazards associated 
with abandoned mines account for deaths and/or injuries each year. 
Abandoned and inactive mines, resulting from mining activities that 
occurred over the past 150 years prior to the implementation of present 
day controls, are scattered throughout the United States. The sites are 
located on private, state and public lands.
    Over the years, several studies have been undertaken in an attempt 
to quantify the hardrock AML cleanup effort. In 1991, IMCC and the 
Western Governors' Association completed a multi-volume study of 
inactive and abandoned mines that provided one of the first broad-based 
scoping efforts of the national problem. Neither this study, nor any 
subsequent nationwide study, provides a quality, completely reliable, 
and fully accurate on-the-ground inventory of the hardrock AML problem. 
Both the 1991 study and a recent IMCC compilation of data on hardrock 
AML sites were based on available data and professional judgment. The 
data is seldom comparable between states due to the wide variation in 
inventory criteria. Nevertheless, the data do demonstrate that 
nationally, there are large numbers of significant safety and 
environmental problems associated with inactive and abandoned hardrock 
mines and that cumulative remediation costs are very large.
    Across the country, the number of abandoned hardrock mines with 
extremely hazardous mining-related features has been estimated at 
several hundred thousand. Many of the states report the extent of their 
respective AML problem using a variety of descriptions including mine 
sites, mine openings, mine features or structures, mine dumps, 
subsidence prone areas, miles of unreclaimed highwall, miles of 
polluted water, and acres of unreclaimed or disturbed land. Some of the 
types of numbers that IMCC has seen reported in our Noncoal Report and 
in response to information we have collected for GAO and others include 
the following gross estimated number of abandoned mine sites: Alaska--
7,000; Arizona--80,000; California--47,000; Colorado--7,300; Montana--
6,000; Nevada--16,000; Utah--17,000 to 20,000; New York--1,800; 
Virginia--3,000 Washington--3,800; Wyoming--1,700. Nevada reports over 
200,000 mine openings; Minnesota reports over 100,000 acres of 
abandoned mine lands and South Carolina reports over 6,000 acres. While 
the above figures attempt to capture a universe of all abandoned mine 
sites by state, the actual number of sites that pose significant 
health, safety or serious environmental problems is likely far lower.
    What becomes obvious in any attempt to characterize the hardrock 
AML problem is that it is pervasive and significant. And although 
inventory efforts are helpful in attempting to put numbers on the 
problem, in almost every case, the states are intimately familiar with 
the highest priority problems within their borders and know where 
limited reclamation dollars must immediately be spent to protect public 
health and safety or protect the environment from significant harm.
    Estimating the costs of reclaiming hardrock abandoned mines is even 
more difficult than characterizing the number of mines. If one accepts 
the estimates of the number of AML sites, one can develop a very rough 
estimate for the costs of safeguarding mine hazards and reclaiming 
small surface disturbances. But the costs of remediating environmental 
problems such as ground water and surface water contamination, acid 
rock drainage or wind blown contaminants are extremely difficult to 
estimate. And many of these problems will not even be detected unless a 
thorough assessment and testing occurs at a site.
    In an effort to quantify and forecast what states could spend as 
part of an economic stimulus package that focuses on the cleanup of 
abandoned hardrock AML sites over the next 18 to 24 months, IMCC 
received the following information from the states:

   South Dakota.--South Dakota has one major mining Superfund 
        site waiting for remediation. The Gilt Edge Mine Superfund Site 
        is located in the northern Black Hills, approximately four 
        miles from the town of Deadwood. Mining activities began at the 
        site in 1876 and continued intermittently for more than 100 
        years. The most recent owner of the site, Brohm Mining Company, 
        operated a large-scale, open pit, heap-leach gold mining 
        operation at the site from 1986 until 1999. Brohm affected 265 
        acres consisting of open pits, waste rock depositories, process 
        facilities, and a heap leach pad. This mining activity caused 
        significant acid rock drainage. In 1999 Brohm abandoned the 
        site and in 2000 the EPA listed the mine as a Superfund Site. 
        Work accomplished to date is the construction of a lime water 
        treatment plant for treating acid water and the capping of a 
        65-acre acid generating waste rock facility. EPA recently 
        issued a Record of Decision for the remediation of the rest of 
        the site which includes three pits, waste rock depositories, a 
        heap leach pad and process facilities. Remedial design is 
        estimated to take one year with the selected remedy emphasizing 
        site-wide consolidation and containment of mine waste. The 
        estimated cost for the remaining reclamation work is $50 
        million and it will take five to seven years to complete 
        depending on availability of funding.
   Montana.--Potential abandoned mine projects for funding 
        total $31.7 million, with 202 persons projected to be employed. 
        These projects are outside of the current AML planning window, 
        but could be brought to construction within 18 months or less. 
        Projects include a bond forfeiture and a recent environmental 
        emergency, as follows:

    --Engineered portal plug for Evening Star/Big Dick mine blowout and 
            discharge to Little Blackfoot River. (Powell County). $6.5 
            million, 20 employed.
    --Silver Creek Tailings removal and stream reconstruction project 
            (Lewis and Clark County). $10 million, 40 employed.
    --Basin Creek Mine closure--bond forfeiture bankruptcy. Lewis and 
            Clark and Jefferson Counties. $4.7 million. 50 employed.
    --Winston Area Multi-site Mine Waste Repository and Reclamation 
            Project: East Pacific, Sunrise-January, Custer Millsite, 
            and Chartam Mine Sites (Broadwater County). $3.4 million 40 
    --Emery Mine Reclamation Project (Powell County). $5 million. 25 
    --Frohner and Nellie Grant Mine (Jefferson County) $1.5 million, 15 
    --Broken Hill Mine Reclamation Project (Saunders County). $.8 
            million. 12 employed.

   Colorado.--The following projects address serious mine 
        hazards and environmental problems associated with abandoned or 
        inactive mines. The state and local community-based watershed 
        groups use the funding to develop and construct projects that 
        safeguard dangerous mine sites and to remediate environmental 
        problems associated with abandoned mines such as acid mine 
        drainage, and erosion of mine and mill waste piles into streams 
        and rivers. In addition these funds provide local economic 
        benefits by creating hundreds of jobs in Colorado's 
        construction industry. Every project dollar expended translates 
        into jobs in the construction, labor, equipment, materials and 
        service industries.

    What follows is a very general list of the types of upcoming 
        projects. All are undergoing reviews related to NEPA, 
        landownership, state purchasing and contracting but could 
        quickly be on deck for final review and processing. Summary of 
        all of the projects below: $5-7 million dollars spent in the 
        construction and technical consulting industry. Translates 
        roughly into 500 jobs. (Would not necessarily be new jobs but 
        work for people already in the industry.)

    BLM and USFS Safeguarding and Environmental Remediation Projects--
        $2 million in 09. Colorado AML already partners with BLM, USFS 
        and NPS to contract and manage these projects. Colorado AML is 
        in a good position to assist with funding that would be granted 
        to these agencies for AML work in Colorado.

    Safeguarding Hazardous Mine Openings Statewide in Colorado's 
        Mineral Belt areas: $1 million in 09--Several hardrock 
        safeguarding projects have been developed for this year. These 
        projects could be out to bid in the summer season for 
        completion in 2010.

    Environmental Mine Site Reclamation--$2-$5 million. Projects in the 
        following river watersheds: Colorado, Animas, Arkansas, Rio 
        Grande, and South Platte--all related to remediation of 
        environmental problems associated with abandoned mines such as 
        acid mine drainage, and erosion of mine and mill waste piles 
        into streams and rivers. This will include funding to partner 
        with local watershed groups to expedite design and construction 
        of projects. Many watershed groups have projects outlined but 
        have never had significant funding to get them off the ground. 
        Through our watershed agreements we are all in a position to 
        manage and construct these types of projects.

    Reclamation of Forfeited Mine Sites. $500,000--Projects statewide. 
        This funding is used to reclaim forfeited mine sites. Not 
        considered abandoned but inactive. There is not a solvent 
        company to clean up such sites, and the responsibility to 
        perform reclamation remains with the state.
   Utah.--the state could spend $9,471,033 on six projects in 
        five rural counties for an estimated 93 new jobs if total 
        reclamation (as opposed to just physical safety hazard 
        abatement only) is allowed. Hazard abatement only would be 
        about $525,000 with 53 jobs created.
   New Mexico.--the state has six projects with a total 
        estimated construction cost of $1.95 million that could be 
        undertaken within the 18--24 month time frame. There are two 
        additional projects with a cost of $750,000 that could also 
        likely meet the deadline. These costs are only for the 
        construction contracts, and do not include any costs for 
        investigation, evaluation, design or oversight. The projects 
        all involve noncoal and are on federal lands.
   Wyoming.--In the next 18 months Wyoming can put $10 to $12 
        million worth of projects on the ground. The number of jobs 
        that would be involved is harder to estimate but based on 
        similar sized projects it would be around 75 people but less 
        than 100.
   Arizona.--the state has Twenty-three (23) high-risk mine 
        sites with 81 openings which can be identified for closure in 
        the next 24 months. These areas typically have high use for 
        backcountry touring and off highway vehicle activities, and 
        recreational mineral collection by winter visitors, or are 
        located near populated areas. Many of the 23 mine sites has 
        several openings with depth's greater than 50 feet. These mine 
        sites are hardrock AML projects. The number of jobs created by 
        and through AML hardrock remediation is difficult to estimate 
        because, in general, the abandoned mines that need to be 
        addressed resulted from the efforts of small-time prospectors. 
        We would estimate the number of jobs created to be 50-100. This 
        number is subject to change once the momentum of closures 
        increases throughout the 24 month timeline. The estimated costs 
        are $810,000.
   Alaska.--As one of several Minimum Program States, Alaska 
        has outstanding Abandoned Mine Land Inventory projects required 
        to protect public health and safety that are large enough in 
        size and cost to make accomplishment impractical without access 
        to larger blocks of funds, such as those the economic stimulus 
        package might provide. The projects that we can have on the 
        street and working within the next 18 to 24 months (or less) 
        would include the following for your consideration:

    --Healy Creek Washplant Demolition--AMLIS AK000043SGA--this was the 
            site of a near fatal injury during the past summer and we 
            want to make sure there is no repetition. Cost $670,000 
            with 10 jobs created and roughly 200 tons of steel provided 
            for recycling. This site is near the entrance to Denali 
            National Park.
    --Hydraulic Pit Highwall Mitigation--AMLIS AK000046SGA--this 
            represents a safety hazard with 200 to 300 foot highwalls. 
            Most of the exposure is actually during winter months when 
            recreational snowmachiners are blasting around at 70 miles 
            per hour in the nearly continuous darkness. AMLIS has this 
            feature on the books at a projected cost of over $28 
            million. By utilizing different mitigation techniques (cast 
            blasting) we can accomplish this project at a cost of $15 
            million which includes $10 million for highwall mitigation 
            and $5 million to reduce sediment flow from the area into 
            Healy Creek. This will create some 20 jobs and include 
            highwall mitigation as well as reducing sediment load 
            coming from the site entering Healy Creek near Denali 
            National Park.
    --North Jones Highwall Mitigation--AK000009SGA--this site has 200 
            foot highwalls in the Sutton area outside of Anchorage that 
            actually are not accessible to vehicles or most foot 
            travelers. What makes this site so extremely hazardous is 
            the frequent public and school/college class use of the pit 
            bottom to collect fossils. There is a continuous run of 
            rocks falling from the highwall and rolling into the pit 
            bottom that creates a very real threat of injury. Estimated 
            cost would be $4.382 million and create 40 jobs plus 
            contract helicopter work while providing for public safety.
    --North Jones Mine 3 subsidence features--AMLIS AK000009SGA--
            Collapsing airshafts up to 1,500 feet deep that require 
            mitigation for public safety. Cost estimated at $200,000 
            with employment of 10 people.
    --North Jones Mine Upper Fire Area--AMLIS AK000009SGA--We plan on 
            verifying extent of the problem this summer. Fire 
            elimination from this heavily used recreational site is 
            estimated at $5 million due to depths of material at over 
            300 feet in places. Jobs created would be 30 to 40.
    --Center and Bill Pits Hazardous Impoundments and Highwalls--AMLIS 
            AK000025SGA--This site is located in the Healy Valley. In 
            order to drain the impoundment and reduce the highwall to 
            safe levels the cost would be an estimated $5 million. Jobs 
            created would be 20.
    --East and West Coal Creek Pit Highwalls--Not yet in AMLIS--Located 
            in the Healy Valley these two pits adjacent to Coal Creek 
            would have the highwalls mitigated and the erosive 
            contributions to Coal Creek and subsequently Healy Creek 
            reduced. Cost is estimated at $3.2 million and jobs created 
            would be 10 to 15.
    --Inmate Training--With an additional $2.0 million we could 
            initiate a program starting this spring to train 60 to 80 
            inmates to operate several types of equipment and develop 
            other skill sets that would help them secure employment 
            after they served their sentences. Examples of work done 
            would be heavy equipment operation and maintenance (cat 
            dozers, excavators, dump trucks and backhoes) and 
            vegetation management (controlling pest vegetation species 
            and harvesting/planting willows in the Matanuska Valley 
            Moose Range). We would use leased equipment and contract 
            for well qualified instructors to lead the effort on the 
            ground to insure participants learned employable skills 
            applicable to construction, highway, oil and gas and 
            mineral extraction industries.

   California.--the state estimates that approximately 47,000 
        abandoned mines are distributed throughout California. Of 
        these, approximately 5,200 sites (11% of 47,000) present 
        environmental hazards, and more than 39,400 sites (84%) present 
        physical safety hazards. Some of the highest priority AML sites 
        (for example, Iron Mountain) are being addressed, but the 
        majority have not been evaluated to determine the required 
        cleanup actions to protect public health and safety and the 
        environment. In addition, there are numerous areas throughout 
        the Sierra, including tribal lands that are contaminated from 
        historic mercury use associated with gold mining. Hundreds of 
        millions of dollars will ultimately be necessary to remediate 
        all the AML sites within the State. As you know, California 
        does not currently receive federal AML funding as it is not a 
        SMCRA state.

    In 2007, at the request of Senator Feinstein's office, California's 
        state and federal agencies working on AML issues created lists 
        of priority AML sites with environmental and physical hazards. 
        The list is being updated, but a current version is available 
        from the state or IMCC. This list provides a snapshot of the 
        known environmental, human health, and safety problems posed by 
        abandoned mines in California. It is important to note that 
        many AML sites have not yet been inventoried or assessed for 
        hazards. The prioritization process used for each list is 
        briefly outlined in the document.

    Of the sites on the list, many can be considered at/near a 
        ``shovel-ready'' stage (i.e., projects already advanced that 
        can put out to bid/work begun within 18 months). Listed 
        alphabetically below are six of the State's priorities 
        identified by the Office of Mine Reclamation, State Water 
        Resources Control Board, and Department of Toxic Substances 

Argonaut Mine, Amador County (private land/low-                    $2.0M
 income PRP)...................................
La Joya Quicksilver Mine, Napa County (private                     $2.0M
 land/low-income PRP)..........................
New London Mine, San Luis Obispo County                            $3.0M
 (California National Guard)...................
Oro de Amador, mine tailings in Amador County                      $5.0M
 (city of Jackson).............................
Plumas Eureka Mine, Plumas County (State Parks)                    $3.0M
150-200 priority physical hazard features on                       $1.5M
 federal and state lands.......................
    Total......................................            $16.5 million

    Other priority sites would likely be provided by federal agencies 
        such as the Bureau of Land Management, U.S. Forest Service, and 
        National Park Service (an estimated 67% of California's AML 
        sites lie on federal land). We would like to stress that any 
        hardrock AML funds for California's priority AML sites should 
        go directly to the State of California or that the federal 
        agencies receiving funds funnel them to the State.
    Please note, the above ``short list'' represents only a partial 
        list. We would be happy to work with California Senators Boxer 
        and Feinstein and the Senate Energy and Natural Resources 
        Committee as a whole to provide a complete list that 
        corresponds to our updated priorities. The above short list 
        also does not address the many abandoned mine sites that would 
        benefit from funding for assessment investigations prior to 
        cleanup Should such funds be available, California could use an 
        additional, initial $5,000,000 to conduct investigations at AML 
        sites that pose immediate threats to human health and the 
        environment to define cleanup construction projects. State and 
        federal agencies would work together to conduct the 
        investigations and select the highest priority cleanup actions. 
        Sites and cleanup actions would be defined within less than a 
        year of initiation of the investigation work and construction 
        contracts could be awarded using contractors in place several 
        months thereafter (thus, within 18 months from the notification 
        of funding to award additional cleanup construction contracts).

    In addition to the above forecasts provided by these states 
regarding economic and job enhancements, it should be noted that, in 
general, for every dollar spent by the states/tribes on local 
construction, this translates to $2.70 that is spent in the local 
economy for things such as supplies and materials, local equipment 
rentals and equipment operators, and employee support.
    Today, state agencies are working on hardrock abandoned mine 
problems through a variety of limited state and federal funding 
sources. Various federal agencies, including the Environmental 
Protection Agency, the Bureau of Land Management, the National Park 
Service, the U.S. Forest Service, and the U.S. Army Corps of Engineers 
have provided some funding for hardrock mine remediation projects. 
These state/federal partnerships have been instrumental in assisting 
the states with our hardrock AML work and, as states take on a larger 
role for hardrock AML cleanups into the future, we will continue to 
coordinate with our federal partners. However, most of these existing 
federal grants are project specific and do not provide consistent 
funding. For states with coal mining, the most consistent source of AML 
funding has been the Title IV grants under the Surface Mining Control 
and Reclamation Act (SMCRA). Section 409 of SMCRA allows states to use 
these grants only at high priority non-coal AML sites. The funding is 
generally limited to safeguarding hazards to public safety (e.g., 
closing mine openings) at hardrock sites. It is worth noting that 
recent fatalities at abandoned hardrock mine sites have been in states 
without SCMRA-funded AML programs. The small amount of money that SMCRA 
states have been able to spend on physical safety hazards at hardrock 
sites appears to be making a difference.
    As states work to address the remaining inventory of abandoned 
hardrock mine sites, the states are increasingly concerned about the 
escalating costs of addressing those problems that continue to go 
unreclaimed due to insufficient funding. Unaddressed sites worsen over 
time, thus increasing reclamation costs. Inflation exacerbates these 
costs. The longer the reclamation is postponed, the less reclamation 
will be accomplished. In addition, the states are finding new, higher 
priority problems each year, especially as many of our urban areas grow 
closer to what were formerly rural abandoned mine sites. New sites also 
continually appear, due to the effects of time and weather. This 
underscores the need for constant vigilance to protect our citizens.
    In addition to the economic stimulus package that Congress will 
consider, the continued debate on reform of the General Mining Law 
provides yet another opportunity to establish a consistent, and robust, 
funding source for addressing hardrock AML problems. We would like to 
address a few needed components of any hardrock AML program that might 
be included in any new legislation--be it reform of the 1872 Mining Law 
or the economic stimulus package. First, any program to distribute 
funds for hardrock mine reclamation should allow for states and tribes 
to receive funding and conduct AML projects. Today, there are abandoned 
mine land programs in most states. These include the 28 programs 
established by states and tribes under SMCRA Title IV, along with 
states across the country that are not eligible for Title IV funding, 
including New York, South Carolina, North Carolina, Nevada, California, 
and Arizona. All of these states and tribes are experienced with 
administering federal grants and completing AML projects in a cost-
effective manner, including projects on federal land.
    It is essential that the states be provided an opportunity to 
assume primary responsibility for implementing any hardrock AML program 
given the unique differences among the states in terms of geology, 
climate, terrain and other physical and environmental conditions. Each 
state should also be provided the discretion to determine which among 
the many AML sites in its respective inventory of sites deserves the 
most immediate attention with input from the federal land management 
agencies on whose land the sites may be located. The states can also 
best decide the appropriate remediation required under the 
circumstances given available funding. This state-lead approach will 
assure the most critical AML problems are addressed first, since the 
states are closer to the problems and can make a better determination 
about priorities and actual remediation work.
    In the West, several states, including New Mexico, Colorado, Utah, 
Wyoming and Montana, have used SMCRA Title IV funds to address a number 
of significant AML problems, both coal and hardrock. In addition, these 
AML programs have cooperative agreements with the Forest Service, BLM 
and the U.S. Army Corps of Engineers that allow those agencies to fund 
AML projects on their lands when money is available. It is simply more 
efficient for the federal land managers to use the already established 
state AML programs with their staff of experienced engineers, 
reclamation specialists and project managers to design and conduct 
cost-effective AML projects on federally-managed land within each 
state's boundaries. Given the importance of the states being able to 
access SMCRA Title IV funds for noncoal AML work, any new legislation 
should ensure that this practice can continue or increase. In this 
regard, it should be kept in mind that the states are generally in a 
better position to accomplish AML work. They have assembled 
professional staffs with thirty years of experience and an excellent 
local contracting knowledge base. States would require minimal staffing 
increases, thereby increasing on-the-ground results per program dollar.
    Second, the legislation should recognize that most hardrock AML 
problems are on non-federal lands, even in the West. In most states, 
federal lands contain less than a quarter of all hardrock AML sites. In 
part, this is due to the patenting of mining claims in the nineteenth 
and early twentieth century that led to mining occurring on private 
land. And when there are abandoned mine problems on federal lands, they 
often spill over into adjacent non-federal lands or in-holdings. To be 
effective, a hardrock AML program needs to be able to spend funds on 
all classes of land.
    A critical component of any reclamation program is prioritization 
of sites and identification of remediation options. Abandoned mine 
lands range from sites with features that require no remediation 
because of their minimal size or risk; to sites which require 
significant earthwork, topsoiling and revegetation for erosion and 
pollution control; to safeguarding shafts and adits that present public 
safety hazards; to remediating sites with significant toxic leachate 
causing contamination of ground and surface waters. In addition, there 
are hardrock mine sites with such a conglomeration of features, access 
problems, drainage problems, etc., that estimated reclamation/
remediation costs exceed the entire annual AML budget of a state. 
Regardless of which inventory or listing of sites is used, a large 
portion of sites will require little if any reclamation. In other 
cases, the per unit cost of reclamation is relatively small. These 
sites will also rank low in priority because of the reduced threat to 
public health or the environment. On the other end of the spectrum, 
there will be a small number of sites that require a significant amount 
of funding to remediate and that constitute a chronic risk to public 
health or the environment. Under current law, these are the sites that 
are being or might be remediated under Superfund (the Comprehensive 
Environmental Response, Compensation and Liability Act (CERCLA)). The 
AML priority sites should be those that constitute a physical threat to 
public safety, and sites with significant contamination, but that will 
likely never score high enough to be remediated under CERCLA.
    Another aspect of any hardrock AML program is the process of 
quantifying the problem. A consistent and cost-effective inventory of 
AML problems may be needed. However, lessons need to be learned from 
the inventory of abandoned coal mines undertaken pursuant to the 
Surface Mining Control and Reclamation Act (SMCRA), which is estimated 
to have cost more than $25 million and is still fraught with 
controversy. Based on the SMCRA experience, any hardrock AML inventory 
needs to: have well thought out goals and instructions; maintain 
standardized inventory procedures; keep inventory crews small to 
minimize inconsistencies in reporting methods; minimize the influence 
on the inventory by those with vested interests in the results; require 
any federal agency inventory work to be coordinated with the states; 
utilize state-of-the-art GPS imagery; and be conducted with 
consideration for seasonal vegetation cover. In the end, there should 
also be a cap placed on the amount of money to be invested in any 
inventory effort so as not to divert money and energy from on-the-
ground reclamation work.
    There are many other components to an effective and efficient AML 
program. The states have significant experience in this area, based on 
our work under SMCRA and with AML programs in other non-SMCRA states. 
Among the other areas that should likely be addressed in fashioning a 
hardrock AML program are: reclamation program elements; reclamation 
standards; priorities for cleanup; set-aside accounts for special 
circumstances such as acid rock drainage; emergency situations; post-
construction monitoring that evaluates the success of remediation 
activities as a learning tool; and funding distribution mechanisms. A 
new complication for state AML work that also needs to be addressed is 
the limited liability protection provided for noncoal AML work 
undertaken with SMCRA Title IV funds. A recent rulemaking by OSMRE 
removed this protection and it could have a significant chilling effect 
on the ability of the states and tribes to undertake some of their 
noncoal projects with SMCRA funds. This will likely need to be 
addressed with a perfecting amendment to SCMRA. We would welcome the 
opportunity to work with Congress and others to address all aspects of 
a hardrock AML program that is led by the states and coordinated with 
our federal partners.
    We believe that the states and tribes could contribute to and 
benefit from an economic stimulus package that includes funding for 
enhanced hardrock AML cleanup. We assert that the work detailed above 
would maximize both job creation over the short term and return on 
investment over the long term, especially with regard to restoring the 
environment and protecting the public health and safety. We strongly 
support funding in the economic stimulus package for these programs and 
projects and welcome the opportunity to work with this Committee and 
others to put to this money to work in an expeditious fashion.
    Should you have any questions or require additional information, 
please contact us. Thank you for the opportunity to submit this 
     Statement of Laura Filbert Zacher, Smart Future, St. Louis, MO

    I represent former leaders of NASA and other scientists in their 
company as well as the residents of eleven communities along the 
Mississippi River in southwestern Illinois. I have attached to this 
letter the communication that was sent in July to President-Elect 
Barack Obama by the eleven mayors of those communities.
    Equitech International, LLC (EI) is a consortium of 23 sister 
companies holding all of the licenses and patents for an advanced 
renewable energy system (ARES). These former leaders of NASA/JPL have 
developed and proven two concepts that they propose to merge into one 
national exemplar of stand-alone, emissions-free power that can 
kickstart a new ARES industry of exportable replications worldwide. The 
two concepts have been previously proven at the cost of $55 million. 
Proofs of concept on Solar Fuel Cell Regeneration (SFCR) and Waste 
Steam Reform System (WSRS) are ready for design-build construction by a 
turnkey contractor, Whiting Turner. The WSRS component processes the 
worst waste elements in society (medicinal, industrial, and 
    Equitech has partnered with the Metro East Citizens Land 
Cooperative (MECLC), a community investment corporation, to build the 
7.5MW E-Macrosystem power plant and manufacturing center in East St. 
Louis where the surrounding communities would benefit from the 2,300 
green jobs created by the demonstration alone. The exemplar is 105,000 
s.f. with 90,000 s.f. available for EI/MECLC's first committed tenant, 
a solar energy products manufacturer. The exemplar will cost 
$65,000,000 to construct. Due to the numerous profitable by-products of 
the E-Macrosystem, debt service on replications is short term. By 
products include premium power demanded by pharmaceuticals and computer 
chip industries, pure water, hospital-grade methanol, and more.
    In addition to having national and international implications, the 
economic stimuli in the eleven impoverished communities of the MECLC 
include the dividends that will be paid directly to resident 
shareholders of the community investment corporation, income tax, and 
retail tax revenues. Please see the attached list of benefits for 
supporting the E-Macrosystem and consider inviting EI to speak on 
Wednesday. The CEO is located in Washington, DC, and would be available 
on short notice.



    Equitech International LLC and Metro East Citizens Land Cooperative 
(MECLC) would like to stress the following point pertaining to the 
importance of funding the first project: the emissions-free E-
Macrosystem power plant and shell building that will support 
manufacturing of advanced renewable energy system components for 
nationwide and worldwide export from the Metro East St. Louis, Illinois 
          1. Advanced Renewable Energy Systems (ARES) manufacturing is 
        a new industry that will contribute to the ECONOMIC BASE of any 
          2. The E-Macrosystem will create 2300 new jobs that are 
        considered ``good jobs'' that pay well and provide benefits.
          3. The Waste-to-Energy component of the E-Macrosystem 
        processes the worst toxic waste and provides a solution to 
        industrial waste handling within the State and elsewhere.
          4. The success of the E-Macrosystem holds the promise for the 
        national, state local expansion opportunities through 
        replication of the E-Macrosystem in new markets.
          5. In addition to producing 7.5 MW of Premium Power, the E-
        Macrosystem generates other products to sell and additional 
        revenue streams that contribute to economic feasibility.
          6. MECLC's partners are prepared to expand manufacturing of 
        advanced renewable energy systems components in the Metro East 
        as soon as the national demonstration E-Macrosystem pilot is 

    The E-Macrosystem should qualify for support from various Federal 
agencies because it:

   Offers premium power capable of being independent of (or 
        linked to) the utility grid and capable of supporting battery-
        powered ``plug-in'' vehicles.
   Supports needs in remote locations. (Solar fuel cell 
        regeneration produces electric power, heat and water from 
        recycling of all forms of organic waste, including biomass).
   Can be mobile, including marine capabilities when replicated 
        on a ship. (When unique systems patent is commercialized, ships 
        can be moved from port-to-port using the two technologies of 
        the national demonstration / pilot project.)
   Can be applied to reduce the costs of penal systems by 
        enabling prisoners to produce marketable components and profits 
        for victim restitution, family support, prison operations and 
        related enterprises in the communities in which they locate.
   Has been proven to have tunnel-safe transport implications 
        through the use of its solar fuel cell regeneration power--no 
        threat in tunnels, non-combustible.
         Statement of the National Association of Home Builders


    On behalf of the approximately 235,000 members of the National 
Association of Home Builders (NAHB), thank you for the opportunity to 
submit testimony for the hearing on investments in clean energy and 
natural resources projects and programs to create green jobs and 
stimulate the economy. We applaud the efforts of the Committee to seek 
ways to hasten the recovery of the nation's economy and to develop 
clean energy infrastructure, including investing in energy efficiency 
and green jobs, as a component of the broader recovery effort. Housing 
and home building, including energy efficient home construction and 
green building, must play a critical role in the overall recovery of 
the national economy, as well as the continued growth in sustainable 
building and building technology advancement.
    NAHB believes that the housing crisis must be addressed 
aggressively and with priority if there is any hope for a speedy 
economic recovery. Furthermore, due to the housing crisis and the ever-
increasing inventory of existing homes, the demand for and construction 
of new, more energy efficient and green homes is at a near standstill. 
Data from the U.S. Department of Energy's Energy Information 
Administration (EIA) and the U.S. Census Bureau confirms that older 
homes (built before 1991) consume 17.1% of U.S. total energy\1\ and 
74.1% of the 128 million dwelling units were built before 1990.\2\ In 
addition, Census data shows that since July of 2005 sales of newly 
constructed homes have fallen from an annual rate of 1.389 million 
homes to a rate of 464,000--a 66.6% drop--representing the most 
dramatic decline since the Great Depression.
    \1\ 2001 Annual Energy Review; 2001 Residential Energy Consumption 
Survey, U.S. Energy Information Administration, 2005.
    \2\ 2007 American Community Survey, U.S. Census Bureau.
    NAHB believes that replacing and improving existing buildings with 
more energy efficient or green new homes is a real opportunity that 
addresses both the housing downturn and need for better energy 
performance and sustainability in the built environment. However, 
without urgent action by Congress to jump start housing generally, 
i.e., giving consumers incentives to buy homes, the realization of this 
opportunity's benefits and the ability for our nation to address these 
two crises--energy and housing--will be dramatically diminished.
    This statement is divided into three sections. First, it provides 
an update on the current state of the housing and mortgage markets. 
Second, it details the best approach for investing in energy 
performance improvements in the areas with the greatest need and where 
Congress can find the biggest returns in energy and resource savings. 
Finally, it provides information on stimulating growth in green jobs in 
the housing industry and how to establish an effective green jobs 
program that is appropriate for residential construction.


    Housing is central to the economic crisis that now affects the 
global economy. The declines in home prices, the surge in foreclosures, 
and the reduction in home building activity are historic in scope and 
have generated the most severe recession in decades. Policies that aim 
to improve the current economic environment must address conditions in 
the housing market. Indeed, in testimony before the House Budget 
Committee on October 21, 2008, Federal Reserve Chairman Bernake 
highlighted the importance of stimulating housing demand:

          Finally, in the ideal case, a fiscal package would not only 
        boost overall spending and economic activity but would also be 
        aimed at redressing specific factors that have the potential to 
        extend or deepen the economic slowdown. As I discussed earlier, 
        the extraordinary tightening in credit conditions has played a 
        central role in the slowdown thus far and could be an important 
        factor delaying the recovery. If Congress proceeds with a 
        fiscal package, it should consider including measures to help 
        improve access to credit by consumers, homebuyers, businesses, 
        and other borrowers. Such actions might be particularly 
        effective at promoting economic growth and job creation.

    A review of several key housing statistics reveals the historic 
nature of the downturn and its overall impact on the economy. For 
example, according to the Bureau of Economic Analysis, home building 
was responsible for 5.4 % of gross domestic profit (GDP), while housing 
in general contributed another 10.2 %, for a direct housing impact on 
GDP of 15.6 %. With additional consideration of related entities--e.g., 
furniture, housing wares, appliances, etc.--housing's total share of 
the economy was equal to 25% of the GDP in 2005. Furthermore, housing 
was responsible for 22.3 % of the growth of the GDP in 2005.
    Facing the most severe housing downturn in history, all of the 
industries that rely on housing are feeling the effects. Not only are 
new homes not selling--and in many cases no longer being built--but 
data from the National Association of Realtors (NAR) shows that since 
September of 2005, sales of existing homes have declined 32.8 % to an 
annualized rate of 4.26 million. The historic rise in foreclosures has 
also added to rising inventories of both new and existing homes. 
According to Census data, newly-constructed home inventories have 
increased in the months-supply ratio (the number of months required to 
sell all inventory at current sales rates) from 4.5 months-supply in 
August 2005 to 10.4 months-supply in September 2008. For reference, a 
healthy months-supply ratio is no more than 6. The NAR data also shows 
the same months-supply ratio of 10.4 for existing homes sales.
    Lastly, the final statistic describing the dramatic downturn is the 
fall in home prices. The Case-Shiller Composite 20 house price series 
indicates a price decline of 20.3 % since June 2006, with some 
metropolitan areas seeing much more drastic declines. While some price 
adjustment is healthy for a housing market, an overshoot of prices on 
the downsizing due to weak demand not only hurts the real estate 
industry, but also hurts homebuyers and consumers as well. According to 
Federal Reserve data, housing wealth constitutes approximately one-half 
of the median U.S. household's net worth. Thus, declines in prices 
necessarily produce a negative wealth shock for American families, 
resulting in reduced consumption and investment, creating long-term 
negative impacts on economic growth. With respect to investments in the 
home, when existing homeowners feel that the property is devalued, it 
is significantly more challenging to encourage necessary energy 
efficiency improvements and sustainability upgrades (e.g., green 
remodeling) that can help save energy and resources for everyone.
    During this critical time, facing the twin challenges of a severe 
economic downturn and a rapidly changing climate, NAHB believes that 
the housing industry has solutions for both problems. Fixing housing 
must be Congress' first priority by giving consumers the appropriate 
incentives to buy homes and to invest in efficiency improvements in 
existing homes, stabilizing home prices and reducing inventories, and 
generating job growth again in the myriad of industries linked to 
housing. Because newer homes are much more energy and resource 
efficient than older homes, these are investments that not only spur 
job growth in conservation and green innovation for the industry, but 
that also deliver sustainable homes for generations.


    As stated, newer homes are dramatically more energy efficient than 
the 94 million homes built before 1990 (largely without energy codes or 
efficiency). Thus, as Congress searches for ways to invest limited 
resources in improving energy efficiency and performance in the 
residential sector, it must focus on ways to achieve the most savings 
per dollar. NAHB believes that this is accomplished not only with 
incentives for new homes that are truly pushing the innovation envelope 
in green and above-code performance, but also delivering meaningful 
incentives and subsidies to existing homeowners for improvements to 
older homes.
    As the chart* below explains, most of the homes in the U.S. today 
were constructed prior to the implementation of modern energy codes. 
Therefore, these homes should be the primary focus of any policy 
approach aimed at saving energy in the residential sector. With only 
3.3 percent of homes built since 2005, it is obvious that newer homes 
are not the biggest part of the energy consumption problem. As a 
participant in the code development process, NAHB consistently works to 
improve the energy efficiency codes that govern residential building in 
a manner that delivers the most cost-effective savings to consumers. In 
fact, the most recent code change cycle concluded with an improvement 
to the 2009 International Energy Conservation Code (IECC) of almost 20% 
over the 2006 edition. This 20% jump in efficiency in just three years 
for new homes is dramatic, almost unparalleled by other industries.
    * Graphic has been retained in committee files.
    The problem is that fewer new, more energy efficient homes will be 
built unless something is done immediately to turn housing around. NAHB 
estimates that for 2009, housing starts will be approximately 778,000 
units, dropping from a high of approximately 2 million in 2005. 
Furthermore, the rate at which new housing replaces older, less 
efficient homes is not nearly adequate enough to deliver meaningful 
savings without assisting residents occupying the oldest housing, i.e., 
primarily lower and moderate-income families that typically face higher 
price sensitivities or that cannot afford a newer, more efficient home. 
Although there has been exponential growth in the green building 
market, including commercial construction, over the last few years, the 
sheer impact of the housing downturn is likely to cast a pall over the 
enormous strides that have been made in sustainable building as a 
    In addition to the energy performance of the structure itself, 
Congress must do something reduce the biggest source of energy loss in 
a home--consumer behavior. The EIA's 2008 Buildings Energy Data Book, 
issued in September, provides data on 2006 end-use consumption 
``splits'' (or a breakdown) that details how energy is used by dwelling 
units in the U.S. Across all fuel types, the largest single component 
of energy consumption in a home is consumer behavior--e.g., lighting, 
refrigeration, laundering, cooking, electronics use, etc.--eating up 
57% of the energy, while space heating and cooling (typically a builder 
responsibility) represents a mere 26%, with water heating, again 
largely dependent on consumer behavior, is about 9%.
    Given the dire statistics that persist in media circles today about 
the energy consumed by homes and buildings (as high as 70% according to 
some), Congress must provide adequate resources--education, 
information, or direct subsidies--to consumers to help curb growing 
appetites for in-home energy. Large-screen plasma televisions, DVRs 
that are constantly plugged in, and other electronics consume vast 
amounts of energy over the long term that many consumers may not even 
realize. In fact, the Electric Power Research Institute (EPRI) 
estimates that by the year 2030, almost 30% of the residential energy 
load will be ``plug-connected.'' EPRI also suggests that if every 
American household operated a digital photo frame for one year, it 
would be equivalent to powering five 250MW power plants.\3\ This is 
extremely important because it confirms that improving energy 
performance simply does not materialize from ramping up code 
requirements for the already energy-efficient new homes as many 
advocates have recommended. If nothing is done to address consumer 
behavior inside a home, then the advances in building technology, 
green, and energy performance that come from envelope improvements may 
be completely displaced.
    \3\ ``Energy Efficiency Across the Electricity Value Chain.'' 
Presentation by Arshad Monsoor, Ph.D., Electric Power Research 
Institute, April 16, 2008.

    Without a doubt, the green revolution is a remarkable new media and 
policy force that has transformed the way millions of people think 
about seemingly everyday things. Yet, for home builders, green is not 
something new because NAHB members have been building green homes for 
decades, long before ``green'' became what it is today. These pioneers 
were building sustainable, energy, and resource-efficient homes as 
early as 1991 and continued to improve practices to incorporate more 
innovation over time. By the early 2000s, builders were expanding what 
would become green building programs and a push to develop a national 
guideline for residential green building emerged in the industry.
    In 2005, NAHB, along with more than 60 stakeholders (architects, 
engineers, environmentalists, etc.) developed the Model Green Home 
Building Guidelines (The Guidelines). The Guidelines helped better 
define green home building and rapidly grew in popularity and demand, 
as well as in adoption by local and state Home Builder Associations 
(HBAs) around the country. Due to the success of The Guidelines, NAHB 
decided to proactively help develop the first-ever national standard 
for residential green building approved by the American National 
Standards Institute (ANSI), a non-affiliated Standards Developing 
Organization. With the advice and counsel of a Committee of more than 
40 experts, builders, environmentalists, and federal, state, and local 
officials, the group develop a rigorous set of criteria covering all 
facets of green building--energy efficiency, water efficiency, resource 
efficiency, lot size and development, indoor environmental quality, 
global impact, and education and maintenance. The consensus process, 
including a thorough public vetting with over 3,000 comments, produced 
a document that was submitted to ANSI in April 2008 and is awaiting 
    The tremendous strides in green building have begun to reshape the 
residential construction industry, the training and workforce 
development that support it, and even the choices of consumers buying 
green homes. In many instances, the talent already exists in the 
industry to build green homes, i.e., green roofers, insulators, 
designers and planners, etc. However, accessing additional training and 
expertise in the most advanced housing technologies is meaningful in 
order to further deliver energy performance and conserve precious 
natural resources. NAHB supports efforts to provide grants for training 
and workforce development in this area.
    Unfortunately, the Green Jobs Act of 2007 (the Act), that was 
signed into law under PL110-140, limits eligibility for funding in this 
critical area to those entities who are partnered with labor unions. 
The Act established several new programs through the Department of 
Labor to set up grant and training programs in a number of green-
related capacities. For example, the Act establishes National Energy 
Training Partnership Grants, which are directed to training programs 
for energy efficiency and renewable energy industries. The Act also 
creates a State Energy Training Partnership Program, similar to the 
National Energy Training Partnership, which provides State-level 
funding for administering similar efficiency and renewable energy 
programs. Finally, the Act utilizes the Energy Efficiency and Renewable 
Energy Worker Training Program to make grants to community-based 
nonprofit organizations in order to train low-income individuals in 
skilled trades related to energy efficiency enhancements. Each and 
every one of these new programs would be a meaningful for the 
residential construction industry. Yet, because 86% of the private-
sector construction workforce is non-unionized, including nearly all of 
the residential construction industry, the majority of the housing 
industry would be precluded from participating.
    NAHB believes that denying equal access to any training and 
development funding for green technology advancement through green 
jobs, particularly in housing, is terribly short-sighted and detracts 
from Congress' larger goal of significantly improving the energy 
performance and efficiency of our nation's environment. As in any 
industry, the housing industry needs qualified, trained, and 
knowledgeable experts to build the next generation of housing, once the 
recovery occurs and new homes again are being built. With so many 
advocates publicly decrying the ills of the building sector generally, 
it seems appropriate to provide equal access to all professionals 
performing green jobs, which should include the residential 
construction industry. Congress must act to fix this exclusion and 
provide equal access to training and workforce development that will 
aid energy efficiency and the use of renewable energy technologies in 
the millions of green and energy efficient homes yet to be built.


    NAHB applauds the efforts of this Committee to seek stimulate clean 
energy investments and infrastructure through projects and programs 
that will truly have a positive impact on our national economy. As a 
sizeable component of that national economy, the housing industry must 
play a role in the recovery, as well as in the efficiency and building 
technology advancement capacity going forward. The current housing 
market conditions are the bleakest that our nation has seen since the 
Great Depression and unless something is done immediately to address 
the housing crisis and to get Americans buying homes again, there will 
be far fewer green and sustainable homes to replace our nation's aged 
and less efficient housing stock.
    Improving the energy performance of our nation's housing stock is 
vitally important. In an environment with limited resources and major 
climate challenges, focusing investments in areas with the biggest 
returns will be critical in order to fully realize true energy savings. 
Upgrading existing homes and changing consumer consumption behaviors 
must be a part of any policy approach that Congress considers. 
Moreover, providing the most robust training and workforce development 
programs to further stimulate the growth of green jobs is essential and 
limiting these resources to affiliates of labor unions is extremely 
restrictive in light of the enormous need for conservation and energy 
efficiency facing the U.S.
    Housing and home ownership play a fundamental role in our society, 
one with vast documented social and private benefits. Investing in 
housing, including the recovery as well as energy efficiency and green 
building, is extremely important for the national economy and for the 
environment. NAHB looks forward to working with Congress to ensure a 
speedy and effective near-term recovery, as well as a long-run success 
of these programs and the role that housing will play in the clean 
energy future of the U.S. as a whole.
  Statement of Robert Bendick, Director, US Government Relations, The 
                           Nature Conservancy

    Mr. Chairman and members of the Committee, thank you for the 
opportunity to testify on how investing in natural resources projects 
will create green jobs and stimulate the economy. I am Robert Bendick, 
the Director of US Government Relations for The Nature Conservancy.
    The Nature Conservancy is an international, nonprofit organization 
dedicated to the conservation of biological diversity. Our mission is 
to preserve the plants, animals and natural communities that represent 
the diversity of life on Earth by protecting the lands and waters they 
need to survive. Our on-the-ground conservation work is carried out in 
all 50 states and in more than 30 countries and is supported by 
approximately one million individual members. The Nature Conservancy 
has protected more than 117 million acres of land and 5,000 miles of 
river around the world. Our work also includes more than 100 marine 
conservation projects in 21 countries and 22 U.S. states.
    Mr. Chairman, we applaud you for holding this hearing today and for 
your leadership to craft a vision for how to stimulate the economy 
while protecting and restoring natural resources. The Nature 
Conservancy agrees that investment in stimulating the nation's economy 
can and should have environmental benefits. My testimony suggests that 
this can be accomplished through two key actions:

          1) spending stimulus funds on a suite of job-intensive 
        ``green infrastructure'' projects such as wetland restoration, 
        forest restoration, invasive species removal, and modification 
        of roads and other infrastructure that impact habitat
          2) minimizing the environmental impacts of traditional hard 
        infrastructure projects by giving priority funding to those 
        projects that utilize the most innovative design techniques

    There are a variety of federal environmental programs able to 
implement ``green infrastructure'' projects that restore degraded 
ecosystems, grow the nation's green economy and create green jobs. From 
rebuilding coastal wetlands to restoring forest health, all of these 
restoration activities require extensive labor with significant job-
creation benefits. In this testimony, we describe the rationale for 
investing in green infrastructure, and we have developed funding 
recommendations for existing Federal programs where investing in 
ecological restoration will lead to job creation.
    While we argue for a significant green infrastructure component to 
any stimulus package, we also recognize that much of our nation's 
infrastructure is deteriorating, would greatly benefit from federal 
investment, and that this investment would result in thousands of much 
needed jobs. Roads, rails, pipelines, dams, levees and other hard 
infrastructure projects have negatively impacted ecosystems in the 
past, but there are design techniques that can help ensure any new or 
refurbished infrastructure is built in a way that is more compatible 
with the conservation of natural resources. Given both the desire to 
minimize the environmental impacts of a massive new investment in 
infrastructure and the need to allocate funding in a short timeframe, 
this testimony argues for setting funding priorities based on a 
project's use of innovative design techniques to reduce environmental 
    Together, investing in ``green infrastructure'' and giving priority 
to hard infrastructure that employs ``green techniques'' will lead to 
economic recovery and rehabilitation of the nation's aging 
infrastructure while improving the condition of our natural resources. 
The testimony that follows lays out specific recommendation on why this 
approach is important and how this can be accomplished.


    The nation's rivers, coasts, estuaries, forests and grasslands, 
including the millions of acres of public lands, are directly and 
indirectly linked to billions of dollars in economic productivity and 
provide important habitat and ecological services. Wetlands provide 
water quality improvements and flood protection, forests help filter 
water and improve water quality, and oyster reefs can provide self-
renewing barriers to reduce erosion along shorelines. Moreover, healthy 
rivers, forests, and estuaries provide habitat for resource-based 
economies, such as tourism, fishing, and aquaculture.
    Unfortunately, many of these critical ecosystems have been in 
decline for years. For example, a USGS report published in September of 
this year indicated that over 40% of freshwater fish in the US are 
under threat of extinction in the next 20 years. Approximately half of 
the Nation's wetland habitats have been lost, including in areas like 
coastal Louisiana where marshes provide important protection during 
hurricanes and other severe storm events. Millions of acres of forest 
lands have large fuel loads and are at great risk of catastrophic fire. 
Multiple federal agencies are currently involved in restoration, but 
current Federal investment in restoration falls well short of the 
national need. As is the case in traditional infrastructure projects, 
restoration projects create jobs and opportunities in the near-term 
while also creating the ecological and economic benefits that flow from 
healthy ecosystems over the long-term.
    Ecological restoration has emerged as a high growth sector of our 
regional and national economy with additional investment in restoration 
offering the potential to provide significant job-creation benefits. 
This emergent industry, comprised of many applied sciences, employs a 
wide set of labor skills. These skills range from non-skilled laborers, 
to restoration design engineers, restoration ecologists, landscape 
architects, hydrologists and specialized botanists who work in 
nurseries that offer local seedlings and other specialized plants for 
restoration. Other sectors of the restoration labor force include 
specialized equipment operators of both light and heavy duty 
construction equipment, restoration monitoring specialists, 
construction crews and experts, soil experts, and many other 
diversified skilled laborers.
    A recent example of job creation through restoration is the jobs 
being offered to watermen in the Maryland blue crab fishery, which was 
declared a Commercial Fishery Failure earlier this fall. Federal and 
state disaster aid is being used to provide over 520 jobs to affected 
watermen, employing them to carry out oyster restoration work in the 
Chesapeake Bay. Similarly, a study by the North Coast Restoration Jobs 
Initiative showed that environmental restoration projects in Humboldt 
County, CA and surrounding areas employed 1057 worker-weeks over the 
course of 2002, mostly as a result of road decommissioning and culvert 
replacement projects. The Humboldt County study also indicated that 
most of the ecosystem restoration work using heavy equipment was 
contracted out to non-government entities, indicating private sector 
and small businesses benefit from the investment in restoration.
    The examples above illustrate that investing in restoration will 
not only meet a critical national need by improving the ecological 
health of our nation's rivers, coasts, forests and grasslands but will 
also create green jobs to stimulate the economy. Given the significant 
national need for Federal investment in restoration and the 
demonstrated job-creation benefit of this investment, any stimulus 
package should dedicate significant funding to the restoration of 
    The following table lists funding recommendations by Federal agency 
and by restoration activity. We recognize that this list includes a 
number of agencies that are not under the jurisdiction of this 
committee, but we include them to give a broad vision for the potential 
for green infrastructure investment within an economic stimulus 
package. More detailed descriptions of the agency funding 
justifications follow. Lists of example projects that demonstrate the 
on-the-ground funding need are included in Appendix I.*
    * Document has been retained in committee files.

                                         SUMMARY FUNDING RECOMMENDATIONS
                 Agency                       ACTIVITY/PROGRAM                 FUNDING RECOMMENDATION
U.S. Army Corps of Engineers              Large Scale Ecosystem                                      $1 billion
                                          Individually authorized                                    $1 billion
                                          restoration and multi-
                                           purpose projects
                                          Section 1135 and 206                                     $500 million
                                          Continuing Authority
National Oceanic and                      Community Based                                          $250 million
Atmospheric Administration                Restoration and Open
Bureau of Reclamation                     Water and Related             Priority funding and a minimum of \1/3\
                                           Resources                              total Bureau stimulus funding
Department of Transportation              State allocation--                   2% of total DOT stimulus funding
                                           retrofits for
                                          stream connectivity
                                          Park, Forest and Refuge                                  $500 million
                                          --retrofits for stream
                                          Stormwater runoff                    2% of total DOT stimulus funding
Forest Service                            Hazardous fuels                                          $1.5 billion
                                          (includes Bureau of Land
                                           Forest Restoration Job                                   $50 million
                                          Small business grants                                    $100 million
                                          State and local fire                                      $75 million
                                          Land Management and                                      $343 million
Environmental Protection Agency           Non-point source--Sec.                                   $300 million
                                           Clean Water State                                         $1 billion
                                           Revolving Fund
                                          Drinking Water State                                       $1 billion
                                          Revolving Fund
Fish and Wildlife Service                 Fish Passage Program                                      $14 million
                                          Coastal Program                                           $21 million
                                          Partners for Fish and                                    $100 million
                                          Refuge maintenance and                                   $443 million
Animal and Plant Health                   Eradicate Asian                                          $100 million
Inspection Service                         longhorned
                                          beetle infestations
                                          Sudden Oak Death                                           $7 million
Bureau of Land Manaement                  Abandoned Mine Lands                                     $400 million

Army Corps of Engineers
    Since Congress added ecosystem restoration as one of the Corps of 
Engineers' primary missions in 1986, the Corps has led some of the 
nation's largest and most ambitious ecosystem restoration projects 
(e.g., the Florida Everglades, Coastal Louisiana, and Upper Mississippi 
River). The Corps has also become a leader in a myriad of smaller-scale 
projects. The Corps aquatic ecosystem restoration efforts include 
restoration of floodplain, wetland and coastal hydrology and 
vegetation, shellfish restoration, dam removal, fish passage, and levee 
modification, among others. Many of these large and small scale efforts 
require significant engineering and construction resources that would 
create a variety of jobs. There are also numerous projects that could 
quickly allocate funding.
    We recommend that no less than a third of the Corps overall 
allocation in the economic stimulus package be dedicated to ecosystem 
restoration projects. There may be a tendency to focus stimulus funding 
solely on the largest restoration projects. However, to achieve 
geographic distribution of funding and to ensure that the stimulus 
funding meets multiple small and large scale restoration needs, we 
encourage distribution among the following restoration authorities:

   Large-scale programmatic restoration authorizations that 
        have received construction authority (e.g. Upper Mississippi 
        River, Everglades, Missouri River Recovery, Puget Sound and 
        Louisiana Coastal Area). Many of these efforts have invested 
        significant resources in pre-construction engineering and 
        design and have projects that have received construction 
        authorization but no funding to proceed with construction. 
        Funding allocated through a stimulus package could be quickly 
        obligated and provide significant economic and environmental 
        benefits. The total funding recommendation provided for this 
        line item is based on the FY 2009 spending capability for the 
        five projects listed above.
   Individually authorized small to medium scale restoration 
        projects or multi-purpose projects with a restoration 
        component. There are a suite of projects that are individually 
        authorized and have received regular investment for feasibility 
        studies and design. Many of these received construction 
        authority in the last Water Resources Development Act. Examples 
        of such projects are provided in the list in appendix I. 
        Funding should be allocated to those projects that have a clear 
        environmental restoration benefit, are authorized for 
        construction and could quickly obligate funding.
   Continuing authority programs (CAPs), which include Section 
        206, Aquatic Ecosystem Restoration, and Section 1135, Project 
        Modifications for Improvement of the Environment. These 
        continuing authority programs have been hamstrung by high 
        demand, insufficient funding and a growing backlog of projects. 
        As a result, the programs cannot implement new restoration 
        projects and many existing projects have been languishing 
        without funding. Many of the projects already in the program 
        cue, some of which have received little or no funding in recent 
        years, have completed large portions of the necessary design 
        work and could quickly finalize design and award contracts for 
        construction. Because of the small nature of projects within 
        these programs (<$ 5 million total Federal cost), a significant 
        investment via the stimulus package could clear the large 
        backlog and quickly inject stimulus dollars into the economy.
National Oceanic and Atmospheric Administration (NOAA)
    The nation's coastal areas are home to half of the US population 
and generate nearly 60% of our GDP. Restoring ecological health in 
these areas supports the long-term sustainability of coastal 
communities and coastal economies. Restored landscapes provide new 
opportunities for businesses such as river rafting or kayaking; they 
support recreational and commercial fishing industries; and improve 
tourism. Working with partners, the National Oceanic and Atmospheric 
Administration's (NOAA) Community-based Restoration Program and Open 
Rivers Initiative has the expertise to successfully implement a wide 
array of coastal restoration projects that both result in near-term job 
creation and result in long-term economic growth by supporting natural 
resource based economies. NOAA is well prepared to deliver stimulus 
funding by competitively selecting projects based on factors such as 
ecological benefit, feasibility, cost-effectiveness, and socio-economic 
benefits, including meeting job creation criteria.
    Over 100 projects have been identified for NOAA with an estimated 
funding need of over $700 million. Some examples are included in 
Appendix I. This is not a comprehensive list but rather a sampling of 
projects to demonstrate scope and scale of the existing opportunity for 
this kind of work. Given the demonstrated need, job creation potential, 
and NOAA's capacity to implement projects, we recommend providing a 
minimum of $250 million in the economic recovery legislation for 
coastal and estuarine restoration and fish passage projects through 
Bureau of Reclamation
    The Bureau of Reclamation is the largest water manager in the 
western United States, and as a result, has a significant impact on 
freshwater ecosystems in the West. While the Bureau's mission is 
focused on water supply, the agency has supplemental authorities to 
address endangered species and other environmental concerns related to 
its projects. Bureau of Reclamation projects suffer from serious 
maintenance neglect with much of the water infrastructure managed by 
the agency in need of rehabilitation and repair. While we support 
investment in the Bureau's water supply projects, before investing 
funding in outdated infrastructure, it is important to seize the 
opportunity to evaluate whether existing infrastructure is meeting 
current needs and if not, to remove it. Furthermore, new investment in 
rehabilitation of water supply infrastructure affords an opportunity to 
identify modifications that both meet water supply needs and benefit 
the environment.
    Given that there are a number of infrastructure removal, 
modification, repair and rehabilitation projects that can both improve 
water supply and provide environmental benefit, priority should be 
given to projects at Bureau of Reclamation facilities that provide 
environmental benefit with a minimum of 1/3 of the total funding 
received by the Bureau going to these projects. Examples of 
environmentally beneficial projects the Bureau could fund include 
improving the efficiency of water delivery systems to provide water for 
environmental purposes, modifications to facilities for fish passage, 
removal of unused or derelict facilities and consolidation of 
irrigation or other diversions to provide environmental benefit, and 
restoration of riparian habitats to meet endangered species or other 
environmental goals. A list of example projects for the Bureau of 
Reclamation is included in Appendix I.
Department of Transportation
    Roads can have a significant impact on ecosystems by causing 
fragmentation of habitats, spreading invasive species, and degrading 
water quality. There are a number of restoration projects that involve 
the modification of roads. These projects require significant 
engineering and construction resources and as a result, will have a 
significant job creation effect. Suggested stimulus investments are 
outlined below:

   Modification of roads for fish passage.--In the past, most 
        road-stream crossing design has been aimed at minimizing costs, 
        protecting the road and minimizing traffic interruptions. Less 
        attention has been given to protecting stream functions, such 
        as sediment transport, fish and wildlife passage, and the 
        movement of woody debris. Many bridges and culverts disrupt 
        these processes causing ecological degradation. The last 
        transportation bill provided authorization and funding for 
        retrofitting culverts on Forest Service lands to improve 
        habitat connectivity. High Priority Project funding was 
        allocated to Alaska for similar work. This initial investment 
        for bridge and culvert retrofits should be expanded in the 
        economic stimulus package. First, $500 million should be 
        provided through existing authorities for road modifications on 
        Forest Service, Fish and Wildlife Service and Park Service 
        land. Second, a new authority with dedicated funding should be 
        created to allow state Departments of Transportation to 
        construct projects to retrofit or replace stream-crossings for 
        environmental benefit. We recommend 2% of the total allocation 
        to transportation infrastructure be dedicated for this purpose.
   Projects to address water quality impairment related to 
        roads.--Modification of hydrological conditions associated with 
        roads as well as the polluted runoff from road surfaces 
        seriously degrades water quality in many areas. According to 
        the Environmental Protection Agency, stormwater runoff from 
        roads, parking lots and other paved surfaces is the largest 
        source of water pollution today. Furthermore, there is 
        currently no dedicated funding for localities to address these 
        concerns. In response to this need, the Senate version of the 
        last transportation bill reauthorization included the Highway 
        Stormwater Discharge Mitigation Program; unfortunately this new 
        program was not included in the final conference agreement. To 
        address the critical threat posed by water pollution from 
        roads, the economic recovery package should authorize the 
        Stormwater Discharge Mitigation program and dedicate 2% of the 
        total investment in road infrastructure to these projects.
Environmental Protection Agency
    The Environmental Protection Agency leads efforts to address the 
water quality of our nation's rivers, streams and wetlands. We have 
made great progress since the passage of the Clean Water Act in 
reducing the pollution contributed to our waterways, but work remains 
to be done. First, much of our water infrastructure, which has been 
largely responsible for improvement in water quality over the past 30 
years, is aging and in need of re-investment and repair. This can be 
accomplished through investment in the Clean Water State Revolving Fund 
and Drinking Water State Revolving Fund.
    While water and wastewater infrastructure and a strong point source 
control program have realized drastic water quality improvements, non 
point source pollution remains a significant threat to many of the 
nation's water bodies. Investment in activities to address non-point 
sources of pollution could go a long way towards improving water 
quality. Furthermore, many of the practices that would be employed 
involve infrastructure development and modification. For example, one 
practice with promise is the construction of two-stage ditches on 
agriculture land. These wider ditches slow the flow of water leaving 
agricultural landscapes, reducing the nutrient and sediment input to 
downstream water bodies. This type of work requires construction labor, 
materials, and equipment and thus would provide an economic stimulus. 
To address this non-point source water quality issue, we recommend a 
stimulus investment in the Section 319 non-point source pollution 
program with a focus on projects that require construction or other 
infrastructure modification.
Forest Service
    More than 100 million acres of federal, state, and private lands 
are at high risk from damaging wildfire. Addressing the fire threat by 
removing overgrown brush and trees and restoring forest health at a 
national scale will stimulate local economies and put people to work in 
the wildland urban interface and in rural communities. It is also an 
effective technique to jump start restoration of degraded ecological 
systems and to enable fire to play its natural role even as climate 
change extends the fire season.
    The National Fire Plan, with its sustained program of hazardous 
fuels reduction, has already spawned the beginning of a green industry 
to restore forest health and reduce wildfire threats. These existing 
industries range from community-based operations with chainsaws and 
trucks to large multi-state operations with mechanical harvesters and 
hundreds of employees. Under current programs, only 3 million acres of 
at-risk forests can be treated each year and the backlog is growing 
faster than the treatments can keep up. Accelerated fuels treatment 
will require sustained funding to the federal land management agencies 
and states and capacity building to get the workforce and business 
infrastructure in place.
    The economic recovery package should address four aspects of this 
green jobs opportunity:

   Hazardous Fuels Reduction on Federal land.--Increase funding 
        to the Forest Service and Department of Interior agencies in 
        the Wildland Fire Management account, Hazardous Fuels Reduction 
        line item, for agencies to prepare fuels treatment projects, 
        gain NEPA clearance, and administer contracts.
   Forest restoration job training.--Provide job training 
        programs to build the workforce and contractor capacity needed 
        to restore forests, using USDA grants programs and authorities, 
        such as Economic Action Program, Youth Conservation Corps, Job 
        Corps Centers, and partnerships and agreements.
   Small business incentive grants.--Build infrastructure for 
        efficient restoration of forests and utilization of small 
        diameter wood from fuels treatments by providing small 
        businesses and local governments with grants and technical 
        assistance (under the Economic Action Program authorities) and 
        low-interest loans and short-term lines of credit through the 
        Small Business Administration.
   Hazardous fuels reduction on private lands.--Increase 
        funding to the Forest Service, State Fire Assistance and 
        Department of the Interior, State and Local Fire Assistance for 
        fuels reduction on state and private lands and for job training 
        and capacity building to employ local and volunteer 
        firefighters in fuels reduction and controlled burning.

    In addition to restoration of forest lands to reduce the risk of 
catastrophic fire, there are a variety of other activities needed to 
improve forest conditions. Activities for investment on both forest 
service land and private lands include reforestation, watershed 
restoration, restoration of insect-damaged sites, invasive species 
management, and maintenance and reconstruction of roads to reduce 
environmental impact. These habitat restoration activities will produce 
jobs in local communities while improving the health of the nation's 
Animal and Plant Health Inspection Service
    The Asian longhorned beetle threatens hardwood forests reaching 
from New England to Minnesota and in parts of the West. Sudden Oak 
Death is an invasive non-native forest pathogen that infects and kills 
oaks, hardwoods, and shrubs in the Pacific Coast states and across the 
East. Vulnerable forests support hardwood timber, maple syrup, and 
autumn foliage tourism industries, each of which represents a multi-
million dollar contribution to the economy. Furthermore, these pests 
and blights threaten economic harm, job losses to the timber, 
agriculture, and nursery industries, plus state, national, and 
international quarantines. Asian longhorned beetle, in particular, also 
puts urban trees in cities across the country at risk; these trees have 
a total value of more than $600 billion. The experience in Chicago 
shows that the beetle can be eradicated when sufficient resources are 
    The Animal and Plant Health Inspection Service has been working in 
partnerships with state agencies to eradicate these pests and blights, 
and the stimulus package presents an opportunity to ramp up eradication 
efforts. Stimulus funding would allow for efforts to eradicate the 
extensive Asian longhorned beetle outbreak detected in Massachusetts in 
summer 2008 as well as complete eradication of previously known 
infestations in New York and New Jersey. Funds would also be used to 
hire workers to target Sudden Oak Death outbreaks in Southern Oregon 
and Northern California with work concentrating on early detection, 
host removal, and eradication efforts. Funding would allow hiring and 
equipping of hundreds of workers who would remove the several thousand 
infested trees, apply proven chemical treatments to tens of thousands 
of trees exposed to the insect, and carry out intensified surveys to 
ensure that no beetles escape.
Fish and Wildlife Service
    The US Fish and Wildlife Service operates a number of voluntary 
habitat restoration programs that provide grants to improve fish and 
wildlife habitat. All of these programs currently have a backlog of 
projects and could spend funding quickly on restoration projects such 
as dam removal and fish passage construction, fish habitat restoration, 
and wildlife habitat restoration. We recommend investment in the 
following programs:

   Fish habitat restoration: The Fish and Wildlife Service 
        operates a fish passage program that provides grants for the 
        removal or modification of barriers to fish passage as well as 
        the National Fish Habitat Action Plan, which provides funding 
        to partnerships for on-the-ground fish habitat restoration. 
        Based on current backlogs, we recommend $14 million and $10 
        million, respectively, for each of these programs
   Coastal Restoration: The Fish and Wildlife Service's coastal 
        program focuses on a variety of coastal restoration projects 
        ranging from invasive species removal to coastal marsh and 
        wetland restoration by cost-sharing restoration projects with 
        coastal landowners. The program has an average annual funding 
        level of $11 million and a project backlog of $10 million; 
        thus, we recommend a stimulus investment of $21 million.
   Partners for Fish and Wildlife: The Partners Program 
        provides funding to private landowners for projects in all 
        habitat types that conserve or restore native vegetation, 
        hydrology, and soils associated with imperiled ecosystems such 
        as longleaf pine, bottomland hardwoods, tropical forests, 
        native prairies, marshes, rivers and streams. This program 
        currently funds approximately $75 million in projects per year 
        and has a backlog exceeding $35 million. We recommend $100 
        million in stimulus funding.

    In addition, hundreds of thousands of acres of native habitat on 
national wildlife refuges is in need of restoration, which is critical 
to maintaining healthy populations of game and nongame species. Of 
particular note are the many national wildlife refuges that are being 
overtaken by invasive plants and animals that crowd out native 
vegetation and degrade the quality of wildlife habitat. Investment is 
needed hire teams of workers to cultivate and plant native trees and 
grasses and eradicate invasive species as well as contract local 
companies and workers to repair, construct and restore deteriorating 
water infrastructure that provides important wildlife benefits.
Bureau of Land Management
    The Bureau of Land Management (BLM) Abandoned Mine Land (AML) 
program seeks to eliminate or reduce dangers to public health, safety 
and the environment as a result of impacts related to abandoned hard 
rock mines on public lands. There are over 12,000 abandoned mines. Of 
the 12,000 sites that have been evaluated and approximately 80% need 
remediation. In addition there are estimated to be a total of 100,000-
500,000 abandoned sites yet to be fully characterized for remediation.
    Environmental problems from abandoned mines include: contaminated/
acidic surface and ground water; and stockpiled waste rock and mill 
tailing piles. In addition, surface runoff can carry AML-originated 
silt and debris down-stream, eventually leading to stream clogging. 
Sedimentation results in the blockage of the stream and can cause 
flooding of roads and/or residences and pose a danger to the public. 
Sedimentation may also cause adverse impacts on fish. The cost 
estimates to clean up abandoned hardrock mines range from $30--$70 
billion. The BLM AML program could quickly allocate a minimum of $400M, 
which could produce tens of thousands of jobs.
   minimizing environmental damage from hard infrastructure projects
    Design approaches and environmental standards have improved 
dramatically since much of our current infrastructure was built. If we 
are to avoid many of the harmful impacts of past infrastructure 
development, any new investment in infrastructure should seize on the 
opportunity to use the state of the art design and building standards 
that are already being applied in many places.
    An important example of an improved design approach is the 
development of stream crossing standards for roads in New England. One 
study inventoried 3,600 crossing structures in New England and 
identified over 2,000 that act as severe barriers to aquatic organism 
passage and river processes, demonstrating that road crossings present 
one of the greatest threats to these aquatic ecosystems. In response, 
the New England District of the Army Corps of Engineers, working with 
state and NGO partners, developed standards for road-stream crossings 
that ensure new or rebuilt crossing structures maintain habitat 
connectivity by defining minimum criteria for parameters such as 
minimum bridge span width, culvert design, and substrate type. The 
standards apply to all new projects seeking regulatory approval under 
the programmatic general permit for each state in New England and offer 
a tested model to apply to road projects nation-wide.
    Many infrastructure projects are being developed in coordination 
with regional conservation plans such as ecoregional assessments, 
regional Habitat Conservation Plans (HCPs), and watershed plans. Many 
organizations utilize ecoregional assessments to identify important 
conservation areas sufficient to ensure the long-term persistence of 
the ecoregion's biodiversity. The Nature Conservancy, Western 
Governor's Association and Bureau of Land Management are all investing 
in some form of ecoregional planning to guide decision-making. 
Similarly, California has employed regional HCPs for infrastructure 
siting, permitting and mitigation and has recognized the streamlining 
benefits of this approach. These planning tools ensure that necessary 
project permitting can go forward in a timely manner and result in 
mitigation that provides greater ecological benefit. Therefore, 
projects that utilize these tools should be given priority in 
allocation of stimulus funding.
    In the realm of water resources infrastructure, numerous studies 
and decades of experience have demonstrated the economic and 
environmental benefit of combining non-structural approaches with 
structural projects to achieve flood risk reduction goals. The best 
example of this approach is the development of set-back levees that 
provide flood protection but do so in a way that maintains connection 
between the floodplain and the river and allows the floodplain to serve 
its natural function of attenuating floods. This design approach is a 
significant departure of the traditional practice of building levees 
directly on the river bank but should be employed where possible in any 
new investment.
    Broad scale standards for bridge design, regional planning and 
flood risk reduction should be adopted in a stimulus package to steer 
the agencies' project selection toward those projects that employ best 
practices such as the ones described above. Funding should first be 
allocated to projects that have been designed using these techniques. 
While we understand the need to allocate funding quickly, there will be 
a number of projects that are not designed using the best design 
practices but that could easily be retrofitted to meet these standards. 
A second funding priority should go to those projects that can be 
retrofitted to reduce or reverse environmental damage. The third tier 
for funding should be any other project that has completed design and 
environmental review and is ready to be built but does not employ 
innovative design practices to minimize environmental damage.
  Statement of Stacey L. Pine, Senior Director of Government Affairs, 
                National Recreation and Park Association

    Thank you Chairman Bingaman, Ranking Member Domenici, and other 
honorable members of the committee for this opportunity to submit 
written testimony on investment ideas for clean energy and natural 
resources projects and programs to create green jobs and to stimulate 
the economy.
    The National Recreation and Park Association (NRPA) is a national, 
non-profit organization with a mission of advancing parks, recreation 
and environmental conservation efforts that enhance the quality of life 
for all people. There are more than 6,500 park and recreation agencies 
throughout the country, majority of which are members of NRPA. Through 
our network of more than 21,000 citizen and professional members we 
represent the local and state park and recreation departments across 
the country.
    NRPA commends this committee and the entire Congress for seeking 
innovative ways to address our nation's economic challenges. As you 
know, roughly two million jobs have been lost in the United States in 
2008 and more losses are forecasted. Thus, we are pleased that you are 
in the process of developing economic recovery legislation that will 
put people back to work by funding ready-to-go infrastructure projects 
that meet critical needs in communities across America. Undeniably, it 
is the economic hardships of individual communities that have merged to 
create a national recession. Therefore, to be truly effective, efforts 
to diminish this recession and boost the national economy must start 
with providing resources at the local level so communities such as 
Silver City, New Mexico or Ketchikan, Alaska can stimulate their own 
economies and create jobs for their citizens.
    As the Congress works to craft economic recovery legislation, we 
request that you include funding for the construction and renovation of 
parks and recreation by providing $125 million for the Land and Water 
Conservation Fund state assistance program (LWCF) and $100 million for 
the Urban Park and Recreation Recovery Program (UPARR). These programs 
are ideally suited to achieving the goals of the proposed economic 
recovery package by creating jobs, stimulating economic activity, and 
putting people back to work.
    LWCF stateside assistance provides 50% in federal funds to states 
and localities as matching grants for the purchase and development of 
parks and construction of recreation resources. As a result of LWCF 
stateside assistance funding, over 41,000 athletic and playing fields, 
hiking trails, campgrounds, ski areas, swimming pools and boating 
facilities have been created in local communities. Since its inception 
in 1965, the program has provided more than $4 billion in matching 
funds to states and local communities in 98% of American Counties.
    Similarly, since 1978, UPARR has provided more than $270 million in 
matching grants to nearly 400 cities to rehabilitate and improve their 
parks and recreational facilities that have fallen in disrepair due to 
lack of investment. With UPARR grants serving as a catalyst, urban 
communities are able to make recreation centers and public parks safe, 
rebuild deteriorating infrastructure, and leverage existing resources 
to serve larger populations while also meeting new demands.
    Our nation has a long history of investing in park restoration and 
construction as a way to create jobs and revitalize the economy. 
President Franklin Roosevelt created the Citizens Conservation Council 
(CCC) to build and fix up America's parks as a key component of his 
strategy to put people back to work during the Great Depression. Again 
in 1983, Congress recognized the important role park construction 
projects could play in immediately stimulating our nation's economy. 
The Emergency Job Appropriations Act of 1983 invested in LWCF and UPARR 
by providing $40 million to LWCF for development/redevelopment projects 
and $40 million to UPARR for rehabilitative grants and repairs. Under 
this Act, states were encouraged to rapidly fund construction projects 
that would create employment opportunities between September 1983 and 
September 1984. As a result of this funding, 572 LWCF development 
projects 126 urban park projects were funded in communities and major 
cities across the nation. Additionally, this Act increased employment 
by providing 35,000 jobs.
    Unfortunately, in recent years, funding for LWCF stateside 
assistance and UPARR has significantly diminished leaving communities 
with lists of projects and needed repairs they are unable to complete 
because they do not have funding. Numerous communities throughout the 
country have capital construction and maintenance projects that are 
ready to commence pending matching federal funds. These projects such 
as new roofs for community centers, irrigation systems for sport 
fields, repairs to swimming pools, and electrical upgrades to park and 
recreation facilities would allow communities to preserve, rehabilitate 
and maintain already existing, and in some cases crumbling, 
infrastructure that provides numerous recreational opportunities for 
citizens. Many of these projects have designated local funding set 
aside, are poised to receive local approval or permits, and are 
suitable for small or minority businesses and contractors. LWCF 
stateside assistance and UPARR funding for these projects would allow 
construction to begin almost immediately, thereby putting local 
residents to work and helping communities ensure they are providing 
safe recreational facilities for children and adults alike.
    In addition to contributing to local economies and repairing 
infrastructure, LWCF stateside assistance and UPARR projects serve to 
protect our environment and promote environmental stewardship while 
also creating green jobs. Grants provided by LWCF stateside assistance 
and UPARR have funded projects that contribute to reduced stormwater 
runoff, enhanced groundwater recharge, stormwater pollutant reductions, 
urban heat island mitigation, and reduced energy demands. These 
projects conserve our environmental resources such as green space and 
water. Additionally, these projects serve to make communities and 
neighborhoods safer by protecting against environmental contamination. 
Businesses contracted to carry out these projects are in sectors that 
are part of the green economy. Through the services they provide jobs 
are created that conserve our natural environment and improve 
environmental quality.
    However, park and recreation agencies also serve another important 
function: to improve the physical and mental health of citizens. By 
developing and restoring this local infrastructure, you are also 
investing in the health of local communities. Our nation currently 
faces an obesity epidemic and strengthening or improving local 
recreation infrastructure is necessary to combat this epidemic.
    As you probably know, hundreds of parks and recreational facilities 
are in disrepair in communities across America due to budget cutbacks 
and the lack of federal funding during the past eight years. This 
seriously undermines local educational and athletic programs, the 
availability of indoor and outdoor recreational activities, and overall 
quality of life in communities. Therefore, NRPA also supports increased 
funding for programs such as Community Development Block Grants and the 
various transportation programs, such as the Recreational Trails 
Program, that would provide funding for local park and recreation 
    From the information I have presented to you, I believe it is 
obvious that LWCF and UPARR develop and restore local infrastructure in 
communities facing growing populations and demands. Investing in local 
communities and giving them the necessary resources to preserve, 
maintain and rehabilitate local infrastructure is especially important 
in times of an economic downturn, such as the one we are currently 
experiencing. For it is during such times that demand for local 
recreational programs and services significantly increases as citizens 
look for close to home recreation, entertainment and fitness 
opportunities. And for many citizens, local park and recreation 
agencies are where they turn for recreation, entertainment and fitness 
    In conclusion, NRPA believes that LWCF stateside assistance and 
UPARR are invaluable tools for Congress and the new Administration. We 
are confident that investing in LWCF and UPARR would immediately 
stimulate our economy through the creation of jobs, serve to protect 
our environment and provide much needed resources to communities to 
address local needs. Please include $125 million in funding for LWCF 
and $100 million in funding for UPARR in any economic stimulus 
legislation considered and passed by the 111th Congress.
    Thank you for this opportunity to present testimony.
 Statement of Mark Singleton, Executive Director, American Whitewater; 
                       Chairman, Outdoor Alliance

    Mr. Chairman and members of the Energy and Natural Resources 
    Outdoor Alliance is a coalition of six national, member-based 
organizations devoted to conservation and stewardship of our nation's 
public lands and waters through responsible human-powered outdoor 
recreation. The Outdoor Alliance includes: Access Fund, American Canoe 
Association, American Hiking Society American Whitewater, International 
Mountain Bicycling Association, and Winter Wildlands Alliance. 
Collectively, the Outdoor Alliance has members in all fifty states and 
a network of almost 1,400 local clubs and advocacy groups across the 
nation. Our coalition represents the millions of Americans who hike, 
paddle, climb, mountain bike, backcountry ski and snowshoe on our 
nation's public lands and waters.
    Our staff and members spend much of their free time exploring 
public lands via the roads, trails, rivers, and at the campsites. 
Collectively, we witness firsthand the state of these resources and are 
among the many people impacted by an aging infrastructure that is 
mismatched with today's priorities for public land management. We 
recognize the need for active and immediate efforts to bring our public 
lands infrastructure and in some cases the lands themselves up to 
standards. Perhaps most importantly today, we believe that doing so 
would create an array of economic benefits across multiple sectors of 
the United States economy immediately and for decades to come.
    Specifically, we suggest that the Committee prioritize the 
following activities in an economic stimulus package:

          US Forest Service Road Decommissioning and Restoration: 
        Unmanaged roads can wash out and erode, pollute water, damage 
        wildlife habitat, impact recreation, and speed the spread of 
        weeds. The current 380,000-mile US Forest Service (USFS) road 
        network contains many redundant, obsolete or unnecessary roads 
        that are costly to maintain and do not serve the millions of 
        people who visit national forests. Outdoor Alliance supports a 
        common-sense policy, including retiring unnecessary roads to 
        limit environmental damage and focusing scarce resources on 
        maintaining the roads that best serve the public. Currently, 
        deferred maintenance is over $8.4 billion nationwide and 
        increases annually as allocated funds fall far short of annual 
        maintenance needs. A number of national forests have already 
        set sound road maintenance priorities, but lack the funds to 
        reach those goals. An infusion of funding into road management 
        would immediately put people to work and would avert risks to 
        water supplies, wildlife habitats, recreational opportunities, 
        and fire-sensitive communities.
          USFS and BLM Recreation Infrastructure Improvements: Forest 
        Service and Bureau of Land Management (BLM) lands often provide 
        the closest and best mountain biking, backcountry skiing, 
        hiking, snowshoeing, paddling, and climbing opportunities for 
        millions of Americans. Investing now in the construction and 
        maintenance of trails, river access areas, campsites, parking 
        areas, sanitary facilities, and other visitor amenities--in the 
        tradition of the Civilian Conservation Corps--would immediately 
        create new jobs and benefit our citizens and gateway economies 
        for decades to come.
          Federal Agency Recreation Field Staff: The primary federal 
        land management agencies (US Forest Service, Bureau of Land 
        Management, National Park Service, and US Fish and Wildlife 
        Service) each have a significant need for recreation field 
        staff. The National Park Service has proposed 3,000 new rangers 
        as part of their Centennial Initiative, and the other agencies 
        certainly have a similar need. Hiring field staff to interact 
        with the visiting public would directly create thousands of new 
        jobs, encourage recreation-based tourism, reduce planning 
        conflicts and errors, and create new opportunities for 
        volunteerism. We envision these individuals as highly skilled 
        recreationists that share experiences with the public, forming 
        an invaluable personal connection between public land managers 
        and the public.

    Each of these priorities would result in both immediate and lasting 
economic and societal benefits for communities near public lands and 
the nation as a whole. In addition, each of these priorities is a wise 
and necessary investment that will protect at-risk public assets. We 
ask that you consider the following relevant points:

                  1. These priorities offer a wide range of jobs: From 
                backcountry trail crews requiring physical stamina, to 
                engineers requiring years of higher education, the 
                priorities we are suggesting provide a full range of 
                job opportunities. Thus, these projects offer work for 
                a broad cross section of citizens.
                  2. These priorities offer construction related jobs: 
                Many of the jobs relating to public lands 
                infrastructure are within the hard-hit construction 
                field. These jobs include heavy equipment operators, 
                engineers, architects, surveyors, landscapers, and 
                general contractors.
                  3. These priorities bolster the recreation economy: 
                Outdoor recreation is a $730 billion industry in the 
                US, and the vast majority of outdoor recreation occurs 
                on public lands. These priorities will enhance 
                recreation opportunities and in turn the recreation 
                economy. The economic benefits of these actions are 
                significant in both the manufacturing of outdoor 
                equipment and products, and also in the nature-based 
                tourism economies of countless and often rural 
                communities. It is our belief that high quality 
                infrastructure, landscapes, and management result in 
                high quality recreational experiences and in turn 
                increased participation in human-powered outdoor 
                  4. These priorities avert economic and ecological 
                risks: Many roads and other infrastructure elements 
                require maintenance to prevent failure--and failure can 
                have massive impacts requiring costly remediation. 
                Getting to work on the sizable backlog of basic 
                maintenance and in some cases decommissioning of public 
                land infrastructure is a good and needed investment. 
                Doing so will protect the landscapes, water, and 
                recreation that define our public lands, and protect 
                our nation from future, much larger management 
                expenses. Taking these actions is analogous to putting 
                a new roof on your house to avoid major water damage--
                and by all accounts there are already some leaks in the 
                old roof.
                  5. These priorities can happen right away: There is 
                certainly no shortage of work to be done, and it is our 
                understanding that agencies have active lists of 
                projects in need of implementation. Unlike some agency 
                actions, infrastructure maintenance and enhancements 
                are generally noncontroversial and in fact popular with 
                the public. Therefore agencies should be able to 
                complete the planning and implementation of such 
                projects in short order. In the parlance of the day, 
                what we have recommended is ``shovel ready.''
                  6. These priorities have additional societal value: 
                Protection and enjoyment of our American landscapes are 
                core values of our nation. In addition to their 
                inherent and iconic value, public lands provide human-
                powered outdoor recreation opportunities that foster 
                public health, childhood development, an invaluable 
                connection with nature, and other quality of life 
                benefits. We believe that investing in our public lands 
                is money well spent.

    In conclusion, we feel that offering federal land management 
agencies significant economic stimulus funds for the priorities that we 
have listed above will have an immediate and lasting positive impact to 
the United States economy. We feel that the funding levels suggested at 
today's hearing by the witnesses (Roughly $2-3.5 billion each for BLM 
and USFS per year, and roughly $1.5 billion for the NPS) represent 
reasonable balances between the agencies' needs and their capacities.
    Thank you for considering this testimony.
      Statement of Scott Jorgensen, President and CEO, Solarsa Inc

    Mr. Chairman, Ranking Member Domenici, and Members of the 
Committee, I am submitting this unsolicited testimony for your 
consideration as you work through an immediate economic stimulus 
package because I believe you can turn this crisis into an 
extraordinary opportunity to achieve far-reaching benefits for our 
country and the world. I wish my voice to be heard in strong support 
for you to combine rapidly S. 3233, the 21st Century Energy Technology 
Deployment Act, and S. 2730, the Clean Energy Investment Bank Act of 
2008 and make the combined act a key component to the economic stimulus 
package with an initial funding of $10 billion dollars.
    Please allow me to introduce myself. My name is Scott Jorgensen, I 
am President and CEO of SOLARSA INC., headquartered in Tampa, FL. I 
started the company in 2003 and have developed it into one of the 
leading providers of solar thermal and photovoltaic solutions in the 
country. Please visit our website at www.Solarsa.com to find out more 
about our company. In short, our main business is selling renewable, 
on-site energy and cogeneration systems (which we call our Energy 
Independence Systems) directly to residential or small business end 
users or to third parties such as general contractors who install the 
systems for the end user. These systems are comprised of one or more of 
the following components, solar hot water, solar air conditioning, and 
solar electric. We sell Energy Independence Systems to residential, 
commercial and industrial clients and we franchise our business model.
    The bills I referred to above, S. 3233 and S. 2730, create a 
federal funding entity whose purpose is to invest in renewable energy 
and energy efficiency technologies which can put people to work 
immediately--engineers, contractors, plumbers, electricians and solar 
installers to work in every community throughout America. Investments 
that can help ameliorate the financial crisis with real assets as 
collateral for the loans.
    I encourage this Committee to specifically provide this $10 billion 
dollars for an economic stimulus package that focuses on existing, 
proven technologies that are not being fully exploited, such as energy 
efficiency enhancements and solar thermal installations for residential 
and small business.
    Loan guarantees, energy-efficiency mortgages, and secondary market 
support for energy efficiency improvements, solar thermal applications 
and other similar technologies provide the greatest short and long-term 
societal benefit for our tax dollars. These `unsexy' improvements and 
technologies can be made more attractive by encouraging the aggregation 
of such projects for resale to a government-sponsored secondary market. 
Don't throw money at a single solution, build sustainable financial 
markets that can eventually stand on their own and keep generations of 
Americans working.
    Energy efficiency, solar thermal cooling/heating and solar hot 
water projects can make a meaningful contribution to our energy, 
environmental, economic or physical security but have difficulty 
accessing private sources of funding due to aggregation-related credit 
issues, unknown residual values, inadequate secondary markets for used 
equipment and/or certain regulatory risks.
    Eventually, the federal funding entity needs to expand authority to 
fund energy supply solutions for new technologies under development 
that meet the goal of energy independence. Additionally, the federal 
funding entity requires the flexibility to invest in expansion and 
improvement of the transmission grid, which will provide benefits in 
job creation and energy security into the future.
    States should participate in the federal funding entity through 
Intergovernmental Agreements with risks sharing for the deployment of 
energy efficiency and solar thermal technologies. I spoke at the second 
annual ``Serve to Preserve Summit on Global Climate Change'' in Miami 
this year hosted by Florida's Governor Charlie Crist. During my session 
titled ``Going Green Makes Economic Sense'', I proposed a $1 billion 
dollar loan guarantee program to put solar thermal cooling, heating and 
hot water into Florida's government buildings. This $1 billion dollar 
initiative translates into 200 to 300 solar thermal cooling projects 
ranging from $1 million to $10 million dollars each throughout the 
State of Florida. A single billion dollar investment in ``solar 
cooling'' shifts $4 billion dollar in fossil fuels purchases to create 
jobs directly in our local communities. Annual energy for cooling and 
ventilating commercial buildings and homes consume over 50% of all 
electricity produced in Florida.
    Dr. Hermann Scheer, a member of the German Parliament, President of 
EUROSOLAR, the European Association for Renewable Energy, and General 
Chairman of the World Council for Renewable Energy, met with me at the 
second annual ``Serve to Preserve Summit'' in Miami. Dr. Scheer, who 
has led Germany's rise to a solar and wind energy superpower, said that 
countries need to do three things to push renewable energy: guarantee 
payment (through loan guarantees), guarantee access to grid for any 
producer of renewable power, and to not cap contribution of renewable 
    Except for a short time working for Price Waterhouse in New York 
City, I have worked the majority of my life in small family businesses. 
I am your foot soldier in our ``war against unsustainable living''.
    After 9/11 occurred, I felt directly responsible for that event due 
to my prior profligate use of energy. Now, as a responsible person who 
assumes full responsibility for my actions and inactions, I have been 
working diligently to see that my sons and daughters live in a better 
place. My existing businesses turned to recycling and saving energy 
immediately. And I started a new company focused on solar thermal 
energy for air conditioning. For the past 18 months, my solar company, 
Solarsa has spent $500,000 dollars engineering three of the largest on-
site solar thermal (cooling, heating & hot water) systems in the world 
that make economic sense regardless of gas prices. Solarsa uses 
technology that has been tested, certified and is readily available. 
Thousands of similar systems are in Asia and Europe.


    Energy efficiency and solar thermal (hot water) projects can make a 
meaningful contribution to our energy, environmental, economic or 
physical security but have difficulty accessing private sources of 
funding due to aggregation-related credit issues, unknown residual 
values, inadequate secondary markets for used equipment and/or certain 
regulatory risks. A federal funding entity can smooth the way for 
valuing these risks and encouraging the private markets to accept 
certain risks.
    With a back ground in accounting and finance, over 25 years of 
running my own businesses and five years in startup mode for my solar 
thermal energy company, I present to you:
The Jorgensen Plan:
   Ask the American people to work hard, even `pay the price' 
        for ``Energy Independence''. And we will. Pricing signals 
   Provide immediate emergency funding of $10 billion for a 
        federal funding entity (as identified in S. 3233 and S. 2730) 
        and $100 billion each year for the next nine years.
   Provide loan guarantees for large and small energy 
        efficiency and solar thermal projects.
   Create a government-sponsored secondary market to aggregate 
        residential and commercial scale energy efficiency and solar 
        thermal projects so that Americans can invest in our homes, 
        businesses and communities.

    There are Americans that will never hold a rifle, but we Americans 
are ready to fight and work hard for our ``Energy Independence''. Give 
us not guns, but create financial markets so that we can invest in our 
homes and businesses. After 9/11, the country had an opportunity to 
call the American people to war against oil . . . not for oil.
    We have had enough finger pointing; Americans are ready to take 
responsibility for 9/11, climate change, high or low gas prices and 
world unrest. We no longer accept Washington, Wall Street or Detroit 
blaming others for their demise.
    Shift to long-term thinking. Consider the legacy we leave our 
children. Thirty years from today, what will our children remember of 
what we did today? What will the history books say about you, about me? 
Wall Street bailout. Detroit bridge-loan. Job losses . . . Not exciting 
things to be remembered by.
    Call Americans to work! To work harder for our ``Energy 
Independence''! We don't need handouts, but jobs. Jobs that are 
sustainable. We are willing to work hard, save and invest in our 
children's future. Our grandparents knew how to save and maybe we need 
to live a little more like they did.
    From democrats to republicans, both parties have changed because of 
us, the voters. I call on Congress to immediately replace purchases of 
fossil fuels with manufacturing, finance, engineering, installation, 
maintenance and repair jobs through the enactment of a combined S. 
3233, the 21st Century Energy Technology Deployment Act, and S. 2730, 
the Clean Energy Investment Bank Act of 2008 and a minimum funding of 
$1 trillion dollars over ten years.
    Call on Americans to help, to innovate, to invest and to save. Make 
``Energy Independence'', America's number one priority. Thirty years 
from now, I want my grandchildren to see those same solar panels still 
working that we installed during this first year of our ``war against 
unsustainable living''!
    Thank you for the opportunity to put my thoughts before this 
Committee. I would be happy to provide additional information or 
background on anything included in this testimony.
           Statement of the American Institute of Architects


    As the global financial crisis continues to threaten the livelihood 
of American businesses and workers, the American Institute of 
Architects (AIA) strongly urges Congress to support polices that will 
stimulate and restore confidence in the United States economy.
    The economic crisis has tightened credit markets, putting financing 
for construction projects in jeopardy and forcing businesses to lay off 
workers. The slowdown in building could not come at a worse time--when 
America's infrastructure is deteriorating, with clogged highways 
stifling commerce, transit systems overwhelmed and underfunded, and 
energy prices on the rise.
    The AIA's nearly 85,000 members have been particularly hard-hit by 
the recent economic downturn, and it appears that the fiscal climate 
will get worse before it gets better. The AIA's Architecture Billings 
Index, a leading economic indicator of the building industry, forecasts 
a significant reduction in activity for industries within the building 
sector over at least the next 12 months.\1\ As the building sector is 
responsible for about one of every ten dollars of United States GDP, 
continued stagnation within the building industry will only further 
magnify the overall struggles of our economy.
    \1\ http://www.aia.org/aiarchitect/thisweek08/1121/1121b_otb.cfm

    America's architects believe that this economic crisis presents an 
opportunity not only to build, but to build better--greener buildings, 
vibrant communities, and a 21st century transportation network that is 
good for both the environment and the economy. To that end, the AIA 
believes that any funding for infrastructure projects that Congress 
appropriates should be prioritized with these principles in mind:

   Projects for which construction can commence within 24 
        months of enactment of the economic recovery legislation
   Projects that rebuild and improve safety of existing 
   Projects for new infrastructure that are more energy 
        efficient, sustainable and help create healthier, livable 
        communities than what existed before

    The AIA believes that it is important to provide funding for 
projects across at least a 24-month timeline for several reasons. 
First, as indicated previously, the ABI suggests that the economic 
downturn in the building sector will last at least a year, if not 
longer, and previous recessions show that recovery tends to lag in the 
construction and real estate sectors; providing funding for projects 
across 24 months ensures a steady stream of funds for job creation over 
the likely life of the recession. Second, it will be difficult if not 
impossible to push significant sums of money as those proposed for the 
economic recovery through the ``pipeline,'' without increasing the risk 
of funds being poorly spent and projects hastily planned and executed; 
allowing for longer planning and design time for certain projects will 
help ensure they are carried out in the most effective, cost-efficient 
manner. Third, allowing for planning and design work through the 
various stages of the process will ensure that the economic recovery 
package creates jobs not only in the construction sector, but 
throughout the building industry.
    A 2004 AIA survey of architecture firms determined that the average 
time between the award of a design contract and the award of a 
construction contract for that facility was about one year, but less 
than six months for 40 percent of the projects.\2\ Therefore, providing 
funding for projects in the design phase will not prevent construction 
contracts from being awarded within the timeframe of the economic 
recovery package, and will allow for a broader and better designed set 
of projects.
    \2\ http://www.aia.org/SiteObjects/files/
    To achieve the aforementioned goals, the AIA has developed a number 
of policy ideas that, if enacted now, would invigorate the design and 
construction industries, in turn providing an immediate stimulus to the 
    These proposals would create approximately 1.6 million jobs, 
including 14,000 jobs for architects.\3\
    \3\ Not including potential job creation from revenue provisions.
1. 21st Century schools
    Schools across the country are in desperate need of restoration. 
Too many of America's children attend school in overcrowded buildings 
with leaky roofs, faulty electrical systems, and outdated technology, 
all of which compromise their ability to achieve, succeed, and develop 
the educational skills necessary for the workforce of the 21st century.

          a. The AIA supports an investment of $25 billion in helping 
        school districts repair, modernize and green school buildings.

    According to the National Education Association (NEA), it would 
take more than $268 billion to bring America's K-12 school facilities 
to a good condition. As the economic crisis has worsened, local 
education agencies are further delaying and canceling major capital 
projects to repair and modernize school buildings, meaning that the 
amount of money needed to repair schools grows every day.
    Modernized, green schools promote healthy, high achieving students 
who will become future advocates for green living, as this generation 
learns the importance of building for a sustainable future
    Currently the green schools cost premium is between 1.5--2.5 
percent of the total cost of the project. Studies undertaken to 
demonstrate the efficacy of green schools peg the benefits to states at 
anywhere from 10 to 20 times the initial cost. School districts see 
direct benefits accrue at a level of around four times the cost due to 
energy savings and other cost control mechanisms implemented. In fact, 
according to Greening America's Schools by researcher Greg Kats, the 
energy and water savings from green schools would save schools enough 
money to hire an additional teacher.\4\
    \4\ http://www.cap-e.com/ewebeditpro/items/O59F12807.pdf
    According to the State Education Data Center (SEDC) of the Council 
of Chief State School Officers, average spending by school districts on 
operations and maintenance is $900 per student, or $45 billion 
nationwide per year.\5\ This means it costs school districts $45 
billion just to maintain school buildings' current condition. 
Construction adds an additional $45 billion per year.
    \5\ http://www.schooldatadirect.org/app/data/q/stid=1036196/
    With the increased costs of energy and construction materials and 
tight budgets, school districts are currently contemplating laying off 
maintenance personnel, canceling or deferring modernization work and 
delaying purchases of new equipment. A funding level of $25 billion 
would ensure that funds go not only to maintaining what is currently 
there but realizing improvements to school facilities and student 
learning outcomes.
    This proposal would create approximately 435,000 jobs, including 
4,100 jobs for architects.\6\
    \6\ AIA analysis of U.S. Conference of Mayors MainStreet Economic 
Recovery Report (http://www.usmayors.org/mainstreeteconomicrecovery/)

          b. The AIA supports an investment of $700 million to create a 
        pilot program that would provide grants for up to 15 state or 
        local education agencies to develop 21st century model school 
        campuses in each region of the country, utilizing 21st century 
        design and construction techniques that align to support 21st 
        century teaching and learning.

    Tests and studies repeatedly place U.S. education achievement 
behind those of other developed nations. Concurrently it is well known 
that the health of any economy is based on the quality of its 
educational system and the capabilities of our students entering the 
work force. For many years foundations, researchers and educational 
experts have been focusing on the reform of the American school system, 
particularly at the secondary level. That reform is critical to the 
future success of America's students and our economy.
    To that end the AIA proposes that a network of ``model schools'' 
across the nation be established as exemplar examples from which public 
school districts can observe and learn as they reform their educational 
programs. These pilot projects would be created in partnership with 
local or state educational districts and supported by non profits and/
or foundations that are focusing on the critical needs of America's 
secondary students. These projects would become incubators of and 
showcases for contemporary educational programs and models for 
educational transformation.
    This proposal would create approximately 12,000 jobs, including 115 
architect jobs created or saved.\7\
    \7\ AIA analysis of U.S. Conference of Mayors MainStreet Economic 
Recovery Report (http://www.usmayors.org/mainstreeteconomicrecovery/)
2. Green commercial, residential and institutional buildings
    As nearly every segment of the design and construction industry is 
in a state of serious decline due to the economic downturn, Congress 
should pursue policy ideas that will incentivize new construction and 
major building renovations. A federal commitment to public, 
residential, commercial, and institutional building design, 
construction and renovation will put Americans back to work and 
generate economic activity nationwide.
    Although any improvement in energy efficiency are desirable, 
federal funding should focus on those improvements that have the 
potential for the greatest energy savings by looking at all building 
systems (such as lighting, HVAC, and building shell) in an integrated 
process. Improving energy efficiency in the building shell through 
better insulation and glazing, for example, could then allow for the 
use of smaller, more efficient HVAC systems, which would lead to 
greater energy savings, at a lower cost, than from installing a more 
efficient HVAC system by itself.

          a. The AIA supports providing $10 billion for federal 
        building energy efficiency upgrades and modernization for 
        projects where construction can commence within 24 months of 

    The federal government alone has jurisdiction over a significant 
portion of all buildings in the U.S. Requiring significant energy 
reduction targets in new and renovated federal buildings will 
demonstrate to the private sector that the federal government is 
leading by example. It would help spur the development of new 
materials, construction techniques, and technologies to make buildings 
more energy efficient. And it will help show that significant energy 
reductions are both practical and cost-effective.
    The Energy Independence and Security Act of 2007 (P.L. 110-14) 
included several provisions to require increased energy efficiency and 
carbon reduction from federal buildings, including a provision that 
requires agencies reduce energy consumption by three percent per year 
through 2015 (Sec. 431) and a provision that requires that federal 
agencies reduce the fossil fuel consumption for new buildings and major 
renovations on a scale that reaches carbon neutrality by 2030 (Sec. 
    It has been reported that the U.S. General Services Administration 
(GSA) and other agencies have a significant backlog of renovation, 
modernization and energy efficiency projects. A $10 billion 
appropriation will enable federal agencies to meet their statutory 
obligations, reduce energy costs for U.S. taxpayers and put thousands 
of design and construction professionals to work. This proposal would 
create approximately 280,000 jobs, including 2,750 jobs created or 
saved for architects.\8\
    \8\ AIA analysis of Alliance to Save Energy estimates (www.ase.org)

          b. The AIA supports an appropriation of $10 billion to state 
        energy offices for energy efficiency retrofits to public (state 
        and local), residential, commercial, industrial and healthcare 
        facilities where construction can commence within 24 months of 

    The economic recovery plan provides an excellent opportunity for 
improving the energy efficiency of buildings nationwide. Energy 
efficiency modernizations not only produce jobs and economic activity, 
but they help reduce energy consumption and create healthier, more 
sustainable places to live, work and play.
    The AIA believes that in order to ensure the greatest energy 
savings, funds should be prioritized towards projects that achieve 
specific energy saving targets, such as 30 percent below ASHRAE 90.1-
    This proposal would create approximately 150,000 jobs, including 
about 2,750 architect jobs created or saved.\9\
    \9\ AIA analysis of Alliance to Save Energy estimates (www.ase.org)

          c. The AIA supports providing at least $20 billion in 
        appropriations through the Community Development Block Grant 
        program and $10 billion for the Energy Efficiency and 
        Conservation Block Grant program, authorized in EISA, to 
        promote infrastructure projects that promote energy efficiency, 
        particularly energy efficiency affordable housing, on projects 
        where construction can commence within 24 months of enactment.

    According to the U.S. Conference of Mayors' MainStreet Economic 
Recovery Report, there are approximately $30 billion in projects that 
would promote improvements energy efficiency and community development, 
including for affordable and more energy efficient housing.
    These proposals would create approximately 378,000 jobs, including 
4000 architect jobs created or saved.\10\
    \10\ AIA analysis of U.S. Conference of Mayors MainStreet Economic 
Recovery Report (http://www.usmayors.org/mainstreeteconomicrecovery/)

          d. The AIA supports enlarging the Energy Efficient Commercial 
        Buildings Tax Deduction (Public Law 109-58, Sec. 1331) from 
        $1.80 per square foot to at least $3.00 per square foot.

    By increasing incentives for green building design and renovation, 
Congress has an opportunity to stimulate economic activity in an 
energy-conscious manner. As some energy efficient systems are more 
expensive to design, build, and install than their traditional 
counterparts, the initial increased capital costs often dissuade owners 
from installing these systems, especially given the current economic 
    Increasing the commercial buildings tax deduction, which was 
extended until Dec. 31, 2013, as a part of the financial rescue package 
enacted into law earlier this fall, will provide the necessary 
incentives to spur the design and construction of more energy efficient 
buildings in the United States.
3. Transit, mixed use development and complete streets projects
    America's infrastructure is crumbling. A lack of investment in our 
nation's highways, transit systems, and bridges has limited economic 
growth, lowered quality of life, and jeopardized safety for citizens in 
all 50 states. A new federal commitment to rebuilding infrastructure 
will not only begin to address these issues but will also create jobs 
in the sagging construction industry, in turn stimulating economic 
growth nationwide.

          a. The AIA supports providing at least $12 billion in funding 
        for transit facilities and operations, including for New Starts 
        projects where construction can commence within 24 months of 

    Well planned transportation projects can greatly enhance the 
economic development, sustainability, safety, and livability of 
communities. In 2008, the AIA and the University of Minnesota released 
a study that measures how planning and design play a major role in 
infrastructure projects.\11\ This study found that well-designed 
infrastructure projects can bring multiple enhancements to communities 
in terms of economic development, job creation, and increased 
productivity. As Congress prepares to debate legislation aimed to 
stimulate the economy, funding for well-designed infrastructure 
projects must be included.
    \11\ www.movingcommunitiesforward.org
    The AIA believes that funding should focus on those types of 
projects which have the greatest impact on sustainability, economic 
development and safety, such as transit-oriented development (TOD) 
projects, which create compact, walkable communities that mix housing, 
retail, office space and other amenities centered around high quality 
train systems; and ``Complete Streets'' projects that are designed and 
operated to enable safe access for all users, including pedestrians, 
bicyclists, motorists and bus riders.
    This proposal would create approximately 375,000 jobs, including 
450 jobs created or saved for architects.\12\
    \12\ AIA analysis of U.S. Conference of Mayors MainStreet Economic 
Recovery Report (http://www.usmayors.org/mainstreeteconomicrecovery/)
4. Historic preservation projects
    Directing funding to preservation projects already in the pipeline 
will immediately put architects, contractors, builders, and skilled 
tradepeople to work. These projects not only protect America's history, 
but they generate economic activity by restoring vitality to the 
surrounding communities.

          a. Congress should provide at least $30 million in funding to 
        the Save America's Treasures program and $100 million in grants 
        through State Historic Preservation Officers and Tribal 
        Historic Preservation Officers for non-federal public and 
        nonprofit historic sites.

    Save America's Treasures provides funding to bricks-and-mortar 
preservation projects. This program however, is underfunded and as a 
result there are thousands of shovel-ready preservation projects 
nationwide that have not been undertaken. In addition, restoring these 
historic buildings will create work for the building industry and 
generate positive economic returns in the communities surrounding them.
    Funds for SHPOs and THPOs will help their communities develop site-
specific business plans to sustain economic viability; rehabilitate, 
maintain, retrofit structures for energy efficiency; and fund projects 
associated with site investment, especially if those projects relate 
directly to the business plan. States have already identified key 
projects in need and await resources to get projects underway.

          b. The AIA supports increasing the Historic Preservation Tax 
        Credit from 20 percent to 40 percent for smaller projects in 
        which the qualified rehabilitation expenditures do not exceed 
        $2 million.

    Studies have shown that every federal or state dollar invested in 
the historic tax credit leverages approximately five dollars in 
complimentary private investment. Enhancing the historic tax credit 
could encourage reinvestment in communities with projects that are 
ready to go but have been halted by the recession and existing tax 
credit limitations.
    An increase from 20 to 40 percent for smaller projects would target 
the incentive to those ``main street'' type developments where tax 
credit costs are currently too prohibitive. Second, to maximize the 
creation of housing in historic and older buildings, the 10-percent 
portion of the historic tax credit should be available for housing in 
all eligible buildings 50 years old or older and specifically in HUD 
``Difficult to Develop Areas'' and Census Bureau ``Qualified Census 
Tracts'' where investment is most difficult.
5. Tax relief for businesses

          a. Congress should amend Section 199 to allow eligible sole 
        practitioners to claim the deduction for qualified 
        architectural and engineering firms.

    In 2004 Congress created a new deduction, codified in section 199, 
which allows taxpayers engaged in certain businesses to deduct up to 9 
percent of their qualified receipts (the percentage is phased in, 
through 2010). The deduction was established partially to enhance the 
ability of U.S. small businesses to maintain their position as the 
primary source of new jobs in this country. However, due to an unfair 
and inconsistent limitation within the code, some of the smallest 
design firms in the country are not allowed to claim this deduction.
    Section 199 contains a limitation, providing that the amount 
deductible in a given year is limited to the amount of W-2 wages that 
the taxpayer paid in that year, which is the amount on which an 
employer withholds taxes. Some businesses that otherwise qualify for 
the deduction are organized as sole proprietorships or other types of 
businesses that do not pay W-2 wages. For example, an architect working 
as a sole proprietor with no employees will pay no W-2 wages (although 
he or she will pay estimated taxes, including self-employment taxes). 
As a result, these taxpayers will not be able to take a section 199 
deduction or will be able to take only a very small portion of the 
deduction that otherwise would be available (e.g., if the architect has 
a part-time clerical assistant to whom he or she pays W-2 wages).
    This result is unfair and is inconsistent with the purposes 
underlying section 199. Congress intended the section 199 deduction to 
apply to architects, and specifically amended section 199 to include 
them. However, the artificial limitation to W-2 wages denies the 
deduction solely because a business is small and is not organized in a 
particular form. This has the practical effect of denying the section 
199 deduction to the thousands of architects who do business as sole 
    Many sole practitioners and small design firms currently face the 
most ominous economic conditions in nearly two decades. Being denied 
the section 199 deduction simply because they do not file W-2s is an 
unfair and unintended situation that is hurting the smallest design 
firms across the country do business and create jobs. Congress should 
amend Section 199 to allow these firms to claim this deduction.

          b. The AIA supports accelerating the depreciation of energy-
        efficient heating, ventilation, air conditioning, or commercial 
        refrigeration property installed in nonresidential real 
        property or residential rental property

    The AIA believes that this would not only provide help businesses 
of all sizes looking to improve their operations and reduce costs, and 
help equipment manufacturers, retailers and installers, but would also 
reduce energy consumption. Such a proposal is included in Rep. Melissa 
Bean's (D-IL) legislation, H.R. 4574.

          c. The AIA strongly supports the repeal of Section 511 of 
        P.L. 109-222, which requires federal, state and most local 
        government agencies to levy a three-percent withholding on all 
        government contracts, grants and other payments.

    Although this provision is not slated to go into effect until 2011, 
many businesses are in the process of developing their plans for the 
next few years and are having to invest funds already in preparing 
accounting systems to handle the new withholding. In addition, the 
withholding would come into effect around the time that many economists 
believe that the economy will begin to recover. It makes no sense to 
provide economic relief to businesses on one hand and yet punish them 
for performing government work with the other.


    The AIA looks forward to working with the members of the committee 
to advance bipartisan, common-sense proposals that will help invigorate 
America's economy.
      Statement of Richard Moe, President, the National Trust for 
                         Historic Preservation

    As Congress considers strategies to address this serious recession, 
the National Trust for Historic Preservation applauds the Committee's 
leadership in calling for investment in energy and natural resources 
that would create jobs, stimulate the economy, and help to revitalize 
America's public assets. The National Trust supports the principle that 
short-term stimulus proposals must have long-term benefits for our 
economy, environment, and society. We need to focus on using resources 
wisely and I see this economic crisis as an opportunity to place the 
nation on a better course toward a more sustainable future.
    I am Richard Moe, President of the National Trust for Historic 
Preservation, the largest private, nonprofit membership organization 
dedicated to protecting the irreplaceable. Chartered by Congress in 
1949 and recipient of the National Humanities Medal, the National Trust 
provides leadership, education, advocacy, and resources to save 
America's diverse historic places and revitalize communities. Our 
headquarters in Washington, six regional offices, and 28 historic sites 
work with our 270,000 members and thousands of local community groups 
in all 50 states.
    Much of the national dialog surrounding relief for the country's 
ailing financial markets, businesses, lending institutions, and 
industries refers to the larger implications for ``Main Street.'' Given 
the substantial role the National Trust and the preservation community 
play in supporting Main Street jobs, revitalization, and economic 
development, we have been encouraged by this critical emphasis on the 
country's historic core--its communities--including rural communities--
and the people who make them work. So many of these places and their 
economic well-being are linked to public land, and the historic and 
cultural resources located in their midst.
    Much of the land managed by the National Park Service (NPS), U.S. 
Forest Service (USFS) and the Bureau of Land Management (BLM) is 
located in rural areas with communities that benefit from all of the 
economic activities associated with this country's diverse array of 
public places. These activities include services for visitors and 
meeting all the needs of historic buildings, infrastructure, trails, 
roads, archaeological sites, and museum collections that require 
stabilization, maintenance, conservation, surveys, and management. This 
provides jobs for contractors, architects, engineers, and cultural 
resource specialists. The National Trust proposes stimulus plans that 
will rebuild Main Street and rural communities through reinvestment in 
public land, and historic and cultural resources across America.
    Our national assets on public land have been neglected for far too 
long. Significant reinvestment in the historic and cultural resources 
therein would generate jobs and support local businesses, often in 
parts of the country where the need is great, such as rural 
communities. And stewardship that emphasizes reusing and rehabilitating 
the existing buildings, infrastructure, communities, and places we 
already have is inherently more efficient and sustainable.
    For example, the reuse of older and historic buildings on national 
public land alone is a powerful tool for job creation and employment 
retention. Rehabilitation generally uses about 20 percent more labor 
and, in turn, produces a greater number of jobs than new construction. 
As compared with new construction, every $1 million spent to 
rehabilitate a building results in:

   $120,000 more dollars initially remaining in the community;
   Five to nine more construction jobs created;
   An average of 4.7 more new permanent jobs created;
   Household incomes in the community increasing by $107 more 
        than through new construction;
   Retail sales in the community increasing by $142,000--
        $34,000 more than through new construction; and
   Real estate companies, lending institutions, service 
        vendors, and restaurants receiving more direct monetary 

    The Trust would like to see Congress create and fund a 
comprehensive program to unlock the economic potential of the nation's 
public land and cultural resources. Using the precedent set by the 
great corps network established in the 1930's, we propose establishing 
a new ``National Public Land Service Corps'' that would address 
maintenance and stewardship of historic structures and other cultural 
resources under the jurisdiction of the three principal land agencies 
of the federal government. A National Public Land Service Corps would 
help us manage, identify, and protect the places that must be 
preserved, and in so doing change our relationship to energy use, 
exploration, and extraction on public land. This investment would 
strengthen local economic development and provide new jobs through 
rehabilitating existing structures, documenting and caring for cultural 
resources, and expanding renewables and other energy sources. All of 
this could be accomplished while training a whole new generation in 
caring for the places and objects that help define our heritage. I have 
outlined the Trust's proposals by agency.
 public land investments for jobs, energy delivery, and revitalization
1. Bureau of Land Management
    A significant portion of a National Public Land Service Corps funds 
would be used to conduct cultural resource surveys and consult with 
Tribes on BLM-managed land that is slated for energy development. While 
BLM, ``manages the largest, most diverse and scientifically most 
important body of cultural resources of any federal land agency,'' only 
seven percent its 258,000,000 acres has been surveyed. Much of the land 
targeted for alternative energy development remains unsurveyed. This 
leads to difficulties with the agency's two-fold mission to provide 
energy and protect its cultural resources. The lack of information on 
the location and significance of historic and cultural sites results in 
costly delays and conflicts. Industry needs certainty while we strive 
to protect historic and cultural resources, and surveys can provide the 
comprehensive information we need. To accomplish this, the National 
Trust proposes a $40 million increase each year for two years in the 
BLM 1050 account to hire professionals for surveys, studies, and Tribal 
consultations, particularly in the Southwest where the demand for solar 
energy is greatest.
    A portion of this funding should also be directed toward the 
protection of fragile archaeological ruins, trails, and historic 
buildings, many of which are located in the National Landscape 
Conservation System, the ``crown jewels'' of BLM land. Site 
stabilization is needed in places like the Canyons of the Ancients 
National Monument in southwest Colorado; historic mining camps in Grand 
Canyon Parashant National Monument in northwest Arizona; Chiles 
historic site on the Potomac Heritage National Scenic Trail in 
Maryland; and Piedras Blancas Historic Light Station Outstanding 
Natural Area in central California. Additionally, many significant 
artifacts in BLM museums lie neglected in boxes and drawers. These need 
to be cataloged, conserved, and interpreted appropriately.
    Heritage tourism is one of the fastest growing segments of the 
travel industry and it can be one of the most beneficial to local 
economies. Visitors to historic and cultural sites stay longer in an 
area and spend more money than other tourists. Utah's San Juan County 
Economic Director recently told the National Trust that 72 percent of 
the area's tourism relies upon international visitors drawn to Cedar 
Mesa's ancient Native American ruins. Eighty percent of these visitors 
employ local tour operators that generate jobs in one of the state's 
poorest counties.
2. National Park Service
    A National Public Land Service Corps could provide an historic 
infusion of capital into National Parks for planning, design, and 
construction. It has been nearly 50 years since the Parks have received 
a significant boost for construction and rehabilitation, and now there 
is an enormous backlog of projects in need of attention with an 
estimated $1 billion in projects that are ready and awaiting funding. 
These include the preservation of historic structures, making Park 
facilities more energy efficient, and restoring trails and open space. 
The National Park System already employs upwards of 20,000 workers and 
generates about $12 billion in consumer spending for the economy--about 
four times more than Congress appropriates for Parks annually. It is 
logical that any stimulus plan would focus on the National Park System 
with a valuable inventory of projects ready for easing this recession.
    Stimulus funding should address deferred maintenance in the System. 
Of the $8.7 billion in overall Park maintenance needs, $1.9 billion is 
for the preservation and maintenance of 27,000 historic structures 
listed in or eligible for the National Register of Historic Places. The 
line item construction budget for projects ready to go includes $50 
million for the rehabilitation of historic structures. This would 
generate jobs for architects, engineers, construction workers, and 
cultural resource specialists. More projects could be added in 12 
months if they could get in the pipeline now.

   Historic Buildings and Structures.--According to the 
        recently released report on Park cultural resources by the 
        National Academy of Public Administration, 46 percent of 
        structures in our National Parks are in fair or poor condition. 
        Even Independence Hall, one of America's most historic 
        buildings, needs $3.7 million in repairs.
   Transportation and Infrastructure.--There is an enormous 
        amount of work to be done with about $1 billion in road repair 
        and infrastructure projects ready and awaiting funding.
   Curatorial and Museum Collections.--There is a backlog in 
        cataloging curatorial resources and museum collections in the 
        National Parks. Nearly half of the Parks' collections is 
        uncataloged--about 56 million items. These collections could be 
        managed by contract services and brought on-line expeditiously. 
        At present the continued use, accessibility, and preservation 
        of valuable materials and information is threatened. Just the 
        way the Historic American Buildings Survey was established to 
        create jobs in documenting historic resources, a new Public 
        Land Service Corps could accomplish similar goals and protect 
        important cultural collections at risk.
   Facility Energy Retrofits.--In keeping with the NPS goal of 
        making all the Park facilities carbon neutral in time for the 
        2016 centennial, Park facilities should undergo a comprehensive 
        energy efficiency upgrade and retrofit program. This would not 
        only produce jobs, but would also lead to more sustainable and 
        cost-effective Park operations.
3. US Forest Service
    The same type of resources targeted to the NPS under a National 
Public Land Service Corps should be available to the US Forest Service 
as well to survey, rehabilitate, and maintain historic structures and 
other cultural resources on USFS land. The Forest Service estimates 
that it lacks $38 million for deferred maintenance costs for historic 
resources. Addressing this need would create engineering, design, and 
construction jobs in rural areas of the country that have been deeply 
affected by the recession. This work could also focus on energy 
efficiency retrofits for historic buildings used for Forest Service 
operations--reducing long-term operating costs--and the rehabilitation 
of tourist facilities to foster rural heritage tourism.
    Federal agencies receiving funding from the stimulus package should 
be allowed to retain a portion of the money for contract administration 
and oversight.


    America's public land and the diverse array of historic and 
cultural resources that are part of them help define us as a nation. 
These national assets deserve the highest degree of preservation, 
maintenance, and stewardship independent of their potential to foster 
energy independence, stimulate the economy, and create jobs. From a 
practical standpoint, investing in the certainty that comes from early 
historic and cultural surveys on land slated for energy development 
avoids costly conflicts later and protects our heritage. The 
rehabilitation of historic buildings and structures on public land 
generates jobs and stimulates local economies hardest hit by the 
recession. Access and improvements to collections and museums will 
provide more opportunities for heritage tourism. Investing in our 
nation's public land patrimony is a long-term investment in preserving 
these places for generations to come.
    History shows us how effective a public land component to a 
recovery plan has been in the Depression Era service corps network that 
relied--in part--on harnessing the potential of historic and cultural 
resources. It is time to look to the lessons of the past and create a 
new Public Land Service Corps to fund the long list of backlogged 
construction and maintenance projects in the leading federal land 
agencies. Embarking upon a new, comprehensive, program to fund the 
queue of projects ready to go in the BLM, NPS, and USFS would open up 
an array of opportunities for the American people in adjacent towns, 
Main Street neighborhoods, and especially rural communities. Surveys, 
assessments, restorations, rehabilitations, energy retrofits, 
infrastructure/transportation works, curatorial services, and all types 
of maintenance projects employ people, leverage federal dollars, and 
address an unmet need that will have an exponential return on the 
Treasury's initial outlay. Funding this initiative now will carry the 
nation through the present recession and put the country on a much more 
sustainable footing for the future.
  Statement of David Bradley, Executive Director, National Community 
                           Action Foundation

    Mr. Chairman, Ranking Member Domenici, thank you for scheduling 
this inquiry into how energy programs can meet the challenge of 
creating many new jobs quickly. The National Community Action 
Foundation represents the local Community Action Agencies that deliver 
over 80% of the Weatherization Assistance Program (W.A.P.) services. We 
were delighted when the Chairman mentioned the role this time-tested 
program can play during last week's interviews, and we thank you for 
the vote of confidence.
    We support, and our membership can deliver, a $2 billion two-year 
``Weatherization Stimulus'' initiative that can sustain more than 47 
000 annual homebuilding industry jobs over two years while giving very 
low-income consumers $ 350-500 in annual savings to use for other 
necessities. (CBO estimates avoided costs like food and energy savings 
for low-income consumers produce $1.73 of GDP for each dollar of cost 
    \1\ Mark Zandi, Testimony before the U.S. House Committee on Small 
Business, July 24, 2008
 how is a stimulus w.a.p. different from today's program, the ``core'' 
    It can focus on:

   Direct employment and retention in agencies and private 
   Training thousands in specialized ``green-collar'' skills
   Total cost-effective energy savings per program
   Capital/equipment/durable goods purchases: e.g. vans, crew 
        equipment, home heating systems, other major appliances

    Instead of:

   Number of units weatherized
   Capped average cost-effective spending per-home, which means 
        limited work, because of limits on average cost
   Minimal investment in furnace replacement and other major 
        ``capital investments''
   Gradual transfer of specialized green-collar skills and 

    And . . . 

    It can add a one-time quick-start, job-creating element: a major 
home repairs program, Weatherization-Fix, that will invest up to 25% of 
funds in:

   Replacing roofs
   Installing high-efficiency furnaces
   Repairing broken floors, window, or doors
   Bringing electrical systems to safety code standards

    However, there are statutory constraints that would constrain and 
delay the new investments and the employment impact of the program 
unless they are changed, and we ask the Committee's support for the 
necessary changes. The unwieldy limitations include: the ceiling on the 
average investment levels per home, on the specialized training and on 
some elements of program operations Without added flexibility and 
expanded program purposes, as explained below, we believe that no more 
than $1 billion, or half, could be spent over two years.
    Each key program element is discussed below with the statutory or 
policy changes it requires, if any. Some will prepare the program to 
meet the challenge of permanent expansion that meets the needs of a 
carbon-constrained nation; others are temporary to meet job-creation 
    The proposed growth to $2 billion is rapid, but not exponential. 
The Weatherization network already has about $1 billion from all 
funding sources in the current fiscal year (with the $250 million in 
the CR). Its PY 2007 total funding was $779.5 million; its PY 2008 
total was $772 million.\2\ A 2009 W.A.P. program with an additional 
$750 million this year will be just over double (225%) of its size in 
2008. States' percentages will vary considerably by region. Great need 
and opportunity for CO2 reductions lies with warm states' especially 
inefficient low-income housing stock, where the program penetration and 
funding has been extremely low.
    \2\ Economic Opportunity Studies, ``How Many Workers Does the 
Weatherization Assistance Program Employ Now? What About the Future?'' 
           the one-time major repair program: ``w.a.p.-fix''
   We are suggesting authorizing the use of \1/4\ of the funds 
        for a function that is not a major component of Weatherization 
        today. Substantial work could be contracted VERY quickly--in 
        some areas DAYS after funding begins if Weatherizers are 
        allowed to make major repairs of four types:

    --Replacing roofs
    --Installing high-efficiency furnaces
    --Repairing broken floors, window, or doors
    --Bringing electrical systems to safety code standards

    The skilled licensed contractors who will do that work are not 
required to know how to weatherize homes. Local agencies routinely 
contract for all those licensed trades' services including HVAC 
installers, electricians, and roofers in the few homes where they can 
raise funds to make those investments. The contractual relationships 
are in place.
    Further, local Community Action Agencies have records of dozens or 
hundreds of homes where Weatherization was denied (``deferred'') 
because the rotted roof would not protect the insulation or the wiring 
was unsafe. Many weatherized homes needed a replacement furnace which 
will be extremely cost effective, but both the program and the owner 
lacked the capital. Most heating systems used are U.S. made. In other 
word, there is an identified ``market''--addresses and income 
eligibility already verified and a willing private workforce ready to 
    Note: The four general types of major repairs are not 
rehabilitation of the entire house or all its systems. CAAs partner 
with others, typically CDBG--funded programs, which specialize in the 
slow, individualized process of designing, permitting and overseeing 
and true `rehab'. Weatherizers see their role as assisting partner 
agencies with the efficiency upgrades, but managing only the repairs 
listed above.

                       ISSUES AND CHANGES NEEDED

    The statutory restriction on re-visiting homes that received 
previous limited W.A.P. investments must be waived for the stimulus 
period. As noted above, the agencies know the location of homes needing 
the major repairs because they have worked in them and done whatever 
minor work was possible, perhaps replacing the refrigerator or freezer. 
That makes the home ineligible for a new treatment.
                 ``core'' weatherization as a stimulus
1. Employment
            The Size of the Workforce
                  There are no contemporary data from the field on the 
                workforce size. BEA construction sector modeling 
                suggests that the PY 2008 program, absent any stimulus, 
                will generate at least 9,000 direct jobs, absent any 
                stimulus, from all its funding sources combined. Those 
                will lead to 2.9 times as many indirect jobs 
                (suppliers, services, fiscal support, etc.) and induced 
                jobs (those created by all workers and businesses 
                spending their pay). W.A.P.'s network has the highest 
                funding level (from all sources) in the program's 
                history; because of the record LIHEAP funding that 
                probably will add about $300 million more than last 
                year to W.A.P. programs in 44 states.

            Employment Stimulus
                  The $1 billion per year, two-year program would 
                increase all employment by 75% to about 46,700 jobs 
                (using the conservative BEA formula). The growth rate 
                will vary dramatically by state.
                  Since we believe the current workforce is 
                considerably larger and, because it is lower-paid than 
                the wages assumed in the BEA models, the number of 
                newly-employed could also be considerably more. 
                Improving the retention rates for the newly trained 
                skilled workers and contractors will require better 
                wages as the economy recovers.


          Local Contractors and Community Agency Employees

                  At the last survey of local Weatherizers in 2002,\3\ 
                about half the workforce was private contractor labor. 
                The practice varies by state. The local Community 
                Action Agencies that use contractor labor must retain 
                at least one technically skilled employee to train, 
                manage, and inspect their work.
    \3\ Economic Opportunity Studies, ``Weatherization PLUS Other 
Efficiency and Housing Investments Delivered by Local Weatherizers in 
PY 2000'' http://www.opportunitystudies.org/repository/File/
                  Many private contractors have the equipment needed 
                for the W.A.P. and hundreds of their employees have 
                some W.A.P. training; in fact, the increase in LIHEAP 
                funding for W.A.P. is resulting in more contracting 
                today. There remain underemployed trained Weatherizers 
                can be put to work while new recruits are trained.

            Job Skills and Training
                  The program requirements mean the workers who 
                evaluate homes and install efficiency measures need 
                specialized skills based on an understanding of 
                building science, and state-of the-art tools that 
                diagnose building energy loss sources, inefficient 
                indoor air movement and safety hazards, as well as the 
                investment/work order ``audit'' or decision tool. The 
                local agency staff and private contractors need the 
                programs' training to use them.
                  Appendix A defines the levels of ``core 
                competencies'' that make up the workforce. The highest 
                level, auditor, needs six to eight months of formal 
                training, including supervised field work and 
                classroom, and can then work independently if monitored 
                in the field by a more experienced auditor. W.A.P. 
                local agencies will need many more auditors with 
                comparable advanced training.

                       ISSUES AND CHANGES NEEDED

Weatherization Skills Training Expansion
    DOE training resources are limited to 10% of a state's grant. This 
has allowed only a small share of workers at any level to attend formal 
training. Contractors must pay for training and equipping the workers 
they assign to W.A.P.
    Changes are needed to ensure hiring and the quality of the 
workforce. For the two year period:

   Allow 20% (not 10%) of FY '09 and '10 funds for state/local 
   Directly subsidize contractor workers' training
   Develop federal and state standards and ``best practices'' 
        for W.A.P. green-collar workforce development.

    There are no data indicating how many in the W.A.P. workforce 
receive the formal training or credential each year. Ten training 
centers, regular regional meetings, and biennial national training 
sessions serve a minority; however, most workers rely on skills passed 
on by their supervisors or peers. Few have the resources in their 
program to maintain a program of studies through a certificate or other 
credentials. States received 8.5% of the program funds for ``Training 
and Technical Assistance'' or ``T & TA'', including for their staff and 
their technology transfer. The Department retained 1.5% for federal 
technical support, research and training events.
    The rate at which training is offered to the current workforce is a 
barrier to ramping up. The barrier is highest for private contractors. 
The program requires them to provide already-trained workers; they 
spend training costs in hope of winning jobs.
2. Production
    The states reported more than 140,000 homes were fully weatherized 
using any funding source in 2007. Of these, 82,409 received DOE-funded 
investments. However, that total omits fully-weatherized ``non-
federal'' units in California, Pennsylvania, and Washington's large 
utility programs among others. The true total of units weatherized by 
the local network was almost certainly over 175,000 in FY 2007.

                       ISSUES AND CHANGES NEEDED

    The outdated statutory limit on average expenditures per home must 
be repealed or replaced by an average which allows for major 
improvements including heating system replacements when their Savings 
to Investment ratio is high, or when they are a hazard.
    DOE Weatherization works effectively because matching funds are 
available to pay for essential services and materials that the DOE 
regulations or statute restrict primarily the statute's limit on 
statewide average expenditures, which is $2,966 in 2008.
    While no national figures on all the funding ``packaged'' per home 
have been validated, the NASCSP surveys\4\ allow us to estimate states' 
average expenditure of labor and materials per home. Other funding 
sources, especially LIHEAP, have more flexible conditions. For most, 
the figure is between $4,000 and $5,500 using all their sources of 
funds. This figure varies widely among states from $2,000 in Hawaii (no 
LIHEAP, no utility money, low usage) to well over $8,000 in Alaska 
(predominantly state funding with LIHEAP and W.A.P., high usage).
    \4\ www.waptac.org
    Matching funds will not grow at the speed of the ``Core'' W.A.P. 
That means new work will be more constrained by the statute than is 
currently the case; there will be a proportional reduction in purchases 
of cost-effective, but higher-cost, measures like efficient furnaces, 
appliances and repairs. Crews will have less equipment, older vehicles 
and low pay. (All those costs are allocated to the cost-per-home.) Even 
more homes will be rejected as candidates because they need repairs or 
safety upgrades before insulation and air sealing can occur. These 
dilapidated units are also the most inefficient.
    If the cost-effectiveness test is not a satisfactory alternative to 
the outdated statutory limit on average expenditures, one option is a 
temporary ceiling of $7,000 to be reviewed in two years when the 
permanent program is designed. This overdue change will make the 
expanded program spend quickly while increasing its energy savings and 
CO2 reductions, and retaining its qualified workers.
    The OMB program ``metric'' is `units produced'. This should be 
discarded; if the suggestion seems too radical, then the all goals of 
the program and the stimulus should have results that are weighted 
together, including energy bill savings, CO2 reductions and, 
for the life of this statute, employment effects.
3. Capital Equipment Acquisitions for the Workforce
    Agencies equip their employee crews with specialized equipment and 
agency vans. Contractors must own the same specialized equipment before 
bidding to work for the program. It costs between $55,000 and $70,000 
to equip a crew of 3-4, including a van or truck that is set up with 
the insulation blower, generators, blower door, scanners and other 
testing equipment required for the job. (Nearly all the technology/
tools for the crew are made in the US).
    An early purchase strategy in summer of 2009 will create jobs and 
avoid any delays later as new personnel finish training.

                       ISSUES AND CHANGES NEEDED

    Agencies should be encouraged to purchase all the new equipment and 
vehicles they will use for their ramped up workforce as soon as 
possible to jump start the stimulus impact. This requires waiving some 
federal accounting rules which require the vehicle cost be assigned to 
homes being served.
    Further, DOE should adopt the policy that agencies own the sets of 
specialized equipment contractors will use and lease it back to them. 
This removes a major stumbling block to quickly bringing new small 
businesses into the program. Credit for $65,000 of purchases is harder 
to come by than ever, and the possible loss of the W.A.P. business 
before the equipment is amortized is a threat. No regulatory change is 
4. Management
                       issues and changes needed
          DOE Capacity

                  The closing of the EERE regional offices and the 
                decimation of the population of technically qualified 
                Headquarters staff already means W.A.P. runs without 
                vital federal supports. It is inexplicable that EERE's 
                growth has brought travel restrictions on our federal 
                monitors; they cannot attend training outside their 
                base without forgoing their oversight responsibilities.
                  The Committees must require substantial increases in 
                federal personnel with the appropriate experience and 
                credentials and oversee the DOE management of the 
                program until it recovers.

          State Capacity

                  We are very concerned about the constraints on the 
                staffing of our state leadership in an era of state 
                hiring and travel freezes. Many offices are 
                understaffed today and lack technical competence that 
                training centers and peers can offer. Grants should 
                include assurances these constraints will not fall on 
                the federal program, which is providing half of the 
                administrative allotment to the grantee.

          Local Administrative Cost Restrictions

                  The 1990 amendments to the statute allowed a higher 
                percentage of administrative funding for small local 
                agencies; 10% instead of 5% so they could purchase the 
                core administrative services required to operate with 
                federal funds. (States typically keep half of the 
                administrative funds--another 5%). Small agencies were 
                considered to be those with grants under $350,000 in 
                1990. This increase will pull many of the hundreds of 
                small agencies above the threshold--they would have to 
                double in size to regain the lost administrative 
                dollars-but by then they would be serving twice as many 
                  The statute must change. Our temporary suggestion for 
                an adjustment is to double the 1990 ceiling to $700,000 
                and allow states to negotiate a declining rate, but not 
                less than 5%, with agencies that are growing beyond the 
                $700,000 threshold.
5. Preparing for the Next-Generation W.A.P.
    Careful evaluation of the results of this job-oriented initiative 
compared to careful evaluation of the way the ``core'' W.A.P. can 
contribute to the national goals of reducing greenhouse gases, 
investing in a green-collar labor force, and making energy bills 
affordable for low-wage workers, retirees, and their families.
    Whether the future program expands further or contracts, all its 
investments should guarantee lower CO2 emissions and major 
energy efficiency results and persist. Report guidance is needed to 
ensure the Department uses the stimulus period to complete the national 
evaluation of core W.A.P. practices funded and then interrupted by the 
current DOE leadership. The state-of-the-art in any residential 
retrofit initiatives should be identified and used in the development 
of more advanced standards for program practices and, most importantly, 
its training. By FY 2011, a workforce training plan and operating 
strategy should be developed, together with partnerships with 
institutions that will deliver training leading to green-collar 
careers; the Department must create more linkages among federally 
funded initiatives that are supporting the residential retrofit 
sector's workforce and practices.
    Federal technology support for the program should be appropriated 
for these purposes; these would be in addition to the training funds. 
The one-time, delayed major evaluation will require .005. There should 
be another 2% set aside for the two-year period that both underwrites, 
put bluntly, a technical catch-up period followed by the development of 
the nationwide training capacity that the program and the private 
sector will require for a low emissions economy.
    With the Committee's support for such a framework, the 
weatherization delivery system will commit to strategic plan to get the 
job done, correct any bottlenecks and put American homebuilders back to 
work at lowering consumers' unaffordable energy bills and reducing our 
greenhouse gas emissions for a generation to come.
         Statement of Mark Heesen, President, National Venture 
                          Capital Association

    Thank you, Chairman Bingaman, for the opportunity to provide 
testimony regarding investments in clean energy and natural resources 
projects and programs to create green jobs and to stimulate the 
economy. The philosophy of the National Venture Capital Association, as 
it relates to the structure of an economic recovery package, is guided 
by several key principles:

          1. Clean Technology Means Job Creation.--Investments in clean 
        technology will create a significant percentage of the new jobs 
        in the U.S. in the near term and over the next five to ten 
        years. Just as a point of reference, in 2008 the clean 
        technology sector was the fastest growing sector for venture 
        capital investment. Just as the venture capital industry 
        created millions of high paying jobs within the biotechnology 
        sector with the funding of pioneering companies such as 
        Genentech, Amgen and others, so too will it fund similar 
        entities in the alternative energy and sustainability space in 
        the next several years. In total, venture backed companies have 
        historically and consistently accounted for almost 10 percent 
        of US jobs and 18 percent of U.S. GDP.
          2. Public Investment in Clean Technology R & D is 
        Inadequate.--When compared to the public investment in research 
        and development in other sectors of the economy, the 
        government's funding of R & D in clean technology is inadequate 
        by any measure. While the energy sector of the economy is 
        roughly the same size in GDP terms as the health care sector, 
        annual NIH R & D expenditures are roughly $30 billion, 
        completely dwarfing the $1.5 billion expended on clean 
        technology research and development.
          3. Clean Technology Needs Robust Markets in which to Grow.--
        To the extent possible, policy tools should be used to 
        strengthen financial, commercial, and consumer market 
        mechanisms so that clean technology companies get the benefit 
        of nimble, fast-adapting, and market-signal-driven investors, 
        suppliers, and customers. Where markets are not functioning 
        properly and are failing clean technology companies--as is the 
        case in the current credit crisis--policymakers should take 
        steps to fill in the gaps until the markets are repaired.
          4. Only Consistent and Long-Term Policies Encourage Growth in 
        Clean Technology.--Public policy must encourage certain 
        favorable market behaviors, including long term investment. 
        Therefore, public policy provisions should both extend for a 
        significant period of time and not be subject to significant 
        modification or varying interpretations over those time 
        periods. Market participants--including investors--require 
        consistent signals to act for the longer-term. As one data 
        point, the minimum time horizon venture investors set for their 
        portfolio company investments is 10 years.
          5. Diversity of Clean Technologies Will Strengthen Our 
        Country's Position.--The diversity of clean technologies and 
        cleantech company strategies is a desirable thing, and policy 
        should encourage that diversity. To the extent possible, we 
        should prefer market decisions to government decisions in 
        selecting the winners from this diverse pool of technologies 
        and companies. Where policymakers must make choices (e.g., in 
        research and development programs), those decisions should be 
        based on the best independent scientific and market advice 
          6. Amid Price Fluctuations in the Energy Market, Policy 
        Should Encourage ``Market Pull'' for Clean Technologies.--Many 
        factors contribute to the success of entrepreneurial, high-
        growth companies, but a truly critical determinant of the 
        growth of clean technology companies will be the perceived 
        value/cost proposition of their products and services (relative 
        to high-carbon energy alternatives) in energy markets--some of 
        which are highly regulated. Because the nation has an interest 
        in energy independence, in solving the global warming problem, 
        and in creating new high-paying jobs at home, policy should 
        strive to remind markets of the long-term cost/value 
        proposition of clean energy products and services and help them 
        weather the vagaries of periodic price fluctuations of energy 
        alternatives. Where appropriate, policy should encourage 
        ``market pull'' forces to encourage the start-up and growth of 
        new clean technology companies.

    Based on the above principles, the NVCA would support the following 
provisions in an economic recovery package.
    Accelerating the Work of DOE's Loan Guarantee Program. DOE's Loan 
Guarantee Program is an important and valuable facility for funding 
clean energy projects that needs to be strengthened. To date, the 
administration of DOE's Loan Guarantee has been slow; no applications 
have yet received approval or funding. Policymakers should consider 
taking steps in the recovery bill to greatly accelerate the processing 
and awarding of loan guarantee applications.
    Without significant new authorizing language, options to accomplish 
this acceleration are somewhat limited. One viable option would be to 
fund a significant infusion of human capital resources to process these 
applications. Bankers, lawyers, financial analysts and modelers are 
needed to do the job well, and that emergency infusion may require 
exemptions to personnel hiring rules or providing DOE with the 
authority to hire consultants to process more of these applications 
faster. With these new resources should also come some agreed-upon 
timelines for the processing of loan-guarantee applications. In the 
longer term, the Senate should consider shifting the loan guarantee 
program to another entity, perhaps one like the 21st Century Energy 
Deployment Corporation contemplated by Senator Bingaman's Senate Bill 
    Other issues have been raised about the workability of the program, 
two of which may be candidates for correction in the recovery bill: (1) 
reducing the application fees associated with the program so that more 
start-up companies can easily qualify, and (2) eliminating rigid 
application deadlines that seem to reduce the pool of applicants rather 
than to expedite the orderly and swift processing of applications.
    Funding a Significant Increase in Cleantech RD & D funding.--The 
recovery package represents a golden opportunity to fund new research, 
development, and deployment across a diverse range of clean 
technologies. Fully funding RD&D levels authorized by various sections 
of the Energy Independence and Security Act will create a significant 
number of jobs. The hiring of researchers, research assistants, 
laboratory staff, and the purchase of laboratory and research 
equipment, and the support of our universities through these additional 
funds will have significant ripple effects in university communities 
across the country. The time is now to begin making the serious 
investments in RD&D that will lead the creation of millions of new 
American jobs in the mid-to longer term.
    Making the Renewable Energy Tax Credits Refundable, Expanding the 
Tax Investor Pool to Individuals, and Making the Credits 
Transferable.--In order to increase the pool of tax equity available to 
fund renewable energy development, the Senate should consider--as part 
of an energy tax title in the recovery bill--making the investment tax 
credit refundable, opening up tax equity to individual investors, and 
making such tax credits transferable. As current renewable energy tax 
credit provisions now operate, only large financial institutions and 
companies typically provide tax equity. The repeal of passive loss and 
at-risk limitations--currently permitted for working interests in oil 
and gas property--would significantly expand the tax equity pool to 
include high net worth individuals and others. The ability to transfer 
these credits should further enhance the pool of investment in these 
projects. These changes would convert the newly-extended tax credits 
into immediate and powerful financing propellants for new energy 
projects around the country.
    The Senate should also consider a temporary transformation of the 
tax credits for renewable energy projects to cash rebates to help fund 
these projects. With the drying up of capital sources in the wake of 
the current financial crisis, it is possible that entire renewable 
energy sectors may wither significantly. By making the tax credits 
fully refundable (with no requirement that they be matched against 
income) until capital flows again post-financial-crisis, the government 
could make available to project developers the funds absolutely 
required to launch and sustain new renewable energy development.
    Allowing Bonus Depreciation.--The Senate might further consider 
allowing a temporary accelerated depreciation schedule for U.S. 
cleantech projects such as solar, wind, biomass, geothermal, etc. and 
to extend this accelerated depreciation treatment to any capital 
expense that can be demonstrated to improve energy efficiency by some 
appropriate standard (or by a certain percentage improvement over the 
existing equipment).
    Eliminating Capital Gains Taxes for Investment in Small, Start-Up 
Businesses.--During the presidential campaign, the Obama-Biden team 
demonstrated their understanding of critical drivers of economic growth 
by including in their tax platform a provision for a zero capital gains 
tax rate for investments in start-up companies. Across industries 
venture investment has been linked to new job creation and innovation, 
and we expect this to be clearly manifest in the cleantech area where 
such a policy would attract both much-needed capital and experienced 
management teams necessary to build these companies.
    Accelerating the ``Greening'' of Buildings.--The first step the 
Senate should consider is fully funding the authorized level of $2 
billion annually for the Energy Efficiency and Conservation Block Grant 
Program under Title V, Sections 543-548 of the Energy Independence and 
Security Act of 2007. The purpose of this program is to help state and 
local governments to fund energy efficiency improvements in the 
building sector and other sectors, and fully funding the program will 
provide the resources required for campaigns like the one launched by 
New Mexico Governor Bill Richardson and Albuquerque Mayor Martin Chavez 
to bring schools and other public buildings to LEED--Silver status.
    The second step to consider is providing incentives for small 
businesses (under 500 employees) to ``green'' their facilities. The 
Senate could support proposals to increase the SBA loan guarantee from 
50% to 75% for owner occupied buildings if the tenant improvements 
comply with an energy-efficiency standard (perhaps as simple as a 
percentage above what comparable buildings in the region consume). Both 
steps would create a significant number of new jobs in energy 
efficiency equipment manufacturers and energy retrofit contractors 
across the country.
    Increasing Incentives for Energy Efficiency in the Transportation 
Sector.--These steps could provide extremely powerful ``market pull'' 
forces to drive new transportation technologies, which will drive new 
companies, new jobs, and the beginnings of recapturing a lasting 
American competitive advantage in the transportation sector.
    The Senate should consider: (1) temporarily doubling federal tax 
credits for fuel-efficient cars; currently there are credits of up to 
$3,400 for a new hybrid, between $2,500 and $7,500 for a plug-in car 
under 10,000 pounds, and up to $15,000 for a plug-in vehicle over 
26,000 pounds; (2) accelerating investments in upgrading its fleet to 
more efficient vehicles, achieving at least the 50% target set by 
President-elect Obama by 2012; (3) providing corporate tax credits for 
purchases and leases of high efficiency vehicles and providing grants 
for converting corporate fleet vehicles to plug-ins; and (4) providing 
grants to support efforts like the Advanced Energy non-profit 
corporation in North Carolina to help school districts purchase or 
lease hybrid school buses.
    Providing for Standardized and Long-Term Federal Power Purchase 
Agreements (PPAs).--Several commentators have reviewed the history of 
hydro development projects in the United States and concluded that the 
longer terms of the standardized PPAs under which their power was 
purchased by the government was a key factor in the success of that 
effort. The Senate should consider establishing a standard PPA for 
federal government purchase of clean energy that does not have to be 
fully renegotiated for each agency and each project. Moreover, the term 
of the PPA agreement might extend well beyond the 10-year range, 
perhaps out to as many as 30 years.