[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
NOT GOING AWAY: AMERICA'S ENERGY SECURITY, JOBS AND CLIMATE CHALLENGES
=======================================================================
HEARING
before the
SELECT COMMITTEE ON
ENERGY INDEPENDENCE
AND GLOBAL WARMING
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
DECEMBER 1, 2010
__________
Serial No. 111-20
Printed for the use of the Select Committee on
Energy Independence and Global Warming
globalwarming.house.gov
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SELECT COMMITTEE ON ENERGY INDEPENDENCE
AND GLOBAL WARMING
EDWARD J. MARKEY, Massachusetts, Chairman
EARL BLUMENAUER, Oregon F. JAMES SENSENBRENNER, Jr.,
JAY INSLEE, Washington Wisconsin, Ranking Member
JOHN B. LARSON, Connecticut JOHN B. SHADEGG, Arizona
HILDA L. SOLIS, California GREG WALDEN, Oregon
STEPHANIE HERSETH SANDLIN, CANDICE S. MILLER, Michigan
South Dakota JOHN SULLIVAN, Oklahoma
EMANUEL CLEAVER, Missouri MARSHA BLACKBURN, Tennessee
JOHN J. HALL, New York
JERRY McNERNEY, California
------
Professional Staff
Michael Goo, Staff Director
Sarah Butler, Chief Clerk
Bart Forsyth, Minority Staff Director
C O N T E N T S
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Page
Hon. Edward J. Markey, a Representative in Congress from the
Commonwealth of Massachusetts, opening statement............... 1
Prepared Statement........................................... 7
Hon. F. James Sensenbrenner, Jr., a Representative in Congress
from the State of Wisconsin, opening statement................. 9
Hon. John Hall, a Representative in Congress from the State of
New York, opening statement.................................... 10
Hon. Marsha Blackburn, a Representative in Congress from the
State of Tennessee, prepared statement......................... 11
Witnesses
panel i
General Wesley K. Clark, United States Army (Ret.), NATO Supreme
Allied Commander Europe 1997-2000, prepared statement.......... 3
Vice Admiral Dennis McGinn, United States Navy (Ret.)............ 13
Prepared Statement........................................... 16
Dr. Peter Gleick, Pacific Institute for Studies in Development,
Environment and Security....................................... 26
Prepared Statement........................................... 28
Answers to Submitted Questions............................... 105
Mr. Richard L. Kauffman, Chairman of the Board, Levi Strauss &
Co............................................................. 50
Prepared Statement........................................... 52
Answers to Submitted Questions............................... 111
Mr. Kenneth Green, American Enterprise Institute................. 66
Prepared Statement........................................... 69
Answers to Submitted Questions............................... 114
panel ii
Mr. Robert F. Kennedy, Jr., Chairman of the Waterkeepers Alliance 84
Prepared Statement........................................... 90
Submitted Materials
Mr. Kenneth Green, copy of article from AIE, ``Climate Change:
Caps vs. Taxes,'' by Kenneth P. Green, Steven F. Hayward, and
Kevin A. Hassett, June 2007.................................... 135
Mr. Kenneth Green, copy of article from AIE, ``Climate Change:
The Resilience Option,'' by Kenneth P. Green, October 2009..... 147
NOT GOING AWAY: AMERICA'S ENERGY SECURITY, JOBS AND CLIMATE CHALLENGES
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WEDNESDAY, DECEMBER 1, 2010
House of Representatives,
Select Committee on Energy Independence
and Global Warming,
Washington, DC.
The committee met, pursuant to call, at 11:01 a.m., in room
210, Cannon House Office Building, Hon. Edward J. Markey
(chairman of the committee) presiding.
Present: Representatives Markey, Blumenauer, Inslee,
Herseth Sandlin, Cleaver, Hall, Sensenbrenner, Blackburn, and
Capito.
Staff Present: Ana Unruh-Cohen, Morgan Gray, Jonathan
Phillips, Jeff Sharp and Jonah Steinbuck.
The Chairman. Welcome. Welcome to the Select Committee on
Energy Independence and Global Warming.
In April of 2007, the Select Committee on Energy
Independence and Global Warming held its first hearing. At that
inaugural gathering, we discussed the twin challenges of
climate change and our dependence on foreign oil. Since that
time, Congress passed new fuel economy standards. We made
investments into renewable energy, advanced battery technology
and efficiency measures that save families and small businesses
money. The House passed a comprehensive energy and climate
bill. The world, including China and India, committed to reduce
carbon pollution in the Copenhagen Accord. Our troops continue
to fight bravely in Iraq and Afghanistan, where our energy
interests remain entangled. The Gulf of Mexico was sullied by
BP's oil spill, which became the worst environmental disaster
in United States history. And here in this committee, we
discussed and debated it all, paving the way for informed
action.
Over the last few years, the politics of energy have
changed and shifted more times than we can count, yet what has
not changed are the problems we face as a Nation and as a
planet. Today's hearing is called ``Not Going Away'', a fitting
title for issues that will be central to the health and
survival of our planet and our economy for decades and
centuries to follow. The national security challenges from our
dependence on oil are not going away.
Today before our committee we have Vice Admiral Dennis
McGinn, who was a witness at our very first hearing. He knows
the price of our dependence on foreign oil borne out not in
this rhetorical battlefield but in the theater of actual war
where bullets and bombs are spent to defend or acquire barrels
of oil.
The national security threats from climate change are not
going away. During the first select committee hearing, we
discussed the drought-influenced Somali conflict that led to
Black Hawk down. A warming world exacerbated a military
hotspot.
This September, we hosted the Pakistani ambassador to
discuss his country's devastating floods. He discussed how his
country diverted resources like helicopters away from fighting
Al Qaeda to assist in the flood response. An increasingly
destabilized climate will invariably lead to more of these
destabilizing geopolitical events.
The economic security threats stemming from America's lack
of an energy plan are not going away. China is pushing ahead
with clean energy investment along with other emerging
technologies to capture and store carbon from coal. Twice as
much money was invested in clean energy in China as was
invested by the United States last year. As we heard from the
private investment community, this move by China will attract
trillions in private capital money that could be invested in
jobs here at home in the United States. And China is not alone.
Germany, Japan, South Korea, and other countries recognize that
dominating the trillion dollar market of tomorrow requires
foresight and public investment today.
Regardless of our political party, we can all agree that
second place in the clean energy race is not an acceptable goal
for the United States, and the carbon pollution that we have
already spewed into the atmosphere warming our earth is not
going away. The pollution we emit today will still be in the
atmosphere centuries from now. Every day that we wait to act to
stem the tide of carbon emissions will be felt for decades and
centuries to come as our planet warms and our weather patterns
become less stable.
And, today, as the world's climate community gathers in
Mexico, those of us who accept that cutting carbon pollution is
this generation's responsibility are saying that we are not
going away. We are not going away because the problems that
climate change presents are too dangerous, too urgent for us to
disappear into the abyss of cynicism and lost opportunity. We
are not going away because China and India and Germany are not
going away as competitors for global energy dominance. We are
not going away because the national security threats from our
continued dependence on foreign oil are not going away.
I would like to thank our witnesses for coming today, and I
look forward to their testimony. Unfortunately, General Wesley
Clark was unable to make it here today. We look forward to
having him back here soon, and we will submit his testimony for
the record.
[The statement of General Clark follows:]
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The Chairman. Before I close, I would also like to thank
the members of this committee and their staff for their service
over the last two sessions of Congress. It has been an honor
and a pleasure to explore and understand these global issues
with each and every one of you, and I thank each of you on both
sides of the aisle for your service to our country.
[The prepared statement of Mr. Markey follows:]
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The Chairman. I would now like to turn and recognize my
friend, the gentleman from Wisconsin, the ranking member, Mr.
Sensenbrenner.
Mr. Sensenbrenner. Thank you very much, Mr. Chairman.
This hearing will be the last of the Select Committee; and,
while I was initially skeptical of the Select Committee's
mission, it ultimately provided a forum for bipartisan debate
and an opportunity for House Republicans to share a different
view on the pressing energy and environment issues that we
currently face.
I would like to thank Chairman Markey for his fair and firm
leadership of this committee. He has showed courtesy, respect
for the rules, and a willingness to rise above partisanship. I
consider respect for the rights of the minority to be a
hallmark of great congressional leadership, and I commend
Chairman Markey for giving us the resources and platform that
we needed to express our ideas.
Chairman Markey and I disagree on policy choices, but we do
agree that America needs to diversify its energy supply and
increase our energy efficiency. When Senator Dodd of
Connecticut gave his valedictory speech in the Senate
yesterday, he made a comment saying that even though people can
be friends and respect each other despite policy differences, a
lot can get accomplished; and, unfortunately, there has been
too little of this in this Congress as time has gone on.
I can say that I consider Chairman Markey a friend. I can
say that Chairman Markey believes that what Senator Dodd has
said is good for America in this respect, and I hope that in
the Congress ahead, where there will be a partisan divide
between the two ends of the Capitol building, that we will be
able to establish respect for each other without compromising
our policy ideals. Because the American people want action. The
American people do respect positions that are opposite, and it
is going to be a tough task ahead.
Now, I think that this select committee has shown a very,
very wide division on how to approach our shared goals.
On Monday, the Wall Street Journal ran an article in a
special report on energy which I am holding up so that
everybody can see. On the red side are arguments that have been
made and which have failed in the forum of domestic and
international public opinion and on the green side there are
ideas and advocacy on what looks like is achievable in the road
ahead. And on the red side it says, old, set a high tax on
carbon to make alternative energy sources more competitive;
old, impose strict controls on carbon dioxide emissions; old,
force wealthy countries responsible for most emissions to send
money to help poorer ones adapt to the effects of climate
change; old, use the United Nations to work out comprehensive
agreements.
All of those were eloquently advocated by the chairman and
people on the majority side of the aisle, and they have been
rejected both in international forums and here in America.
Now, let's look at what is on the new side. New, invest in
making new clean energy technologies cheaper; new, focus on
modest emission reductions such as replacing old diesel
generators; new, encourage development aid that helps poorer
countries deal with the effects of drought or flooding, no
matter what the cause; and, new, focus on agreement amongst the
world's 20 largest economies.
All of these new things were advocated by the Republican
minority on this select committee; and I believe that the
select committee, unlike any other committee in Congress, was
really the focus of the debate between what this article refers
to as old and what this article refers to as new. And I would
urge my friends on the other side of the aisle to forsake the
old and embrace the new because I think in the years ahead we
can make progress by looking forward rather than backward.
I yield back the balance of my time.
The Chairman. I thank the gentleman very much.
The chair now recognizes the gentleman from Oregon, Mr.
Blumenauer.
The chair recognizes the gentleman from Washington State,
Mr. Inslee.
The chair recognizes the gentlelady from South Dakota.
The chair recognizes the gentleman from New York, Mr. Hall.
Mr. Hall. Mr. Chairman, I just want to thank you for your
leadership of this chairmanship and able guiding of this
committee. It has been a privilege to serve and learn all the
things I have learned from the witnesses over the last 4 years
who have come before the select committee, and I will waive an
opening statement.
The Chairman. I thank the gentleman very much. We thank the
gentleman from New York for his incredible commitment to
exploring these issues, raising them higher and higher as a
national priority; and your service to our country is gradually
appreciated. Thank you.
The chair recognizes the gentlelady from West Virginia. The
gentlelady waives her time.
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Mr. Chairman. Let us turn then to our opening panel; and I
will recognize Vice Admiral Dennis McGinn.
Admiral McGinn spent 35 years with the United States Navy
as a naval aviator, test pilot, aircraft carrier commanding
officer, and national security strategist. Since completing his
service with the Navy, Admiral McGinn has been an active
climate change and clean energy advocate in national forums,
stressing the need to develop comprehensive solutions to create
a sustainable global environment. Admiral McGinn testified at
the very first hearing of the select committee, and he will be
our first witness today.
We welcome you, sir.
STATEMENTS OF VICE ADMIRAL DENNIS McGINN, U.S. NAVY (RET.);
ROBERT F. KENNEDY, JR., CHAIRMAN, WATERKEEPERS ALLIANCE;
RICHARD L. KAUFFMAN, CHAIRMAN OF THE BOARD, LEVI STRAUSS & CO.;
PETER GLEICK, CO-FOUNDER AND DIRECTOR, PACIFIC INSTITUTE FOR
STUDIES IN DEVELOPMENT, ENVIRONMENT, AND SECURITY; AND KENNETH
GREEN, RESIDENT SCHOLAR, AMERICAN ENTERPRISE INSTITUTE
STATEMENT OF VICE ADMIRAL DENNIS McGINN
Admiral McGinn. Thank you. Thank you, Mr. Chairman. It is a
privilege for me to be back before this committee. Mr.
Sensenbrenner, great to see you again, sir, and all the members
of the committee.
Since April 18, 2007, when I first appeared before this
committee, I have been on the road a lot. I have traveled from
Maine to California, from Alaska to Florida, from North Dakota
to Louisiana and Texas; and I have been doing that to talk
about these issues to the American people. And recognizing that
there are always regional differences, regional assets, and
liabilities related to energy or environmental challenges, the
consistent thing that I brought from all of these travels and I
share with the committee today is that the American people are
concerned about energy security. They are concerned about
environmental issues locally, regionally, and globally,
including greenhouse gases.
The question, as it always is, is what do we do about it
and how urgently should we do it. In 2007, at that hearing we
had the then chairman of the CNA Military Advisory Board,
General Gordon Sullivan, who was a witness and talked about the
first report that the CNA Military Advisory Board put out. The
Advisory Board consists of about a dozen or 15 retired generals
and admirals from all four of the military services, including
the Coast Guard and the National Guard, and came up with the
consensus in that report that climate change was a threat to
national security because it will act as a threat multiplier
for instability in critical regions of the world.
This can be manifested in many different ways, but it
occurred to me this summer when Pakistan had 20 million people
affected by torrential monsoon flood, historical levels of
flooding, that here is a nation that is nuclear armed, has an
ongoing Taliban insurgency that threatens the stability of that
government, and is essential to our success and the success of
NATO in Afghanistan. And we have 20 million people that are
affected by severe weather, the type of scenario that was
exactly in the minds of the Military Advisory Board when we
said climate change is a threat to national security.
Another aspect of this was that the board recognized that
our economy, energy, climate change, and national security are
all inextricably linked. If you want to develop policies and
solutions to address any one of those, you have to carefully
think through the effects on all of the others.
So, as a result of that, we got together and put out a
report in May of 2009 that focused on the energy aspect of
these interlinked challenges. And our main conclusion in that
report was unequivocal. America's energy posture constitutes a
serious and urgent threat to our national security--
diplomatically, economically, and militarily. In the military
venue, we see it manifesting in Iraq with roadside bombs now in
Afghanistan. We saw burning NATO fuel convoys that were along
the Pakistan-Afghanistan border. We see from intelligence
reports that petro dollars that are going to Iran are finding
their way into the hands of the Taliban and al Qaeda and being
used to buy the equipment and the very lethal projectiles and
components that are killing and maiming our troops on a weekly
basis over there. That money is coming from global purchase of
oil, and the United States purchases one-quarter of that oil
every year.
Diplomatically, we are trying to do something about
preventing a nuclear armed Iran from emerging. Our leverage in
the international diplomatic community is undercut by the fact
that we use 25 percent of the world's oil every year and we sit
on perhaps 3 percent.
And economically, make no mistake, the recession that we
are hopefully and too slowly starting to come out of, has as a
fundamental cause factor the tremendous cost of our addiction
to oil in the past. In fact, if you go back in history, over
the past four recessions, every one of them has been preceded
within 6 months by oil spikes, oil price spikes.
This is not going to go away. We are going to come out of
this recession. The economy of the world and the United States
is going to heat up and so will the appetite for oil and so
will return the volatile cycle but ever higher prices and ever
scarcer availability, certainly over the next 10 years but
perhaps even sooner than that. We have got to find ways to
break that addiction.
Finally, in July of this year, the Military Advisory Board
put out a report titled Powering America's Economy: Energy
Innovation at the Crossroads of National Security Challenges;
and the key finding of this report was that our economy and our
national security are so inextricably linked. As we look at
ways to deal with our deficit, as we look for ways to afford
all of the priorities of America, one of the things that will
be inevitably on the table is how much do we pay for defense.
If you don't have a good and strong economy, you don't have a
good and strong defense structure in armed services. So there
is an inextricable link. And the fact that our energy choices
in the past and certainly going forward are going to have a
tremendous effect for the good or for not good on our economic
strength is the key part.
The main recommendation from this report that was published
in July of this year was simply that the United States
Government should take bold and aggressive action to support
clean energy technology innovation and rapidly decrease the
Nation's dependence on fossil fuels.
Lastly, I want to share a quote from Admiral Mike Mullen,
the Chairman of the Joint Chiefs of Staff. He addressed a
Department of Defense energy forum on October 13th of this
year:
``I am proud of the work that the men and women of the
Department of Defense are doing, the work many of you are
leading to ensure we turn our own energy security from a
vulnerability to the strength that it could be. Few of us can
argue that the need is not there. Many of us can see that the
right technology is emerging, and I hope all of us can agree
that the time for change is now.''
He was addressing a Department of Defense armed services
audience. His comments apply to every aspect of American
society and the American economy.
And I would like to close my opening remarks, Mr. Chairman,
Mr. Sensenbrenner, by a summary that I made 3 years ago on
April 18th. I will simply quote.
``Mr. Chairman, thank you. This is an American challenge.
It is one that Americans together will meet. It doesn't have
partisan labels on it. The solutions are available today. They
need to be guided by leadership and good policy which enables
us to advance our energy efficiency and to increase our choices
of clean, renewable fuels in order to create opportunity for
our economy, create opportunity for our society, and raise our
level of national security and to be a leader in the global
sense in meeting these energy and climate challenges.''
Thank you, Mr. Chairman. I request that my written
statement be included in the record.
[The statement of Admiral McGinn follows:]
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The Chairman. It will. Thank you, Admiral, very much. It
will be included without objection.
Our next witness is Dr. Peter Gleick. Dr. Gleick is an
internationally recognized water expert and the cofounder and
President of the Pacific Institute for Studies in Development,
Environment, and Security, a nonpartisan research institute
that works to advance environmental protection, economic
development, and social equity.
Doctor, we welcome you. Whenever you feel comfortable,
please begin.
STATEMENT OF PETER GLEICK
Mr. Gleick. Thank you very much, Chairman Markey, Ranking
Member Sensenbrenner, and committee members. I appreciate the
opportunity to appear before you today.
My training and background is in the field of environmental
science, hydrology, climatology, engineering. I have been asked
to offer comments on the science of climate change and some
thoughts about appropriate responses. My longer written
testimony has been provided to the committee, and I would just
like to make six brief points.
First, the science of climate change is clear and
convincing that climate change is happening, happening rapidly,
and happening because of human activities. Based on a
combination of our understanding of basic laws of science,
laboratory experiments, observations of the real world,
mathematical and computer modeling, the science of climate
change is compelling and strong. Emissions of greenhouse gases
from human activities not only will change the climate but are
already changing the climate. The evidence is now
incontrovertible.
Second, despite continued efforts on the part of a small
group of skeptics and deniers to mislead, misrepresent, and
misuse the science, our understanding of human-caused climate
change continues to strengthen and improve. There is nothing
identified in recent efforts to discredit climate science that
remotely changes these fundamental conclusions about climate
change, and no credible alternative explanation has ever been
offered that explains the science of what we observe around the
world.
A recent letter from 255 members of the U.S. National
Academy of Sciences, of which I am a member, was published in
Science magazine in May. I have attached it with my testimony,
and it addresses this area as well.
Third, every major international scientific organization
working in the areas of geophysics, climate, geology, biology,
chemistry, physics, human health, atmospheric sciences,
meteorology, and every National Academy of Science of every
country of the world, including our own, agrees that humans are
changing the climate. Again, a list is attached with my written
testimony. Conversely, there is no scientific body of national
or international standing that rejects the findings of human-
induced climate change.
Fourth, the Nation now only faces three options:
mitigation, that is, reducing the emissions of greenhouse
gases; adaptation, that is, dealing with the unavoidable
consequences of climate change; and suffering. The only
question that remains is what combination of those three things
are we going to experience.
The argument that all we have to do is adapt to climate
change is simplistic. We have no choice but to do all three. If
we do nothing to work on mitigation, the impacts of climate
change will continue to accelerate and continue to become more
and more extreme. We are now faced already with unavoidable
climate change because we have already delayed too long to
implement policies to reduce greenhouse gas emissions. In fact,
it appears that many of our estimates of the rate of climate
change have been too low, not too high, and that climate
changes are happening faster than expected.
Fifth, a wide range of impacts, ranging from sea level rise
to changing water availability to altered food production to
human health effects from heat and spreading tropical diseases
to very clear threats to our national security, as Admiral
McGinn just talked about and as others have talked about, are
already beginning to appear. These impacts will be costly to
society, far more costly, I believe, than efforts to reduce
emissions of greenhouse gases.
I offer one example in my testimony of the massive
consequences expected simply from sea level rise along the
California coast from an analysis my Institute did for the
State of California. The value of infrastructure at risk along
the coast of California from expected sea level rise is already
$100 billion. There are 500,000 people in areas that are
expected to be flooded from sea level rise, and that is one
small impact in one small area of the world that we are going
to have to deal with. Those costs are real, if badly
quantified.
Finally, the good news is that there are smart and
effective things that can be done immediately with a focus on
energy policy, land use policy, and water policy. Robert
Kennedy, Richard Kauffman, General Clark all offer concrete
examples in their written testimony. These kind of options
include national energy policy that you have been discussing
for a long time. Focused on non-carbon energy sources with
Federal financing, tax credit, loan guarantees, there are many
different ways of approaching that problem.
We need environmental standards for greenhouse gas
emissions, including not just carbon dioxide but methane,
hydroflurocarbons carbons, and black carbon. We need to begin
the process of adapting to unavoidable impacts of climate
change through smarter land use and water use planning. If we
act to slow climate change and the impacts turn out to be less
severe than we predict, we will still have reduced our
dependence on fossil fuels. We will have cut our export of
money to countries that fund extremism and terror. We will have
reduced our emissions of pollutant. We will have boosted our
economy with new technologies and jobs.
But if we do nothing, as some argue we should do, and
climate changes are indeed more severe than we expect, we will
have made things far worse than they need to be. Congress
should step up and do its job.
Thank you for the opportunity to provide this testimony. I
would be happy to answer any questions that you may have.
[The statement of Mr. Gleick follows:]
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The Chairman. Thank you, Doctor, very much.
Our next witness is Mr. Richard Kauffman. Mr. Kauffman is
chairman of the board of Levi Strauss ` Company. During his
long career, Mr. Kauffman has had broad experience in capital
markets and corporate finance and recently stepped down as the
chief executive officer of Good Energies, one of the largest
investors in renewable energy. We welcome you, sir.
STATEMENT OF RICHARD L. KAUFFMAN
Mr. Kauffman. Thank you, Chairman Markey, Ranking Member
Sensenbrenner, members of the committee. Thank you again for
the opportunity to testify today.
My name is Richard Kauffman. I am indeed the chairman of
the board of Levi Strauss, although I must say that I am not
dressed that way today.
I would like to give you a view from the business
community. Levi Strauss cares deeply about energy and climate
change not just because we want to be a good corporate citizen
but because of our business.
First, we rely upon an agricultural product, in this case
cotton, to make 95 percent of our product. Extreme weather
events in Pakistan have driven up prices of cotton 50 percent
since July, 100 percent since the beginning of the year. So we
are actually seeing prices that we haven't seen since Levi
Strauss himself was around. Climate change puts consumers of
agricultural products at risk for crop availability, quality,
and pricing.
Second, climate change has a major effect on another part
of our supply chain, our manufacturing facilities, which are
already feeling the effects of extreme weather. Our products
are manufactured in more than 45 countries, many of which are
in the developing world that are expected to bear the risks of
water shortage, such as India or Nicaragua, disease, such as in
Cambodia, and flooding and saltwater intrusions, such as in
Bangladesh and Vietnam.
Third, we care about climate change because of our brand.
Levi Strauss, like many other American companies, is the
beneficiary of globalization not only in terms of establishing
a global supply network but in terms of demand for our
products. Our biggest growth markets are outside the United
States and in particular the developing markets of China,
India, Russia, and Brazil.
I think we all recognize that Levi Strauss is an American
brand. We respect the best of American cultural values:
honesty, integrity, hard work, and the pioneer can-do spirit.
These values speak to consumers around the world. But to the
degree to which consumers see the U.S. as being resistant to
the science of climate change and as wasteful of natural
resources, our brand is at risk. I think all of us have had the
experience, but young people in particular around the world
care about climate change since it will affect them more than
any of us in the room.
Fourth, our own people care about our being a leader in
environmental stewardship. Like other companies, we are in a
constant battle for talent. Great people make great companies.
What we do to help make our products more sustainable helps us
attract and retain the best people. When we have done a
lifestyle assessment of our products and identify environmental
impacts and we work to address them, for example, educating
consumers on how to care for their clothes more responsibly,
including washing less or washing in cold water and line
drying, we are not only reducing environmental impact but
helping our people feel that their work has meaning.
Fifth, we also see commercial opportunity in addressing the
challenges of energy and climate change. There are product
innovations that offer more environmental benefits that will
differentiate us from lower cost commodity suppliers. All
companies have to deal with that issue of competing with
commodity suppliers.
A good example of such products is our recently announced
waterless jeans. A single jean uses over 10 gallons of water in
its finishing process. The waterless jeans, as the name
implies, can save over 90 percent of this water.
Another opportunity for us is energy efficiency. At a
single distribution facility--and we have quite a number of
them--we could save over $600,000 a year, a 33 percent savings
at this site. The millions of dollars that we could save from
energy efficiency we would be able to reinvest in our business.
Our goal as a company is to achieve carbon neutrality by
reducing the amount of energy we use and moving to 100 percent
renewable energy. The immediate short-term target is to reduce
energy use in our globally owned and operated locations by 11
percent compared to 2007.
One of the problems we have in achieving our goal of carbon
neutrality is uncertain and stop-start government policy and
this can be measured in a lot of ways, from a failure to enact
comprehensive climate and energy legislation to uncertainty
about whether there will be an extension of the grant in lieu
of tax credits for renewable energy we will be able to acquire
and the cost of that energy.
And in terms of energy efficiency, we could do more faster
and cheaper with Federal legislation that incentivizes
utilities to work with us. Utilities generally still have the
incentive to sell more electricity rather than invest in energy
efficiency.
In terms of energy efficiency, there are substantial
upfront costs we must make to invest that are difficult for us
to finance. We see that the financing system for renewables and
energy efficiency is not up to the task. And while we applaud
government policy in supporting more R`D, the emphasis on
innovation over deployment make it difficult for us to achieve
our objectives by using good enough technology that is
available today.
My experience as renewable energy entrepreneur has taught
me a lot about the promise and perils of the business that I
hope we can explore in questions and answers. Thank you very
much.
[The statement of Mr. Kauffman follows:]
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The Chairman. Thank you, Mr. Kauffman, very much.
Our next witness is Kenneth Green. Mr. Green is a resident
scholar at the American Enterprise Institute for public policy
research. He has studied public policy involving risk,
regulation, and environment for over 16 years.
We welcome you, sir. Whenever you are ready, please begin.
STATEMENT OF KENNETH GREEN
Mr. Green. Thank you, Chairman Markey, Ranking Member
Sensenbrenner, members of the committee. It is a pleasure to be
back with you again.
I am Dr. Kenneth Green of the American Enterprise
Institute, a resident scholar there for going on 5 years now.
My training is in the environmental sciences. I hold a
doctorate in environmental science and engineering from UCLA,
and I have twice served as an expert reviewer for reports of
the Intergovernmental Panel on Climate Change, the United
Nations' IPCC.
Thank you for inviting me to testify on what continues to
be an important question of the day: How can we best manage the
risks involving America's energy security, jobs, and climate
challenges? Thank you also for the job security suggested in
the title of this session: Not Going Away. If it did go away,
so would my job security.
First and foremost, I believe that it is critical for
America that we shift our focus from mitigation of greenhouse
gas emissions toward an agenda of building energy and climate
resilience. Whether you believe that climate change is a
looming disaster or whether, as I believe, it is a real but
modest threat, there is really no rational argument for
continuing to focus on mitigation of greenhouse gas emissions
in the near or midterm. And that is because, despite the claims
of renewable energy and efficiency rent seekers--for that is
what they are--we do not have the technologies needed to
significantly curb greenhouse gas emissions without causing
significant economic destruction, and the money and attention
we are spending on mitigation is largely wasted. Even if we
shut the United States and the EU off, the savings on the
greenhouse gas emissions would be overcome by emissions from
China, which is now the world's largest greenhouse gas emitter.
So the environmental benefit of our mitigation would be
precisely zero.
The fact of the matter is, also, mitigation is
immiseration. Let us start with what was mentioned earlier, the
legislation that was passed in the House, cap and trade, which,
while seemingly dead, could come back to haunt us in the future
under other guises such as buried in clean energy standards.
For an emission treaty to work, certain conditions must
apply. You need readily available technology to capture
emissions or less-emission-intensive input fuels. We do not
have those with greenhouse gases.
You need a single regulatory jurisdiction. We do not have
that.
You need a single trading currency that can't be
manipulated. We do not have that.
We need the ability to confirm emission reductions and a
manageable number of actors, preferably uniformly distributed;
and you need to auction all permits to prevent rampant
corruption of the scheme by seekers and special interests. We
had those conditions for sulfur dioxide, which is why acid rain
trading worked, but we don't have them for carbon dioxide.
And even the economists who develop emissions trading for
pollution control have acknowledged that it is not a suitable
vehicle for controlling greenhouse gases. All that instituting
cap and trade or, for that matter, a carbon tax would do is
raise our energy costs, raise the costs of our goods and
services, make our economy less productive, and make us less
competitive internationally.
The same is true of EPA's misguided efforts to use
regulation to force down emissions of greenhouse gases. There
are few, if any, affordable ways to do this. That is why it has
proven so intractable in Europe and elsewhere. The methods of
mostly switching to natural gas from coal are expensive and
will render many businesses uncompetitive both domestically and
internationally.
We hear about efficiency gains. The idea that there are
massive efficiency gains just laying around is an economic
fallacy. There are not $100 bills laying on the ground to get
picked up by actors who internalize that value. If they have to
go to the government to do something, it is because it doesn't
really make sense for them to do it without the government. It
is not actual real efficiency. It is faux efficiency.
My extended remarks, of course, will cover more things.
What I want to say, though, is if we shouldn't regulate and we
shouldn't institute cap and trade, what should we do? And, in
fact, there is a very ambitious agenda of what we can do.
First and foremost, though, we should stop making things
worse. Right now, governments incentivize people to live in
climatically fragile areas. If they are flooded out of a coast,
we rebuild them on the same coast. If they have a drought area,
we subsidize bringing water in to remedy their drought.
Government as an insurer of last resort is a risk subsidizer.
Infrastructure was mentioned earlier. And one of the things
I wanted to talk about--I am running out of time, I am afraid.
But we do build infrastructure. Governments are great at
building infrastructure. But they don't price it. Therefore,
there is no pricing signal to tell you what the risk to the
infrastructure is from climate change.
If our infrastructure was fully priced, the infrastructure
that was mentioned earlier in California, for example, and sea
levels rise, you get two things that happen: One, you have a
price signal to tell you what to do about it, to reroute the
highway, elevate the highway, put up seawalls along the highway
and pass the cost onto the commuters on that road, which would
move those away who can't afford the value at risk. The same is
true of our water infrastructure. The same is true of our
electrical infrastructure. We are making the issues much worse
because of the way government manages our infrastructure, and
that should change.
The same is true of zoning. If the climate changes and
people seek to move north, they will face a welter of zoning
restrictions, national parks, State parks, and other barriers
to entry. And this is particularly true of poor people who have
faced difficulties moving into areas that are zoned and highly
regulated and which have higher prices.
Finally, I will say that we should trust in resilience but
tie up our camel. I think the government should redirect
research funds into geo engineering and into carbon capture
technologies. Those will give us an option in case the worst
case scenarios are correct but not cost us an arm and a leg and
sacrifice our economic growth in the meantime.
I would like to point out somebody recently from the
Tyndall Center in the U.K., one of their scientists, said that
in order to really deal with climate change the developed
world--the entire developed world--must forgo 20 years of
economic growth. Does anyone realistically think that is going
to happen? I don't think so. And I think it is a waste of time
and money and energy to focus on attempting to do what will not
be done.
I have submitted extensive remarks for the record as well
as two policy studies backing up my comments, and I look
forward to your questions.
[The statement of Mr. Green follows:]
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The Chairman. Thank you, Dr. Green; and we will include
your studies in the record.
Let me now turn and recognize the gentleman from Oregon,
Mr. Blumenauer.
Mr. Blumenauer. Thank you, Mr. Chairman.
It is interesting to think about where we are ending up. I,
for one, have appreciated the opportunity over the last 4 years
to work with you and the committee in constructing a record and
hearing from distinguished panelists such as we are graced with
today. Nothing to me suggests that 10 years hence people are
going to feel like these were exaggerated concerns, that
somehow government did too much during this period. I fear that
10 years hence the consensus will be we made a start in the
House, there was aggressive effort, but that we have fallen
short of the mark.
I listened again to Dr. Green, and I do agree with him in
one area, that we are not appropriately pricing the risks, that
government is involved because we would like to help everybody.
Having spent a lot of time dealing with flood insurance reform
over the years, we subsidize people to be in harm's way, and we
put them back afterwards, and that is wrong, and it is going to
create a problem. But we have any number of Federal policies
where we are paying people lavishly to grow cotton in the
desert and then paying off Brazilian cotton farmers because we
cheat internationally. A whole host of these things are going
to come into play, and I think we will be making some
significant changes.
But the record that has been developed is replete with
references that the cost of making these adjustments are a tiny
fraction of what is to be expected that we will be contending
with because of the problems that our witnesses have pointed
out. And, in fact, it is not 20 years of growth that will lose.
It is perhaps a fraction of a percent of GDP which may be
redirected if we undertake the right policies.
I conclude these hearings feeling actually a little more
encouraged, even though we haven't done what we should have. I
am encouraged because of what we are hearing from business. Mr.
Kauffman, I appreciate very much both what you have done and
what you have said. We are seeing businesses understanding the
opportunities and the risks, and have been moving forward, not
waiting for government. We have seen over 1,050 communities
that haven't waited for the Federal government, that have
started ahead with their own climate policies. This includes my
own hometown of Portland, Oregon, which is essentially Kyoto
compliant at this point and people can still earn a living and
get across town. We are watching what is happening with the
community of faith, with education in the communities and,
frankly, with a lot of other governments.
Part of my concern listening to Mr. Green, is his notion
that we shouldn't do anything because there are other problems
that are growing in India and China and that our actions will
make no difference. First of all, this is not accepted
scientific fact. If we move to mitigate and make a change, it
does make a change. It doesn't maybe offset others' pollution
entirely. But looking at what governments are doing in Brazil
and Mexico, in China with stronger environmental standards than
we have in some areas, I am heartened by what we have
encountered.
Last but not least, there is nothing that suggests that we
shouldn't move forward with a more rational energy policy,
rational water policy, even if you didn't believe in climate
change. In terms of national security, in terms of not wasting
energy, in terms of getting the economics right, the case is
compelling.
I am wondering if, Mr. Kauffman, you could comment briefly
on what you are seeing in the business community even in the
absence perhaps of appropriate pricing signals from the Federal
Government. What do you see now that we may be able even in
this more restricted climate you will face politically in
Congress, things--simple things to do that would reinforce your
interests and things that you think are opportunities?
Mr. Kauffman. If I understand your question, what are the
things that Congress can do?
Mr. Blumenauer. That you think either in a scaled down--
that might be helpful in making the initiatives you talked
about possible.
Mr. Kauffman. Well, I do think that there is much more to
be done in terms of a focus on energy efficiency. I am afraid I
don't agree with Dr. Green. I do think that there are actually
lots of dollars that are on the ground, but there are lots of
market failures that could be addressed. I don't want to go
into all of them. But I think efficiency is an area.
I also think, as I say, on the financing side--and maybe
this is one example I could talk about in terms of energy
efficiency--there is some terrific energy efficiency technology
that works that is available today off in little companies that
are trying to go up against giants. They can't offer a leasing
product to the market, they can't get financing, and the
challenge with that is that the person often at a company that
is responsible for the capital budget is different from the
person responsible for the operating budget. So it seems very
kind of prosaic, but it really creates a lot of issues.
So the ability to create a financing vehicle that would
help energy efficiency would go a very, very long way to
accelerating energy efficiency and it really, really does pay
for itself and it will help the economy.
Mr. Blumenauer. Thank you.
Dr. Gleick, you have referenced the scientific consensus
which I believe was reflected in our record, notwithstanding
Dr. Green's notion that we have to forego 20 years of economic
development and that it really would make no difference what
the United States did because other countries are polluting
more. Do you want to make a brief reaction to that, which seems
to fly in the face of your testimony and research?
Mr. Gleick. Yes, I would be happy to.
There are a number of things with which Dr. Green and I
don't see eye to eye. That is one of them. The United States is
still a massive emitter of greenhouse gases. There is no doubt
that anything we do to reduce greenhouse gas emissions will
have an effect on the ultimate concentration of greenhouse
gases in the atmosphere and the extent and severity and speed
of climate change.
Certainly, without a global agreement to reduce emissions,
we will not turn emissions around, but we have the enormous
opportunity just from a technical side of slowing the rate of
climate change and that by itself has a huge economic value.
That is a critical issue.
I don't often tell jokes at congressional hearings--and I
am not an economist--but there is a classic economics joke
about an economist walking down the street with his little
girl. And the little girl--they are holding hands, and the
little girl says, daddy, there is a $20 bill on the ground. And
the economist says, don't be silly, dear. If there was a $20
bill on the ground, someone would have found it already.
And the truth is the potential for efficiency improvements,
as you have said already yourself and as Mr. Kauffman has said,
are enormous. The ability to improve the efficiency with which
we use energy in this country, do the things we want to do with
much less energy, and I would argue water efficiency as well,
which has an enormous greenhouse gas savings as well, is
largely untapped. We have made progress in that area, but there
is enormous progress to be made. And it is far, far cheaper to
do that than for the Federal Government to be spending money on
expensive, unreliable efforts to sequester carbon. The cost
benefit of expenditures at the Federal level on efficiency
versus carbon sequestration are very different. I am not saying
don't do research, but we should do research in that area as
well.
The Chairman. The gentleman's time has expired.
By the way, our final witness, Robert F. Kennedy, Jr., has
been delayed on the tarmac at La Guardia because of this
violent weather that is going up and down the east coast. He is
still trying to arrive for the hearing.
Let me turn and recognize the gentlelady from Tennessee,
Mrs. Blackburn.
Mrs. Blackburn. Thank you, Mr. Chairman.
I appreciate all of you being here with us, and I
appreciate that this is our final hearing. We thank you for the
leadership that you have shown.
I think that we can agree that we--quite frankly, I have
never met anyone that wants to pay more on their utility bill.
We are all seeking better ways to use and to conserve and to
achieve energy efficiency. I think the underlying question is,
do you do that at the expense of American jobs? And that is
something this committee has looked at and I think in the next
Congress we will continue to look at.
Dr. Green, I will have to say you have a friend in me. I
may be the only one on this panel that is in agreement with
what you have to say.
Mr. Kauffman, first for you, what percentage of Levi jeans
are manufactured in the U.S.?
Mr. Kauffman. We do comparatively little manufacturing in
the United States.
Mrs. Blackburn. And primarily that manufacturing is held
where?
Mr. Kauffman. It is outside the United States. That is the
nature of the global apparel industry. We would like to
manufacture more in the United States.
Mrs. Blackburn. What percentage of that is in China?
Mr. Kauffman. What percentage of----
Mrs. Blackburn. Of your manufacturing.
Mr. Kauffman. I don't know the exact percentage.
Mrs. Blackburn. And then what percentage of Levi jeans are
marketed in the U.S.?
Mr. Kauffman. Well, in terms of the United States, the
United States is our biggest single market. But, as I said
before, the growth of our business is outside the United
States. It grows more rapidly than in the United States.
Mrs. Blackburn. Thank you for that.
You talked a little bit about clean energy and VC capital.
Let me ask you this. Are you familiar with the experiences of
the Spanish government's efforts to subsidize renewable
energies over the past several years and the results of those
efforts? And do you think the U.S. government should look at
Spain as a model to imitate?
Mr. Kauffman. I don't think that we should--yes, I am
familiar with it, and I don't believe the United States
government should emulate that experience. Do you want me to
explain why?
Mrs. Blackburn. That is fine, but I am running out of time.
So let us make it fast if we can.
Mr. Kauffman. In part, the Spanish government changed the
rules of the game, and that is one of the problems that the
United States has had as well.
Mrs. Blackburn. So uncertainty of regulation and
uncertainty of policy.
Mr. Kauffman. That is correct.
Mrs. Blackburn. We hear that a lot from companies.
Okay, Dr. Gleick, I wanted to ask you, how can you talk
about green jobs as a way to boost our economy in light of the
colossal failures in Europe where each green job in Spain costs
2.2 jobs elsewhere in the economy and each green job in Italy
cost 6.9 jobs in the industrial sector and 4.8 jobs across the
entire economy?
Mr. Gleick. Let me first say I am not an economist. I am
not familiar with the statistics you are using and their source
or their quality.
I do believe that the potential for jobs in new American
technologies in energy efficiency, water efficiency, renewable
energy technology, non-carbon technology, whatever it is, is
very significant. Obviously, you don't want those jobs to come
at the expense of other jobs, but I think that is probably a
fallacy. I think we are probably smart enough to develop new
jobs without losing old jobs.
Mrs. Blackburn. Dr. Green, how do you respond to that?
Mr. Green. Well, this is the Hayek's fatal conceit, that
somehow, despite all experience elsewhere, that somehow we just
have the ability to centrally plan the economy in a way to make
jobs in this sector or that sector and create them on net. It
is a fallacy that has been badly, many times, debunked.
I am familiar with the studies you mentioned in Spain and
Italy. I am not an economist, also. I play one on TV sometimes,
but that is about as close as it gets. Those studies are quite
robust. In fact, the Spanish government recently acknowledged
that the 2.2 job study that you pointed out is accurate. They
are cutting their subsidies to wind and solar power, and
rampant corruption has been discovered in the Spanish example,
especially of solar power, where some of the criminal cartels
moved heavily into solar power and were using diesel generators
to sell solar power, quote, unquote, at night to the Spanish
government at a fixed rate higher than the competitive sources
of energy. These things are, frankly, boondoggles. They are
promoted by rent seekers, and this has been shown time after
time after time.
Mrs. Blackburn. Thank you. I have some other questions and
I will submit those for written response. Thank you.
Mr. Markey. We thank the gentlelady very much. The chair
recognizes the gentleman from Missouri, Mr. Cleaver.
Mr. Cleaver. Thank you, Mr. Chairman. I have,
unfortunately, a meeting that I must chair beginning at 12
noon. And I did want to have the opportunity to thank you in
leading us in what I consider to be a great and important
information gathering. And I appreciate all of your comments
today and your willingness to provide us with information. We
received it from scholars and thoughtful men and women from all
over the world, actually, and I appreciate it.
I look at this whole issue a little, perhaps differently.
In a book that I read, frankly, often, there is a little-read
line that says: The Earth is the Lord's and everything that is
in it.
We are, in a real sense, only squatters, not owners. It is
our responsibility to care for the Earth. And we have no more
right to change the climate of Earth than we have the right to
change the thermostat in another person's home. And I think
that in the years to come, one of the great questions will be--
and I can see television clips of it, I probably won't be
around--of people denying that the Earth is warming or denying
that humans are the cause. And I have looked at TV program
special documentaries on things in the past how they show
people saying this won't happen and so forth. And I hope for my
children and my children's children that what we have attempted
to begin will, in future days, rise to the surface of national
consciousness, and certainly the Congress, and we will find
ourselves taking an appropriate stand.
Thank you so much, Mr. Chairman, for everything that you
have done in leading this committee.
Mr. Markey. And thank you. And thank you for everything
that you are doing in Kansas City to make it a model for the
installation of the energy efficiency and renewable energy that
I think will ultimately be the model for the country, and we
thank you for your great leadership as well.
The chair recognizes the gentleman from Washington State,
Mr. Inslee.
Mr. Inslee. Thank you. Just one comment as we wrap up our
hearing and our work of this committee. I want to thank my
colleagues for working on this. If some archeologist happens to
dig up the records of this committee 100 years from now, some
of us will be shown to have been right and some of us will have
been shown to be wrong. And none of us knows that for sure, but
I want to thank all members for working on this important
issue.
I want to thank Dr. Gleick for being here, who is the
author of a great book, ``Bottled and Sold, The Story Behind
Our Obsession with Bottled Water.'' My wife has turned me on to
that work, and I enjoy it very much.
Dr. Gleick, tell me, why do you think there has been a
group of folks that refuse to accept this, you described as
uncontroverted science? And I think that is an accurate
description given that every scientific group of any esteem has
recognized this phenomenon as uncontroverted at this point. Why
do you think there is any discussion to the contrary in our
society today?
Mr. Gleick. Thank you, Congressman. I was wondering where
that copy of the book had been sold. Thank your wife for me.
I am very reluctant to get into motive. I don't think it is
useful for me----
Mr. Inslee. Let me ask a different question then. What do
you think is the most successful dialogue when you have had
dialogue with people who have expressed doubts about that clear
science? What do you think is most successful in a dialogue in
that regard?
Mr. Gleick. When I talk to people who are unsure about the
science of climate change or skeptical, don't believe it is
happening, I do like to find out why they believe that.
Sometimes it is ignorance; they don't know anything about the
science, they haven't read the science, they don't know where
to go for good information. Sometimes it is ideological. They
just don't want to believe that humans could possibly change
the climate of something as great as the planet. Sometimes it
is fear about what we might have to do to change emissions of
greenhouse gases. There is concern about economics, there is
concern about politics, there is concern about government
versus nongovernmental action.
There are a lot of things that drive it. And I find that
people are willing to be convinced about the science when they
understand that there is still plenty to debate on the policy
side that the fact that the climate is changing, the fact that
humans are changing the climate is a reality doesn't
necessarily dictate what the response should be. There is a lot
of difficult discussion that, frankly, you in Congress have to
deal with about what to do about it, about where to put the
effort on mitigation versus adaptation versus not doing
anything.
Mr. Inslee. So one thing, I hope you will have license to
be vocal. We need the scientific community to step up to the
plate here and be vocal on the issues. There is a tendency to
be academic and we understand that, and that is important. But
there is a time to be vocal, too. I hope you and your fellows
will be vocal.
Mr. Kauffman, you were talking about the need for financing
mechanisms, particularly for efficiency and deployment of
things that are ready to go now. We tried to pass a green bank
to try to help finance the sort of first commercial-scale
plants of a lot of these technologies. Could you give us some
thoughts on what a financing mechanism could be for efficiency
or those first new technologies and production?
Mr. Kauffman. Okay. Thank you. One of the issues about
financing efficiency is just one of the questions about who has
the relative legal standing of the efficiency loan relative to
the mortgage. And so Great Britain has actually been able to
solve that by putting it on the utility bill. And so I think
there are some financing structures that can be used, but
fundamentally the problem is right now when we think about
trying to finance energy efficiency, we have, first, that
problem. And the other thing is if, in some cases, if you are
using innovative technology, you think that would require a
kind of specialized financing entity. Well, you couldn't get a
bank license to do that, so we have bank regulations that are
opposed to that.
The other issue, broadly, in terms of some of the financing
problems, is the proposed new capital rules for banks which
will have the effect, not because of this reason, it is an
unintended consequence of reducing the amount of credit that
will be made available to below investment grade or marginal
investment grade companies, unless they can generate a lot of
business for the bank because the amount of capital needs to be
reserved against those assets are very high.
Mr. Inslee. Just so you know, we are working on the pace
bond issue that will do exactly what Britain has done
essentially. And if you have any influence with Freddie or
Fannie right now, we have been trying to browbeat them into
doing the right thing. Thank you for that insight.
Dr. Green, I want to ask you about this issue. When you
have an empty pop can and you are driving the car, do you throw
it out the window?
Mr. Green. Well, first of all----
Mr. Inslee. That should be easy. That is a yes or no.
Mr. Green. Well, I don't have a car. So the answer would
have to be no.
Mr. Inslee. If you had a car, would you throw it out the
window?
Mr. Green. Of course not.
Mr. Inslee. Why not?
Mr. Green. Mostly because it would be littering.
Mr. Inslee. Now, you realize that even though you don't
throw it out the window, somebody else might throw theirs out
the window anyway. You can't stop other people from throwing
theirs out the window. Right? But you decide, because it is
unethical to do that, you just don't do that. Right?
Mr. Green. Right.
Mr. Inslee. Doesn't that logic, isn't that logic, shouldn't
it be the same for all of us on the planet at this point to
have an ethic of not polluting even though others somewhere
else may do so? And if that should be the ethic, would you not
urge the U.S. Congress to ask America to lead in that
direction? Isn't that the same reason we don't throw junk out
our window?
Mr. Green. No. And the reason is this: As was mentioned
earlier, that we are stewards of the planet. That is true.
There are, however, at this point in time billions of people
living in abject energy poverty. They are starving to death,
they are dying of lung disease because they are using wood and
dung fires. They are leveling the rain forests and destroying
massive amounts of ecosystems because they are poor.
If we raise the cost of energy, we raise the cost of
everything. We slow the development and the elevation of those
people out of poverty. And I think that is a much more
important moral imperative than banging our head against the
wall of litigation, which will not produce significant
environmental benefits and will only impose significant costs.
Mr. Inslee. So you say just keep throwing the cans out the
window as long as somebody else wants pop. And I just disagree
with you with that, and I will close with that. Thank you, all
of our panelists.
Mr. Markey. I thank the gentleman very much. And now we
will recognize the gentleman from New York, Mr. Hall.
Mr. Hall. Thank you, Mr. Chairman. Thank you to our
panelists all.
Dr. Green, I was listening to NPR on the way in this
morning. They were talking about interviewing some insurance
executives who would say that their industry has already
decided that the science is in, and they agree with you, and so
do I, that we shouldn't--governments shouldn't keep paying to
rebuild houses on the Outer Banks or, you know, flood plains,
places where they will obviously be destroyed again by another
storm or another flood. But what they have done, in fact, many
insurance companies, is withdraw completely from the market in
south Florida and the Bahamas and places that they have taken a
beating.
When Hurricane Frances and Jeanne came through the Bahamas,
they lost so much money that most insurance companies have
completely pulled out. So that is a statement, a market
statement in which the people on the show who were being
interviewed are saying that the markets will arrive at the
conclusion before the governments do, and I think people do as
well.
I just want to address a couple things that were said by
the gentlelady from Tennessee, who I am sorry is not here any
longer, and others. The idea that some of us on this committee
or some of those who feel that we need to take action to
prevent the worst-case scenario of climate change want to
forego 20 years of economic growth. That is just not true. None
of us said that. That is something being stated for us or
imputed to my--first of all, I don't think that is the choice.
That is a false choice.
I will tell you a couple quick stories in the little bit of
time before we have to vote. I think those were votes on the
floor looming.
One of my case workers, who handles veterans issues in the
district in the Hudson Valley, asked me to come over in October
to her house to see her husband's low head hydro project. He
had come to a workshop that we held with some people who deal
with low head hydro. And DOE's Web site, in fact, has 4,000
small dams and waterfalls listed in New York State alone that
are unused, many of them powered mills of the previous century,
and the water is going--tons of water a second going over and
being wasted. And these are not dams that can be removed
because downstream has been developed. There are houses and
restaurants and marinas and other things downstream.
So these are opportunities for huge numbers of people to be
employed. All the trades people. It would be mechanics and
sheet metal workers and electrical workers and on and on, and
engineers, lawyers to deal with the liability issues when you
have an orphan dam and so on. But Idaho National Laboratory of
our DOE, not a lefty environmental group by any means,
estimates greater than 1,200 megawatts in New York just by
harvesting the water that is already falling over existing
infrastructure, some of which needs to be upgraded.
Now, my staffer's husband, who I went up to their house,
has--they don't have a waterfall, but they have a little stream
about this wide that runs down their property and maybe about a
70-foot drop from the top of their property to the lower part,
and he decided, after going to our workshop, that he was going
to try something, and he dug a trench, created a little pool up
at the top with some boulders to get a little depth of water in
the stream, put a grate with a screen on it to keep debris from
clogging it and a 6-inch plastic pipe buried under the ground
down to about 70 feet less elevation and landed into what looks
like a doghouse, but you open it up, looks like a big blue
motor there upside down. He is running it backwards. He put the
blades on it and split one pipe into four pipes to blow water
at the four blades as they turn around in, and the motor is
acting as a generator running backwards and he is using a
quarter of the power to power their entire house. He could
power three other houses. They are selling power back into the
grid from the project that he did because his eyes lit up when
he got the information that this was possible and that other
people were doing it.
As for the other 4,000 in New York and many more thousands
in New England, these are one of the untapped, unused regional
resources. The Midwest doesn't have the geography, the
topography to have these kinds of waterfalls or dams or stream
flows, but they have other things. And I think we really do
need to diversify and use all these things. And my experience
and the studies that I have seen show that these jobs are real,
that, in fact, the more decentralized our power is, the more
people are hired. It is capital intensive projects are the big
goal of national gas or nuclear plants. They are really good
for the banks that lend the money and then get the interest on
it. Labor intensive, job producing are the many decentralized
and mostly renewable projects that are available, like these
4,000 low head hydro sites in New York.
Lastly, I just want to say there is another staffer I am
very proud of who is with the Wounded Warrior project, did two
tours in Afghanistan, was stop-lossed for 287 days on his
second tour, a medic with a paratrooper unit, a fabulous guy.
Josh Van Sanders is his name, and I spent a good deal of time
riding around in the car with him and going to events, and as
chairman of the Subcommittee on Veterans Disabilities, we had a
lot to talk about. He is also a Purple Heart recipient. But he
said that one time he was on a mountaintop exchanging fire. His
unit was exchanging fire with a Taliban unit on another
mountaintop, and the Taliban unit was solar powered and our
unit was using a diesel generator. And he said, that is wrong.
You know? They don't have to worry about the supply chain and
the tankers blown up in the paths coming across from Pakistan.
So we can make the sensible choices, whatever the reason
is, whether you believe that the climate is warming or not,
there are many reasons to want to do these same things. And I
think that we should try to cooperate, and I hope the next
Congress will do so.
Mr. Chairman, thank you for your leadership of this
committee. And I yield the rest of my time.
Mr. Markey. Again, I can't thank the gentleman enough.
There has been no more conscientious and committed person to
ensuring that this issue is dealt with in a historically
responsible way than you have been. We thank you so much for
your service.
Mr. Kennedy's plane has just landed. So what I think might
be appropriate for him, just to make sure that we recognize his
efforts, is that I am going to deliver my closing remarks right
now with this panel here. And then, at the conclusion of my
remarks because there are six roll calls pending on the House
floor right now, we will then stand in recess so that Mr.
Kennedy can testify himself, perhaps an hour and 15 minutes
from now, to the committee so the record will be complete with
all of those who had been intending to testify.
So I want to close by thanking Speaker Nancy Pelosi who
created this select committee. She did so with her
grandchildren in mind, hoping to ensure that the world we leave
behind is safe, prosperous, and filled with all the natural
treasures that God intended. I want to thank my friend, ranking
member Jim Sensenbrenner, for his bipartisan cooperation in the
way in which we conducted business, the way in which we went to
countries around the world, China, India, and many other places
to study this issue. We may have disagreed on what the remedies
are to deal with the issue, but we traveled, we conducted these
hearings with a measure of bipartisanship that I believe is a
model for how these important historic debates should be
conducted.
The select committee held over 75 hearings. We have focused
on developing solutions to end our dangerous addiction to
foreign oil and create millions of new clean energy jobs. The
select committee looked to domestic energy resources, new
technologies, and efficiency measures that cut waste and save
consumers money. The select committee brought in hundreds of
the world's leading energy and national security experts, from
military generals, energy CEO's, Nobel Prize winning
scientists, private-sector inventors and entrepreneurs and
innovators who are creating the next generation of clean energy
technology. Each and every energy industry had a seat at our
table, from giants like oil and coal, to startups like the
solar innovators at 1366 technologies and synthetic genomics
who have traveled the globe in search of fuel-producing algae.
Their message is clear: If Congress can provide regulatory
certainty and an even playing field, then we can unleash
American innovation and harness our technological advantage.
While some in Congress may question the science of global
warming, the rest of the world does not. The members of this
committee met with world leaders from Germany, China, India,
and other nations large and small. Our members from both sides
of the aisle represented the United States in this global
conversation on energy and climate with dignity, substance, and
class.
As I said in my opening statement, the politics may change,
but the problem isn't going away. To illustrate this point, I
want to share with you a few numbers. Number one, 1.3 trillion.
That is the amount of money consumers have shipped overseas for
foreign oil since the select committee was created in 2007.
Imported oil represents nearly half of our trade deficit. This
massive transfer of wealth is an albatross on our economy and a
boon for terrorist activities around the globe. As long as
foreign oil continues to jeopardize our national security and
economic security, our work in Congress is not done.
Number two, 738 billion. That is the amount of money China
plans to invest in clean energy over the next decade. This will
create jobs that should be created here in the United States.
We have the technological advantage. We have the
entrepreneurial might. But unless we generate the political
will, we will continue to lose our innovation and manufacturing
edge. Losing the jobs race with China is not an outcome that
any of my colleagues would support.
Number three, $4. In the summer of 2008, that was the price
of gasoline that focused this Nation like a laser on finding
alternatives to oil. As the global economy recovers, China and
India continue to grow and supplies remain tight. It is
inevitable that these prices will return. Consumers should not
be forced to suffer for our inaction.
And, number 4, finally, is the number one. We have one
planet. We all share it. We are all responsible for it. 2010 is
on track to be the hottest year on record following the warmest
decade on record. We have heard the warnings from scientists.
We have seen the damage with our own eyes. Some day our
children and grandchildren will read the record of the select
committee. Maybe they will watch our hearings on YouTube. They
will see a respectful and rigorous debate and an unprecedented
understanding of the problem.
Whether or not they see action taken on the solutions
remains to be seen. But trust me, it is a fight that is far
from over. A fight that they will most certainly be watching to
see what decisions we make in order to make sure that we have
not passed on this problem to generations yet to come.
So we thank each of our witnesses for their participation
in this final hearing and with the thanks of the committee, we
will now stand in recess and we will return at the conclusion
of the roll calls.
[Recess.]
Mr. Markey. The Select Committee on Energy Independence and
Global Warming is reconvened to hear its final witness. And we
could have no more distinguished American than Robert F.
Kennedy, Jr. He was delayed because of a violent storm that
went up the East Coast that made it impossible for him to make
it earlier today, but I felt it was very important for him to
be able to present his testimony to this committee so that it
is part of a permanent record that will document the need for
aggressive, urgent action to deal with this issue.
Mr. Kennedy is the chief prosecuting attorney for the
Hudson Riverkeeper and president of the Waterkeepers Alliance,
an environmental organization that protects the ecological
integrity of the Hudson River and its tributaries.
Throughout his career, Mr. Kennedy has been a champion of
environmental issues and has established a reputation as a
successful historic defender of the environment. He has been
named one of Time Magazine's heroes of the planet. He is a hero
to me as well.
We welcome you, Mr. Kennedy. Whenever you feel comfortable,
please begin.
STATEMENT OF ROBERT F. KENNEDY, JR.
Mr. Kennedy. Thank you very much, Mr. Chairman. And thank
you to the other members of the committee and thank you for
reconvening here to accommodate the difficulties that I had
this morning. I want to thank you first of all, Mr. Chairman,
for your years that you put into service in this committee and
that you brought to us, and the ideologic views that you have
to this country. And as you know, as I know, it should not be a
partisan issue and I hope it does not become a partisan issue
over the coming years. There is no such thing as Republican
children or Democratic children. Our country ought to be the
leaders of the world on this, these issues; and instead, we are
looking at the future by staring at a rearview mirror, and it
is not good for our country and it is not good for the world.
I want to just make one brief remark to this committee,
because yesterday the New York State Legislature, New York
State Assembly--and you have my written remarks and I am going
to depart from those. But yesterday, the New York State
Assembly passed a bill that was previously passed by the New
York State Legislature to establish a moratorium on natural gas
drilling in New York State.
This is a controversial area. Sheldon Silver, who is the
chair of the Assembly in New York State, said that they got
more calls on this bill than they have on any other bill. They
had hundreds of bills to consider yesterday. It is a bad sign
for the natural gas industry, it is a bad sign for our country.
We have a thousand trillion cubic feet of natural gas that have
become available for the past couple of years. There is so much
distrust in the grassroots community of the natural gas
industry, and of the regulators, that this bill has become
necessary.
It is not good for our country. We should be replacing the
coal. We have 320 gigawatts of build capacity for coal in this
country. We have 450 gigawatts of natural gas capacity. The
coal capacity is used 99 percent of the time, the gas capacity
is used between 37, 38 percent of the time. And that is not
good for the environment, it is not good for jobs, it is not
good for our country. And it is because of the reckless
drilling protocols that are being employed by the lowest
producers in the natural gas--the lowest cost producers in the
natural gas industry. They are doing bad things, and they don't
have to.
There are three problems with natural gas with fracking.
One is a water management problem. There are technological
solutions. They should be required to do close-looped systems
and they should be required to have transparency in their
drilling fluids. That would solve the problem of water
management.
Number two, there is a problem with migration of methane,
not from the target formations, but usually from high pressure-
low pressure formations that the drop well goes through as it
is trying to reach the target formation. And the reason that
migrates up and blows up the houses or catches the faucets on
fire or contaminates drinking water is because of poor casing
protocols. NRDC has worked with the gas industry to develop
very, very high-quality casing protocols that would prevent
those kinds of migrations. Those ought to be the law in all the
States. We ought to have Federal regulations of that. Then we
need very, very strong Federal enforcement.
Number three, the industrialization of the landscapes. And
that can be dealt with--and this is controversial, in the
environmental community too--but in my view, the best way to do
that is through pooling, saying we can do this horizontal
drilling. We don't need to have 40 or 50 wells per square mile.
You can have a single well per county in many places. And it
increases the revenues that the industry gets, it increases the
revenue of the landowners and of the people of that community.
That is all I am going to say about that. We need
government action on this in order to free up this vast
reservoir, because natural gas isn't just a good replacement
for coal. It is also a natural companion for wind and solar. It
gets rid of the variability problems and lets wind and solar
deliver baseloads to the utilities. So we need to do that, and
I hope that this committee will consider that in the future. It
is a critical issue. Republicans and Democrats ought to get
together on this.
The big issue and the issue that you have been working on
for years, that this committee is trying to solve, is the issue
of our dependence on carbon and on the decarbonization of
American society, which is good for our country. Put aside the
environmental issues. Everything we have got to do to deal with
global warming are things we ought to be doing anyway, for the
sake of our national prosperity, for the sake of building jobs,
for the sake of our national security, our energy security, our
independence, and our international leadership.
We are borrowing $1 billion a day today, mainly from
nations that don't share our values. In order to spend $1
billion to import oil into this country, again largely from
nations that don't share our values, we are--through our deadly
addiction to oil--we are funding both sides of the war against
terror. And we give about $1.3 trillion in subsidies to the oil
industry every year. If you doubt that figure, look at Terry
Tamminen's new book, ``Lives Per Gallon,'' direct Federal
subsidies through the oil depletion allowance, then the
indirect subsidies, the military expenditures, the crop damage,
the air damage, et cetera, et cetera.
We give about half a trillion a year, half a trillion to
the nuke industry, about 1 trillion--nobody has ever done the
calculations--to the coal industry. And these have allowed the
incumbents to dominate the marketplace which otherwise would be
dominated by renewables.
We have extraordinary renewables in this country. We are
the best in the world. My home in Mount Kisco, New York is
powered by geothermal. We could do that with virtually every
home in our country outside of the major cities we have, that
we are number two in solar resources in the world. The
Scientific American just did a study saying that if we were to
harness the solar in an area that is 75 miles by 75 miles in
desert southwest, we could power 100 percent of the existing
grid. The Great Plains States, the Saudi Arabia of wind. We
have enough wind in Montana, North Dakota, and Texas to provide
100 percent of the energy grid of North America three times
over, even if every American owned an electric car. The problem
is developing a marketplace that is rational in this country.
People have said to me for years, What is the biggest
answer to environmental problems? I have always said, Free
market capitalism, true free market capitalism, which we do not
have in the energy sector, and we don't have much in this
country anymore. But the energy sector is almost completely
based on a kind of corporate crony capitalism model that is
funded by subsidies to the big incumbents.
We need to develop a grid system in this country. And I
know your prejudices against a national unified grid because of
the ease with which that would facilitate coal power into New
England when we already have a New England extraordinary wind
resource that we ought to be exporting. But we need a grid
system. We need a grid system, whether it is regional grids or
national unified grids, that are going to create a marketplace
that is governed by rational rules, rather than having 50
different public utility commissions in 50 different States,
each with its own arcane, Byzantine set of rules, a vulcanized
set of rules that restricts access to the grid.
We need a system that creates a rational marketplace that
coordinates the public interest with the marketplace rules. And
right now we have a marketplace--we need a marketplace that
does what a market is supposed to do--which is to reward good
behavior, which is efficiency, and to punish bad behavior,
which is inefficiency and waste.
Today we have a marketplace in the energy sector that is
governed by rules that were rigged by the incumbents to reward
the dirtiest, filthiest, most poisonous, most destructive, most
addictive fuels from hell, rather than the cheap, clean, green,
abundant, and wholesome and local fuels from heaven. We need to
reverse that dynamic. We need a market system.
You know, I have my home--I have geothermal in my home and
I have two solar systems. My home, 24 hours a day, produces
more energy than it uses. It is a power plant. I ought to be
able to sell that back on the grid and get market rates for it.
We need a grid system that will turn every American into an
energy entrepreneur, every home into a power plant, power our
country based upon American ingenuity, resourcefulness, human
energy, what Franklin Roosevelt called American industrial
genius, rather than Saudi Arabian oil. We can do that in our
country. And let me give you two examples of when we have done
this before.
In 1979, the Federal Government created an alternate grid
in this country that connected every American home to the
Internet. A year after that, the CEO of IBM in 1980 said that
personal computers were a dead-end technology. And there were a
lot of other computer companies that we knew about back then
that made that same bet, that are no longer around today or
moved out of the computer business, companies like Honeywell
and others.
Now, today most of us have PCs, and the reason is we
created a national marketplace that rewarded their use. And
what happened to the cost of information, of bits and bytes? It
plummeted to virtually zero. That is what is going to happen to
electrons in this country as soon as we build a national grid
for energy.
In 1996, we created a national unified grid for
telecommunications. Bill Clinton signed the Telecommunications
Act. He told all the baby bells, you have got to unify your
lines. You can no longer restrict access to anybody. The lowest
cost providers can prevail in the marketplace. And that
triggered a telecommunications revolution in this country, and
all of these little gadgets that we now have like I-phones are
the offspring of that revolution.
But what happened to the cost of telecommunications? Well,
yesterday afternoon I was watching TV with my children. I saw
an ad on TV by a company called Vonage, by a company that
promises unlimited long distance overseas and local telephone
calls for $19. Well, that is practically free. Two months ago,
I made a call from Miami to London that cost $74. That is the
old way. The new way is free telecommunications forever,
because we created that national marketplace.
As soon as we create a national marketplace for electrons,
we build out that grid system so that every American can
participate and sell and buy energy on the grid and have a
rational marketplace with rational drivers, we are going to
have essentially free energy forever in this country.
Two weeks ago on Wednesday, one of my companies--I am on
the board of the biggest green-tech venture capital firm in
this country, Vantage Point. I also work as a special adviser
to Starwood Energy, which is one of the largest players in
transmission construction field and generation field. Two weeks
ago we broke ground on one of the largest power plants ever
built in this country, which is Bright Sources power plant,
which you know well, because you helped get this done in the
Mohave Desert. We are going to complete construction in 2
years. It is 2.7 gigawatts, and we have power purchase
agreements with the two biggest utilities in California. A
typical nuke plant, as you know, is about 1,000 megawatts, so
it is about 2\1/2\ times the size of a nuke plant. Well, we are
going to build it in 2 years. A nuke plant will take, who
knows, 20 years to build. A coal plant and a nuke plant costs
15 to $20 billion a gigawatt. This plant costs $3 billion a
gigawatt. A coal plant takes 10 years to build and a coal plant
costs 3 billion a gigawatt, the same as an oil plant, the same
as ours. But once you build our plant, once Bright Source
builds its plant, it is free energy forever because the photons
are hitting the Earth every day for free. All we have to do is
build the infrastructure to harvest them and put them in the
lines; then it is free energy forever.
Once you build that coal plant, now the big costs are just
starting because you have got to go cut down the Appalachian
mountains, ship them across the country in railcars, burn the
coal, poison every fish in America with mercury, acidify the
oceans, acidify the high peaks of the Appalachians, poison,
kill 60,000 people a year, according to EPA's Web site, from
ozone and particulates, and all the other hidden costs of coal.
Once you build an oil plant, now you have got to go to
Saudi Arabia, punch holes in the ground, bring up the oil,
refine it expensively, genuflect to the sheiks who despise
democracy and are hated by their own people, get in periodic
wars that cost $4.3 trillion, according to OMB--that is what
this one is going to cost over the next 20 years--bring it
across the Atlantic, with a military export that Exxon doesn't
pay for, but you and I pay for, then spill it all over the
Gulf, spill it all over Valdez, burn it, and poison everybody
in America.
So the big costs of oil occur after you build that $3
billion plant. Once you build that solar plant, it is free
energy forever.
Here is the math. We use 1,000 gigawatts a day of peak
demand in our country; 500 of those are carbon-based. So to
replace the 500--wind is even cheaper than solar. So to replace
those 500 gigawatts, if we had the transmission system, it is
going to cost about $1.5 trillion--that is less than the Iraq
war--to give us a decarbonized economy that will bring us free
energy forever.
Let me just say one last thing. In 1929, just before the
stock market crash, the Dow Jones industrial average was at
385. In 1942, 13 years later, it was at 85. So the stimulus
package we now call the New Deal put millions of Americans to
work, left millions of Americans--kept them in their homes,
kept millions of farmers in their farms, kept 1,000 banks from
closing. But it did not--it was not robust enough to restore
the American marketplace economy.
Then, a year before Pearl Harbor, Franklin Roosevelt made
his biggest stimulus package ever, which was the preparation
for World War II. And he gave a famous radio speech, and my
grandfather was a part of this because he was part of the
shipbuilding industry that built more tonnage of ships than had
ever been done in history. But Franklin Roosevelt said to this
country, We are going to build 50,000 airplanes a year. His
aides later admitted that just before the radio address, he had
picked that number out of thin air. The year before, we had
built 2,800 aircraft in this country; he said we are going to
build 25,000 tanks a year, we are going to build a ship a day,
we are going to build a battleship every 3 months, an aircraft
carrier every 6 months. We are going to do it until the war is
over and won, and on and on. People laughed at him. He was
ridiculed by editorials from the left and from the right. They
said no industrial mobilization of this kind has ever happened
in the history of the world. How are we going to do it here? He
has overpromised, he has overcommitted.
But Roosevelt went to Detroit and told the automakers, You
are not building cars anymore. You are building tanks and
aircraft and half tracks and amphibious vehicles and bombs and
detonators. Within 6 weeks, they retooled their factories.
Within 6 months, they had met his goals. Within 12 months, they
had surpassed them.
The following year we built 96,000 aircraft in this
country. You had full employment; 160,000 women went to Detroit
and found jobs where they had been black-balled before; 200,000
blacks went to Detroit and found jobs. And that full employment
created aggregate demand for this country, which stimulated the
marketplace and then made us the richest country on Earth, with
half the wealth in the world, for the next 50 years.
We have the opportunity to do that same thing now by
transforming our country into a green-tech economy, to employ
thousands of people, to build pylons across the country and
string wires down the existing railroad tracks and right-of-
ways to create a national grid system, and to build off the
coast of New England, the Google grid that is being
contemplated today, to employ thousands of people building
solar thermal plants in the desert southwest, erecting wind
turbines on every farm in the Midwest that wants them, to go--
teams of tens of thousands to go into people's homes to
pressure-test the homes, to spray in cellulosic insulation.
And, at the end of that we will have a system in place that
gives our country free energy forever, and that will be the
largest tax break in the history of the world. A permanent tax
break. Because that is the biggest cost to American enterprise,
the cost of our energy. And if we can eliminate that or reduce
it significantly, we all of a sudden become the greatest
competitor on the global marketplace.
And that is the way we need to start thinking about this
country. Instead of starting thinking about all the impediments
to doing this and all the things that are going to go wrong, we
need to start adopting a view of this country that has been the
traditional view, which is an idealistic view, a hopeful view,
a view that can allow our children to have a future that they
can embrace, and us to be something that we can give them that
we can be proud of. Thank you very much.
[The statement of Mr. Kennedy follows:]
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Mr. Markey. I thank you so much for that incredible
statement that you made. In a lot of ways, we are going to be
challenged, from the end of this hearing on, for 2 years to
ensure that this vision of what our country can become remains
in front of the American people. Because ultimately as you are
saying, what we need to do is to inject Darwinian paranoia,
inducing competition into the energy marketplace.
We have to make sure that the energy giants, just as the
telecommunications giants, feel the threat of smaller, more
nimble, more cost-efficient ways of communicating or generating
electricity, generating energy generally, to enter into this
marketplace.
And that is ultimately what the Waxman-Markey bill is
intended to accomplish. It was modeled on the
telecommunications laws of the 1990s. I happened to be the
chairman of the committee that passed them, and it turned that
into a different reality. And as you are saying, Wang Digital,
and many other large companies that were household names no
longer exist because they did not understand the change that
was taking place. They did not have to go out of business, but
they did not evolve. They did not see this future.
I think that the attitude that the coal companies have, the
attitude that the oil companies have, is that they can stop
progress indefinitely. But I don't believe they are right. I do
believe there is a green generation out there in the same way
that there was a suffragette movement that rose up to get the
vote for women, and the same way that the young people went
south to be part of the movement to bring the vote to
disenfranchised African Americans in the South. There is a new
green generation out here. And as each year goes by, they are
going to be pressing for the change that has to take place, and
I do think it is going to happen.
So I am still an optimist, as I know you are. We know that
this is inevitable. We know that this change has to take place.
But it will take place, because technology always triumphs.
And the question for America, from my perspective, is not
whether or not technology is going to triumph, but whether
America will be the country that is number one, looking over
its shoulder at number two and three in the world. Or, are we
just importing things that say ``made in China,'' ``made in
Germany, ``made in India, ``made in Brazil,'' made in countries
all over the word?
But we decided, because of the oil and coal industry, that
we are going to tie the hands of entrepreneurs, our venture
capitalists, our young people, to be able to be the global
leaders. That is the challenge.
And what this hearing, this last hearing of the Select
Committee on Energy Independence and Global Warming, needed
ultimately was this kind of inspirational vision which you give
us, Mr. Kennedy, of what the future can be, and will be,
because we are going to make it our future. Each and every
revolution has taken years to happen, but at the end of the
day, I think truth does triumph.
So if you can--and I would ask you to just relate to--a
little bit about this vision that you laid out for us and what
happened in the Gulf of Mexico this spring and summer in terms
of the two alternative paths that our country can travel over
the next generation.
Mr. Kennedy. Well, the two are connected. And actually,
what people need to understand is this is part of the cost of
oil, the same way that the Gulf War is part of the cause of our
addiction to oil.
You know, and the Bush administration, the most recent Bush
administration was kind of coy about this not being an oil war.
The original Bush administration was not coy. They said--in
fact, they had to explain to the American people why are we
going to war to stop Iraq, one dictatorship, from invading
Kuwait, another dictatorship? Why is that a concern of the
American people? And he proffered at that time what he called
the Bush Doctrine, which was that the United States had a right
to intervene in the affairs, the sovereign affairs of other
countries, to protect the vital interests of our oil lines. So
that was the justification for that war.
And the second Gulf War, which we are now still involved
in, grew out of the failure of Saddam Hussein to obey the
treaties from the first Gulf War.
So clearly this is a cost of oil. But it is not the only
cost of oil. And I said, you know, I will refer you again to
Terry Tamminen's book, ``Lives Per Gallon,'' where he--Terry
Tamminen just stepped down as head of California EPA, and he
scrupulously, meticulously inventories the vast raft of
subsidies that we hand over to the oil industry every year. And
they include crop damage, they include human health damage, the
cost of all that. They include the direct Federal subsidies,
like the oil depletion allowance, which is about $5 billion a
year, but also all these indirect subsidies. And among those
are the cost to our country of the Gulf oil spill. And it is
hard to even calculate what that cost will be.
We are finding now that--yesterday there was an
announcement that seafood from the Gulf is in fact contaminated
with dangerous levels of hydrocarbon. The government has tried
to gloss over this fact by doing tests which are smell tests,
you know, to try to smell hydrocarbons in the fish. Of course
you can't do that. And the consumers in the Gulf have been
saying, Wait a minute. We want to know more than just the smell
test. Well, now a number of groups have gone out, including
NOAA, and done these tests and found out there are high levels
of contamination in fish from all over the Gulf. So that is
going to be part of the legacy of the oil industry to our
country.
Let me just talk about some of the subsidies of coal. The
National Academy of Sciences in August of last year, and the
National Research Council, both research arms of the Federal
Government, completed a 10-year study where they found that
every freshwater fish in the United States is now contaminated
with mercury. Well, that is a cost of coal to our country. When
coal says, Oh, we are only 11 cents a kilowatt hour, they are
not telling you that every fish in our country is now
contaminated with mercury.
If you go to EPA's Web site, there are two studies on
there, one by the Harvard School of Public Health that says
that ozone and particulate emissions from coal-burning power
plants kill 60 million Americans every year. That is 20 times
the number of people who were killed in the World Trade Center
attacks, but not just once, year after year after year. And
that is part of the cost of coal. A million asthma attacks, a
million lost workdays.
Another more recent study on EPA's Web site estimates the
cost of ozones and particulates to the public health system in
this country to be $156 billion a year. You have got people out
there complaining about the cost of ObamaCare. Well, if you
want to eliminate all the costs of national healthcare in this
country, just get rid of ozone and particulates from coal-
burning power plants. That is $156 billion a year. You have got
acid rain.
You know, I live 2 hours south of the Adirondacks. I take
my kids fishing and camping and kayaking and swimming up there
and recreating. The oldest protected wilderness on the face of
the Earth has been protected forever as wild since 1988. One-
fifth of the lakes in the Adirondacks is now sterilized from
acid rain. That is the cost of coal, which has also destroyed
the forest cover from the high peaks of the Appalachians, from
Georgia to northern Quebec.
If you fly over the Appalachians today, you will see a
national disgrace. I flew over, not long ago, the Cumberland
Plateau. We are literally cutting down the Appalachian
Mountains. During the Bush administration, we flattened 1.4
million acres, an area larger than the State of Delaware. We
have buried 2,000 miles of rivers and streams, according to
EPA. We have cut down 500 of the largest mountains in West
Virginia, these historic landscapes where Daniel Boone and Davy
Crockett roamed. Well, these were all parts of the cost of coal
that they don't tell you about when they say it is only 11
cents a kilowatt hour.
If you really added up the price of coal, you would find
that it was the most catastrophically expensive method ever
devised to boil a pot of water. And we can do it a lot cheaper
with solar and wind, and we can keep our country healthy and we
can keep it independent, and we can create a lot more jobs.
Mr. Markey. So let's move to solar and wind, if we could.
Everybody knows that there is a Moore's law for semiconductors,
and it told us that today's iPhones would be more powerful than
the last generation's supercomputers. But there is also a
Moore's law for solar photovoltaics as well. Every time
deployment of solar photovoltaics doubles, the cost of solar
falls by 18 percent. So you can see, going back to 1978 when it
was $5 a kilowatt hour, as production globally doubled we are
now down to maybe 23, 24 cents a kilowatt hour, but on this
track to ultimately, by the year 2020, have it be competitive
with coal, because the marketplace works.
Over the last 2 years, the cost of solar has dropped by 50
percent, 5-0 percent, in 2 years, and the industry expects it
to drop by another 50 percent over the next few years. So the
markets play a huge role in this phenomenon, because Moore's
law is not an independent law of physics; but it rests on the
role of markets, because without a vibrant market into which
you sell integrated circuits, the shape of the performance
curve would look very different. And so that is the same thing
that is true for solar. It is the marketplace that creates the
incentive for the physics to have the breakthroughs that then
reduce the cost.
Could you expand now a little bit on your own personal
experience, using the companies that you work with or other
observations that kind of reflect this reality in terms of what
is happening out in the marketplace?
Mr. Kennedy. I mean, kind of the collateral accessory that
I would add to that is that the country that creates the
infrastructure for solar or for wind is going to own the
technologies that the rest of the world wants to buy.
And you look at Germany which now has the largest
deployment--Germany has solar because it was one of the first
ones to develop feed-in tariffs for solar. And Germany has the
largest deployment in the world of solar, but it has less
sunlight than Alaska.
I just came back from China. And When you go into--I toured
all the major solar photovoltaic plants in China, which is now
a Chinese industry. The interesting thing was they are using
American infrastructure in their factories. Their furnaces are
made by GT Solar, which you and I talked about before, which is
a New Hampshire union company. And they have dozens of them in
every factory. Their fusion furnaces are made by Dispatch,
which is a Minnesota company. And those are technologies that
were developed at a time when they were encouraging solar
through rational policies from the Federal Government. We had
companies all over this country that were developing new ways
of creating solar. And a lot of those are still viable, they
are still the marketplace leaders.
But in the last 8 years, you have seen Germany take over
that. So about three-quarters of the infrastructure in these
Chinese plants is German-made. And Germany is now losing its
lead because the Chinese are so aggressively moving forward.
The Chinese have committed, as you know, $738 billion. They are
spending three times what we are right now. They are going to
increase their wind deployment over the next 5 years by 20,000
percent. They are increasing their solar deployment by 1,200
percent. They see this as the arms race of the future. They
know whoever controls this industry is going to be the winner
on the world economic stage. And they are moving aggressively
to do it, and we are sitting on our hands over here.
But now a lot of that original technology, that innovation
technology is being developed in China. All the major research
labs are moving to China. They are going to own that
technology.
So what I am saying is the country that creates the
infrastructure--when I was a little boy, I went to Europe with
my father in the 1960s. Everybody wanted to own an American car
because we made the best cars in the world. Everybody wanted an
American car. They had contempt for their own cars and they all
wanted an American car. Why is that? Because we built a
national highway system. We built the infrastructure that
made--you know, building cars and a marketplace for those cars
right here at home, something that was advantageous for local
industries. So we owned the automobile industry. We developed
all of the modern innovations for the automobile industry here
in this country. And we sold them later to the Japanese, et
cetera, as they improved their infrastructure.
But the countries that have the infrastructure--and what
that means today when it comes to solar, when it comes to wind,
it means the rational economic incentive system that encourages
or incentivizes the quick adaptation, the rapid adaptation of
wind and solar. Whoever has the best legal infrastructure and
incentive and marketplace infrastructures for quick adaptation
is also going to be the nation that owns the technologies that
they are going to be selling to the rest of the world, because
that is part of the industry.
The Chairman. So here is what I would ask then, Mr.
Kennedy. Let us have you give us the last word for the Select
Committee on Energy Independence and Global Warming. What is it
that you want this committee, this Congress to know.
Mr. Kennedy. The Republicans now control Congress. A lot of
them talk about free-market capitalism. And I have said for
many years, the free market is something that will give us the
advantage in these areas. But the marketplace is not a god. It
is a tool. It is like a hammer. You wouldn't worship a hammer.
You would use it to build something that was good for your
children.
And what we have to do is build marketplace incentives that
create competition and create that ferment and incentivize. The
market is an economic engine, but it has to be harnessed to a
social purpose. And the social purpose in this case would be
what do we want as a country. We want energy independence. We
want national security. We want economic independence and we
want prosperity. How do we do that? We create it by creating
rational market incentives that encourage people to invest in
solar and wind, which is economic independence, which is going
to create local jobs, which is going to use local resources,
rather than having to get our resources from the Gulf. So I
would say that would be the best future for our country, to
live up to the values that we have espoused since the beginning
of our history.
The Chairman. Thank you, Mr. Kennedy. And thank you for
your eloquence and thank you for your continued commitment to
raising the profile of this issue so that Congress, the States,
individuals, take the action which we need. The politics may
have changed, but the problems have not changed. We have to
continue to work to make sure that we solve the problems that
you have brought before our committee.
Since this select committee was created 4 years ago, we
have imported $1.3 trillion of oil into our country. It
represents about half of America's trade deficit and it goes
largely to countries that are not our friends. The Chinese have
announced that they are going to spend $750 billion over the
next 10 years on solar and wind and developing that as an
economic engine of growth.
In the 1960s, we had the space race. Now we have a jobs
race. Who will, which country will control these jobs, this
manufacturing sector? The United States cannot sit on the
sidelines. The price of a gallon of gas is going back up to $4
a gallon. It is inevitable. And when that happens, consumers in
America are going to turn to Congress once again and say, What
were you people doing? Why didn't you put something in place
that can break our dependence on OPEC's ability to tip us
upside down at the gas pump and make us pay this $4 or $5
again?
And ultimately, it will be the green generation that is
following on this generation of politicians, and they are going
to ask the question, Why didn't you protect this one planet
that we have? Why didn't you understand the interrelationship,
the interconnectivity of all people on the planet?
That is what this select committee has tried to do over the
last 4 years, to raise these issues, to show how they are all
interconnected, how it all goes to our national security, our
economic security, our environmental security and how
ultimately it is a moral issue. God created this planet. Our
responsibility is to pass it on better than we found it. Maybe
just a small bit better, but better than we found it be.
And right now, the baby boomers, this generation of
political leaders, has failed. They have failed all subsequent
generations. So we cannot stop. We have a responsibility to
stand up to, to fight these interests that want to keep us
addicted to fuels which harm our environment, harm our national
security, and harm our ability to create a new generation of
jobs for American workers.
That is my personal commitment. That is what I am going to
be doing for the rest of my career here in Congress and for the
rest of my life. And I am going to join with you, Mr. Kennedy,
and millions of others out there who are committed to this same
cause.
I thank you for your great service to our country and I
thank all of you who have helped us over the last 4 years to
create this incredible record, led by Speaker Pelosi who made
this her flagship issue 4 years ago. And 35 miles per gallon as
an average fuel economy was considered to be impossible in
January of 2007. Now people realize that it might be the best
thing that can happen economically for General Motors or Nissan
or all of these companies that are in this electric car
revolution.
The same thing is going to happen in every area of American
economic competitiveness once we get the right market-based
incentives on the book. I thank everybody for everything they
have done to help us, the staff especially, over the last 4
years. With that, this hearing is adjourned.
[Whereupon, at 2:10 p.m., the committee was adjourned.]
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