[Senate Hearing 111-1214]
[From the U.S. Government Publishing Office]


                                                      S. Hrg. 111-1214

 LEGISLATIVE HEARING ON S. 1733, CLEAN ENERGY JOBS AND AMERICAN POWER 
                                  ACT

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

                                HEARING

                              BEFORE THE 

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 27, 2009

                               __________

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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                     ONE HUNDRED ELEVENTH CONGRESS
                             FIRST SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
FRANK R. LAUTENBERG, New Jersey      DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland         JOHN BARRASSO, Wyoming
BERNARD SANDERS, Vermont             MIKE CRAPO, Idaho
AMY KLOBUCHAR, Minnesota             CHRISTOPHER S. BOND, Missouri
SHELDON WHITEHOUSE, Rhode Island     LAMAR ALEXANDER, Tennessee
TOM UDALL, New Mexico
JEFF MERKLEY, Oregon
KIRSTEN GILLIBRAND, New York
ARLEN SPECTER, Pennsylvania

                    Bettina Poirier, Staff Director
                 Ruth Van Mark, Minority Staff Director
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

                            OCTOBER 27, 2009
                          
                          OPENING STATEMENTS

Boxer, Hon. Barbara, U.S. Senator from the State of California...     1
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     3
Kerry, Hon. John, U.S. Senator from the State of Massachusetts...     5
Baucus, Hon. Max, U.S. Senator from the State of Montana.........    14
Alexander, Hon. Lamar, U.S. Senator from the State of Tennessee..    15
Klobuchar, Hon. Amy, U.S. Senator from the State of Minnesota....    17
Bond, Hon. Christopher S., U.S. Senator from the State of 
  Missouri.......................................................    20
Specter, Hon. Arlen, U.S. Senator from the State of Pennsylvania.    21
Crapo, Hon. Mike, U.S. Senator from the State of Idaho...........    22
Udall, Hon. Tom, U.S. Senator from the State of New Mexico.......    24
Voinovich, Hon. George V., U.S. Senator from the State of Ohio...    25
Lautenberg, Hon. Frank R., U.S. Senator from the State of New 
  Jersey.........................................................    87
Barrasso, Hon. John, U.S. Senator from the State of Wyoming......    89
Merkley, Hon. Jeff, U.S. Senator from the State of Oregon........    90
Vitter, Hon. David, U.S. Senator from the State of Louisiana.....    91
Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode 
  Island.........................................................    94
Sanders, Hon. Bernard, U.S. Senator from the State of Vermont....    96
Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland    97
Gillibrand, Hon. Kirsten, U.S. Senator from the State of New 
  York, prepared statement.......................................   267

                               WITNESSES

Chu, Hon. Steven, Secretary, U.S. Department of Energy...........   144
    Prepared statement...........................................   146
    Response to an additional question from Senator Lautenberg...   149
    Responses to additional questions from:
        Senator Inhofe...........................................   150
        Senator Voinovich........................................   155
        Senator Vitter...........................................   159
    Response to an additional question from Senator Barrasso.....   161
    Responses to additional questions from Senator Alexander.....   162
LaHood, Hon. Ray, Secretary, U.S. Department of Transportation...   165
    Prepared statement...........................................   167
    Responses to additional questions from Senator Inhofe........   174
    Response to an additional question from Senator Barrasso.....   180
Salazar, Hon. Ken, Secretary, U.S. Department of the Interior....   181
    Prepared statement...........................................   184
    Responses to additional questions from:
        Senator Inhofe...........................................   189
        Senator Barrasso.........................................   194
Jackson, Hon. Lisa P., Administrator, U.S. Environmental 
  Protection Agency..............................................   196
    Prepared statement...........................................   198
    Responses to additional questions from:
        Senator Udall............................................   200
        Senator Inhofe...........................................   201
        Senator Voinovich........................................   220
        Senator Vitter...........................................   222
        Senator Barrasso.........................................   224
        Senator Alexander........................................   225
Wellinghoff, Hon. Jon, Chairman, Federal Energy Regulatory 
  Commission.....................................................   228
    Prepared statement...........................................   230
    Responses to additional questions from:
        Senator Whitehouse.......................................   239
        Senator Udall............................................   244

                          ADDITIONAL MATERIAL

Statement of Shaun Donovan, Secretary, Housing and Urban 
  Development....................................................   269
Statement of Gary F. Locke, Secretary of Commerce................   274
Testimony of Americans for Tax Reform............................   279
Testimony of the Gas Technology Institute........................   283
Report from the Center for American Progress: The Economic 
  Benefits of Investing in Clean Energy..........................   295

 
 LEGISLATIVE HEARING ON S. 1733, CLEAN ENERGY JOBS AND AMERICAN POWER 
                                  ACT

                              ----------                              


                       TUESDAY, OCTOBER 27, 2009

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:33 a.m. in room 
406, Dirksen Senate Office Building, Hon. Barbara Boxer (chair 
of the committee) presiding.
    Present: Senators Boxer, Inhofe, Baucus, Lautenberg, 
Cardin, Sanders, Klobuchar, Whitehouse, Udall, Merkley, 
Gillibrand, Specter, Voinovich, Vitter, Barrasso, Crapo, 
Alexander, and Bond.

           OPENING STATEMENT OF HON. BARBARA BOXER, 
           U.S. SENATOR FROM THE STATE OF CALIFORNIA

    Senator Boxer. The committee will come to order.
    Before I start my 5-minute statement, everyone is going to 
have 5 minutes, and we are doing the early bird rule. Senator 
Inhofe and I have agreed that if we are in the middle of a 
panel and a Senator arrives, we are going to just have them 
have to delay their opening statement so we can keep the flow 
of this going. We do expect a very good attendance on both 
sides of the aisle.
    Senators, this is the first legislative hearing on S. 1733, 
the Clean Energy Jobs and American Power Act. Over the next 3 
days, we will hear from 54 witnesses on 9 separate panels. 
Today I want to welcome my partner in writing this bill, 
Senator John Kerry, and our distinguished Obama administration 
witnesses. I greatly appreciate the President's strong 
leadership on this issue.
    As promised, the Chairman's mark was made public on Friday, 
and we released and posted EPA's economic analysis of the bill. 
Committee rules provide that this document be circulated 3 days 
before the markup. We have done this at least 10 days before 
the markup.
    The Kerry-Boxer bill was based on the successful 
legislation in the House, the Waxman-Markey bill. Our bill is 
straightforward, as you can see on the chart. After outlining 
the findings, goals and targets, Division A lays out a series 
of authorizations, and Division B sets up the pollution 
reduction and investment program.
    EPA's economic modeling found that the Kerry-Boxer bill 
will carry modest costs for America's families, the overall 
impact being 22 cents to 30 cents a day. Let's talk about that 
for a minute. What will America's families get for 30 cents a 
day?
    For 30 cents a day, we will put America in control of our 
own energy future and take a stand for home grown American 
energy, rather than foreign oil from countries who don't like 
us. For 30 cents a day, we will protect our kids from dangerous 
pollution. For 30 cents a day, we will send a signal that 
sparks billions of dollars of private investment in job 
creation. For 30 cents a day, we will be the world's leader in 
clean energy technology.
    No climate bill has ever had this level of review, and the 
Obama administration stands behind this analysis. EPA spent 5 
weeks analyzing the Waxman-Markey bill and another 2 weeks 
analyzing our version. Scientists in the Obama and Bush 
administrations and the National Academy of Sciences and the 
U.N. IPCC tell us that we have a narrow window of time in which 
to avert the ravages of global warming. They tell us about 
frequent and intense storms, wildfires in the west, heat waves 
across the Nation, increased droughts and flooding, threats to 
agriculture, global conflict, refugees and food shortages.
    In 2005, Hurricane Katrina took an estimated 1,700 lives, 
displaced a million people and cost well over $100 billion. 
Four years later, there is still suffering, and it will take 
billions to protect the coast in that region. Katrina provides 
a window into the kind of world we can expect if we fail to 
act.
    S. 1733 is our best insurance against a dangerous future. 
It is a responsible approach that sets attainable goals for 
gradual reductions in carbon emissions. And it protects 
consumers, businesses and workers as we move toward clean 
energy.
    Let me give the warmest of thank yous to John Kerry and his 
staff, as well as to all majority members of this committee and 
their dedicated staffs. Their hard work is reflected in the 
Chairman's mark.
    I also want to thank Senator Carper for agreeing to take 
the helm of the Coal Working Group and for working with 
Senators on and off the committee to produce a positive 
outcome. Of course, I am disappointed that since John Warner 
retired, I don't have a Republican partner on the committee. 
But I am appreciative for the productive conversations I have 
had with Senator Alexander about nuclear energy and for the 
wide ranging conversations and meetings I had with Senator 
Voinovich and his staff.
    We have been helped by environmental organizations, 
business and workers, religious experts, and I thank all of 
them.
    Ladies and gentlemen, here is where we are. Since the 
Supreme Court ruled that greenhouse gas pollution is covered 
under the Clean Air Act, the EPA must move forward to meet its 
responsibilities under the law. Our bill is the best way to 
proceed. It provides flexibility to businesses and powerful 
incentives to drive innovation. It helps consumers, workers, 
agriculture, transportation, energy efficiency, wildlife. It 
helps cities and counties. It will launch an economic 
transformation, and it is deficit neutral, and may even have a 
surplus at the end of the day.
    Over the past four decades, this committee has been at the 
center of our Nation's landmark environmental laws. They were 
written right here in this room. And those who sat in these 
chairs before us never ran from a challenge. Global warming is 
our challenge now, and I am very pleased that today is an 
important milestone on our road to action.
    Members of the committee, I am going to call on Senator 
Inhofe. We are then going to hear from Senator Kerry, who must 
go to a committee hearing. And then we are going to go with the 
early bird rule and we will let all of you know your place on 
that.
    Senator Inhofe.

          OPENING STATEMENT OF HON. JAMES M. INHOFE, 
            U.S. SENATOR FROM THE STATE OF OKLAHOMA

    Senator Inhofe. Thank you, Madam Chairman. We are here 
today to discuss a 923-page bill to fundamentally redesign our 
$14 trillion economy. The bill is no doubt ambitious, but it is 
also extremely costly. I won't argue on the 30 cents a day; it 
is going to be very similar to the other efforts on cap-and-
trade. It is going to be very, very expensive.
    I do want to congratulate you, Madam Chairman, because I 
watched your YouTube this morning. It is the first one I have 
seen. And the fact that you are using the term global warming 
again is--I appreciate that. People have been running from that 
term ever since we went out of that natural warming cycle about 
9 years ago.
    Now, I won't go into a lot of details on the request that 
we have had for a narrative on this thing from the 
Environmental Protection Agency. I will have some questions for 
the Director. But I will let Senator Voinovich talk about that, 
since we have made these requests together over a period of 
time.
    Now, getting the analysis will help cut through a lot of 
the catch words. It will bring into focus the words of 
Representative John Dingell from Michigan, who said cap-and-
trade is ``a tax, and a great big one.'' The Kerry-Boxer is a 
tax, and it will mean more economic pain and suffering and 
fewer jobs.
    When President Obama signed the $780 billion stimulus bill 
into law, he promised to save or create 3.5 million jobs. Since 
then, we have lost 3 million jobs. And the number keeps 
growing. Today the Administration will argue that cap-and-trade 
creates jobs. But it won't.
    The Senate Energy Committee recently had a hearing about 
the cost of cap-and-trade. Here are some of the headlines that 
follow. The Washington Post: ``Cap-and-Trade Will Slow the 
Economy, CBO Chief Says.'' The Wall Street Journal: 
``Congressional Budget Chief Says Climate Bill Would Cost 
Jobs.'' In the Guardian: ``The Obama Climate Change Bill Would 
Hurt the U.S. Economy.''
    Let us recount a telling moment of that hearing. That is 
when Senator Sessions asked the Government witnesses--now, we 
have some overlap here, Ms. Jackson, you are one of them; they 
had the CBO, EPA, EIA and the CRS. He asked them whether anyone 
disagreed with the finding that the net effect of cap-and-trade 
would be a reduction in jobs. None did. Cap-and-trade 
supporters acknowledge job loss. They acknowledge the 
transition to a green economy. I am not sure what that means. 
The CBO director provided some help. They said, transition will 
be painful. The victims of cap-and-trade can't just move on and 
get new green jobs. The transition will mean leaving high 
paying jobs, moving away from hometowns and significant 
reductions in lifetime earnings. Now, that's the CBO that 
stated that.
    Now the majority will say that Kerry-Boxer has provisions 
to soften the transition. This raises two points. First, it is 
an implicit acknowledgment that the bill will destroy jobs. We 
have a provision in the bill that says we are going to try to 
have worker training, because people will be losing jobs.
    Second, I am sure the worker in the cement plant, when he 
loses his job, won't find it very much consolation in the green 
welfare programs. Even the job killing impacts of cap-and-trade 
become clear. We now hear of a grand climate compromise. It 
entails greater support for nuclear plants and more offshore 
and gas drilling. These are sensible policy goals. But why 
attach them to an energy tax that destroys jobs? And can you 
really try to drive fossil fuels into extinction on one hand 
and increase them on the other? It doesn't work.
    This apparent compromise will also entail a massive 
expansion of Government bureaucracy. Senator Webb, a Democrat 
from Virginia, compared it to ``the old Soviet Union.'' 
Consider that in 2003, the Climate Stewardship Act--this is 
interesting, because we have addressed this five different 
times in the Senate. That had 58 pages. The next version in 
2005 had 63 pages. The Lieberman-Warner bill had 344 pages. And 
the Kerry-Boxer has 923 pages. Waxman-Markey was 1,428 pages.
    So if we are talking about a deal, let's focus on nuclear 
and oil and gas drilling; keep taxes and bureaucracy out of it.
    In his speech last week, President Obama dismissed 
opponents of cap-and-trade as cynical and pessimistic. I wonder 
if that applies to the 44 Democrats who voted against the 
Waxman-Markey bill. I think differently. They object to a 
policy that would destroy jobs and radically increase the size 
and scope of Government.
    I think if you just look at this in light of the Kyoto 
Treaty, then the 2003 bill, the 2005 bill, the 2008 bill, the 
one thing they have in common is cap-and-trade is very 
expensive. We are talking about somewhere between $300 billion 
and $400 billion a year. That is something the American people 
can't tolerate, and I don't believe they will.
    Thank you, Madam Chairman.
    [The prepared statement of Senator Inhofe follows:]

                  Statement of Hon. James M. Inhofe, 
                U.S. Senator from the State of Oklahoma

    We are here today to discuss a 923-page bill to 
fundamentally redesign our 
$14 trillion economy. The bill is no doubt ambitious, but it's 
also extremely costly and ineffective. It is a massive new tax 
on consumers that will have virtually no effect on climate.
    This bill necessarily will raise the price of gasoline, 
electricity, food, and just about everything else. So we need a 
comprehensive economic analysis to understand the bill's 
impacts. But we don't have it. We have instead a 38-page 
narrative from the Environmental Protection Agency, the gist of 
which is, ``This bill is a lot like Waxman-Markey, so go see 
our analysis of Waxman-Markey.'' I did read the analysis of 
Waxman-Markey. It's flawed and incomplete. So what do we have 
here? Not much.
    While I have serious problems with EPA's analysis of 
Waxman-Markey and its 38-page ``meta-analysis'' of Kerry-Boxer, 
the latter was not entirely EPA's fault. In its drive to ram S. 
1733 through the legislative process, the majority didn't 
provide EPA enough time to do a serious analysis. Why would the 
majority ram through a 923-page bill to overturn the existing 
economic order? The question answers itself. The public 
deserves more than just a 38-page description of how much S. 
1733 resembles another energy tax passed by the House.
    We were told EPA's work contains ``everything that you ever 
wanted to know.'' Yet EPA glosses over and minimizes key 
issues. Moreover, EPA's analysis of Waxman-Markey lacks the 
real world assumptions that Senator Voinovich and I asked for 
in July. EPA rejected our request--we were told to go and find 
rigorous analysis somewhere else. At this point, I hope we can 
work with EPA to sort this out, or else our ability to have a 
markup will be in jeopardy.
    Getting the analysis will help us cut through the 
catchwords. It will bring into focus the words of 
Representative John Dingell (D-Mich.), who said cap-and-trade 
is ``a tax, and a great big one.'' Kerry-Boxer is a tax, and it 
will mean more economic pain and suffering and fewer jobs.
    When President Obama signed the $787 billion stimulus bill 
into law, he promised to ``save or create'' 3.5 million jobs. 
Since then, we have lost 3 million jobs, and the number keeps 
growing. Today the Administration will argue that cap-and-trade 
creates jobs. With all due respect, there is a credibility 
problem here.
    The Senate Energy Committee recently had a hearing about 
the costs of cap-and-trade. Here are some of the headlines that 
followed--the Washington Post: ``Cap-and-Trade Would Slow 
Economy, CBO Chief Says''; the Wall Street Journal: 
``Congressional Budget Chief Says Climate Bill Would Cost 
Jobs''; and the Guardian: ``Obama climate change bill could 
hurt U.S. economy, panel told.''
    Let me recount a telling moment in that hearing. Senator 
Sessions asked the Government witnesses--and they were CBO, 
EPA, EIA, and CRS--whether anyone disagreed with the finding 
that the net effect of cap-and-trade would be a reduction in 
jobs. None did.
    Cap-and-trade supporters acknowledge some job loss. They 
acknowledge a ``transition'' to the green economy. I'm not sure 
what that means. The CBO director provided some help. He said 
the ``transition'' will be painful--the victims of cap-and-
trade can't just move on and get a new green job. The 
``transition'' will mean leaving high paying jobs, moving away 
from hometowns, and ``significant reductions in lifetime 
earnings.''
    Now the majority will say Kerry-Boxer has provisions to 
soften the ``transition.'' This raises two points: first, it's 
an implicit acknowledgement that the bill will destroy jobs; 
and second, I'm sure the worker at a cement plant, when he 
loses his job, won't find much consolation in green welfare 
programs.
    Even as the job killing impacts of cap-and-trade become 
clear, we now hear of a grand climate compromise. It entails 
greater support for new nuclear power plants and more offshore 
oil and gas drilling. These are sensible policy goals, but why 
attach them to an energy tax that destroys jobs? And can you 
really try to drive fossil fuels to extinction on the one hand 
and increase them on the other?
    This apparent compromise will also entail a massive 
expansion of Government bureaucracy. Senator Webb (D-Va.) 
compared it to ``the old Soviet Union.'' Consider that in 2003, 
the Climate Stewardship Act was 58 pages; the updated version 
in 2005 was 63 pages; the Lieberman-Warner bill in 2008 was 344 
pages; in 2009, Kerry-Boxer is 923 pages and Waxman-Markey is 
1,428 pages. So if we're talking about a deal, let's focus on 
nuclear and oil and gas drilling; keep taxes and bureaucracy 
out of it.
    In his speech last week, President Obama dismissed 
opponents of cap-and-trade as ``cynical'' and ``pessimistic.'' 
I wonder if that applies to the 44 Democrats who voted against 
Waxman-Markey. I think differently: they object to a policy 
that will destroy jobs and radically increase the size and 
scope of Government.
    This is about prudence and common sense. And it's about a 
fundamental difference in vision for the country. We have the 
approach to tax and destroy versus the approach to expand and 
create. The American people prefer the latter. And so do I. 
Thank you.

    Senator Boxer. Thank you very much, Senator.
    Our first witness is the author of the Kerry-Boxer bill, 
and we are very happy you could be here, Senator. We know you 
have many other obligations, but we will be very interested in 
hearing what you have to say in as long as you need to take to 
say it.

             OPENING STATEMENT OF HON. JOHN KERRY, 
          U.S. SENATOR FROM THE STATE OF MASSACHUSETTS

    Senator Kerry. Well, Madam Chairman, thank you very, very 
much. Thanks for the privilege of appearing before this 
committee, Senator Inhofe, and all the members of the 
committee, many of whom I have met with individuals talking 
about this, and all of whom I really want to sit down with and 
talk about this. Because we need to find the path forward.
    I listened carefully, Senator Inhofe, to your comments, and 
I will address some of them as I go along, and I would like to.
    But I want to thank Chairman Boxer, first of all, for her 
passionate, determined, inspirational leadership on this issue. 
She has been a gracious and invaluable collaborator in this 
effort. I am personally grateful to her, as are many people, 
for her effort to push this along. And you may disagree with 
her, but she is determined to try to put America in the right 
place on this issue. And I hope in the course of these hearings 
we will all understand how we are doing that.
    Today we begin the formal legislative process to lead the 
world in rolling back the urgent threat of climate change. I 
believe, and the vast majority, overwhelming numbers of 
scientists and peer reviewed studies across the globe, leaders 
of countries across the globe, presidents, prime ministers, 
finance ministers, environment ministers, all across the 
planet, have all determined that we need to move forward to 
deal with climate change, and that in doing so, Senator Inhofe, 
we will actually improve every sector of our energy economy, 
from coal to nuclear, to wind and solar. We will take crucial 
strides toward energy independence, which strengthens America's 
national security. And critically, we will create millions of 
jobs, new jobs and entire new industries will stay in the 
United States of America.
    We will create jobs that cannot be exported, because we 
will create our energy here at home, which makes America 
stronger and which in fact strengthens our competitive posture. 
It is no surprise that somebody like Jim Rogers, who runs a 
multi-billion dollar company, a CEO of a Fortune 500 company, 
Duke Energy, is one of the leaders, he is the chairman of 
America's Competitiveness Council. He is responsible in that 
capacity for creating jobs and for making America more 
competitive. And he is one of the leaders in saying that we 
need to set a fixed target of pollution reduction in order to 
challenge our economy and in order to grow our economy for the 
future and remain competitive.
    Now, we are not going to do these things if we don't pass 
an aggressive, forward looking climate and energy combined 
piece of legislation. Let me share with you very quickly--I am 
not going to spend much time on this, but I do want to share 
with you why there is an urgency to this. Senator Inhofe, you 
just talked about the costs of doing some of this. Are there 
some costs? Yes, sir. There are some costs. But almost every 
study that looks at the costs does not factor in the impact of 
energy efficiency or the impact of new technology or what the 
impact is of becoming more energy independent.
    And most importantly, they none of them factor in the cost 
of doing nothing. That is far more expensive for your folks in 
Oklahoma or for your folks in any of the other States 
represented on this panel.
    So we need to be honest and realistic as we assess how we 
in fact best protect the interests of our country. There is a 
reason that the leaders of the G20 in Italy recently affirmed 
that we cannot let the temperature of the planet rise more than 
2 degree Centigrade. And the reason is that all of our best 
scientists in peer-reviewed studies tell us that if it goes 
over 2 degrees Centigrade, we risk catastrophic changes to the 
climate, to our crops, to our water supply, to the ocean 
currents, to the ecosystems that we depend on.
    And I will say to you, the science, Senators, is more 
definitive than ever. The science is screaming at us to take 
action. A few years ago, the scientists told us that the Arctic 
ice would be melted perhaps by 2030. It is now going to be 
summer, ice-free, by 2013. And already Russia has gone ahead 
and planted a flag underneath the ocean to say, we have the 
right to take these minerals out of here, because they have an 
ability, because it is ice-free, to be able to go up there and 
do that.
    There are huge conflicts that will come out of what we are 
allowing to happen without addressing it adequately.
    In the 21 years that we have had hearings on this in the 
Senate, Al Gore and I shared the privilege of having the first 
hearings on this in 1988, when Jim Hanson first told us that it 
was happening. And the evidence is now clearer than ever before 
that a voluntary approach just doesn't work.
    We went down to Rio with President George Herbert Walker 
Bush, a Republican Administration, with the efforts of John 
Sununu and Bill Reilly, put in place a voluntary framework for 
a global effort to reduce emissions. Because in 1992, we 
determined that we needed to do this.
    What happened? In every country in the world, emissions 
have gone up faster than is allowable to meet the 2 degrees 
Centigrade standard. And it is because voluntary doesn't work. 
Everybody is waiting for the next person to move. Nobody wants 
to sort of curb in their economy, as you have said, Senator 
Inhofe, because they are afraid they will be non-competitive.
    But the consequences of that are really traumatic. The best 
experts tell us that the last 10 years have been the hottest 
decade on record, since we have kept records of temperature. 
Our oceans have become 30 percent more acidic. And that has a 
profound impact on the spawning grounds and on the krill that 
feed the whales and on the cycle of the oceans.
    Pine beetles have destroyed 6.5 million acres of forest 
land in the western States. I recently listened to Governor 
Ritter from Colorado come in and tell us how in Colorado alone 
they have lost a million acres because beetles that used to die 
off because it got cold now don't die off. So the cycle has 
changed.
    A hundred and eighty Alaskan villages are losing 
permafrost, literally melting the ground beneath their homes 
and feet. The citizens of Newtok, Alaska--ask Lisa Murkowski, 
ask Mark Begich, they will tell you what is happening in 
Alaska. The citizens of Newtok, Alaska, recently voted to move 
their village inland because of the rise of sea level and the 
lack of sea ice in the winter. That is at a cost of some $400 
million.
    The fact is that there is enormous melt-off of our glaciers 
in the western part of our country. Water supply is already at 
issue. The principal supply to American agriculture is at 
issue. And the rivers around the world are at issue.
    The Chinese have taken enormous note of this. I was in 
China 2 months ago. They are fearful that the great rivers of 
China, the Yangtze, the Yellow River, are going to dry up, the 
Mekong. And that affects a billion people and the agriculture 
of their nation.
    Southwestern States in our country are projected now to 
experience permanent drought conditions by mid-century. And the 
area that is burned by western wildfires is projected to nearly 
triple. The fact is that the Siberian ice shelf study, which 
just came out this last year, shows that because the permafrost 
lid is melting, because the oceans are getting warmer, we have 
columns of methane rising now in the ocean. And if you were to 
stand at the place where those bubbles of methane actually 
burst out into the open air and light a match, it would ignite.
    Methane is 20 times more dangerous and damaging than carbon 
dioxide, than CO2. So we have an enormous challenge 
facing us in order to be able to do this. And all of the 
scientists who, in these peer-reviewed studies are telling us 
that these changes may well be irreversible for a thousand 
years.
    An organization as innocent as the Audubon Society has 
reported that there is now a 100-mile swath wide belt in the 
United States where there is a transformation in what plants 
and flowers and bushes and shrubs and so forth will grow in 
America. There is already a migration that has been predicted 
by many scientists. So that is why, Madam Chairman, the 
countries of the world, and there are many other impacts, I am 
not going to go into all of them here now, but that is why the 
countries of the world, including India, China and the United 
States, have agreed to limit this global rise to 2 degrees 
Celsius.
    Now, why is that so critical? Because the current warming 
level of Earth, scientists tell us, is already at about .8 
degrees since the Industrial Revolution. And what is already up 
there in the atmosphere, which we can't get out, has a half-
life, that is, it will continue to do the damage it is doing 
today for another thousand years perhaps.
    That means that what we have put up there that has done the 
damage that has raised the temperature the .8 degrees is 
guaranteed to raise it at least another .8 degrees. That means 
we are going to be at almost certainly 1.6 degrees Centigrade 
before we even do anything, Madam Chairman. And that gives us a 
cushion of about .4 degrees before you reach the 2 degrees, 
which they say could result in catastrophe.
    Now, I can't tell you that it absolutely is. I can't sit 
here and tell you with certainty that I know the answer to 
that. But I can tell you as a public person that if the best 
scientific minds we have in the world in peer-reviewed studies 
are all in unity telling us this is the potential consequence, 
I think as public people we have a responsibility to try to 
respond. And if we are wrong, we will have created more jobs, 
become more energy independent, moved to the point of having 
better health in America and increased the security of the 
United States. If we are right and someone else is wrong and we 
haven't done anything, the results are obviously absolutely 
catastrophic. That is the balance here.
    Now, I believe there is a workable mechanism to get this 
done, Madam Chairman. If you look at our legislation, we ask 
America to do our part, and we have to work, obviously, to 
convince others to do theirs. Let me make it clear that by 
putting this target in place, I believe we will attract private 
investment and spur a new industrial revolution in America. We 
had the great movement of wealth, if you will, in the 1990s, 
when we moved to the tech economy. That is an economy that was 
about a trillion dollars large, and it had about a billion 
users. What we are looking at now is an economy where most 
estimates say it is a $6 trillion economy with 6 billion users. 
Energy economy is the mother of all economies. And right now, 
the United States of America is watching China, watching 
Germany, watching India and other countries race to this 
marketplace at the expense of the jobs of our Nation.
    I believe that the pollution reduction measures that are in 
this bill are very tightly focused for maximum impact. And I 
want to emphasize that some people argue the effect on the 
economy. Senator Inhofe, you have raised this, U.S. 
unemployment, et cetera, why kill more jobs. I have a report 
here, it is a compilation of reports, different reports by the 
Center for American Progress, by the U.S. Conference of Mayors, 
by the American Council for an Energy Efficient Economy, by the 
College of Natural Resources at the University of California 
Berkeley. Every single one of these analyses, we have done them 
for each of your States, for every one of you on this 
committee, and we will do them for everybody on the Senate. 
They show net creation of jobs in every one of your States. 
They show net increase of investment and money moving into your 
States.
    In Idaho, for instance, 7,000 to 14,000 jobs net, according 
to the University of California Berkeley. According to the 
American Council for Energy, by 2020, 200,200 jobs created from 
energy efficient measures, a savings of $226, by 2030, 2,900 
jobs created, $700 million, according to the Center for 
American Progress, $700 million will come into Idaho alone, 
creating 8,000 jobs. There is a variation here.
    But there isn't one of these that doesn't suggest an 
increase of jobs, an increase of investment. We are going to 
create the equivalent of 5 or 10 Google equivalents that are 
going to drive the economy of our country. That is why people 
like DuPont, Dow Chemical, American Power, the Florida Power 
and Light, Duke Energy, Cisco Systems, some of the largest 
companies in America are all saying, do this. Give us a market 
certainty on the price of carbon. Give us a system where you 
will help us to transition.
    Now, I want to just say a word about that if I can. Senator 
Inhofe, this is not economy-wide. Only 7,500 entities in the 
United States of America are covered by this legislation. 
Ninety-eight percent of America's small business is exempt. 
Agriculture is exempt. Transportation is exempt. Small business 
is exempt. So you may say to yourself, well, what do you do 
with that other 2 percent? Well, the fact is that that 2 
percent represents three-quarters of America's greenhouse gas 
emissions. We are only talking about creating a marketplace 
between entities that pollute more than 25,000 tons of carbon 
dioxide a year. That is the equivalent of the output of 2,300 
homes, or 4,600 automobiles, or 130 railway cars full of coal.
    It exempts office buildings, apartment, homes, malls, 
stadiums, small firms. We have to be able to find it in our 
capacity to reduce pollution from 2 percent of America's 
businesses that represent 75 percent of America's pollution.
    Now, let me say another reason we need to do this. Climate 
change and our dependence on foreign oil are a significant 
threat to our national security. There is nothing conservative 
about remaining indebted to hostile regimes for our energy. 
Doubters often talk about the cost of taking action. But I have 
to tell you, every analysis shows that the cost of not taking 
action is more expensive. If we think that it is good for 
America to send $400 billion a year to other countries so we 
can put stuff up into the atmosphere that costs us even more to 
fix, we are crazy. We would be far better off moving more 
rapidly toward the creation of that energy here at home.
    Eleven former admirals and high ranking generals issued a 
seminal report warning that climate change is a ``threat 
multiplier'' with the potential to create sustained natural and 
humanitarian disasters on a scale far beyond those we see 
today. And John Warner, who will testify, our former colleague, 
there is no greater security advocate for the United States, 
speaks eloquently about this, as have others. General Zinni, 
former CentCom commander, said this is going to cost us lives. 
It is going to cost us the deployment of the American military 
because of the crises that will ensue as a consequence of 
allowing this to go unaddressed.
    It threatens to bring more famine and drought, worse 
pandemics, more natural disasters, more resource scarcity and 
human displacement on a staggering scale. And the result is, we 
risk fanning the flames of failed stateism. Madam Chairman, you 
can see this today in Africa. Right now, there is fighting 
between tribes in the Sudan because they have been forced to 
move because of the lack of water and the desertification that 
has taken place. So they move into another area, fight for 
water, fight for location, and the result is conflict and the 
destabilization of a whole region.
    In an interconnected world, that threatens all of us. I 
think you will hear this from Senator Warner. Let me quote 
Anthony Zinni directly. He said ``We will pay the price later 
in military terms. And that will involve human lives. There 
will be a human toll.''
    Fourth issue, Madam Chairman. America's leadership is 
significantly on the line here. Brazil, Mexico, South Korea, 
the European community, Japan, Australia, have all committed to 
significant emissions reductions. Last month, Chinese President 
Hu Jintao pledged to reduce China's emissions below projected 
levels.
    India is working on its own domestic legislation to reduce 
pollution. It is a myth that China and India have been sitting 
on the sidelines. I was just in China. Let me tell you, they 
have tripled their wind goals and targets. They have determined 
to be the world's leader in electric automobiles. They are now 
the world's leader in solar production and in battery storage, 
et cetera. They have moved to put transportation restrictions 
on their automobiles, more strict than the ones that we have in 
this country. And they have put them in place faster. And the 
fact is that they are coming to the negotiating table with an 
agreement that they will be a constructive and positive force 
at Copenhagen.
    Fifth, the economic opportunities that stare us in the face 
are enormous. There are millions of jobs, major improvements to 
every sector of our economy. But I am telling you, Madam 
Chairman, if we hang back, you can tell what is happening. 
Today, of the five top 30 companies of the world in solar, wind 
and advanced batteries, only five are based in the United 
States of America. We invented solar. We invented wind. And we 
pulled back and we allowed those technologies to be developed 
and taken from laboratory to shelf by other countries.
    Germany now has created 280,000 new renewable energy jobs 
and actually employs more people in its renewable energy sector 
than in the legendary German auto industry. That is the future. 
Wind energy alone can bring tremendous benefits.
    I will give you an example, the State of North Dakota. I 
have talked to Byron Dorgan about this. The State of North 
Dakota is ranked by the Wind Power Energy Association as No. 1 
wind potential in the United States of America. It is currently 
number 24 in terms of its production. Though its regular 
economy has grown by about 2 percent over the course of the 
last few years, its renewable energy sector has grown by about 
19 percent. That represents the kind of growth in each of your 
States, if you will take a look at the analysis of these 
studies.
    In Montana, there is a plan to build a $25 million wind 
turbine manufacturing plant in Butte with scientists who are 
trained at Montana Tech. In Pennsylvania, the wind turbine 
manufacturer, Gamesa, has invested over $175 million and put 
over 1,100 Pennsylvanians to work. In Norman, Oklahoma, there 
is a 30-year-old family owned company that has become the third 
largest manufacturer of small wind turbines in the world, with 
installations in all 50 States and over 100 countries. That 
business can grow and compete with the Chinese.
    And that is just a few examples from what comes from a 
clean energy sector.
    Now, I understand there is some concern in the Senate that 
the process is moving too quickly. I will put aside my own 
feelings that a process that began over 20 years ago is 
actually moving too quickly. That could happen only by Senate 
standards, frankly.
    But within the constraints of the Senate, what is happening 
here in this committee is just one step. There are five other 
committees. They are all working. The Energy Committee has done 
part. The Foreign Relations Committee, the Agriculture 
Committee, et cetera. By the time this gets to the floor, a 
comprehensive energy and climate bill will include the inputs 
from six Senate committees. And the foundation of all that work 
has to come through this committee first.
    I will just close. You have been very generous in allowing 
me the time here. Let me just close and say, OK, why put a 
target that is mandatory on the reduction of emissions? Some 
people argue it would be cleaner to have a carbon tax. Well, it 
might be cleaner. But I don't believe that you will change 
behavior with a tax at the level that you might under some 
miracle be able to pass in the Senate. I doubt that there are 
enough people here who would vote for a tax of any kind.
    And therefore, to say you are going to change behavior, you 
are going to have to have a tax that is high enough to force 
companies to be able to reduce emissions, because they are 
going to say, whoops, this is too costly, we have to go find a 
different way to behave, and we are going to invest in the 
different technologies.
    So I don't think this is going to work, which is why 
companies that are big companies have decided to support the 
idea of a targeted pollution reduction, mandatory reduction. 
Because it allows them, if they have been good performers and 
they have reduced their emissions, they can take the difference 
between where they are at and the emissions target and sell it 
to another company that can't yet meet the target or wants to 
be able to continue its current practices.
    That is the marketplace, folks. That is classic American 
capitalism. It is classic marketplace capacity. There isn't a 
dime of public dollar in that. There is not one tax dollar in 
that. It is not a Government-run program. It is a private 
company deciding that it wants to behave this way or that way. 
And depending which way it decides to behave, it gets an asset 
that is worth something, or it sells the asset; it can buy it 
and continue to pollute for a period of time while it 
transitions to a place where they are willing to invest to meet 
the target.
    So I would just say to all of my colleagues, I respect the 
passion on this committee. I am happy to answer any questions.
    I think we have to believe in America's technology ability. 
I do. We saw this in 1990 with the Clean Air Act.
    I will just end on this note. I sat in that room and 
negotiated with John Sununu and President Bush and Bill Reilly. 
And we heard the same arguments. Everybody said it is going to 
cost $8 billion, and you are going to bankrupt us, and you will 
make us noncompetitive, and we can't do it. The environment 
community came in and said, no, no, no, that is just those 
studies that sort of exaggerate things. It is going to cost $4 
billion, and it will take 4 years, and we can do it.
    To the credit of George Herbert Walker Bush, he decided to 
do it. And guess what? We achieved our goals within about a 
year and a half to 2 years at a cost of about a billion and a 
half to $2 billion. Why? Because nobody has the ability to 
predict what happens when you set a target and American 
ingenuity and genius begins to move to create the technologies 
and find the solutions to meet that target.
    I believe that is exactly what is going to happen here if 
we will have the courage to set the goal and lead the world. 
And if we do that, I believe we are going to, in 10, 15 years, 
not only see that we have met the challenge of climate change, 
but we have improved the health in America, we have created 
more jobs, we have strengthened American security, we have met 
our environment responsibility, and we are more energy 
independent. Tell me a public policy choice where you get five 
benefits for one choice. There are very, very few of them.
    Thank you, Madam Chairman.
    [The prepared statement of Senator Kerry follows:]

                     Statement of Hon. John Kerry, 
              U.S. Senator from the State of Massachusetts

    Thank you, Chairman Boxer and Senator Inhofe, for the 
opportunity to discuss a set of issues as important as any we 
face. Chairman Boxer has been a passionate, determined, and 
inspirational leader on environmental issues for as long as 
I've known her--and an invaluable and gracious collaborator on 
this bill.
    Today, we have an opportunity to lead the world in rolling 
back the urgent threat of climate change. We can protect the 
air our children breathe and the water they drink. We can 
improve every sector of our energy economy, from coal and 
nuclear to wind and solar; take crucial strides toward energy 
independence; and create millions of new jobs and entire new 
industries that will stay in America.
    But we can't and we won't do those things if we don't pass 
aggressive, forward looking climate and energy legislation. And 
let me tell you why.
    First, the science is more definitive than ever and more 
troubling than ever, and--21 years since first Senate hearings 
on climate change back in 1988--the evidence is now clearer 
than ever before that a voluntary approach won't get the job 
done.
    NASA scientists--the best experts we have--tell us that the 
last 10 years have been the hottest decade on record. Our 
oceans have become 30 percent more acidic. Pine beetles have 
destroyed 6.5 million acres of forest land in the western 
States. 180 Alaskan villages are losing permafrost--literally 
melting the ground beneath their homes and their feet. 
Southwestern States are projected to experience permanent 
drought conditions by mid-century, and the area burned by 
western wildfires is projected to nearly triple. And worst of 
all, scientists say these changes may well be irreversible for 
1,000 years.
    That's why the countries of the world--including India, 
China and the United States--have agreed to limit the global 
rise in temperature to 2 degrees Celsius.
    Second, there is a workable mechanism to get this done. For 
America to do our part and convince others to do theirs, we 
need to set a mandatory target to reduce the carbon pollution 
that causes climate change--and then we need to drive private 
investment to meet those goals as affordably and efficiently as 
possible.
    The pollution reduction measures in this bill are tightly 
focused for maximum impact: Only companies emitting 25,000 tons 
of carbon each year are covered. These are big polluters--with 
an output equivalent to 2,300 homes, 4,600 automobiles, or 130 
railway cars full of coal. Even as it exempts office buildings, 
apartments, homes, malls and stadiums, farmers, small firms, 
and over 98 percent of America's businesses, the bill still 
covers three-quarters of America's carbon pollution. So this is 
a smart way to start the ball rolling and transition America to 
clean energy.
    Third, climate change and our dependence on foreign oil are 
a threat to our national security. There's nothing conservative 
about remaining indebted to hostile regimes for our energy. 
Doubters often talk about the costs of taking action. Let me 
tell you, the costs of inaction are larger, and frankly they 
become more staggering by the day.
    Eleven former admirals and high ranking generals issued a 
seminal report warning that climate change is a ``threat 
multiplier'' with ``the potential to create sustained natural 
and humanitarian disasters on a scale far beyond those we see 
today.'' Why? Because climate change injects a major new source 
of chaos, tension, and human insecurity into an already 
volatile world. It threatens to bring more famine and drought, 
worse pandemics, more natural disasters, more resource 
scarcity, and human displacement on a staggering scale. We risk 
fanning the flames of failed stateism and offering glaring 
opportunities to the worst actors in our international system. 
In an interconnected world, that endangers all of us. Senator 
Warner, a friend to many here, will speak eloquently to the 
national security case for preventing catastrophic climate 
change. General Anthony Zinni, former commander of our forces 
in the Middle East, warned that without action--and I quote--
``we will pay the price later in military terms. And that will 
involve human lives. There will be a human toll.''
    Fourth, America's leadership is also on the line. While the 
Senate stands still, the world is racing ahead: Japan, Mexico, 
Brazil, South Korea, the EU, and Australia have committed to 
significant emissions cuts. Last month, Chinese President Hu 
Jintao pledged to reduce China's emissions below projected 
levels. India, for its part, is working on its own domestic 
legislation to reduce carbon pollution. So it is a myth that 
China and India have been sitting on the sidelines. The truth 
is, they've been coming to the negotiating table with concrete 
actions and commitments, and they're waiting for us to do the 
same!
    Fifth, and as important as anything, if we act, the 
economic opportunities will be enormous: millions of new jobs 
and major improvements in every sector of the energy economy. 
But if we hang back, we know what will happen, because it is 
happening already. Today, only 5 of the top 30 companies in the 
world in solar, wind and advanced batteries are based in the 
United States. We invented solar and wind technology, but we 
let others master it first, and now Germany has created 280,000 
renewable energy jobs and actually employs more people in its 
renewable energy sector than in the legendary German auto 
industry.
    State by State, a smart energy bill can deliver growth and 
jobs. Wind energy alone can bring tremendous economic benefits. 
In Montana, there's a plan to build a $25 million wind turbine 
manufacturing plant in Butte, with scientists trained at 
Montana Tech. In Pennsylvania, the wind turbine manufacturer 
Gamesa has invested over $175 million and put over 1,100 
Pennsylvanians to work. In Norman, Oklahoma, there's a 30-year-
old family owned company that has become the third largest 
manufacturer of small wind turbines in the world, with 
installations in all 50 States and over 100 countries. And 
that's just a few examples from one clean energy sector! I 
understand that there is some concern inside the Senate that 
this process is moving too quickly. I'll put aside my own 
feeling that a process that began over 20 years ago is quick 
only by Senate standards. But within the constraints of the 
Senate, we know this is only one step--albeit a crucial one--in 
a broad, comprehensive, Senate-wide effort. By the time it gets 
to the floor, a comprehensive energy and climate bill will 
include inputs from six Senate committees. But the foundation 
for all of that work--a cap on carbon pollution--must come 
through this committee first.
    I respect that there is a lot of passion on all sides of 
these issues. People are worried about jobs, about keeping 
energy affordable, and about economic competitiveness. These 
are real and legitimate subjects of concern. And we must 
address them as thoroughly and honestly as we can together. I 
am confident that the more people understand about what we are 
trying to accomplish here--not the politics, but the 
substance--the more they will be willing to join us. So to sum 
up, the science is more urgent than ever. We have a workable 
mechanism to address the challenge in a way that is affordable 
and efficient. Our security, our leadership, and our economic 
future are at stake.
    And frankly, this body's leadership is at stake, too. 
America and the world are waiting to hear from the U.S. Senate. 
World leaders are waiting for a signal that we are serious 
before they make commitments at the Copenhagen climate talks 6 
weeks from now. CEOs and business leaders are waiting for a 
signal from Washington that will give them market certainty.
    Failure to act comes with another cost. If Congress does 
not pass legislation dealing with climate change, the 
Administration will use the Environmental Protection Agency to 
impose new regulations. Imposed regulations are likely to be 
tougher, and they certainly will not include the job 
protections and investment incentives we are proposing. Killing 
a Senate bill is not success; indeed, given the threat of 
agency regulation, those who have been content to make the 
legislative process grind to a halt might well later be 
demanding that Congress secure the kinds of incentives and 
investments we can and should simply pass today.
    For all these reasons it's time for the Senate to lead--and 
with an eye toward our best traditions find common ground to 
move the country forward, keep our country safe and strong, and 
lay the groundwork for decades of economic growth to come.

    Senator Boxer. Thank you, Senator Kerry. We so appreciate 
your expanding on why it is so important that we act. We thank 
you very much.
    I want to say to the committee, we are going to now go to 
opening statements. And we are going to be tough on the clock. 
I do have a request from Senator Baucus, who is late for a 
health care meeting, he would like to go first, if it is OK 
with my side. He said he only needs 3 minutes. So if there is 
no objection, I think everyone knows what is on your shoulders. 
So go ahead.

             OPENING STATEMENT OF HON. MAX BAUCUS, 
             U.S. SENATOR FROM THE STATE OF MONTANA

    Senator Baucus. Thank you. I am keeping Director Orszag and 
Director Summers waiting in my office for 12 minutes. I deeply 
apologize, I will be very, very brief, and I will thank the 
indulgence of my colleagues.
    First, I want to thank the Senator from Massachusetts. 
Senator Kerry has worked so hard on climate change, and 
clearly, his statement today shows how hard he has worked. He 
has done a great job.
    Madam Chairman, I want to thank you and thank Ranking 
Member Inhofe and our witnesses for being here today to discuss 
climate change. The legislation before us today is about 
protecting our outdoor heritage. We, I think all of us in the 
country, certainly those of us in Congress, when we leave this 
place, have a moral obligation to leave it in as good a shape 
or better shape than we found it. If uncontrolled, the impacts 
of climate change put this future at risk.
    The legislation before us today is about our economy. 
Montana, with our resource-based agriculture and tourism 
economies, cannot afford the unmitigated impacts of climate 
change. But we also cannot afford the unmitigated effects of 
climate change legislation. That is why I support passing 
common sense climate legislation that reduces greenhouse gas 
emissions while protecting our economy. And the key word in 
that sentence is passing.
    I have some concerns about the overall direction of the 
bill before us today and whether it will lead us closer to or 
further away from passing climate change legislation. For 
example, I have serious reservations about the depth of the 
mid-term reduction target in the bill and the lack of 
preemption of the Clean Air Act's authority to regulate 
greenhouse gas emissions.
    We cannot afford a first step that takes us further away 
from an achievable consensus on common sense climate change. We 
could build that consensus here in this committee. If we don't, 
we risk wasting another month, another year, another Congress 
without taking a step forward into our future.
    I look forward to working with my colleagues on both sides 
of the aisle in this committee prior to the markup to address 
these issues and other key issues. I think it is very important 
that we do.
    Thank you, Madam Chairman.
    Senator Boxer. Thank you very much, Senator.
    Senator Alexander.

          OPENING STATEMENT OF HON. LAMAR ALEXANDER, 
            U.S. SENATOR FROM THE STATE OF TENNESSEE

    Senator Alexander. Madam Chairman, thank you.
    I have no problem with the problem. My problem is with the 
solution. Eleven academies in industrialized countries say that 
climate change is real, humans have caused most of the recent 
warming. If fire chiefs of the same reputation told me my house 
was about to burn down, I would buy some fire insurance.
    But I would buy insurance that worked, and I wouldn't buy 
insurance so expensive that I couldn't pay my mortgage or my 
hospital bill. That is my problem with this solution. It is 
going to make it harder for Americans to support their 
families. When it is all wrapped up and put together, it is 
going to be an economy-wide cap-and-trade, narrowly defined 
energy mandates, taxes, mandates and surprises.
    My colleagues, I am sure, are going to point out the 
surprises and the things we know. At a time of 10 percent 
unemployment, utility bills going up, manufacturing jobs going 
overseas, a new slush fund in Washington with corporations with 
their hands out. It will be ineffective against fuel, which 
produces 30 percent of carbon, because raising the price of 
gasoline doesn't change human behavior enough to change to 
reduce much carbon.
    If it is like Waxman-Markey, which EPA says it mostly is, 
then according to President Obama's budget director, it is the 
largest corporate welfare program in history. According to CBO, 
it could reduce our gross domestic product by 3 and a half 
percent. Brookings says $300 billion a year, et cetera.
    So the strategy is, taxes, expensive energy and mandates, 
and make 20 percent of our electricity from subsidized 
windmills. But our dream should be cheap energy, to create jobs 
and eliminate hardship. So before we embark deliberately on a 
program to send jobs overseas and make it hard to pay our 
bills, why don't we try a cheap energy strategy for clean 
energy?
    One, build 100 new nuclear plants in 20 years. They are 70 
percent of our carbon-free energy; wind is 4 percent of our 
carbon-free energy. Two, electrify half our cars and trucks in 
20 years. We can do that without building one new power plant 
if we plug them in at night. Three, explore offshore for 
natural gas. It is low carbon. Four, launch four mini-Manhattan 
projects like the one we had in World War II. Secretary Chu 
calls them innovation hubs, to find ways to recapture carbon 
from coal plants, make solar costs competitive, make electric 
batteries better, recycle used nuclear fuel.
    Instead, we have this plan for a national energy tax plus a 
national windmill policy. This windmill policy would require 
building 186,000 50-story wind turbines that would cover West 
Virginia, 19,000 new transmission lines, $170 billion in 
taxpayer subsidies, ridge tops and coastlines and treasured 
landscapes turned into junkyards in the sky, kill a million 
birds a year. And it still would work only a third of the time, 
and you would have to build natural gas or nuclear or coal 
plants to back them up.
    What happened to nuclear? If we are going to war, and we 
had invented a nuclear navy 60 years ago, and it was doing 
exactly what we wanted, and thousands of sailors had lived 
safely on top of the reactors for 60 years, would we stop 
building nuclear ships and start building sailboats?
    Building nuclear power plants, 100 of them in 20 years, is 
the fastest, cheapest, reliable way to reduce carbon from 
utilities, just as electrifying half our cars is the fastest 
way to reduce foreign oil. China is building 132 nuclear 
plants, France is 80 percent nuclear, it has the lowest 
electric rates, among the lowest carbon emission rates in 
Europe. Japan, Taiwan, India, the United Arab Republic, Russia, 
all building nuclear plants. We invented it, and we haven't 
started a new one in 30 years.
    If we went full speed ahead, by 2030, nuclear would produce 
40 percent of our electricity, natural gas 25 percent, 
hydroelectric 10, wind and solar 5. We would come close to 
meeting the Kyoto carbon emissions by 2030 just with nuclear 
plants and electric cars. And presidential leadership could do 
it, remove barriers, provide incentives, fund the Manhattan 
Projects. With presidential leadership, we could build 100 
nuclear plants, electrify half our cars and trucks, find new 
low carbon natural gas, launch the Manhattan Projects, meet our 
clean energy goals, all without a national energy tax and 
without running jobs overseas.
    All 40 Republican Senators agree with this four-part 
agenda. So do many Democrats. Then why are we pursuing a high 
cost national energy tax and subsidizing 186,000 windmills, 
when we could agree on a low cost clean energy plan that would 
create good jobs and low electric fuel bills?
    Thank you.
    Senator Boxer. Thank you, Senator.
    Senator Specter. Oh, I'm so sorry, Senator Klobuchar and 
then Senator Specter. Under the early bird rule.

           OPENING STATEMENT OF HON. AMY KLOBUCHAR, 
            U.S. SENATOR FROM THE STATE OF MINNESOTA

    Senator Klobuchar. Thank you.
    Senator Boxer, I first want to thank you for moving 
proactively on this issue that is so important to our Nation's 
economy, security and environment. Your leadership on this 
issue is well recognized. And I appreciate your working with me 
and our staff on this bill to include provisions to better 
protect the middle class, to expand agriculture allocations and 
to work to provide a stable business environment for companies 
that make energy efficient technology.
    I also appreciate how both you and Senator Kerry have 
worked across the aisle and people like Lindsey Graham and 
others. I hope that ultimately we will have a bi-partisan bill 
here.
    I look forward to working with you, Senator Boxer, on key 
issues including ensuring that the bill further protects middle 
class families as well as businesses and manufacturers from 
fluctuating energy costs. We have done a lot in this area, but 
there is more to do. I look forward to working with my 
agriculture colleagues on further agriculture provisions in 
this bill.
    And finally, I believe that ultimately this bill must 
include a strong renewable electricity standard.
    Let me focus on why this legislation is important. This 
legislation is about putting America back in control of our 
energy supply. It is about our national security, and it is 
about investing in the farmers and the workers of the Midwest 
instead of the oil cartels of the Middle East.
    This is about getting jobs right here in this country. 
Unlike the IT revolution, which was a great thing, but tended 
to bring jobs to certain places in the country, the ET 
revolution, the energy technology revolution, if done right, 
will mean jobs across the country and across demographic lines. 
In other words, the wind turbine manufacturing companies won't 
have signs outside that say, Ph.Ds. only apply.
    Second, there are a wide variety of solutions to our energy 
dependence problem, as Senator Alexander has acknowledged. Some 
critical paths of this bill, which I support, will take years, 
like developing complex technology and building more nuclear 
plants, something that I believe we need to do. But some of the 
solutions, which this bill acknowledges, will be more 
achievable in the short term: energy efficiency, 
weatherization, using some of the existing technologies we 
have, like solar, wind, geothermal, biomass as quickly as 
possible.
    Third, we need an energy bill, as Senator Kerry had so 
eloquently discussed, that can send clear market signals that 
both short-term and long-term investment in energy technologies 
will be rewarded, allowing businesses to plan to invest in new 
technologies and realize long-term development of new 
facilities and operations.
    Finally, we want an energy bill that builds on the work 
being done at the State level. All over the country, we are 
witnessing improvements to our communities on the State level. 
Minnesota has one of the most aggressive renewable electricity 
standards in the country, 25 percent by 2025. Our biggest 
utility is Xcel. Its goal is 30 percent. I have talked to the 
CEO, Dick Kelly. He said they are going to make it, and they 
are going to make it without increasing rates.
    When this legislation passed in Minnesota, it had 
Democratic and Republican support, farmers, environmentalists, 
traditional energy companies. It passed 123 to 10 in the House, 
63 to 3 in our State Senate and was signed into law by a 
Republican Governor.
    So while Minnesota and so many other States are already 
heading down the path toward a new energy economy, the Federal 
Government has not even made it to the trailhead. In a famous 
opinion, Justice Brandeis once wrote that States are truly the 
laboratories of democracy. He said that if one of the happy 
incidences of the Federal system could be that a single 
courageous State may, if its citizens choose, serve as a 
laboratory and try more social and economic experiments without 
risk to the rest of the country.
    Well, he didn't mean by that statement that we should have 
inaction by the Federal Government. And that is what has been 
happening. This bill is an opportunity to put the courage and 
the entrepreneurship of the American people up front and 
center. It is about the thousands of people employed in 
biofuels plants throughout our State, dotting the countryside. 
It is about nine people in Starbuck, Minnesota, that had the 
courage to leave their jobs to go work for a solar panel 
factory. It is about a little phone company in Sebeka, 
Minnesota, that decided they wanted backup power for their 
customers and put together a wind and solar backup system.
    And one guy who is 80 years old decided that he wanted to 
outfit his whole house that way. And they said, well, you know, 
you are not going to get your investment back, sir, for 10 
years, and you are 80 years old. He said, that is OK, I want to 
go green.
    You know, this, if the people of American have this kind of 
courage, this Congress should have this courage. That is why I 
believe we need to move forward on this legislation. I hope 
that eventually we will be doing it on a bi-partisan basis.
    Thank you.
    [The prepared statement of Senator Klobuchar follows:]

                   Statement of Hon. Amy Klobuchar, 
                U.S. Senator from the State of Minnesota

    Senator Boxer, I want to thank you for moving proactively 
on an issue so important to our Nation's economy, security, and 
environment. Your leadership on this issue is well recognized, 
and I appreciate your working with me and my staff on this bill 
to include provisions to protect the middle class, expand 
agriculture allocations, and provide a stable business 
environment for companies that make energy efficient 
technology. I also appreciate how both you and Senator Kerry 
have reached out across the aisle on this issue to Lindsey 
Graham and others. I believe this will be key to getting the 
bill passed--at least that's how we got energy legislation 
passed in my State.
    I look forward to working with you further on key issues 
including ensuring that the bill further protects middle class 
families as well as businesses and manufacturers from 
fluctuating energy costs. We've done a lot in this area, but 
there's still more work to be done.
    As a member of the Agriculture Committee, I'm also looking 
forward to working with my Ag colleagues on additional 
agricultural provisions.
    Finally, the ultimate bill must have a strong renewable 
electricity standard.
    Let me first focus on why this legislation is so important. 
This legislation is about putting America back in control of 
our energy supply. It's about investing in the farmers and 
workers of the Midwest instead of the oil cartels of the 
Mideast. Renewable energy--coming from our wind, sun, ground 
and bio products is by its nature going to involve jobs right 
here in our country. Unlike the IT revolution which tended to 
focus the jobs in certain places in our country, the ET 
revolution, if done right, will mean jobs across this country 
and across demographic lines. In other words, the wind turbine 
manufacturing companies won't have signs outside that say 
Ph.D.s only apply.
    Second, as acknowledged in the bill, there are a wide 
variety of solutions to our energy dependence problem. Some 
things will take years--like developing complex technology and 
building more nuclear plants. But some of the solutions are 
more achievable in the short term--conservation, weatherization 
and using some of the existing technologies--solar, wind, 
geothermal, biomass, as quickly as possible.
    Third, we need an energy bill so that we send clear market 
signals that both short-term and long-term investment energy 
technologies will be rewarded, allowing businesses to plan to 
invest in new technologies and realize long-term development of 
new facilities and operations.
    Finally, we want an energy bill that builds on the work 
being done at the State level. All over the country, we are 
witnessing improvements to our communities through renewable 
energy projects, facilities, and products, as well as a focus 
on increased energy efficiency.
    For renewable electricity, for instance, I note that 
Minnesota is further down the path than any other State.
    By the year 2025, the State's energy companies are required 
to generate 25 percent of their electricity from renewable 
sources such as wind, water, solar, and biomass. The standard 
is even higher for the State's largest utility, Xcel Energy, 
which must reach 30 percent by 2020. CEO Dick Kelly has been in 
my office and said it is going to be tough, but they are going 
to make it, and they'll meet this goal without raising rates.
    When this legislation passed in Minnesota, it wasn't a 
partisan issue. It was supported by both Democrats and 
Republicans--as well as the farmers and environmentalists, 
traditional energy companies and new renewable energy 
companies. It passed overwhelmingly in the Minnesota 
legislature: 123-10 in the House and 63-3 in the Senate, and 
was signed into law by a Republican Governor.
    But while Minnesota and so many are States are already 
heading down the path toward the new energy economy, Federal 
legislation has not even made it to the trail head.
    In a famous opinion Justice Brandeis once wrote that States 
are truly the ``laboratories of democracy.'' He went on to 
describe the special role of States when it comes to 
experimenting with new policies in our Federal system.
    States are where new ideas emerge, where policymakers can 
experiment, where innovative proposals can be tested.
    Brandeis wrote over 70 years ago, ``It is one of the happy 
incidents of the Federal system that a single courageous State 
may, if its citizens choose, serve as a laboratory; and try 
novel social and economic experiments without risk to the rest 
of the country.''
    Yet he did not in any way mean for State action--which has 
been precipitated so often in the energy area this decade as a 
result of Federal inaction--he did not mean for State action to 
serve as an excuse for inaction by the Federal Government. Good 
ideas and successful innovations are supposed to emerge from 
the laboratory and serve as a model for national policy and 
action. That is now our responsibility in Congress.
    When we do this, we need to put the courage and 
entrepreneurship of the American people front and center. 
People in my State believe in this new energy future.
    Or the solar panel factory in Starbuck, Minnesota, where 
nine people left their jobs to go work for this little company.
    Or the story of the little phone company in Sebeka, 
Minnesota, with back-up power. Will take you 10 years. He was 
80. I want to go green.
    By being part of something bigger than themselves, by 
actually seeing this new homegrown energy in their own 
communities, it makes it a lot easier for people to support 
energy legislation, to see it as part of the greater good.
    If you ever visit our office in Washington, you will see a 
picture on the wall, and it's the picture of an angel placing 
the world in some outstretched hands, and the words read, ``The 
angel shrugged. She placed the world in the palms of our hands, 
and she said, `If we fail this time, it will be a failure of 
imagination.' ''
    Well, I don't believe we are going to fail; we can't. If 
nine people in a solar panel factory in Starbuck, Minnesota, 
have the courage and imagination to see a new energy future and 
the world of opportunity before us, Congress can, too.
    Thank you.

    Senator Boxer. Thank you so much.
    Now, we do have a lot of speakers. We know that Secretary 
Salazar must leave by noon. So it is my intention to get where 
we are going, and at that point, if we are really slow, we will 
get to at least Secretary Salazar and go back to our plan.
    So here is the list. It is Bond, then Specter, Crapo then 
Sanders.
    Senator Bond.

        OPENING STATEMENT OF HON. CHRISTOPHER S. BOND, 
            U.S. SENATOR FROM THE STATE OF MISSOURI

    Senator Bond. Thank you, Madam Chair, for holding the 
hearing.
    Unfortunately, this latest cap-and-trade bill was just 
released late Friday night. That is why the EPA discussion 
paper is nothing more than a political document requested by 
advocates and acquiesced by politicians. Career EPA experts 
would usually take about 6 weeks to conduct a thorough economic 
analysis. EPA's analysis of Bingaman-Specter ran 252 pages, 
Lieberman-Warner 193, Waxman-Markey 160. But for Kerry-Boxer, 
EPA slapped together a mere 38 pages of excuses and analogies.
    Left unsaid by EPA is how Kerry-Boxer provides less 
consumer protection against higher prices. The businesses that 
will be hit with this high carbon tax will pass along these 
higher prices, which are disguised taxes, to every family, 
every small business, every farm, in the United States. If you 
think about it, a smaller pie produces smaller slices. In the 
case of Kerry-Boxer, their bill has a more stringent 20 percent 
target in 2020, instead of 17 percent in Waxman-Markey. It 
means it will distribute 1.46 billion fewer allowances between 
2012 and 2030. And while most of Kerry-Boxer and Waxman-
Markey's allocation percentages are the same, the Kerry-Boxer 
allocates smaller. Smaller pie, smaller slices, which mean less 
relief from the burdensome taxes. This means, by my 
calculations, electric consumers will receive nearly $16 
billion less from Kerry-Boxer in protection against higher 
energy prices.
    Since consumers and workers in coal dependent States like 
the Midwest will bear the brunt of this multi-million dollar 
shortfall, we deserve to know how much less it will protect gas 
consumers and trade exposed workers. Another gaping hole is the 
plight of farmers, a major concern in the Midwest and South. 
Cap-and-trade threatens farmers and livestock producers with 
higher production costs, from fuel to run their machinery to 
fertilizer to drying costs to the cost of shipping their goods 
to market. It is as if the Kerry-Boxer bill is telling farmers 
and the ag communities, you are not important. It took away the 
USDA's offset role, negotiated in the House, removed the 5-year 
pause in EPA's indirect land use rule. It proposes uncertain 
potential for ag offsets. It proposes higher production costs 
for farmers. And their bill will result in ag lands taken out 
of production. That means higher food prices for all of us.
    The last dynamic is a result of farmers reacting to a 
carbon offset program by taking land out of production. Higher 
food prices, more pain at the grocery checkout for families. I 
don't know if EPA even understands, or else they chose not to 
discuss in their discussion paper these land production 
dynamics and the regional disparities in crop and production 
cost estimates. America deserves better. America's families, 
farmers, and workers deserve to know how Kerry-Boxer will 
impose trillions of dollars in higher energy taxes, kill 
millions of jobs and treat unfairly entire regions of the 
country such as the Midwest, South and Great Plains.
    The analysis discussed about new green jobs did not mention 
the tremendous costs to existing jobs of this carbon tax to be 
passed throughout our economy. Independent organizations not 
swayed by the Administration's influence, such as the 
Congressional Budget Office, say the same thing, cap-and-trade 
will hurt the economy and cost jobs.
    Now, we can make this country, including the North American 
continent, energy independent in 15 years, if we have some 
leadership to start developing in an environmentally friendly, 
efficient way to tap the energy resources that we have. 
Producing more of the energy we need here, using significantly 
more nuclear power, using energy conservation, using electric 
cars. These will generate more good jobs, produce more revenue, 
instead of costing the tremendous amount of taxpayer subsidies 
for wind and solar. And we can do that without costing jobs 
that are higher pay, existing jobs throughout the economy.
    We want to see changes. But we want to make them smart, 
energy efficient, not kill jobs, not put burdens on families, 
small businesses and farmers.
    I thank the Chair.
    Senator Boxer. Thank you very much.
    Senator Specter.

           OPENING STATEMENT OF HON. ARLEN SPECTER, 
          U.S. SENATOR FROM THE STATE OF PENNSYLVANIA

    Senator Specter. Thank you, Madam Chairwoman.
    I think it is not too much to say that what we are doing 
today may really turn out to be historic, as we grapple with 
very critical objectives. The objective of providing energy for 
our country, to take care of us and our economy in the future, 
to deal with climate change and to protect the planet from 
global warming, and to free ourselves from dependence on OPEC 
and Venezuelan oil.
    I compliment you, Madam Chairwoman, for your prodigious 
work here, and both you and Senator Kerry for producing the 
legislation we are looking toward today. I note, as everyone 
must, the very heavy political overtone at the start of these 
hearings. It is my hope that we will listen to the witnesses. 
We all are concerned about job loss.
    My State, Pennsylvania, is a microcosm. It has been built 
upon coal and steel. And it is critical that any legislation 
take into account those factors. My State has a great deal of 
natural gas with the new Marcellus Shale, opening clean fuel 
for the future. My State is a leader on green jobs. A week ago 
today, I held a hearing in Pittsburgh on the potential of green 
jobs. But at the same time, concerned as to what would happen 
in southwestern Pennsylvania in the coal mines.
    Now, we are building on Lieberman-Warner, and in the 109th 
Congress I worked with Senator Bingaman to try to craft a 
moderate bill which got support from many of the environmental 
groups, got support from the power plants and got support from 
the United Mine Workers. Now, for a Pennsylvania Senator, 
support from those facets, especially the mine workers, is 
very, very important.
    We are open for business for people who have problems and 
ideas. Yesterday, I met with the Building Trades Council in 
Pennsylvania. And they brought to my attention, as it had been 
before, the refinery problem. Well, our refineries are not up 
to date. And there are problems with them. But there are 
thousands of jobs in Philadelphia on the Sunoco refinery and on 
the Conoco Phillips refinery. So when I hear comments about 
loss of jobs and higher costs for consumers, I am very, very 
much concerned with that.
    We have dedicated some $80 billion in the stimulus package 
to wind and hydro power. So we are moving ahead. So it is 
complicated. I have been in the Senate a while, and I haven't 
seen two mammoth legislative problems like health care and 
climate control, which we are facing now. But it would be my 
hope that we will finally get to the witnesses, and then we 
will have other witnesses. And the people who have raised 
objections, I respect them, have worked with them for a long 
time. We will bring their witnesses in, and let's be fact 
oriented, and let's look for public policy. We all have the 
same objectives and the same goals. It would be very refreshing 
in America today if we could find a bi-partisan answer.
    Thank you, Madam Chairwoman.
    Senator Boxer. Thank you so much, Senator.
    Let's see, next is Senator Sanders, who isn't here, so we 
will go--I am sorry.
    Senator Crapo.

             OPENING STATEMENT OF HON. MIKE CRAPO, 
              U.S. SENATOR FROM THE STATE OF IDAHO

    Senator Crapo. Thank you very much, Madam Chairman.
    I want to comment on a few things like process and a few 
aspects of the bill that I want to highlight, and then conclude 
discussing the policy issues that a number of my colleagues 
have already addressed.
    With regard to process, Madam Chairman, I want to 
congratulate you for having some bill language for us to 
evaluate, although we just barely got it. I just went through 
the process in the Finance Committee of having to actually go 
through an entire 2-week markup and vote on a bill that didn't 
exist. In fact, I am not sure it ever did get fully drafted, 
because then it was redrafted as it was merged with the Health 
Committee bill. That process was flawed.
    I appreciate the fact that we have bill language. I would 
hope that as we move through the hearing process here that we 
will also take the time to get a thorough EPA analysis and to 
get a thorough CBO score before we would go to any kind of a 
markup. And let the American public, as well as this committee, 
to truly vet this legislation and understand what the exact 
wording in the bill means and does for us.
    Second, I appreciate our witnesses begin here today. I work 
with all of them and appreciate the relationship I have with 
them and look forward to hearing what they have to say. I do 
wish that the Secretary of Agriculture was here. In fact, Madam 
Chairman, I wish that the legislation gave the Secretary of 
Agriculture a greater role.
    Senator Boxer. Senator, if you would yield without losing 
any time, we do have a statement. He is traveling in China. But 
he has a wonderful statement which I will quote from later.
    Senator Crapo. All right, good. I appreciate that. And 
actually, the legislation as it is now structured puts the EPA 
in charge of the offset programs for farmers and foresters, as 
I understand it; is that not correct?
    Senator Boxer. That is not correct. Again, without losing 
his time, we leave it up, we say the White House will, it is a 
place holder for the Ag Committee, which Chairman Lincoln 
understands. And she is planning to fill it in. So as we have a 
place holder for Finance, we have a place holder for Ag. And in 
the bill, it just says right now that the White House will 
determine who would be in charge of it.
    Senator Crapo. All right, very good. This just shows the 
importance of us being able to have the time to know what is in 
the bill and to vet it adequately. But I really do hope that 
when we get to that point and we get it finalized that we have 
the Department of Agriculture in charge of managing the offsets 
in any bill that we might pass dealing with farmers and 
foresters.
    I want to move now to the policy issues that we are all 
discussing. I really don't believe there is a huge disagreement 
between us on the need for us to move forward and develop a 
very robust and meaningful national energy policy that will 
help us to dramatically remove or reduce our dependence on 
carbon-based forms of energy. I personally think that our 
country is far too dependent on petroleum as a form of energy. 
Not that we shouldn't recognize the need for petroleum and 
develop our own resources, because frankly, we are also far too 
dependent on foreign sources of that energy. And as Senator 
Kerry indicated, that creates a threat not only to our national 
security in a defense context, it creates a threat to our 
economy, as we have most of our eggs in just one or two 
baskets, so to speak.
    So I strongly support developing a national energy policy 
that will help us to become more diversified. I often analogize 
it to an investment portfolio, and very few people would invest 
all of their assets or resources in one place or just a couple 
places. A diversified investment portfolio is clearly a better 
way to approach our energy policy, just like it would be in 
managing one's own financial circumstances.
    Because of that, I am a very strong advocate for wind and 
solar and geothermal and nuclear, which I am going to talk a 
little bit more about, and a number of other kinds of energy. 
My point, though, is very similar to that made by Senator 
Alexander. And that is that as we move to new, strong, robust 
energy policy in our country, we should do so in a way that 
does not devastate the economy. I am concerned that the 
provisions of this legislation would have the impact that many 
of my colleagues have already identified. We can do things like 
focus on conservation aggressively and find tremendous 
reductions of consumption just in the conservation arena. In 
fact, every bit of energy that we conserve is the equivalent, 
in my opinion, to energy generated.
    Second, nuclear power. And I wish the bill did more for 
nuclear power. Reading from the text of the bill itself, which 
does have a nuclear section, it talks about how nuclear energy 
is the largest provider of clean, low carbon electricity, 
almost eight times larger than all renewable power production 
combined, excluding hydroelectric power. This is from the bill 
itself.
    Senator Boxer. [Remarks off microphone.]
    Senator Crapo. I appreciate that. My problem is that we 
continue, in different contexts, to hear positive support with 
regard to nuclear, but the specific serious details that the 
committee needs to be getting into with regard to nuclear, in 
terms of the loan guaranty programs, the financial commitments 
to construction of new sites, the effort to address the 
incredible regulatory burdens and delays that are stopping us 
from being able to move forward aggressively. Those kinds of 
very robust energy policies in the nuclear context need to be 
put in the bill, rather than just the findings about how 
important nuclear is.
    So I appreciate the fact that the Chairman has put this in 
the legislation and I hope to work with her. We are already 
working with many members of the committee to address this 
issue and get a robust energy title.
    Senator Boxer. Thank you very much.
    Senator Sanders isn't here, so we will skip over him until 
he gets back and go to Senator Udall.

             OPENING STATEMENT OF HON. TOM UDALL, 
           U.S. SENATOR FROM THE STATE OF NEW MEXICO

    Senator Udall. Thank you very much, Chairman Boxer. Thank 
you for your leadership. I have said a number of times here 
that you have weighed in in such a way that has been very 
persuasive, and I think Senator Kerry joining us in these 
Tuesday group sessions has been very, very helpful.
    Today we are facing a narrow window of opportunity on three 
fronts: our economy, our environment and our national security. 
Every recent economic downturn in our country has been preceded 
by a major spike in energy prices, and 2008 was no exception. 
With world oil production flat, we are likely going to see 
worse than $4 gasoline when the world economy turns around and 
demand returns. Nobody wants to see that, but I am afraid that 
is where we are headed.
    Our legislation here today offers a way out of that 
economic trap. We can loosen our dependence on foreign oil 
supplies, which are limited and restricted, and create jobs and 
home grown energy.
    This legislation takes a do it all, do it right approach to 
energy policy. The bill today provides powerful incentives for 
plentiful, affordable, renewable energy like wind and solar. 
The bill will create tens of thousands of jobs that save 
hundreds of billions of dollars in energy efficiency. The bill 
provides critical resources to increase the safety and security 
of our nuclear energy power plants. The bill provides 
incentives to tap our abundant low carbon supplies of American 
natural gas, which have increase by 40 percent in just the last 
2 years.
    The bill improves upon the already substantial investments 
in carbon capture and sequestration for coal power that were 
made in the House legislation. And the bill provides strong 
incentives to capture CO2 for enhanced domestic oil 
recovery, which can increase our domestic oil supplies by four 
times, enough supply for a decade or more.
    The bill improves the renewable fuel standard by creating a 
technology neutral standard, which is important for new, 
innovative sources of biofuel like algae. The incentives in 
this legislation are based on a fundamental principle: the 
polluter pays. There should be a fee for permits to pollute, 
since pollution is a cost imposed by a profit making entity on 
society.
    If polluters do not have to consider the costs of their 
actions, then society will face the costs of global warming: 
increased droughts, wildfires, crop loss and flooding. Society 
at large will pay the cost instead.
    Finally, we must find new sources of energy to preserve our 
national security and independence. Two-thirds of the world's 
oil supplies lie in six Middle Eastern nations and Russia, 
which do not, do not operate based on market principles. Future 
Presidents will face national security decisions if we enact 
this legislation and move rapidly toward energy independence.
    And I am going to yield back my time now, because I 
anxiously await the testimony of our excellent panel and look 
forward to hearing Secretary Salazar and the others here. Thank 
you.
    Senator Boxer. Thank you, Senator Udall.
    Senator Voinovich.

        OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, 
              U.S. SENATOR FROM THE STATE OF OHIO

    Senator Voinovich. Thank you, Madam Chairwoman.
    Climate change, I think we know, is a serious and complex 
issue that deserves our full attention. I think that Senator 
Alexander did a very good of eloquently stating that there are 
alternatives to this legislation, and I think that Senator Bond 
did a very good job of outlining the impact that this 
legislation would have on the economy of our country.
    This may be the most single significant piece of 
legislation that has come before this committee, touching every 
section of the economy and having an immense energy, economic, 
environmental and national security consequences. Yet despite 
our requests of earlier this year, the committee plans no 
legislative hearings on specific bill texts. Rather, we will 
proceed with conceptual hearings only. And now I am told we 
will proceed to a markup and final vote on November 3.
    I note that on legislation of significant importance the 
Senate has a history of expending the time and consideration 
necessary to achieve broad bi-partisan support before reporting 
legislation out of committee. For example, when considering the 
American Clean Energy Leadership Act, the Senate Energy 
Committee held 19 formal hearings and 11 open business meetings 
over a span of 5 and a half months before favorably reporting 
out a bill, a bi-partisan bill.
    Following a similar process during consideration of this 
legislation is important, because we cannot afford to get it 
wrong. At this point, we do not fully understand how this 
legislation will impact GDP or the price, supply and 
reliability of electricity, gasoline and other commodities that 
millions of Americans are going to have to pay. What is more, 
we don't know if the bill will have any appreciable impact on 
climate change. EPA's recent economic analysis of the bill 
fails to provide answers to these questions. Instead, it 
compares and contrasts various provisions of 1733 with the 
Waxman-Markey bill.
    First, a credible legislative process on Kerry-Boxer cannot 
be supported by a piecemeal analysis based on estimates from 
the House bill. Second, EPA did not model all the Waxman-Markey 
provisions and include in their assessment assumptions 
concerning the timing and availability of clean energy 
technologies, CCS, nuclear and offsets that defy technological, 
practical and political realities.
    We do have a comprehensive analysis from various outside 
groups on the possible impacts. For example, the American 
Council for Capital Formation has concluded by 2020, the House 
bill could reduce household income in my State of over $261 per 
year, increase energy costs up to 20 percent, and result in the 
net loss of more than 100,000 jobs.
    I have been working with the EPA for a number of months to 
correct these deficiencies. While we made progress on that 
front, we now face a hurried political agenda. At this stage of 
the game, I think the most important thing is that we get a 
comprehensive analysis on this bill before we proceed to 
markup.
    And only the Chairman of this committee and the 
Administration can make this possible. I recall when I had the 
Clear Skies legislation before this committee that the members 
on the other side of the aisle insisted that they have analysis 
of their prospective bills before we marked up the Clear Skies 
legislation. They delayed the markup on three occasions, it was 
over a 2- or 3-month period, in spite of the fact that we 
provided 10,000 pages of analysis.
    Madam Chairman, I made the point the last time around, and 
that was that we needed the EPA to do the analysis, complete 
analysis before this bill went to the floor. I think you 
realize what a disaster it was when it hit the floor because of 
the few number of the members of the U.S. Senate that actually 
supported it.
    In closing, I reference an October 21, 2009, New York Times 
article by John Broder, which states in regard to Copenhagen, 
``The United States and many other countries have concluded 
that it is more useful to take incremental steps toward a 
global agreement rather than try to jam it down through a 
treaty.'' The article goes on to say, ``U.S. officials and 
congressional leaders have said that final legislative action 
on a climate bill would not occur before the first half of next 
year.''
    So Madam Chairman, the question I have for you and Senator 
Kerry and the other members of this committee, why are we 
trying to jam down this legislation now? Wouldn't it be 
smarter--wouldn't it be smarter to take our time and do it 
right, like we didn't do it the last time around that we had 
this legislation before us?
    [The prepared statement of Senator Voinovich follows:]

                Statement of Hon. George V. Voinovich, 
                  U.S. Senator from the State of Ohio

    Madam Chairwoman, climate change is a serious and complex 
issue that deserves our full attention. I acknowledge your 
commitment to timely legislation, but the abbreviated process 
by which this legislation is moving is not conducive to 
thoughtful, bipartisan climate change legislation.
    This may be the single most significant piece of 
legislation that has ever come before this committee, touching 
every sector of the economy and having immense energy, 
economic, environmental and national security consequences. Yet 
despite our requests of earlier this year, the committee plans 
no legislative hearings on specific bill text; rather, we will 
proceed with conceptual hearings only. Now, I am told that we 
will proceed to a markup, and a final vote, on November 3.
    I note that, on legislation of significant importance, the 
Senate has a history of expending the time and consideration 
necessary to achieve broad, bipartisan support before reporting 
legislation out of committee. For example, when considering the 
American Clean Energy Leadership Act (ACELA), the Senate Energy 
Committee held 19 formal hearings and 11 open business meetings 
over a span of 5 and a half months before favorably reporting a 
bill with bipartisan support.
    Following a similar process during consideration of this 
legislation is important because we cannot afford to get this 
wrong.
    At this point we do not fully understand how this 
legislation will impact GDP or the price, supply and 
reliability of electricity, gasoline and other commodities that 
millions of Americans depend upon every day. What's more, we 
don't know if the bill will have any appreciable impact on 
climate change.
    EPA's recent economic analysis of the Kerry-Boxer climate 
bill fails to provide answers to these questions. Instead, it 
compares and contrasts various provisions of S. 1733 with 
Waxman-Markey bill.
    First, a credible legislative process on Kerry-Boxer cannot 
be supported by a piecemeal analysis based upon estimates from 
the House bill. Second, EPA did not model all of Waxman-
Markey's major provisions and included in their assessment 
assumptions concerning the timing and availability of clean 
energy technologies (e.g. CCS and nuclear) and offsets that 
defy technological, practical and political realities.
    We do have comprehensive analyses from various outside 
groups on the possible impacts of Waxman-Markey. For example, 
the American Council for Capital Formation has concluded that 
by 2020 the House bill could reduce household income in my home 
State of Ohio by up to $261 per year on average, increase 
energy costs by up to 20 percent, and result in a net loss of 
more than 100,000 jobs. But this is no substitute for EPA's 
providing a comprehensive, unbiased assessment of the bill.
    I have been working with EPA for a number of months to 
correct these deficiencies. And while we have made progress on 
that front, we now face a hurried political agenda. At this 
stage of the game, I would be willing to release my hold on 
Robert Perciasepe if EPA is given the time necessary to provide 
a comprehensive analysis on the bill before we proceed to mark 
up.
    Last year's bill--the Lieberman-Warner proposal--saw a 
miserable showing on the Senate floor. It gathered only 32 
votes on the Senate floor--and subsequent to the vote, 9 of the 
Senators voting to limit debate sent Senator Reid a letter 
saying they wouldn't have votes for the bill on final passage. 
I predict that if we rush this bill through committee without a 
considered, thoughtful amendment process, we will have a 
similar result.
    Madam Chairwoman, when this committee was considering the 
Clear Skies Act--legislation that was far less complicated or 
far reaching--several analyses were completed as we considered 
legislative text. I recall that Senators Baucus, Carper, 
Chaffee and Obama were adamant that we have an EPA analysis on 
their alternative proposals before moving forward. In fact, 
even after the Administration gave them 10,000 pages of 
analyses, they delayed the mark up three times. I insist that 
similar consideration be afforded to us in this process.
    In closing, I reference an October 21, 2009, New York Times 
article, which states in regard to Copenhagen, ``the United 
States and many other . . . countries have concluded that it is 
more useful to take incremental . . . steps toward a global 
agreement rather than to try to jam through a treaty.'' The 
article goes on to say: ``[U.S.] officials and congressional 
leaders have said that final legislative action on a climate 
bill would not occur before the first half of next year.''
    So Madam Chairwoman, the question I have for you and 
Senator Kerry is, why are you trying to jam this legislation 
through committee when it is unlikely we will move legislation 
or that a treaty will be ratified this year?

    Senator Boxer. Thank you, Senator. I am going to answer a 
couple of things you said, I think it is important.
    No. 1, in terms of process, the committee rules say you 
have to have a bill out for 3 days before markup. Ours will be 
out for 10 days. And I appreciate Senator Crapo's comments 
about that.
    No. 2, this need for bi-partisanship--believe me, I would 
give anything if I had a John Warner still sitting here. We 
don't have it. Climate change, global warming, isn't waiting 
for who is a Democrat and who is a Republican. Either we are 
going to deal with this problem or we are not. That is No. 2.
    And as was stated before, we are going to be in 
negotiations with both sides, with members on and off this 
committee.
    The last point I am going to put in the record, a study 
that shows that Senator Alexander's plan to build 100 nuclear 
plants by 2030 would cost $800 billion, all paid for by 
ratepayers. And most of us on this side of the aisle believe a 
better way to go is our legislation, because putting a price on 
carbon will make the nuclear field way more competitive and 
will result in 200 plants being built.
    So I think that is part of the debate we are going to have. 
Very last point I am going to put in the record, John Kerry's 
good staff work here, analysis of jobs in every State showing 
that, these are net jobs created in Ohio, 35,000 to 61,000 
jobs. These are studies that were done over a great period of 
time. So put all that in record and call on Senator Lautenberg.
    [The referenced information follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Senator Alexander. Madam Chairman.
    Senator Boxer. Yes.
    Senator Alexander. May I ask permission, since you 
mentioned my comment, to put in the record a comparison of 
nuclear and wind power that has a Department of Energy estimate 
that shows the cost of building 186,000 wind turbines is 
approximately the same as building 100 nuclear plants, that it 
would cover 25,000 square miles instead of 100, and that it 
would cost 10 times as much in Federal subsidies and 19,000 
more miles of new transmission lines, which are not part of 
that calculation?
    Senator Boxer. We will put that in the record and make a 
point, I am not supporting having ratepayers pay for those 
windmills outside of this bill either. So I think what you do 
is, if you do this cap-and-trade, all of these have a level 
playing field and you don't pick a winner, because they are all 
going to be winners if they don't emit carbon.
    [The referenced information follows:]
    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 
    
    Senator Inhofe. Madam Chairman.
    Senator Boxer. We are going to move on.
    Senator Inhofe. Well, Madam Chairman, let me ask 
procedurally, if you are going to come through and refute 
things that each member on this side says afterwards, I think 
that is not a good policy unless we get a chance to participate 
in that.
    Senator Boxer. Right, I only do it----
    Senator Inhofe. I sat here for 25 minutes listening to 
Senator Kerry talk about me, and I didn't have a chance to 
respond. I will, however.
    Senator Boxer. I so appreciate it. And I just have to say, 
when somebody says the Chairman isn't being fair and that we 
don't have the bill out there, I need to respond to that. But 
we will all have time later.
    Senator Lautenberg.

        OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, 
           U.S. SENATOR FROM THE STATE OF NEW JERSEY

    Senator Lautenberg. Thanks very much, Madam Chairman. We 
are all indebted to John Kerry for his presentation.
    Even though one could disagree, I don't know whether it is 
in a substantial fact disagreement or political, but the fact 
is, he offered us a view of where we are at that cannot be 
ignored. We are all grateful to him. Along the way, I think we 
ought to have a vote on whether his speech made any sense or 
not.
    But I feel like we are developing an unreality show here. 
The whole thing to me is unreal, I must tell you, friends. We 
are now looking at the number of pages of paper that determine 
whether or not this bill has veracity. I didn't know there was 
such an interest in protecting the trees here. But we hear 
protests about 900 pages.
    The fact of the matter is that we have a very good friend 
on the other side, distinguished Senator, Senator Voinovich; he 
was very proud of his work on Clean Skies and talked about 
producing 10,000 pages worth of information that could be 
viewed and judged.
    Senator Voinovich. It was the analysis, Senator, just the 
analysis of it.
    Senator Lautenberg. So what we are now hearing is that, 
heaven forbid that there are too many pages in this thing. We 
ought to have in our audience a bunch of children, 6 to 10, 6 
to 11 years old, and explain to them why it is that we want to 
fight about this. Do we see any risk to them? Do we see any 
danger? When we look at the evidence in front of us, whether it 
is our physical security or whether it is security for good 
health and long lives.
    There is a film produced on ocean acidification. Thirty 
percent of the carbon dioxide has been typically absorbed in 
oceans. That has increased markedly since the Industrial 
Revolution. The increase is a hundred times faster than any 
change in acidity experienced by marine organism for at least 
20 million years. Ocean acidification affects shellfish, 
primarily by impairing their ability to develop protective 
shells. Carbon dioxide continues to be released into our 
atmosphere. Ocean acidification could harm commercially 
important shellfish, lobster, crabs and mussel.
    And yes, it would be important to hear from the farmers. It 
would be equally important to hear from the fishermen. It would 
be equally important to hear from those who are concerned about 
what is happening with asthma in our society. The same things 
that increase global warming increase temperatures also 
increase susceptibility to asthma. One in 10 Americans today is 
asthmatic. And I wish that we could look into the faces of the 
children and explain in their simple terms, I have 10 
grandchildren, my oldest 16 years old, just turned, has asthma. 
One of my younger granddaughters has diabetes.
    What would I pay in taxes, what would any American spend in 
taxes if we could reverse the damage of an illness that they 
might carry through their lives? What does that cost? Is that 
cost realistic in terms of what we are talking about? No, 
listen. Job loss is a terrible calamity. My father lost his job 
many times during the Depression years, and it was catastrophic 
in our family. But what is the final cost? That is the thing 
that we have to look at.
    And Madam Chairman, please accept the full presentation of 
my speech into the record. But I do want to commend you for 
getting this hearing going, for moving the process along, for 
saying, we have had enough, we are sounding the alarm, America, 
wake up, wake up, your kids are in danger, your families are in 
danger. And let's get to work putting out that fire.
    Thank you.
    [The prepared statement of Senator Lautenberg follows:]

                Statement of Hon. Frank R. Lautenberg, 
               U.S. Senator from the State of New Jersey

    Madam Chairman, global warming is threatening the future of 
our planet. It is harming our health. It is destroying our 
ecosystems. And it is threatening our security.
    In 2007, 11 former admirals and high ranking generals 
warned that climate change could ``create sustained natural and 
humanitarian disasters on a scale far beyond those we see 
today.''
    Testifying before this committee, Retired Vice Admiral 
Dennis McGinn said, ``Without bold action now to significantly 
reduce our dependence on fossil fuels, our national security 
will be at greater risk.''
    According to the CIA's National Intelligence Council, as 
many as 800 million more people will face water or cropland 
scarcity in the next 15 years.
    Too many people fighting for too few resources breeds 
conflict, terrorism and war.
    The military itself could be affected by global warming. 
Major U.S. bases in Norfolk, Virginia, and Diego Garcia in the 
Indian Ocean could be overrun with water if sea levels rise 
just a fraction of what scientists are predicting.
    Our dependence on oil causes global warming, but it also 
distorts our foreign policy, leaving us at the mercy of the few 
countries that control most of the world's oil--and putting the 
national security of our country at risk.
    It is up to us to leave the planet and our economy in 
better shape for generations to come.
    The world's eyes are now on this committee to see if we 
will fulfill our duty--to pass a bill that addresses the 
greatest environmental challenge of our time.
    We must begin by setting a science-based target for 
reducing global warming pollution--and this bill gets that 
done.
    This legislation would reduce emissions in the U.S. by 20 
percent by 2020. That's a modest goal, but one rooted in 
science--and one that promotes clean energy today, not years 
down the road.
    We must invest in our transportation system--because cars, 
trucks, buses and other forms of transportation represent about 
one-third of the greenhouse gases generated in the United 
States.
    This bill is a good start--but we've got to do a lot more 
to support cleaner and more efficient transportation like 
transit and rail. And we must invest in research and 
development to create jobs in the short-term and give our 
country the tools to compete in the long-term.
    Investing in new technologies turns factories that are now 
dark into vibrant centers of industry, building components like 
wind turbines and solar panels. In fact, from 1998 to 2007, the 
number of jobs in America's emerging clean energy economy grew 
nearly two and a half times faster than overall jobs, and these 
jobs have remained strong during otherwise difficult economic 
times.
    In New Jersey alone, more than 2,000 clean energy companies 
employ more than 25,000 people.
    I am proud to say that this bill increases funding for 
clean energy research and development by billions of dollars 
over the life of the bill.
    Madam, Chairman, every generation has a duty. Fighting 
climate change is ours. Nothing less than the security of our 
country, the future of our economy, the health of our families, 
and the survival of our planet are at stake.

    Senator Boxer. Thank you so much, Senator.
    Senator Barrasso.

           OPENING STATEMENT OF HON. JOHN BARRASSO, 
             U.S. SENATOR FROM THE STATE OF WYOMING

    Senator Barrasso. Thank you so much, Madam Chairman.
    Madam Chairman, I have very serious concerns about American 
job losses under this Administration. We must view the promises 
of green job creation made by the President and the authors of 
this bill with legitimate skepticism. The Administration and 
experts told the American public and members in Congress that 
their economic stimulus bill would create millions of jobs 
across America. The economic stimulus package has failed to 
deliver on that promise. In fact, the opposite has occurred.
    Jobs in western States have spiraled downward. In my home 
State of Wyoming, 8,000 jobs were projected to be created; 
instead, 10,500 have been lost since the stimulus passed. 
Throughout the West, thousands of jobs have been lost in every 
western State. In fact, over 2.7 million jobs have disappeared 
nationwide since the stimulus package was passed. The situation 
is only getting worse. The $800 billion stimulus bill is not 
going to save the day.
    The Chair of the President's Council on Economic Advisors, 
Christina Romer, testified last Thursday before the 
Congressional Joint Economic Committee. She stated the stimulus 
package's impact on the economy will weaken from here on. She 
stated, most analysts predict that the fiscal stimulus will 
have its greatest impact on growth in the second and third 
quarters of 2009. By mid-2010, fiscal stimulus will likely be 
contributing little to growth.
    This is a stark admission by the Administration that we 
have already seen the best we are going to see in terms of job 
growth from the President's stimulus. This energy tax bill will 
be an American job killer as well. It is the next attempt by 
the Administration to promise jobs for all, create some for a 
few and let the rest of us fend for ourselves.
    The west and the fossil fuel reliant States in the South 
and the Midwest face a different future than the coastal States 
under this bill. The Director of the Congressional Budget 
Office, Dr. Douglas Elmendorf, gave America a glimpse of that 
future in a recent testimony before the Senate Energy and 
Natural Resources Committee. Dr. Elmendorf stated that the 
fossil fuel sector would mirror the massive job losses 
experienced by the manufacturing industry since the 1970s. He 
also stated that the fact that jobs turn up somewhere else for 
some people does not mean that there are not substantial costs 
borne by people, by communities and by firms in affected 
industries and affected areas. You saw this in manufacturing, 
and we will see this in response to the changes that this 
legislation will produce.
    The 1970s were not a happy time in the Rust Belt 
manufacturing States. No region of this country should have to 
suffer that again. So why are we setting up whole regions of 
the country to have a replay of that era?
    There is a lot of talk about green job creation in this 
energy tax bill to replace lost jobs. The few jobs created will 
not benefit the most affected. Once the jobs have been driven 
away from the towns and cities that rely on the fossil fuel 
industry, chain reactions will occur for the folks who live 
there. The people of Wyoming will not accept this outcome. So I 
urge my colleagues to consider what has already been stated by 
the non-partisan Congressional Budget Office. This massive 
energy tax is a job killer for States that produce the red, 
white and blue energy that our Nation relies upon, and all of 
those people who depend upon fossil fuels.
    Thank you, Madam Chairman.
    Senator Boxer. Thank you very much, Senator.
    Senator Merkley.

            OPENING STATEMENT OF HON. JEFF MERKLEY, 
             U.S. SENATOR FROM THE STATE OF OREGON

    Senator Merkley. Thank you very much, Madam Chair. I 
appreciate your leadership and Senator Kerry's leadership and 
deliberations that have led us to this point to have a bill 
ready to debate and consider in detail in public. Certainly, 
these many months of intensive efforts, both last year and this 
year, have prepared to this point.
    But there is a moment when you need to lay out a bill 
before the public and have the full conversation. I appreciate 
that you all have taken us forward to that point today.
    Many say that this bill is very complicated, and indeed, 
energy touches virtually every aspect of our economy. But this 
bill can be reduced to a series of fairly clear choices. It is 
a choice between clean air or dirty air. It is a choice between 
investing a billion dollars a day in red, white and blue 
American-made energy or sending that billion dollars a day 
overseas to countries like Venezuela and Saudi Arabia and other 
countries that don't always share our national interests.
    This bill is a choice of creating jobs for Americans or 
sending those jobs overseas. It is a choice between a strong, 
secure energy independent America or a weaker, oil addicted 
America. It is a choice between planetary stewardship that 
serves our ecosystems and human civilization well or a rise in 
the Earth's temperature that is devastating for ecosystems and 
for human civilization.
    This bill represents a choice between a forward looking 
American leadership that repositions our energy economy to make 
America an economic powerhouse in the future or backward 
looking American policies that protect and sustain an 
inefficient energy status quo that will undermine our success 
in the coming generation.
    Here in this building, we often wrestle with short-term 
choices versus long-term vision. But our children get this. 
Every university I have been to, when I ask the students what 
their top concern is, they always weigh in that we need to act 
on climate change. They get it because they have seen the 
science. We simply have to look at the Arctic ice, the 
Antarctic ice, the amount of carbon dioxide and the 
acidification of the ocean. Our glaciers, our permafrost, the 
rate of carbon dioxide buildup in the environment. Each one of 
these clear, significant factors can only be missed if you shut 
your eyes or put your head in a hole in the ground.
    Now, some say that this bill moves too fast. The aim is 20 
percent reduction below 2005 carbon dioxide levels by 2020. We 
are already closing on in 9 percent below 2005 levels. That 
means this bill is saying, let's move 11 percent more over the 
next 11 years. That is just 1 percent per year. That is not an 
overly aggressive goal for us to undertake as a Nation.
    In fact, you could argue that this bill is not moving fast 
enough. The Intergovernmental Panel on Climate Change said that 
to limit the probability of reaching a temperature increase 
over 2 percent, developing countries should reduce their 
CO2 by 2020 by 25 percent below the 1990 level. 
Well, to compare apples to apples, this bill will put us at 7 
percent below 1990 by 2020, not 25 to 40 percent.
    We are taking and setting up a framework that moves us 
forward on a vision of reducing carbon dioxide, but few could 
argue that this bill is overly aggressive. We need to 
understand today what our children already understand, that 
this is a debate about the security of our Nation, about how 
clean our air is, about whether we create American jobs, about 
whether we have a strong economy in the future, and about 
whether we are good stewards of our planet for the benefit of 
our ecosystems and human civilization. I hope we in this 
committee can make the right decision.
    Thank you, Madam Chair.
    Senator Boxer. Thank you, Senator.
    Next we will hear from Senator Vitter, and then Whitehouse, 
Gillibrand if she returns, and Cardin. And then we will get to 
the panel.
    Senator Vitter.

            OPENING STATEMENT OF HON. DAVID VITTER, 
            U.S. SENATOR FROM THE STATE OF LOUISIANA

    Senator Vitter. Thank you very much, Madam Chair.
    Like all the members on this side of the dais, I also 
support an aggressive national energy policy that looks to 
dramatically decrease our dependence on foreign sources and 
aggressively get us beyond high carbon fuels. And like other 
members here, I think that needs to focus on conservation, 
nuclear, natural gas and new technologies like electric cars 
and many other advancing new technologies. I think that sort of 
approach, that sort of national energy strategy, would have 
broad based support of the American people and bipartisan 
support from Congress.
    Unfortunately, that is not what we are talking about today. 
I think what we are talking about today, this sort of cap-and-
trade proposal is very different and doesn't have that broad 
based support. I believe this cap-and-trade concept is a bad 
idea in any climate, and is a particularly horrible idea in 
this deep recession, as unemployment continues to grow and 
hover around 10 percent.
    I want to mention four concerns in particular with this and 
similar legislation. First of all, something about the science. 
I believe there is certainly one thing that the science is 
absolutely clear on, and it is beyond debate. And that is, if 
countries like China and India and Russia are not part of a 
carbon reduction global program, that it does not matter what 
we do. And that the only effective actions like this will be to 
dramatically harm our economy.
    If there is any suggestion in the science to the contrary, 
I would love to hear it, and I would love to hear forecasts 
from our Administration witnesses regarding scenarios where 
China, India, Russia and similar powers do not reduce carbon 
emissions. It has been made perfectly clear by them, directly 
from their mouths, that they have no plans to join such a 
global regime. And all three are aggressively pursuing natural 
resource assets around the world and dramatically increasing 
energy production from fossil fuels.
    Secretary Chu mentions in his testimony that China is 
spending $9 billion a month on clean energy. The other side of 
that coin, the bigger side of that coin is that they are 
building two coal-fired power plants a month and securing oil 
resources around the globe.
    Point No. 2 is the cost of all this. I think it is very 
significant that the Obama administration Treasury Department 
developed a cost estimate. And their cost estimate, not a 
Republican one, not a Heritage Foundation one, but their cost 
estimate is that the cost of cap-and-trade would be over $1,700 
a year per household. This would roughly be the equivalent of 
hiking income taxes by 15 percent. Certainly a little more than 
a postage stamp a day. And Treasury stated specifically that 
``Economic costs will likely be on the order of 1 percent of 
GDP, making them equal in scale to all existing environmental 
regulation.''
    Others have agreed with this, including the President on 
the campaign trail: ``Under my plan of a cap-and-trade system, 
electricity rates would necessarily skyrocket. Whatever the 
plants were, whatever the industry was, they would have to 
retrofit their operations. That will cost money. They will pass 
that money on to consumers.'' ``Cap-and-trade would increase 
the cost of energy.'' From Secretary Tim Geithner. ``Under a 
cap-and-trade program, firms will not ultimately bear most of 
the cost of the allowances, but instead would pass them along 
to their customer in the form of higher prices.'' That is Peter 
Orszag, as Director of CBO. Of course, he is now the Obama 
administration head of OMB.
    ``Cap-and-trade is a tax, and it's a great big one.'' John 
Dingell. And Charlie Rangel, ``Whether you call it a tax, 
everyone agrees that it's going to increase the cost to the 
consumer.''
    Point No. 3 is putting points No. 1 and two together. 
Foreign competition does nothing like this. We dramatically 
increase taxes and costs. And obviously, that significantly 
hurts jobs and pushes jobs overseas.
    Thank you, Madam Chairman.
    [The prepared statement of Senator Vitter follows:]

                    Statement of Hon. David Vitter, 
                U.S. Senator from the State of Louisiana

    Thank you, Chairman Boxer; and I would like to thank the 
Administration witnesses for their testimony here today and 
their candor in this most important debate.
    As a recently obtained Treasury Department analysis of cap-
and-trade stated, ``Economic costs will likely be on the order 
of 1 percent of GDP, making them equal in scale to all existing 
environmental regulation.'' As unemployment is headed upward of 
10 percent the impact of further job losses by a massive new 
regulatory program could not be overstated.
    ``Cap-and-trade'' is potentially a new stealth tax in the 
order of magnitude of more than $1,700 per American household 
annually. American families can look forward to an increase in 
their electricity bills, their gas bills, their food bills and 
their utility bills. It is clear that most Americans' standard 
of living will be reduced.
    It doesn't matter if the study is done by the Energy 
Information Administration, the Congressional Budget Office, 
the National Black Chamber of Commerce, the National 
Association of Manufacturers, the Brookings Institute or the 
Heritage Foundation--every legitimate economic analysis says 
that this is a bad idea. The human impact of these new 
regulations, job losses, and the increased price of energy 
should never be marginalized or ignored.
    Senator Gillibrand wrote an insightful op-ed last week in 
the Wall Street Journal titled ``Cap and Trade Could Be a Boon 
to New York.'' This article provided important insight into who 
will make money and how much. The Senator from New York stated 
that ``carbon permits could quickly become the world's largest 
commodities market, growing to as much as $3 trillion by 
2020.'' That is $3 trillion that has to be generated by the 
work of America's farmers, refiners, miners, small businesses 
and manufacturers and then redistributed to Wall Street. It 
will perhaps be the greatest transfer of wealth in U.S. 
history. And it may very well be the greatest scam ever thrust 
on the people of the United States. This program would be the 
equivalent of TARP in perpetuity for a handful of financial 
institutions that have already been bailed out once. And you 
don't need a Republican to tell you that.
    Senator Dorgan recently stated that ``I know the Wall 
Street crowd can't wait to sink their teeth into a new 
trillion-dollar trading market in which hedge funds and 
investment banks would trade and speculate on carbon credits 
and securities. In no time they'll create derivatives, swaps 
and more in that new market. In fact, most of the investment 
banks have already created carbon trading departments. They are 
ready to go. I'm not.'' Senator Dorgan further stated that 
``For those who like the wild price swings in the oil futures 
market, the unseemly speculation in mortgage-backed securities, 
or the exotic and risky financial products like credit default 
swaps that pushed our economy into the ditch, this cap-and-
trade plan will be the answer to their prayers.''
    I look forward to hearing from the Administration on what 
programs they plan on cutting to pay for a transfer in our 
economy from energy jobs that generate massive amounts of 
wealth to energy jobs that require massive amounts of 
subsidies. I also look forward to the Administration discussing 
China's purchase of mineral resources around the world, 
including rare earth minerals. As well, I am not aware of any 
solar project or wind mill that doesn't require mined or 
refined materials or inputs that are derivatives from oil and 
natural gas.
    The CBO has stated that mining and refining jobs will be 
among the most impacted by the proposed cap-and-trade program. 
However, nearly every product made, farmed, built, and 
manufactured requires some derivative from oil and natural gas 
or other minerals. How in the world can it be strategically 
beneficial for the United States to become more dependent on 
mined and refined products from foreign countries?
    Secretary Chu mentions in his testimony the International 
Energy Agency in his support for renewable energy technologies. 
I wonder why he fails to mention that the same agency has 
recommended that Germany end its solar subsidies that will 
total $115.5 billion by 2013. If the U.S. were to take the same 
approach as Germany, U.S. consumers could expect their 
electricity bills to increase by 100 percent. The 
Administration's contention is that a cap-and-trade system 
along with significant subsidies will create a new industry and 
a lot of high tech jobs. Yet Germany's solar producers are now 
scaling back as they are crowded out by Chinese manufacturers.
    A critical point in this whole debate is that China, India 
and Russia have made unequivocally clear that they have no 
intention of agreeing to a cap on carbon emissions. As well, 
all three are aggressively pursuing natural resource assets 
around the world and increasing energy production from fossil 
fuels. It is silly to think that U.S. businesses will be able 
to compete on the international level when they are subject to 
carbon caps and regulation, increased energy costs and an 
easily manipulated market scheme. Secretary Chu mentions in his 
testimony that China is spending $9 billion a month on clean 
energy. They are also building two coal-fired power plants a 
month, are increasing nuclear power generation and are securing 
oil resources across the globe.
    Secretary Chu also mentions Denmark as an example, a 
country where electricity prices are more than 200 percent 
higher than they are in the United States. One recent study 
shows that each wind related job in Denmark is taxpayer 
subsidized at the rate of $90,000 to $140,000 per job. In fact, 
the Danes pay more for their power than anyone in the European 
Union.
    Despite my concerns with the idea of a cap-and-trade 
program, I do support investment and research in renewable 
technologies. I do believe a robust plan for investment should 
be in place, but to do so we must not be borrowing money from 
China or stealing money from American families under the guise 
of ``global warming.'' The greatest opportunity for investment 
in new technologies is revenue generated from increased 
domestic energy production. Recent analysis suggests that 
increased domestic resource production could represent $8 
trillion in GDP, $2.2 trillion in incremental tax receipts, and 
perhaps 2 million jobs or more. All without borrowing a dime or 
increasing taxes even a penny.
    Finally, there are significant issues that need to be 
raised and questions that need to be answered in regard to this 
program. Some of those questions include:
    (1) Who are the winners and losers under cap-and-trade?
    (2) What States benefit, and what States are adversely 
impacted?
    (3) How does it affect the U.S. strategically to be 
importing more refined mineral products and refining less 
domestically?
    (4) How are Federal and State treasuries affected by moving 
from industries that generate massive amounts of wealth to 
industries that require massive amounts of subsidies?
    (5) Given that reliable low cost energy is one of the 
greatest equalizers in the history of mankind, how are families 
impacted by dramatically increasing costs?
    (6) Who are the benefactors of any ``third party'' 
certifying provisions, and how much money are they anticipating 
receiving?
    (7) Why are Administration officials claiming that ``we 
must reduce our carbon emissions by 80 percent by mid-century 
to stabilize atmospheric greenhouse gas concentrations'' when 
there are no models or studies to support such statements, 
especially without similar reductions from China, India or 
Russia?
    (8) Who are the major investors in the Chicago Climate 
Exchange, and in what countries are the assets held?
    (9) Why not a single one of the computer models predicted 
the stabilizing, if not cooling, atmospheric temperatures the 
world has experienced over the last 10 years?
    (10) If the United States is to sign a binding 
international agreement, what freedoms and pillars of the 
democratic process are we asking American citizens to cede to 
an international body?
    Thank you, and I look forward to asking questions of these 
witnesses.

    Senator Boxer. Thank you very much, Senator.
    Senator Whitehouse.

         OPENING STATEMENT OF HON. SHELDON WHITEHOUSE, 
          U.S. SENATOR FROM THE STATE OF RHODE ISLAND

    Senator Whitehouse. Thank you, Madam Chairman.
    President Obama said last week at MIT, everyone in America 
should have a stake in legislation that can transform our 
energy system into one that is far more efficient, far cleaner 
and provides energy independence for America. The letters and 
phone calls I received from constituents in Rhode Island 
overwhelmingly support clean energy legislation and demonstrate 
the momentum growing behind this effort.
    Rhode Islanders and Americans across our Nation acutely 
understand the benefits of becoming the world's leader in clean 
energy technology and the risks of failing in that endeavor. 
Some States, like Rhode Island, transitioned at their own 
expense to cleaner energy years ago. Other regions of the 
country are new to this endeavor. But there is emerging a 
shared sense of purpose across the country. Even my colleagues 
from our coal States, on and off this committee, are seriously 
engaged in this discussion for the first time.
    Americans are brought together by our common understanding 
that our current fossil fuel energy habit is not sustainable 
and by our common recognition that America can and should lead 
the world to move to a clean energy economy.
    The United States has always been at the forefront of 
technological and economic advancement, from Slater Mill at 
Pawtucket to the world's first automobile and airplane, to air 
conditioning and the light bulb. We put the hand of man on the 
Moon, on Mars and on Venus and opened the computer era with the 
invention of the microprocessor and the Internet. It is in 
America's DNA to innovate.
    The next great economic revolution is the race to clean 
energy. Yet America continues to rely today on the same fuels 
and energy sources that fed the manufacturing centers and steam 
engines of the Industrial Revolution over a century ago. Oil 
still accounts for approximately 40 percent of our total energy 
needs, and 70 percent of this oil is imported from foreign 
countries, many of whom, to put it mildly, are not committed to 
our best interests.
    But we fed the flow to the oil cartel of hundreds of 
billions of dollars rather than step forward into the clean 
energy economy that beckons, promising clean, abundant, 
renewable American energy sources. Millions of hard working 
Americans could be back on the job, building and servicing an 
American clean energy infrastructure.
    In the last 10 years, jobs in the clean energy sector have 
grown at a rate nearly two and a half times faster than overall 
jobs. And these jobs can be created anywhere in the country, 
including States like my own State of Rhode Island, where jobs 
are now most scarce. We have only begun to scratch the surface. 
There is strong and growing domestic demand for wind turbines, 
solar panels and advanced batteries. Yet almost half our 
turbines are imported. Only 1 of the top 10 solar component 
manufacturers calls the United States home. And China, Japan 
and Korea are taking the lead in battery research.
    As John Doerr testified before this committee, if you list 
today's top 30 companies in solar, wind and advanced batteries, 
American companies hold only 6 spots. The Clean Energy Jobs and 
American Power Act is key to unshackling America from implicit 
subsidies to dirty foreign fuels and putting us on the path 
toward prosperity and world economic leadership.
    History has stood us at this point of choice. Winston 
Churchill described those small agate points on which the 
balance of the world turns. We are at one now. We can reach to 
the clean energy future that beckons, pave the way for jobs and 
energy independence at home and show leadership in the world 
economy abroad. Or we can sit idle, beguiled by the money and 
spin of polluting industries, and let destiny's moment pass. 
The right choice is clear, and I am confident that we will make 
it, perhaps ultimately in bi-partisan fashion.
    I hope we can act soon, and I for one have not lost hope 
that buoyed by a success on health care reform, we can turn 
swiftly and with optimism to meeting our responsibilities on 
this front. I concur with Senator Kerry that we are not moving 
too quickly. By all reasonable measures we are all moving, and 
for a long time have been moving too slowly.
    Thank you, in particular, Madam Chairman, for your 
inspirational, collegial, passionate and determined leadership. 
I yield the remainder of my time.
    Senator Boxer. Thank you so very much.
    Senator Sanders has come back to join us. We welcome you 
back, and then you will speak now and then Senator Cardin, and 
then we will get to our panel.

          OPENING STATEMENT OF HON. BERNARD SANDERS, 
             U.S. SENATOR FROM THE STATE OF VERMONT

    Senator Sanders. Thank you, Madam Chair. Let me just echo 
what Senator Whitehouse has just said. This has been an 
extraordinary process, and I thank you and Senator Kerry for 
the openness of that process.
    The issue that we are dealing with today is very different 
than many of the other issues that we deal with. Do you know 
why? Because what we are dealing with is not a political 
compromise, it is not just trying to get votes. You are dealing 
with science. And at the end of the day, we can have a bill 
passed and have a great celebration in the White House, and it 
may not be good enough. Because as you know, Madam Chair, what 
we are hearing from virtually all of the scientists that come 
before this committee, what are they telling us? What they are 
telling us is that, we told you in the past that the problem 
was serious, but we underestimated the problem. That if we do 
not act aggressively, the planet that we are leaving to our 
children and grandchildren will be a planet severely damaged in 
terms of drought, in terms of disease, in terms of flood, in 
terms of extreme weather disturbances. According to the CIA, in 
terms of national security issues.
    And the question is, do we have the brains and the courage 
to address that crisis? And at the same time understand that in 
terms of our economy, what we are doing is preventing hundreds 
and hundreds of billions of dollars of damage a year while, as 
we go forward, we create millions of good paying jobs. That 
seems to me a no-brainer.
    So the opportunity that we have right now in terms of 
energy efficiency, in my State of Vermont right now, under 
normal economic circumstances, we consume less electricity now 
than we did in the past, because we have been smart on energy 
efficiency. And you know what? We are creating jobs. The 
Department of Energy gave a small company in Vermont a grant 
for capacitors as part of hybrid cars. We are creating new jobs 
doing that, and we thank you for that grant.
    There is a windmill company in the State of Vermont making 
wind turbines on the cusp of massive growth providing wind 
turbines to Alaska and other remote areas. We are creating 
jobs. Our rail system today is behind Europe, behind Japan. How 
many new jobs do we create as we rebuild our rail system and 
build the trains that we need right here in the United States 
of America?
    Secretary Salazar has told us that we can produce almost 29 
percent of the electricity in this country from solar thermal 
plants in the southwestern part of this country. How many 
thousands of new construction jobs do we create? We are 
importing hundreds of billions of dollars of oil every single 
year from foreign countries, hundreds of billions of dollars. 
How many new jobs do we create where we invest those hundreds 
of billions of dollars in the United States, creating a new 
energy system?
    This, my friends, is a no-brainer. The science is there, 
the economics is there, the job creation is there. And if we do 
not seize this moment to do the right thing, history will look 
back at us, and our children and our grandchildren will say, 
where were you as this planet undergoes catastrophic damage? We 
can do it, and I do not accept the argument of those on the 
other side who say this is a negative for the economy. This is 
a positive for the economy.
    So Madam Chair, I want to thank you, I want to thank 
Senator Kerry for your very hard work. And we are going to make 
this happen. Thank you.
    Senator Boxer. Senator, thank you so very much.
    Senator Cardin.

         OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 
            U.S. SENATOR FROM THE STATE OF MARYLAND

    Senator Cardin. Madam Chair, let me also add my 
congratulations, and thanks for your leadership and Senator 
Kerry's leadership. All of us want to make sure we get it 
right.
    But I just hope my colleagues understand the urgency of 
this issue. We have to act. We can't just talk about this. We 
have to act. My friend from Ohio and I were together at a 
meeting with our European friends. They talked about the 
urgency in a term that you don't hear often hear about climate 
migrants, people who are being forced to leave their homes 
because of drought and flooding, causing stability issues in 
Africa and Asia and Europe.
    Now, I can take you right here to Maryland, to Smith 
Island, Maryland, and you are going to see potential climate 
migrants there, as their island is disappearing because of sea 
level increases due to global climate change. And of course, we 
can all give examples of why it is urgent for us to act in our 
own individual States. I talk to our watermen who tell me that 
with the rising temperatures in the Bay, it is become more and 
more difficult for juvenile crabs to survive.
    So it is urgent that we act. I think my colleagues 
understand the urgency from a national security point of view. 
We are dependent upon imported oil, which jeopardizes the 
security of America. I think we all understand the economic 
threats that we go through. We are held hostage to oil, which 
affects our economy.
    So it is urgent that we get this right. My friend from 
Vermont makes a very compelling point about the economic impact 
of this legislation. It is going to be positive on jobs. I look 
at White Marsh, Maryland, where they are doing the new battery 
technology with a grant that the Department of Energy just 
recently awarded. I thank the Secretary for that innovation, 
where we are going to lead in the creation of alternative ways 
to fuel our automobiles.
    Madam Chair, I just really want to take issue from my 
friend from Wyoming, as he used his numbers. I am going to ask 
unanimous consent that the congressional research on job loss 
and infrastructure job creation on the stimulus be made part of 
our record. I just want to quote from one report on that. It 
says, ``Based on two different estimating procedures, it found 
that the American Recovery and Reinvestment Act may have added 
some 1 million jobs to employers' payroll in August, 2009, 
compared to what employment would have been in the absence of 
the legislation.''
    And my point is this: if we didn't act, we don't know how 
many jobs we would have lost in our economy. We do know that 
job losses have been reduced dramatically. Economists tell us 
the stimulus package worked.
    So on this bill, when we are dealing with energy policies, 
we know that American ingenuity will create jobs if given the 
right incentive. And that is what this bill does: it gives the 
right incentive. It unleashes what America does best, and that 
is the economic ingenuity of its people in solving the problems 
of energy security, of dealing with the economic impact of 
energy and dealing with our environment.
    I just want to applaud the Chairman and Senator Kerry for 
the framework of this legislation. Because it provides a way in 
which we can deal with alternative and renewable energy 
sources. It recognizes nuclear power. By having a friendly 
carbon footprint it is given priority in this legislation. And 
it allows us to invest in lifestyles that are going to be 
important for America.
    All we need to do is visit any European capital and know we 
could do much better on transit here in America. Transportation 
represents 30 percent of the emissions of greenhouse gases, 70 
percent of our oil use. We can do much better. And thank you, 
Madam Chair, because your bill gives us the opportunity to 
invest in that type of America that will make us more 
competitive in the future. You provide the resources to help 
consumers and energy intense industries so we make the 
transition to polluter pays. Polluter should pay. But we want 
to make sure the consumers are protected.
    And I just want to mention one more aspect of this bill. It 
is deficit neutral. You have provided to make sure that we are 
not going to burden our children and grandchildren by 
additional debt. Look, I hope we all can work together, 
Democrats and Republicans. This is an issue that America is 
asking us to solve. I think we have the blueprint to do it. 
Let's get down to work.
    [The prepared statement of Senator Cardin follows:]

                 Statement of Hon. Benjamin L. Cardin, 
                U.S. Senator from the State of Maryland

    Madam Chairman, thank you for your hard work and commitment 
to working with your committee members to draft the legislation 
we are considering today. And to our partners in the Obama 
administration, thank you for your guidance and commitment to 
stemming climate change. I look forward to your testimony.
    Madam Chairman, we've all heard the saying, ``necessity is 
the mother of invention.'' Well it applies to the United States 
of America right now. At this critical juncture in our Nation's 
history, we face an economic crisis, an energy security crisis, 
and a global climate crisis.
    The good news is that the solutions to these problems are 
intertwined with one another. And those solutions will come 
from new American ideas, new American industries, and a careful 
approach to maintaining the health of our planet.
    I am confident that the work my colleagues and I have put 
into the legislation we are considering today will provide the 
legal framework, business incentives and consumer protections 
necessary to move America toward a more prosperous, secure, 
clean energy future.
    The bill sets ambitious yet essential targets for 
greenhouse gas emission reductions. Through the expanded use of 
existing technologies, particularly in the area of energy 
efficiency, we can reach these near-term goals.
    The investments this bill makes in renewable and 
alternative energy sources over the life of the bill will help 
us achieve energy security, leave our grandkids a healthy 
planet and generate millions of new, well paying jobs in the 
clean energy and transportation sector.
    How? Well, for one, it will provide the regulatory 
certainty and incentives that the energy sector desperately 
needs to plan and develop the power generation and delivery 
systems for the future. This bill will create an environment 
that will spur innovation to develop greater domestic energy 
sources that are clean and affordable.
    I am very pleased that this bill makes a significant 
investment in transportation infrastructure efficiency and 
access to transit. The transportation sector is responsible for 
30 percent of the United States' greenhouse gas emissions and 
70 percent of our oil use.
    This bill recognizes the role transit will play in reducing 
vehicle emissions. According to the American Public 
Transportation Association, public transit currently saves 37 
million metric tons of carbon dioxide emissions per year. If we 
are going to reach our targets for cleaner air and a cooler 
planet, we must invest in public transportation in this 
country. I fought hard to make sure this bill would boost 
funding for transit so that we can put more people on clean, 
efficient and convenient buses, trolleys, subways and rail 
systems.
    The bill helps also helps keep consumer costs low by 
mitigating cost increases to ratepayers and providing 
incentives for energy efficiency. The bill recognizes the need 
to provide for a smooth transition period as we move toward a 
clean energy economy. This means providing ratepayer cost 
protections against energy price increases while the energy 
sector works to shift toward cleaner energy production and more 
efficient energy technologies.
    The bill pays close attention to the needs of America's 
agriculture sector. Farmers will play an essential role in 
meeting our emissions targets by developing offsets that they 
can sell to help capped carbon emitters meet their compliance 
requirements. Additionally, the manager's mark increases 
funding for supplemental agriculture programs for farmers to 
participate in and receive financial benefits from when they 
engage in activities that help mitigate greenhouse gases, even 
if these activities or projects are not eligible as official 
offset projects.
    The threats climate change brings to our way of life are 
not theoretical to many Marylanders. Ask the people of Smith 
Island who are watching their island vanish under rising sea 
levels. Ask Maryland's watermen whose way of life is 
disappearing as rising temperatures destroy the habitat the 
Chesapeake Bay's fish, crabs, and oysters depend on.
    Their struggles are mirrored in communities around the 
globe where droughts, floods and other natural disasters are 
already destroying local economies and forcing people to change 
their way of life and even leave their homes. Dislocation, 
struggles over scarce resources: our Nation's top national 
security minds tell us that climate change is a real threat to 
our national security.
    This bill allocates critical funds to make sure our wild 
places and our wildlife do not disappear. It sets aside money 
to help States protect their residents against the impacts of 
climate change including protecting water supply, defending 
against sea level rise, and repairing infrastructure from the 
damage these changed conditions will create. It will allow us 
to invest in third world countries to protect their way of life 
and prevent the dislocation that could impact our own safety 
here, thousands of miles away.
    Congress has taken far too long to address our economic, 
energy security and climate crises. This bill will address all 
three. I am proud of the effort that has gone into this bill to 
build consensus. I look forward to working with the Chairman to 
advance this bill through committee and eventually to the 
floor. Let's get back to work!

    [The referenced information follows:]
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    Senator Boxer. Thank you.
    We are going to ask our witnesses to please take their 
seats right now. Our witnesses, in this order of speaking, 
unless Secretary Salazar is going to work with his colleagues, 
this is what I have. Hon. Steven Chu, Hon. Ray LaHood, Hon. Ken 
Salazar, Hon. Lisa Jackson, Hon. Jon Wellinghoff. That is the 
array that we have.
    Senator Voinovich.
    Senator Voinovich. I just would like to have the article 
that I referred to in the New York Times put in the record 
after my statement, along with the analysis of the job loss by 
the American Council for Capital Formation.
    Senator Boxer. Absolutely, and we will also place in the 
record a number of studies cited by Senator Kerry that shows 
the opposite, so everybody sees it.
    While you are all getting ready, we were asked about 
Secretary Vilsack. I explained that he is traveling. But for 
that he would have been here. And I am going to place, ask 
unanimous consent now to place his statement in the record. I 
am going to quote from two sentences. He says ``The cost of 
inaction will have a significant effect on our farmers, 
ranchers and rural communities. While farmers and ranchers and 
forest land owners have a lot at stake if we fail to act, they 
have much to gain if we address climate change quickly and 
wisely. And there are significant opportunities for landowners 
in a cap-and-trade program that can help revitalize rural 
America.'' And it talks about wealth creation.
    [The referenced statement follows:]
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    Senator Boxer. So we are going to place this, and we are 
proud to have Secretary Vilsack's support for a good climate 
change bill.
    We are honored to have this array of experts with us from 
the Administration, and we thank you for your patience. 
Sometimes I know it seems interminable, but I think it is also 
important for you to hear from each of us, so you know exactly 
the issues that we are all dealing with.
    So is there any change in the order? Or we can stick with 
it? OK. The Honorable Steven Chu, Secretary, United States 
Department of Energy. Welcome.

           STATEMENT OF HON. STEVEN CHU, SECRETARY, 
                   U.S. DEPARTMENT OF ENERGY

    Mr. Chu. Thank you, Chairman Boxer, Ranking Member Inhofe, 
members of the committee. Thank you for the opportunity to 
testify today.
    When I appeared before you in July, I focused on the energy 
challenge and the grave threat from climate change. The 
Intergovernmental Panel on Climate Change found in 2007 that 
the best estimate for the rise in the average global 
temperature by the end of this century would be more than 7 
degrees Fahrenheit if we continued on a high growth fossil fuel 
intensive course.
    A 2009 MIT study found a 50 percent chance of a 9 degree 
rise in the century and a 17 percent chance of a nearly 11 
degree increase. Eleven degrees might not sound like much, but 
during the last Ice Age, when Canada and much of the United 
States were covered all year in a glacier, the world was only 
about 11 degrees colder. A world 11 degrees warmer would be 
very different as well.
    Today I want to focus on the other half of the energy 
equation, the energy opportunity. The world now realizes that 
its current level of greenhouse gas emissions is unsustainable. 
In the coming years, there will be a vigorous effort to limit 
carbon pollution that will require a massive deployment of 
clean energy technologies. The only question is, which 
countries will invent, manufacture and export these clean 
technologies, and which countries will become dependent on 
foreign products?
    The Energy Information Administration, an independent 
statistical agency within the Department of Energy, recently 
estimated the market for a few clean energy technologies. It 
based its analysis on a scenario derived by the International 
Energy Agency that could prevent the worst changes to our 
climate. The EIA found globally the cumulative investment in 
wind turbines and solar photovoltaic panels from now to 2030 
could be $2.1 trillion and $1.5 trillion respectively. The 
policy decisions we make today will determine the U.S. share of 
this market. And many additional dollars, jobs and 
opportunities are at stake in other clean energy economies.
    China has already made its choice. China is spending about 
$9 billion a month on clean energy. It is also investing $44 
billion by 2012 and $88 billion by 2020 in ultra-high voltage 
transmission lines. These lines will allow China to transmit 
power from huge wind and solar farms far in the western part of 
China to its cities on the eastern coast.
    While every country's transmission needs are different, 
this is a clear sign of China's commitment to developing 
renewable energy.
    The United States, meanwhile, has fallen behind. The 
world's largest turbine manufacturing company is headquartered 
in Denmark. Ninety-nine percent of the batteries that power 
America's hybrid cars are made in Japan. We manufactured more 
than 40 percent of the world's solar cells as recently as the 
mid-1990s. Today we produce only 7 percent.
    When the gun sounded on the clean energy race, the United 
States stumbled. But I remain confident that we can make up 
ground. When we gear up our research and production of clean 
energy technologies, we can still surpass any other country.
    This work began in earnest with the American Recovery and 
Reinvestment Act. That Act includes $80 billion to put tens of 
thousands of Americans to work, developing new battery 
technologies for hybrid vehicles, making our homes and 
businesses more energy efficient, doubling our capacity to 
generate renewable electricity, and modernizing the grid.
    In fact, today, President Obama will announce an investment 
of more than $3.4 billion in smart grid projects across the 
country. This is a major down payment on a more robust, more 
flexible electricity transmission and distribution system.
    However, to truly seize the opportunity, we must enact 
comprehensive energy and climate legislation. I commend 
Chairman Boxer and Senator Kerry for bringing forward this 
legislation. The most important element of this bill is that it 
puts a cap on carbon emissions that ratchets down over time. 
That critical step will drive investment decisions for clean 
energy.
    Imagine, for example, you own a power company and are 
considering building more generating capacity. You can build a 
new coal-fired plant or a new nuclear plant. These are serious, 
multi-billion dollar investments, and they will last 60 years. 
If you knew that carbon emissions had to decrease, would you 
build a coal plant without carbon capture and storage 
technology? Would a nuclear power plant look more attractive? 
Would you consider investing in wind and solar?
    On-again and off-again incentives will not drive the level 
of clean energy investment we need. A cap on carbon will give 
the energy industry the long-term direction and certainty that 
it needs to make appropriate technology and capital investment 
decisions.
    To achieve our long-term goals in a cost effective way, we 
will also need a sustained commitment to research and 
development. Only R&D will deliver a new generation of clean 
technologies. Much of this work is underway at the Department 
of Energy using resources provided in the Recovery Act. 
However, continued investment will be needed.
    S. 1733 would continue portions of this work, and the 
legislation reported by Chairman Bingaman's committee would 
also bolster these efforts. I applaud you for holding this 
hearing and look forward to working with this committee and the 
full Senate to swiftly pass comprehensive clean energy and 
climate legislation. Thank you.
    [The prepared statement of Mr. Chu follows:]
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    Senator Boxer. Thank you very much.
    The Honorable Ray LaHood, Secretary, U.S. Department of 
Transportation.

           STATEMENT OF HON. RAY LAHOOD, SECRETARY, 
               U.S. DEPARTMENT OF TRANSPORTATION

    Mr. LaHood. Chairman Boxer, Ranking Member Inhofe and 
members of the committee, thank you for inviting me to discuss 
the Clean Energy Jobs and American Power Act. I appreciate the 
challenge you and your colleagues have undertaken in this 
important bill.
    President Obama's Administration and the Department of 
Transportation believe that making the transition to a clean 
energy environment and combating climate change are major 
priorities, and the time to act is now. We also understand that 
transportation contributes to and is affected by climate 
change, and therefore our transportation policy must be a part 
of the solution.
    To that end, transportation will play a vital role in 
helping to reduce greenhouse gas emissions, decrease our 
reliance on oil, create more livable, sustainable communities 
and generate green jobs. Let me review some of the actions 
already underway.
    In recent months, DOT has teamed up with the Department of 
Housing and Urban Development and the Environmental Protection 
Agency to better direct Federal investments in transportation, 
housing, improved air quality and water infrastructure across 
the country. Our agencies support coordinated infrastructure 
investments and economic development as a means of creating 
more livable neighborhoods while residents in urban, suburban 
or rural communities can get to work, school, the doctor or the 
grocery store without having to get into an automobile.
    We know that in the U.S., shifting just 10 percent of its 
new housing starts to livable communities over the next decade, 
Americans would save nearly 5 billion gallons of gasoline. And 
people who live in walkable communities served by transit have 
a much smaller carbon footprint than those in car dependent 
communities and spend less on transportation as well.
    To move this agenda forward, our agencies would like to 
partner with Congress to align our programs to ensure Federal 
spending is effectively leveraged with other public and private 
investments. We are consulting on performance measures that 
could be used to determine outcomes, and we are developing an 
affordable index and other tools to help achieve our goals. We 
are also providing joint technical assistance through EPA to 
communities interested in coordinating these types of 
investments right now. And we are collaborating on implementing 
sustainable community grants through HUD, if they are funded in 
the 2010 appropriations bill.
    Through the American Recovery and Reinvestment Act, DOT is 
making significant investments in transportation-related 
projects that reflect our livable and sustainable priorities. 
Liveability for instance, is given significant weight as part 
of the $1.5 billion TIGER grants, and applications are 
currently under review. As you know, we are also investing $8 
billion for high speed rail corridors and other inter-city rail 
passenger service. The Federal Railroad Administration's long-
term plans seek to build upon this initial investment with a 
national network of passenger rail corridors that improve 
mobility, service, convenience, safety and efficiency, all of 
which contribute to developing livable, sustainable 
communities.
    In pursuit of our climate change goals, we are planning to 
work with EPA to develop and implement fuel economy and 
greenhouse gas emissions standards for medium and heavy trucks. 
This follows our successful collaboration to propose harmonized 
national fuel economy and emissions standards for light duty 
vehicles and trucks. We are greatly encouraged by our ability 
to work together to achieve the best possible regulations 
without imposing undue hardships on industry. We believe this 
intergovernmental approach can serve as a model for future 
Government action in this area.
    We look forward to working with Congress to support robust 
transportation planning techniques and target investments 
toward projects that reduce emissions and fuel consumption. We 
understand that State DOTs and metropolitan planning 
organizations will need new tools, technical assistance, 
capacity building and resources to determine which investments 
generate the best outcomes.
    There are many, many other promising initiatives underway 
throughout DOT, too numerous to discuss. I will mention just a 
few. The Federal Highway Administration is developing cost 
effective strategies and performance measures to determine 
progress in reducing emissions. The Federal Aviation 
Administration is conducting research to improve our scientific 
understanding of the impact of aviation emissions on climate 
and working with domestic and international stakeholders to 
develop appropriate strategies to develop a global impact of 
climate change.
    And finally, the Federal Transit Administration is working 
to expand access to public transportation, support transit-
oriented development and conduct research to help public 
transportation agencies operate more efficiently.
    We are delighted to be here, and we look forward to your 
questions.
    [The prepared statement of Mr. LaHood follows:]
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    Senator Boxer. Thank you so much, Mr. Secretary.
    And now, Secretary Salazar, of the United States Department 
of the Interior. Welcome, Mr. Secretary.

           STATEMENT OF HON. KEN SALAZAR, SECRETARY, 
                U.S. DEPARTMENT OF THE INTERIOR

    Mr. Salazar. Thank you very much, Chairman Boxer and 
Senator Inhofe and the distinguished members and friends who 
are on this committee.
    This issue is an imperative issue of our time. President 
Obama has made it clear from day one that we will succeed on 
this effort. It is driven by the imperatives, many of which 
have come out here today.
    First, we need to get our country to a point of greater 
energy independence. Second, we need to create millions of new 
energy jobs here at home. And third, we need to make sure that 
we are protecting our children and our planet from the dangers 
of pollution. That, frankly, is what this is all about. And I 
hear the conversation and the presentations by the Senators, 
trying to address those issues. Our hope is that in fact, at 
the end of the day, as this U.S. Senate works its way, that 
there will be a way in which Democrats and Republicans can join 
in terms of getting a climate change and energy bill that will 
finally be one that this country can be very proud of.
    Let me say I am proud of my colleagues as well. We work 
together as a team, as a team under the Obama administration 
helping us to forge a new energy future for our country. We 
have not let the absence of this legislation keep us from 
moving forward with a number of different initiatives. I want 
to speak briefly about some of the work that we are doing at 
Interior, because it ties into some of the work that this 
committee will be doing in the days and weeks ahead.
    First, at the Department of Interior, we see ourselves and 
our mission to be the stewards of America's natural and 
cultural resources. We have an energy and climate change role 
as an energy supplier for this Nation in many ways. We are the 
carbon catchers of this country in terms of carbon 
sequestration, both biologically as well as geologically. We 
are also a primary agent of adaptation programs for this 
country based on the resources that we have. And we are a 
science provider, through the scientists we have at the U.S. 
Geological Survey, as well as the Fish and Wildlife Service.
    Let me very quickly just say a word about the assets that 
we have to fulfill these roles. The United States Fish and 
Wildlife Service oversees 550 wildlife refuges and 150 million 
acres of fish and wildlife refuges around the country. The 
Bureau of Land Management, 253 million acres. The National Park 
Service, 84 million acres. Tribal lands, which we hold in trust 
for American native peoples, 56 million acres. And in the Outer 
Continental Shelf, and I know many of you are interested in 
that, we oversee 1.75 billion acres of the Outer Continental 
Shelf.
    We have educational assets that we bring to the table on 
the energy and climate change agenda, because we have about 500 
million people that will come to visit our icons, from the 
Statue of Liberty to Yellowstone to the Everglades every year. 
And we have personnel, some 70,000 people, which includes the 
scientists that are some of the premier scientists in America 
in the USGS and Fish and Wildlife.
    On the energy supplier side, Madam Chairman, the 
conventional fuels that we produce through the Department of 
Interior include approximately 30 percent of the oil for this 
country from our public lands and the submerged lands, about 30 
percent of our natural gas and 40 percent of the coal that is 
used in this country. That is what we have been doing, and we 
continue to work on that agenda.
    But exciting for all of us in the Department of Interior 
also is the new energy frontier. And from the beginning of this 
year, we have stood up the renewable energy world in the 
Department of the Interior. We moved fast forward with solar 
energy where we have set aside 1,000 square miles for the 
development of solar energy. As Senator Sanders said earlier, 
our estimates are that the solar energy potential just on those 
lands alone is about 100,000 megawatts, which would power 29 
million homes or provide about 29 percent of the energy 
equivalent needed for the households of America today.
    We also are moving fast forward, because this is not pie in 
the sky; we don't want to have people thinking about whether or 
not we can do it in 4 or 5 years. So we are fast tracking 
applications in Arizona and California and Nevada and New 
Mexico, where we hope to be able to permit by the end of next 
year 4,500 megawatts of solar power. The 4,500 megawatts is the 
equivalent of close to 14 or 15 coal-fired power plants.
    But we are not stopping with the Sun. We are also doing 
everything we can to capture the power of the wind, both 
onshore as well as offshore. On the onshore, we hope on the 
same time line by the end of next year to have 800 megawatts of 
power stood up with respect to wind energy. And our belief and 
our estimates are that there is huge potential, especially in 
the Atlantic seaboard, because the Governors in those States 
are very excited about what we can do with respect to offshore 
wind.
    We have great potential with hydro power, using existing 
facilities and not creating new dams, but using our facilities 
that we currently have and moving forward with the hydro 
renewable energy agenda. Geothermal is big. Transmission, we 
are working together as a Cabinet group to move forward with 
transmission. We are fast tracking transmission facilities in 
the West as well.
    Two quick points before my time runs out here. As a carbon 
catcher, I want this committee, who oversees the Fish and 
Wildlife Service, to recognize the great importance of what we 
can do in terms of our climate change and energy agenda. 
Through our refuges and through the facilities that we oversee 
along the Nation's coastlines, national wildlife refuges alone 
and the National Park Service alone, we have 160 wildlife 
refuges and 74 national parks along the coastlines of America. 
And what we can do in terms of biological sequestration there 
is no different than what we are proposing in this bill to do 
in places like Brazil, Indonesia and other places. So the 
deforestation aspects of this legislation are something also 
that we need to deal with here at home.
    We are excited, and would be delighted at some point, Madam 
Chairman, to talk about the landscape conservation 
cooperatives, which we are moving forward with in the 
Department, that can help us essentially create carbon sinks 
within the United States of America.
    And finally, the USGS has moved fast forward with the 
creation of protocols for carbon sequestration for coal. We are 
excited about that agenda.
    And in conclusion, what I will say, we can do a lot on 
adaptation with water, with wildlife, with migration corridors, 
because we are really at the front line in terms of seeing the 
consequences of climate change. And our science providers at 
USGS and U.S. Fish and Wildlife will be key to moving forward 
with this agenda.
    We at Interior and in the Obama administration, under 
President Obama's leadership, very much look forward to working 
with this committee on both sides of the aisle, as well as the 
rest of the U.S. Senate, to finally, once and for all, address 
the signature issue of our times, energy and climate change.
    [The prepared statement of Mr. Salazar follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Senator Boxer. Thank you very much.
    And EPA Administrator, Lisa Jackson, welcome.

       STATEMENT OF HON. LISA P. JACKSON, ADMINISTRATOR, 
              U.S. ENVIRONMENTAL PROTECTION AGENCY

    Ms. Jackson. Thank you, Chairman Boxer, thank you to 
Ranking Minority Member Inhofe and members of the committee for 
inviting me to testify about the Clean Energy Jobs and American 
Power Act. It is always a good day when I join my colleagues 
from the Administration here and EPA's authorizing committee.
    I last appeared before this committee on July 7th. Since 
then, this Administration has, under President Obama's 
leadership, taken unprecedented steps to decrease America's 
dependence on oil, put our Nation in the lead of the 21st 
century energy economy and reduce the greenhouse gas pollution 
that threatens our children and grandchildren.
    On September 15th, for example, as you have already heard, 
Secretary LaHood and I jointly announced coordinated DOT and 
EPA rulemakings to increase fuel efficiency and reduce 
greenhouse gas emissions of cars and light trucks through the 
year 2016. The joint DOT/EPA rules will reduce the lifetime oil 
consumption of those vehicles by 1.8 billion barrels. That will 
mean eliminating more than a billion barrels of imported oil, 
assuming the current ratio of domestic production to imports 
does not improve.
    At today's oil prices, we are talking about saving $78 
billion of the dollars that America would otherwise give to 
other countries for their oil. In the process, the rules will 
avoid nearly a billion metric tons of greenhouse gas pollution. 
And we have heard each of my colleagues here describe other 
steps that the Administration has already taken to make 
America's economy stronger by getting it running on clean 
energy.
    Even as the President and members of his Cabinet move 
forward under existing authority, we continue urging Congress 
to pass a new clean energy law. Only new legislation can bring 
about the comprehensive and integrated changes that are needed 
to restore America's economic health and keep the Nation secure 
over the long term. This committee held its July 7th hearing 
shortly after the House of Representatives had passed the 
American Clean Energy and Security Act. So I took the 
opportunity to echo President Obama's request that the Senate 
demonstrate the same commitment that we had seen in the House 
to building a clean energy foundation for a strong American 
economy.
    While the introduction of the Clean Energy Jobs and 
American Power Act on September 30th shows that the Senate is 
responding to the President's call to action, and I commend 
you, Madam Chair, and Senators Kerry and Kirk, for introducing 
that bill. I applaud the many Senators, including members of 
this committee, who have contributed meaningfully to the 
Chairman's mark, and I thank Senator Graham for joining with 
Senator Kerry in a recent statement that reminds all of us that 
giving America control over its energy future can and should be 
a bipartisan mission.
    Earlier this year, EPA ran the major provisions of the 
House Clean Energy legislation through several economic 
computer models. When it comes to the specifications that the 
models are designed to detect, the Clean Energy Jobs and 
American Power Act is very similar to the House legislation. 
Nevertheless, EPA has examined the ways in which the Senate 
bill is different and has determined which of the conclusions 
reached about the House passed bill can confidently be said to 
apply to the Senate bill as well.
    EPA delivered the results of that inquiry to the committee 
last Friday, and the members can review the report in detail. 
But let me just state some of the key projections about the 
House bill that EPA feels confident also apply to the Clean 
Energy Jobs and American Power Act.
    First, the legislation would transform the American economy 
from one that is relatively energy inefficient and dependent on 
high polluting energy to one that is highly energy efficient 
and powered by advanced, cleaner and more domestically sourced 
energy. Second, the legislation would bring about that 
transformation at a cost well below 50 cents per day per 
American household in 2020.
    Third, the region by region cost differences would be 
small. Finally, if the U.S. adopted the legislation, then the 
world could avoid a 2 degree Celsius rise in temperature over 
pre-industrial levels without assuming international action any 
more ambitious than the goals agreed to at the July 9th major 
economies forum. That is good news, because as the U.S. global 
climate change research program reported in June, a 2 degree 
Celsius rise would subject the American people to unacceptable 
risk from catastrophic harm, from intensified droughts, 
wildfires, spring floods, heat stress to livestock and much 
more.
    Madam Chairman, the American people have waited decades 
while our Nation has become increasingly dependent on foreign 
energy sources, while our global competitors create the clean 
energy jobs of tomorrow, and while we fail to safeguard the 
well-being of our children and our grandchildren. I think 
Americans are tired of listening to the same corporate interest 
groups that vastly exaggerated the cost of reducing acid rain 
pollution and of reformulating gasoline. I think Americans want 
reform that harnesses the country's can-do spirit. I think they 
want to fuel long-term economic recovery with a wise investment 
that sparks a clean energy transformation and protects our 
children and grandchildren.
    The Clean Energy Jobs and American Power Act is a 
significant milestone on that road. There of course remains the 
road ahead. There are many Senators on and off this committee 
who have tremendous value to add. Thank you for your continuing 
work, and thank you for inviting me to testify today.
    [The prepared statement of Ms. Jackson follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Senator Boxer. Thank you so much, Administrator Jackson.
    And our last witness is Hon. Jon Wellinghoff, Chairman of 
the Federal Energy Regulatory Commission. Welcome.

  STATEMENT OF HON. JON WELLINGHOFF, CHAIRMAN, FEDERAL ENERGY 
                     REGULATORY COMMISSION

    Mr. Wellinghoff. Thank you, Madam Chairwoman Boxer, Ranking 
Member Inhofe and members of this committee. Thank you all for 
inviting me here today to speak about a very important subject.
    First, I want to commend Chairwoman Boxer and Senator Kerry 
for this undertaking and offer the support and assistance of my 
agency to further your effort here today.
    I would like to submit my prepared testimony for the record 
and I will highlight a few points of my testimony.
    Senator Boxer. Without objection.
    Mr. Wellinghoff. Thank you.
    The Federal Energy Regulatory Commission seeks to assist 
energy consumers in obtaining reliable, efficient, sustainable 
energy services at a reasonable cost through appropriate 
regulatory and market means. Toward that end, the Commission is 
removing barriers to the use of low carbon renewable resources 
and encouraging greater efficiency in the electric energy 
system. These efforts and the efforts by many States are 
helping to reduce the emissions produced by the generation of 
electricity.
    Our Nation, however, has the capability to reduce these 
emissions much, much more. A major reason why low carbon 
renewable resources and energy efficiency are not used more 
extensively is that the cost of greenhouse gas emissions is, in 
economic terms, an externality. In other words, the effects of 
these emissions is not reflected in the price of energy in the 
marketplace. S. 1733 would change the situation by recognizing 
in the energy marketplace the effect of greenhouse gases. And I 
would note that this concept of internalizing these external 
costs has bipartisan support at my Commission.
    Renewable resources cannot only help reduce greenhouse gas 
emissions but also diversify the fuels used to generate 
electricity. Fuel diversity helps stabilize our electric supply 
against shortages or price spikes in particular fuel markets. 
Using domestic energy instead of foreign energy also 
strengthens our national security.
    This month, I provided the Congress with the Commission's 
strategic plan for the next 5 years. In that document, we 
committed to take additional steps to address possible barriers 
to more extensive use of renewable energy resources and 
distributor resources in energy markets, thus allowing for 
markets to operate more efficiently, reduce carbon and reduce 
costs to consumers.
    But a significant expansion of renewable resources in our 
electricity supply portfolio will require additional high 
voltage transmission facilities, network upgrades and feeder 
lines. I also note that the inter-regional transmission 
facilities necessary to deliver the output of certain renewable 
resources are unlikely to be constructed without additional 
Federal authority in areas of planning, citing and cost 
allocation.
    Consumer energy use management, also called demand 
response, refers to consumers reducing their usage at certain 
times to improve grid efficiency. In June, at the direction of 
Congress, the Commission issued an assessment of the potential 
for consumer energy use management both nationally and for each 
State through 2019. The assessment found that the potential of 
peak electricity demand reductions across our country is 188 
gigawatts, or up to 20 percent of the national peak demand. 
These savings, if realized, can significantly reduce the number 
of power plants needed to meet peak demand, and thereby reduce 
carbon emissions by as much as 1.2 billion tons annually.
    As I indicated above, in the Commission's new strategic 
plan, we commit to continue our efforts to identify and 
eliminate barriers to participation by demand resources in the 
Nation's organized wholesale electric markets.
    FERC is using its statutory authorities to aggressively 
eliminate barriers to renewable resources and distributor 
resources in wholesale electric markets and to encourage 
greater efficiency in the electric system and thereby reduce 
carbon emissions. For such efforts to increase reductions in 
carbon and improve efficiency, sound energy policies must get 
the price in the markets right to achieve both our 
environmental and our economic energy policy goals.
    S. 1733 is the key to getting it right. I encourage you to 
pass this legislation.
    Thank you again for the opportunity to testify here today. 
I will be happy to answer any questions that you may have.
    [The prepared statement of Mr. Wellinghoff follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Senator Boxer. Thank you so much.
    We will each have 5 minutes to question.
    Secretary Salazar, how will this bill help to mitigate the 
impacts of unchecked global warming pollution on the Nation's 
most precious natural resources? And I know how strongly you 
feel about being the guardian of those for this time. So how 
will this bill help to mitigate if, if we are successful, and 
what would happen if we fail?
    Mr. Salazar. It would have a dramatic and positive impact 
in terms of protecting the national icons of America. And you 
can see it in the way that I think many Americans would see it 
if they have the opportunity to sit in my chair, where you can 
go to a place like the Apostle Islands in Lake Superior in 
Wisconsin, and you can see the warming of the surface of Lake 
Superior by 5 degrees or flying across to the wildlife refuges 
of Minnesota and recognizing what is happening with wildlife 
and wildlife migration and their habitat because of the warming 
of those places.
    Or perhaps even most graphically, in places like Glacier 
National Park, which we have now projected will have no more 
glaciers by the year 2020. And finally, in the Grand Canyon, 
where there was a compact with respect to water put together 
back in the 1920s, which we now are projecting that there will 
be perhaps as much as 20 percent less water available in the 
Colorado River basin, which will affect all of those States, 
including Southern California.
    So the urgency of this bill is there. And I believe that 
one of our responsibilities is to be able to tell that story of 
urgency to America.
    Senator Boxer. Thank you, and you do it so very well.
    Administrator Jackson, a lot of people think that the 
trading program that we have in this bill is somehow brand new. 
Some of my colleagues call it a tax. All of them do, on the 
other side. They never called it a tax when it was in the Clean 
Air Act's acid rain program. So, they never called it a tax 
then.
    So now, what I want to ask you is how successful has the 
Clean Air Act's Acid Rain Sulfur Dioxide trading program 
worked? And do you have optimism that a trading program around 
carbon will have a similar impact?
    Ms. Jackson. Thank you, Madam Chair.
    The acid rain control program--the predictions at the time 
were that it would cost a lot of money and be ineffective. And 
EPA was very proud of the fact that it worked in a bi-partisan 
fashion back then with the first Bush administration to pass 
amendments that would actually prove that to be wrong and have 
indeed proven it to be wrong.
    The acid rain costs, which were regarded at the time to be 
optimistic, even on behalf of the Bush administration, turned 
out to be lower than thought. In fact, the Administration 
estimated that the annualized compliance costs would be $4 
billion a year. In fact, the costs are now estimated to be just 
$2 billion annually. So it is a lot cheaper, and emissions have 
been reduced.
    It has also proven to harness the marketplace and the 
private sector, once they got the clear signal, once the market 
incentive was there, once they knew that SO2 
pollution had a cost, they were able to make business 
decisions. We saw the most cost effective reductions come 
forward. And that is what I believe can happen here as well.
    Senator Boxer. Thank you.
    Secretary Chu, I see that Senator Specter is back. His 
focus was jobs. I have here a study by the Center for American 
Progress. It says, ``Investments in a clean energy economy will 
generate major employment benefits for Pennsylvania and the 
rest of the U.S. economy.'' They go on to say, ``Our research 
finds that Pennsylvania could see a net increase of about $6.1 
billion in investment revenue and 72,000 jobs.''
    It points out that adding 72,000 jobs to the Pennsylvania 
labor market in 2008 would have brought the unemployment rate 
down to 4.3 percent from its actual level of 5.4.
    The reason I am using Pennsylvania, I just happen to have 
this particular paper in front of me. We talked before, I think 
it was at a Democratic Caucus lunch, about the importance of 
letting the private sector put a price on carbon through this 
system. So my question is, the certainty of that kind of 
policy, how important is it to attracting the kind of venture 
capital that we need to get this economy rolling forward?
    Mr. Chu. Well, as I said in my testimony, that long-term 
signal is incredibly important, because when companies make 
investments, for example, when power companies make 
investments, they are thinking this investment will last for 60 
years. It could take anywhere from 5 to 10 years from the 
decision to go forward to the time it is really built. So you 
are really talking a 70-year time scale. In that time scale 
investment, you really need these long-term signals to say what 
is going to be happening in the next 50, 60, 70 years.
    To the question about jobs, I should also say that not only 
are we talking about jobs today in the near-term future, we 
actually need to talk about jobs that will be sustaining 10 
years, 20 years, 50 years from today. So these are going to be 
jobs that will continue to be jobs in the future. The 
rebuilding of the American infrastructure, the retrofitting of 
our buildings, the building of a clean new industry, the 
restarting of a nuclear industry in the United States and the 
building of those power plants, these are all jobs where, if we 
don't choose to lead in the development of this new technology, 
China and other countries will.
    Senator Boxer. Thank you very much.
    Senator Inhofe.
    Senator Inhofe. Thank you, Madam Chairman.
    I have been observing over the last 2 and a half hours or 
whatever it has been how quickly we forget here in these 
hallowed halls, the insulation of the U.S. Senate. It was only 
60 days ago we came back from our August recess. And we have 
forgotten all about the outrage that is out there. Those 
people, many of them have been denigrated for not really 
expressing a sincere concern, but let me assure you, I say to 
my friends in the Senate, it is there.
    And there are two issues, health care and then this thing 
we keep saying is not a tax, but what I consider to be the 
largest tax increase in history. And the people understood 
that.
    Now, I also, I don't want any of the media to think just 
because I had to sit here and listen to our good friend, 
Senator Kerry, for 28 minutes, that I don't have responses to 
everything he said. I can assure you that over a period of 
time, I will be responding to such things as naming Duke Energy 
and other companies. We have already talked about this. There 
are clear winners and losers in this program. We had a hearing, 
and I outlined how much money each of those individuals from 
corporations would make if this thing becomes a reality. And 
they are out there. It will be huge amounts of money. So follow 
the money; it is there.
    The carbon tax, he mentioned James Hanson. James Hanson, we 
all know, is the recipient of $250,000 from the Heinz 
Foundation. However, for the first time, I agreed with him, his 
statement, just the other day was, this James Hanson, cap-and-
trade is a temple of doom, it would lock in disasters for our 
children and our grandchildren. He goes on and on talking about 
that.
    And the reason he is doing that, I say to my friends in the 
panel, is that if you want to go about this honestly, go ahead, 
do a carbon tax, so everybody knows. But there is a good reason 
why we are not doing that. And that is, it can be so easily 
masqueraded by this very complicated tax in trade thing, or 
cap-and-trade thing that we are talking about.
    Then I have to correct my fellow Senator, he is not here 
right now, but I understand he is returning, Vitter, when he 
said that China is cranking out two new coal-fired generating 
plants each month. It is really, according to the Chinese 
government, they are doing it each week, not each month. It 
goes on and on.
    And on the science. The science is more definitive than 
ever. You keep saying that, because you want to believe it so 
much. And yet the same people, those scientists, I have a list, 
I say to my good friend, Secretary Salazar, of scientists who 
are on the other side of this issue, back during Kyoto and even 
back 6 or 7 years ago, and during the consideration of the 2005 
bill, who are solidly on the other side right now. It is 
coming. It has already shifted. It is not shifting, it already 
has shifted.
    And I would suggest to you that when we get on the floor 
and talk about this, I will say to my good friend, the Chairman 
of the committee, that I am going to do the same thing we did 
during the debate, if it comes to debate on the floor, during 
the Warner-Lieberman bill. And that is say, science is not 
settled, everyone knows it is not settled. But for the sake of 
this debate, let's assume it is. It is not, but let's assume it 
is so we can talk about the economic issues. And that is what 
we would be doing.
    So quickly here, Administrator Jackson, first of all, I 
would just make one comment. I think you would have to agree 
with this. If not, let us know in writing for the record if you 
disagree, that we use this example of acid rain. In acid rain, 
there was a big difference. That is, technology was proven, and 
that is a huge difference from where we are today.
    But I do want to ask you one question. Senator Barrasso and 
I sent you letters on the endangerment finding throughout 
August and September, and we didn't get any response until last 
night about 5 o'clock. I don't want to use up the remaining 
time, but if you just for the record would let me know, if you 
would try to stay with those things that you stated during your 
confirmation hearing, that you would be responsive to our 
requests, I would appreciate that very much.
    The second thing I would ask, a response for the record 
from each of the members, that is the worker adjusted 
assistance provision of this Act, if that doesn't presume that 
we are going to lose jobs in the Act.
    But last, since Secretary Salazar, I know that you have a 
schedule, you might get up and leave, I want to give you the 
opportunity to respond to something that I feel is very 
significant. That is a report that just came out last week from 
the Congressional Research Service that says America's combined 
recoverable natural gas, oil and coal reserves is the largest 
in the world. We didn't used to be. It is now. And I agree with 
the three goals that you outlined at the beginning of your 5-
minute statement. I would like to know if, should we develop 
these resources, and what can your department do to help do 
that.
    Senator Boxer. Senator, you have gone over your time, but 
you want these in writing. So what I was going to suggest----
    Senator Inhofe. That would be fine, for the record.
    Senator Boxer [continuing]. As a way we have done it 
before. If you could get your questions in writing from your 
staff to ours by tonight----
    Senator Inhofe. No, Madam Chairman, I have already stated 
them. I don't have to change them.
    Senator Boxer. So you don't want to put them in. OK, then 
what we will do, with your permission, because I just want to 
make sure it is answered to your satisfaction, we will take 
your question from the record and we will put them in writing 
to Lisa Jackson. And we would ask all the panelists, please, to 
get your answer in by close of business tomorrow. Is that all 
right with everybody?
    Senator Inhofe. Fair enough.
    Mr. Salazar. Madam Chairman, if I may, I need to excuse 
myself for another meeting.
    Senator Inhofe. You have to leave, yes.
    Mr. Salazar. But I wanted to say two quick things. One is 
that I had a formal statement that I will submit for the 
record, and I am sure my colleagues as well, and hope that that 
can be accepted for the record.
    Senator Boxer. Yes.
    Mr. Salazar. And second, on behalf of my colleague, Tom 
Vilsack, who is not here, but he has been part of these 
meetings getting ready for this hearing, he would be here to 
tell the people of American that rural America is going to 
benefit significantly from this legislation.
    Thank you very much.
    Senator Boxer. Yes, and I have placed his statement in the 
record.
    Thank you so much. We are so sorry that we ran a long time, 
but you know what, I think it is key for colleagues to have 
their chance.
    With that, we will go to Senator Klobuchar.
    Senator Klobuchar. Thank you very much, Madam Chair, and 
thank you to all of you for your leadership. Thank you, Senator 
Salazar.
    I wanted to clarify, in my opening statement I talked about 
how the Federal Government hadn't gotten to the trailhead. And 
I probably should have more likely said Federal legislation 
hasn't gotten to the trailhead, because I want to commend all 
of the Secretaries for the work that you have done with the 
legislation that you have. But I truly believe that we can 
bring more jobs and put America back in the driver's seat here 
by passing some forward thinking energy legislation.
    The question I had, and I think, Secretary Chu, I have 
always enjoyed talking to you about these new technologies, and 
a more optimistic approach to this. To turn a phrase on Senator 
Inhofe, to sort of crawl out of this temple of gloom that gets 
created when we talk about this legislation. I really see some 
optimistic possibilities here.
    When you look back, when President Kennedy talked about 
putting a man on the Moon, all the technologies that came out 
of that that weren't about the Moon, from GPS monitors to CT 
scans to satellite weather technology to the little chocolate 
space sticks that my family took on camping trips in the 1970s. 
Could you talk about the signal that this can provide to the 
private sector for investments, and explain that in a little 
detail? Because we have with this game of red light, green 
light that we have done in Congress with some of these tax 
incentives, we just haven't gotten to the place that other 
countries have gotten with investment.
    Mr. Chu. Sure. I think going back to what we need are long-
term signals, both on anything we do, whether it is a tax 
credit, subsidy of some kind, programs for it. On-again, off-
again is disastrous if you do it every other year. It just 
doesn't work. Denmark and Europe and Germany developed their 
wind turbine industry. They took it away from us, because they 
gave a very long-term view to this.
    Going back, those long-term signals, particularly a cap on 
carbon, and then you know what is going to happen in 2020, 
2030, 2040, 2050, can actually stimulate a lot of stuff. Now, 
yesterday we just announced the first 37 selections for our 
ARPA-E program. We had nearly 3,700 applicants. So we had to 
winnow it down to the top 1 percent.
    Some of those top 1 percent are truly spectacular. New 
batteries that could potentially scale up where you can store 
megawatt hours of energy, at a cost that perhaps is a factor of 
10 or 20 cheaper than existing technology. And this is an old 
metal liquid battery that the positive and the negative side of 
the batteries are metal, and the electrolyte in between is a 
metal salt. And when you charge the battery up, it goes to pure 
metal and a little electrolyte is left over and you discharge 
it. It goes, all the metals go back into the salt.
    So you can make a swimming pool sized battery, or you can 
make it this big. And so to see ideas like that, brilliant 
ideas that I am beginning to see on carbon capture, that could 
dramatically lower the cost, and when you see these things 
popping up, and most of what I see popping up has only appeared 
in the last 5 years.
    Senator Klobuchar. And your view is that if we don't put 
these kinds of clear market signals in place in legislation we 
may not get this investment.
    Could we just switch to nuclear? Because I am in the group 
that believes this has to be part of our solution as well, and 
I know you have been positive about this. Just the timeframe 
for nuclear, as we know that this should be, for those of us 
that believe it should be part of the solution. If we only 
relied on nuclear, what would be the timeframe of that? I guess 
I am getting to the point of, we have to have a combination of 
things, some things that move quicker.
    Mr. Chu. We are pressing very, very hard on getting the 
first of the nuclear loan guarantees. We have authorized $18.5 
billion for nuclear loans. That is able to start three, maybe 
four, depending on foreign partners. Four nuclear reactors at 
most. So we are working very, very hard. Hopefully very soon we 
can announce the first of these, and hopefully by the end of 
the year the rest of them.
    This is a beginning of the re-starting of the nuclear 
industry. Getting three or four going, I would say, doesn't 
really get it going. So I view that as the beginning. But we 
are also looking.
    Senator Klobuchar. So what is the timeframe on that, for 
when we will get that energy?
    Mr. Chu. Those loans?
    Senator Klobuchar. Yes.
    Mr. Chu. As I said, we are trying to move forward by the 
end of this year.
    Senator Klobuchar. No, but getting a nuclear power plant up 
and running.
    Mr. Chu. Well, that depends. It depends on a lot of things. 
It depends on what the NRC does. The NRC is trying to 
streamline its review process of the power plants. And so one 
wants to decrease the time of approval. They are trying to make 
generic approvals of each type of power plant, instead of just 
doing one off each time. And then a much quicker approval at a 
particular site.
    Senator Klobuchar. But how about when we really get the 
energy from it? Nothing to do with delays and the Government 
process.
    Mr. Chu. Ideally, it could be between 5 and 10 years from 
the time you say ``go ahead'' to the time you turn on the 
electricity.
    Senator Klobuchar. Thank you very much.
    Senator Boxer. Senator Voinovich.
    Senator Voinovich. Administrator Jackson, you and I and our 
staffs have had an ongoing disagreement about the thoroughness 
of your doing your analysis. In your report on the impacts of 
1733, you state, ``Because of these many similarities and the 
relatively small differences between the two bills, it is 
likely that a full analysis of 1733 would show economic impacts 
very similar to H.R. 2454.'' The fact is that you have not done 
a complete analysis, is that correct?
    Ms. Jackson. We have not run the full economic modeling, 
sir.
    Senator Voinovich. How long would it take you to do that?
    Ms. Jackson. I believe we estimated 4 to 5 weeks. I think 
that was the estimate to run the full suite of modeling.
    Senator Voinovich. So that we would actually have the 
numbers of a full analysis. And that is exactly what I have 
asked the Chairwoman that we have before we mark up this bill 
from this committee.
    The other thing that we have talked about, I remember when 
we talked and you came in, you said that you would prefer that 
we deal with climate change through legislation rather than the 
Clean Air Act. I note in this legislation that it does not 
preempt the Clean Air Act. In other words, we would continue to 
have, we would have this legislation and we would also have the 
Clean Air Act to contend with.
    Have you changed your position on that?
    Ms. Jackson. I have not changed my position. I have--my 
belief is that there is only one way to get economy-wide market 
incentives for reducing greenhouse gas emissions, and that is 
through new legislation. But I also firmly believe that the 
Clean Air Act has value and that there are common sense 
measures that can be taken under the Clean Air Act, either in 
the absence of or with new legislation.
    Senator Voinovich. Well, my feeling is this. If we are 
going to have a comprehensive climate change piece of 
legislation pass that the people out there, that Dr. Chu 
referred to, that are going to be making decisions, ought to 
know that this is it. In other words, these are the rules that 
we are going to abide by and we can count on it, and they are 
not going to change the rules on us 5 or 10 years from now.
    Dr. Chu, and by the way, the number in the Boxer-Kerry bill 
is 20 percent, Waxman-Markey is 17 percent. I can't believe 
that by increasing that percentage, that you are not going to 
have a larger impact on the economy, on the number of jobs and 
also on the rates that folks in Ohio are going to have to pay 
for electricity, for natural gas and pay for gasoline.
    But Dr. Chu----
    Senator Boxer. Do you want an answer to that?
    Senator Voinovich. No, I just----
    Senator Boxer. OK. Well, I would appreciate--can you freeze 
the time? I would appreciate your answering that in writing, 
because I know there is a very good answer to that. So if we 
could have that done as well. OK, go ahead.
    Senator Voinovich. Dr. Chu, one of my problems with this 
legislation is that the caps are unrealistic in terms of the 
availability of technology. The real issue that we have here is 
by 2020, are we going to have the technology, for example, to, 
there is an assumption about how many clean coal plants we are 
going to have. Are we going to have enough money to do that 
technology so that we can capture and sequester carbon? For 
example, my concern is this. The Chinese are putting on two 
coal-fired per week. If they continue to do these emissions 
from coal, it is urgent that we get at this carbon capture and 
sequester issue, because it is not only going to affect the 
United States, but also China.
    And I think that the President talked about 15 percent of 
this money, the bill money going to technology. And I think the 
Kerry-Boxer bill is a little better than Waxman, but not a 
whole lot better in terms of available money to do technology. 
Could you comment on that?
    Mr. Chu. Yes, I think that in the 2020 time scale, I see a 
couple things beginning to turn around. It is our goal, for 
example, to test, pilot a number of carbon sequestration 
things. I think in a reasonably optimistic analysis, these 
things could be done in 8, perhaps 10 years. So it is 2009 now, 
and then you begin to deploy on a more or less routine basis 
some things, so it begins to happen.
    Nuclear power, I said ideally, 5 to 10 years. Let's put it 
a little bit further and say 10 years from today power plants 
start turning on.
    So a lot of the things that will give us the much reduced 
carbon or completely clean things like that will take a scale 
of 10 years. We can grow the wind renewable aggressively, as we 
are doing now. Energy conservation, if we really think hard 
about how to implement that is, I believe, the lowest cost 
option to getting a lot of the carbon out of what we are doing. 
It is things like that. But it has to be done in a 
programmatic, very aggressive manner.
    Senator Voinovich. Thank you.
    Senator Boxer. Thank you.
    Senator, there is, the question you raised is answered in 
the EPA modeling, because we have some offsets to that increase 
that deal with allowing landfill, coal mine and natural gas 
system methane sources as offsets. That is why it doesn't 
impact the cost.
    Senator Specter.
    Senator Specter. Thank you, Madam Chairman.
    Administrator Jackson, the issue that Senator Voinovich has 
raised is a big one. One of the factors which has brought 
support to this legislation has been the provision in the House 
bill which does make the determination as to emissions on 
carbon dioxide. And the approach is to have to buy allowances, 
so you can't emit carbon dioxide unless you pay for it. 
Establishing that standard, that the Congress would, would have 
a tradeoff of not having EPA come in with additional 
regulation. And that is a big selling point for people who 
don't like the legislation.
    Now, there are those who are very much in favor of keeping 
EPA with its regulatory authority. But we face a very practical 
situation, like your thinking, if it comes down to getting the 
votes so that we really deal with carbon dioxide, and deal with 
it in a pretty rugged fashion, 2020, 2017 or whatever we do, 
and these allowances are very expensive, and we make that kind 
of gigantic progress, would you concede a little on that issue?
    Ms. Jackson. Senator, I certainly understand the point. I 
would only make three points for consideration, because I 
believe the EPA authority question is one that will certainly 
be discussed in this committee and in broader venues.
    The first is that there are--the cap in this bill is 
actually not entirely economy-wide. There are important carbon 
emission sources that could be addressed through Clean Air Act 
regulation. The transportation sector and the rules that 
Secretary LaHood and I cited are a good example of that. So 
obviously, not all Clean Air Act regulation is created equally.
    Second, and quite important, is that the move to market 
incentives, we have heard from communities who say it is very 
important that we also make sure that we don't inadvertently 
concentrate pollution in any one area. So part of the Clean Air 
Act New Source Review idea is that it allows for when 
significant investments are being made, or new sources are 
coming on, for us to reset the playing field, if you will, to 
say, no, listen, no matter what pollution allowances are 
calling for at that point, we need to think about the fact of 
whether we should be investing any more in a community. It does 
allow for equity concerns, if you will, across communities. And 
that is important.
    And last, I will simply say that I think that your point 
about the fact that this is designed to address some places 
that there are overlapping authorities is a good one. It is 
certainly one I respect tremendously. I have already come out 
to say that I believe very strongly that the most cost 
effective way to put a price on carbon and move our market and 
transition our economy and build a clean energy economy is 
through cap-and-trade and though legislation of this type with 
this kind of model.
    So I think the market incentive tradeoff with regulation is 
one that we are happy to continue to discuss with this 
committee.
    Senator Specter. Well, I am glad to hear you like cap-and-
trade and like the legislation. But in order to get the 
legislation, there may have to be a little give. But if there 
are new plants, they are subject to totally different 
standards. And you are dealing with carbon dioxide; you are not 
exactly dealing with a local problem. You are dealing with a 
general problem.
    But if you have other ideas that you think there needs to 
be more flexibility, I would suggest you let us know what they 
are, and let us deal with them in legislation. Because if we 
come up with legislation which is finite and people know what 
to expect, you will get a lot more support out of western 
Pennsylvania and maybe from Arlen Specter or Bob Casey, 
although I don't want to speak for my colleague.
    But if there are other things that you want, let us know 
what they are. And we will try to accommodate them. But there 
is a great deal to be gained by certainty, so people can make 
plans. That is what we want to legislate on. If the 
Administrator of EPA continues to have flexibility, people are 
going to say, we don't know where we are, we don't want to buy 
a pig in a poke. But as tough as it may be, through 
legislation, they may say OK.
    I am almost out of time, so I just want to make two 
comments, one to Secretary LaHood, about CLEAN-TEA, the 
legislation which Senator Carper has championed and I have co-
sponsored, the Carper-Specter bill, which the Chairwoman has 
graciously included in this legislation. That would provide for 
a reduction of vehicular oil burning or cars, for mass transit, 
for bicycles, for rail. And I would like to see us pursue that 
at the administrative level.
    And a question for Chairman Wellinghoff to be answered for 
the record, I have introduced in the last two Congresses 
legislation, now in Senate Bill 32, which calls for hearings by 
FERC. And in my travels through Pennsylvania, 67 counties, I 
have a lot of complaints about transmission line and power 
lines and pipelines. My legislation would require a hearing. 
And a hearing is a very useful thing. Some hearings are not 
very useful, like my town meetings in August.
    [Laughter.]
    Senator Specter. But a hearing has great utility in 
allowing people to express themselves and to have some 
consideration, even if you don't find it. So I would appreciate 
it if you would take a look at Senate Bill 32, which Senator 
Casey and I are pursuing. I think it would take a lot of the 
steam off, if you come out and listen to people. I find it very 
helpful. And even if you can't agree with people, they like to 
have an opportunity to hear it.
    Thank you, Madam Chair.
    Senator Boxer. Thank you, Senator Specter, and you are 
absolutely right about certainty. That is what this legislation 
is all about. Without the certainty, you are not going to have 
the investments. Without the certainty, nobody is going to know 
what happens.
    So we will work together to make sure that you have that 
certainty that you feel is necessary. As long as we protect 
clean air, that is what we are about.
    Senator Specter. My constituents and I very much appreciate 
that assurance. Thank you.
    Senator Boxer. Absolutely. Thank you, Senator.
    Senator Sanders.
    Senator Sanders. Thank you, Madam Chair. Just a couple of 
questions for Secretary Chu and a question for Secretary 
LaHood.
    The State of Vermont has, I believe, led the country in 
terms of energy efficiency. We are actually consuming less 
electricity now than we were a couple of years ago. And it is 
not like, the recession has hit us, but not any worse than it 
has hit other States.
    Mr. Secretary, I understand you are announcing today a very 
significant funding for the ``smart grid,'' and Vermont is 
going to do well by that. My understanding is that in previous 
studies, a home can reduce its electricity consumption by 15 or 
20 percent with one of these smart grids. Can you take a moment 
to explain to the people what you hope to accomplish with this 
smart grid program?
    Mr. Chu. Well, the first thing that will happen with a 
smart grid, especially with homeowners, is what you want to do 
is you want first to let the homeowners know sort of in real 
time how they are using electricity. And at times, as we 
transition to real costs, real time pricing of electricity, for 
example, it is not true in Vermont, but let's say in a place 
where there is a lot of air conditioning, and you are using 
energy, it costs a lot of money to provide power during those 
peak times.
    We have about 5 percent, if you look at the power that we 
have, a lot of peakers, they are essentially idle except for 
maybe the last 5 percent of the time.
    Senator Sanders. The bottom line here, it will enable 
consumers of electricity to use that electricity much more cost 
effectively. Do you have any estimates as to what kind of 
savings we can see in that in terms of percentage of reduction 
of electricity in the average home?
    Mr. Chu. Not off the top of my head. But I know globally, 
across the United States, if we just peak load shift that last 
5 percent, which we can do without really any disruption or 
change in lifestyle, globally and in the United States, we are 
talking about over $100 billion per year.
    Senator Sanders. The other thing is, Mr. Secretary, I have 
a chart here, which deals with the cost to build new power 
plants in 2009. What it suggests is that the least expensive 
way forward is through wind, followed by biomass, followed by 
solar thin film, followed by geothermal, followed by solar 
thermal. Then we have coal gasification. And that number does 
not include coal sequestration, which makes that a lot more 
expensive. Then we have nuclear.
    In other words, what this chart tells you, if you are 
serious about building more capacity in the United States, the 
most cost effective way to go forward is through the new 
sustainable energies. What does that chart tell you in terms of 
how this country has to invest into the future?
    Mr. Chu. Unfortunately, my eyes are getting old.
    [Laughter.]
    Mr. Chu. I can read the axis, I can't say about the 
numbers. But certainly one of the things is that we are trying 
to, first, the first thing you do is you work very hard on 
energy conservation, so you don't build anything new. And you 
just save. If done correctly, that is a money maker. The 
investments in energy efficiency, the consumer actually keeps 
that money.
    So that is the best thing you can do.
    Senator Sanders. My only point here is that the most 
expensive new electricity generation is nuclear and coal. Yet, 
I sit around this committee and all I hear is nuclear and coal. 
It seems to me that if we are smart, and we want to save 
taxpayers money, and we want to protect the environment, and we 
want to create jobs, maybe we should start looking at wind, 
biomass, solar and geothermal.
    Let me ask Secretary LaHood a question. This is just a very 
general question. People come back from visits to Europe, they 
come back from visits to Japan, they come back from visits to 
China, and they say, wow, they have these fast, these high 
speed rails, zillions of people going to work on mass 
transportation. And we come back to the United States, we have 
trains that are going 25 miles an hour over rickety rail. Why 
is it that the United States today is so far behind other 
countries in terms not only of rail, but of public 
transportation in general? What are we going to do about it?
    Mr. LaHood. Lack of investment. We have never made the 
investment. If President Eisenhower had signed the Passenger 
Rail Bill instead of the Interstate Bill, we would have state-
of-the-art like they do in Spain, like they do in Europe, like 
they do in Asia. But we have a state-of-the-art interstate 
system. Second to none in the world.
    But because of President Obama's vision, because of Vice 
President Biden's vision, high speed passenger rail, better 
passenger rail is coming to America. The down payment is $8 
billion. That is not near enough. But there are companies from 
Europe and Asia in the United States right now ready to make 
investments in passenger rail. And we have some great proposals 
that have come into the Department. We are evaluating them for 
the use of our $8 billion. We need help from Congress to----
    Senator Sanders. But you will agree that $8 billion is a 
fairly paltry sum?
    Mr. LaHood. It is a down payment. It is a very small 
amount. But it is $8 billion times more than we have ever had 
at the Department.
    Senator Sanders. All right. Let me ask you this, also. It 
is not just rail. I come from a rural State where people, in a 
vast majority of instances, can't get to work on public 
transportation. They have to use their car, period. What are we 
going to do about that?
    Mr. LaHood. We are going to continue to work with you, 
Senator, and others that represent rural States on making sure 
there are good transit services for people that want to live in 
rural America. We owe it to them to do that. There are people 
that want to stay in small towns, but yet get to a larger area 
to go to a doctor or go to the grocery store or go to the 
drugstore. And we are going to work with you and other Senators 
from rural America to make sure these transit services are 
available.
    Senator Sanders. Madam Chair, I would just simply say that 
when we look at transportation, we have to have a special focus 
on rural transportation, which needs just an enormous amount of 
improvement. Thank you all very much, to all of the panelists.
    Senator Boxer. Thank you, Senator.
    Senator Udall.
    Senator Udall. Thank you, Madam Chair.
    I don't want to neglect Chairman Wellinghoff, so I want to 
ask you a question. Your testimony here today discussed the 
need for a renewable electricity standard, and RES and the 
climate bill are intended to be complementary. We expect that 
with what the leadership has talked about them to be joined on 
the Senate floor. Several Senators have joined me in 
introducing legislation that would set a 25 percent renewable 
electricity standard by 2025. Based on the rapidly declining 
costs and the huge potential resource, especially in the West, 
do you believe that this standard is achievable, and what would 
its impact be on our climate goals?
    Mr. Wellinghoff. Thank you, Senator Udall. I assure you, I 
don't feel neglected.
    I do think it is achievable . In fact, I was one of the 
primary authors of the renewable portfolio standard in the 
State of Nevada and am very familiar with California's and 
Colorado's and your State's efforts in that area. We now have 
31 States, in fact, in this country that have renewable, 
portfolio standards for renewable energy standards. But I think 
it is essential that we have a national standard. It is time 
that we have a national standard, and I think the goals that 
you set are very achievable.
    Senator Udall. Secretary Chu, recently the Potential Gas 
Committee found that the U.S. natural gas supply has increased 
40 percent in just 2 years, and that some industry estimates 
are pointing to a 100-year supply of U.S. natural gas. I 
believe that natural gas is an overlooked resource and has 
great potential to replace oil in heavy truck transportation, 
create jobs in States like New Mexico. Does the Department of 
Energy believe that we are entering a time of abundance with 
natural gas that could make our climate goals much easier to 
reach, since it is a relatively low carbon fuel?
    Mr. Chu. The short answer is yes. I have heard estimates 
considerably more optimistic than the one you just cited. And 
if you include Canada, it is considerably more. So we are 
beginning to look at things, for example, in central locations 
where there is not an infrastructure problem. We are funding, 
piloting vehicles that are propelled by natural gas, delivery 
trucks, buses, go to the central station and then will always 
return to that station, to see if this is a viable thing.
    Certainly in this century, because of the new technologies 
that can recover natural gas from shale, it is a lower carbon 
option.
    Senator Udall. And from everything your scientists tell 
you, these are pretty reliable estimates in terms of the 
increase and the potential out there?
    Mr. Chu. They appear to be.
    Senator Udall. And talking about renewable energy here, 
from your perspective on renewable energy, are the costs per 
kilowatt coming down for solar and wind, and should we expect 
it to continue under this legislation? And are the innovation 
benefits in this area reflected in traditional economic 
analyses of climate legislation? Or is this an extra benefit 
that we should expect to see?
    Mr. Chu. Well, the costs of wind and solar are coming down. 
They are steadily coming down. It is looking very good. Right 
now, the cost of the solar module, the retail cost, has just 
gone down below a dollar per watt. A decade ago, it was $5, $8 
a watt. So it is remarkable. The things that we have to do in 
terms of photovoltaic solar, in particular, is to balance the 
system costs. It has to be coming down at that same rate, much 
cheaper inverters, much easier to install type of modules, 
things of that nature.
    But I am optimistic that solar and wind, they are 
continuing to come down.
    Senator Udall. Secretary LaHood, you talked a little bit 
about railroads and bringing back the railroads. Is that an 
area where we could see significant savings in terms of energy 
efficiency and lower costs?
    Mr. LaHood. Take a lot of cars off the road, take a lot of 
CO2 out of the air. It is much cleaner burning 
transportation, whether it is light rail or whether it is 
passenger rail. We know that it is cleaner burning, and we know 
that when somebody gets on a train, they are out of their 
automobile. The benefit of it will be enormous in terms of 
taking CO2 out of the air.
    Senator Udall. And it is a big priority for your 
Department?
    Mr. LaHood. It is an $8 billion priority right now, and we 
hope with the help of all of you in the Senate and the House, 
we will continue to make it a priority. But it is President 
Obama's vision and Vice President Biden's vision. I want to 
give them the credit on this. Senator Sanders' question is very 
important. We haven't made the investments in America in 
passenger rail. But we are about to do it.
    Senator Udall. Thank you very much. Thank you, Madam Chair.
    Senator Boxer. Thank you very much.
    I just want to give us a little update on how we are 
proceeding. We are going to go down the list of everybody, and 
we are going to, therefore next call on Senators Lautenberg, 
then Merkley, Whitehouse and Cardin, of those who are here. We 
are not going to have any more rounds. So you should know that, 
because it is getting very late.
    I also wanted to say, while colleagues are here, tomorrow 
we have panel one on jobs and economic opportunities, panel two 
on national security, and I guess is it two panels? Where is 
the third panel? Panel three on utility policies and panel four 
on adaptation. We have a very big agenda tomorrow. We start at 
9:30. We are going to work throughout the day just taking a 
small lunch break. So I wanted to let colleagues know.
    Next on the list, Senator Lautenberg.
    Senator Lautenberg. Thanks, Madam Chairman.
    I am struck by the fact that as we look at the placards 
here we see, why not? Those are the questions that are asked. 
Why not do something positive? Why doesn't it say, the reason 
that we want to do these things is a benefit to ourselves, to 
our families, to future generations, to the health and well-
being of America? We don't see any placards up there that say 
that. We say, why not. Well, it is the wrong attitude, I think, 
and that is what has got us in the trouble that we have.
    To Administrator Jackson and Secretary Chu, by the way, 
thank each one of you, you are a terrific panel, and a good 
start that we had, Madam Chairman, with John Kerry here.
    The Intergovernmental Panel on Climate Change, based on the 
research of leading scientists around the world, says U.S. has 
got to cap emissions to at least 20 percent below 2005 levels 
by the year 2020. A recent study says that we can reduce our 
emissions by 17 percent by 2020 without adding to that cost 
using just energy efficiency.
    Now, do either one of you, you first, Mr. Secretary, agree 
that we or doubt that we can't achieve a 20 percent emissions 
reduction by the year 2020?
    Mr. Chu. Oh, it is achievable, but you have to look at 
every corner. And also, I forgot to mention, that would also 
include, in addition to efficiency, there are offsets: 
reforestation, agricultural, ways of changing agricultural 
practices. That is also part of the mixture. Some of the other 
technologies that I talked about, like nuclear and coal; it is 
going to take a while to get them on. But you can promote the 
renewables that we do have. The cost is going down. Wind is 
approaching parity with new power in terms of coal or gas.
    So if you look at all the sectors and say, you can say, 
yes, we can do this. But you have to look across the board.
    Ms. Jackson. And Senator, the only thing I would add to my 
colleague here is that the clock is ticking. So every time we 
don't have legislation, every time we don't move forward, every 
time we don't have a price on carbon, we are losing precious 
time that might help us get to that 2020 goal. So we are 
actually racing against the clock. It doesn't help to start in 
2015.
    Senator Lautenberg. But you each agree that we can do this?
    Ms. Jackson. Yes, we have to.
    Senator Lautenberg. And the Intergovernmental Panel and the 
Union of Concerned Scientists says that we need to be on that 
kind of a glide slope in order to get our long range objective, 
which is a longer time than I may be here. No? Thank you very 
much for that assurance.
    [Laughter.]
    Senator Lautenberg. Secretary LaHood, good to see you here. 
We have had a chance to get to know one another over the period 
of time that you are serving. You are getting really good at 
this job, I want to tell you.
    So when we look at Amtrak, other forms of passenger rail, 
they have a need to be eligible to receive that funding. What 
is the role that passenger rail can play in lowering 
congestion? You described preventing pollution, reducing our 
dependence on oil. Do you have any kind of an estimate that 
tells us what we can achieve there?
    Mr. LaHood. I will get you an answer for the record, 
because I would like to be specific on that. But we know every 
time you get someone out of their car, you reduce 
CO2. The work that we have done with the EPA and the 
Administrator, Lisa Jackson, on getting to a much better 
gasoline standard for automobiles by 2012 and 2016 is enormous. 
Every time somebody uses mass transit, whether it is a bus or 
light rail or Amtrak, we know that they are out of their car, 
we know that car is not on the road.
    But I will be happy to get you the statistics. And we know 
that we have some really good proposals coming in to us that 
are in the Department for passenger rail. And we are evaluating 
those and hopefully we will make some decisions on the $8 
billion later this year.
    [Mr. LaHood's response to the above question follows:]

    Properly designed intercity passenger rail service can play 
an important and simultaneous role in all three--easing 
congestion, relieving pollution, and enhancing energy 
independence. Passenger rail can accomplish all this by 
offering competitive door-to-door travel times at affordable 
fares, thus diverting substantial traffic from the energy 
intensive air and automobile modes.
    For example, the Department's commercial feasibility study 
(CFS) of high speed rail \1\ showed that in California, a new 
high speed rail system (analogous to that currently proposed by 
the State) would generate 4.7 billion passenger-miles in 2020, 
of which 2.4 billion would be attracted from air and 0.9 
billion from auto. These diversions would help to ease 
congestion at airports and on highways.
---------------------------------------------------------------------------
    \1\ High-Speed Ground Transportation for America (September 1997), 
the Department's most recent corridor-by-corridor analysis of the 
operating and economic potential of high speed rail.
---------------------------------------------------------------------------
    Furthermore, as discussed in the Department's Vision for 
High-Speed Rail in America, intercity rail consumes about 25 
percent fewer BTUs per passenger-mile than travel by 
automobile, and about 18 percent fewer BTUs than air travel. 
\2\ These differentials, when multiplied by the volume of 
traffic diverted, result in substantial emissions and energy 
savings. For instance, the CFS projected a present value of air 
and highway congestion delay savings and emissions reductions 
of some $13 billion (2009 dollars) from the California New HSR 
project alone.
---------------------------------------------------------------------------
    \2\ The source is the U.S. Department of Energy, Transportation 
Energy Data Book, Edition 26, May 2007.
---------------------------------------------------------------------------
    As regards energy independence, while even diesel powered 
trains can economize on fuel consumption over other modes, 
electrified railways have the added potential of being 
completely oil independent. Already today, Amtrak's Northeast 
Corridor segment between New York and Washington obtains about 
38 percent of its power from totally green and totally domestic 
hydroelectric power.
    For all these reasons, intercity passenger rail offers 
great promise of achieving congestion relief, pollution 
abatement, and energy independence, all at the same time--even 
as it increases the options and mobility available to 
travelers.

    Senator Lautenberg. Ms. Jackson, a lot about the cost of 
passing a global warming bill. But the report by a former chief 
economist at the World Bank found that the inaction on global 
warming could cost 10 times as much as transitioning to a clean 
energy economy, because of the increased risk of drought, 
flooding, water scarcity, rising sea levels, social disruption. 
How might our environment be affected and our economy as well 
if we--the question is too much, this is too easy for you, and 
I don't want to give you easy questions. You are better at the 
hard ones.
    So with that, I say, thank you very much, each one of you 
for your service and your being here today. Thank you, Madam 
Chairman.
    Senator Boxer. Thank you, Senator Lautenberg. I think this 
cost of doing nothing is a very important point to keep on 
making. It is huge. And it is not in any of the economic 
models. We have to keep remembering that.
    Senators Merkley, Whitehouse and Cardin.
    Senator Merkley. Thank you very much, Madam Chair.
    The first question I wanted to address to Secretary Chu. 
The McKinsey study has laid out an analysis that we could 
achieve 17 percent reduction in our carbon dioxide through 
energy efficiency alone. It is very interesting to look at some 
of the numbers. For example, the Lazar energy consulting firm 
has laid out the cost per kilowatt in energy efficiency as 
between zero and $50, whereas the complete range is below any 
form of new production.
    And in essence, because energy efficiency also reduces the 
power bills that folks pay, there is a real feedback that 
expands the purchasing power of citizens in our Nation.
    So given this set of facts, the low cost of energy 
efficiency, the significant impact that energy efficiency alone 
could have on carbon dioxide, are we under-investing in energy 
efficiency, even in this bill? Do we need to go further? Should 
we have a separate energy efficiency standard and really push 
all the concepts that are cost effective in that realm?
    Mr. Chu. Yes. The McKinsey study I know came out just this 
summer, said by 2020 you can actually decrease the energy 
consumption, the end use consumption by 23 percent of the 
aggregate consumption, which includes the generation of all 
those losses by 26 percent. If you only count those investments 
based on net present value, that would make money. So the 
report actually said $680 billion savings, and you get 26 
percent reduction in energy.
    However, there are many economists who differ on that 
statement. So we have actually been spending a lot of time 
digging into it, trying to understand. There are some barriers 
at work here. For example, if you want to retrofit your home, 
there are barriers, what economists would call market failures. 
Many people don't know what to do. It is inconvenient. There is 
inertia, and there is also a finance barrier.
    So the short answer to your question is, if we overcome all 
those barriers, then we can start to recoup this. That was part 
of my earlier answer. Energy efficiency, you can't just say 
make it happen. You have to be very proactive because of these 
market failures.
    Senator Merkley. Well, certainly I and many members of this 
committee would love to work with you as you dig deeper into 
those numbers and identify those barriers, how we might 
overcome them and go further in that effort. Because when you 
look at what you can do with energy efficiency alone, and give 
the fact that we are closing in on 9 percent below the 2005 
levels already on carbon dioxide production, it starts to make 
it look like 20 percent by 2020. That is an additional 11 
percent. Isn't that demanding? And we could actually bridge 
that entire factor with energy efficiency alone if we really 
applied ourselves to it, a strategy that actually pays us back.
    Mr. Chu. I agree. We are rolling out a couple of things. 
For example, on retrofitting, it costs a lot of money. If you 
did it in a mass produced sort of way, like you get one-half of 
the entire block to sign on, so the energy auditor goes from 
house to house to house to house, as a trusted, certified 
auditor, and then the truck that blows in the insulation goes 
to house to house to house, all in the same block, you can 
easily see where the price can come down by a factor of two or 
three.
    And there is a trust, it is a social event, a block party. 
So we are going to be trying to pilot these things in the 
coming year to see if we can really bring down those costs.
    Senator Merkley. Thank you.
    Another aspect of energy efficiency is turning to electric 
vehicles. And my colleague, Lamar Alexander, noted that we 
could work to have 50 percent of our cars be electric over the 
next 20 years. I would reframe that a little bit differently in 
that I have read statistics that if we were to take and have 
the cars on our road all be able to go the first 30 miles on 
electricity, so they could potentially be hybrid cars rather 
than full electric, preserving additional range, but if all the 
cars could go 30 miles on electricity, we would reduce the 
carbon dioxide production, which is, assuming the electricity 
comes from renewable sources, by 80 percent from passenger 
vehicles. Should we be working more to really push the frontier 
on the conversion of the American auto fleet. I would open this 
up certainly to Secretary Jackson and Secretary LaHood and to 
yourself.
    Mr. LaHood. Let me just say this. I was in Detroit recently 
and visited all three of the American automobile manufacturers. 
I drove the Volt. It is the wave of the future. It is the way 
that, talk about a company that is forward thinking, GM is 
forward thinking on this. And so it is coming. And they get it. 
Because they know this is what the American people want, 
because the American people get it. It is an amazing vehicle, 
and it will be here soon.
    Senator Merkley. Thank you.
    Senator Boxer. We are going to move on, because we are over 
our time.
    Senator Whitehouse.
    Senator Whitehouse. Thank you, Madam Chair. First of all, I 
want to thank this very distinguished panel for being here. I 
know you are all very busy and have significant 
responsibilities. But I do think it is helpful for you to be up 
here, and I hope the fact that every single one right now of 
our Republican colleagues has departed, despite the fact that 
we have such a distinguished panel, including four Cabinet 
members here, helps give you a signal as to how difficult our 
lift is going to be on this issue with our colleagues.
    A few quick points, the first, Secretary Chu, as you have 
heard from Senator Alexander and others, there is considerable 
interest in expanding our nuclear energy supply. The Navy does 
operate nuclear plants very safely. However, they do generate 
waste. And the waste is a considerable concern. I would urge 
that as you look at the nuclear component of our energy 
portfolio, you invest aggressively in potential technologies 
that could take our existing nuclear waste and reconfigure it 
into fuel and turn it into value. I have heard estimates that 
the power contained in our nuclear waste, if properly 
reconfigured, could provide $2 trillion worth of energy, not 
only essentially free energy, but energy that actually comes at 
the savings of not having the disposal and national security 
risk costs of all of that.
    So I urge you to look very much in that area, and I will 
certainly be far more comfortable with whatever the nuclear 
strategy is if it has that investment in the future. One day we 
should be burning this nuclear waste as fuel and not having it 
a continuing hazard for thousands of generations into the 
future.
    Mr. Chu. I couldn't agree with you more. In fact we have 
started a detailed look at this. If you look at the uranium you 
dig out of the ground, and you ask how much of the energy 
content of that uranium is actually used in our current light 
water once pass through cycle, after you have enriched, there 
is energy content in uranium 238. It is about 1 percent. Only 1 
percent of the energy content is used. The rest is either 
depleted uranium or----
    Senator Whitehouse. Let's work together on making sure we 
do that.
    The next question is for Chairman Wellinghoff. FERC, I 
believe, has some oversight responsibility over the dispatch 
rules by which units are turned on and off. They are agreed by 
the local ISO, but they have to be filed and approved by FERC, 
if I am not mistaken.
    Mr. Wellinghoff. Yes, to the extent that there are 
organized wholesale markets with independent system operators, 
those independent system operators, the regional transmission 
organizations, in fact do file their tariff rules with FERC as 
to how they do dispatch units within their footprint.
    Senator Whitehouse. It is my understanding that those 
dispatch rule do not take the environmental costs of the units 
into consideration whatsoever, and that all other things being 
equal, they would run a coal plant instead of a hydro plant 
because there is no adjustment for the pollution costs. And I 
would like to work with you to see what might be necessary to 
have FERC take a look at that. Because as we all know, those 
environmental costs truly are economic costs. And to ignore 
them is to give an unwarranted subsidy to certain industries at 
the expense of others and the public health.
    Mr. Wellinghoff. We would very much like to work with you 
on that. In fact, I was in China 2 years ago, and they were 
talking about economic dispatch versus environmental dispatch, 
actually looking at environmental dispatch in China. So we were 
very interested in looking at the feasibility of that in this 
country and how it affects the economics of the overall system. 
We would like to do that very much.
    Senator Whitehouse. Good. Finally, Administrator Jackson, 
the last point that I would like to make with you regard to 
some of the comments that have been made about Clean Air Act 
enforcement. The perspective that I have on this is that for 
many years, corporate polluters in the Midwest have been 
ducking and dodging around the Clean Air Act. They have not met 
their responsibilities. What they have done is built 
smokestacks, higher and higher smokestacks, now reaching as 
high as 1,000 feet.
    Now, a smokestack doesn't make the air any cleaner. What it 
does is it takes the poison, the pollution, and it exports it 
to other States. Right now, in Rhode Island, on a bright summer 
day, the radio in the morning could easily announce that today 
is a bad air day. And infants and the elderly and people with 
breathing disabilities should stay inside in the air 
conditioning. And it is not because of local emissions. It is 
because of what is being rained in on us by these power plants. 
It is not just my State, Senator Lautenberg's State is 
downwind, Senator Cardin's State is downwind, Senator Sanders' 
State is downwind, Senator Gillibrand's State is downwind.
    So as we look at this Clean Air Act, there are a great 
number of us who believe, I should say, there are a great 
number of us who are in that geographic position. I very, very 
strongly believe it is time that these power plants were held 
to account. They have dodged around the law for too long. And 
their corporate lobbyists have won against our children's 
lungs. I for one am fed up with it.
    So I hope you will stand firm on the Clean Air Act. I, at 
least, and I hope many of my colleagues, will support you on 
that.
    Senator Boxer. Thank you so much, Senator.
    Senator Cardin.
    Senator Cardin. Madam Chair, thank you very much.
    I think each member of the committee has expressed our 
appreciation for you all being here. I am going to go a little 
bit further. I thank you for your public service, taking on the 
incredibly important jobs that you are taking on in the Obama 
administration and doing such an effective job on your 
individual portfolio, but also understanding it is part of a 
national strategy as we deal with the energy issues.
    I thank you for that commitment to get the job done, going 
well beyond what is your immediate responsibility.
    I want to just underscore two points that were made. 
Secretary Chu, your point about conservation in our energy 
policy, critically important; and Secretary LaHood, about 
investment and how we make our investments. Let me start first 
by saying, I agree completely on the comments about passenger 
rail, but I take that a lot further. I want to talk about 
transportation for a moment. Transportation represents 30 
percent of our greenhouse gas emissions and 60 or 70 percent of 
our oil use. So it is a huge issue. And we could do a lot 
better.
    I want to get to public transportation, going well beyond 
just passenger rail. I first start off by saying, this 
legislation makes a huge investment in this area. Thank you, 
Madam Chair. Thank you for what you have done for public 
transportation in this, in your mark. It will make a huge 
difference on the infrastructure we need to conserve energy, as 
well as to have a more efficient way to have transportation 
needs met.
    But I want to get to the second point, which is how you use 
your existing authorities. I would underscore the point that 
Senator Whitehouse made about Administrator Jackson. You have 
put the Environment back into the Protection Agency. We thank 
you for that. You have used the tools you have. You have tools 
today that you can use, and you are using those tools.
    And Secretary LaHood, I know you have a huge budget. Not 
big enough, you would like to have more, we would all like you 
to have more, we would like you to have more predictable 
funding. But we do subsidize the passenger car more than we do 
public transportation in this country. And we need to change 
that. It is not going to be easy.
    But we need to look at how we use the existing resources we 
have at our disposal. So I guess my point is, we need to get 
this bill done. This bill provides opportunities for us to make 
the type of investments in transportation that will make our 
country more secure, much more competitive and certainly 
friendlier toward the environment.
    And by the way, for those who live in the Washington area, 
maybe I could have gotten here in time if we had a better 
transportation system in place for commuting. It affects all of 
our lives. It is the second worst congested area in the 
country, next to New York. We could double the number of people 
using public transit here. We just don't have the capacity, and 
it is old, and it needs investments.
    So it is a matter of investment. This bill will make a 
difference. But I just urge you all, in each one of your areas, 
be aggressive with the tools that are currently available. This 
bill is meant to supplement, not to be the sole effort we have 
in the type of commitments we make to an energy policy in this 
country.
    That is my message. Let's figure out a way we can get this 
budget more focused on what we need to do as we work to give 
you the additional tools that are necessary. Thank you for your 
commitment. I have a lot of confidence that what you are doing 
is going to make a huge difference. We need to work together to 
get the job done.
    Thank you, Madam Chair.
    Senator Boxer. Thank you very much.
    Let me just thank everybody. I am very proud to say that 
President Obama today, in a speech, noted the markup in this 
Environment and Public Works Committee today. He said he 
believes that a comprehensive piece of legislation is what 
needs to happen. I am paraphrasing here. He said that is 
finally going to make clean energy the profitable kind of 
energy in America. Legislation that will make the best use of 
resources we have in abundance through clean coal technology, 
safe nuclear power, sustainably grown biofuels and energy we 
harness from the wind, waves and the Sun.
    So he noted then that we are having these hearings.
    I just want to say to all of you, thank you so much, not 
only for your eloquence today, but just for working with us 
these many, many, many weeks and months to get to this stage. 
And there are always naysayers when you are about to embark on 
change. But positive change only comes with courage. And all of 
you have shown that courage here today.
    Thank you very much. We stand adjourned until 9:30 
tomorrow.
    [Whereupon, at 1 p.m., the committee was adjourned, to 
reconvene at 9:30 a.m. the following day.]
    [An additional statement submitted for the record follows:]

                 Statement of Hon. Kirsten Gillibrand, 
                U.S. Senator from the State of New York

    Thank you, Chairman Boxer, for your leadership and hard 
work on this very critical legislation.
    I'd like to recognize my Chairman from the Senate Foreign 
Relations Committee, Senator Kerry, who has joined us today, 
for his dedication to these issues.
    I'd also like to thank our witnesses for taking the time to 
be here today to provide their perspective and expert analysis 
of this legislation.
    S. 1733, the Clean Energy Jobs and American Power Act, is 
the platform to move America forward on a path to achieve 
energy independence, revitalize our economy by creating green 
jobs here at home, and protect our environment from the threats 
of global climate change.
    I have heard from thousands upon thousands of New Yorkers 
of all age groups, from Brookhaven to Brooklyn, to Buffalo, who 
have called, written, visited my offices, and attended events 
to push for strong legislation that will transition our Nation 
to a clean energy economy.
    I am confident that the Clean Energy Jobs and American 
Power Act is the framework that will do just that.
    The passion and advocacy of my constituents have been 
invaluable leading up to these important hearings, and I thank 
them for their continued support to see strong climate change 
legislation across the finish line.
    Over the course of these hearings I look forward to 
receiving testimony from witnesses representing business 
interests and local governments from around the country, 
describing how this legislation will lead to American 
prosperity and a demonstration of the kind of innovation and 
ingenuity that our country is built on.
    In particular, I am interested in exploring a number of 
aspects of this legislation that are critical to my 
constituents in the State of New York.
    First, the Clean Energy Jobs and American Power Act 
includes a framework for significant investments in carbon 
reducing transportation planning.
    The development and expansion of mass transit systems are 
critical to New Yorkers who take one-third of the Nation's mass 
transit rides and are vital to mitigating America's greenhouse 
emissions, 30 percent of which comes from the transportation 
sector.
    I'm also interested in the many ways that this legislation 
prioritizes and incentivizes energy efficiency, which as we all 
know is one of the most reliable and cost effective ways to 
reduce energy bills for consumers and cut harmful emissions.
    S. 1733 includes a provision I authored, entitled the Green 
Taxis Act. This legislation will allow municipalities to set 
standards for emissions and fuel economy for taxicabs using 
Federal minimums and predicated on the commercial availability 
of vehicle technologies.
    These provisions will be beneficial to many cities across 
the United States.
    Replacing the current fleet of taxicabs on New York City 
streets with fuel efficient vehicles would reduce greenhouse 
gas emissions by more than 296,000 tons, or the equivalent of 
taking 35,000 cars off the road.
    In addition, switching to fuel efficient vehicles would 
save each driver an average of $4,500 annually in gas costs and 
reduce the upward pressure on passenger fares.
    As I have stated in previous hearings, one area that is of 
vital concern to me is providing effective oversight for the 
carbon market created by this legislation.
    Ensuring that we have an active carbon market that allows 
for the type of customization that end users need in order to 
finance a new clean power facility, large scale solar or wind 
project, or international reforestation project is central to 
this legislation's success.
    I look forward to working with my colleagues, Senators 
Baucus and Klobuchar and Chairman Lincoln in the Agriculture 
Committee, as we engage in comprehensive market reform that 
will set a framework for how carbon markets are regulated to 
protect consumers from market manipulation while facilitating 
investment in emissions reductions.
    I am particularly interested in the provisions in this 
legislation that will allow our farms and forests to engage in 
activities that have real, measurable benefits in emission 
reductions.
    Ensuring that New York's dairy farms and private forest 
lands can participate in activities that help us reach our 
climate goals is important to me.
    Just as important as what is in this legislation, is what 
is not.
    S. 1733 does not include provisions that were part of the 
House passed version that I believe are detrimental to reaching 
the goals of comprehensive climate change legislation.
    The Clean Energy Jobs and American Power Act preserves 
Clean Air Act authority to regulate the Nation's oldest and 
dirtiest coal plants.
    These protections are critical to New Yorkers, as we are on 
the receiving end of air pollution from many of these plants--
contributing to acid rain, harming natural resources such as 
the Adirondacks, increasing contamination in our waterways, 
limiting the number of fish we can eat, and increasingly 
growing asthma rates that raise our health care costs.
    The Clean Energy Jobs and American Power Act will lead to 
long-term economic prosperity, energy security, and the 
protection of our environment for future generations.
    Chairman Boxer, I want to thank you, my colleagues on the 
committee, and the staff for all of their hard work on this 
legislation.

    [Additional material submitted for the record follows:]
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