[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]




 
                      AMERICAN ENERGY INITIATIVE:
                       IDENTIFYING ROADBLOCKS TO
                       WIND AND SOLAR ENERGY ON
                       PUBLIC LANDS AND WATERS,
                         PART II--THE WIND AND
                      SOLAR INDUSTRY PERSPECTIVE

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

                           OVERSIGHT HEARING

                               before the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                        Wednesday, June 1, 2011

                               __________

                           Serial No. 112-37

                               __________

       Printed for the use of the Committee on Natural Resources



         Available via the World Wide Web: http://www.fdsys.gov
                                   or
          Committee address: http://naturalresources.house.gov



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                     COMMITTEE ON NATURAL RESOURCES

                       DOC HASTINGS, WA, Chairman
             EDWARD J. MARKEY, MA, Ranking Democrat Member

Don Young, AK                        Dale E. Kildee, MI
John J. Duncan, Jr., TN              Peter A. DeFazio, OR
Louie Gohmert, TX                    Eni F.H. Faleomavaega, AS
Rob Bishop, UT                       Frank Pallone, Jr., NJ
Doug Lamborn, CO                     Grace F. Napolitano, CA
Robert J. Wittman, VA                Rush D. Holt, NJ
Paul C. Broun, GA                    Raul M. Grijalva, AZ
John Fleming, LA                     Madeleine Z. Bordallo, GU
Mike Coffman, CO                     Jim Costa, CA
Tom McClintock, CA                   Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Jeff Denham, CA                          CNMI
Dan Benishek, MI                     Martin Heinrich, NM
David Rivera, FL                     Ben Ray Lujan, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Scott R. Tipton, CO                  Betty Sutton, OH
Paul A. Gosar, AZ                    Niki Tsongas, MA
Raul R. Labrador, ID                 Pedro R. Pierluisi, PR
Kristi L. Noem, SD                   John Garamendi, CA
Steve Southerland II, FL             Colleen W. Hanabusa, HI
Bill Flores, TX                      Vacancy
Andy Harris, MD
Jeffrey M. Landry, LA
Charles J. ``Chuck'' Fleischmann, 
    TN
Jon Runyan, NJ
Bill Johnson, OH

                       Todd Young, Chief of Staff
                      Lisa Pittman, Chief Counsel
                Jeffrey Duncan, Democrat Staff Director
                 David Watkins, Democrat Chief Counsel


                                 ------                                

                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Wednesday, June 1, 2011..........................     1

Statement of Members:
    Gosar, Hon. Paul A., a Representative in Congress from the 
      State of Arizona, Prepared statement of....................     2
    Hastings, Hon. Doc, a Representative in Congress from the 
      State of Washington........................................     1
        Prepared statement of....................................     4
    Markey, Hon. Edward J., a Representative in Congress from the 
      State of Massachusetts.....................................     5
        Prepared statement of....................................     6

Statement of Witnesses:
    De Rosa, Frank, Senior Vice President, Project Development, 
      North America, First Solar, Inc............................    48
        Prepared statement of....................................    49
    Gordon, James S., President, Cape Wind Associates, LLC.......    23
        Prepared statement of....................................    24
        Response to questions submitted for the record...........    27
    Lanard, Jim, President, Offshore Wind Development Coalition..    28
        Prepared statement of....................................    29
    Piszczalski, Dr. Martin, Industry Analyst, Sextant Research..    52
        Exhibits submitted for the record........................    54
    Reicher, Dan W., Executive Director, Steyer-Taylor Center for 
      Energy Policy and Finance, Stanford University.............    57
        Prepared statement of....................................    59
    Reilly, Susan, President & CEO, Renewable Energy Systems 
      Americas Inc...............................................    11
        Prepared statement of....................................    13
    Resch, Rhone, President and CEO, Solar Energy Industries 
      Association................................................    34
        Prepared statement of....................................    36
    Roberts, Roby, Vice President of Communications and 
      Government Affairs, Horizon Wind Energy LLC, and Chairman, 
      Siting Committee, American Wind Energy Association.........     7
        Prepared statement of....................................     9

Additional materials supplied:
    Donavin, Chris, President, Energy Dense Power Systems, 
      Statement submitted for the record.........................    92
    Wald, Johanna, Western Renewable Energy Project, Natural 
      Resources Defense Council; Pamela Pride Eaton, Deputy Vice 
      President, Public Lands, The Wilderness Society; and Jim 
      Lyons, Senior Director for Renewable Energy, Defenders of 
      Wildlife, Letter submitted for the record..................    88
                                     



  OVERSIGHT HEARING ON THE ``AMERICAN ENERGY INITIATIVE: IDENTIFYING 
 ROADBLOCKS TO WIND AND SOLAR ENERGY ON PUBLIC LANDS AND WATERS, PART 
             II--THE WIND AND SOLAR INDUSTRY PERSPECTIVE.''

                              ----------                              


                        Wednesday, June 1, 2011

                     U.S. House of Representatives

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Committee met, pursuant to call, at 11:36 a.m., in Room 
1324, Longworth House Office Building, Hon. Doc Hastings 
[Chairman of the Committee] presiding.
    Present: Representatives Hastings, Duncan, Gosar, Labrador, 
Landry, Markey, DeFazio, Napolitano, Holt, Grijalva, Garamendi 
and Hanabusa.

    STATEMENT OF THE HON. DOC HASTINGS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF WASHINGTON

    The Chairman. The Committee will come to order. The 
Chairman notes the presence of a quorum, which, under Committee 
Rule 3(e), is two Members.
    The Committee on Natural Resources is meeting today to hear 
testimony on an oversight hearing on the American Energy 
Initiative: Identifying Roadblocks to Wind and Solar Energy on 
Public Lands and Waters, Part II--The Wind and Solar Energy 
Perspective. Under Committee Rule 4(f), opening statements are 
limited to the Chairman and the Ranking Member of the 
Committee. And before I recognize myself for the opening 
statement, I do want to just kind of make some housekeeping 
observations.
    We have had kind of fits and starts by getting this 
together. We have had to postpone this Committee meeting from 
past days, and then we had to postpone the time of this because 
the Republicans were invited down to the White House to meet 
with President Obama and, of course, that compresses all of the 
activity we have today. So we are then doing something that is 
again out of order, and that is combining the two panels into 
one.
    So I just wanted to say that sometimes these things happen 
here. The best plans sometimes go awry. But the important part, 
of course, in all of this is the substance of the testimony 
that our witnesses are giving to this Committee, and that 
indeed is the important part.
    I will ask unanimous consent that all Members who want to 
submit a statement for the record can do so. And without 
objection, so ordered.
    [The prepared statement of Mr. Gosar follows:]

Statement of The Honorable Paul A. Gosar, a Representative in Congress 
                       from the State of Arizona

    I would like to thank Chairman Hastings for holding today's hearing 
on roadblocks to wind and solar energy development on public lands.
    The United States' dependence on foreign oil is one of the gravest 
national security issues facing our country. If we want to reduce its 
dependence on foreign oil, we must properly utilize all our resources 
right here in America. This hearing is critical to exposing federal 
policies that are prohibiting the industry's job creators from 
utilizing public lands and developing renewable energy infrastructure. 
It is important that this Congress learns from today's hearing exactly 
what agencies and policies are improperly stagnating our renewable 
energy development.
    The State of Arizona has some of the most promising areas for solar 
and wind energy development in this country and perhaps in the world. 
Many of the most suitable locations are found on the state's public 
lands. Arizona's First Congressional District, which I serve, consists 
of almost seventy percent in public land; that includes around 2.6 
million acres of Bureau of Land Management (BLM) land and 9.2 million 
acres of Forest Service land. The federal government must partner with 
industry, small business, and state and local governments to ensure our 
public lands continue to be utilized for diverse purposes such as 
outdoor recreation, livestock grazing, mineral development, and energy 
production, while still protecting natural treasures. The mixed use of 
these lands is a fundamental aspect my state of and my district's 
economic viability.
    Arizona's First Congressional District can be a model for energy-
driven economic recovery in this country. Rural Arizona is rich with 
natural resources that provide for sound extraction and contains a 
diverse climate that is conducive to all forms of energy generation 
including traditional fossil fuels, hydro-electric, solar, and wind 
power. However, renewable energy development, like other resource use 
and energy sectors, are being plagued by excessive administrative 
costs, duplicative permitting, and lengthy and burdensome lawsuits 
filed by any or all environmentalist groups. New generation pilot and 
developmental projects are simply not getting off the ground. The 
government is requiring redundant, costly and unnecessary environmental 
reviews; making inconsistent permit approvals and denials; and in some 
cases, even completely halting the advancement of projects already 
underway.
    For example, there are 32 pending applications for solar energy 
projects in the State of Arizona alone. If all 32 of these projects 
were processed and approved today, Solar Energy Industries Association 
estimates that these projects could support nearly 100,000 new jobs 
within in the next five years. These projects would amount to over 
18,630 megawatts of power.
    The wind energy business is experiencing very similar struggles. I 
have met with a wide variety of companies doing business in my state, 
whose projects are in regulatory limbo. This includes an 85 megawatt 
project which would be the very first Native American majority-owned 
renewable energy project in the country. The unstable regulatory 
environment is simply unacceptable given the opportunities we have in 
the state.
    Let me be clear, environmental protections are extremely important 
to me. My district is home to some of the most frequently visited 
destination locations in the country, and contains an abundance of 
other hidden natural treasures. But a careful balance between 
environmental protection and economic activity can be achieved. 
Regulations need to be developed in a transparent and streamlined 
manner, and with consideration for the negative impacts they may impose 
on our communities and the economy.
    Currently, the federal government's policies are having a 
disproportionately negative effect on rural communities like mine which 
depend on public lands for their livelihood and continued economic 
development. At the same time, the federal government expects our 
communities to meet its obligations as stewards.
    I look forward to hearing from today's witnesses, the industry 
people who deal with these policies on a day-to-day basis. It is 
important that this committee continues to investigate examples in 
which the federal government is doing a disservice to communities like 
mine so that we can move forward, implement policies that remove 
unreasonable barriers to economic development and get people back to 
work.
                                 ______
                                 
    The Chairman. I will now recognize myself for my opening 
statement.
    America has been blessed with many kinds, different kinds, 
of natural resources, and there is no doubt that we need to 
utilize all of them to significantly reduce our reliance on 
unfriendly foreign energy. The House Republicans' American 
Energy Initiative is an ``all-of-the-above'' approach to 
address our energy needs, working to ensure affordable prices 
and creating good-paying American jobs.
    Renewable and alternative energy sources, such as wind, 
solar, geothermal and hydropower, are an integral part of any 
long-term energy strategy, and there is tremendous potential to 
use our public lands and waters to help foster and expand their 
development.
    Today's hearing is the second in a series to identify the 
roadblocks to wind and solar energy on public lands. On May 
13th, the full Committee heard from the Obama Administration 
representatives when we received testimony from BLM Director 
Bob Abbey and BOEMRE Director Michael Bromwich. Today we will 
hear testimony from representatives of the renewable energy 
industry, who are struggling to fight through the red tape that 
is hindering clean energy projects and slowing job creation.
    While the Obama Administration deserves credit for some 
advances on facilitation of their renewable energy projects on 
Federal lands, significant obstacles exist to renewable energy 
development. Ironically, the bureaucratic delays, unnecessary 
lawsuits and burdensome environmental regulations impede our 
ability to harness wind and solar energy on public lands.
    As we learned at the last hearing, only 1 percent of BLM's 
solar energy zones, or SEZs, created from over 120 million 
acres of BLM land is currently being offered for streamlined 
solar energy production. Often, BLM's regulatory structure is 
so complicated and slow that companies don't bother applying, 
opting instead for private land.
    Our public land has specifically been designated as 
multiple use. It simply makes no sense that the ability to 
access it, including for energy development, is so cumbersome 
and uninviting. Even more stunning is that the perpetrators of 
many of the lawsuits that are blocking solar and wind 
production on Federal lands are often the exact same groups 
that are supposedly the leading proponents for renewable energy 
development.
    Time after time, renewable energy projects that the Obama 
Administration has highlighted its support for have been 
canceled, held up, or defunded due to their own policies or 
their inability to follow through with the licensing or 
permitting. The Cape Wind project off the Massachusetts 
coastline is an excellent example of an offshore wind project 
that has suffered from years of setbacks. While the Cape Wind 
project received construction approval in April, it was a 10-
year process that was subject to numerous bureaucratic delays 
and red tape. BLM recently announced a request for interest 
from the public and received 11 submissions from 10 companies 
expressing commercial leasing interests. However, after 
receiving the submission, BOEMRE announced that it was reducing 
the leasing area by more than half.
    There is tremendous wind energy potential off the coast of 
Massachusetts, but this Administration's decision appears to 
not have been based on any scientific studies with regard to 
potential for wind development in this area. There are clearly 
abundant opportunities on our public lands and waters for 
homegrown American energy, but until the restrictive government 
inefficiencies and politically driven lawsuits are addressed, 
they may never reach their true energy-production potential. 
These policies cost American jobs, block clean energy 
production, and increase our dependence on foreign sources of 
energy.
    So I am looking forward to hearing from the witnesses today 
to learn more about the challenges they are facing and what 
Congress may be able to do to better facilitate the renewable 
energy production on our public lands.
    [The prepared statement of Mr. Hastings follows:]

          Statement of The Honorable Doc Hastings, Chairman, 
                     Committee on Natural Resources

    America has been blessed with many different kinds of natural 
resources and there is no doubt that we need to utilize all of them to 
significantly reduce our reliance on unfriendly foreign energy. House 
Republicans' American Energy Initiative is an all-of-the-above approach 
to addressing our energy needs, working to ensure affordable prices and 
creating good paying American energy jobs. Renewable and alternative 
energy sources, such as wind, solar, geothermal, and hydropower are an 
integral part of any long-term energy strategy and there is tremendous 
potential to use our public lands and waters to help foster and expand 
their development.
    Today's hearing is the second in a series to identify roadblocks to 
wind and solar energy on public lands. On May 13th, the Full Committee 
heard from Obama Administration representatives when we received 
testimony from BLM Director Bob Abbey and BOEM Director Michael 
Bromwich. Today we will hear testimony from representatives of the 
renewable energy industry who are struggling to fight through the red-
tape that is hindering clean energy projects and slowing job creation.
    While the Obama Administration deserves credit for some advances on 
facilitation of their renewable energy projects on federal lands, 
significant obstacles exist to renewable energy development. 
Ironically, bureaucratic delays, unnecessary lawsuits and burdensome 
environmental regulations impede our ability to harness wind and solar 
energy on public lands.
    As we learned at the last hearing, only one percent of BLM's 
``solar energy zones,'' created from over 120 million acres of BLM 
land, is currently being offered for streamlined solar energy 
production.
    Often, BLM's regulatory structure is so complicated and slow that 
companies don't bother applying, opting instead for private land. Our 
public land has specifically been designated as multi-use. It simply 
makes no sense that the ability to access it, including for energy 
development, is so cumbersome and uninviting.
    Even more stunning is that the perpetrators of many of the lawsuits 
that are blocking solar and wind production on federal lands are often 
the exact same groups who are supposedly the leading proponents for 
renewable energy development.
    Time after time renewable energy projects that the Obama 
Administration has highlighted its support for have been canceled, held 
up or defunded due to their own policies or their inability to follow 
through with licensing or permitting.
    The Cape Wind project off of the Massachusetts coastline is an 
excellent example of an offshore wind project that has suffered from 
years of setbacks. While the Cape Wind project received construction 
approval in April--it was a ten year process that was subject to 
numerous bureaucratic delays and red tape.
    BOEM recently announced a Request for Interest from the public and 
received 11 submissions from 10 companies expressing commercial leasing 
interest. However, after receiving the submission, BOEMRE announced it 
was reducing the leasing area by more than half. There is tremendous 
wind energy potential off the coast of Massachusetts but this 
Administration decision appears to not have been based upon any 
scientific studies regarding the potential for wind development in this 
area.
    There are clearly abundant opportunities on our public lands and 
waters for homegrown American energy, but until the restrictive 
government inefficiencies and politically-driven lawsuits are 
addressed, they may never reach their true energy production potential. 
These policies cost American jobs, block clean energy production and 
increase our dependence on foreign sources of energy.
    I'm looking forward to hearing from the witnesses today to learn 
more about the challenges they are facing and what Congress may be able 
to do to better facilitate the renewable energy production on our 
public lands.
                                 ______
                                 
    The Chairman. With that, I now recognize the distinguished 
Ranking Member for his opening statement.

  STATEMENT OF THE HON. EDWARD J. MARKEY, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF MASSACHUSETTS

    Mr. Markey. Thank you, Mr. Chairman, very much. And we 
welcome you back. We know it has been a difficult couple of 
weeks for you and your family. Our thoughts and our prayers 
have been with you. We are happy to have you back.
    And for part two of this hearing that we are having on 
renewable energy development on public lands, I know that there 
has been a lot of talk about moratoriums here in the Committee, 
but the Republican majority is ignoring the real moratorium 
that they protected for years, the Bush-Cheney clean energy 
moratorium. During the 8 years of the Bush Administration, a 
grand total of zero permits were issued for solar plants, and 
only five wind projects were approved in the entire United 
States. Renewable energy development was almost exclusively a 
private-land endeavor, leaving untapped some of the best 
renewable resources on Federal lands.
    Under the Obama Administration, that has changed. The 3,800 
megawatts of wind and solar projects permitted in 2010 alone 
under this Administration is 13 times more than what was 
permitted during the entire 8 years of the Bush Administration 
at the Department of the Interior. When the Bush Administration 
was blocking these permits and locking up Federal lands to 
clean energy development, where were the Republicans then? 
Republicans want to criticize the Obama Administration when it 
was actually Republican policies for 8 years that stymied 
renewable energy development on public lands. Talk about 
ignoring the elephant in the room.
    I am happy to see this recent progress under the Obama 
Administration, but I am deeply concerned about current 
Republican policies directly aimed at rolling it back. While 
the Republicans fight to keep each of the oil and gas 
industry's eight different tax subsidies, they stand ready to 
let the highly successful 1603 renewable energy program expire 
in 7 months. That financing program saved tens of thousands of 
jobs during the economic downturn and helped put new renewable 
energy on the grid.
    Demonstrating that there is apparently never an 
inappropriate time to give an assist to Big Oil, the Republican 
leadership has scheduled a vote for later this week in which 
the critically necessary emergency aid to tornado victims in 
Joplin, Missouri, is dependent upon defunding a program that 
helps American companies manufacture superefficient and clean-
fuel vehicles. This is not an ``all-of-the-above'' strategy, 
but it is an ``oil above all'' strategy, taken straight from 
the Bush-Cheney playbook that was used for 8 consecutive years.
    There is much at stake here, and it goes far beyond the 
environmental and public health benefits of renewable energy. 
The clean energy sector represents one of the most important 
opportunities to generate economic growth and new, good-paying 
jobs for the next generation of Americans. These benefits will 
not come from subsidizing Big Oil. Despite $485 billion in 
profits over the last 5 years, ExxonMobil, BP, Shell, Chevron 
reduced their U.S. workforce by more than 10,000 people. They 
reduced their workforce. It is not happening with coal. Even 
with U.S. coal production increasing 600 percent, since 1950 
employment in coal mining has fallen from 416,000 to fewer than 
88,000 coal miners. That is with a 600 percent increase in 
production. And those resources are becoming more expensive and 
scarcer with nearly every passing year.
    The trends with renewable energy are in the opposite 
direction. Costs are going down, employment is going up, 
advanced technologies that utilize the free fuel of the wind, 
the sun and the Earth will ultimately win out. A $12 trillion 
market awaits the technology leaders that can do so most 
effectively, but we have to beat the Chinese, the Germans and 
the Koreans. We need a plan. Using our rich public lands as a 
launching pad for the clean energy sector is about as close to 
a home run as we get in public policy.
    I am pleased that the Committee is taking a deeper look at 
the issue here today, and I hope that we can find a bipartisan 
way to circle the bases together. And I am sure that the 
meeting with the Republicans in the White House this morning 
has now got them on our side on renewable energy, and I am 
hoping that that clarifying moment did occur. I was not allowed 
in that meeting.
    Anyway, I yield back the balance of my time.
    [The prepared statement of Mr. Markey follows:]

     Statement of The Honorable Edward J. Markey, Ranking Member, 
                     Committee on Natural Resources

    First of all, I'd like to welcome back our Chairman today. I know 
it has been a difficult couple of weeks for you and your family. Our 
thoughts and prayers have been with you, and we are happy to have you 
back.
    As we heard 2 weeks ago in Part 1 of this hearing, the Obama 
Interior Department has made renewable energy development on public 
lands a top priority.
    I know there has been a lot of talk about moratoriums here in this 
committee, but the Republican Majority is ignoring the real moratorium 
they protected for years: the Bush-Cheney clean energy moratorium.
    During the 8 years of the Bush administration, a grand total of 
zero permits were issued for solar power plants and only 5 wind 
projects were approved. Renewable energy development was almost 
exclusively a private land endeavor, leaving untapped some of our best 
renewable resources on federal lands. Under the Obama administration, 
that has changed.
    The 3,800 megawatts of wind and solar projects permitted in 2010 
alone under this administration is 13 times more than what was 
permitted during the entire 8 years of the Bush administration.
    When the Bush administration was blocking these permits, and 
locking up federal lands to clean energy development, where were the 
Republicans then?
    Republicans want to criticize the Obama administration, when it was 
actually Republican policies that stymied renewable energy development. 
Talk about ignoring the elephant in the room!
    I'm happy to see this recent progress under the Obama 
administration, but I am deeply concerned about current Republican 
policies directly aimed at rolling it back.
    While Republicans fight to keep each of the oil and gas industry's 
8 different tax subsidies, they stand ready to let the highly 
successful 1603 renewable energy program expire in 7 months. That 
financing program saved tens of thousands of jobs during the economic 
downturn, and helped put new energy on the grid.
    Demonstrating that there is apparently never an inappropriate time 
to give an assist to Big Oil, Republican leadership has scheduled a 
vote for later this week in which the critically necessary emergency 
aid to tornado victims in Joplin, Missouri is dependent upon defunding 
a program that helps American companies manufacture super-efficient and 
clean-fuel vehicles.
    This is not an ``All of the Above Strategy'' but an ``Oil Above 
All'' strategy taken straight from the Bush-Cheney playbook.
    There is much at stake here, and it goes far beyond the 
environmental and public health benefits of renewable energy. The clean 
energy sector represents one of the most important opportunities to 
generate economic growth and new good-paying jobs for the next 
generation of Americans. [CHART]
    Those benefits will not come with subsidizing Big Oil. Despite $485 
billion in profits over the last 5 years, ExxonMobil, BP, Shell, and 
Chevron reduced their U.S. workforce by more than 10,000 people. 
[CHART]
    It's not happening with coal. Even with U.S. coal production 
increasing 600 percent since 1950, employment in coal mining has fallen 
from 416,000 to fewer than 88,000. [CHART]
    And those resources are becoming more expensive and scarcer with 
nearly every passing year.
    The trends with renewable energy are in the opposite direction. 
Costs are going down and employment is going up. Advanced technologies 
that utilize the free fuel of the wind, the sun, and the earth will 
ultimately win out. A $12 trillion market awaits the technology leaders 
that can do it most effectively. But the Republican assault on clean, 
domestic energy production is making it increasingly likely that those 
technology leaders will not be American, but Chinese, German, and 
Korean.
    Using our rich public lands as a launching pad for the clean energy 
sector is about as close to a home run as we get in public policy. I am 
pleased that the committee is taking a deeper look at the issue here 
today, and I hope that we can find a bi-partisan way to circle the 
bases together.
    Thank you. I look forward to our witness's testimony.
                                 ______
                                 
    The Chairman. Optimism is contagious.
    I thank the gentleman for his opening statement, and I want 
to welcome the witnesses, our combined panel here. We have Mr. 
Roby Roberts who is the Co-Chairman, Legislative Committee of 
the American Wind Energy Association; Susan Reilly, CEO of RES 
Americas; Mr. James Gordon, President of the Cape Wind 
Associates, LLC; Jim Lanard, President of the Offshore Wind 
Development Coalition; Mr. Rhone Resch, President and CEO of 
Solar Energy Industries Association; Mr. Frank DeRosa, Senior 
Vice President for First Solar, Inc.; Dr. Martin Piszczalski--
is that good?
    Dr. Piszczalski. Close.
    The Chairman. Does anybody ever do your name precisely 
right the first time?
    Dr. Piszczalski. There is always a pause.
    The Chairman. And I had that pause. But thank you. I know 
your background anyway. At least when your name ends in S-K-I, 
that is a dead giveaway.
    And finally, Dan Reicher with the Center for Energy Policy 
and Finance at Stanford University.
    Like all of our witnesses, your written statement will 
appear in total in the record. So we ask you to keep your oral 
remarks to 5 minutes if you can do that. Hopefully you can.
    You have to turn on the microphone that is in front of you, 
and when you turn on the microphone at the start, let me 
explain the timing lights. The green light goes on, and that 
signifies the first 4 minutes. When the yellow light goes on, 
you have 1 minute left. When the red light goes on, that is the 
end of your 5 minutes, and certainly I ask you to complete your 
thought.
    So with that, Mr. Roberts, you may begin, and you are 
recognized for 5 minutes.

STATEMENT OF ROBY ROBERTS, CO-CHAIRMAN, LEGISLATIVE COMMITTEE, 
                AMERICAN WIND ENERGY ASSOCIATION

    Mr. Roberts. Thank you. Chairman Hastings, Ranking Member 
Markey and other members of the Committee, thank you for the 
opportunity to testify today. My name is Roby Roberts and I am 
Vice President of Communications and Government Affairs for 
Horizon Wind Energy. I am testifying on behalf of the American 
Wind Energy Association, AWEA, where I currently serve as the 
Chair of the AWEA Siting Committee and previously served as 
Chair of AWEA's Board of Directors and Legislative Committee.
    Wind energy is a clean, affordable and homegrown energy 
resource. It contributes to rural development through property 
taxes that support schools and communities; royalty payments 
that help families stay on their farms or ranches; and good 
jobs for communities that all too often lack such 
opportunities.
    Wind energy is also an important part of a diverse energy 
portfolio. It is commercial, rapidly scalable. And taking into 
account Federal incentives received by all energy technologies, 
wind energy costs have fallen blow the cost of most 
conventional sources and are close to cost-competitive with new 
natural gas generation. Importantly, wind energy prices can be 
locked in up front for 20 years, which acts as a hedge on 
volatile fuel prices.
    The wind energy industry currently supports 75,000 people 
in the U.S. The industry has been one of the few bright spots 
in an otherwise difficult economy. In 2010, the industry 
installed over 5,000 megawatts, representing 11.1 billion in 
investments. Total cumulative installed capacity stands at over 
40,000 megawatts, enough to power 10 million homes. Since 2001, 
wind energy has represented 35 percent of all new electric 
capacity, second only to natural gas, and more than nuclear and 
coal combined. The industry has utility scale wind projects 
operating in 38 States and more than 400 manufacturing 
facilities in 42 States.
    The biggest roadblock facing the wind energy industry right 
now is a lack of consistent and long-term Federal policy to 
support renewable energy. Despite bipartisan support, tax 
credits for renewable energy have been on again, off again. The 
production tax credit, PTC, expires at the end of 2012. Failure 
to extend this incentive will result in a large tax increase on 
wind energy. We request that Congress extend the PTC for wind 
energy this year. Given lead time for project development, it 
is critical to act now to avoid a lull in development post-
2012. Business decisions for 2013 are already being made.
    And again, despite bipartisan support, there is no long-
term demand signal, such as a renewable or clean energy 
standard.
    The wind industry is also facing urgent challenges as a 
result of two documents released in February of 2011 by the 
U.S. Fish and Wildlife Service. I will focus my testimony on 
the Draft Land-Based Wind Energy Guidelines, as Susan Reilly 
from RES Americas will discuss the Eagle Guidance.
    In 2007, the Secretary of the Interior Kempthorne, created 
a Federal Advisory Committee comprised of 22 individuals, 
primarily from State agencies, industry, science and wildlife 
conservation organizations, to provide recommendations on wind 
turbine siting guidelines, Secretary Salazar extended the 
Advisory Committee charter. The committee submitted consensus 
recommendations endorsed by every single member in March 2010. 
Having industry, States and NGO's unite around a single set of 
recommendations was a significant achievement by agreeing to a 
higher standard for wildlife study and protection than any 
other industry in the country.
    Unfortunately, the draft land-based guidelines issued 
earlier this year by the Service differ in fundamental ways 
from the Advisory Committee recommendations, and are unworkable 
for the industry, and will result in substantial delays or even 
abandonment of thousands of megawatts of proposed wind 
projects.
    Among industry key concerns are, number 1, the scope of 
covered species and covered impacts; number 2, the scope and 
duration of pre- and post-construction monitoring; number 3, 
the role of the Service; number 4, questionable science used to 
justify certain recommendations; number 5, the lack of phase-in 
prior to implementation; and number 6, mitigation 
recommendations are neither practical nor proven to be 
effective.
    I would strongly urge this Committee and the Congress to 
express support of the Department of the Interior and the 
Service for returning to the consensus Advisory Committee 
recommendations.
    Finally, in my written testimony, I detailed a handful of 
policy recommendations specific to public lands. In the 
interest of time, I won't repeat those here. But I do want to 
emphasize that without long-term Federal policies on the tax 
and demand side, as well as making the Service policies more 
workable, establishing policies specifically to make developing 
projects on public lands more attractive will be of marginal 
benefit at best.
    Thank you for the opportunity to testify. I am happy to 
answer questions.
    The Chairman. Thank you very much, Mr. Roberts, for your 
testimony.
    [The prepared statement of Mr. Roberts follows:]

              Statement of Roby Roberts, on behalf of the 
                American Wind Energy Association (AWEA)

    Chairman Hastings, Ranking Member Markey and other members of the 
Committee, thank you for the opportunity to testify today. My name is 
Roby Roberts, and I am Vice President of Communications and Government 
Affairs for Horizon Wind Energy LLC (``Horizon''). I am testifying on 
behalf of the American Wind Energy Association (AWEA), where I 
currently serve as the Chair of AWEA's Siting Committee and previously 
served as Chair of AWEA's Board of Directors and Legislative Committee.
    AWEA is the national trade association representing a broad range 
of entities with a common interest in encouraging the deployment and 
expansion of wind energy resources in the United States. AWEA members 
include wind turbine manufacturers, component suppliers, project 
developers, project owners and operators, financiers, researchers, 
renewable energy supporters, utilities, marketers, customers and their 
advocates.
    Horizon and its subsidiaries develop, construct, own and operate 
wind farms throughout North America. Based in Houston, Texas with 27 
wind farms, over 300 employees and over 15 development offices across 
the United States, Horizon has developed more than 3,600 MW and 
operates over 3,400 MW of wind farms. Horizon ranks third in the United 
States in terms of net installed capacity. Horizon is owned by EDP 
Renewables, a global leader in the renewable energy sector that 
develops, constructs, owns and operates renewable generation 
facilities.
    Wind energy is a clean, affordable and homegrown energy resource. 
It contributes to rural development through property taxes that support 
schools and communities, the royalty payments that help families keep 
on their farms or ranches, and through the good jobs, both long-term 
and short-term, that it brings to communities with all too few such 
jobs.
    Wind energy is also an important part of a diverse energy 
portfolio. It is commercial, rapidly scalable, and, taking into account 
federal incentives received by all energy technologies, wind energy 
costs have fallen below the costs of most new conventional sources, and 
are close to cost-competitive with new natural gas generation. Because 
the ``fuel'' for wind energy is free and inexhaustible, prices can be 
locked in for 20 years, thus acting as a hedge on volatile fuel prices. 
Deploying wind energy domesticates our energy supply and bolsters 
energy security.
    In short, it is good for our economy, our national security, public 
health and the environment.
    The wind energy industry currently employs 75,000 people in the 
U.S. The industry has been one of the few bright spots in the otherwise 
difficult economy. In 2010, the industry installed 5,116 megawatts, 
representing $11.1 billion in investment. Total cumulative installed 
capacity stands at 40,181 MWs, enough to power 10 million homes. 
Average annual growth for the past five years was 35 percent, second 
only to natural gas and more than nuclear and coal combined. The 
industry has utility scale wind projects operating in 38 states and 
more than 400 manufacturing facilities in 42 states.
    The industry's potential as a jobs and economic engine is much 
greater. The U.S. Department of Energy released a report in 2008 
analyzing a scenario of 20 percent of U.S. electricity coming from wind 
energy by 2030. According to that report, which was prepared by the 
Bush Administration's DOE, the wind energy industry would support 
500,000 jobs at that level of deployment, which is achievable with 
existing technology.
    The biggest roadblock facing the wind energy industry right now is 
the lack of a consistent and long-term federal policy to support 
renewable energy. Despite bipartisan support, tax credits for wind and 
other forms of renewable energy have been on-again, off-again. The 
production tax credit, which is the key existing federal tax incentive 
for wind energy development, expires at the end of 2012. Failure to 
extend this incentive will result in a large tax increase on wind 
energy developers that will be reflected in the cost of wind power, 
making it less competitive with competing sources that also receive 
federal incentives. We request that Congress block this tax increase 
and extend the production tax credit for wind energy this year. Given 
lead times for project development, it is important to act now to avoid 
a lull in development post-2012. Business decisions for 2013 are 
already being made.
    And, again, despite bipartisan support, there is no long-term 
demand signal, such as a renewable or clean electricity standard.
    Without more stable federal financial incentives and demand-side 
policies, any changes to make developing wind energy projects on public 
lands more attractive will be of only marginal benefit, at best.
    The wind energy industry is also facing urgent challenges as a 
result of two documents released in February 2011 by the U.S. Fish and 
Wildlife Service (``the Service''). The first document is the Draft 
Land-Based Wind Energy Guidelines and the second is the Draft Eagle 
Conservation Plan Guidance. I will focus my testimony on the draft 
guidelines \1\ as Susan Reilly from RES Americas will discuss the Eagle 
Guidance.\2\ I would like to ask that the executive summaries of AWEA's 
public comments on both of these documents be made a part of the record 
for this hearing.
---------------------------------------------------------------------------
    \1\ AWEA's full comments on the draft land-based wind energy 
guidelines can be found here: http://www.awea.org/issues/siting/upload/
AWEA-Comments-on-USFWS-Wind-Energy-Guidelines_May-19-2011.pdf
    \2\ AWEA's full comments on the draft eagle conservation plan 
guidance can be found here: http://www.awea.org/issues/siting/upload/
AWEA-Comments-on-USFWS-Eagle-Guidance-May-19-2011.pdf
---------------------------------------------------------------------------
    In 2007, then-Secretary of Interior Kempthorne created a federal 
advisory committee (FAC)\3\ comprised of 22 individuals primarily from 
state agencies, industry, academia and wildlife conservation 
organizations to provide recommendations on wind turbine siting 
guidelines. Secretary Salazar extended the FAC charter. The Committee 
submitted consensus recommendations endorsed by every single member in 
March 2010. Having industry, states, and NGOs unite around a single set 
of recommendations was a significant achievement. By agreeing to these 
recommendations, the wind energy industry was voluntarily agreeing to 
be held to a higher standard for wildlife study and protection than any 
other industry in the country.
---------------------------------------------------------------------------
    \3\ Available at http://www.USFWS.gov/habitatconservation/
windpower/wind_turbine_advisory_committee.html.
---------------------------------------------------------------------------
    Unfortunately, the draft land-based guidelines issued earlier this 
year by the Service differ in fundamental ways from the FAC 
recommendations and are unworkable for industry and will result in 
substantial delays or even abandonment of thousands of MWs of proposed 
wind projects.
    Among industry's key concerns are:
          The scope of covered species and covered impacts
                  We recommend the narrower scope proposed by the 
                FAC;
          The scope and duration of pre- and post-construction 
        monitoring
                  We recommend duration be based on the risk 
                profile of the site rather than the three to five years 
                of minimum study recommended by the Service;
          The role of the Service
                  We recommend a developer-led process as proposed 
                by the FAC rather than having the Service in a 
                decision-making role;
          Questionable science used to justify certain 
        recommendations (for example, requiring study of noise impacts 
        on wildlife and studying airspace as habitat);
                  We recommend the use of sound science and that 
                topics that are less clear be researched rather than 
                evaluated at every project;
          The lack of a phase-in prior to implementation
                  Requiring immediate adherence is not practical, 
                which is why the FAC recommended a two-year phase-in;
          Mitigation recommendations that are neither practical 
        nor proven to be effective
                  Mitigation recommendations should be proven and 
                cost-effective, not speculative.
    I would strongly urge this Committee and this Congress to express 
support to the Department of Interior and the Service for returning to 
the consensus FAC recommendations.
    To fully utilize the wind energy resources in our country, we also 
need to expand our nation's transmission infrastructure. The BLM has an 
important role to play in permitting transmission projects in the west. 
But, coordination needs to be improved among the many field offices 
working on major transmission projects, including the establishment of 
national project teams, with an individual who has ultimate decision-
making authority.
    Finally, I wanted to offer a few other suggestions for changes that 
could improve the ability to pursue projects on public lands. Though, 
as I noted earlier, these will be of only marginal benefit without 
stable federal policy to support renewable energy and without fixing 
the problematic draft guidelines and guidance proposed by the Service:
        1.  Establish reasonable timelines for agency responses.
        2.  Allow commercial negotiation of terms of cost-recovery 
        agreements, right-of-way agreements and memorandums of 
        understanding with federal agencies such as BLM and the 
        Service, which is a standard practice in the private sector, 
        particularly for agreements like those entered into with BLM 
        that may last 20 years.
        3.  Require that policy changes proposed and implemented 
        through instruction memorandums be subject to a public comment 
        process, which would allow industry to challenge 
        recommendations that would make wind energy projects on public 
        lands impractical, regardless of whether those came from BLM 
        itself or resulted from BLM implementing a recommendation from 
        another agency like the Service.
        4.  Allow a portion of the revenue paid by wind energy projects 
        on BLM lands to be recycled back into the agency for the 
        purpose of improving processing of future permits as is already 
        done for oil and gas, geothermal, film production and 
        communications towers.
        5.  Provide for categorical exclusions for putting up temporary 
        meteorological towers to test wind speeds on public lands. This 
        is already allowed under BLM's wind energy development policy, 
        but is not consistently used.
    Thank you again for the opportunity to testify. I am happy to 
answer questions.
                                 ______
                                 
    The Chairman. And I will recognize Ms. Reilly for your 
testimony. You are recognized for 5 minutes.

STATEMENT OF SUSAN REILLY, PRESIDENT AND CEO, RENEWABLE ENERGY 
                     SYSTEMS AMERICAS INC.

    Ms. Reilly. Chairman Hastings, Ranking Member Markey and 
members of the Committee, thank you for the opportunity to 
testify today. My name is Susan Reilly, and I am the President 
and CEO of Renewable Energy Systems Americas. RES is 
headquartered in Colorado, and we are one of the leading 
renewable energy companies in the United States. We have built 
more than 10 percent of the operating wind farms in the U.S., 
and we currently have approximately 10,000 megawatts of wind 
and solar projects under development, which equates to the 
amount of electricity used by approximately 2.5 million average 
American homes.
    You have asked us to provide an industry perspective 
regarding roadblocks to developing wind and solar energy on 
public lands. We encounter many obstacles to developing 
renewable energy projects, but the number one obstacle that our 
industry faces is uncertainty, both market uncertainty and 
regulatory uncertainty. Like any business, what matters to us 
is the markets, and markets are driven by supply and demand. 
There is seemingly strong and growing demand for renewable 
energy from the American people, but this is not translating 
into predictable market demand. A national renewable or clean 
energy standard and predictable tax policy would really help 
fix this problem.
    On the supply side, we face uncertainty on many fronts. 
Developing projects is a complicated process, and it is much 
more difficult on public lands, though the process can take 
twice as long as it would on private lands. This is reflected 
by the fact that under 2 percent of all wind farms in the U.S. 
Are sited on public lands.
    My written testimony provides additional detail regarding 
the many issues we have encountered when trying to develop 
projects on public lands. And in particular, I would like to 
draw your attention to the increasing challenge we face in 
obtaining permits for wind projects.
    A recent example, a major obstacle is the regulatory 
uncertainty created by the U.S. Fish and Wildlife 2011 Draft 
Eagle Conservation Plan Guidance, which I will refer to as the 
Eagle Guidance. The Eagle Guidance is a document intended to 
provide direction on implementation of the 2009 eagle permit 
final rules. When combined, the guidance and the rules create 
an eagle regulatory program that is complicated and completely 
unworkable for our industry.
    Unfortunately, just fixing the Eagle Guidance won't solve 
the problem because the real problem lies in the underlying 
2009 eagle rules. All of this uncertainty will make financing 
projects more difficult and cause buyers to shy away from 
signing purchase contracts.
    I provide more detail in my written comments as to why the 
Eagle Guidance is so problematic, but I would like just to 
stress the following two issues. Firstly, the Eagle Guidance 
is, in fact, more stringent than the Endangered Species Act, 
despite the fact that neither the bald nor the golden eagle are 
currently endangered. Under the Eagle Guidance, permits for 
wind projects can only be obtained for 5 years at a time. This 
is a significant problem because wind and solar projects 
typically have a 20- to 30-year life and often need financing 
for 10 to 15 years. So having a permit that expires after 5 
years will make financing difficult, if not impossible. By 
comparison, it is possible to obtain a permit under the 
Endangered Species Act for the life of a project, and that is 
what we need, for the life of the project.
    Second, the 2011 Eagle Guidance focused only on wind, yet 
modern wind turbines are estimated to cause less than 1 percent 
of eagle mortalities. We don't see the sense of singling wind 
out when the impact of modern wind farms on eagle populations 
is so small.
    I would like to emphasize that these are not theoretical 
problems. My company has several wind projects that are 
currently being directly impacted by this issue, and we believe 
that the changes to the permitting process regarding eagles 
will ultimately impact the majority of our projects, creating 
delays and millions of dollars of additional cost, and that 
many of our developers are in a similar situation.
    We further support reasonable protections for wildlife, but 
there does not appear to be any scientific justification for 
these onerous requirements, nor can it be demonstrated that the 
requirements will help eagles. How could they when we are only 
causing 1 percent of the problem?
    So how can we fix the problem created by the eagle 
regulatory program? We believe that the most sensible way 
forward is to suspend the 2009 eagle rules and open a new 
rulemaking process. But this process will likely take another 2 
to 3 years, and we can't put our business on hold for that 
long. Projects won't get built unless we can reduce the level 
of uncertainty. We need a bridge solution for the interim 
period. So our suggestion is that the Federal Advisory 
Committee recommendations be used.
    In closing, I would like to reiterate our strong support 
for regulations to protect wildlife. RES Americas' business is 
developing and constructing renewable energy projects that 
benefit the environment. Renewable energy is all we do, and our 
corporate ethos is grounded in sustainability. So this isn't 
about cutting corners or trying to sidestep reasonable 
regulations, but the key word is ``reasonable.'' Both 
conservation and renewable energy are critical, but there has 
to be a balance between the two agendas.
    The American people want domestically produced, clean, 
renewable energy, and we want to supply it to them, but our 
energy faces market uncertainty at the national level, and we 
are thwarted by regulatory uncertainty during the development 
process. In the immediate term, Eagle Guidance combined with 
the land-based guidelines are significant obstacles to the 
industry. Renewable energy has the power to deliver, to drive 
investment, particularly in the manufacturing sector, and to 
create tens if not hundreds of thousands of jobs.
    Chairman Hastings, Ranking Member Markey and the rest of 
Committee, I thank you for your interest in and attention to 
these issues, and I look forward to any assistance you may be 
able to provide.
    The Chairman. Thank you very much for your testimony.
    [The prepared statement of Ms. Reilly follows:]

             Statement of Susan Reilly, President and CEO, 
                 Renewable Energy Systems Americas Inc.

Introduction
    Chairman Hastings, Ranking Member Markey and members of the 
Committee, thank you for the opportunity to testify before the 
Committee on Natural Resources Oversight Hearing on ``American Energy 
Initiative: Identifying Roadblocks to Wind and Solar Energy on Public 
Lands and Waters, Part II--The Wind and Solar Industry Perspective''.
    My name is Susan Reilly. I am the President and Chief Executive 
Officer of Renewable Energy Systems Americas Inc. (``RES''). RES is one 
of the leading renewable energy companies in the United States. For 
more than a decade, RES has developed, constructed, owned, and operated 
wind farms in North America. RES has constructed or is currently 
constructing more than 5,200 megawatts (``MW'') of wind energy 
projects, representing some 10% of the operating wind farms in the 
United States, and has successfully developed more than 2,200 MW of 
renewable energy projects in the United States and Canada.
    RES currently holds a development portfolio of approximately 10,000 
MW and maintains ownership in 226 MW of operating projects. RES is 
headquartered in Broomfield, Colorado, with regional offices in Austin, 
Texas; Portland, Oregon; and Minneapolis, Minnesota. Our Canadian 
projects are managed from Montreal, Quebec. RES is part of the RES 
Group, a leading renewable energy developer with offices and projects 
all worldwide.
    RES is somewhat unique in the industry due to the range of 
activities in which it is involved. RES develops, designs, constructs, 
and operates renewable energy projects, and focuses not only on wind, 
but also on solar, biomass, and energy storage projects. This broad 
scope of activities means that RES has in-house expertise dedicated to 
understanding the requirements of regulatory agencies, state and local 
governments, investors, landowners, and other stakeholders, throughout 
project development, construction, and operation. As such, we are well-
positioned to comment on the obstacles facing the development of 
renewable energy projects on public lands.

Uncertainty: The Greatest Roadblock to Renewable Energy Development on 
        Public Lands
    The Committee seeks an industry perspective regarding roadblocks to 
developing wind and solar energy on public lands. While there are many 
obstacles to developing renewable energy projects, the number one 
obstacle our industry faces is uncertainty, including both market 
uncertainty and regulatory uncertainty.
    Like any business, the renewable energy markets are driven by 
supply and demand. On the demand side, the renewable energy industry 
faces market uncertainty due to the lack of a consistent national 
energy policy. Unlike many countries, the U.S. does not have a national 
renewable or clean energy standard, feed-in tariff or other mechanism 
for promoting renewable energy; and U.S. tax policy supporting 
renewable energy development has been inconsistent.
    On the supply side, we face both legislative and regulatory 
uncertainty on many fronts. Developing renewable energy projects is a 
complicated process, and obtaining permits--the gating item for so many 
aspects of the development process, including financing--is now 
particularly challenging. Regulatory uncertainty introduced over the 
past twelve months--including uncertainty regarding required 
environmental studies, the ``useful life'' of permits and regulatory 
approvals, the risk of permit ``re-openers'', and potential requirement 
to employ undefined adaptive management--has had a profound negative 
effect on the development of renewable energy projects on public lands.
    Of relevance to this hearing is the fact that the level of 
regulatory uncertainty is much higher when developing projects on 
public lands, where the process can take twice as long as it would on 
private lands. As a result, there is a strong incentive to avoid public 
lands, which is borne out by the fact that only 1.4% of wind farms are 
currently located on public lands.\1\ Projects developed on public 
lands are subject to many more regulations; compounding the issue, 
these regulations often overlap and lack clarity as to which should 
take precedence.
---------------------------------------------------------------------------
    \1\ See Appendix I, ``Comparison of the Percentage of Renewable 
Energy Generation Located on Public and Private Lands''.
---------------------------------------------------------------------------
    In the immediate term, the biggest obstacle the renewable energy 
industry is facing when it comes to developing renewable energy 
projects on public (and private) lands is uncertainty relating to 
permitting, and in particular, the uncertainty created by the U.S. Fish 
& Wildlife Service's 2011 ``Draft Eagle Conservation Plan Guidance'', 
or ``Eagle Guidance''.
    In summary, the key points I wish to convey regarding the 
roadblocks to developing renewable energy projects on public lands 
created by regulatory uncertainty are:
        1.  The process for developing renewable energy projects is 
        complicated, and critical steps in successfully completing a 
        project hinge on the permitting process.
        2.  Adding regulatory uncertainty to the permitting process 
        makes project development more complicated, lengthy, and 
        expensive. . .and therefore more risky.
        3.  In the past ten months, the U.S. Fish and Wildlife Service 
        (USFWS) and the Bureau of Land Management (BLM) have issued 
        several documents that significantly increase the regulatory 
        uncertainty associated with permitting wind energy projects.
                a.  Among these documents, the Eagle Guidance is the 
                most immediately problematic.
                b.  The Eagle Guidance is unnecessarily onerous, and 
                unfairly penalizes wind energy.
        4.  The Eagle Guidance creates a significant roadblock to 
        developing renewable energy projects on public lands--RES has 
        some proposed solutions.
        5.  The Eagle Guidance is the most immediate issue the industry 
        faces, but it is not the only roadblock--there are other 
        reasons why developing renewable energy projects on public 
        lands is difficult.
        6.  DOI's ``Fast-Track'' process is welcome and well-intended, 
        but needs to focus more on successful outcomes for wind 
        projects.
        7.  This is not a theoretical issue--some of RES' projects have 
        already been directly impacted by the roadblocks listed above.

1. Renewable Energy Project Development is a Complex Process
    To appreciate the challenges that the wind energy industry faces 
for development on public lands, it may be helpful to understand the 
extensive process involved in developing, financing, constructing, and 
operating a wind energy facility.
    In general, the early stage development process follows these 
steps:
          Identify areas with promising wind or solar 
        resources, compatible land uses, power markets and access to 
        transmission lines with sufficient capacity;
          Conduct preliminary siting and environmental 
        screening, followed by initial environmental assessments and 
        studies;
          Establish and maintain relationships with landowners, 
        and negotiate wind or solar measurement agreements and/or land 
        leases;
          Establish and maintain relationships with local 
        stakeholders, including local government, public agencies, 
        environmental groups, and community groups, among others;
          Commence preliminary project planning and design; and
          Commence permitting discussions and planning with 
        regulators.
    The next phase of development usually involves ensuring the project 
is able to interconnect to the grid and has access to sufficient 
transmission capacity, selecting turbines, and finalizing permits. 
These processes often progress simultaneously, which requires complex 
coordination among multiple parties.
    The final, and most critical stage of development revolves around 
securing a power purchase agreement (PPA), and obtaining financing. The 
key point to understand is that this critical final phase hinges on the 
permitting process. This testimony will focus on obstacles to 
successfully completing the permitting process for renewable energy 
projects on public lands.

2. How Regulatory Uncertainty Affects Project Development
Regulatory Uncertainty Further Complicates a Challenging Process
    As outlined above, successful development of a commercial-scale 
wind energy project requires coordination among multiple parties, 
including landowners, local governments, transmission providers, power 
purchasers, and investors.
    Contractual arrangements among these parties may span 20-30 years, 
and each of these parties seeks assurances that the project will be 
constructed and operated in compliance with law during that timeframe. 
As such, regulatory uncertainty makes the challenging process of 
coordinating agreements among these parties even more difficult, and 
may even render it infeasible.
    In addition, increased uncertainty, or risk, may also increase the 
cost of developing, constructing, or operating a project. In doing so, 
it will almost certainly decrease the profitability of a project and in 
some circumstances, it may worsen project economics to the point that a 
project cannot be justifiably developed.
Regulatory Uncertainty Causes Delays, Drives Away Investment Capital 
        and Customers
    One of the biggest factors affecting the cost of a wind project is 
the time required to obtain permitting and ensure regulatory 
compliance. Commercial-scale wind farms require investments of hundreds 
of millions of dollars. Currently, there is significant interest in 
investing in renewable energy, partly due to a belief that the sector 
is poised for significant growth, and partly because investors are 
concerned about sustainability.
    However, wind energy projects ultimately compete with other 
investment opportunities for access to development and long-term 
capital. If development costs make a project uneconomic, or if 
permitting delays increase the time, cost and risk of projects, 
development capital will flow elsewhere--either to other projects or 
sectors.
    Customers--which in the case of the renewable energy industry are 
often utilities--also seek projects with regulatory certainty, and will 
typically not sign power purchase agreements if a project's future is 
in doubt. As described in the case studies provided, RES has 
experienced firsthand the loss of customer interest due to regulatory 
uncertainty relating to eagles.

3. The USFWS and BLM Have Greatly Increased Regulatory Uncertainty with 
        Their Recent Issuance of Multiple and Conflicting Directions
    A large proportion of wind energy projects on public (and private) 
lands has been significantly delayed and thrown into regulatory 
uncertainty due to communications and policies recently issued by the 
BLM and the USFWS aimed at protecting eagles. Significantly, these 
policies were created without industry or stakeholder input, and 
seemingly without regard for the realities of renewable energy 
development. \2\
---------------------------------------------------------------------------
    \2\ This is despite the fact that the Federal Advisory Committee 
(FAC) provided substantial input to the DOI on ways to balance 
renewable energy development and protection for wildlife. The Federal 
Advisory Committee (FAC) was created by the Department of Interior for 
the specific purpose of advising the Secretary on wind energy 
guidelines. The FAC included representatives from state wildlife 
agencies, conservation organizations, the USFWS and the wind industry. 
The FAC met regularly for more than two and a half years and produced a 
set of recommendations that relied on peer-reviewed, sound science. The 
FAC submitted these broadly agreed upon recommendations to Secretary 
Salazar in March 2010.
---------------------------------------------------------------------------
    On February 18, 2011, the USFWS announced the availability for 
public comment of draft Eagle Conservation Plan Guidance (``Eagle 
Guidance'').\3\,\4\ As described below, the Eagle Guidance creates 
significant regulatory uncertainty for wind energy project developers.
---------------------------------------------------------------------------
    \3\ 76 Fed. Reg. 9529 (Feb. 18, 2011). See also U.S. Fish and 
Wildlife Service, ``Draft Eagle Conservation Plan Guidance'' (Jan. 
2011), available at http://www.fws.gov/windenergy/docs/
ECP_draft_guidance_2_10_final_clean_omb.pdf
    \4\ RES, the American Wind Energy Association (``AWEA'') and many 
other interested parties filed detailed comments on the Eagle Guidance. 
I encourage the members of this Committee to consider the detailed 
comments filed by industry participants.
---------------------------------------------------------------------------
    However, it is important to note that the Eagle Guidance is not the 
only source of regulatory uncertainty--the USFWS has also issued draft 
Land Based Wind Energy Guidelines and a White Paper on Avian and Bat 
Protection Plans, and the BLM has issued an Instruction Memorandum (IM) 
intended to provide direction to BLM Field Offices for complying with 
the Bald and Golden Eagle Protection Act, including the implementing 
regulations. These items are discussed in more detail in section 5 
below.
    Cumulatively, these actions by the USFWS and BLM have nearly 
paralyzed what was already a lengthy and difficult process for 
development on public lands. Moreover the detailed requirements within 
the aforementioned regulations have substantially increased the 
regulatory uncertainty of the permitting process.
a. Why the ``Eagle Guidance'' is Problematic
    The Eagle Guidance introduces significant regulatory uncertainty 
that RES believes will severely impair wind energy development on 
public lands in the United States. The greatest source of uncertainty 
is that the fact that the process for obtaining an eagle ``take'' 
permit is not yet known, and may not be determined for months if not 
years.
    Further compounding the uncertainty, the Eagle Guidance sets an 
extremely low threshold for projects that will require an eagle 
``take'' permit \5\. To this end, it is worth noting that the Eagle 
Guidelines are more stringent that the Endangered Species Act, despite 
the fact that neither bald nor golden eagles are currently considered 
endangered.
---------------------------------------------------------------------------
    \5\ In addition to very low thresholds for requiring a ``take'' 
permit, the draft Eagle Guidance defines ``take'' as including 
``disturbance''--this is problematic, because a lot of things count as 
``disturbance'', and if you ``take'' a golden eagle, it may trigger a 
permit violation that causes the whole project to be shut down. Such an 
onerous restriction makes it exceedingly difficult for the wind 
industry to operate, much less continue to grow.
---------------------------------------------------------------------------
    RES has no doubt that cumulatively, the new regulatory program--as 
drafted--will:
          (i)  Provide little to no certainty that adherence to the 
        Eagle Guidance will enable projects to avoid regulatory 
        ``surprises'' imposed by the USFWS later in the development and 
        operation of the facility;
         (ii)  Significantly, and unjustifiably, increase the time and 
        costs required to develop a wind energy facility, thereby 
        increasing development risk/uncertainty;
        (iii)  As a result of (i) and (ii) above, create significant 
        barriers to obtaining acceptable project financing.
    For example, the Eagle Guidance:
          Imposes a five-year permit term for eagle ``take'' 
        permits, which is far too short to cover the 20-30 year life of 
        a typical wind energy project. As a result, an eagle take 
        permit for a project would need to be renewed multiple times 
        over the life of the project.
    This is problematic because it creates regulatory and compliance 
uncertainty that could make it impossible for projects to secure long-
term financing, given the risk that the project's permit might not be 
renewed.
    Permit renewal could also require environmental analyses under 
NEPA, which would require the investment of substantial time and money 
by both the USFWS and wind project operators. In fact, this could 
trigger NEPA for wind projects on public and private land.
          Provides that after a project is permitted, project 
        operators may be required to modify operations or introduce 
        additional mitigation measures with no certainty that any such 
        requirements will be reasonable, practical, economical or 
        technically feasible.
    This is problematic because such modifications or mitigation may 
abrogate existing contractual requirements, thereby putting a project 
into default. As such, this has the potential to render project 
financing infeasible.
          Provides no ``grandfathering'' or phase-in period for 
        projects that are in the middle of the permitting process or 
        are already operational.
    This is problematic because it may abrogate existing contractual 
requirements and put projects into default.
          Requires unjustifiably lengthy pre-construction 
        surveys in addition to lengthy NEPA and permitting processes, 
        and categorizes sites as risky before proper analysis has been 
        performed.
    This is problematic because it causes delays, greatly increases 
costs, and may drive away investors.
b. The Eagle Guidance is Unreasonably Onerous and Unfair to Wind
    Importantly, the Eagle Guidance and the 2010 BLM IM appear to have 
been issued without any regard for the magnitude of impact they would 
have on the renewable energy industry. The negative effects of the new 
regulatory program on renewable energy development are appreciably 
disproportionate to any anticipated benefit on eagle populations.
    As described in AWEA's filed comments on the Eagle Guidance, Tetra 
Tech, Inc. (a prominent environmental and wildlife consulting company) 
reviewed all known eagle mortality data sources and found that 1% or 
less of all documented eagle fatalities caused by human activity are 
attributable to modern wind energy facilities.\6\
---------------------------------------------------------------------------
    \6\ This analysis excludes data from a few specific projects (such 
as those in the Altamont region) that utilize obsolete equipment, were 
constructed many years ago, and where unusual conditions exist.
---------------------------------------------------------------------------
    For example, Tetra Tech, Inc. found that the leading human causes 
of eagle mortality are:
          electrocutions on power lines (with a significant 
        portion of those occurring at distribution lines)--50%
          direct and indirect poisoning--13%
          shooting and trapping--7%
          vehicle strikes--6%
Disproportionate Burden on Wind Industry
    Despite the fact that wind energy accounts for 1% or less of human-
caused eagle fatalities, the USFWS has proposed eagle-related project 
criteria, permitting procedures, and mitigation measures that are 
specific to the wind energy industry while failing to propose similar 
regulatory measures for other industries and practices resulting in 
significantly greater eagle take. Simply put, regulations comparable to 
the Eagle Guidelines have not been proposed for other industries or 
sources of eagle mortality.
    This approach demonstrates a lack of perspective and 
proportionality, and it is also inconsistent with the stated renewable 
energy objectives of the Administration. Moreover, it ignores the fact 
that increased deployment of renewable energy resources can help lessen 
our impact on climate change, which the USFWS itself has called one of 
the greatest threats to our nation's environment and wildlife.\7\
---------------------------------------------------------------------------
    \7\ USFWS Strategic Plan for Responding to Accelerating Climate 
Change, September, 2010.
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4. Proposed Solutions to the Eagle Guidance Problem
    RES suggests the following steps to address the significant 
roadblock to renewable energy development on public lands created by 
the Eagle Guidance:
          Request that the DOI suspend the Eagle Guidance and 
        the associated regulatory program that began in 2009. RES 
        suggests that the USFWS open a new formal rulemaking that is 
        open to the public. New regulations would be developed in 
        cooperation with the wind and solar industries to sensibly 
        address permitting under the Bald and Golden Eagle Protection 
        Act.
          Direct USFWS to work with industry to develop a 
        permit program that imposes regulatory requirements that are 
        proportional to the impact of the wind energy industry on eagle 
        populations. Such a program must include certain core elements 
        necessary for successful project development, including:
                (1)  Timely, clear and efficient processes for 
                obtaining a permit;
                (2)  Permits for the life of a facility;
                (3)  ``No surprises'' assurances for the life of the 
                project;
                (4)  Phase-in periods for projects currently under 
                development; and
                (5)  ``Grandfathering'' for operating facilities.
    As explained above in 3.a., many of these permit provisions are 
found in other regulatory regimes like the Endangered Species Act, 
which is considered the ``gold standard'' for regulation of impacts on 
protected species.
          Beginning immediately and continuing throughout the 
        period while new industry-specific eagle regulations are being 
        developed, provide the renewable energy industry with written 
        assurances that adherence to the Federal Advisory Committee 
        (FAC) Recommendations is sufficient for compliance with the 
        Bald and Golden Eagle Protection Act.
    Use of the FAC Recommendations as a ``bridge'' would provide an 
urgently needed solution by removing the current significant regulatory 
uncertainty and permitting delays that have impacted the development, 
financing and construction of wind energy projects on public lands. The 
FAC Recommendations would also seem to be a strong foundation upon 
which to develop a new eagle regulatory program.

5. The Eagle Guidance isn't the Only Problem
    The Eagle Guidance illustrates a major impediment to renewable 
energy development on public lands, but it is just one of several 
recent regulations promulgated by BLM and USFWS that contribute to the 
existing level of regulatory uncertainty.
July 9, 2010--BLM's Instruction Memorandum 2010-156 and August 3, 
        2010--USFWS' White Paper on Avian Protection Plans (APPs)
    The new approach to eagle regulation began when the BLM issued 
Instructional Memorandum 2010-156 on July 9, 2010 (the ``2010 BLM 
IM''). The purpose of the 2010 BLM IM was to provide direction to BLM 
Field Offices for complying with the Bald and Golden Eagle Protection 
Act, including the implementing regulations, for projects on public 
lands.
    The 2010 BLM IM primarily addressed golden eagles and requires 
USFWS approval of wind and solar projects prior to BLM issuing a Record 
of Decision. Specifically, the IM declared that if a proposed project 
has the potential to impact golden eagles or their habitat, an APP is 
required as a condition of the right-of-way grant.
    The introduction of this policy created significant uncertainty for 
renewable energy on public and private lands, including two RES 
projects as further documented below. Projects which were on track to 
begin construction in 2010 or 2011 were delayed, thereby rendering them 
unable to take advantage of grant funds available under American 
Reinvestment and Recovery Act (ARRA). Moreover, some USFWS field staff 
began to impose the new requirements on projects on private land.
    On August 3, 2010, the Service issued a white paper on the 
development Avian Protection Plans for renewable energy facilities.\8\ 
The white paper attempts to provide considerations for APPs as required 
by the BLM's July 9, 2010 Instruction Memorandum while the national APP 
guidance and template are under development.
---------------------------------------------------------------------------
    \8\ See Memorandum from Director, Fish and Wildlife Service, to 
Service Directorate, regarding ``Service White Paper Providing Guidance 
for the Development of Project-Specific Avian and Bat Protection Plans 
for Renewable Energy Facilities'' (Aug. 3, 2010).
---------------------------------------------------------------------------
    As wind developers began to work with USFWS and BLM staff to work 
towards mutually acceptable APPs, the USFWS issued the 2011 Eagle 
Guidance, which further changed the regulatory environment.
February 18, 2011--USFWS' Land Based Guidelines
    Simultaneously with the USFWS' issuance of the Eagle Guidance, 
USFWS announced the availability for public comment of another layer of 
regulatory requirements in the form of draft Land-Based Wind Energy 
Guidelines (``Land-Based Guidelines'').\9\ The Land-Based Guidelines 
were intended to provide developers and agency staff with guidelines 
for selecting sites to avoid and minimize negative effects to fish, 
wildlife, and their habitats resulting from construction, operation, 
and maintenance of land-based, wind energy facilities.
---------------------------------------------------------------------------
    \9\ As with the Eagle Guidance, RES, AWEA, and many other 
interested parties filed detailed comments on the Land-Based 
Guidelines. I encourage the members of this Committee to consider the 
detailed comments filed by industry participants.
---------------------------------------------------------------------------
The NEPA Process
    On public lands, the ``gating issue'' for the development of 
renewable energy is completion of the National Environmental Policy Act 
(``NEPA'') process and obtaining appropriate federal rights-of-way. 
While the NEPA process is not new, many BLM field offices have been 
ill-prepared to manage the multitude of renewable energy right-of-way 
applications submitted over the past ten years. NEPA regulations 
prohibit project proponents from preparing their own environmental 
analysis and project proponents are invariably subject to the cost of 
paying for their internal staff, BLM staff time, and BLM's third-party 
consultants.
    These challenges combine to create an unbalanced risk-benefit 
profile to those involved in renewable energy development on public 
lands, relative to projects on private land. The Eagle Guidance--as 
proposed--will only exacerbate these BLM resource issues by creating a 
``federal nexus'' for all wind projects, regardless of whether they are 
sited on public or private lands. Dedication of greater resources to 
BLM state, district and field offices is sorely needed to address these 
issues.

6. Additional Comments on ``Fast-Track'' Projects
    RES supports the renewable energy goals annunciated in the Energy 
Policy Act of 2005 and by Secretary Salazar. In particular, the 2009 
Department of Interior Renewable Energy Fast-Track project list was a 
well-founded effort by the BLM to foster the economic development goals 
associated with ARRA through renewable energy development.
    As BLM Director Bob Abbey testified on May 13th, the DOI Fast-Track 
process completed permitting of nine solar projects, but only one wind 
project in the 2010 calendar year. While we commend the DOI and BLM for 
their efforts, there is substantial opportunity for improvement 
particularly with regard to wind energy development.
    In RES' experience, the roadblocks described in this testimony have 
played a significant role in the failure of fast-tracked (and other) 
wind projects to successfully complete the permitting process. RES 
therefore submits that in order to reduce the roadblocks to renewable 
energy development on public lands, there must be a strong federal 
commitment to completing renewable energy projects on public lands.
    Such a commitment would involve not only ensuring a streamlined 
permitting process, but providing regulatory consistency and certainty 
that is necessary for all phases of renewable energy development, 
including project financing. Just as renewable energy developers 
partner with local governments, land owners and other stakeholders 
during the entire life of a project on private lands, renewable energy 
development on public lands needs cooperation and coordination with 
applicable federal agencies that will be sustained for the life of the 
project.
    This would include directives to all applicable federal agencies 
prioritizing renewable energy development and imposing appropriate 
perspective and proportionality on conflicting regulatory programs. 
Further, the industry would benefit from federal leadership in 
identifying and prioritizing lands for wind and solar energy generation 
and transmission corridors.
    RES suggests the active engagement of top leadership within the 
DOI, BLM, and USFWS to seek efficient and effective approaches to 
permitting that will allow projects to be developed, permitted, 
financed, constructed and placed into operation on public lands.

7. Case Studies: RES Americas' Projects
    The roadblocks I have described are not theoretical. RES is 
developing projects on public and private lands that are grappling with 
inconsistent permitting pathways and the lack of compliance certainty.
Granite Mountain Wind Project (CA)
    A case in point is our 60 megawatt Granite Mountain Project located 
on BLM lands in San Bernardino County, California, which has been 
significantly impeded by these roadblocks. Granite Mountain was put on 
the DOI 2009 Fast-Track project list, and RES was encouraged to hasten 
development of the project so that it could qualify for ARRA/Treasury 
Grant funding.
    RES has been developing the Granite Mountain project for more than 
8 years and has spent more than $6.1M in developing the project.\10\ 
The original right-of-way for wind testing and monitoring was executed 
by RES in July 2003. RES filed a right of way application for wind 
development with the BLM in December 2006. The NEPA process was started 
in earnest in 2007.
---------------------------------------------------------------------------
    \10\ In stark contrast to the 8 years (and counting) needed to 
develop the Granite Mountain Wind Farm on public lands, consider that 
RES is about to complete construction of a 227 MW project on private 
land in Oklahoma that started the permitting and development process in 
late 2008. That said, developing projects on private land is in no 
sense ``easy'', and involves complex permitting and the involvement of 
multiple governmental entities and stakeholder groups.
---------------------------------------------------------------------------
    It is important to note that this project has many of the key 
ingredients of a successful development, including an executed power 
purchase agreement, an executed interconnection agreement, and a 
completed Draft Environmental Impact Statement. The sole missing 
development asset required to finance the project RES was a Record of 
Decision from BLM. . .which was scheduled to be received by December 
2010.
    However, in late summer 2010, we were notified by the USFWS of a 
concern regarding potential golden eagle issues. The notification came 
as a direct result of BLM's July 9, 2010 Instructional Memorandum. 
Given the new USFWS eagle regulatory program and BLM policies, this 
left RES in a state of regulatory and permitting uncertainty as to how 
to advance the project, comply with the new eagle regulations, and BLM 
policy.
    As a result, this project did not qualify for the Treasury Grant 
and is clearly a missed opportunity for RES and for economic stimulus 
and job creation.
    While RES is working with USFWS and BLM to conduct additional eagle 
surveys intended to support an ABPP and the project's Final EIS, the 
construction of the project has been set back by a minimum of twelve 
months and development costs have increased on the order of hundreds of 
thousands of dollars. The February 2011 Eagle Guidance casts further 
uncertainty on the project and will likely result in further delays and 
additional costs.
Rock Creek Wind Project (OR)
    The USFWS' new eagle program has impacted project development 
beyond just public lands. Throughout the spring of 2010, RES negotiated 
the sale of a 400 MW wind energy project with a regulated utility in 
the Pacific Northwest. The project is/was sited entirely on private 
lands and is adjacent to multiple operating wind projects. The 
investor-owned utility had requested regulatory hearings and petitioned 
its regulatory authorities to review the transaction.
    Shortly after issuance of the BLM's July 2010 Instruction 
Memorandum, local USFWS field offices began to provide feedback to 
developers regarding their projects on public as well as private lands. 
This feedback included the need for additional eagle surveys as well as 
the prospect that proposed projects--if constructed--would be at risk 
under the Bald and Golden Eagle Protection Act.
    Given the concerns raised by USFWS as well as the uncertainty 
regarding the outcome of the USFWS dialogue, the utility withdrew its 
petition to acquire the project and negotiations of the transaction 
were cancelled. RES continues to develop the Rock Creek site, albeit at 
significantly greater risk and expense.
    Both the Granite Mountain project and the Rock Creek project 
demonstrate that these roadblocks to development have a profound and 
demonstrable impact on renewable energy development on both public and 
private lands. It is critical that the underlying causes of these 
roadblocks be addressed as quickly and as efficiently as possible so as 
not to result in further missed opportunities for renewable energy 
development in the United States.
Conclusion
    RES has been and continues to be a strong advocate for responsible 
development of renewable energy projects on public and private lands. 
Renewable energy development, construction and operation is our focus, 
and our corporate ethos is grounded in sustainability and environmental 
responsibility. We have enjoyed a cooperative relationship with the 
federal agencies that administer public lands and look forward to 
improving that relationship in the future.
    We appreciate the tireless efforts of the BLM and USFWS field 
office staff and appreciate their efforts to process the multitude of 
applications for right-of-way grants for renewable energy projects on 
federal land as well to comply with regulations promulgated from 
Washington, DC.
    But there are currently significant roadblocks to renewable energy 
development on public lands that should be rectified before further 
delay and uncertainty impedes the industry. In RES' experience, the 
three biggest roadblocks to development of renewable energy projects on 
public lands are that:
         (i)  There is no ``clear path'' for permitting development on 
        public lands;
         (ii)  Issues and concerns in the permitting process lack 
        perspective and proportionality; and
        (iii)  Completion of development requires dedicated BLM 
        resources and direction that is currently lacking.
    Collectively, these three problems can be summarized as 
``regulatory uncertainty'', which as explained above, is anathema to 
project developers and investors. The cumulative impact of this 
regulatory uncertainty on the wind industry is severe. In the case of 
the Eagle Guidance and the Land Based Guidelines, AWEA estimates that 
these USFWS policies jeopardize:
          More than 34,000 megawatts of wind power projects;
          More than 27,500 jobs;
          $103 million in potential landowner revenue per 
        annum; and
          $68 billion in investment.
    On behalf of RES, I would like to thank Chairman Hastings, Ranking 
Member Markey and members of the Committee for the opportunity to 
testify in the Committee on Natural Resources Oversight Hearing on 
``American Energy Initiative: Identifying Roadblocks to Wind and Solar 
Energy on Public Lands and Waters, Part II--The Wind and Solar Industry 
Perspective''.
Appendix I: Comparison of the Percentage of Renewable Energy Generation 
        Located on Public and Private Lands
    RES is currently pursuing rights-of-way for the development of 
renewable energy projects on public lands, but such projects are a 
small portion of our entire development portfolio. In fact, other than 
a re-powering project over a decade ago, RES has never completed the 
development and construction of a renewable energy project on public 
lands. Only 9% of RES' current development portfolio is on public 
lands. I submit that RES' experience is not unique.
    As the tables below demonstrate, only 1.4% of all installed wind 
capacity and 2.1% of all wind capacity under construction in the United 
States from any renewable energy developer is on public lands. These 
numbers dramatically illustrate that public lands is clearly a less 
attractive option for renewable energy developers.

[GRAPHIC] [TIFF OMITTED] T6728.001


              National Figures for all developers \11\
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    \11\ Source: AWEA's 2010 U.S. Wind Industry Market Report.
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                                 __
                                 
    The Chairman. I now recognize Mr. Gordon for your 
testimony. You are recognized for 5 minutes.

           STATEMENT OF JAMES S. GORDON, PRESIDENT, 
                   CAPE WIND ASSOCIATES, LLC

    Mr. Gordon. Thank you, Chairman Hastings and Congressman 
Markey. My name is Jim Gordon. I am President of Cape Wind 
Associates and Energy Management, Inc., which is the developer 
of Cape Wind. I understand how a diversified energy portfolio 
can increase our Nation's energy security and independence, 
create new jobs, and improve our environment, because for the 
last 35 years, our company has successfully developed a number 
of energy projects that have contributed to those important 
objectives.
    Eleven years ago, our company embarked on developing 
America's first offshore wind farm. Coming from the New England 
area, it was always a truism that New England has no indigenous 
energy resources; we have no coal, oil or natural gas. But I am 
here today to tell you that we have an abundant offshore wind 
resource right off our coast that we can harness to create new 
jobs, increase energy independence and create a healthier 
environment.
    Over the last 11 years, our company worked with 17 Federal 
and State agencies to permit the Cape Wind project. We are 
proud of the fact that we helped to evolve the regulatory 
framework for offshore wind in the United States. And just a 
month ago, Secretary Salazar at the Charlestown Navy Yard, 
against the backdrop of the USS Constitution, announced that 
Cape Wind was fully permitted and gave the green light for 
construction. That was a very proud moment for our company. We 
have invested over $50 million to develop this project to date, 
and every penny of that money has come from the senior managers 
of our company.
    Unfortunately, because of the ability of a small group of 
project opponents that file suit after suit in either 
regulatory forums or judicial forums, the project has been 
delayed. We have won 15 of those decisions. Every single 
regulatory or judicial system we have won. We were working very 
closely with the Department of Energy, and for over a year we 
have been working to try to obtain a loan guarantee. And a 
government help through the Department of Energy loan guarantee 
is going to be critically important for commercializing the 
first of a kind of this innovative project.
    I can tell you that these incentives are very important 
because currently our company is building two of the largest 
biomass projects in the United States. Each one of those 
companies has over 400 construction workers on the site, 
working over a 33-month period, and will create over 500 
permanent jobs in the forestry industry. Those projects relied 
on the crucial investment tax credit and 30 percent cash grant 
that was rolled out through the Obama Administration.
    Right now I would ask your panel to consider a couple of 
important policy recommendations to help expedite the 
development of renewable energy, which all of us in this room 
and on this panel would like. Number one, there needs to be a 
statutory timeframe for permitting these projects. It can't be 
endless and open-ended where sophisticated parties can 
manipulate and abuse the process.
    Number two, it is critically important that we have a 
consolidated and expedited judicial process.
    And number three, the incentives that are being developed 
to incentivize renewable energy projects need to be consistent 
and coincide with the development cycles and the construction 
period cycles of these projects. For instance, in 2012, the 
wind incentives end, but the first offshore wind project was 
only permitted, finally permitted, about a month ago.
    With these programs in place, I think we will be able to 
increase the penetration of renewable energy in this country. 
Thank you.
    The Chairman. Thank you very much, Mr. Gordon.
    [The prepared statement of Mr. Gordon follows:]

   Statement of James S. Gordon, President, Cape Wind Associates, LLC

Introduction
    I appreciate this opportunity to address the Committee. My name is 
James S. Gordon, President of Cape Wind Associates, LLC (``Cape 
Wind''). For the last eleven years, Cape Wind has been developing the 
Nation's first offshore wind generation project. The project's nearest 
point of land will be approximately 5 miles off the coast of 
Massachusetts. Most of the turbines will be 6--10 miles from the 
nearest shore. It would generate 468 MW of clean and renewable energy, 
with no fuel requirements and no air emissions. This amount would 
represent approximately 75% of the annual electricity needs of Cape Cod 
and the Islands of Martha's Vineyard and Nantucket. The Cape Wind 
project would be located on a shoal that is outside of the shipping 
lanes and would impose no restrictions on current uses of the area. 
Cape Wind enjoys strong support of environmental, consumer advocacy and 
labor groups and the overwhelming majority of Massachusetts voters, and 
has a grass-roots support organization with over 4,000 members. 
However, it has drawn the opposition of a few wealthy landowners who 
will be able to see it in the distance.
    The principals of our company have been in the energy business for 
more than thirty years. We have developed and operated some of the most 
efficient gas-fired plants operating in the United States and we are 
intimately familiar with federal and state licensing processes for 
electric power plants. In direct response to mandates of the New 
England States for renewable energy, we are now focusing upon offshore 
wind energy development, which is uniquely well-situated to serve the 
population centers of the East coast. Offshore wind energy technology 
has now advanced to the point where it is both proven and reliable and 
can play a much more meaningful role in our National supply mix. A 
study commissioned by the Department of Energy entitled ``A National 
Offshore Wind Strategy'' estimates that America's offshore wind could 
generate 4,150 GW, approximately four times the current generating 
capacity of the Nation. However, if we are to realize the potential of 
offshore wind energy, we need to ensure that our National energy and 
environmental policies are implemented in a consistent and timely 
manner. We know that this technology works. Although Cape Wind will be 
the first offshore wind farm proposed in the United States, many 
projects are operating successfully in Europe, and the Chinese, after 
starting much later than us, have already now deployed their first 
offshore project.

1. Federal Regulatory Process
    The Federal and state regulatory process for offshore renewable 
energy is thorough and comprehensive, but often not coordinated. One 
fundamental defect is that it lacks any legal requirements that would 
limit the duration of the review period. As a result, with no required 
end point, opponents can use regulatory stalling and delay tactics to 
try to financially cripple even a project that meets all statutory 
standards and serves Federal and State policy objectives.
    Cape Wind submitted its Federal permit application to the U.S. Army 
Corps of Engineers (``USACE'') in November of 2001, pursuant to section 
10 of the Rivers and Harbors Act, which governs the placement of 
structures in Federal waters. The Corps considered the project for 
several years and issued a Draft EIS in November, 2004. However, 
pursuant to the Energy Policy Act of 2005, The Department of the 
Interior, (MMS now BOEMRE) became the lead federal agency and 
essentially the process had to begin anew. BOEMRE conducted its own 
multi-year extensive review processes and issued a highly positive 
Environmental Impact Statement in January of 2009. The Record of 
Decision was not issued by DOI for another 15 months, in April 2010. 
Secretary Salazar then issued the first lease for OCS renewable energy 
to Cape Wind in October of 2010 and BOEMRE approved our Construction 
and Operation Plan (the ``COP'') in April 2011. The project thus has 
been undergoing extensive regulatory and public scrutiny for 10 years, 
and has now received all major permits and approvals.
    The review of Cape Wind's application was a process that has 
included the active participation of 17 Federal and State participating 
agencies and afforded exceptional opportunities for public involvement. 
During this process, an exhaustive analysis of all potential impacts of 
the project was conducted, including studies of issues including 
potential impacts upon existing uses, environmental issues, including 
potential impacts to fish, birds threatened species and marine mammals, 
protection of Native American rights, project aesthetics, cost 
implications and the energy needs of the public. State Regulatory 

Process
    In addition, there have been extensive state regulatory 
proceedings. In September of 2002, Cape Wind petitioned the 
Massachusetts Energy Facilities Siting Board (``MEFSB'') for 
authorization of its facilities located within Massachusetts. After an 
exhaustive review, including 20 days of expert testimony, on May 10, 
2005, the MEFSB approved Cape Wind's petition based upon its findings 
that Cape Wind's energy is needed (i) to reliably meet the growing need 
for power in the region; (ii) to stabilize prices to electric rate 
payers; and (iii) to offset air emissions from fossil generators. 
Moreover, in 2009 the MEFSB issued a Certificate of Environmental 
Impact and Public Interest to Cape Wind and such grant has been upheld 
on appeal by the Massachusetts Supreme Judicial Court. Most recently, 
in November of 2010, the Massachusetts Department of Public Utilities 
approved Cape Wind's long-term power sales agreement with National 
Grid, finding that ``it is abundantly clear that the Cape Wind facility 
offers significant benefits that are not currently available from any 
other renewable resource'' and that the ``benefits outweigh the costs 
of the project.'' D.P.U. 10-54.

2. Judicial Appeals.
    Along the way, opponents sought to appeal regulatory decisions to 
the federal or state courts more than ten times, and Cape Wind has won 
every case to date. Notwithstanding this extensive review and analysis 
and the appeals we have already won, the project now faces multiple 
appeals of its federal approvals brought by the same small, but well-
funded, special interest group that has sought to delay the review 
process at every turn. In light of the past and continuing delays that 
we have experienced, we offer the following three policy suggestions 
for your consideration.

3. Policy Recommendations
   A.  Limit Time Periods of Agency Review.
    First, national policy objectives would be far better served if the 
environmental review of proposed renewable energy facilities were 
conducted in a more timely manner, perhaps pursuant to specific 
statutory timeframes that prevent delay tactics from financially 
crippling important and worthy projects. We recognize and applaud the 
progress that has been made by BOEMRE (including its ``Smart from the 
state'' initiative), but firm deadlines applicable to all federal 
agencies would provide certainty to the review schedule. We reference 
for example the energy facility siting acts that have been enacted by 
many of the New England states, which provide that that a thorough 
environmental review of proposed energy facilities is to be conducted 
within a statutorily limited time frame, which is limited to 12 months 
by Massachusetts law.
   B.  Consolidate and Expedite Judicial Review.
    Second, renewable energy projects often require multiple federal 
approvals, each of which is subject to judicial review, processes which 
can consume additional years and substantial funds. Renewable energy 
projects that require federal approvals would be expedited 
significantly if all such reviews were consolidated in a single 
appellate proceeding in which the court is encouraged to expedite its 
decision.
    There is ample precedent for such a provision in recent energy 
legislation. The Alaska Natural Gas Pipeline Act of 2003 at section 
720e provides for expedited consideration and exclusive review in the 
D.C. Circuit of any order or action of any federal agency or any 
challenge under NEPA related to the authorities in the Act. Similarly, 
the Energy Policy Act of 2005, section 313, provides for development of 
a single consolidated record and for exclusive jurisdiction and 
expedited consideration by the D.C. Circuit Court of Appeals to review 
any Federal agency or state agency actions pursuant to Federal law 
relating to construction of certain natural gas facilities.
    If Congress is serious about encouraging the development of 
renewable energy resources, streamlining the judicial review process 
would be a most effective mechanism for getting such facilities on 
line, and would do so without modifying any substantive rights of 
review by any aggrieved party.
   C.  Coordinate Duration of Investment Incentives with Permit Review 
        Timelines.
    Third, Congress should address the fact that federal investment 
incentives for long lead time renewable energy projects (such as 
offshore wind, geothermal and biomass projects) are typically put in 
place for time periods far shorter than the time required for 
permitting, environmental review and construction. For example, current 
provisions for the Investment tax Credit (``ITC''), the Production Tax 
Credit (``PTC'') and the Section 1705 Federal loan guarantee program 
are set to expire in 2012 and 2011, respectively. These time frames are 
just too short to develop and construct an offshore wind, geothermal or 
biomass project.
    The result is an untenable situation where investors in proposed 
projects must proceed without knowing whether crucial incentives will 
still be in effect when such projects are placed in service. These 
incentive durations may be workable for projects that take only one or 
two years to develop, but they are not workable for types of projects 
that take much longer (which, by their nature, provide greater economic 
stimulus and longer-term employment). To be effective, tax and other 
incentives for long lead time projects must be in place for at least 5 
years. We thus suggest a long-term extension for offshore wind and 
other long-lead renewable projects, for both the ITC (to at least 2016) 
and the DOE loan guarantee program, in order to provide a more certain 
and dependable signal to the investment community.
    With these changes, I am certain that America can catch and pass 
the current world leaders in offshore wind development, with massive 
reductions in oil imports and emissions.
    Thank you for your consideration.
                                 ______
                                 

    [The response to questions submitted for the record by Mr. 
Gordon follows:]

[GRAPHIC] [TIFF OMITTED] T6728.013

[GRAPHIC] [TIFF OMITTED] T6728.014

    The Chairman. Next, Mr. Jim Lanard, President of the 
Offshore Wind Development Coalition.

              STATEMENT OF JIM LANARD, PRESIDENT, 
              OFFSHORE WIND DEVELOPMENT COALITION

    Mr. Lanard. Thank you, Mr. Chairman, Ranking Member Markey. 
My name is Jim Lanard, and I am President of the Offshore Wind 
Development Coalition. We represent offshore wind developers 
and the entire supply chain that will be involved in creating 
jobs and manufacturing opportunities here in the United States 
in the offshore wind industry.
    The technology for offshore wind is not new. In fact, 
offshore wind has been operating successfully in Europe since 
1991. And the European Wind Energy Association projects that by 
the year 2030, there will be 215,000 people working in the 
offshore wind industry, more than those workers that are 
working on the land-based side in Europe.
    Now China is in the mix. They are operating 102 megawatts 
of offshore wind energy right now, with more than 2,300 
megawatts under construction.
    To put it very bluntly, the United States is losing the 
intellectual property race for creating a new industry for the 
offshore wind industry here in the United States. And I will 
give you just one very blatant example of that. We have a U.S.-
owned company based in Seattle, Washington, that is developing 
plans for a floating turbine, offshore turbine, foundation. 
They had no place to go in the United States for funding to 
prepare this demonstration project, but the country of Portugal 
offered them their shipyard and their financial support, and 
right now they are building a floating foundation in Portugal 
shipyard and will be beta testing that off the Portuguese coast 
this summer. The United States is losing the intellectual 
property rights. We need to catch up.
    Now, other than Cape Wind, the offshore wind industry 
started really in 2005 when President Bush passed after you 
guys enacted the Energy Policy Act of 2005. That was a very 
important piece of legislation that gave the Department of the 
Interior the jurisdiction to oversee the Outer Continental 
Shelf for renewable energy. The Obama Administration is really 
picking up the pace, devoting very significant resources and 
making great progress with offshore wind.
    We look at this industry as a job creator and manufacturing 
sector, and that is how we approach all of our policy and 
advocacy perspective. We will need accelerated domestic 
production of offshore wind equipment if this industry is to 
succeed. And the reason for that is the high cost of installing 
offshore wind must be offset by the benefits that our 
developers can bring by attracting manufacturing to the United 
States.
    If I may, I would like to just quote Governor Christie from 
New Jersey just last Thursday when he said, quote, We are going 
to make New Jersey number one in offshore wind production. Last 
year I signed the Offshore Wind Economic Development Act to 
provide financial assistance and tax credits to businesses that 
construct, manufacture, and assemble facilities that support 
offshore wind projects. And we have accelerated the development 
of offshore wind projects by working closely with the U.S. 
Department of the Interior and the Bureau of Ocean Energy 
Management Regulation and Enforcement to speed the 
implementation of 1,100 megawatts of power.
    There are three policy issues primarily that we would like 
to address before the Committee for your consideration and for 
Congress'. On the Federal legislative front, as Jim said from 
Cape Wind, we need the investment tax credit. It is probably 
the most fundamental tax incentive that can support this 
industry. We think it is fair because it helps to level the 
playing field with all of the benefits that the Ranking Member 
talked about in his opening statement that the fossil fuel 
industries are enjoying and have been enjoying for over a 
century.
    We need to extend the placed-in-service date for offshore 
wind, and all of this is because of long lead times that it 
takes to permit and develop these projects. We would like to be 
treated similar to solar, to our colleagues in solar, where 
they have an ITC that runs to 2016, and we hope that the 
Congress will consider such an extension.
    We also very strongly support loan guarantee extensions. We 
are disappointed that the DOE was forced to defund some of the 
loan guarantee programs for offshore wind developers. It is 
essential to create jobs. And we also support a credit subsidy 
for those loans.
    We congratulate the Department of the Interior for its 
Smart from the Start programs. It has reduced the permitting 
timeline by 2 years, but still at 5 to 7 years it is too long. 
Even Director Bromwich at your testimony at the hearing on May 
13th commented that he is still working to reduce that 
timeline.
    We also need to overcome market barriers. We need a market 
for our product, and the Federal Government can help looking at 
Federal procurement by the Department of Defense, by the 
Department of Energy, and we are having those conversations 
with those Departments. We would love for you to help us with 
that.
    And on the State level--of course, we also support research 
and development initiatives. On the State level, we want the 
States to continue to collaborate and coordinate with the 
Federal Government. Market creation is essential. New Jersey 
has done this by creating a revenue stream for up to 1,100 
megawatts of power if the benefits will exceed the costs.
    And we also need to incentivize manufacturers. When we do 
this, we will have the energy security and the energy 
independence and the national security that this Congress and 
this Nation needs as we progress.
    Thank you very much.
    The Chairman. Thank you very much for your testimony.
    [The prepared statement of Mr. Lanard follows:]

Statement of Jim Lanard, President, Offshore Wind Development Coalition

Introduction
    Mr. Chairman and Members of the Committee,
    Thank you for the opportunity to present testimony to you today on 
the topic: ``American Energy Initiative: Identifying Roadblocks to Wind 
and Solar Energy on Public Lands and Waters, Part II--The Wind and 
Solar Industry Perspective''. My name is Jim Lanard, President of the 
Offshore Wind Development Coalition. The Offshore Wind Development 
Coalition represents offshore wind developers, service providers to the 
industry including turbine manufacturers, cable manufacturers, 
submarine cable installers, other supply chain businesses, offshore 
submarine transmission providers, environmental consulting firms, and 
law firms. Our founders include seven offshore wind developers and the 
American Wind Energy Association (AWEA) has a seat on our Board of 
Directors.
    Technology to generate electricity from offshore wind farms is not 
new and has a proven track record. In fact, the first modern day 
offshore wind farm became operational in 1991 off the coast of Denmark. 
There are now more than 40 offshore wind farms operating in European 
waters for a total of 2,396 MWs of power generation. There are sixteen 
more projects under construction, for an additional 3,972 MWs of 
installed capacity.
    And let's not forget China, which is currently the world's largest 
generator of wind energy and is quickly becoming a world leader in 
offshore wind, too. China has clearly demonstrated that it values wind 
energy. For the year 2010, 46% of the world's newly installed wind 
energy capacity was in China, while the US accounted for 14.3% of the 
world's new wind energy facilities. Regarding offshore wind, China now 
has 102 MWs of offshore wind operating and 2.300 MWs of offshore wind 
is under construction. China's wind energy programs are supporting that 
country's efforts to achieve energy security, economic development and 
emission reductions.
    Yet in the United States, no offshore wind farms have been built. 
But this will soon change. Change, in fact, began here in the US in 
2005, when Congress passed and President George W. Bush signed into law 
the Energy Policy Act of 2005 (EPAct 2005). EPAct 2005 gave the 
Secretary of the US Department of the Interior leasing and permitting 
jurisdiction for renewable energy projects proposed for the Outer 
Continental Shelf (OCS).

Background
    While the efficacy of offshore wind energy technology has been 
demonstrated in Europe, this technology and regulation of it is new to 
the United States. Federal and state regulators have had to draft 
regulations and learn about all aspects of developing, constructing, 
operating and decommissioning offshore wind farms. And they have had to 
consider more than 20 federal laws and Executive Orders that apply to 
offshore wind farms. This has been a steep learning curve for all 
parties, admirably begun under the prior administration and continuing 
at an even faster pace now. It is hard to imagine that anyone 
associated with offshore wind doubts the commitment and efforts that 
federal and state officials are continuing to make to establish this 
industry and its potential to employ tens of thousands of people in 
good paying jobs. We applaud President Obama, US DOI Secretary Ken 
Salazar, US DOE Secretary Steven Chu, and their staffs for their 
leadership on the continuing development of the offshore wind industry.
    Momentum in the development of offshore wind is evidenced by the 
surge of interest demonstrated by developers. What began with Cape 
Wind's leading role a decade ago, when it first proposed an offshore 
wind farm for Massachusetts, has now turned into a very robust offshore 
wind industry. For example, state initiatives in Delaware, New Jersey 
and Rhode Island provided offshore wind developers opportunities to 
propose projects in the Atlantic Ocean. In 2006, Delaware held a 
competitive process to select a generation source to be located in-
state. One offshore wind developer competed against two other power 
sources--one a gas-fired power plant and one a coal gasification plant. 
The offshore wind developer won that competition. Then, in 2007 and 
2008, two states, New Jersey and Rhode Island, held competitions just 
for offshore wind developers. Five offshore wind developers bid in the 
New Jersey competition and then seven competed in Rhode Island.
    And, with the advent of the federal government's OCS leasing 
program, we have seen even more interest in developing offshore wind. 
In 2010, eight offshore wind developers bid to lease land on the OCS 
off the coast of Maryland. Earlier this year, ten offshore wind 
developers bid in the leasing process for federal waters off of 
Massachusetts and, just next month in June 2011, it is expected that 20 
or more offshore wind developers will respond to the federal 
government's Call for Nominations on the OCS off of New Jersey's coast.
    This rapidly increasing level of interest is a significant signal 
that the offshore wind industry and the great benefits it can offer to 
our country is about to become a reality. Offshore wind provides clean, 
renewable energy that will support US efforts to reduce reliance on 
foreign energy sources and increase our country's quest for energy 
independence. In a sentence: Offshore wind can--and will--play a 
significant role to help the United States meet our national and energy 
security goals.

Job Creation and Manufacturing
    Moreover, offshore wind has the potential to become one of our 
nation's newest manufacturing sectors and could employ tens of 
thousands of workers in good paying, clean tech jobs. In Europe, the 
European Wind Energy Association projects that ``by 2030, more than 
375,000 people should be employed directly in the sector--160,000 
onshore and 215,000 offshore.'' (Emphasis added.) And President Obama, 
in an Earth Day speech on April 22, 2009 said,
    ``It's estimated that if we fully pursue our potential for wind 
energy on land and offshore, wind can generate as much as 20% of our 
electricity by 2030 and create a quarter-million jobs in the process--
250,000 jobs in the process, jobs that pay well and provide good 
benefits. It's a win-win: It's good for the environment; it's great for 
the economy.''
    Some commentators have compared the jobs and manufacturing history 
of the development of the land-based wind industry with what we can 
expect from the offshore sector. We think US-based jobs and 
manufacturing for offshore wind farms will develop quicker than what 
has occurred in the land-based wind industry.
    As background, it should be noted that domestic content of turbine-
related materials for land-based wind farms, in their early years, was 
low. Prior to 2005, less than 25% of land-based turbines (based on 
cost) were manufactured in the U.S. Five years later that percentage 
has doubled so that in 2010, domestic content of U.S.-deployed turbines 
has reached 50%. According to the AWEA, more than 75,000 people work in 
the land-based wind industry and there are over 400 wind-related 
manufacturing plants in 43 states that support the manufacture of the 
8,000 components of a typical wind turbine.
    Offshore wind developers and state economic development officials 
expect--and the latter likely will demand--higher domestic content much 
earlier in the development cycle for the offshore wind industry. One 
driving force for domestic content of offshore wind equipment is that 
the cost of installing offshore wind farms is considerably higher than 
for land-based wind farms. Hence, there are sound public policy 
arguments for the case that offshore wind developers and their state 
counterparts should be able to demonstrate economic benefits--job 
creation and establishment of manufacturing centers--early in the 
development stage of this new industry. These economic benefits can 
thus offset the higher costs for installation of offshore wind farms. 
And those benefits must be enjoyed by residents in states where 
offshore wind power is being sold.
    The question we are often asked is whether offshore wind can 
achieve the economies of scale necessary to support state and federal 
policies that promote the establishment of this multi-billion dollar 
industry. The answer is yes, economies of scale can be achieved for 
offshore wind farms. First, the use of larger turbines will result in a 
reduction of the number of foundations that need to be installed in the 
ocean while at the same time increasing per unit energy output. Second, 
developers have begun to propose larger wind farms; i.e., more turbines 
per wind farm. Several offshore wind developers planning to compete for 
the right to sell power in New Jersey have reported that they plan to 
propose wind farms scaled at 1,100 MWs each--and that 5- and 6-MW 
turbines are being considered. These wind farms are likely to cost more 
than three billion dollars ($3,000,000,000) each, which represents 
significant manufacturing and job creation potential for New Jersey and 
other states that embrace this new-to-the-US economic engine.
    Offshore wind is a bipartisan issue. In addition to the Energy 
Policy Act of 2005 that President Bush signed, New Jersey Governor 
Chris Christie is a leader at the state level. Just this last Thursday, 
May 26, Governor Christie said:
        We're going to work to make New Jersey number one in offshore 
        wind production. Last year I signed the Offshore Wind Economic 
        Development Act to provide financial assistance and tax credits 
        to businesses that construct, manufacture, and assemble water 
        access facilities that support offshore wind products. The DEP 
        has completed the first of its kind, two-year baseline study 
        that identifies optimal sites for offshore wind turbines. This 
        study combined with the strong policies I've spoken about is 
        going to be instrumental and has been instrumental at the 
        Department of the Interior recognizing New Jersey in its Smart 
        from the Start program as a wind energy area. That provides us 
        the opportunity for expedited federal permitting in this area, 
        and we're going to try to take advantage of it. We've joined 
        with the federal government and other East Coast states to 
        establish the Atlantic Offshore Wind Energy Consortium to 
        promote commercial wind development on the outer continental 
        shelf. And we've accelerated the development of offshore wind 
        projects by working closely with Interior and the Bureau of 
        Energy Management Regulation and Enforcement to speed the 
        implementation of 1100 MW of wind turbines. Since the call for 
        interest last month we will be receiving applications for more 
        than 3,000 MW of projects within the next two weeks.
        So the interest in New Jersey in wind power is significant, 
        because of the laws that this administration has helped to put 
        into place and we are going to continue to pursue that.
    With these introductory and background comments, I will now address 
the Federal and State roles that are necessary to make the offshore 
wind industry and its manufacturing and job creation potential a 
reality.

The Federal Role in Offshore Wind
Legislative Priorities
    The Offshore Wind Development Coalition has two major federal 
legislative priorities. The first is a long-term extension of the 
Investment Tax Credit. The second is restoration of the US DOE Loan 
Guarantee program.
        1.  Long-term extension of the Investment Tax Credit (ITC)
            Extension of the ``placed-in-service'' date applicable to 
        the investment tax credit for offshore wind energy facilities 
        is a very high priority for offshore wind developers. The ITC 
        is the most fundamental federal tax incentive for renewable 
        energy. The ITC imposes a strict deadline of December 31, 2012 
        for wind farms to qualify, whether onshore or offshore. This is 
        in sharp contrast to the placed-in-service dates for all other 
        renewable energy projects, which range from 2013 for marine and 
        hydrokinetic facilities, biomass, geothermal, municipal solid 
        waste and qualified hydropower to 2016 for solar energy 
        projects. Although the 2012 deadline may create some 
        difficulties for onshore wind, it imposes a near impossible 
        barrier for offshore wind due to the long lead time required 
        for development. In its current form, the ITC may not be 
        available to any of the projects being developed and permitted 
        off the Atlantic Coast or in the Great Lakes.
            The unavailability of the ITC will make it hard to finance 
        offshore wind projects and will thwart development of an 
        enormous indigenous offshore wind resource, one that the DOE 
        estimates could reach 54 GW by 2030. Equally troublesome, if 
        the ITC is renewed only for short periods just before it 
        expires, as is often the case with other ``extenders'', it may 
        never be usable for offshore wind.
            A long-term extension of the ITC is consistent with US 
        policies that applied for coal, oil and gas powered generation 
        when those facilities were first coming on line. Offshore wind 
        developers hope to be given the same consideration. With a 
        level playing field, and achieving the economies of scale 
        discussed above, offshore wind will be a competitive power 
        generation source. According to AWEA (www.PowerofWind.com):
                  The Congressional Research Service notes that 
                for more than 90 years fossil fuel industries have 
                taken subsidies via tax breaks.
                  The Government Accountability Office, during 
                President Bush's administration, concluded that fossil 
                fuels continue to receive nearly five times the tax 
                incentives as renewable energy. (Federal Electricity 
                Subsidies, Government Accountability Office, October 
                2007)
            The Offshore Wind Development Coalition strongly supports 
        an ITC extension to at least 2016, the date that currently 
        applies to solar facilities. Such an extension will signal the 
        markets that projects can be developed and financed.
        2.  Restoration of the DOE Loan Guarantee Program
            The US DOE Loan Guarantee program for renewable energy 
        projects was established when the Energy Policy Act of 2005 was 
        enacted into law. The loan program exists to support debt 
        financing for innovative energy projects, including first-mover 
        offshore wind farms. Recent Congressional action on a 
        Continuing Resolution (CR) for Fiscal Year 2011 has essentially 
        eliminated funding for these loan guarantees for our members' 
        projects. Several offshore wind farm developers were recently 
        informed by the US DOE that their applications for loan 
        guarantees were put on hold until additional resources are made 
        available to the program. These loans, which would have reduced 
        the cost of electricity to consumers, are essential to support 
        job creation and economic development opportunities in many 
        states. The loans would also begin to balance the substantial 
        subsidies other sources of electricity generation receive from 
        various federal tax incentive provisions. The elimination of 
        federal loan guarantees presents a significant problem for 
        offshore wind developers, since these guarantees significantly 
        lower the cost of borrowing funds for an offshore wind farm. 
        The cost to the US government is not high: The availability of 
        eight billion dollars of federal loan guarantees, which could 
        support several first-mover projects, would require an 
        appropriation of just $80 million.
            An additional aspect of the loan guarantee program, 
        provided for in the 2009 Recovery Act, had been its funding of 
        a credit subsidy fee, which would otherwise have to be paid by 
        an offshore wind developer at the loan closing. This credit 
        subsidy payment provided for by the Recovery Act would have 
        required offshore wind developers to reach loan closing by 
        September 2011, an unrealistic date, considering the current 
        federal permitting process timeline.
            The Offshore Wind Development Coalition respectfully asks 
        Congress to restore and fully fund the US DOE Loan Guarantee 
        program as quickly as possible.

Regulatory Priorities
        1.  The US DOI's Smart from Start Initiative
            The Offshore Wind Development Coalition and our member 
        companies worked hard to make the case that the seven-to-nine 
        year permitting timeline for offshore wind, as originally 
        contemplated by the DOI's Bureau of Ocean Energy Management, 
        Regulation and Enforcement (BOEMRE, previously the Minerals 
        Management Service--MMS), was too long to support the 
        establishment of this new industry. Secretary Salazar's Smart 
        from the Start initiative has begun to address this long lead 
        time for permitting and has already reduced the timeline by up 
        to two years. This is a significant accomplishment and sends 
        the right signals to offshore wind developers and their 
        investors.
        2.  Continued Refinement of the BOEMRE Permitting Process for 
        Offshore Wind Farms
            In his May 13, 2011 remarks to this Committee on Part I of 
        this hearing, BOEMRE Director Bromwich said that his agency 
        continues to work with other federal and state agencies to 
        improve the permitting process for offshore wind. We think this 
        coordination and collaboration is essential. The Offshore Wind 
        Development Coalition and our member companies have had 
        opportunities to discuss the offshore wind permitting process 
        with federal officials and we appreciate the efforts they have 
        made to reduce the permitting timeline. While the timeline 
        still needs to be reduced some more, we believe BOEMRE is 
        heading in the right direction. We will continue to work with 
        BOEMRE and federal officials in other agencies to find 
        additional reductions in the time it takes to permit an 
        offshore wind farm.

Overcoming Market Barriers
    State-driven policies, discussed in the last section of this 
testimony, will play a significant role to identify opportunities for 
offshore wind developers to sell their power into the grid. There is a 
federal role, too, and that includes federal procurement of power 
produced by offshore wind farms. To that end, the Offshore Wind 
Development Coalition has begun conversations with the US Department of 
Defense and the US Department of Energy to assess whether--and how--the 
federal government can help meet renewable energy goals set for the 
government's electricity use by purchasing energy produced from 
offshore wind farms.

Research and Development
    The US DOE has taken a leading role to identify research and 
development programs that can support fast-track improvements for 
offshore wind technology, ranging from more efficient turbines to 
removal of market barriers to new offshore wind turbine designs. The 
Offshore Wind Development Coalition and our member companies have an 
excellent working relationship with DOE officials and its Office of 
Energy Efficiency and Renewable Energy (EERE). We will continue to work 
with DOE and EERE on these and other research and development 
initiatives.

State Role in Offshore Wind
State Support for Federal Government Programs
    The US DOI has made cooperation and collaboration with state 
officials a cornerstone of its approach to offshore wind. We support 
these initiatives. Two programs stand out: the Federal--State Task 
Forces that have been formed in most states along the Atlantic and the 
establishment of the Atlantic Offshore Wind Energy Consortium. As New 
Jersey's Governor Christie said, his state will continue to work 
closely with the US DOI and BOEMRE to ``speed the implementation'' of 
offshore wind development in his state. To support the Governors' 
efforts to develop offshore wind off of their coasts, the Offshore Wind 
Development Coalition works closely with state officials affiliated 
with the Atlantic Offshore Wind Energy Consortium and we have plans to 
reach out to Governor's offices in the Great Lakes states and Gulf of 
Mexico (primarily Texas) so that we can serve as a resource for all 
coastal states interested in offshore wind.

Market Creation
    An important challenge that the offshore wind industry is 
continuing to address is the need for there to be markets for the power 
generated by our wind farms. State policies will play a significant 
role in the creation of these markets. A cost-benefit analysis 
associated with proposals to locate offshore wind farms in New Jersey 
is now required by law; this analysis will be carefully reviewed by 
that state's utility commission (the NJ Board of Public Utilities) and 
if the benefits of a specific project justify the costs, that project 
will be approved. Maryland Governor Martin O'Malley has proposed 
legislation expected to be considered in the next session of his 
state's General Assembly that would require a similar cost-benefit 
analysis. These analyses will look to the job creation and economic 
development commitments offshore wind developers can make to the states 
in which they hope to sell their power.

Economic Incentives for Manufacturers of Offshore Wind Equipment
    States along the Atlantic Coast, the Great Lakes and Texas would 
all welcome the establishment of manufacturing facilities and the jobs 
associated with the soon-to-be-created offshore wind industry. 
Manufacturers of offshore wind equipment are being actively courted by 
the economic development agencies in many of these states. While there 
clearly will not be a ``winner takes all'' outcome in regard to which 
states are able to attract new manufacturers of offshore wind 
equipment, first mover states will reap the early--and likely more 
valuable--benefits.

Conclusion
    The Offshore Wind Development Coalition appreciates the opportunity 
to present this written testimony for the Committee's consideration and 
for the opportunity to make an oral presentation of a summary of our 
written comments. We look forward to working with all Members and Staff 
of the Committee. And we hope that you will consider us as a resource 
as you deliberate on the value of offshore wind and the job creation 
and manufacturing opportunities that it offers our nation.
                                 ______
                                 
    The Chairman. Next we will go to what was the other panel, 
the solar panel, and we will recognize Mr. Rhone Resch, 
President and CEO of Solar Energy. You are recognized for 5 
minutes.

         STATEMENT OF RHONE RESCH, PRESIDENT AND CEO, 
              SOLAR ENERGY INDUSTRIES ASSOCIATION

    Mr. Resch. Thank you. I have a PowerPoint presentation 
which should come up. OK. Great.
    Mr. Chairman, it is great to have you back. I am glad you 
are feeling better.
    Ranking Member Markey, great to see you and the rest of the 
members of the Committee. I want to thank you for the 
opportunity to submit testimony on roadblocks to solar energy 
development on public lands.
    I am Rhone Resch, the President and CEO of the Solar Energy 
Industries Association, and I am testifying on behalf of our 
1,000 member companies and 100,000 Americans employed by the 
solar industry. SEIA, my organization, represents the entire 
solar industry, encompassing all major solar technologies, 
including photovoltaics, which you see up on the screen now, 
concentrating solar power, and solar heating and cooling.
    Let me first thank Chairman Hastings and Ranking Member 
Markey for their leadership and support of solar energy. We are 
grateful that the Committee recognizes the important role that 
our public lands play in the development of solar. Even in the 
struggling economy, the solar industry has become an energy and 
jobs powerhouse. The solar industry grew by 67 percent last 
year. Let me repeat that. The industry grew by 67 percent last 
year, and employs Americans in all 50 States, and is now one of 
the fastest-growing industries in the Nation.
    Solar is an energy source available in every U.S. 
congressional district. Given our vast solar resources, we 
could easily lead the world in solar development. Solar also 
enjoys overwhelming public approval; 94 percent of Americans 
support solar overall, and 75 percent are in favor of building 
solar power plants on public lands.
    Last year, 956 megawatts of solar electric capacity was 
installed, enough to power 200,000 homes. This phenomenal 
growth is a result of private investment, technological 
innovation, a maturing industry, and smart Federal and State 
policies. The Federal Government has received a strong return 
on its investment of public dollars with benefits to our 
economy that far exceed the costs.
    Like most products, the costs of solar energy decreases as 
more solar is installed. The policies and incentives in place 
yield dividends now and also act as a catalyst for driving down 
future costs. Just to give you a sense, last year the cost of 
solar install costs decreased by 20 percent across the country. 
With increased deployment of solar energy, solar manufacturing 
and supply chain productions have followed.
    This slide here shows the location of solar companies 
across the United States, with some examples like REC Silicon, 
which produces solar-grade polysilicon in Moses Lake, 
Washington. They expanded production last year to meet growing 
domestic demand, and the facility now employs 550 people in 
your district.
    Abengoa Solar is constructing a 280-megawatt concentrating 
solar power plant in Gila Bend, Arizona, employing up to 2,000 
people in Representative Grijalva's district. It looks like he 
just left. Through supply chain purchases from other companies, 
the plant supports hundreds of jobs throughout the entire 
country.
    In early 2011, a 19-megawatt PV plant, the largest solar 
plant in Colorado, came on line in Representative Tipton's 
district. That plant now powers nearly 4,000 homes, and a 
larger 30-megawatt plant is under construction nearby and will 
be operational later this year.
    Last year was also a noteworthy year as the Bureau of Land 
Management issued the first-ever permits for construction of 
utility-scaled solar power projects on public lands. And by the 
end of last year, nine permits had been approved by BLM. Today 
work is under way at three of these sites, and several other 
solar power plants are under construction on private land in 
the Southwest, employing hundreds of workers from the region.
    Here you can see a worker building the frame for a power 
block at BrightSource Energy's Ivanpah project. And the next 
slide, here you can see a worker that is working through the 
night to construct a molten salt storage plant at Abengoa 
Solar's Solana Power Plant in Arizona.
    Still, there is room for improvement. Developers face many 
hurdles in bringing a solar project to fruition, whether on 
public or private lands. Our industry needs stable, predictable 
policies for continued growth. Today we propose several steps 
that will keep solar growing and surmount some of the hurdles 
that make it harder to locate utility-scale solar on public 
lands.
    Specifically we are seeking, as you heard from the wind 
industry, a multi-year extension of the 1603 Treasury program. 
Plain and simple, this program is the most effective mechanism 
available for deploying renewable energy while providing a 
strong economic return for the taxpayer.
    Second, we need maximum flexibility for solar developers to 
site projects on public lands without being restricted to 
zones.
    Third, the section 10 consultation process performed by the 
Fish and Wildlife Service must include a cost-recovery 
mechanism and consistent timeframes to speed up the processing.
    Fourth, BLM must employ a solar rent policy that is 
comparable to private-land prices.
    And finally, continued support for the DOE loan guarantee 
program is critical, as is the creation of the new Clean Energy 
Bank to provide long-term, low-cost financing for solar.
    Again, thank you for inviting SEIA to submit this 
testimony. We look forward to working with the Committee to 
remove roadblocks to the development of solar energy on public 
lands. And I am happy to answer your questions at the 
appropriate time. Thank you.
    The Chairman. Thank you very much, Mr. Resch.
    [The prepared statement of Mr. Resch follows:]

              Statement of Rhone Resch, President & CEO, 
                  Solar Energy Industries Association

    Mr. Chairman and Members of the Committee,
    Thank you for the opportunity to submit testimony on roadblocks to 
solar energy development on public lands. I am Rhone Resch, the 
President and CEO of the Solar Energy Industries Association (SEIA). I 
am testifying on behalf of our 1,000 member companies and 100,000 
American citizens employed by the solar industry. SEIA represents the 
entire solar industry, encompassing all major solar technologies 
(photovoltaics, concentrating solar power and solar water heating \1\) 
and all points in the value chain, including financiers, project 
developers, component manufacturers and solar installers. Before I 
begin my testimony, let me thank Chairman Hastings and Ranking Member 
Markey for their leadership and support of solar energy. We are 
grateful that the Committee recognizes the important role that our 
public lands play in the deployment of solar energy.
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    \1\ For more information on each of these solar technologies, see 
http://seia.org/cs/solar_technology_and_products.
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I. Introduction
    Established in 1974, the Solar Energy Industries Association is the 
national trade association of the U.S. solar energy industry. Through 
advocacy and education, SEIA and its 1,000 member companies are 
building a strong solar industry to power America. As the voice of the 
industry, SEIA works to make solar a mainstream and significant energy 
source by expanding markets, removing market barriers, strengthening 
the industry and educating the public on the benefits of solar energy.
    We have an opportunity--and perhaps an obligation--to craft 
policies today that will guarantee a clean energy future for tomorrow, 
one in which our energy comes from renewable, domestic sources. Today's 
hearing is an important step in securing that future. Developers face 
many hurdles in bringing a solar project to fruition, whether on public 
or private lands. Below we make recommendations for ensuring the long-
term policy certainty needed to make solar energy a substantial part of 
our energy supply in the United States:
          Retain maximum flexibility for solar developers to 
        site projects on public lands without being restricted to 
        zones.
          Establish a cost recovery mechanism and consistent 
        timeframes to expedite the Section 10 consultation process 
        performed by the U.S. Fish and Wildlife Service.
          Extend the 1603 Treasury Program, which allows solar 
        and other renewable energy developers to receive a direct 
        federal grant in lieu of taking the investment tax credit, 
        which is already in place.
          Continue support for the DOE Loan Guarantee Program 
        and/or establish a Clean Energy Bank to provide long-term, low-
        cost financing to those deploying solar.
          Grant long-term clean energy contracting authority 
        for federal agencies to reap the benefits of solar energy.

II. Overview and Recent Highlights of the U.S. Solar Industry
    At a time of high unemployment and difficult economic conditions, 
the solar industry has become the fastest growing U.S. energy sector 
and one of the fastest growing industries across the entire economy. In 
2010, the solar industry grew at a rate of 67 percent and now employs 
Americans in all 50 states. Last year, 956 megawatts (MW) of 
photovoltaics (PV) and concentrating solar power (CSP) technologies 
were installed, as well as 2.4 million square feet of solar water 
heating collectors. This phenomenal growth is the result of private 
investment, technological innovation, a maturing industry and smart 
federal and state policies. The federal government has received a 
strong return on its investment of public dollars, with benefits to our 
economy that far exceed their costs.
    Solar is an energy source available in every U.S. Congressional 
district.\2\ At this time, Germany leads the world in solar 
installations with a solar resource equivalent to that of the state of 
Alaska. Given our vast solar resources, we could easily lead the world 
in solar deployment. The vast majority of Americans would no doubt 
support such a goal: 94% of Americans think it is important for the 
nation to develop and use solar energy.\3\
---------------------------------------------------------------------------
    \2\ See PV Resources chart at Attachment 1, comparing the United 
States to Germany and Spain.
    \3\ 2010 SCHOTT Solar BarometerTM. See details at http:/
/seia.org/cs/news_detail?
pressrelease.id=1061.
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    Solar energy has many benefits, including the ability to be tapped 
in a variety of circumstances--in power plants, in residential and 
commercial applications, and even off-grid in remote areas where no 
other electric infrastructure exists. Solar also generates electricity 
during peak demand, when we need it most and electricity is most 
expensive.
    The solar industry is maturing rapidly. Major companies like GE, 
Dupont and Applied Materials have solar divisions. Utilities from 
Florida Power & Light to PSEG and Arizona Public Service Company own 
solar assets in their generation fleet. Other energy players are 
increasingly investing in solar, such as NRG Energy, AREVA and 
Westinghouse. Even Google is making a major play, putting a 1.6 MW 
distributed solar generation system on its Mountain View, California 
campus and investing $168 million in the Ivanpah Solar Electric 
Generating System, a solar power plant which uses BrightSource Energy's 
proprietary power tower technology.
    Like most products, solar energy's costs decrease as more and more 
solar is installed. The policies in place today to incentivize solar 
deployment not only yield dividends now, they act as a catalyst, 
driving down future costs. The right policy underpinnings can shave 
years off of the organic price drops analysts expect.
    With increased deployment of solar energy, solar manufacturing and 
supply chain production have followed. For example:
          In 2010, REC Silicon, which produces solar-grade 
        polysilicon in Moses Lake, Washington, expanded capacity and 
        production to meet growing domestic demand. The facility 
        produces 27% of all solar-grade polysilicon in the U.S. and 
        employs 550 people in Chairman Hastings's district.
          A 280 MW concentrating solar power plant is under 
        construction in Gila Bend, Arizona, employing up to 2,000 
        people in Representative Grijalva's district during 
        construction of the facility. Through supply chain purchases 
        from companies around the country, the plant supports hundreds 
        of jobs in every region.
          Early in 2011, a 19 MW PV plant, the largest solar 
        plant in Colorado and one of the largest in the country, came 
        online in Representative Tipton's district. The plant produces 
        enough clean solar energy to power nearly 4,000 homes, and this 
        is just the beginning. A larger 30 MW plant is under 
        construction nearby, and is expected to become operational 
        later this year.
    More solar energy highlights by Congressional district can be found 
at Attachment 2.
    Last year was also a noteworthy year for the Bureau of Land 
Management's (BLM) solar efforts: it issued the first nine permits for 
construction of utility-scale solar power projects on public lands in 
the entire history of the agency. Today, work is underway at three of 
the sites and several other utility-scale solar power plants are under 
construction in the Southwest, employing hundreds of workers from the 
region. In addition, the supply chains behind each of those facilities 
are turning out highly reflective mirrors, precision-crafted receiver 
tubes, steel posts and thousands of other components in Alabama, 
Michigan, New Mexico, Pennsylvania, Tennessee and Virginia.
    As you can see, 2010 was an exciting year for the U.S. solar 
industry. But we're not stopping there: the SEIA Board of Directors set 
out a goal for the industry to install 10 gigawatts--10,000 MW--
annually by 2015.

III. Solar Power Plant Developers Face Persistent Challenges
    Solar power plant developers face persistent hurdles in bringing a 
project to completion, whether the solar plant is sited on public or 
private lands. In the public lands arena, the Department of the 
Interior (DOI), thanks to the leadership of Secretary Salazar, 
prioritized the permitting of renewable energy projects, and SEIA 
commends DOI, BLM and the U.S. Fish and Wildlife Service (USFWS) for 
their efforts.
    The overarching challenge for any industry is policy certainty. 
When companies are deciding where to build their next manufacturing 
facility, when and where to spend $1 billion constructing a new power 
plant or how many employees to add this year, they need a high degree 
of confidence in the future. This is true for public lands policy as 
well as tax, finance and energy policies.

A. Public Lands Policy: The Programmatic Environmental Impact Statement 
        for Solar Energy
    In 2008, BLM initiated a major undertaking studying and preparing a 
programmatic environmental impact statement (PEIS) for solar 
development in six Southwest states.\4\ When final, the PEIS will 
establish policy for solar development on public lands for the next two 
decades. As part of the study process, BLM proposed and analyzed 24 
``solar energy study areas'' on existing public lands which could be 
codified as ``solar energy zones'' and which would encourage solar 
energy development within their boundaries. BLM released the Draft PEIS 
in December 2010 and the public comment period recently closed.\5\
---------------------------------------------------------------------------
    \4\ While the PEIS is intended to set policy for all lands managed 
by BLM, the six states studied were Arizona, California, Colorado, 
Nevada, New Mexico and Utah.
    \5\ SEIA's full comments on the Draft PEIS are available at http://
www.seia.org/galleries/pdf/Final_PEIS_Comments_5.2.11.pdf.
---------------------------------------------------------------------------
    A fundamental policy decision to be made in the final PEIS is 
whether solar energy development will be allowed across 22 million 
acres of public lands in the Southwest, with benefits accruing to those 
projects located within the solar energy zones, or if solar development 
will be restricted to only lands within the identified zones. 
Recognizing that not every acre of BLM-managed land is appropriate for 
solar development,\6\ the solar industry is nevertheless concerned that 
permitting development exclusively within the solar energy zones is 
overly restrictive, would thwart development and would undermine the 
renewable energy goals Congress set out for BLM in the Energy Policy 
Act of 2005.\7\
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    \6\ Indeed, BLM's Preferred Alternative in the Draft PEIS takes 
approximately 77 million acres off the table for solar energy 
development and puts forth rules for the remaining lands.
    \7\ Section 211 of the Energy Policy Act of 2005 (P.L. 109-58) 
establishes a goal for DOI of approving 10,000 MW of non-hydropower 
renewable energy projects on public lands by 2015.
---------------------------------------------------------------------------
    Our public lands have been used for a wide variety of economic and 
recreational activities over the last century, and solar must be one of 
those acceptable uses. In fact, three out of four Americans approve of 
solar energy development on public lands.\8\ BLM should not adopt the 
solar energy zone-only alternative presented in the Draft PEIS. 
Instead, BLM should adopt the Preferred Alternative identified in the 
Draft PEIS and work to make the solar energy zones themselves more 
attractive to project developers.
---------------------------------------------------------------------------
    \8\ View poll details at http://seia.org/cs/
news_detail?pressrelease.id=769.
---------------------------------------------------------------------------
    Much more needs to be known about the solar energy zones to make 
them a useful option for solar energy developers. Only a cursory review 
of the zones has been conducted, and neither BLM nor a developer can 
affirmatively state that a solar power plant belongs within any of the 
zones. Not enough is known regarding the biological and cultural 
resources within these zones. As a result, a developer that seeks to 
site a power plant within such a zone will still expend a great deal of 
effort and money studying the site in order to receive a permit for 
development. The solar energy zones were intended to ease the way for 
development, providing a sort of ``pre-approval'' that such acres are 
suitable for solar power plants. But in their current state, the solar 
energy zones do not provide real incentives for solar development 
within their boundaries.

B. Public Lands Policy: Early Stakeholder Input is Preferable when 
        Crafting New Policies
    In 2010, the Department of the Interior faced the daunting task of 
permitting solar energy projects at a pace the department had never 
before attempted, while simultaneously crafting the policies necessary 
to carry out such permitting. Even now there are many new policies 
coming out of BLM and USFWS in Instruction Memorandum (IM) format. The 
pace of these releases is challenging for both developers and field 
office staff to react to and the regulatory continuity between the 
field offices is not consistent. In many cases, guidance has been 
crafted based on policies from other industries that BLM oversees, with 
limited applicability to solar energy.
    As a recent example, the U.S. Fish and Wildlife Service issued 
draft Eagle Conservation Plan Guidance for wind developers. Just after 
this document's release, some regional USFWS staff began requiring 
solar developers to comply with the guidelines contained therein. Such 
a standard is wholly inappropriate, given that the guidance was written 
for another industry and is only in draft form. A solar developer 
cannot reasonably be expected to comply with guidance for wind 
development.\9\ USFWS should ensure that no regional or field offices 
are applying any aspect of this guidance to solar power projects. In 
addition, USFWS should have to make a threshold determination of a 
project's adverse impact on eagles prior to applying any Eagle Guidance 
to a renewable energy project. Without a threshold finding, USFWS has 
no way of knowing whether the proposed Guidance is applicable or 
appropriate for a given project. Moreover, without an initial 
understanding of a project's impact, USFWS cannot determine whether the 
Guidance will even be effective at monitoring and protecting eagles and 
their environment.
---------------------------------------------------------------------------
    \9\ SEIA's full comments to USFWS regarding the Eagle Conservation 
Plan Guidance are enclosed here as Attachment 3.
---------------------------------------------------------------------------
    Similarly, BLM's Instruction Memorandum establishing performance 
and reclamation bond requirements for solar energy projects \10\ relies 
heavily on the requirements for the mining industry. A solar power 
plant's footprint and potential impact on public lands are far 
different than mining and other extraction activities, and that should 
be recognized by the agency and reflected in policy decisions.
---------------------------------------------------------------------------
    \10\ See IM 2011-003, available at http://www.blm.gov/wo/st/en/
info/regulations/Instruction_Memos_and_Bulletins/national_instruction/
2011/IM_2011-003.html.
---------------------------------------------------------------------------
    Finally, the rent policy BLM established for solar energy produces 
excessive charges to developers. In some instances, the BLM rent is 
double what a developer would pay for nearby private land. Developing 
on public lands also comes with other costs to the developer not seen 
for private lands: increased processing time, mitigation fees, 
restoration and revegetation bonding. Each of these extra costs will 
deter solar development on public lands, contrary to the goals of the 
Administration and Congress. In addition, charging high rents by BLM 
will lead to higher rents in the private sector, which will further 
damage the economics of future solar projects.

C. Private Lands Policy: Section 10 Consultations from USFWS Are Not 
        Timely
    A perennial challenge faced by solar developers (and many others) 
is that of securing a timely Section 10 consultation \11\ from USFWS. 
Many in the solar industry are developing projects on private lands 
and, due to biological considerations, need permits to be issued by the 
U.S. Fish and Wildlife Service to proceed with their project.\12\ 
Projects without a federal nexus (i.e., projects that are not funded, 
authorized, or carried out by a federal agency) may linger for years at 
the back of the queue while USFWS staff provides Biological Opinions 
and incidental take statements (if needed) to other applicants whose 
projects are on public lands or otherwise have a federal nexus (e.g., a 
recipient of a Department of Energy loan guarantee).
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    \11\ The Endangered Species Act (ESA) prohibits anyone from 
committing a ``take'' (kill, injure, harass, etc.) of any listed 
species without appropriate authorizations from the USFWS. 16 U.S.C. 
Sec. 1531 et seq. However, Section 10 of the ESA provides exceptions to 
this rule, such as permits, when a ``take'' is likely to occur during a 
proposed activity. Id. at Sec. 1539(a)(1)(B). Obtaining a permit can be 
a long and arduous process for projects without a federal nexus as it 
requires the permit applicant (and not USFWS) to determine the effects 
of the project on endangered species and their habit, design a Habitat 
Conservation Plan (HCP), provide a long-term commitment to species 
conservation, and request a consultation with the USFWS. During 
consultation, the Service and the applicant discuss the proposed 
project and the species likely to be affected as well as mitigation and 
conservation measures for habitat maintenance, enhancement, and 
protection, coincident with development. There is no formal timeline 
associated with Section 10 consultation. However, preparation of and 
agreement by all parties involved in the HCP can take several years. In 
addition, it can take months to years for the USFWS to review and 
approve the HCP and issue an incidental take permit.
    \12\ Section 10(a) of the ESA requires preparation and approval (by 
USFWS/NMFS) of a Habitat Conservation Plan before USFWS can authorize 
the project or issue an Incidental Take Permit.
---------------------------------------------------------------------------
    This is not a matter of undue preferential treatment, but of 
insufficient staff resources. Indeed, in Fiscal Year 2010 alone, USFWS 
performed over 30,000 consultations with federal agencies under Section 
7 of the Endangered Species Act, leaving little time for staff to 
provide Section 10 consultations.\13\ To address this staffing 
challenge, SEIA recommends establishing a cost recovery mechanism 
through which applicants could reimburse USFWS for contracting 
independent, non-biased scientists and permit experts to expedite the 
consultation and review and process. This process is used today by BLM 
in processing right-of-way applications.\14\ In addition, we recommend 
that USFWS establish a consistent timeframe for Section 10 
consultations, enabling solar projects on private lands to move forward 
in a timely fashion.
---------------------------------------------------------------------------
    \13\ http://www.fws.gov/endangered/esa-library/pdf/
consultations.pdf
    \14\ See 43 U.S.C. Sec. 1764 (``The Secretary concerned may. . 
.require an applicant for or holder of a right-of-way to reimburse the 
United States for all reasonable administrative and other costs 
incurred in processing an application for such right-of-way. . .'') and 
43 CFR Sec. 2804.14, which dictates that an applicant pay ``full 
reasonable costs'' for certain applications.
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D. Tax Policy: Recent Success Demonstrates the Value of Certainty
    The Energy Policy Act of 2005 created tax incentives for solar 
energy. Specifically, the measure provided a 30% investment tax credit 
(ITC) for commercial and residential solar energy systems. Congress 
subsequently improved and extended the ITC through 2016. The multiple-
year extension of the residential and commercial solar ITC gave 
entrepreneurs the policy certainty needed to invest in solar energy 
projects. As a result, the industry has grown by 800% since the ITC was 
implemented in 2006. Cumulative solar capacity in the U.S. now exceeds 
2,600 MW, enough to power more than a half million homes.
    The 2008 economic crisis rendered solar and other renewable energy 
tax incentives of little immediate value. Prior to the financial 
crisis, many large renewable energy projects relied upon third-party 
tax equity investors to monetize the value of federal renewable energy 
incentives. The economic downturn drastically reduced the availability 
of tax equity, severely limiting the financing available for renewable 
energy projects.
    In response to the dramatic decline in available capital, Congress 
enacted the Section 1603 Treasury Program. This program allows solar 
and other renewable energy developers to receive a direct federal grant 
in lieu of taking the ITC that is already in place. This simplifies 
financing for renewable energy projects and provides access to capital 
at a time when project developers' tax burdens are inadequate to 
capitalize on tax incentives and tax equity financing is both scarce 
and expensive.
    By any objective measure, the Section 1603 Treasury Program has 
been a resounding success. Due in large part to the liquidity provided 
by this important incentive, the solar industry grew 67% in 2010, 
making it one of the fastest growing industry sectors in the U.S. 
economy. Due in large part to reliable, consistent federal policy, 
solar costs continue to decline. Last year, installed costs fell by 
20%, and from the year 2000 to the present, the per-watt price of 
photovoltaics has declined by 40%. Solar is a diverse technology, and 
costs will continue to drop as the industry achieves greater 
efficiencies and economies of scale.

E. Energy Policy: Long-Term Commitments to Renewable Energy Are Vital
    Solar power plants are sizable assets that have a useful life of 30 
or more years. In order for a proposed solar project to be built, it 
needs a long-term buyer of its electricity (typically through a 
bilateral contract with a utility called a power purchase agreement or 
PPA) and a long-term loan from a bank, financing the project at a 
reasonable interest rate. Federal policies are needed to provide 
certainty regarding the financial underpinnings of projects. Such 
policies include the Department of Energy (DOE) Loan Guarantee Program 
or a Clean Energy Bank. State-level renewable portfolio standards have 
incentivized utilities to sign long-term contracts with solar 
providers. Federal agencies face similar RPS goals for the energy they 
use, but lack the authority to similarly enter into long-term contracts 
with solar providers. Long-term clean energy contracting authority 
should be granted so the federal government can enjoy the same benefits 
of solar energy that utilities and homeowners do.
    DOE's loan guarantee program was initially created by the Energy 
Policy Act of 2005 in recognition of the great challenges that large 
nuclear, renewable and other low-carbon energy projects face obtaining 
affordable long-term financing in the commercial marketplace. In 
today's economic climate, these programs are critical to attract 
investment in nuclear, clean coal and renewable energy projects. Until 
the financial community witnesses the successful completion of several 
of these projects, it will continue to charge substantial premiums or 
not lend to those projects at all. In addition to reducing component 
costs, access to long-term debt at a low interest rate is key to 
ensuring that solar power plants are cost-competitive with other 
electricity sources. We urge Congress to provide sufficient funding to 
the Section 1703 DOE Loan Guarantee Program in Fiscal Year 2012 to 
continue the timely processing and reward of loan guarantees to all of 
the projects deserving of DOE support.
    Another way to accomplish this goal would be to establish a Clean 
Energy Bank or Clean Energy Deployment Administration (CEDA). As 
envisioned in H.R. 2454 (2009), CEDA could directly provide loans to an 
applicant that deploys a clean energy technology. CEDA would also 
continue to provide loan guarantees, similar to the current DOE Loan 
Guarantee Program.
    On the purchasing side of the ledger, only the Department of 
Defense currently has the authority to enter into contracts of longer 
than 10 years with energy providers.\15\ However, most solar energy 
projects require a 20- to 30-year contract in order to be financially 
viable and provide electricity at a rate at or below the retail price. 
Unlike other sources of electric generation, solar power plants mainly 
consist of the up-front cost of installing the infrastructure and solar 
equipment. Ongoing operations and maintenance costs are quite low, and 
the fuel is free. Therefore, the longer the term of the contract, the 
cheaper the electricity is on a per-unit basis. If a buyer wants a 10-
year contract, the entire cost of the power plant must be amortized and 
recovered over only 10 years. If the buyer can sign a 30-year contract, 
however, the equipment costs are spread over 30 years instead.
---------------------------------------------------------------------------
    \15\ See 10 U.S.C. Sec. 2922a.
---------------------------------------------------------------------------
    Nellis Air Force Base, outside of Las Vegas, Nevada, illustrates 
the potential of long-term clean energy contracting. There, the U.S. 
Air Force contracted for electricity via a 14 megawatt solar PV 
installation. In addition to providing 25% of the electricity needed 
annually for base operations, the solar project is saving the base over 
$1 million each year in lower electricity costs.\16\ Solar projects can 
similarly save other federal agencies millions on their utility bills 
over the next several decades, but these solar projects cannot move 
forward until civilian agencies have the authority to sign a long-term 
contract. Extending the contracting authority to match the life of the 
solar project would benefit solar companies and the public by securing 
long-term sources of clean energy.
---------------------------------------------------------------------------
    \16\ Department of Defense Strategic Sustainability Performance 
Plan FY2010, page I-5.
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IV. Conclusion
    Again, thank you for inviting SEIA to submit this testimony. We 
look forward to working with the Committee to establish long-term, 
stable policies which remove roadblocks, promote job creation and 
ensure the deployment of solar energy technologies on public lands.
                                 ______
                                 
                                 [GRAPHIC] [TIFF OMITTED] T6728.005
                                 
                            ATTACHMENT 2

          SOLAR INDUSTRY HIGHLIGHTS BY CONGRESSIONAL DISTRICT

Alaska, At-Large--Rep. Don Young
          There are 15 companies providing solar jobs in Alaska
          Alaskan owned and operated Polar Wire Products 
        manufactures ``arctic grade'' wire and electrical equipment 
        used extensively in alternative energy systems
Arizona, 1st District--Rep. Paul Gosar
          Solargenix's Saguaro Solar Power Plant, a 1-MW CSP 
        Trough Plant in Red Rock is online
          Arizona Public Service built the Prescott Solar Power 
        Plant, a 3-MW PV Plant in Prescott
          Global Solar Energy built the Springerville 
        Generation Station Solar System, a 5-MW Thin-Film PV Plant in 
        Springerville
Arizona, 7th District--Raul Grijalva
          Abengoa is constructing its Solana Project, a 280-MW 
        trough CSP plant, in Gila Bend
          First Solar is constructing the 17-MW Paloma Solar 
        thin-film PV plant in Gila Bend
          Solon is constructing the Cotton Center, a 17-MW PV 
        plant in Gila Bend
California, 4th District--Rep. Tom McClintock
          SunEdison, a global solar developer, has an office in 
        McClellan
          SolarRoofs.com, a solar water heating and cooling 
        manufacturing company, is headquartered in Carmichael
          United Natural Foods is installing a 1.19 MW solar PV 
        array on its roof in Rocklin
California, 10th District--Rep. John Garamendi
          SolarBOS, a designer and manufacturer of electrical 
        ``Balance of System'' products for the solar industry is based 
        in Livermore
          Amerimade, also based in Livermore, manufactures a 
        variety of PV systems and parts
California, 19th District--Rep. Jeff Denham
          10 companies in California's 19th Congressional 
        district are creating solar jobs
          MRL Industries, Inc. manufactures solar industry-
        related heating products and services in its Sonora factory
California, 20th District--Rep. Jim Costa
          Cleantech America Inc.'s CalRENEW-1 5-MW Thin-Film PV 
        Project in Mendota is online
          There are 1,053 companies creating solar jobs in 
        California
California, 38th District--Rep. Grace Napolitano
          The Los Angeles Unified School District is partnering 
        with SunPower Corporation to install a 1 MW solar panel array 
        on top of its General Stores Warehouse in Pico Rivera
Colorado, 3rd District--Rep. Scott Tipton
          SunPower's Greater Sandhill Solar Plant, a 19-MW PV 
        plant is online in Alamosa County
          SunEdison's Alamosa PV Solar Plant, an 8-MW PV plant 
        is operational
          SunPower and Iberdola are constructing the 30-MW PV 
        San Luis Valley Solar Ranch in Alamosa County
Colorado, 5th District--Rep. Doug Lamborn
          Three Phases/Green Rock Capital built a 2-MV PV plant 
        on Fort Collins Army Base
          Diamond Wire Material Technologies, a diamond wire 
        cutting technology manufacturer serving the global solar 
        industry, is headquartered in Colorado Springs
Colorado, 6th District--Rep. Mike Coffman
          Douglas County School System began construction this 
        year on a 3.1-MW solar system
          ProtoFlex Corporation, a thin film coating 
        manufacturer is headquartered in Centennial
Florida, 2nd District--Rep. Steve Southerland II
          There are 8 companies creating solar jobs in 
        Florida's second Congressional district
          There are four utility-scale solar power projects 
        online in Florida, two projects under construction, and 6 
        projects under development
Florida, 25th District--Rep. David Rivera
          There are 236 companies creating solar jobs in 
        Florida
          Cuantum Solar America, LLC, a PV module manufacturer, 
        is headquartered in Miami
Georgia, 10th District--Rep. Paul Broun
          US Battery, a solar battery manufacturing company, 
        has a branch in Augusta
          The ROOKER company, an industrial real estate firm, 
        is constructing a 115-kW PV system
Hawaii, 1st District--Rep. Colleen Hanabusa
          Sopogy's 5-MW concentrating solar power project in 
        Oahu is under construction
          Hoku Corporation, headquartered in Honolulu, 
        manufactures solar grade polysilicon
Idaho, 1st District--Rep. Raul Labrador
          Voodoo Solar, a residential solar installer, is 
        headquartered in Cocolalla
Louisiana, 3rd District--Rep. Jeff Landry
          An AGC Flat Glass Inc commercial glass fabrication 
        facility is in nearby Baton Rouge
Louisiana, 4th District--Rep. John Fleming
          Another of AGC Flat Glass Inc's commercial glass 
        fabrication facilities is in Opelousas
Maryland, 1st District--Rep. Andy Harris
          PowerUp Corporation, a solar PV project distributor, 
        has an office in nearby Chase, Maryland
Maryland, 3rd District--Rep. John Sarbanes
          Constellation Energy installed a 750-kW PV system on 
        a Millersville government building
          Constellation Energy installed a 500-kW PV system on 
        Coppin State University's rooftop
Massachusetts, 5th District--Rep. Niki Tsongas
          Rivermoor Energy is constructing a 1-MW PV plant in 
        Haverhill
Massachusetts, 7th District--Rep. Edward Markey
          1366 Technologies in North Lexington is 
        commercializing a new manufacturing process for PV wafers
          Practical Solar, based in nearby Boston, manufactures 
        and supplies solar heliostats
Michigan, 1st District--Rep. Dan Benishek
          Phoenix Navigation and Guidance Inc. in Munising is 
        building solar turbogenerators
          SES Flexcharge USA, based in Charlevoix, manufactures 
        custom PV systems
          The world's largest manufacturer of polycsrystalline 
        silicon used in solar panels is Hemlock Semiconductor located 
        in the district next door
Michigan, 5th District--Rep. Dale E. Kildee
          79 Michigan companies are creating solar jobs, six 
        are in the fifth Congressional district
          Mersen USA Ultra Carbon Division, a manufacturer of 
        advanced materials and solutions for high temperatures, is 
        based in Bay City
New Jersey, 3rd District--Rep. Jon Runyan
          The east coast regional office of SunPower 
        Corporation, a large designer, manufacturer and distributor of 
        solar PV panels, is located in nearby Trenton
          There is one utility-scale solar power plant 
        operating in New Jersey, four plants under construction, and 
        seven plants under development
New Jersey, 6th District--Rep. Frank Pallone, Jr.
          America Capital Energy is constructing 5-MW PV 
        Yardville Solar Farm in Hamilton
          Aston Solar, headquartered in Piscataway, is a solar 
        energy product manufacturer, distributor, system integrator, 
        and services provider
New Jersey, 12th District--Rep. Rush Holt
          American Capital Energy and SunEdison are 
        constructing the Trenton Solar Farm, a 1 MW ground-mounted PV 
        system in nearby Trenton
          201 companies are creating solar jobs in New Jersey; 
        28 are in the 12th district
New Mexico, 1st District--Rep. Martin Heinrich
          First Solar's 2-MW thin film PV facility in 
        Albuquerque is online
          60 companies are creating solar jobs in Arizona; 23 
        are in the first Congressional district
          Schott Solar, Inc., a global PV receiver tech 
        manufacturer, is headquartered in Albuquerque
New Mexico, 3rd District--Rep. Ben Ray Lujan
          Chevron's 1-MW concentrating PV plant is operating in 
        Questa
          First Solar's 30-MW thin film PV facility is online 
        in Cimarron
Ohio, 6th District--Rep. Bill Johnson
          New Harvest Ventures/Agile Energy are developing the 
        50-MW PV Turning Point Solar Project in Cumberland
          There are 65 companies creating solar jobs in Ohio, 
        and 3 are in the sixth district of Ohio
Ohio, 13th District--Rep. Betty Sutton
          Akron Metro Regional Transit Authority's 480-kW 
        rooftop PV project in Akron is online
          Westlake Metals Company, in North Ridgeville, 
        manufactures metal for solar projects
Oklahoma, 2nd District--Dan Boren
          19 companies are creating solar jobs in Oklahoma
Oregon, 4th District--Rep. Peter DeFazio
          94 companies are creating solar jobs in Oregon. 
        Pacific Metal Fabricators, LLC, a sheet metal manufacturer for 
        solar power projects, is headquartered in Eugene
          Industrial Finishes and the Pepsi Cola Bottling 
        Company have each installed two of the largest PV projects in 
        the Northwest on their Eugene facilities' rooftops
Pennsylvania, 5th District--Rep. Glenn Thompson
          288 companies are creating solar jobs in 
        Pennsylvania, and five are in the fifth district
          There is one utility-scale solar power project online 
        in Pennsylvania, three projects under construction and three 
        projects under development
South Carolina, 3rd District--Rep. Jeff Duncan
          Ulbrich, in Westminster, supplies copper wire used in 
        solar panels.
South Dakota, At-Large--Rep. Kristi Noem
          Ellsworth Air Force Base is installing PV systems 
        through its $7.2 million energy initiative
Tennessee, 2nd District--Rep. John Duncan, Jr.
          Efficient Energy of Tennessee built a 1-MW PV Plant 
        in Knox County
          ATAS, a roof and PV system installer, has an office 
        in Maryville
Tennessee, 3rd District--Rep. Chuck Fleischmann
          Wacker Chemical is investing 1.5 billion in a 
        polysilicon manufacturing plant near Cleveland. The plant will 
        create 650 jobs.
          39 other companies are creating solar jobs in 
        Tennessee
Texas, 1st District--Rep. Louie Gohmert
          PowerUp Corporation, a solar PV project distributor, 
        has an office in Tyler
Texas, 17th District--Rep. Bill Flores
          Connexa Energy, a renewable products manufacturer/
        distributer, is in nearby Boerne
          The Cameron Park Zoo in Waco will be installing a 
        6,000 square foot PV panel system
Utah, 1st District--Rep. Rob Bishop
          Salt Lake City is one of the Department of Energy's 
        Solar America Cities
          Utah has a goal of installing 10 MW of new solar PV 
        power in Salt Lake City by 2015
          Applied Materials, a global provider of equipment, 
        services and software for manufacturing PV products has a 
        research, development and manufacturing facility in Salt Lake 
        City
Virginia, 1st District--Rep. Robert Wittman
          There are 91 companies creating solar jobs in 
        Virginia, and 6 are in the first district
          Infinite Energy Resources, a renewable energy 
        facilities developer, is based in Fredericksburg
Washington, 4th District--Chairman Doc Hastings
          Infinia Corporation, the manufacturer and supplier 
        for Stirling-based solar power generation systems, is 
        headquartered in Kennewick
          Teanaway Solar Reserve is developing a 75-MW PV 
        project in Cle Elum
American Samoa, At-Large--Del. Eni Faleomavaega
          American Samoa has 616 kW of distributed solar 
        operating at 25 government and commercial buildings
Guam, At-Large--Del. Madeleine Bordallo
          A new 250-kW solar PV system installed at Guam Naval 
        Base will produce an estimated 411,000 kWh of renewable power 
        per year, reducing electricity costs by $106,050
Northern Mariana Islands, At-Large--Del. Gregorio Kilili Camacho Sablan
          160 SCHOTT 280-watt PV panels are being installed at 
        Southern Saipan High School thanks to a grant from the American 
        Recovery and Reinvestment Act of 2009
Puerto Rico, At-Large--Resident Commissioner Pedro R. Pierluisi
          Walmart and SunEdison are building the biggest solar 
        power project in Puerto Rico on five Walmart-owned stores. The 
        program could expand to 23 stores over five years.
Virgin Islands, At-Large--Del. Donna M.C. Christensen
          The largest solar-powered electricity system in the 
        territory is being installed at King Airport in St. Thomas. The 
        PV panel system is expected to generate 450 kW, supplying 15 
        percent of the airport's energy needs.
                                 ______
                                 

                              ATTACHMENT 3

       SEIA Comments to USFWS on Eagle Conservation Plan Guidance

May 19, 2011

Mr. Jerome Ford
U.S. Fish & Wildlife Service
Attn: Eagle Conservation Plan Guidance
4401 North Fairfax Drive; Mail Stop 4107
Arlington, VA 22203-1610

TRANSMITTED VIA E-MAIL

RE: Eagle Conservation Plan Guidance

Dear Mr. Ford:

    On behalf of the Solar Energy Industries Association (SEIA) and its 
1,000 members, I would like to express our appreciation for the U.S. 
Fish and Wildlife Service's (USFWS) ongoing efforts to support the 
deployment of solar energy projects. The United States has some of the 
richest solar resources in the world and we should not miss an 
opportunity to create jobs and generate clean, reliable energy with 
this inexhaustible, domestic resource. USFWS can simultaneously 
encourage renewable energy development and protect eagles and their 
habitat. SEIA and its members would like to meet with USFWS to discuss 
these critical issues and develop strategies consistent with the dual 
purpose of protecting wildlife and increasing solar power generation.
    Thank you for this opportunity to submit comments on these 
guidelines for the wind industry. We believe that these guidelines 
should not apply to the solar industry. We are eager to work with the 
USFWS to create eagle conservation guidance that facilitates solar 
power project development.

Best Regards,

Daniel M. Adamson
Vice President of Regulatory Affairs

Contacts
Katherine Gensler, Solar Energy Industries Association,
 575 7th Street NW, Suite 400, Washington, DC 20004
(202) 682-0556 -- [email protected]

Emily J. Duncan, Solar Energy Industries Association,
 575 7th Street NW, Suite 400, Washington, DC 20004
(202) 682-0556 -- [email protected]
                                 ______
                                 
These Guidelines Should Not Be Applied to the Solar Industry
    SEIA appreciates the U.S. Fish and Wildlife Service's (USFWS) 
efforts to develop Eagle Conservation Plan Guidance. When developed in 
collaboration with stakeholders and narrowly defined to achieve the 
conservation goal without unnecessary or inappropriate burdens on 
regulated entities, guidance of this nature can be beneficial to all 
parties. To achieve this goal, however, the Guidance should set forth 
clear standards that will result in improved efficiency for government 
action, reduced costs and delays to project developers, and clarity on 
procedures for the involvement of third parties.
    As discussed in these comments, SEIA appreciates the intent of the 
Guidance to achieve these objectives. As currently proposed, the 
Guidance does not provide an effective mechanism for screening out 
projects affecting eagles and also includes numerous recommended 
measures that are expensive, burdensome, and unnecessary. While the 
draft Guidance applies to wind project development, SEIA is concerned 
that the Guidance will severely hamper, rather than aid, renewable 
energy development in general, and may specifically adversely affect 
solar energy projects now and in the future. This is because, as USFWS 
states, many of the concepts and approaches outlined in this Guidance 
``can be readily exported to other situations.'' \1\ Thus, SEIA is 
concerned that many, if not most, of the costly and burdensome 
guidelines the USFWS is recommending for the wind industry could be 
applied to the solar industry as well. In fact, SEIA has already heard 
anecdotes from member companies that USFWS Field Offices have been 
applying this wind Guidance to their solar power projects. USFWS should 
ensure that no Regional or Field Offices are applying any aspects of 
this wind Guidance to solar power projects.
---------------------------------------------------------------------------
    \1\ U.S. Fish & Wildlife Service, ``Draft Eagle Conservation Plan 
Guidance,'' at p. 8 (Jan. 2011). SEIA is also concerned that USFWS may 
apply this Eagle Guidance to condors and raptors generally.
---------------------------------------------------------------------------
    Application of the USFWS Eagle Conservation Plan Guidance, 
formulated in large part to address the impacts of wind power 
facilities, to the solar industry is inappropriate for many reasons. 
First, the solar industry employs different equipment and technologies, 
and utilizes land differently than the wind industry. Second, the solar 
industry has fundamentally different impacts than other energy 
industries. Both of these factors make it doubtful that solar power 
plants will directly impact eagles. For instance, eagle mortality due 
to direct strikes into panels or mirrors is extremely unlikely. Indeed, 
extensive deployment of solar power is a key element of the overall 
effort to address climate change, a phenomenon that threatens both 
eagles and their habitat. SEIA appreciates that the USFWS is extremely 
busy and developing guidance can be a lengthy process. However, 
guidelines that may be applicable to one industry are often 
inappropriate or impossible to implement for another industry. Thus 
applying the same Guidance to both wind and solar projects is 
unreasonable.
    SEIA and its members would appreciate the opportunity to meet with 
USFWS to discuss these important issues before a decision is made to 
develop guidelines that would be applied to solar projects. Below are 
just a few examples of the many concerns that SEIA has with this 
Guidance.
USFWS Should Make a Threshold Determination Prior to Applying any 
        Guidance
    The Bald and Golden Eagle Protection Act states that anyone who 
``knowingly, or with wanton disregard for the consequences of his act 
take, possess, sell, purchase, barter, offer to sell, purchase or 
barter, transport, export or import, at any time or in any manner any 
bald eagle commonly known as the American eagle or any golden eagle, 
alive or dead, or any part, nest, or egg thereof'' may be subject to 
punishment under the Act.\2\ As such, USFWS should have to make a 
threshold determination of a project's adverse impact on eagles prior 
to applying any Eagle Guidance to a renewable energy project. Without a 
threshold finding, USFWS has no way of knowing whether the proposed 
Guidance is applicable or appropriate for a given project. Moreover, 
without an initial understanding of a project's impact, USFWS cannot 
determine whether the Guidance will even be effective at monitoring and 
protecting eagles and their environment. We believe that threshold 
criteria of this nature would make it clear that solar projects are 
unlikely to affect eagles. In the rare situation where some impact 
could occur, any guidance that would apply to solar projects should 
make it clear that compliance would satisfy all legal requirements for 
take authorization and absolve the applicant of all liability under the 
Bald and Golden Eagle Protection Act. In addition, whether in the draft 
Guidance for wind projects, or guidance for ``other situations'' the 
problems discussed below that result in excessive cost and delay should 
be avoided.
---------------------------------------------------------------------------
    \2\ 16 U.S.C. Sec. 668 (2011).
---------------------------------------------------------------------------
Pre- and Post-Construction Monitoring Is Unnecessarily Burdensome
    The Eagle Conservation Plan Guidance provides that most wind 
projects undertake an initial site assessment; perform site-specific 
surveys; predict initial eagle fatalities; develop and apply advanced 
conservation practices and compensatory mitigation; and evaluate post-
construction impacts. These multiple steps are extremely expensive and 
burdensome and most of this cost would be expended at the outset of a 
project's timeline, requiring developers to spend significant money 
with little or no confidence that USFWS will issue a take permit. In 
addition, this Guidance would further extend an already extremely long 
permitting process for renewable projects by requiring three years of 
pre-construction studies and two to five years of post-construction 
studies for each project, a regulatory burden faced by no other 
industry. Costly and lengthy monitoring should only be required in 
situations where the facts dictate.
    Furthermore, USFWS expects all projects, regardless of their size 
or their category, to undertake the pre- and post-construction 
monitoring. Thus, a small renewable energy project would be required to 
perform the same initial site assessment as a much larger utility-scale 
renewable power plant. Also, a ``category 3'' project that is defined 
as posing minimal risk to eagles would still have to pay for and 
conduct the same pre-construction and post-construction surveys as a 
category 1 or 2 project that poses a high or moderate risk to the eagle 
population. Pre- and post-construction monitoring and surveying should 
be tailored to the size and characteristics of a project and should be 
implemented only for those projects that could seriously harm the eagle 
population.
    Finally, as USFWS has acknowledged, ``effects [of energy facilities 
on eagles] and how to address them at this time is limited.'' \3\ Thus, 
it is unclear whether these multiple studies and surveys would be 
effective or provide a scientifically accurate picture of the proposed 
energy installation's impact on eagles. As such, this Guidance and the 
costly and burdensome steps therein should be applied only after the 
USFWS has made a threshold determination that the application of the 
Guidance is necessary. SEIA is eager to work together with USFWS and 
other interested parties to develop the specifics of such a threshold 
determination. Establishing a reasonable threshold for application of 
the Guidance will focus the efforts of USFWS, the renewable industry 
and others on areas where significant impacts may occur.
---------------------------------------------------------------------------
    \3\ Guidance at p. 11.
---------------------------------------------------------------------------
                                 ______
                                 
    The Chairman. Next I recognize Mr. DeRosa, Senior Vice 
President for North American Project Development, First Solar, 
Inc. You are recognized for 5 minutes, Mr. DeRosa.

STATEMENT OF FRANK DeROSA, SENIOR VICE PRESIDENT, FIRST SOLAR, 
                              INC.

    Mr. DeRosa. Thank you, Mr. Chairman, Representative Markey 
and members of the Committee. I am Frank DeRosa, Senior Vice 
President for Project Development for First Solar. Our mission 
is to deliver clean, affordable and sustainable energy. We 
developed the technology here in the United States that has 
made us one of the largest photovoltaic manufacturers and 
developers of solar energy in the world. We are headquartered 
in Tempe, Arizona, and manufacture panels in Perrysburg, Ohio. 
We will soon begin construction on a second manufacturing 
facility in Mesa, Arizona, that will employ 600 employees. We 
have 2,400 megawatts of power under contract with electric 
utilities in the United States. That is the equivalent capacity 
of almost three nuclear power plants.
    Solar energy generated by First Solar technology keeps 
energy dollars here in the United States by using American 
technology and equipment built by American workers, and, of 
course, there is no imported fuel. We have three large solar 
projects in advanced development on BLM land as well as 
projects on private land.
    The Committee asked about roadblocks, but I would like to 
start with a few successes first. Congress, DOI and BLM have 
adopted policies over the last few years that are expediting 
permitting for solar. First Solar's 50-megawatt project in 
Primm, Nevada, is a good example. The BLM Las Vegas office 
permitted this project, devoted resources and qualified staff. 
I want to point out the work of one staff person, Greg Helseth, 
who kept this project on schedule, and as a result, we are now 
mobilizing to start construction of this project, and it will 
be the first solar project to operate on BLM land.
    But I need to raise two critical issues. The first is the 
Programmatic Environmental Impact Statement process that is 
being run by the BLM, and the second is the impact on private--
development on private land regarding endangered species. My 
written statement includes some other provisions that--other 
issues that I won't go into here.
    In March 2011, BLM released the PEIS for public comment. It 
lists solar energy zones that could receive expedited 
environmental review. The preferred alternative encourages 
development in the zones, but allows development outside the 
zones. And that is critically important to us. Not restricting 
development to just the solar energy zones, which only comprise 
less than 1 percent of Federal land, is important because many 
projects, some of ours, have been in development well before 
the PEIS process started.
    So we urge the BLM to, first of all, revisit the zones; to 
look at not only land compatibility, but technical and 
commercial feasibility of these projects, things like electric 
transmission access and the locational objectives of utilities. 
The second is to adopt a policy that allows development outside 
of these solar energy zones. And the third is to grandfather 
projects that are in advanced development, but are outside of 
these zones. One of our projects is an example of that as well. 
It was not included in the solar energy zones, but it has a 
power purchase agreement, and it has a position on the 
transmission queue. In other words, it is commercially viable 
and in a location that the utilities want.
    My second point concerns the impediment on private land of 
projects that have to receive permits because of endangered 
species concern. There is an inconsistency between basically a 
prudent review schedule on Federal lands versus the 4 to 6 
years that it takes on private lands, and we would ask the 
Committee to address this inconsistency and have one policy for 
both processes.
    With that, I thank you for your time, and I will address 
any questions at the right time.
    The Chairman. Thank you, Mr. DeRosa, for your testimony.
    [The prepared statement of Mr. DeRosa follows:]

          Statement of Frank De Rosa, Senior Vice President, 
            Project Development, North America, First Solar

    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to testify.
Introduction and FS Background
    I am Frank De Rosa, First Solar Senior Vice President for North 
American Project Development. Our mission is to deliver clean, 
affordable and sustainable energy. We developed the technology here in 
the U.S. that has made us one of the largest photovoltaic (PV) panel 
manufacturers and developers of solar energy in the world.
    We are headquartered in Tempe, Arizona, and manufacture solar 
modules in Perrysburg, Ohio. We will soon begin constructing a second 
U.S. manufacturing facility in Mesa, Arizona that will employ 600 
people, which will bring our U.S. employment to over 2,000 employees. 
This is part of a global workforce of approximately 7,000. We are a net 
U.S. exporter of our solar energy modules.
    Solar energy generated by First Solar's technology keeps dollars 
here in the U.S. by using American technology, equipment built by U.S. 
workers, and the ``fuel'' from the sun. Jobs are created and dollars 
stay in our economy.
    First Solar has three large solar projects in advanced development 
on BLM land.
Achievements
    The Committee asked about roadblocks, but I would like to start 
with some successes.
    Congress, the Department of the Interior, and the Bureau of Land 
Management have adopted policies over the last few years that are 
expediting permitting, removing obstacles, and streamlining interagency 
coordination, without sacrificing thoroughness.
    First Solar's 50 megawatt Silver State North Project in Primm, 
Nevada is a good example. BLM's Las Vegas field office dedicated 
qualified staff and resources to the project. Greg Helseth, in 
particular, kept the project on schedule. We are mobilizing our crew to 
start construction for this project which is the first solar project on 
federal land in Nevada.
    BLM took another significant step in April to support solar 
development on public lands with its rule proposing to allow the 
temporary segregation of lands in a pending or future solar generation 
right of way (ROW) application. This much needed rule will prevent the 
use of specious and speculative mining claims to slow down or prevent 
the development of solar energy projects on public lands.
Areas of Concern
    But I'll raise two primary areas of concern as well as several 
areas of regulatory oversight that require continued consultation with 
industry. Of primary concern, the BLM's Programmatic Environmental 
Impact Statement for solar energy development, or PEIS, and the impact 
of the Endangered Species Act (ESA) on solar development on private 
lands.
PEIS
    In March 2011, BLM released the PEIS for public comment. It lists 
``Solar Energy Zones'' that could receive expedited environmental 
review. The ``preferred alternative'' of the PEIS encourages 
development in the Zones but does not prohibit development in other BLM 
areas. Not restricting development to just the Solar Energy Zones 
(which comprise less than 1% of the land under federal management) is 
important because there are many projects that began development well 
before BLM instituted its PEIS process. Plus, it is not clear how many 
of the Zones have all of the necessary attributes for a successful 
project, such as transmission capacity.
    We strongly urge the BLM to:
        1.  Revisit the Zones not for just land use compatibility but 
        for technical and economic feasibility of solar development, 
        with particular attention to factors such as proximity to 
        transmission and the needs of the local electric utility buyer;
        2.  Adopt a policy that allows development outside the Solar 
        Energy Zones. Such development would still be subject to the 
        stringent requirements of NEPA, so environmental oversight will 
        be maintained.
        3.  Grandfather existing projects that are in advanced 
        development. For example, First Solar's Silver State South 
        Project was not included in a Zone but has a Power Purchase 
        Agreement and a transmission interconnection position.
    Businesses require a predictable, transparent set of rules when 
making multi-hundred-million dollar decisions. The BLM must not 
undermine viable, near term projects that were sited several years ago 
and remain subject to rigorous scrutiny under NEPA.
Endangered Species Act
    I would also like to address a second federal policy issue that 
seriously impedes development of utility-scale solar projects on 
private land. If a proposed solar project on private land has the 
potential to adversely affect a listed (endangered) species or critical 
habitat, the U.S. Fish & Wildlife Service requires the solar developer 
to prepare a Habitat Conservation Plan prior to the Service preparing a 
Biological Opinion and issuing an Incidental Take Permit. 
Unfortunately, for projects with no Federal nexus (Federal funding, 
license or permit) under the current process it can take from three to 
five years to receive the required permits versus four to six months to 
complete the permitting process for either projects on Federal land or 
with a Federal nexus. As a result, projects with no Federal nexus are 
typically abandoned or not undertaken at all.
    In order to encourage solar development on private land, we 
recommend an approach that provides similar review timelines as 
followed for projects with a Federal nexus. One way to harmonize 
deadlines for preparing a Habitat Conservation Plan, Biological Opinion 
and issuance of an Incidental Take Permit would be to give the Service 
authority to enter into cost reimbursement agreements to augment its 
staff who review solar projects. Cost reimbursement agreements would 
allow the Service to hire third party resources to work under its 
direction to prepare the Habitat Conservation Plan and could also 
include provisions to augment funding for preparation of the Biological 
Opinion and Incidental Take Permit. Congress previously authorized BLM 
to enter into cost reimbursement agreements under the Federal Land 
Policy and Management Act. This authority has been very successful in 
improving the processing of BLM right of way grants.
    Finally, I recommend that the Committee consider a recommendation 
put forth by Senator Feinstein that Secretary Salazar establish a group 
of Service staff dedicated to permitting renewable energy projects on 
private land.
Stakeholder Engagement
    Before concluding, I would like to make an observation related to 
stakeholder engagement by the BLM and the Service. Whether the topic is 
solar zones, solar rental policy, mitigation fees, reclamation bonding 
or a host of other regulated areas, the industry should be brought to 
the table as early as possible in the development of rules and 
regulations the impact solar development. The track record on early 
engagement in the rulemaking process is mixed, but we believe that 
improving transparency and predictability in the regulatory process 
should be a goal we work toward together.
    Several recently released policies illustrate why industry 
involvement in the formation of guidance documents and policies 
applicable to solar projects is absolutely critical. The reclamation 
bonding policy released by BLM in October, 2010 provides an example.
    The bonding policy requires the solar industry to comply with many 
of the bonding requirements designed for mining projects even though 
they are not directly application to solar development. For example, 
provisions to address mine clean-up when mines are abandoned because 
they are no longer profitable. Solar projects are secured over their 
lifetime by a valuable power purchase agreement and constructed using 
recyclable materials that have recognized reclamation value. If the 
solar industry had been involved earlier in the development of the 
bonding policy, we believe we could have created a better policy that 
offered a broader set of bond instruments and required more reasonable 
bond amounts.
    We would welcome the opportunity to review the bond instruments 
currently accepted by BLM and expand the policy to include financial 
assurance mechanisms that are accepted for decommissioning other types 
of industrial projects.
    The Solar Energy Interim Rental Policy issued by BLM on June 10, 
2010 was likewise developed without sufficient industry involvement. 
The rents established by the policy appear to have been based largely 
on the value of irrigated agricultural lands, which have a higher value 
than the non-irrigated lands on which most projects are proposed. 
Inflated rents are obviously an obstacle to development. Additionally, 
to the extent that rents on BLM lands are higher than rents on similar 
private lands, the rental policy may inflate the costs of mitigating 
project impacts on special-status species as the value of private lands 
will increase.
    As a final example, BLM's 2010 memorandum on golden eagle 
protection measures for renewable energy projects could have also 
benefited from industry involvement in its development. The policy 
requires the Service's approval of an Aviation Protection Plan as a 
precondition to the issuance of a Record of Decision and places no 
conditions on the rationale of the Service in the event that it decides 
to reject such plans. Given that the rejection of a plan can result in 
a requirement to redesign the site late in the project approval 
process, the Service's unfettered discretion on this topic creates 
significant uncertainty for developers.
    Some of this uncertainty should soon be resolved. BLM's golden 
eagle policy is a temporary measure and will be replaced when the 
Service establishes criteria for programmatic golden eagle take 
permits. The Service recently issued Draft Eagle Conservation Plan 
Guidance for wind projects, which is expected to serve as a model for 
programmatic golden eagle take permits in other contexts. We look 
forward to working with the Service when it turns to the development of 
eagle conservation guidance for solar projects because the protection 
measures needed at wind farms, where even temporary contact with the 
facility operations could result in a take, are not necessarily 
required for utility scale solar projects. If structured correctly, 
these proceedings could serve as a model for how to engage industry 
stakeholders in other policy-making proceedings.
Conclusion
    Thank you for allowing me to testify today. To summarize:
          We appreciate DOI's and BLM's commitment to opening 
        federal lands to American renewable energy supplies that will 
        reduce imports and create jobs. We applaud their progress.
          We urge BLM not to restrict solar development to 
        specified Solar Energy Zones and to recognize the considerable 
        effort and expense that companies have invested in existing 
        projects.
          We ask the Committee to address the inconsistency in 
        the treatment of private lands with and without a federal 
        nexus.
          We look forward to partnering with Congress, the 
        Department of the Interior and related agencies as solar 
        policies evolve to meet the needs of a growing industry.
    I ask that my written testimony and a copy of Fist Solar's formal 
response to the PEIS be added to the record.
                                 ______
                                 
    The Chairman. And now Dr. Piszczalski. And if you can state 
your name so we will all know the correct way in case we run 
across you again someplace.
    Dr. Piszczalski. It is pronounced Piszczalski. So it 
doesn't look as daunting as it is.
    The Chairman. You are recognized for 5 minutes. Thank you 
very much.

  STATEMENT OF MARTIN PISZCZALSKI, INDUSTRY ANALYST, SEXTANT 
                            RESEARCH

    Dr. Piszczalski. Thank you, Chairman Hastings and the full 
Committee. Again, my name is Martin Piszczalski, and I am an 
industry analyst with Sextant Research. I will be giving you a 
perspective of how the industry is, I believe, leading to a 
rather disappointing performance.
    If we look at the number of agencies involved, and look at 
the number of regulatory issues that they are--over land use, 
habitat disturbance and so forth, that it makes it overwhelming 
for the developers to move forward in many respects. And before 
I go too much farther, I would like to point out that of the 60 
Federal and State agencies that regulate renewable energy, I 
have not encountered officials that are obstructionists. Indeed 
they are advocates of renewable energy. But let us look at what 
they are facing.
    For a single renewable energy project, there can be 30 
agencies over that 1 project, and these 30 agencies, the lineup 
changes if you go to another site. There is not a standard 
uniform process, sequences and so forth, that these agencies 
do. Consequently, developers are surprised, caught off guard 
and hitting these uncertainties.
    For instance, imagine how many permits and approvals you 
believe are necessary for one project. We can see right now we 
are hitting 100 permits per project, and the number is going 
up. Let us say the developer anticipates 50 of these permits. I 
think they would be doing a pretty good job. That means they 
did not anticipate another 50. These lead to delays. If a delay 
is only 2 weeks, multiply that times 50, and you have a project 
that is a couple of years behind schedule.
    Unfortunately officials are not terribly sensitive to the 
delay issue. Nevertheless, the time value of money is very 
significant. In the early stages this is high-risk money. In 
the later stages we have debt service levels for the term, for 
the construction loans. And consequently, we have companies 
that are reeling under the financial burden.
    Can I have the next slide, please?
    This shows BLM's timeline internally for the many permits 
and approvals that BLM alone requires. I would like to applaud 
BLM for even providing developers with this timeline chart. 
Most agencies, you are pretty much on your own. You are even on 
your own to determine which agencies you have to get in the 
mix.
    Could I have the next slide, please?
    Consequently, the developer is scaling a mountain of 
regulatory hurdles that are vague, contradictory, uncertain and 
ambiguous.
    If I could have the next slide, too, please.
    Earlier this month, we heard Director Abbey stress that the 
BLM is not denying projects. And he said, we just delay them. 
And as I indicated here, delays don't kill the project, they 
kill the company. An example of this would be the solar that 
ran out of money. So we have projects that have one owner after 
another owner, and unfortunately the new owner might not be 
able to take advantage of the previous permitting work, and 
then the clock starts over again.
    I would like to just kind of move forward in terms of what 
would a good regulation look like where it completes all 
permitting in just 18 months. So not just BLM. Remember, if we 
have 100 approvals, all of them must be approved, or you might 
as well not have any of them approved. So let us get all 
permitting approved in 18 months. We protect the environment. 
We have what I will call a deterministic transparent finish 
line. We know what permits we need. If we do those steps, we 
will get our permits, and we will operate.
    And last, we don't need an army of lawyers, and court time 
is routine for those companies in our industry. And I hope that 
you can see, looking at the scope of the problem, that we need 
something that will massively simplify the overall process. And 
I would be happy to go into what some of those solutions might 
be through your questions.
    Thank you very much. I appreciate the honor to be here.
    The Chairman. Thank you very much, Dr. Piszczalski. I will 
get it right here.
    [The prepared statement of Dr. Piszczalski follows:]

                         Dr. Martin Piszczalski

                            Industry Analyst

                            Sextant Research

 Testimony on ``American Energy Initiative: Identifying Roadblocks to 
Wind and Solar Energy on Public Lands and Waters, Part II--The Wind and 
                      Solar Industry Perspective''

                              June 1, 2011

[GRAPHIC] [TIFF OMITTED] T6728.006

[GRAPHIC] [TIFF OMITTED] T6728.007

Exhibit 3, Which Agencies Participate? Some Factors
          Geographical location of project (which state, 
        county. . .)
          Owner(s) of the resources (Federal, private, State, 
        tribal,. . .)
                  Which Federal agency is owner?
          Specific owner for each right: mineral, surface, and 
        water at the site
          Agency funding the development
          Particular technology
          Cultural, Native-American issues
          Endangered, threatened species
          For geothermal: depth of well, water temperatures, 
        resource chemistry
          Power plant size
          Etc.
Source: Martin Piszczalski, (734) 657.0018 [email protected]

[GRAPHIC] [TIFF OMITTED] T6728.008

Exhibit 5 `Permitting Risk,' A Definition
    I define ``permitting risk'' as all things that unexpectedly delay 
getting approval. From a developer perspective these include all the 
unexpected i.e., after the project is well underway:
          new study ordered
          new set of regulations that must be met
          a new form or application that must be submitted
          unexpected mitigation
          A regulatory requirement takes much longer than 
        planned or expected
          another agency that must give an approval (i.e., an 
        agency which the developer had not known was part of the 
        process)
          learning that the submitted application is incomplete
          uncertain if agency has regulatory authority to issue 
        permit/approval (hence, agency may not act)
          discovering that the expected process, procedure or 
        sequence is different than what is actually required by an 
        agency
          learning that one agency's approval is contingent on 
        the action/approval of another agency
          surprised by new stakeholders that previously had not 
        been identified
          a citizen court challenge either to the developer or 
        challenging one of the regulatory agencies
          miscalculating the time, effort, cost to secure 
        approval
    In the most severe form, permitting risk is getting denied the 
necessary approval(s). Alternately, it could have approval contingent 
on conditions so onerous that they knock the project out from being 
commercially viable.
    My definition of ``permitting risk'' is not intended to blame 
anyone. Rather permitting risks are mainly delays. They negatively 
impact financing. They impact the time value of money and greatly 
increase debt service costs. Some developers have a ``burn rate'' alone 
of $2 million/month.
    Considering that one project was recently cited as requiring 100 
permits and approvals, it should be easy to see how multiple delays 
occurred, that cumulatively added years to the project. Those delays 
add millions of dollars to project costs. For instance, Bronicki of 
Ormat said a geothermal project takes ``6 or more years & half of that 
is taken up in permitting.''
Source: Martin Piszczalski (734) 657.0018 [email protected] 
        Martin Piszczalski 2011
                                 ______
                                 
    The Chairman. Our final witness on this panel is Mr. 
Reicher, who is with the Steyer-Taylor Center for Energy Policy 
and Finance at Stanford University. You are recognized for 5 
minutes.

STATEMENT OF DAN W. REICHER, EXECUTIVE DIRECTOR, STEYER-TAYLOR 
   CENTER FOR ENERGY POLICY AND FINANCE, STANFORD UNIVERSITY

    Mr. Reicher. Chairman Hastings, Ranking Member Markey and 
members of the Committee, I am Dan Reicher, Director of 
Stanford University's Steyer-Taylor Center and a faculty member 
of the Stanford Law and Business Schools. Prior to Stanford, I 
was Director of Climate Change and Energy Initiatives at 
Google, had senior roles in energy technology at investment 
firms, and had served as Assistant Secretary of Energy for 
Energy Efficiency and Renewable Energy at DOE.
    In my written statement, I review the many obstacles to a 
long-sought goal: the successful deployment of renewable energy 
at large scale and reasonable cost. Let me emphasize that 
siting renewable energy projects on public lands, the focus of 
today's hearing, is an obstacle to large-scale renewable energy 
deployment, but it is a relatively modest one that to a large 
extent Secretaries Salazar and Vilsack are effectively 
addressing.
    What I worry about more than siting renewable energy 
projects on public lands is successfully navigating the 
complicated road that takes the renewable energy technology 
from the first gleam in a scientist's eye all the way to the 
routine construction of hundreds of full-scale commercial 
plants on all kinds of lands, private and public. In this 
regard, I am concerned that we are increasingly getting beaten 
by the EU and Asia, particularly China. Thus, while in 2004 the 
U.S. had approximately 20 percent of total global clean energy 
investment and China just 3 percent, in 2010 China had 20 
percent of that investment and the U.S. 19 percent, with this 
gap widening rapidly.
    And, Mr. Chairman, the stakes are enormous, with the 
International Energy Agency forecasting that over $5.7 trillion 
will be invested in renewable energy globally over the next two 
decades. 2010 alone saw more than $127 billion in renewable 
energy project financing. Unfortunately, it is looking less and 
less likely that investment will be here in the U.S. As one 
investor recently put it, we are not only seeing companies 
start here in the U.S. And then move overseas, but we are 
increasingly seeing companies start overseas and stay overseas.
    Mr. Chairman, I strongly urge you to take stock of the 
major obstacles we face in our Nation's regaining its lead in 
renewable energy. Siting renewable energy projects on Federal 
lands is worth a look, but if that is where you stop, you will 
be seriously shortchanging U.S. national security, 
competitiveness, and environmental protection.
    My written statement highlights four critical obstacles. 
The first is inadequate R&D funding. The good news is that the 
U.S. has led the world over the last several decades in energy 
R&D. The bad news is that Federal R&D spending in Fiscal Year 
2008 accounted for just 2.6 percent of total Federal nondefense 
R&D spending, a tenfold decline from its peak of approximately 
25 percent in 1980. R&D spending has increased modestly since 
then, but we still have a long way to go to where our 
government is investing adequately. To make things worse, U.S. 
energy companies currently spend little on R&D compared with 
many other industry sectors, while our competitors ramp up 
their spending aggressively.
    The second obstacle is technology demonstration, where 
small, generally underfunded startup companies work to move a 
technology out of the lab to a point where it is ready for 
initial commercialization. The good news is that clean tech 
venture capital investors are spending billions each year to 
make this happen. The bad news is these startups often have a 
difficult time breaking into markets dominated by large 
utilities and regulated by public utility commissions.
    The third obstacle and probably the biggest is 
commercialization. It involves crossing the colorfully but 
accurately named ``Valley of Death,'' where companies, having 
demonstrated that a technology works in a pilot plant, now have 
to prove that it works at full commercial size.
    In the energy investment firm where I worked, I first 
peered into the Valley of Death, seeing there the remains of 
many abandoned energy projects that died trying to get to 
commercial scale. We and most other firms simply couldn't 
shoulder the investment risk in the scale-up of an energy 
technology where a single project can cost hundreds of 
millions, or, in the case of nuclear plants, even billions of 
dollars. In the end we made our biggest investment in corn 
ethanol plans, well proven for decades at large commercial 
scale.
    The Department of Energy Loan Guarantee Program has helped 
to bridge the Valley of Death, having issued as of May 
commitments to 27 projects representing nearly $30 billion in 
financing. This is a good program, but it is subject to annual 
appropriation and therefore lacks the certainty the financial 
community needs to commit to long-term investment in higher-
risk projects.
    Far better is the bipartisan proposal to create a Clean 
Energy Deployment Administration, or CEDA, that would have an 
array of financial tools to accelerate private-sector 
investment. Funded with $10 billion, CEDA could become a self-
sustaining entity, that is no additional appropriations, based 
on its authority to take financial stakes in projects. And 
while CEDA would nominally sit within DOE, it would enjoy 
significant independence with its own Administrator and Board 
of Directors.
    The Senate Energy Committee adopted CEDA in the last 
Congress on a bipartisan basis with broad support, including 
the U.S. Chamber of Commerce, The Nuclear Energy Institute and 
renewable energy trade groups, and the House Energy and 
Commerce Committee added a version of CEDA to the Waxman-Markey 
bill by a 51-6 vote.
    The final obstacle is cost competitiveness, where 
technology has been proven to work at commercial scale, but 
where it often can't yet fully compete with traditional 
technologies. This is where Federal tax incentives come in. 
Unfortunately, these incentives have often been available for 
only short periods of time, causing a boom-and-bust cycle. Of 
particular concern today is the incentive for wind that will 
expire in 2012 unless extended. And even where these incentives 
are in place, companies often can't use them if they lack 
taxable income. Congress created an effective alternative 
providing companies with a cash grants in lieu of a tax credit, 
but this program will expire in December unless extended.
    In closing, I spent the last 4 years at Google. Coming from 
the energy sector, I was struck by how R&D, investment and 
policy come together so effectively to build an entirely new 
industry, the Internet. We must take a similarly coordinated 
approach between the private sector and the government to seize 
the opportunity in clean energy. While siting projects on 
public lands needs some attention, it is the other----
    The Chairman. Director, I have to ask you to summarize and 
close, if you wouldn't mind.
    Mr. Reicher. Just one sentence. If we don't get our act 
together, countries like China and Germany will be the winner 
of this marathon with a prize worth literally trillions of 
dollars and millions of jobs hanging in the balance. Thank you.
    The Chairman. Thank you very much.
    [The prepared statement of Mr. Reicher follows:]

 Statement of Dan W. Reicher, Executive Director, Steyer-Taylor Center 
  for Energy Policy & Finance at Stanford University, and Professor, 
  Stanford Law School, Lecturer, Stanford Graduate School of Business

    Mr. Chairman, Ranking Member Markey, and members of the committee, 
my name is Dan Reicher and I am pleased to share my perspective on 
obstacles to renewable energy deployment on public lands. I am Director 
of Stanford University's Steyer-Taylor Center for Energy Policy and 
Finance and a faculty member of the Stanford Law School and the 
Graduate School of Business. I also chair the board of directors of the 
American Council on Renewable Energy (ACORE) and serve on the Board on 
Energy and Environmental Systems of the National Academy of Sciences 
and the board of directors of the American Council for an Energy 
Efficient Economy (ACEEE).
    Prior to my role at Stanford, I was Director of Climate Change and 
Energy Initiatives at Google. Prior to Google, I was Co-Founder and 
President of New Energy Capital, a private equity firm that invests in 
clean energy projects and Executive Vice President of Northern Power 
Systems, a venture capital-backed renewable energy company.
    Prior to my roles in the private sector, I served in the Clinton 
Administration as Assistant Secretary of Energy for Energy Efficiency 
and Renewable Energy, the Acting Assistant Secretary of Energy for 
Policy, and Department of Energy Chief of Staff and Deputy Chief of 
Staff. Earlier in my career I was a staff member of President Carter's 
Commission on the Accident at Three Mile Island and an Assistant 
Attorney General in Massachusetts.
    In my testimony I will review the many obstacles to a long-sought 
goal: the successful deployment of renewable energy at large scale and 
reasonable cost in our country, with all the resulting economic, 
security and environmental benefits. Let me emphasize that siting 
renewable energy projects on public lands--the focus of this particular 
hearing--is indeed an obstacle to large-scale renewable energy 
deployment. But it is a relatively modest one and an obstacle that, to 
a large extent, the Department of the Interior under Secretary Salazar 
and the Department of Agriculture under Secretary Vilsack are 
effectively addressing.
    What I worry more about more than siting renewable energy projects 
on public lands is successfully navigating the long and complicated 
road that takes a renewable energy technology from the first gleam in a 
scientist's eye and an early pilot project all the way to the routine 
construction and operation of hundreds of full-scale commercial plants 
with low-cost financing and good paying jobs on all kinds of land--
private and public. And in this regard I am concerned that we are 
increasingly getting beaten in the race down this road by the European 
Union and Asia, in particular China. Thus, while in 2004 the U.S. was 
the focus of approximately 20% of total global clean energy investment 
and China accounted for just 3%, in 2010, China saw 20% of that 
investment and the U.S. 19%--and this investment gap is widening 
rapidly.
    And Mr. Chairman, the stakes are very large. The International 
Energy Agency forecasts that over $5.7 trillion will be invested in 
renewable energy globally over the next two decades. 2010 alone saw 
over $127 billion invested globally in renewable energy project 
financing. Unfortunately, it is looking less and less likely that 
investment will be here in the U.S. As Will Coleman, a venture capital 
investor in clean energy companies, said in a recent Senate Energy and 
Natural Resources Committee hearing: ``We are not only seeing companies 
start here in the U.S. and then move overseas, but we are increasingly 
seeing companies start overseas and stay overseas.'' And as we cede our 
competitiveness in renewable energy we are also losing the national 
security benefits that come with their development and deployment in 
our nation. As U.S. Navy Vice Admiral Ret'd Dennis McGinn told the 
House Select Committee on Energy Independence last December:
        [W]ithout comprehensive clean energy legislation, market 
        enhancing policies and decisive action by our nation, fierce 
        global competition, instability and conflict over dwindling 
        supplies of fossil fuels and increasing global warming will be 
        a major part of the future strategic landscape. Moving 
        expeditiously toward clean and sustainable energy choices can 
        greatly lessen that danger, improve global and national 
        economic security and help us to confront the seriously growing 
        challenges of global climate change and energy insecurity.
    I would note that Admiral McGinn recently became President and CEO 
of the American Council on Renewable Energy.
    Mr. Chairman, I strongly urge you to take a walk down this road to 
get a real sense about what it will take to put the U.S. back in the 
leadership position it once had in renewable energy. There is some 
merit in taking a look at renewable energy siting issues on federal 
lands and waters--the focus of this hearing--but if that is where you 
begin and end you will be seriously short-changing U.S. national 
security, competitiveness, job creation, and environmental protection. 
And as you look at renewable energy development on public lands and 
waters, let me make a critical point: deployed significantly and well, 
renewable energy technologies can actually be central to protecting 
these important public resources from the impacts of climate change 
such as habitat loss and species decline. Put simply, addressing 
climate change--through careful but significant development of zero 
carbon renewable energy sources on public lands and waters--offers a 
new strategy for stewardship of these public resources.
    Mr. Chairman, your May 13 hearing on the subject we are addressing 
today saw several committee members and witnesses emphasize that the 
real problem for renewable energy development is not so much Interior 
Department permitting--which is being improved--but instead obstacles 
to getting a renewable energy project built and operating like a power 
purchase agreement, adequate financing, the availability of 
transmission, and reliable tax incentives. I would echo this conclusion 
The testimony that follows explores these and other obstacles to the 
successful deployment of renewable energy at large scale and low cost 
including inadequate R&D funding and the serious challenges of 
technology demonstration, commercialization, and cost competitiveness. 
I conclude by providing my perspective on the siting of renewable 
energy projects--solar, wind, and geothermal--on public lands and 
waters.

1. Obstacle: Inadequate Funding of Research and Development
    The first step on the road to the successful deployment of 
renewable energy at large scale and low cost begins with research and 
development: a scientist or engineer pushing the boundaries of an 
existing technology, inventing an entirely new one, or advancing the 
basic science which underlies both. R&D funding by the U.S. government 
has played a pivotal role in energy technology innovation for decades, 
probably more than any other single source globally. As a 2010 National 
Academy of Sciences (NAS) Study concluded, ``[f]ederally funded basic 
R&D provides the starting point for many (if not most) significant 
energy-related innovations, and federally funded assistance for 
technology development often is the catalyst for turning technological 
innovations into practical products that are sought in the 
marketplace.'' With these practical cost-effective clean energy 
products come many benefits starting with significant job creation. 
They can also greatly reduce the price needed to control carbon 
emissions. And they can enhance national security by cutting dependence 
on foreign oil.
    The good news is that U.S. has led the world over the last several 
decades in basic and applied research--both public and private--leading 
to major progress in a broad array of renewable energy technologies 
from solar, wind and hydropower to geothermal and biomass. The bad news 
is that more recently we have been increasingly starving U.S. federal 
energy R&D, while private sector energy R&D funding has also been 
declining. Measured in multiple ways we have a seen dramatic overall 
reduction in the federal commitment to energy R&D funding. The 2010 NAS 
study found that measured across different key research areas, federal 
R&D spending on energy in FY 2008 was approximately one-twentieth 
federal R&D spending on health, one-sixth of federal R&D spending on 
space, and one-fifth of federal R&D spending on general science. 
Compared across time, the study found that energy R&D spending in FY 
2008 accounted for approximately 2.6 percent of total federal 
(nondefense) R&D spending, a 10-fold decline from its peak of 
approximately 25 percent in FY 1980.
    In 2008, total U.S. RD&D spending on low-carbon energy technologies 
amounted to less than $2.5 billion, with just $500 million assigned to 
R&D for renewables. In contrast, the National Institute of Health (NIH) 
received federal R&D funding worth close to $30 billion. Over the past 
fifty years, such generous funding for innovation in the health sector 
has created vast economic growth and jobs, ensuring U.S. global 
leadership in related technologies. It is time the energy sector 
followed this example.
    Compared internationally, the NAS study found that U.S. spending on 
energy R&D as a share of GDP is considerably lower than that of several 
other leading industrialized countries. As an example, since 1990, 
Japan's energy R&D spending as a share of its GDP has remained at about 
0.08 to 0.10 percent. In contrast, U.S. spending as a share of GDP 
continued to fall until about 1997, eventually leveling off at between 
0.02 and 0.03 percent. It is worth noting that, from 1992 to 2007, 
Japanese government spending on energy R&D also exceeded U.S. federal 
spending on an absolute basis, even though Japan's GDP is about one 
third that of the United States. And the big new player on the block is 
China where in just the last couple of years government energy R&D 
funding has not only surged but U.S. companies are opening new research 
facilities. As an example, the Applied Materials Corporation, the 
world's largest supplier of the equipment used to make semiconductors, 
solar panels, and flat-panel displays, recently opened its newest and 
largest research lab in China.
    All of this suggests that energy R&D is less of a national priority 
in the United States than in other industrialized nations. And while 
the 2009 American Recovery and Reinvestment Act provided a significant 
one-time increase in federal energy R&D expenditures, this is simply 
not the kind of sustained change in federal R&D spending that would 
indicate advanced energy technologies to be a high national priority. 
President Obama's recently released budget request for FY 2012 would 
provide $3.2 billion for DOE's Office of Energy Efficiency and 
Renewable Energy, a 44% increase over Fiscal Year 2010 and, within 
that, $1.1 billion for renewable energy programs, an increase of about 
$430 million over FY 2010. It would also provide significant funding 
for the offices of electricity, fossil energy and nuclear energy. If 
enacted, this budget would provide a significant increase in total 
spending in DOE energy programs--to about $5.5B--at a time of fiscal 
austerity but, as emphasized above, the potential returns from energy 
R&D are very large. And by comparison with federal R&D spending in 
other areas this spending level would still be relatively modest. The 
American Energy Innovation Council, a group of current and former CEO's 
from major American companies like GE, Lockheed Martin and Microsoft 
recently recommended that federal energy R&D spending should be 
increased to something on the order of $16 billion.
    One particularly deserving recipient of federal R&D funding is the 
recently created Advanced Research Projects Agency-Energy (ARPA-E). 
DOE's ARPA-E has the potential to mirror the success of DARPA, within 
the Department of Defense. Designed to pursue an entrepreneurial 
approach to energy R&D, ARPA-E focuses on ``out-of-the-box'' 
transformational energy research that industry by itself cannot or will 
not support due to its high risk but where success would provide 
dramatic national benefits. Without adequate federal funding, however, 
the institutional promise of ARPA-E will not be realized. At present, 
ARPA-E is significantly underfunded, with current budget allocation 
under the recently passed Continuing Resolution of $180 million. This 
represents about 0.6% of NIH's annual funding and 6% of DARPA's annual 
budget. As a result, in its first year of operation, ARPA-E was able to 
support only 37 of the 3,700 proposals it received. President Obama has 
requested $550 million in the FY12 budget for ARPA-E.
    In addition to public sector funding of energy R&D, transforming 
the U.S. energy sector to be more secure, competitive, and clean will 
also require a significant increase in private sector R&D. Compared 
with other U.S. industries, the U.S. energy sector currently spends 
very little on R&D as a ratio of sales, a standard measure. The NAS 
report, cited above, concluded: ``Private-sector funding of energy-
related R&D is also critical for achieving the innovations needed to 
reduce GHG emissions on a large scale. Here too, however, the current 
picture for U.S. industries appears rather bleak.''
    Data suggest that the current rate of R&D spending by U.S. energy 
industries is far below that of other industries. In 2006-2007, R&D 
spending for all U.S.-based companies in the top 1,400 global R&D 
performers was 4.5 percent of sales, while firms in 11 research-
intensive U.S. industries spent an average of 6.5 percent. Three 
industries showed especially high percentages: pharmaceuticals and 
biotechnology (16.7 percent), software and computer services (10.6 
percent), and technology hardware and equipment (9.6 percent). By 
comparison, R&D spending by top U.S. utilities (among the top 1,400 
global R&D performers) averages 0.7 percent of sales. And utility R&D 
managers have reported that, due to deregulation, utilities were 
shifting their R&D focus from collaborative projects benefiting all 
utilities to proprietary R&D and from long-term advanced technology R&D 
(e.g., gas turbines and fuel cells) to short-term projects that would 
be profitable and provide a near-term competitive edge.
    The level of private sector spending on R&D is motivated mainly by 
its value to a firm's profitability. The NAS study concluded that 
``substantial increases in [private sector] energy-related R&D 
expenditures will occur only if government policies create conditions 
under which firms anticipate that such spending is likely to yield 
attractive financial returns in the foreseeable future.'' These include 
the federal government's own commitment to energy R&D spending as well 
as policies that can help move R&D results down the road to successful 
commercialization

2. Obstacle: Demonstration of Technologies
    We have seen a serious increase in recent years in venture capital 
investment in clean energy technology with $7.8 billion invested in 
2010 alone. This investment generally moves energy R&D from the lab to 
a point where a technology is demonstrated at pilot scale and ready for 
initial commercialization and subsequent broad-scale deployment. There 
are a number of challenges in moving venture-backed clean energy 
technologies out of the lab to this point. A recent hearing in the 
Senate Energy and Natural Resources Committee considered global 
investment trends in clean energy technologies and the impact of 
domestic policies on that investment. Will Coleman, a partner at Mohr 
Davidow, a venture capital firm, discussed four obstacles that energy 
technology start-ups face in demonstrating their technologies are ready 
for initial commercialization.
    First, energy markets are often difficult to enter for a new player 
because they are either heavily regulated or dominated by incumbents, 
and in the case of electricity markets we often have both. The 
patchwork of state and federal regulations is often difficult to 
navigate for any company, in particular a small start-up. Second, 
Coleman stressed that in the case of renewable energy technologies that 
generate electricity, the only road to market is often through 
utilities--and the public utility commissions that oversee them--both 
often risk averse. Market entry for these grid-based based technologies 
can often take five to ten years in the pilot stage and small 
deployments before a state public utility commission will typically 
approve cost recovery for broad technology deployment. This timeframe 
seriously dampens interest among many venture investors in renewable 
energy start-ups who often need to see growth much more rapidly.
    A third challenge for most energy technology start-ups is that 
without operating track records, they are unable to get access to low 
cost capital to advance their technologies toward commercialization and 
full-scale deployment. This means that they typically need to raise 
higher cost equity or some combination of equity, mezzanine financing, 
and debt to build early plants. Often the latter two sources of lower 
cost capital are not available at this high-risk stage. And Coleman 
notes that this can have a perverse effect: ``if venture capital firms 
don't anticipate low cost capital being available to move these 
technologies to scale, then they are unlikely to invest in the early 
technology development in the first place.''
    The fourth obstacle is that even where there are incentives and tax 
credits to support new technologies, many of them are not designed for 
small emerging companies. Startups do not have the balance sheets or 
track records of larger corporations and have trouble securing and 
monetizing the credits, incentives, and loans that have been made 
available. This often forces start-ups to enter into awkward third 
party relationships or go to market through the big incumbents, which 
can have dramatic impact on their value and, importantly, investor 
interest.
    Coleman concluded in the Senate hearing:
        ``If time didn't matter, if we were not in a race to remain 
        competitive in the global economy, if the private market valued 
        our national security, the domesticity of our products, and the 
        health and environmental impacts, then ideally we would let the 
        market work to adopt the best solutions. Unfortunately, time 
        does matter and the market does not value these national 
        strategic interests. For these reasons, whether we like it or 
        not, our government must play a proactive role in encouraging 
        clean energy development.''

3. Obstacle: Technology Commercialization--The ``Valley of Death''
    Moving down the renewable energy road, the step from R&D and 
venture capital-backed demonstrations to full-scale commercial projects 
and products may well be the biggest obstacle of all in the successful 
deployment of renewable energy at large scale and low cost. This part 
of the road involves crossing the colorfully but accurately named 
``Valley of Death'' that sits between the early stages in the research 
and development of an energy technology and its full commercial 
deployment.
    Earlier in my career I helped form and lead a private equity firm 
to invest in clean energy projects. We worked with bankers, engineers, 
and construction firms to get real energy projects financed and built. 
It was at this firm that I reached the toughest point along the road to 
large-scale cost-effective deployment of renewable energy. Day after 
day we received investment proposals for energy projects with profiles 
that simply exceeded the risk threshold of our capital. Had the 
underlying technologies been proven in a lab? Generally yes. Had they 
operated in a pilot plant? Sometimes. Had they operated at commercial 
scale? Rarely. There were relatively few proposals that fit our 
investment profile. In the end, we used the biggest chunk of our 
capital to finance corn ethanol plants--a technology well proven at 
large commercial scale for decades.
    It was at this firm that I first peered into the Valley of Death, 
seeing there the remains of hundreds of abandoned energy projects: 
based on exciting technologies supported by DOE or venture capital-
firms; that worked well in pilot plants but died trying to get to 
commercial scale; from wind, solar, biomass and geothermal, to advanced 
coal and natural gas, transmission and distribution, nuclear power and 
beyond. We and most other private equity firms simply couldn't shoulder 
the risk in the commercial scale-up of an energy technology, where a 
single project can cost hundreds of millions or, in the case of nuclear 
plants, even billions of dollars.
    It was interesting landing next at Google, where engineers spend 
months writing computer code for a new software product, test it, and 
then one day, in my simple terms, push a button and it's deployed. 
Google engineers make improvements to the product and then launch a new 
version. There are certainly tough engineering challenges and products 
that fail. It's just that with software, products generally succeed and 
fail faster and more cheaply than in the energy world. In the energy 
technology world, months turn into years, and years into decades, and 
billions can be spent on a single technology before even one commercial 
plant or factory is operating. In the Valley of Death companies 
struggle to obtain the financing needed to deploy their technologies at 
commercial scale--ironically, the very point at which their 
technologies could begin to have a meaningful impact on job-creation, 
energy security, and environmental protection.
    The Department of Energy Loan Guarantee Program, to its credit, has 
been working hard to address the investment challenges of the Valley of 
Death for renewable energy and other technologies. As the program's 
director Jonathan Silver said in a recent Senate Energy and Natural 
Resources Committee hearing:
        The Department of Energy's loan programs were designed to 
        address these impediments and fill this financing gap. Loan 
        guarantees lower the cost of capital for projects utilizing 
        innovative technologies, making them more competitive with 
        conventional technologies, and thus more attractive to lenders 
        and equity investors. Moreover, the programs leverage the 
        Department's expertise in technical due diligence, which 
        private sector lenders are often unwilling or unable to conduct 
        themselves.
    The DOE loan program office administers the Section 1703, Section 
1705, and ATVM loan and loan guarantee programs. The 1703 program, 
created as part of the Energy Policy Act of 2005, supports the 
deployment of innovative energy technologies. As a result of the 
recently passed 2011 Continuing Resolution, the program currently has 
$18.5 billion in loan guarantee authority for nuclear power projects, 
$4 billion for front-end nuclear projects, $8 billion for advanced 
fossil projects, $1.5 billion for energy efficiency and renewable 
energy projects, and $2 billion in mixed authority. In addition, and 
for the first time, the 1703 program, historically a ``self pay'' 
credit subsidy program, now has $170 million in appropriated credit 
subsidy, which will support a small number of loan guarantees for 
renewable energy projects.
    The Section 1705 program was created as part of the American 
Recovery and Reinvestment Act of 2009 to jump-start the country's clean 
energy sector by supporting energy projects having difficulty securing 
financing in a tight credit market. Under the 1705 program, the credit 
subsidy costs associated with the loan guarantees are paid through 
funds appropriated by Congress. Additionally, to qualify for 1705 
funding, projects must begin construction no later than September 30, 
2011.
    The ATVM program issues loans in support of the development of 
advanced vehicle technologies to help achieve higher fuel efficiency 
standards and reduce the nation's dependence on oil. Congress funded 
this program with $7.5 billion in credit subsidy appropriations to 
support a maximum of $25 billion in loans.
    In the recent Senate Energy Committee hearing noted above, Jonathan 
Silver commented on the loan program's results to date explaining that 
between 2005, when the program began, and 2009, DOE did not issue a 
loan or loan guarantee. Mr. Silver said that since March 2009, the 
Department had issued conditional commitments for loans or loan 
guarantees to 27 projects, 16 of which have reached financial close. 
This represents nearly $30 billion in financing to these 27 projects, 
which have total project costs of nearly $47 billion and include an 
array of clean energy technologies, such as wind, solar, advanced 
biofuels, geothermal, nuclear, transmission, and battery storage. The 
projects include the world's largest wind-farm, two of the world's 
largest concentrating solar power facilities, the first nuclear power 
plant to begin construction in the United States in decades, the 
world's first flywheel energy storage plant, and a biodiesel refinery 
that will triple the amount of biodiesel produced in the United States. 
Project sponsors estimate that these 27 projects will create or save 
over 61,000 direct jobs and hundreds of thousands more indirect jobs, 
and generate enough energy cumulatively to power over two million 
households.
    President Obama's FY 2012 request would provide $200 million in 
credit subsidies to support approximately $1 to $2 billion in 
additional loan guarantees for renewable energy and other technology 
deployment. It would also provide up to $36 billion in additional 
authority to loan guarantees for nuclear power projects.
    Those of us watching from the outside have been impressed with the 
recent progress and professional skills of the DOE team, but continue 
to be concerned about the intricate multi-agency review process in the 
loan guarantee program and the great uncertainty of the yearly 
budgeting cycle. I and many others across the energy technology 
spectrum--from renewables to fossil to nuclear power--believe that as 
long as the loan guarantee program remains as currently structured 
inside DOE, it will continue to be subject to these challenges. And I 
and many other observers of the global clean energy race believe that 
our country would be better served by taking a new approach to the 
critically important task of energy technology commercialization.
    We support significant FY 2012 funding for the DOE Loan Guarantee 
Program to continue its important work in the near term. Congress 
should substantially increase the funding for credit subsidies to 
support renewable energy and other projects. Something on the order of 
$1.5 to 2.0 billion in credit subsidies, versus the $200 million 
requested, would support a good proportion of projects currently in due 
diligence. However, over the longer term, supporting the financing of 
capital-intensive energy projects with serious scale-up risks--in close 
collaboration with the private sector--is not a good match for the 
current structure, oversight, risk tolerance, and financial tools of 
the Department of Energy.
    Commercializing energy technology requires a new more effective 
approach--and that approach is the Clean Energy Deployment 
Administration (CEDA). CEDA, in strong partnership with the private 
sector, could more effectively support the scale-up of clean energy 
technologies--and U.S clean energy competitiveness--than the current 
approach. CEDA, as developed over the last couple of years in the 
Senate Energy and Natural Resources Committee--on a bipartisan basis--
would have an array of tools, such as loan guarantees, insurance 
products, and bonds to accelerate private sector investment. Initially 
funded with an appropriation of $10 billion, CEDA could become a self-
sustaining entity--that is no additional appropriations--based on 
mechanisms in the bill that would allow it take financial stakes in 
projects. Also, while CEDA would be established as an agency within DOE 
it would have an administrator and board of directors, and enjoy an 
important degree of independence, like the Federal Energy Regulatory 
Commission, an independent arm of the DOE. As one expert in clean 
energy finance put it: ``CEDA is the current loan guarantee program 
with more tools and less fuss.''
    In the Senate, CEDA enjoys bipartisan cosponsors and was adopted in 
the last Congress by the Senate Energy Committee on a bipartisan basis. 
The Senate bill has broad support including renewable energy trade 
associations, the Nuclear Energy Institute, and the U.S. Chamber of 
Commerce. In the House, a version of CEDA was added by a 51-6 vote of 
the House Energy and Commerce Committee to the Waxman-Markey bill.
    Mr. Chairman let me emphasize that one way or the other--creating 
CEDA and/or making additional funding available for the loan guarantee 
program--we need to ensure that we provide a serious financing 
mechanism for moving U.S. clean energy projects through the Valley of 
Death. Opponents of these mechanisms are concerned about ``the 
government setting industrial policy,'' ``picking winners and losers,'' 
etc. These are understandable issues but they do not recognize several 
key facts. First, virtually all our nation's economic competitors, 
including China, are providing major help to companies facing the 
Valley of Death. Congress, in part recognized this fact, when it 
created the loan guarantee program. Second, U.S. agencies, like the 
Export-Import Bank (ExIm) and the Overseas Private Investment 
Corporation (OPIC) regularly provide help that is not terribly 
different from the loan guarantee program and CEDA for U.S. companies 
wanting to build projects in other countries. Mr. Chairman, it simply 
can't be that Congress intends to make it easier to help finance energy 
projects in India than Indiana.
    Third, and most importantly, if the DOE loan program office finds 
itself without additional funding next year, if the Section 1603 Grant 
program is not renewed (see below), and if the enactment of CEDA 
stalls, the federal government could find itself with almost no tools 
to help with the financing of higher risk energy projects, involving 
renewables and other technologies. This would be a terrible blow to one 
of the highest potential areas of U.S. economic growth--and job 
creation--over the next two decades.

4. Obstacle: Cost-competitiveness
    Proceeding down the renewable energy road we now reach the stage 
where a technology has been proven to work at commercial scale but 
where it often can't yet compete fully because of higher costs than 
traditional technologies. The good news is that renewable energy costs 
have come down significantly over the last two decades with technology 
improvements and expanding manufacturing and deployment. At the same 
time, many of the renewable energy technologies still have some 
distance to go in terms of cost. This is where federal tax incentives, 
financing help, and related support have been so critical to the 
deployment of renewable energy in our country. It is also where state 
renewable energy standards have helped lower the cost of renewable 
energy and drive deployment.
    Federal tax incentives help lower the delivered cost of a project 
or the energy it produces. There are two general categories: Investment 
Tax Credits (ITC) and Production Tax Credits (PTC). The ITC and PTC 
enhance renewable energy project economics, complement state renewable 
energy policies, and as such have been a major driver of growth. Yet 
these policies are incapable of sufficiently scaling renewable energy 
development for two main reasons. First, is the generally short-term 
nature of these tax credits and uncertainty surrounding their 
extensions. This has resulted in a wax and wane cycle for wind and 
solar development. For example, in 1999, 2001 and 2003 when the PTC 
expired, new U.S wind capacity decreased by over 75% from the prior 
year. This ``on again, off again'' behavior creates strong market 
uncertainty and causes abrupt changes in business investments and R&D 
spending.
    The other significant drawback of the ITC and PTC is that they 
force renewable energy development to be calibrated around the 
projected availability and size of the tax equity market. Only 
investors with sufficient capacity to ``monetize'' the tax credit, i.e. 
with sufficient taxable income to off-set, can take advantage of them, 
forcing many renewable energy project developers to rely on third party 
``tax equity investors.'' This raises financing costs, driving up the 
delivered cost of energy and driving down the public benefits the tax 
credits produce in terms of megawatts of renewable energy delivered.
    The risks of tax-based incentives were seen in the recent ups and 
downs of the Investment Tax Credit for solar. The good news is that it 
was extended for eight years in 2008, providing an attractive degree of 
certainty for project investors. The bad news is that during the recent 
financial crisis and recession the renewable energy tax equity market 
shrank by 83%, from $6.1 billion in 2007 to $1 billion in 2009
    To promote economic recovery, stimulate private investment, and 
maintain market momentum, the ``Section 1603 Grant in lieu of tax 
credits'' program (``Section 1603 Grant'') was adopted in the 2009 
American Recovery and Reinvestment Act to specifically address 
insufficient tax equity in the market and corresponding inability to 
take advantage of the PTC and ITC. The Section1603 Grant allows project 
developers eligible for the ITC and PTC to elect to obtain an 
equivalent grant from the Treasury Department in lieu of these credits. 
It has provided certainty for tax equity financing and boosted 
insufficient tax equity supply to meet developer demand. It originally 
required projects to begin construction by December 31, 2010 but in 
2010 Congress extended this date to December 31, 2011.
    As of May 2011, $7 billion in grants have been awarded to 2601 
renewable energy projects leveraging approximately $22 billion in 
private sector investment. There is a rising view that the Section 1603 
Grant is a more cost-effective approach to providing incentives for 
renewable energy projects than tax credits. A study conducted by 
Bloomberg New Energy Finance estimated the 19,000 megawatts of wind 
installed in the U.S. between 2005-2008--costing the government $10.3 
billion via the PTC--could have been achieved with $5 billion in 
Section 1603 Grants.
    There are a number of other market-based policy mechanisms that can 
help lower the cost of and drive private sector investment in renewable 
energy technology. Under a ``feed-in tariff,'' eligible renewable 
electricity generators are paid a premium price for renewable energy 
they produce. Typically regional or national electric utilities 
electric are obliged to take the electricity. Feed-in tariff policies 
have been enacted in more than 60 countries and 12 U.S. states with 
impressive results in driving scale and cost reduction.
    Another policy mechanism is a Renewable Electricity Standard (RES) 
that typically places an obligation on electric utilities to produce a 
specified fraction of their electricity from renewable energy sources. 
RES programs are often implemented through utility renewable energy 
systems or bidding processes for independently developed generation. In 
the latter approach, certified renewable energy generators earn 
certificates for every unit of electricity they produce and can sell 
these to utilities. The utilities then pass the certificates to a 
public utility commission to demonstrate their compliance with their 
regulatory obligations. RES programs can promote significant 
competition and innovation allowing renewable energy to compete with 
cheaper fossil energy sources. RES-type mechanisms have been adopted in 
29 U.S. states as well as several countries.
    Congress has been considering a national RES for several years. The 
Senate Energy and Natural Resources Committee adopted an RES in 2009 in 
the American Clean Energy Leadership Act. The Waxman-Markey bill, 
enacted by the full House in 2009, contained an RES. More recently, 
President Obama proposed a broader Clean Energy Standard requiring that 
the nation derive 80 percent of its electricity from a broad array of 
clean energy technologies by 2035. The Senate Energy Committee is 
considering the proposal.

5. Obstacle: Siting
    Having moved a renewable energy technology to a point where it 
works at full scale and where the energy it produces can be sold 
competitively, at least with attractive financing and some reliable 
incentives, the issue of siting now is worth a look. Public lands hold 
significant potential for renewable energy development. The Interior 
Department estimates that more than 23.000 megawatts of utility-scale 
solar is reasonably foreseeable to be developed on public lands in the 
desert southwest. Offshore, DOE's National Renewable Energy Lab 
estimates that the wind potential off the coasts of the lower 48 states 
exceeds the entire U.S. electricity generating capacity. And U.S. 
geothermal potential, using traditional and advanced technologies, is 
estimated at roughly half of U.S. electricity generation. Although not 
without some challenges, the Obama Administration has stepped up well 
to siting renewable energy on public lands.
    In May, the Departments of Interior and Agriculture issued a major 
report--``New Energy Frontier: Balancing Energy Development on Federal 
Lands''--that reviews issues associated with the development of both 
renewable and conventional energy on Federal lands, both on and 
offshore. The report emphasizes that these lands have:
        ``[V]ast potential for renewable energy production from wind, 
        solar, geothermal, hydropower, and biomass that--together with 
        conventional energy sources--can contribute to the Nation's 
        energy security and to the clean economy of the future. 
        However, the development of these energy resources must be 
        carried out in balance with many other uses and values that 
        serve the public interest and support the quality of life 
        American citizens enjoy.''
    Both Secretaries Salazar and Vilsack have developed strategies to 
advance renewable energy development while balancing these other 
important interests. These strategies include: developing research, 
policy and management tools to minimize impacts of energy development; 
supporting key agencies like the Department of Energy, Federal Energy 
Regulatory Commission, and relevant state agencies; and involving 
interested stakeholders. The May report from the two Departments 
emphasizes that:
        ``[T]he renewable energy strategies of both the DOI and USDA 
        are guided by the fundamental belief that renewable energy for 
        America will allow us to diversify energy sources and 
        ultimately reduce our reliance on fossil fuels. The development 
        of new renewable energy sources need not come at the expense of 
        our Nation's natural and cultural heritage. If promoted and 
        sited in a thoughtful way, new energy development can, instead, 
        contribute to conservation and protection of the environment.''
    Two of the biggest renewable energy siting issues on public lands 
have involved solar projects on desert lands and wind farms off the 
Atlantic coast. Siting issues around geothermal energy projects--an 
important renewable energy technology with a vast resource and 24/7 
operation--is also worth consideration.

a. Desert Solar
    Some of the best solar resources in the world are located on public 
land overseen by the Interior Department's Bureau of Land Management 
(BLM) in Arizona, California, Colorado, Nevada, New Mexico, and Utah. 
Federal agencies have developed extensive processes to authorize use of 
these lands for a variety of purposes, including recreation, grazing, 
mining, and energy development. There is also great potential for these 
lands to produce safe, clean solar energy, yet limited agency action 
has delayed the permitting of solar projects for years. By contrast, 
over the past 20 years, federal agencies approved about 74,000 oil and 
gas drilling permits.
    In June 2009, Interior Secretary Salazar moved to ``fast-track'' 
development of solar energy projects on federal lands. First, by 
secretarial order, he withdrew from other development activities 
670,000 acres in 24 potential solar energy zones that had been 
identified through a number of different processes. At the same time, 
Interior kicked off a long-term planning process based on a Solar 
Programmatic Environmental Impact Statement (SPEIS) to designate 
priority areas for development in the longer term, beginning with the 
study of the 24 zones.
    At the time of these announcements, BLM had already received 155 
applications for solar installations. Since existing statutes provide 
specifically for leasing federal land for oil, gas and geothermal 
activities but not for solar energy, these applications were received 
under the authority of a grant of a federal Right of Way under the 
Federal Land Policy and Management Act (FLPMA). Secretary Salazar 
announced that when the SPEIS was completed, that document would guide 
considerations of applications going forward but that pending 
applications would be evaluated based on interim standards.
    The Secretary also announced that a set of fourteen large projects, 
which had greater potential to be permitted and begin construction by 
the end of 2010, would be given special ``Fast Track'' status. These 
projects would not be subject to less stringent environmental analysis, 
but they would receive priority attention from federal regulatory 
officials. This December 2010 date was critical because, at the time, 
the Section 1603 Grant Program (see above) could only be claimed for 
projects that started construction by December 31, 2010. For many of 
these large projects, the ability to monetize tax credits was critical 
to their ability to secure financing because the recession froze--and 
continues to negatively affect--credit markets and available tax 
equity.
    Under California law, concentrating solar thermal power projects 
(which use mirrors to boil water, create steam, and drive a turbine to 
generate electricity) are treated as power generation facilities and 
must be permitted, like all other power plants, by the California 
Energy Commission, even if they are located on federal land. (Solar 
photovoltaic facilities, however, do not fall under the California 
power plant jurisdiction and only need Interior Department approval.) 
Thus, solar thermal projects have to move through two separate 
regulatory processes and two separate environmental analyses, one under 
the federal National Environmental Policy Act (NEPA) and one under the 
California Environmental Quality Act (CEQA). To avoid this duplication, 
and to make certain that the State and federal agencies were fast-
tracking the same projects, Interior Secretary Salazar and then 
California Governor Arnold Schwarzenegger signed a Memorandum of 
Understanding in October 2009 to integrate the two processes.
    As a result of this more coordinated and focused program, nine 
large solar projects were approved by the BLM prior to the end of 2010, 
seven using concentrating solar technology and two using solar 
photovoltaics, comprising a total of about 3650 MW. Six of these 
projects are in California and three in Nevada. In addition, the 
California Energy Commission permitted an additional 1100 MW of solar 
thermal capacity in 2010 that is not on federal land.
    Looking ahead, the further development of utility-scale solar in 
the Southwest faces some challenges. These include finalizing the SPEIS 
which, done well, can help provide predictability and speed in the 
permit process by steering solar development into Solar Energy Zones 
(SEZ) where the solar resource is high, which are near existing 
transmission (or to which transmission will be constructed), and where 
there are few environmental conflicts. Solar project developers have 
raised concerns that the Solar Energy Zones (SEZ), as currently 
conceived, do not adequately evaluate the suitability of the proposed 
zones from a technical, environmental, transmission, and cultural 
perspective and therefore make planning more difficult. Further, some 
of the developers have stated that successful application of the SEZ 
approach will likely require a larger universe of solar zones than is 
described in the draft SPEIS and flexibility in expanding the zones.
    A broad group of solar developers and environmental organizations 
have joined together to suggest establishing Areas of Facilitated 
Development (AFDs) for utility-scale solar development. AFDs would be 
established, based on: technical criteria (e.g. insolation, slope); low 
conflicts with biological, cultural, and other resources; and access to 
transmission and proximity to load. Solar developers have said that 
AFDs could provide real incentives for development within their 
boundaries, such as project-specific Environmental Assessments instead 
of broader Environmental Impact Statements and assurance of 
transmission interconnection. AFDs could also be large enough to allow 
for siting flexibility, and BLM could establish a clear process for 
expanding AFDs and adding new ones.
    As indicated above, to a large extent, issues related to the 
permitting of solar on public lands are being addressed by the Interior 
Department in coordination with developers and environmental 
organizations. The current challenges in solar energy development have 
little to do with permitting issues, but instead the current 
unpredictability of federal incentives, financing help, and other 
programs. If there is one refrain we hear constantly from industry it 
is this: ``We need a consistent long-term energy policy from the 
federal government.'' As discussed above, the Section 1603 Treasury 
Grant program's deadline for start of construction was extended in 
November 2010 but only for one year. Also, as noted, important 
components of the federal loan guarantee program added by the American 
Reinvestment and Recovery Act, which have been instrumental in 
promoting solar energy development, will expire September 30, 2011 
unless extended. These challenges will likely cause many projects to be 
delayed.
    Added to these policy and market uncertainties is the balkanized 
jurisdictional system in the U.S. for making needed upgrades to the 
transmission system to improve access to renewable generation and 
simultaneously enhance grid efficiency and reliability. While the 
Federal Energy Regulatory Commission (FERC) and a number of state 
public utility commissions are struggling with these issues, there is a 
pressing need for more regional multi-state/federal cooperation--and 
for Congressional attention--to address these problems. This industry 
cannot flourish without multi-state and federal cooperation on 
transmission issues in the southwestern states.
    It is the lack of predictability and consistency of federal 
incentives and financing help, and the need for greater federal 
leadership on regional transmission planning, which are the major 
barriers to the growth of the utility-scale solar industry today. 
Federal permitting of solar projects on federal lands needs continued 
attention, and must be further improved, but that effort is on course.

b. Offshore Wind
    Although existing law governing energy development on the Outer 
Continental Shelf was designed for oil and gas, not for offshore wind 
or wave energy, the Obama Administration has moved expeditiously to 
design and streamline the permitting process and help build an offshore 
wind industry. First, for years there had been serious and unresolved 
disputes among federal government agencies about jurisdiction over off-
shore wind and wave development, particularly between the Federal 
Energy Regulatory Commission (FERC) and the Department of Interior's 
Minerals Management Service (MMS). The Obama Administration settled 
this dispute through a Memorandum of Understanding between the two 
agencies signed in March 2009.
    Second, in April 2009, MMS issued a final ``Renewable Energy 
Framework'' rule specifying the steps necessary to permit an offshore 
wind farm. Third, shortly thereafter MMS announced a decision to issue 
``limited leases'' for five years for sites off Delaware and New 
Jersey, based on its own completed environmental analysis. These leases 
would allow developers to erect meteorological towers to test wind 
conditions and do other studies for potential wind farms. MMS issued 
four leases to three different companies later that year. These sites 
had been narrowed down from 40 initial nominations and 16 areas chosen 
for potential study.
    In the spring and summer of 2010, considerable uncertainty was 
generated by how the environmental analysis required under the National 
Environmental Policy Act (NEPA) and other environmental statutes would 
be integrated with various stages of the permit process. Concerns were 
also raised by several states eager to go forward with off-shore wind 
about the federal process, in particular about the Cape Wind project in 
Massachusetts that had struggled for nearly a decade to secure the 
nation's first off-shore wind permit.
    In response to this uncertainty, the Department of Interior, which 
had already worked with coastal state governors on joint state-federal 
planning for off-shore wind development, resolved the Cape Wind issues, 
and issued a permit. In November 2010, the Bureau of Ocean Energy 
Management, Regulation and Enforcement (BOEMRE), the successor agency 
to MMS, announced the ``Smart From the Start'' program to streamline 
the permitting and NEPA requirements for off-shore wind. BOEMRE 
announced: that it had identified targeted areas off North Atlantic 
states as zones for off-shore wind farms that had local support and few 
environmental conflicts; that coordinated environmental studies 
including Environmental Assessments (EAs) under NEPA would be performed 
by the federal and state governments for these targeted areas; and that 
within a year thereafter leases could be advertised and entered into by 
developers.
    Earlier this year, Secretaries Chu and Salazar announced the first 
joint departmental ``National Off-Shore Wind Strategy'' including final 
designation of the targeted zones off Delaware, Maryland, New Jersey 
and Virginia that would be the subject of accelerated environmental 
analysis leading to prospective leases. At the same time, DOE announced 
$50 million in grants aimed at improving turbine blade design for 
increased efficiency, reducing market barriers, and supporting research 
into ``next generation'' drive trains. Gearless or ``direct drive'' 
wind turbines now under development are expected to have many fewer 
maintenance requirements than current products, which is important for 
off-shore facilities because of the high cost of accessing these 
machines.
    The principal barriers that now confront the development of 
offshore wind off the Atlantic Coast today are not permitting and NEPA 
barriers, they are market barriers. The Cape Wind project off 
Massachusetts has its permit, but must still negotiate a power purchase 
agreement for the second stage of the project under less favorable 
market conditions than when it signed its first agreement, and then 
find financing. As discussed above, the future of the DOE loan 
guarantee program is highly uncertain, the Section 1603 Grant program 
is expected to expire at the end of this year, and tax equity investors 
are still scarce. The large capital investment required, low natural 
gas prices leading to lower off-take prices, and the lead-time required 
for a project all combine to make it more difficult to successfully 
develop an offshore wind facility today.
    If we are to see significant development of offshore wind, with 
substantial associated domestic manufacturing, we need to ensure 
predictable and sustained demand at a reasonable level. This can be 
done through federal policy and, perhaps more expeditiously, through 
the federal government promoting and supporting regional and state 
efforts to procure offshore wind. This may include the federal 
government encouraging Regional Transmission Organizations and 
Independent System Operators, such as the PJM Interconnection, the 
NYISO, and ISO New England to plan for large-scale transmission that 
will facilitate the development of significant offshore wind projects 
rather than rely on individual developers to plan and pay for separate 
tie lines for each offshore project. The lack of coordinated federal 
policy that addresses all barriers to creating an industry will leave a 
valuable clean energy resource--in the vicinity of large population 
centers--largely untapped. If we want to encourage a robust offshore 
wind industry, like that which has developed in Europe and now is 
expanding rapidly in China, further incremental streamlining of 
permitting and related environmental processes would be helpful, but 
this is only a small piece of the interrelated set of factors 
inhibiting growth of the industry.

c. Geothermal
    Geothermal energy is a 24/7 resource providing clean base-load 
power in utility-scale quantities. The federal government figures 
prominently in the future of geothermal energy in the U.S. First, 
approximately 90% of known hydrothermal resources lie under Department 
of Interior and Department of Agriculture lands. Second, as of 2005, 
approximately half of US geothermal production occurred on federally 
managed lands and many of the 7,000 megawatts of geothermal projects 
currently under development will be developed on federal lands. Third, 
much of the nation's advanced geothermal resources such as Enhanced 
Geothermal Systems and Geo-Pressured Geothermal--which exceed 500,000 
megawatts of potential--lay beneath federal lands in the west.
    Compliance with NEPA and other federal and state environmental laws 
add complexity throughout the development cycle. After a lease has been 
acquired, completing the necessary permitting for even initial 
exploration drilling can take well over a year--adding cost, risk, and 
time to project development. The good news is that BLM is stepping up 
to the plate as an active development partner. In 2008, the BLM, as 
well as the U.S. Forest Service opened over 190 million acres to 
geothermal exploration and leasing, potentially facilitating an 
additional 11,100 megawatts of hydrothermal development by 2025. And 
the Obama Department of Interior has moved aggressively to accelerate 
geothermal development on federal lands including:
          Leasing dozens of parcels of land in California, 
        Idaho, Colorado, and Nevada;
          Approving the 236-mile ON Line transmission project 
        connecting Las Vegas to geothermal zones in northern Nevada;
          Fast tracking over 200 megawatts of geothermal 
        projects in Nevada for approval;
          Reaching an agreement with Colorado to accelerate 
        geothermal permitting.
    Additionally, the Department of Energy has reinvigorated the 
Geothermal Technologies Program, investing in badly needed new 
technologies and demonstration projects.

Conclusion
    Wrapping up, I spent the last four years at Google helping to 
develop and implement the company's approach to energy policy, 
investment and technology. Coming from the energy sector, I was struck 
at Google by how innovation, investment and policy came together so 
effectively to help build an entirely new industry--the Internet--that 
has fundamentally transformed life as we know it and created vast 
numbers of good paying U.S. jobs. The federal government had a large 
role in the creation of the Internet, providing early R&D support and 
becoming one of its initial users. Critical policy decisions by 
Congress, a series of Democratic and Republican Administrations, and 
regulatory bodies like the FCC, set smart rules of the road for 
development and use of the technology. Trade policy has helped ensure 
opportunities for U.S. companies in advancing the Internet across the 
globe.
    We must take a similarly coordinated approach between the private 
sector and the U.S. government in order to seize the opportunities in 
clean energy technology. We face declining federal R&D funding, 
inadequate financing mechanisms, unreliable incentives, and a lack of 
transmission capacity. While siting of renewable energy projects on 
public lands needs some continuing attention, it is this broad array of 
other obstacles that really cry out for help.
    And arguably, cooperation between industry and government is even 
more critical in clean energy technology than the development of the 
Internet as the stakes are higher in terms of our nation's security, 
competitiveness, health, and environment. We tend to measure progress 
in information technology in months or years. In contrast, we measure 
progress in energy technology in decades. If we don't get our act 
together between our government and the private sector, other 
countries, like China and Germany, that are taking the long view when 
it comes to clean energy technology, will be the winners of this 
marathon. A prize worth trillions of dollars and millions of jobs hangs 
in the balance--to say nothing of our national security and the future 
of the planet.
                                 ______
                                 
    The Chairman. And I want to thank all of you on the panel 
for your testimony. We will start the round of questioning, and 
I will begin. But before I do, I just want to make an 
observation.
    It is very interesting hearing the tone of what you are all 
saying, at least from some commonality, and you are asking this 
Committee to consider what I think any, any, any energy 
production committee would ask for, whether you are talking 
about renewables or fossil fuels or whatever, and that is 
certainty so that you can proceed forward from whatever, 
whether it is regulatory or statutory. And I certainly hear 
that loud and clear, and I just want to make that observation.
    By full disclosure, I should say, too, that my district has 
a lot of diversity in its energy. I come from an area where 
hydropower is the primary source of energy. But as Mr. Resch 
alluded to, I have a manufacturer of solar components in my 
district. There is going to be a solar facility in one of my 
counties that is in the planning stage, and I understand my 
district is the 15th largest wind producer in the country. So I 
am very much in favor of an ``all of the above'' energy plan, 
as I mentioned in my opening statement.
    But there is always one caveat that I think we always have 
to take in mind as policymakers, and that is that the ultimate 
purchaser of our energy is going to be the consumer, and they 
want the best possible price that they can get, and that is 
something I know you are all striving for. But we should never 
lose sight of that. That is why I think an ``all of the above'' 
energy plan is so important.
    Now, I have just one question, and this is alluded to by 
virtually all of you in your testimony. The question may answer 
itself, but I think it has to be asked from the standpoint to 
get it directly on the record. All of you in one way or the 
other alluded to problems you had with permitting and so forth. 
So my question to all of you is this: Do you believe that the 
Bureau of Ocean Energy Management, Regulation and Enforcement, 
or BOEMRE, and BLM, Bureau of Land Management, has an efficient 
and effective process for reviewing and approving permits and 
plans in a timely fashion right now?
    Mr. Roberts, I will start with you and just go down the 
panel.
    Mr. Roberts. Thank you, Mr. Chair. No, I don't.
    The Chairman. OK. You don't have to elaborate if you don't 
want to, because that is what we are trying to find out.
    Go ahead. Ms. Reilly?
    Ms. Reilly. I would say that these bureaus are full of 
people who are very well intended and people who care about the 
environment. I think we heard that from one of the other 
speakers today. But we need much improving and streamlining in 
the efficiency of the bureaus.
    The Chairman. Thank you.
    Mr. Gordon.
    Mr. Gordon. I think under Secretary Salazar's leadership, 
he has come in and he is making reforms and trying to expedite 
the review process for offshore wind with the Smart from the 
Start initiative. It is going to take a lot of work.
    The Chairman. It is not efficient and effective right now 
then?
    Mr. Gordon. It could be more efficient, sir.
    The Chairman. Thank you.
    Mr. Lanard.
    Mr. Lanard. Thank you, Mr. Chairman.
    When I started in the offshore wind industry 5, 6 years 
ago, the permitting timeline under the Federal Government 
looked like it was 7 to 9 years. Under Director Bromwich and 
Secretary Salazar, we have cut 2 years off of that. We are now 
5 to 7.
    Director Bromwich testified recently before your Committee 
and talked about the fact that the permitting process still 
needs to be refined more. So we do agree with him. We would 
like to see that refinement. We are satisfied that the agency 
is committed and working very hard to find those time savers, 
and I think we will see them in the next 6 months to a year as 
we move forward with leasing for the Outer Continental Shelf.
    The Chairman. Mr. Resch.
    Mr. Resch. Two quick points. There has been great 
improvement, as everybody has said so far, and I certainly 
concur with that, and we hopefully are going to see that 
continue, and hopefully it will continue along the lines of 
what other energy industries enjoy.
    And just to kind of give you a quick example, the oil and 
gas industry received 1,308 permits to drill on Federal lands 
last year, and we were ecstatic to get 9 in the solar industry. 
So the technology and the emphasis that the Bush Administration 
focused on expediting oil and gas permits, I think, can be 
applied directly to renewable energy permits as well, and we 
can see it move faster.
    The other competing issue, of course, is the fact that you 
have not only a permit process through BLM, but you also have 
these Federal tax policies that expire and create a tremendous 
amount of stress on everything within that system. So if we had 
extension also of the tax policy, I think it would streamline 
and make things easier at BLM as well.
    The Chairman. Mr. DeRosa.
    Mr. DeRosa. We have had a positive experience with BLM. I 
mentioned our Silver State North project that was permitted 
with alacrity, and we have other projects that are in the fast 
track of BLM's designation that are proceeding through the 
process. So we applaud the dedication that BLM has given to 
this sector, to this permitting.
    The Chairman. I heard you say it, Mr. DeRosa, but you also 
pointed out one individual, and I would just simply say if the 
success of any project is reliant on one individual, that is 
not good policy.
    Mr. DeRosa. Right.
    The Chairman. Clearly I want to make that point.
    Mr. DeRosa. I appreciate that. I wanted to give credit 
where credit was due there. But on the other hand, we want to 
make sure that the policy going forward is an expansive policy, 
that there are not prohibitions.
    The Chairman. My time is about running out. I asked the 
question if you think it is efficient right now, and I am 
hearing generally from you that there could be improvements, 
and some need a lot of improvements.
    Mr. DeRosa. Yes.
    The Chairman. OK. Dr. Piszczalski.
    Dr. Piszczalski. Within the current structure, I think BLM 
is doing fine, and I hope that I conveyed that it is a 
structural problem. We still have--for a typical project half 
the time is being spent on permitting. That means there is a 
lot of room for improvement.
    The Chairman. OK. Mr. Reicher.
    Mr. Reicher. Chairman, I think we have seen significant 
improvement in the programs. Obviously, like all programs, they 
can be improved further. But I would emphasize that permits 
without adequate policy, financing incentives and the like 
aren't a very useful device.
    The Chairman. Thank you all very much.
    Mr. Markey, you are recognized.
    Mr. Markey. Thank you, Mr. Chairman, very much.
    In the Republican budget they kept in the $20 billion for 
loan guarantees for nuclear power projects, but zeroed out the 
money for loan guarantees for wind and solar. Can we go down? 
We will give each one of you a chance to answer yes or no.
    Would you like to see the line guarantees for renewables 
restored? I will make it a positive for you so you don't have 
to say no. You can each say yes, if you would like.
    Mr. Roberts. From an industry perspective, yes.
    Mr. Markey. OK, good. Thank you.
    Ms. Reilly?
    Ms. Reilly. Yes, we would. We think that a level playing 
field would be tremendously helpful.
    Mr. Markey. OK. Good. You would like them restored. Yes.
    Mr. Gordon?
    Mr. Gordon. Absolutely, yes.
    Mr. Markey. OK. Yes.
    Mr. Lanard. Mr. Markey, in bold, 72-font, underlined, yes.
    Mr. Markey. Thank you.
    Mr. Resch. Absolutely. A critical program.
    Mr. Markey. Thank you.
    Mr. DeRosa. Yes.
    Mr. Markey. Thank you.
    Dr. Piszczalski. Yes, the incentives do make a big 
difference.
    Mr. Reicher. Loan guarantees with credit subsidies 
absolutely, and let us get on to a more reliable program, which 
would be the Clean Energy Deployment Administration.
    Mr. Markey. No, we are ready for question number 2. You are 
too smart for Congress. We are going to break it down a little 
bit. Let us move on here. He is the kid with his hand up right 
from the first grade, you know?
    The Republican budget also cut the clean energy programs, 
you know, the alternative to oil programs, by 70 percent. Would 
you like to see that money restored for the clean energy 
programs that was cut out of the Republican budget? Yes, sir?
    Mr. Roberts. I am not familiar with those programs.
    Mr. Markey. Good. Thank you. You should familiarize 
yourself with them. I think that would be a good idea. It is 
the clean energy part of the Federal budget.
    Ms. Reilly?
    Ms. Reilly. Yes, we would.
    Mr. Markey. Thank you.
    Mr. Gordon. Yes, we would.
    Mr. Markey. Thank you.
    Mr. Lanard. Yes, we would.
    Mr. Markey. OK. Thank you.
    Mr. Resch. Absolutely.
    Mr. Markey. Thank you.
    Mr. DeRosa. Yes.
    Mr. Markey. Thank you.
    Dr. Piszczalski. I would say yes, with better targeting, 
too.
    Mr. Markey. OK, good.
    Mr. Reicher. Yes.
    Mr. Markey. OK, thank you.
    And, more predictably, would you like it all to be more 
predictable for a 4- to 5-year period on all of these tax and 
loan guarantee programs for your industries? We will go down 
again. A yes is the preferred answer.
    Mr. Roberts. Yes, predictability is really important.
    Mr. Markey. OK. Thank you. Yes.
    Ms. Reilly. Yes, absolutely.
    Mr. Markey. OK. Thank you.
    Mr. Gordon. Yes.
    Mr. Lanard. As the Chairman said, it certainty is very 
important, yes.
    Mr. Markey. Good. Thank you.
    Mr. Resch. Yes. And just to put it in perspective, we are 1 
gigawatt today. We expect to be 10 gigawatts annually by 2015 
if we can keep these programs in place.
    Mr. Markey. Great. That is great news.
    Mr. DeRosa. Yes. And let me just say it is that 
predictability of those programs.
    Mr. Markey. I have other questions. Yes. Next?
    Dr. Piszczalski. I would say yes, especially because the 
financing is so hard to handle.
    Mr. Markey. Thank you.
    Mr. Reicher?
    Mr. Reicher. Yes.
    Mr. Markey. Thank you.
    Now, in the Republican appropriations bill for 2012, they 
actually are $4 billion below the President's program for the 
Department of the Interior, and we heard here at this table 2 
weeks ago from the Director of the BLM, from the Bureau of Land 
Management, that those kind of draconian budget cuts will slow 
down their ability to be able to deal with all of the kind of 
the technical issues that you would like to in your testimony 
have a telescoped timeframe to deal with so we can move more 
quickly toward permitting of wind and solar projects. But if 
they have much fewer personnel, it is going to be a lot harder 
for all of them because of all the projects you have planned 
all an across the country.
    Ms. Reilly, would you say that $4 billion less for the 
Department of the Interior will likely increase or decrease the 
amount of time it takes for the Department of the Interior to 
deal with those permitting issues that you were referring to in 
your testimony?
    Ms. Reilly. The reduction in the budget is clearly going to 
put more strain on the operations within those agencies.
    Mr. Markey. Can we just go down? Do you all agree this is 
not the time for us to be decreasing the budget in the areas 
where you are trying to have an expedited dealing with all of 
these very sophisticated issues of environment and ESA and wind 
and solar issues all now combined really for the first time?
    Mr. Roberts. Cutting the DOI's budget will increase the 
permitting time and is not in the national interest.
    Mr. Markey. Great.
    Ms. Reilly. The good news is the BOEMRE budget was not 
decreased significantly, perhaps because the focus was more oil 
and gas, but we would like them----
    Mr. Markey. No, BLM I am talking about. You are an offshore 
guy. OK, good. BLM.
    Mr. Gordon. I concur that the programs that have been put 
in place by Secretary Salazar need to be funded in order to see 
the results that the country is really requesting.
    Mr. Markey. Mr. DeRosa?
    Mr. DeRosa. I agree.
    Mr. Markey. Good. Thank you.
    Dr. Piszczalski. Yes, in the current structure, they will 
lead to more delays.
    Mr. Markey. OK, good. Thank you. 
    Mr. Reicher. Having been a bureaucrat for 8 years, when our 
budgets got cut, we could do less on the regulatory side.
    Mr. Markey. Thank you. I appreciate it, and I thank all of 
you for your testimony.
    Thank you, Mr. Chairman.
    The Chairman. We have just been advised that a vote is 
imminent on the Floor, so that will probably disrupt where we 
are.
    The Chair recognizes the gentleman from Louisiana Mr. 
Landry.
    Mr. Landry. Since Mr. Markey has done such a wonderful job 
of training you all how to answer, if you could just stay in 
that pattern.
    Wouldn't you all, if you would, if any of you all have 
children, wouldn't you like your children to have the same 
opportunity or a better opportunity than you have had in 
today's America? And do all of you all work under budgets, 
meaning you can only--revenue comes, and you spend that 
revenue? I just want to make sure we level the playing field as 
to why maybe some of these cuts are here.
    I do understand, and I am just shocked at the constant 
problem of permitting and uncertainty. I think it is Dr. 
Piszczalski's slide--if you wouldn't mind, I would like to 
borrow that and make it a yard sign for the White House and the 
Capitol, the guy climbing up the hill with the permitting 
process, because we have that in all of the industries. In 
fact, I think it was--I can't see the names over there. Where 
are my names? One of you said that you are having problems in 
the judicial process.
    So my question to each of you would be wouldn't you all 
support an across-the-board reform of the judicial process and 
the permitting process in the Federal Government, across-the-
board meaning for all industries, whether it be solar, wind, 
nuclear, oil and gas?
    Mr. Roberts. Congressman, getting certainty around siting 
and permitting is extraordinarily important. So if we could 
figure out a way to protect the environment and yet make a 
timely, efficient process, that would be extraordinarily 
important.
    Mr. Landry. Regardless of the industry, it should be that 
for every industry.
    Ms. Reilly. Yes. Certainty in the process is paramount. But 
also a focus--the fast-track program that we have heard about 
today has been very successful for solar so far. We haven't 
seen that for wind. We think that there needs to also be a 
focus on getting things on a fast track, but also getting them 
out at the other end. So a focus on outcomes and delivery is 
also helpful.
    Mr. Landry. For all industries.
    Ms. Reilly. For all industries, business and government, 
everywhere. The focus on the outcome is important.
    Mr. Landry. Great.
    Mr. Gordon. I think any time we can cut unnecessary delays 
and procedures across a wide range of industries is a good 
thing.
    Mr. Lanard. Congressman, I can only speak to the offshore 
wind industry perspective on this. I can't speak to the 
industrywide question that you have raised. We work with lots 
of different stakeholders, and there are a number of groups, 
mostly national environmental groups, that have concerns about 
the National Environmental Policy Act. They feel that it is a 
very important component of their role in protecting the 
environment and endangered species, and they would have perhaps 
wanted a better understanding of how we get to that certainty 
and we work closely with them. So we would want to work with 
those national groups to have a better understand of how 
judicial reform and some of the other certainty questions that 
you are asking would apply.
    Mr. Landry. Who had the problem with the eagle?
    Ms. Reilly. I did.
    Mr. Landry. You understand? Look, you all can be nice and 
sugarcoat this over here, or you can just say it as it is, and 
that is we are having a problem with uncertainty in any 
industry. And I think it is fair to say that regardless of what 
industry, whether it is the solar, or the wind, or the oil and 
gas industry, or the nuclear industry, we should be out here, 
this Federal Government should be out here, getting the message 
that we need to create certainty in all of the industries. It 
is not fair for us to create certainty in your wind industry 
and solve the problem of the eagles for you to build your wind 
farm, when there may be a snail that is inhibiting the 
Chairman's ability to build a hydrodam.
    What I am saying is everyone has to be on the same level 
playing field, and that is what I am trying to get you all to 
tell me is whether you support everyone being on the same 
playing field or not in the permitting and the judicial 
process.
    Mr. Resch. Before I came to the solar industry, I worked in 
the natural gas industry, a lot of time on lands issues, very 
similar kinds of issues that the solar industry is facing 
today. So I can say pretty clearly that both industries would 
be able to substantially lower costs to the consumer for their 
products if you had a streamlined regulatory and permitting 
process, yes.
    Mr. DeRosa. Yes. I agree. There needs to be common 
standards, certainty and predictability.
    Dr. Piszczalski. As part of my work, I see what other 
countries are doing. So for instance, the Netherlands does have 
a much more standardized permitting process for shopping 
centers, everything. At the same time, we have to have the guts 
to be able to kill these projects too. Right now we let them 
drag on and just whack at them with a dull knife. If it is a 
bad project, I think we need to kill it as well.
    The Chairman. Answer real quickly. We have a vote going. So 
answer real quickly. We want to get these questions in before 
the vote ends.
    Go ahead, Mr. Reicher.
    Mr. Reicher. Certainty certainly helps, but I think we have 
to strike the right balance between the speed of development 
and other key issues like environmental protection.
    The Chairman. The time of the gentleman has expired.
    Mr. Holt, I just want to advise Members that there is a 
vote on the Floor right now. We will try to get these questions 
in as quickly as we can.
    Mr. Holt, you are recognized for 5 minutes.
    Mr. Holt. Thank you.
    Of course, there is much to be said about--and not enough 
time to say it--about the cuts in the research and development, 
the cuts in the DOI budget, that will affect permitting, adding 
loopholes for Big Oil while making it harder for the 
alternatives.
    Mr. Roberts, I wanted to talk to you a little bit about tax 
policy. We deployed something on the order of 10,000 megawatts 
of wind a couple of years ago; and then less, about 7,500 the 
following year; and then last year it was less, down to about 
5,000. It seems to me there is a relationship between the 
number of years left on the tax credits and the number of 
megawatts we are able to deploy. Do you see a connection there?
    Mr. Roberts. Again, it is all about long-term uncertainty, 
and it is extraordinarily difficult on the manufacturing side. 
We have had great success bringing over 400 manufacturers just 
for wind alone into this country. And lack of long-term stable 
policy----
    Mr. Holt. Thank you.
    It is worth pointing out that in 2005, the Congress, we 
passed a law regularizing the regulatory guidelines, and they 
were not implemented by the last administration. So following 
Mr. Landry's comments, I would like to point that out.
    We should be talking about jobs here. Let me ask Mr. 
Roberts and Mr. Resch, how many jobs today in your industries--
defined broadly, how many jobs are associated with the projects 
that you think are reasonably on line or could move ahead 
promptly? And need we compare this with the Big Oil companies 
that, despite hundreds of billions of dollars of profit, 
actually are employing 10,000 fewer people?
    Mr. Resch. I will give it a shot. It is a little bit tricky 
because the policy we are talking about really affects the 
entire industry regardless of whether you are distributed 
generation or----
    Mr. Holt. OK. How many jobs today in the industry?
    Mr. Resch. We have about 100,000 jobs. We did a census this 
time last year.
    Mr. Holt. OK. And define reasonable projects some way or 
another.
    Mr. Resch. If we look at the utility-scale projects that we 
consider reasonable, there is about 25,000 megawatts of those 
projects. About 20,000 new jobs will be created by those 
projects on site at the facilities. And then you have all the 
secondary jobs, manufacturing, around them.
    Mr. Holt. Mr. Roberts?
    Mr. Roberts. In a study by the previous Administration, it 
was estimated that if we hit our 20 percent goals on wind, that 
there would be close to 400,000 to 500,000 new jobs. So the 
question, I think, ultimately is how do we continue to build 
off of the success? Right now we have 75,000 jobs in our 
industry.
    Mr. Holt. Mr. Reicher, you spoke about research and 
development and some of the cuts in store there in a rather 
small percentage of both revenues or--by any measure, the small 
investment in research and development. What kinds of 
innovations in wind capture and energy transmission might be in 
store there, and what would be a reasonable investment in 
research and development, private sector, public sector?
    Mr. Reicher. In terms of technologies, Mr. Holt, there is 
an extraordinary array of opportunities with wind turbines, 
moving from turbines that use gears to turbines that don't use 
gears, to so-called direct-drive wind turbines that would 
improve the efficiency, lower costs, lower the need for 
service. So that is one thing. Offshore wind turbines, we heard 
earlier, lots of revolutionary things can be done to build 
those better, cheaper, faster than we do today.
    In terms of funding, I am just floored that we are spending 
roughly one-tenth of what we were in 1980 in the energy R&D 
area. We were at 25 percent of Federal R&D spending in 1980. We 
are at a tenth of that today.
    Mr. Holt. Let me get a quick question in, if I may, for Mr. 
Lanard. Does the government have a role to do a better job in 
characterizing the offshore wind out there, or will private 
industry be able to do it?
    Mr. Lanard. Congressman, I listened to your question to the 
last session on this as well, and I think that the industry can 
do it. There are still some proprietary techniques that the 
industries are using for competitive advantage, so right now 
our recommendation would be to at least leave that to the 
developers. There is plenty for the Federal Government to do 
with the permitting process.
    Mr. Holt. Thank you, Mr. Chairman.
    The Chairman. The time of the gentleman has expired.
    Mr. Gosar is recognized for 5 minutes.
    Dr. Gosar. I am going to try to keep this brief, and I hope 
you would keep your answers brief. I am a businessman; I am a 
dentist. I am also from Flagstaff, so I have seen innovative 
industries. Motor Excellence is one reinventing how we look at 
electric engines, and Southwest Wind Power, all at our back 
door, all in our backyard and garages. So the business model I 
have got to concentrate, I have heard the complementary aspects 
from the Democratic side talking about lack of funding.
    Let us go back to the business model. Real quickly, in a 
percentage of your budgets, how much goes to administrative 
aspects and judicial aspects within your businesses toward 
permitting?
    Let me give you a real quick question or analogy. The Army 
Corps of Engineers gives the Flagstaff city a grant of $3 
million, yet 60 percent of that is lost in administration. I 
want to make sure we are talking efficiency here.
    So how much money out of your budgets goes to the 
permitting process having to deal with the justice--and, oh, by 
the way, I also want you to talk to me also about how much 
money or have any of you had to deal with lawsuits from equal 
access to justice accounts? So give me a number.
    Mr. Roberts. I am not aware specifically industrywide 
exactly that number. Unfortunately, it is relevant to us, and 
it does seem to be increasing in a lot of projects.
    Dr. Gosar. Would you say it is 50 or 60 percent?
    Mr. Roberts. I don't think it is that high.
    Dr. Gosar. Really. OK. 
    Ms. Reilly. I don't have a number that I can give you, but 
it is a significant part of the development costs, and quite a 
lot of what our company does is development and construction. 
But in the development phase of a project, a large part of the 
spend is focused on permitting.
    Mr. Gordon. Mr. Gosar, the Massachusetts Bar Association 
has voted me client of the year for the last 10 years in a row. 
I would say that over 70 percent of our investment in the Cape 
Wind project, which I mentioned before, has gone to permitting 
and judicial. But here is the saddest part of it all: The 
judicial is driven by basically one opponent. And although the 
project has the support of over 86 percent of Massachusetts 
citizens, the national, local, regional environmental 
organizations, labor, health advocates, the Massachusetts 
Legislature, the Patrick Administration, the congressional 
delegation, one small group can tie you up in knots for many 
years.
    Dr. Gosar. Thank you.
    Mr. Lanard. I don't want to contradict my colleague here, 
the client of the year, so I will just pass. I agree with him.
    Mr. Resch. We represent large-scale and small-scale solar, 
and I think that the biggest problem is not necessarily the 
percentage, but how it becomes a fundamental barrier for small 
businesses to enter in and actually have a business, where you 
can't spend the $10 million or the $20 million to get from 
concept to contract. And that, I think, is a huge barrier for 
frankly what is the backbone of the American economy, small 
business.
    Mr. DeRosa. Representative Gosar, I will give you some 
numbers. First of all, we have a small project in your 
district. But these larger projects, utility scale, we might 
spend $20 million in the development of those projects, and I 
would say roughly $5 million of that goes to the permitting 
process.
    Dr. Piszczalski. I think that it is difficult to put your 
finger on the figure. For instance, if there is a delay that 
can have the company not hit its contracted delivery date of 
the power, and hit penalties there, because the utility doesn't 
get the power when they expect it. But to give you one number, 
for instance, SunRun of San Francisco spends 33 percent of 
their costs on permitting.
    Mr. Reicher. I am going to take a different view. There are 
development costs in a project, and there are finance costs. I 
was in the project finance business for a number of years. You 
can face a significant percentage of development costs for 
permitting. The big costs in a project, the vast proportion of 
costs, are in the project finance, the equity and the debt. We 
just heard 5 of 20 million, but this could be a solar project 
that costs hundreds of millions to ultimately bill.
    You have to be careful when we say that it is a high 
percentage. It could be a decently high percentage of the 
small, relatively small, development costs. It will be a very 
small percentage of the total project costs.
    Dr. Gosar. However, each time that you have a delay, that 
is running money.
    Mr. Reicher. No doubt. But, again, let us be careful here. 
When you are talking about these projects that are measured in 
hundreds of millions and billions of dollars, permitting costs 
are a very small piece of that.
    Dr. Gosar. When you start looking at the processes in my 
district, when we are talking about a NEPA process now going on 
to 6 years, and we are looking at these lawsuits, we got 
projects on the Native Americans that they go through another 
step. They go through the BIA, which is another hurdle. How 
absurd is this? Some of these projects will never, ever see 
fruition because of the agencies.
    Thank you.
    Mr. Reicher. Those absolutely need to be fixed. No doubt. I 
just want to correct the math.
    The Chairman. The time of the gentleman has expired.
    Unfortunately, we are going to have to break. We only have 
2 minutes on this vote, and we have two Members that want to 
ask questions. So we only have one vote. We will recess so the 
Members can go over and vote and come back. Let us try to set a 
target time of 1:20 to try to reconvene.
    The Committee stands in recess subject to the call of the 
Chair, which we hope will be around 1:20.
    [Recess.]
    Mr. Lamborn. [presiding.] The Committee will come back to 
order, please.
    Thank you for your patience while we took a vote recently. 
I will be filling in as Chairman now for the remainder of this 
hearing. Thank you for being here today. I know a couple have 
had to get to the airport. Thank you also for your indulgence. 
Because of the meeting at the White House, which wasn't 
anticipated until maybe even yesterday, that pushed everything 
back for our schedule today. So sorry for any inconvenience, 
but we appreciate your finishing up the hearing.
    I believe the next person in line to ask questions is 
Representative DeFazio of Oregon.
    Mr. DeFazio. Thank you, Mr. Chairman.
    For Mr. Roberts with AWEA, the AWEA sent out a press 
release on May 17th that refers to nitrogen levels in the 
Columbia. The controversy is that we have perhaps what one can 
say is too much of a good thing, too much wind, too much hydro. 
BPA has curtailed as much thermal as they can curtail and is at 
this point having to curtail wind, and the wind energy is upset 
because they--even though their customers still get their 
electricity, as you know, you don't get your subsidies through 
the tax system.
    So, you are purporting to say that we could spill more 
water, depending upon Save Our Wild Salmon. And I am a bit 
curious, are you an attorney?
    Mr. Roberts. No, Congressman, I am not.
    Mr. DeFazio. All right, you are not an attorney. Good, 
because I am not either. So we are off to a good start.
    But the point here is that the judge, who is both an 
attorney and a Federal judge and lord and master, has said EPA 
must comply with the Washington State standards. That judge has 
ruled that. Save Our Wild Salmon doesn't like that, and, you 
know, if we followed the lead of Save Our Salmon, we would kind 
of incur the wrath of the judge. So I would suggest that you 
might look for other practical ways of addressing this issue. 
But that is not one, given Judge Redden's position on this 
issue, which is quite firm, that we cannot increase the 
dissolved gas levels.
    So since spill is not possible, I guess I would like to 
ask, the implication here is that--I mean, first off, it seems 
to be--as I said, it is not preventable, but second, are there 
things we could do so that you could continue to produce and 
get your tax subsidies while we have high-water years? And I 
think, yes, there are a couple of things.
    One would be improved transmission. BPA is looking at 
improving the DC line. It would be phenomenally expensive. 
Would the wind energy producers be willing to share in the cost 
of improving transmission if they could be given more assurance 
that they could transmit their power and get their tax subsidy 
during periods of high water?
    Mr. Roberts. Congressman, on the nitrogen levels, I agree 
with you that this is a very thorny issue.
    Mr. DeFazio. Look, we are done with nitrogen levels. I 
mean, the judge has ruled. The judge has ruled. I agreed with a 
lot of what the judge has done, as has Doc Hastings, but that 
is where we are at. So let us get on to the other issue.
    If we could look at other ways of allowing you to continue 
to produce electricity so you can get your subsidies--even 
though your customers are always held harmless in this 
condition, but so you could continue to get your subsidies--in 
order to get those subsidies, would you be willing to pay some 
of the costs of upgrading transmission to your customers in 
California?
    Mr. Roberts. Congressman, of course we would. I mean, to 
make a more flexible system. One point I do want to disagree 
just slightly is we have contracts, and those contract 
obligations potentially will not be met. It is more than 
subsidies.
    Mr. DeFazio. Well, your obligations are met in that these 
people are getting their power. California has some very 
perverse rules regarding what is renewable and what isn't, and 
they don't seem to like hydro, so therefore these people aren't 
meeting their renewable energy requirements. I would say that 
that is a problem you have with the State of California and not 
with the Northwest region.
    I mean, the bottom line for me is our ratepayers are not 
going to subsidize you since taxpayers already are, and if you 
want to bump us off the system somehow, that is a problem and a 
concern. I represent the Northwest, I represent Northwest 
ratepayers, and we are looking for a way out of this. To me, 
that would be enhanced transmission, and I am pleased to hear 
you would be willing to negotiate some additional cost to the 
industry to looking at upgrading the DC line, which might be a 
solution that works for both. That way, other ratepayers could 
avoid that part of the cost, could benefit you, and then your 
customers could still get their electrons, which apparently are 
labeled with a W as opposed to an H down there in California so 
that they can meet their obligations for the State. But I think 
the State might sort of rethink some of their bizarre 
rulemaking down there.
    Thank you, Mr. Chairman.
    Mr. Lamborn. Thank you.
    Now Mr. Duncan of South Carolina.
    Mr. Duncan. Thank you, Mr. Chairman. I appreciate the 
Chairman having this hearing.
    The first time I saw wind power was over in Germany. I was 
fascinated with the windmills. Then I was out in the Chairman's 
hometown, Pasco, Washington, and saw some windmills out there, 
and actually were able to drive up and stand right under them, 
and sort of looking into the wind industry at the Hanover trade 
fair in Germany as well. So I appreciate the industry being 
here to talk with us about this.
    You know, sitting on this Committee, I can tell you, most 
of us are all about a complete and comprehensive energy policy 
for this country, which includes renewables of wind, solar, 
hydrogen, algae production for fuel. We just saw the Blue 
Angels, I believe, fly on algae jet fuel. So we will continue 
down that comprehensive energy policy, but we cannot ignore the 
fossil fuels, the hydrocarbons and also nuclear power. So I 
want to make that statement.
    But what we see out of this Administration is them saying 
one thing and doing something completely different; saying that 
they are all about renewables, about increasing opportunities 
there, but then they tie your hands with the regulations, and 
they tie your hands with areas that they are going to allow 
some of this wind farms or solar fields to be implemented.
    Last week, Mr. Chairman, we discussed in the Subcommittee 
the Fish and Wildlife Service and the amount of land they are 
wanting to continue to buy, and they can't maintain what they 
have now. They are asking for more money. It was very obvious 
they can't maintain the new structures that were being built 
with stimulus money.
    Looking at this map, and thinking about the Western States 
where the solar possibilities are, and thinking about how much 
Federal land is owned in Utah and Arizona and New Mexico, and 
wondering how much in this darkest circle here could possibly 
be used for solar power. It is ungodly, the amount the Federal 
Government owns. I know the Western Caucus has been talking 
about this, trying to reverse that trend and put some of that 
land back in private hands.
    Another Committee hearing we had, Mr. Chairman, we talked 
about the secretarial order that Secretary Salazar, I think, 
signed in December to expedite the designation of wilderness 
areas from wilderness study areas. Only Congress has the 
ability, I believe, to designate wilderness area, but the 
Bureau of Land Management is implementing what the Secretary, 
their boss, told them to do.
    So we are having properties being taken off the table 
designated as wilderness areas, and once they are designated as 
wilderness areas--and I have been to the Bob Marshall 
Wilderness Area in Montana. I know what you can and cannot do 
there. You can hike or go on horseback, and the only other 
means of transportation going in there, hiking and horseback. 
You take everything in that you need, and you pack it all back 
out. There are no telephone lines, no power lines, no cell 
towers, no roads, no bridges. And so once these properties are 
designated as wilderness areas, they are off the table for 
good, and you won't be able to put a wind farm or a solar field 
there at all.
    So, anyway, I want to change the line of questioning here 
and tell you from South Carolina, we might have a little wind 
off our coast. There is one little area off Georgetown that 
might be a possibility. And the reason that is the only 
possibility is that is the closest area to the grid.
    Having access to the transmission lines are one of the 
biggest obstacles, I think, to wind power in this country. You 
can simply ask T. Boone Pickens, who was running down that 
track and realized that was the number one obstacle. It would 
be the biggest cost hurdle for him in developing solar. Then 
you had the fuel prices change. I think that helped out a 
little bit, or stymied him a little bit.
    So the questions I have, first off, is what do we need to 
do to increase access to the grid? Is that an issue? Because I 
haven't heard it, and I haven't been sitting here the whole 
time.
    Then the second thing I want to ask is about the golden 
eagles. I would like to find out from Mr. Roberts, how many 
golden eagles have been killed in the last 20 years? I am going 
to ask you that one first because that is an easy one.
    Mr. Roberts. Congressman, I defer this to Ms. Reilly, 
because she has been working on that issue.
    Ms. Reilly. Sir, we recently have a report on the 
mortalities with the golden eagles, and if you look at the 
mortality rate of eagles killed by human sources, the wind 
industry accounts for less than 1 percent. In the last 24 
years, 24 years, we calculate about 12.
    Mr. Duncan. When you say less than 1 percent, is that from 
wind, or is that from all human sources?
    Ms. Reilly. No. The wind industry, modern wind turbines 
account for less than 1 percent of mortalities of eagles caused 
by human causes, like buildings or traffic.
    Mr. Duncan. We are going to stymie a whole industry over 
less than 1 percent of the man-made kills, which I think are 5 
or 6 in the last 20 years. It hasn't been that many.
    So I know I am out of time, Mr. Chairman. If we are going 
to have a second round of questioning, or I can continue.
    Mr. Lamborn. First let us take Representative Napolitano 
from California, and then we will see what the witnesses want 
to do.
    Ms. Napolitano. Thank you, Mr. Chairman. Am I next?
    Mr. Lamborn. Yes, I meant to recognize you. Please 
continue.
    Ms. Napolitano. Thank you, Mr. Chair.
    I have a great interest in wind, but more than that in 
solar, photovoltaic production, and the questions that I have 
are going to be mostly related to that, although I have one 
specific one to the Federal Advisory Committee guidelines.
    The guidelines used are significant, the adverse impacts or 
effects, contrasted with the February 2011 guidelines that use 
merely adverse impacts. Projects that pose low risk to wildlife 
with potential insignificant adverse impacts thus would require 
the same level of assessment and efforts as higher-risk 
projects, using significant adverse impact as a threshold, well 
established under both the NEPA and ESA.
    Could you indicate, any of you, what your comment is on 
that?
    Mr. Roberts. Yes. Congresswoman, the issue is that----
    Ms. Napolitano. Now, I have 5 minutes, so please be very, 
very precise.
    Mr. Roberts. The industry worked with advocates and 
stakeholders on creating a process called the Federal Advisory 
Committee. It started with the last Administration and was 
accepted by this Administration. These rules changed that 
process. What this does is--one of the biggest problems is the 
proportionality thing in Utah. A site that we all know is not a 
problem we have to do the same amount of research on.
    Ms. Napolitano. I have other questions, sir. Thank you.
    Anybody else, real quickly?
    No. OK.
    I want to focus a little bit more on the Native American 
issue that I have a great concern about, because none of you 
talk about placing on Native American land any of the wind or 
solar. I am involved with two organizations, IBW and NECA, that 
are doing this and California tribes. How would that affect 
what you do, or how can we continue to push forward? Because 
the budget in the BIA and the operation of Indian programs is 
dismal, to say the least, to be able to help them.
    This would build on site many factories of solar panels, 
training Native Americans in IBW, the electrical engineers, to 
become engineers. So you produce not only training, but job 
programs and economy. Is anybody looking at that?
    Dr. Piszczalski. I could comment a little. Doing power 
projects on tribal lands is even more difficult than on public 
lands that are nontribal. So that certainly has been a major 
holdup.
    Ms. Napolitano. I would like to talk to you about that, 
sir, because we are trying to get through with Secretary 
Salazar in the last year to develop some kind of guidelines to 
expedite these things.
    Dr. Piszczalski. OK. I could talk to you off line on that.
    Mr. DeRosa. If I could speak to that, we have some 
firsthand experience with that, and some tribal land in the 
Southwest is excellent solar land. And First Solar, we are 
working with tribal entities--it is not public, so I can't say 
with whom, but we are working hard on that.
    Ms. Napolitano. I would love to talk with you about it, 
sir.
    Then are you doing any partnering with R&D universities and 
then universities that are doing a lot of the research to help 
with explanations and comments on some of the projects that you 
have been working on, whether solar or wind, or geothermal for 
that manner? Nobody?
    Mr. DeRosa. We work on the local project level. Like in 
southern California we work with some of the community colleges 
on education and job training.
    Ms. Napolitano. No, I am talking specifically on some of 
the research they are doing on water and things that they are 
finding out about new technology, and even such dumb things as 
the elimination of the quagga mussel.
    Mr. DeRosa. I would have to look into that one.
    Mrs. Napolitano. Anybody else?
    Mr. Resch. There are certainly partnerships between the 
solar industry and a variety of different universities, Arizona 
State in particular is one that has really stepped forward and 
brought together their business school, their law school, their 
engineering departments and created some very robust 
decisionmaking programs. And their Decision Theater at ASU is 
really world class in helping identify multiple issues that 
would prevent solar----
    Mrs. Napolitano. Well, the Department of the Interior finds 
some 30-some universities to do R&D, and we are not asking them 
to focus on specific issues. So maybe that is when we begin to 
throw some ideas their way.
    Then the last question I have is public-private 
partnerships, setting up a fund or being able to work and being 
able to bring those folks in, especially those from Wall 
Street, any others that are interested in a sure thing, because 
this is a technology that is evolved already. It is just 
assistance with the funding. The same thing in transportation. 
We find that we don't have the ability to go out and do it 
ourselves, or the locals don't. So public-private partnerships 
are going to be critical.
    Has anybody begun to ask who, where, when and how of being 
able to formulate bringing them in?
    Mr. Lamborn. [presiding.] Can anyone answer that in 25 
words or less?
    Mrs. Napolitano. Or in writing, for that matter.
    Mr. Reicher. I would simply say that smart developers of 
renewable energy projects, solar and wind, increasingly know to 
go where there are big resources available and where there is 
support at the public level.
    Mrs. Napolitano. It is like the university. They do a lot 
of research, and only they know--they put it on their Website, 
but nobody knows what the Website is. So we have to be a little 
more transparent in being able to get the information so people 
can use it, really can get to it.
    Mr. Lamborn. All right. Thank you.
    And rather than ask your indulgence for a second round of 
questions, even though there are only a handful of people here, 
I am going to just wrap up this round, and that will be it. I 
am the last person, but I am going to give my time and yield to 
the gentleman from South Carolina, who will finish us up.
    Mr. Duncan. Thank you, Mr. Chairman. I just want to finish 
the line of questioning about the transmission before I ask my 
final question. And I guess the Wind Association would be the 
person to ask.
    A transmission is an area that you don't hear that much 
about. You hear about the sound of the windmills, and the 
flash, and the killing of the eagles and that sort of thing. 
But I understand transmission lines being a big obstacle. Can 
you touch on that for me and what we are doing about that?
    Mr. Roberts. Yes. It is a big obstacle. It is very 
important to our industry to deal with. On the public lands we 
can do some more streamlining, and we really encourage the 
Federal agencies to work with the regulatory commissions and 
work with the legislators to help us make siting of 
transmission faster and easier. And that is some work that can 
be done.
    On a national level, of course, we need to work with the 
FERC, with the regional planning groups, et cetera, to create a 
strategy to reinvest in our transmission system, and we have a 
long way to go there. It has been woefully invested in for the 
past 50 years, and we have some catching up to do. So that is a 
high priority for the industry and something that leadership 
from this Committee and from this Congress would be greatly 
appreciated.
    Mr. Duncan. Is that a big hang-up with offshore areas, too, 
where you are limited?
    Mr. Lanard. Mr. Duncan, let me just talk about the offshore 
for 1 second, if I may. Thanks.
    Congressman, we work a lot with Santee Cooper. They are 
doing some really thoughtful, progressive work on assessing 
wind resources and how to move forward in South Carolina for 
offshore wind.
    The question on transmission for us is looking at possibly 
the opportunity for an offshore back--I would defer to you, 
Dan. I think you are going to talk about that. The Atlantic 
Wind Connection is one of our members proposing a project that 
will go from northern New Jersey down to Virginia, and it could 
possibly even go further if those States demonstrate an 
interest and create the demand for offshore wind. So we do 
have--and what would be interesting there is we would be 
bringing power from the east to the west, which doesn't occur 
in the United States generally along the coast. It has always 
flowed the other way in a radial feed situation. So this type 
of transmission system improves reliability. It is much greater 
than just serving the offshore wind industry; it is serving the 
ratepayers by having a more reliable and more robust system.
    Mr. Reicher. Can I just add that when I was at Google, we 
made an investment in this Atlantic Wind Connection, the 
offshore backbone transmission line that would run from New 
Jersey to Virginia, And it is a great project, Mr. Duncan. It 
would avoid a lot of individual lines having to be built from 
each wind farm to the grid on the East Coast, and it would 
improve the efficiency of the transmission system on the East 
Coast. It would allow wind turbines to be sited further 
offshore so permitting is easier, and there would be less 
objection from residents along the coastline, and it would add 
to the security, frankly, of the East Coast grid. So it is a 
real win-win, and I think it is one of those projects that, if 
it works its way successfully through permitting, it is a great 
one to build.
    Mr. Duncan. Thank you.
    We often hear--last question--about the impacts of budget 
cuts and regulation on industry development. And so in your 
opinion, do you think budget cuts or regulation have a bigger 
impediment to renewable energy development on public lands? I 
ask each one of you there.
    Mr. Roberts. Mr. Chair, good question. I think it is a 
combination of both. I mean, if we had a simpler process and a 
more streamlined process, we could get away with less staff. 
But with the existing regulations and not change them and 
cutting staff would be very harmful to us getting our permits 
done in a timely fashion.
    Mr. Duncan. Ms. Reilly.
    Ms. Reilly. To repeat what we said earlier, we need 
efficiency in the process. And we think we can make savings if 
we have more efficiencies and people are focused on getting 
outcomes.
    The other thing I would just mention is that the industry 
has offered to help with the cost of processing permits in a 
more expeditious fashion, and we would ask that to be 
considered.
    Mr. Duncan. Just the rest of you, just regulation or budget 
impacts, which do you think?
    Mr. Lanard. Budget impacts for offshore wind, and the 
investment tax credit, and loan guarantees are critical for our 
industry right now.
    Mr. Resch. Absolutely, budget impacts for solar as well. We 
have great systems in place; we just need the staff to make 
sure they are administered and processed.
    Mr. DeRosa. Yeah, I agree. But we have to be careful not to 
cut off our nose to spite our face. There are laws on the 
books. If a permitting process is not done thoroughly, it just 
opens a project up to lawsuits. So in our terminology, a 
project needs to be bulletproof in its permitting effort.
    Mr. Piszczalski. I guess I would weigh in on the regulatory 
side in that it is then given too little attention.
    Mr. Reicher. I would just say healthy budgets and effective 
regulation, we need both.
    Mr. Duncan. Thank you.
    Thank you, Mr. Chairman.
    Mr. Lamborn. Thank you. And thank you, each member of the 
panel who came here to testify today. We appreciate your 
testimony. We appreciate you making yourselves available to 
answer questions. And please remember that there may be 
additional questions that members of the Committee submit to 
you in writing, and we would ask you to respond to those.
    Mr. Lamborn. And as a final piece of business, I ask 
unanimous consent to add two additional pieces of testimony to 
the record. If there is no objection, so ordered.
    Mr. Lamborn. If there is no other business, then, without 
objection, the Committee stands adjourned. Thank you.
    [Whereupon, at 1:51 p.m., the Committee was adjourned.]

    [Additional material submitted for the record follows:]

    [A letter submitted for the record by Johanna Wald, Western 
Renewable Energy Project, Natural Resources Defense Council; 
Pamela Pride Eaton, Deputy Vice President, Public Lands, The 
Wilderness Society; and Jim Lyons, Senior Director for 
Renewable Energy, Defenders of Wildlife, follows:]

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[GRAPHIC] [TIFF OMITTED] T6728.005

    [A statement submitted for the record by Chris Donavin, 
President, Energy Dense Power Systems, follows:]

    Statement submitted for the record by Chris Donavin, President, 
                       Energy Dense Power Systems

    Mr. Chairman, thank you for the opportunity to submit testimony for 
today's hearing before the House Natural Resources Committee. My name 
is Chris Donavin, and I am President of Energy Dense Power Systems 
(EDPS), a privately held company headquartered in Owings, Maryland that 
was established to develop unique battery-based power management 
product solutions. Our products have been integrated into a variety of 
applications requiring remote power across many industries, including 
the scientific, military, marine, and telecommunications industries.
    Our products are safe, rechargeable Lithium-Ion power systems that 
are lightweight, rugged, and portable. One of the most exciting 
features of our technology is the ability to store and manage input 
power from renewable sources such as solar, fuel cells and wind 
generator as well as conventional generators and the grid.
    We are currently providing our product to the Department of Defense 
to meet very specific needs for smaller, lighter, and more energy dense 
power solutions. We are also reaching out across the federal agencies 
to offer this unique product as a strategic capability to help the 
federal government generate and store power more efficiently, and to 
make better use of alternative and renewable energy sources.
    While today's hearing is focused on large scale efforts to harness 
renewable resources on federal land, I believe that it is also 
important to discuss the opportunity for the federal government to more 
broadly utilize products such as those developed by EDPS in order to 
reduce their own reliance on fossil based fuels.
About EDPS
    Energy Dense Power Systems LLC specializes in high energy density 
scalable power solutions ranging from small portable applications 
(<12OO Watt-hours) up to larger fixed installations (>25 kWatt-hours). 
Our power management technology generally is used to provide primary 
and backup energy storage, to power electronics, medical and 
telecommunications equipment, provide UPS backup as well as provide 
power to a variety of other DC and AC appliances. Our system is 
extremely scalable to accommodate almost any power requirement. In 
general, our installation base includes systems with energy densities 
between 65-200 Watt-hours per kilogram. (30-90 Watt-hours per lbs). The 
system readily accepts and manages input power from renewable sources 
including solar and wind.SE I63
    We believe that EDPS is currently the only US manufacturer of a 
patented energy dense lithium-ion, scalable power management system. In 
addition we believe EDPS is the only company currently that complies 
with the DOT-UN transport requirements for lithium ion batteries 
transportable as non-hazardous cargo.
Department of Interior Need for Portable Power
    The Department of Interior, with expansive land in remote areas, 
has a significant need for renewable and portable power. In fact, the 
Agency has posted numerous requests for proposals to provide portable 
power solutions to the Agency. In my experience, the Agency often posts 
very prescriptive and specific solicitations for portable power that 
offer limited opportunities for creative technology applications.
    For example, in November 2010, the National Park Service solicited 
bids for a renewable energy system for the Bechler Ranger Station 
(Solicitation Q1574110004). As outlined in the solicitation, EDPS has 
several products that could have fulfilled the needs of the National 
Park Service that would have been both environmentally friendly, and 
cost effective.
    Unfortunately, our product is a Lithium-Ion based system and, as a 
result, was not eligible under this solicitation. As President of EDPS, 
I reached out to the contract officer to share the features of our 
safe, rechargeable Lithium-Ion power system. Specifically, I shared the 
fact that the EDPS product would be a lighter, more cost-effective and 
more environmentally friendly alternative to the lead acid system that 
the National Park Service was soliciting. I also highlighted the 
tremendous life cycle cost savings that the Park Service would benefit 
from as well as reduced logistical costs associated with a battery 
system that is roughly half the weight of comparable lead acid systems. 
The life cycle of lithium based systems is up to 3000 charges at 80% 
DOD. That eclipses lead acids capability of roughly 300 at 50% DOD.
    We believe that the EDPS product could provide dramatic cost and 
energy benefits not only for the Bechler Ranger Station, but for any 
facility within the Department of Interior that has a need for portable 
and energy dense renewable power. We look forward to the opportunity to 
discuss our product not only with the National Park Service, but also 
with the Bureau of Land Management and other Department of Interior 
agencies. As the Department of Interior continues to examine its power 
needs, however, we do urge the Agency not to include overly 
prescriptive requirements that preclude specific technologies.
Conclusion
    One of the great challenges facing increased utilization of 
renewable power sources such as solar and wind power is the difficulty 
in capturing and storing the power. There is a nearly infinite supply 
of power that could be generate by sun and wind. But we are limited in 
our ability harness that energy, and deliver it to consumers in a cost-
effective manner.
    As the federal government discusses opportunities to dramatically 
increase the scale on which we generate this type of renewable power, 
we believe it is also important to examine the mechanisms that exist to 
distribute this power to consumers. EDPS has developed a product that 
can help both government and industry to harness and utilize renewable 
power. We stand ready to assist with this technology as our nation 
struggles to become less dependent on fossil based fuels. Thank you 
again for the opportunity to submit testimony for today's hearing. I 
look forward to continuing to work with you.

                                 
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