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



 
  THE AMERICAN ENERGY INITIATIVE, PART 2: CHINA'S ENERGY PORTFOLIO AND 
    THE IMPLICATIONS FOR JOBS AND ENERGY PRICES IN THE UNITED STATES

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



                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 4, 2011

                               __________

                           Serial No. 112-31


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov



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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    HENRY A. WAXMAN, California
  Chairman Emeritus                    Ranking Member
CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  MICHAEL F. DOYLE, Pennsylvania
MIKE ROGERS, Michigan                ANNA G. ESHOO, California
SUE MYRICK, North Carolina           ELIOT L. ENGEL, New York
  Vice Chair                         GENE GREEN, Texas
JOHN SULLIVAN, Oklahoma              DIANA DeGETTE, Colorado
TIM MURPHY, Pennsylvania             LOIS CAPPS, California
MICHAEL C. BURGESS, Texas            JAN SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
BRIAN BILBRAY, California            JAY INSLEE, Washington
CHARLIE BASS, New Hampshire          TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia                MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana             ANTHONY D. WEINER, New York
BOB LATTA, Ohio                      JIM MATHESON, Utah
CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi            JOHN BARROW, Georgia
LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
BILL CASSIDY, Louisiana              DONNA M. CHRISTENSEN, Virgin 
BRETT GUTHRIE, Kentucky              Islands
PETE OLSON, Texas
DAVID McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
MORGAN GRIFFITH, Virginia

                                 7_____

                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
JOHN SULLIVAN, Oklahoma              BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
CLIFF STEARNS, Florida               JAY INSLEE, Washington
JOHN SHIMKUS, Illinois               JIM MATHESON, Utah
MARY BONO MACK, California           JOHN D. DINGELL, Michigan
MIKE ROGERS, Michigan                EDWARD J. MARKEY, Massachusetts
BRIAN BILBRAY, California            ELIOT L. ENGEL, New York
CHARLES F. BASS, New Hampshire       GENE GREEN, Texas
MARSHA BLACKBURN, Tennessee          LOIS CAPPS, California
PHIL GINGREY, Georgia                MICHAEL F. DOYLE, Pennsylvania
STEVE SCALISE, Louisiana             CHARLES A. GONZALEZ, Texas
ROBERT E. LATTA, Ohio                HENRY A. WAXMAN, California (ex 
BRETT GUTHRIE, Kentucky                  officio)
ADAM KINZINGER, Illinois
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

                                  (ii)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Ed Whitfield, a Representative in Congress from the State of 
  Kentucky, opening statement....................................     1
    Prepared statement...........................................     3
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     5
Hon. Brian Bilbray, a Representative in Congress from the State 
  of California, opening statement...............................     6
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     7

                               Witnesses

Steven Koptis, Managing Director, Douglas-Westwood...............     9
    Prepared statement...........................................    11
Fredrick Palmer, Chairman, World Coal Association................    17
    Prepared statement...........................................    20
Deborah Seligsohn, Principal Advisor, China Climate and Energy 
  Program, World Resources Institute.............................    48
    Prepared statement...........................................    50
Mary J. Hutzler, Distinguished Senior Fellow, Institute for 
  Energy Research................................................    62
    Prepared statement...........................................    64


 THE AMERICAN ENERGY INITIATIVE, PART 2: CHINA'S ENERGY PORTFOLIO AND 
    THE IMPLICATIONS FOR JOBS AND ENERGY PRICES IN THE UNITED STATES

                              ----------                              


                         MONDAY, APRIL 4, 2011

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 3:10 p.m., in 
room 2322, Rayburn House Office Building, Hon. Ed Whitfield 
(chairman of the subcommittee) presiding.
    Present: Representatives Whitfield, Shimkus, Walden, Terry, 
Bilbray, Scalise, McKinley, Gardner, Pompeo, Griffith, Rush, 
Markey, Green, and Waxman (ex officio).
    Staff Present: Ray Baum, Senior Policy Advisor/Director of 
Coalitions; Maryam Brown, Chief Counsel, Energy and Power; 
Allison Busbee, Legislative Clerk; Garrett Golding, Legislative 
Analyst, Energy; Cory Hicks, Policy Coordinator, Energy and 
Power; Jeff Baran, Minority Senior Counsel; Phil Barnett, 
Minority Staff Director; Greg Dotson, Minority Energy and 
Environment Staff Director; Caitlin Haberman, Minority Policy 
Analyst; and Jocelyn Gutierrez, DOE Detailee.

  OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF KENTUCKY

    Mr. Whitfield. I call this hearing to order. Ranking Member 
Rush, I know, has been in Illinois and was expected to be 
delayed on his return, but we do expect him to be here soon. 
Certainly Ranking Member Waxman is here, so as I said, I will 
call this hearing to order, entitled the American Energy 
Initiative, and I would say that this is the second hearing 
that we have actually had on this topic of the American Energy 
Initiative. It will be a wide-ranging discussion of the 
domestic energy needs of our country and the impact that 
decisions in other parts of the world have on what we are 
proposing to do here.
    The dominant area focused in today's discussion is the 
rising role of China. For the past 30 years China has 
experienced a remarkable economic boom in an effort to 
modernize and assert its position in the global economy. In 
fact, the International Energy Agency recently projected that 
the world will require 40 percent more energy in the next 25 
years. Now, that is quite an increase in demand for energy. And 
I might also say that the International Energy Agency has 
called China, China, a coal-fueled economic miracle. Last year 
China became the largest energy consumer in the world.
    The economic progress in China has been made possible 
through the availability of affordable, secure, and abundant 
sources of energy. China understands the importance of 
acquiring the resources necessary to power new manufacturing 
consumers, fuel millions of new automobiles, and electrify the 
homes and businesses of the world's largest population. 
Becoming the largest energy consumer in the world has helped 
China become the U.S. chief economic competitor.
    As a result of the tremendous surge in demand, world energy 
markets have taken notice and are adjusting. China's increased 
oil demand over the past 10 years has had a major impact on 
global oil prices. Coal consumption in China has risen at a 
tremendous rate and is projected to continue on the same path 
for the foreseeable future. Nuclear renewable and alternative 
energy technologies have also taken significant steps forward 
this decade as well.
    China is playing for keeps in its quest to modernize this 
economy to become globally competitive and improve the standard 
of living for 1.3 billion citizens. To do so, it realizes the 
value in pursuing energy in all its forms. Rather than 
abandoning fossil fuels in exchange for renewable energy, China 
continues to burn coal at an astonishing rate, using 3.5 times 
more coal than the U.S. and building, last year, one new coal-
fired plant every 2 weeks with technology that exceeds our own.
    It is reported they are undergoing a safety review as a 
result of the situation in Japan. But China, my understanding, 
is continuing to build 25 nuclear plants, 25 times more than 
the U.S. is building. China leads the world in hydroelectricity 
usage. China is the second largest consumer of oil behind the 
United States, but the difference is quickly shrinking.
    During the recession, instead of billions of dollars of 
wasteful stimulus spending, the Chinese put their billions 
toward ensuring oil resources around the globe, some with our 
allies but some with countries who are not.
    With this hearing we hope to explore these issues and many 
more. If we are to win the future, as our President says, we 
must understand the role China plays in energy markets and the 
various sectors affected by it. Part of this strategy must be 
to prevent the EPA from increasing U.S. energy prices by 
regulating greenhouse gases through the Clean Air Act, and 
allow for the environmentally friendly use of our domestic 
resources such as coal, natural gas, and oil. Greenhouse gas 
regulation and policies to stop the use of domestic sources of 
fuel make the U.S. less competitive with China, not more.
    Instead, we must unleash the innovation and efficient 
allocation of resources made possible only through a free 
enterprise system in the absence of burdensome Federal 
regulations and mandates.
    On the subject of oil, as you know, there are about 85 
million barrels of oil being produced each day throughout the 
world. They are projecting by the year 2030 that China alone 
may be consuming 50 million barrels of oil. That is a lot of 
oil.
    [The prepared statement of Mr. Whitfield follows:]
    [GRAPHIC] [TIFF OMITTED] 67390.001
    
    [GRAPHIC] [TIFF OMITTED] 67390.002
    
    Mr. Whitfield. So we look forward to the testimony of our 
witnesses today. And, Mr. Rush, we are delighted to see you. We 
appreciate you coming back from Illinois. I know that you had 
some issues you were dealing with there. And if you are 
prepared at this time I would recognize you for your 
introductory remarks.

 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. I thank you, Mr. Chairman, and I thank the guests 
for being here today. Today's hearing is timely in that it 
falls on the heels of President Obama's call to increase the 
Nation's import of foreign oil by one-third in 10 years, as 
well as the President's drastic cuts forwarding Republican-
backed proposals to the Department of Energy programs such as 
the Renewable Energy Loan Guarantee program and the Office of 
Science which invests in basic energy research.
    I find it quite ironic, Mr. Chairman, that we hold this 
hearing focusing on China's energy and portfolio and 
implications for jobs and energy prices in the U.S. against the 
backdrop of my Republican colleagues' continuous calls for cuts 
of our own investment in the technologies and programs that 
would help build and strengthen our economy for the future.
    As President Obama noted in his speech last week, and I 
quote: ``We want to cut our research and development into new 
technologies. These cuts will eliminate thousands of private 
sector jobs, terminate scientists and engineers, and end 
fellowships for researchers, graduate students, and other 
talent we desperately need for the 21st century.
    ``At a moment like this, sacrificing means investment. 
Reducing our energy security makes us more dependent on oil, 
not less dependent on oil. That is not a game to win the 
future, that is a vision to keep us mired in the past.''
    As China steadily increases its own investment in clean 
energy technology, my colleagues on the other side are 
proposing drastic cuts to the very program that would help us 
compete in the 21st century.
    In one of my amendments to the Upton-Inhofe bill in the 
full committee markup, I repeatedly cited China's investment in 
clean and renewable energy technologies as yet another reason 
why the mostly Republican-passed H.R. 1 continuingresolution 
and the Upton-Inhofe bill was bad policy for this country. H.R. 
1 would drastically reduce Department of Energy loan guarantees 
for renewable energy and energy efficiency projects by billions 
of dollars.
    Upton-Inhofe would prohibit EPA from regulating greenhouse 
gases, which would in turn hinder additional research and 
development in this country for newer, cleaner energy 
technologies.
    Like President Obama articulated, many of my constituents 
also feel that we cannot afford to relinquish our leadership 
role in the area of investment in clean and renewable energy, 
not to China, not to anyone. My constituents understand that 
investing in these technologies will provide jobs and business 
opportunities here in America that can help propel our economy 
forward.
    Mr. Chairman, just weeks ago in a hearing on the Department 
of Energy's budget, Secretary Chu confirmed the importance of 
investing in clean energy and technology, and told us that the 
draconian cuts proposed by my Republican colleagues will make 
the U.S. much less competitive globally. Repeating this theme, 
just last Thursday in a report of the National Academy of 
Sciences, Secretary Chu emphasized the importance of investing 
in scientific research as being crucial for our security now as 
it was during the Cold War.
    When speaking about a race between the U.S. and China in 
investing in clean energy and technology, and how we have seen 
it ground to the Chinese, Secretary Chu said, ``Chinese leaders 
are moving aggressively, not because of environmental concerns, 
but because they see great economic potential. He went on to 
say that China, and I quote, ``has taken over the world in 
high-tech manufacturing. That is our Sputnik moment. This is 
not a threat to our national security or our mission, but our 
economic security.
    And despite some of the testimony that we may hear today, 
downplaying China's commitment to aggressively increase its 
investment in clean energy technology, I would point to the 
report just issued by the Pew Charitable Trust. The Pew report 
found that for the past 2 years China has outpaced the U.S. in 
clean energy investment.
    In 2010 China attracted $64.4 billion in clean energy 
technology, a 39 percent increase from 2009, compared to just 
$34 billion in the U.S. In fact, Pew reports that the U.S. Has 
slipped from first to third in clean energy investment in a 
span of just 3 years, ranking behind both China and Germany, 
which doubled its investment in solar installation to $41 
billion in 2010.
    Mr. Chairman, the American people will not accept us 
willingly ceding ground to other countries in this race to 
secure the future. As President Obama, Secretary Chu, and a 
host of other leaders have warned, we cannot sacrifice our 
investment in clean energy now and we expect to lead the world 
in the future.
    With that, I yield back the balance of my time.
    Mr. Whitfield. Thank you, Mr. Rush.
    At this time, Mr. Bilbray, I will recognize you for 5 
minutes.

 OPENING STATEMENT OF HON. BRIAN BILBRAY, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Bilbray. Thank you, Mr. Chairman. Mr. Chairman, I 
appreciate you holding this hearing, and especially the 
emphasis of what is going on in China, because, you know, you 
hear a lot of people saying let's invest in this or let's do 
that. Let me tell you something. If you look at the statistics 
of China, it sure looks a lot like the let's-do-it-all 
proposal. Short of the fact that they tend to have no 
commitment to expansion of solar, the fact is the Chinese are 
finding reasons to do things, rather than finding excuses not 
to do things.
    Just in their nuclear involvement commitment themselves, we 
are looking at a threefold increase. In fact, the latest data 
that we have seen is they are looking at 20 new units going in 
and nuclear power plants. We have, what, two, maybe three 
possibly. We are talking about an economy one-tenth our size. 
That is almost 100 times more commitment to nuclear than what 
we are talking about in this country.
    And let me point out that there are opportunities for us. 
Some may say, What about the safety issue? The fact is next-
generation technology, such as gas-cooled reactors, totally 
avoid the problem that we have seen in Japan and some of the 
concerns there; at the same time, addressing one of the big 
bugaboos that we talked about with nuclear, and that is the 
disposal issue. The fact is gas-cooled reactors have the 
potential to be developed very quickly, to be able to not only 
use uranium, but also to be able to use plutonium and burn up 
not only weapons-grade material, but also waste from other 
power plants. These are all technologies that we ought to be 
pushing forward now, continue to push forward, rather than 
retreating.
    Obviously from the data we seen here, Mr. Chairman, China 
is not retreating. They are not stalling. They are not putting 
moratoriums. They are going full steam ahead into a future that 
provides their citizens with cost-effective energy, and we darn 
well ought to be leading them, not following them down this 
road.
    And I yield back, Mr. Chairman.
    Mr. Whitfield. Thank you.
    The gentleman from California, Mr. Waxman, is recognized 
for 5 minutes.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Well, thank you, Mr. Chairman. Today we have an 
opportunity to dispose of some persistent myths about China and 
energy that we have heard from special interest groups for 
years. It has become almost an article of faith among those who 
oppose any efforts to cut domestic carbon pollution that China 
will never take meaningful action to cut their pollution. For 
years they have argued, Why should we take steps if China 
refuses to?
    Today we will hear that this is a myth and China is taking 
action. In its new 5-year plan, China set a target of reducing 
carbon dioxide emissions per unit of GDP by 17 percent by 2015. 
That means fewer carbon emissions for each dollar of economic 
growth. The Chinese have set a goal of getting over 11 percent 
of China's energy from non-fossil fuels by 2015. That target 
includes 70 gigawatts of new wind capacity, which is equivalent 
to over 100 coal-powered plants. China's current wind capacity 
is 41 gigawatts, and that is already the highest wind capacity 
in the world. The 5-year plan also calls for China's successful 
industrial energy efficiency program to be expanded.
    These targets are consistent with meeting China's 
commitment under the Copenhagen Accord to reduce its carbon 
intensity by 40 to 45 percent from 2005 levels by 2020. Chinese 
officials are even talking about pilot cap-and-trade programs 
and a carbon tax to reduce pollution. China has also shut down 
70 gigawatts of its most inefficient coal-fired power plants.
    Last year, investment in China's clean energy sector rose 
to over $54 billion. That made them the world's leader in 
attracting clean energy investment. The United States ranks 
just third in the world with $34 billion in clean energy 
investments. We are now behind China and Germany.
    The Chinese are now the world's largest manufacturer of 
wind turbines and they are the world's largest manufacturer of 
solar panels. Over the next decade, the global clean energy 
market is going to be worth $2.3 trillion. The Chinese know 
this and are pursuing policies that will help them compete. 
China's number one priority is jobs and economic growth. They 
know that clean energy and climate policies create jobs and 
economic opportunities.
    While China is moving forward, we are headed in reverse. 
The Republican budget cuts investments in renewable energy and 
energy efficiency by 35 percent. So we are going in the wrong 
direction. This week the House will take up legislation to 
block EPA's modest carbon pollution requirements for the 
Nation's largest polluting facilities.
    The policy being pursued in the committee is based on 
science denial, and it will be an economic debacle for our 
Nation. Money, investments, and jobs will flow to China and 
other nations that are investing for the future.
    We need to stop the partisan fear-mongering. We should 
embrace setting commonsense, cost-effective rules of the road 
for carbon pollution. Ensuring that our largest facilities are 
energy efficient is going to boost their competitiveness and 
spur innovation.
    Ambitious clean energy policies are going to produce clean 
energy jobs. China has figured it out. We need to start getting 
serious about winning these global clean energy markets.
    I look forward to hearing the testimony of our witnesses, 
especially Debbie Seligsohn from the World Resources Institute. 
She is an expert based in China and can tell us what is really 
happening on the ground there. I am pleased she is here with us 
today.
    I yield back the balance of my time.
    Mr. Whitfield. Thank you very much.
    And at this time, we will go to our panel of witnesses. We 
have with us this morning Mr. Steven Kopits who is Managing 
Director for Douglas-Westwood. We have Mr. Fred Palmer who is 
chairman of the World Coal Association. We have Ms. Deborah 
Seligsohn who is Principal Advisor, China Climate and Energy 
program, with World Resources Institute. And we have Ms. Mary 
Hutzler, Distinguished Senior Fellow, Institute for Energy 
Research.
    Once again I welcome you to the hearing. We appreciate your 
being here and look forward to your testimony.

    STATEMENTS OF STEVEN KOPITS, MANAGING DIRECTOR, DOUGLAS-
 WESTWOOD; FREDRICK PALMER, CHAIRMAN, WORLD COAL ASSOCIATION; 
DEBORAH SELIGSOHN, PRINCIPAL ADVISOR, CHINA CLIMATE AND ENERGY 
   PROGRAM, WORLD RESOURCES INSTITUTE; AND MARY J. HUTZLER, 
   DISTINGUISHED SENIOR FELLOW, INSTITUTE FOR ENERGY RESEARCH

    Mr. Whitfield. Mr. Kopits, I recognize you for 5 minutes of 
your opening statement.
    Mr. Kopits. Thank you very much.
    Mr. Whitfield. Be sure to turn your microphone on.
    Mr. Kopits. Which button is it? All right.

                   STATEMENT OF STEVEN KOPITS

    Mr. Kopits. Mr. Chairman, and members of the committee, I 
am deeply honored for the opportunity to appear here before you 
today to discuss China's oil and gas market. Our firm, Douglas-
Westwood, is a leading consultancy in market research covering 
oil field services offshore and in difficult-to-access markets 
like China and Russia, among others. I manage our New York 
offices. And I am solely responsible for any opinions expressed 
herein.
    Let's begin with China's oil demand. China consumes 10 
million barrels of oil per day on global consumption of about 
88 million barrels. China is already the second biggest 
consumer of oil in the world, as the chairman has noted.
    How will China's demand develop? The historical record 
suggests that oil demand evolves quite similarly across a range 
of countries, with demand ascending an ``S'' curve as the 
country motorizes. China entered this ``S'' curve around 2005 
and we forecast China to reach steady state consumption in a 
2025 to 2030 period. At that time, we would anticipate that 
China might have per capita oil consumption around that of 
South Korea, implying demand in excess of 50 million barrels a 
day. That contrasts to the U.S. with 19 million barrels of 
consumption today. Further, we see China surpassing U.S. 
consumption levels around 2018.
    As for China's oil supply, China's conventional oil fields 
are mature. The country currently produces around 4-1/2 million 
barrels a day and this level is anticipated to remain broadly 
stable for the rest of the decade. Like the U.S., China 
currently meets about half its needs through imports, and this 
is new.
    As late as the 1990s, China was self-reliant in oil. Today 
it must be active in global markets to secure domestic needs. 
Indeed it has to obtain about an additional 1 million barrels 
per day each year just to keep up with the demand, and the 
situation will deteriorate markedly in the coming decade. By 
2020 China's dependence on foreign oil may be as much as 80 
percent versus an anticipated 40 percent for the U.S. China's 
vulnerability is a cause for concern for that country's 
policymakers.
    Turning to natural gas. China consumed 3.9 trillion cubic 
feet of natural gas in 2010. The U.S. consumes six times as 
much. China's per capita consumption is even lower, about 1/
26th of U.S. As a consequence, there is considerable scope for 
rapid consumption growth of natural gas in China well past 
2030. China's natural gas demand surged 22 percent last year 
and growth has averaged nearly 15 percent over the last decade 
annually. We anticipate this pace to continue. This would imply 
demand doubling to 2015 and nearly quadrupling from current 
levels to 2020.
    China's natural gas production has tripled in the last 
decade from 1 trillion cubic feet in 2000 to 3.3 trillion cubic 
feet in 2010, a growth rate over 13 percent per annum. We 
project this to double to 6 trillion cubic feet in 2015 and 
nearly triple to 8.6 trillion cubic feet in 2020, implying a 10 
percent growth rate for the balance of the decade.
    Coal bed methane and shale gas are hoped each to contribute 
5 to 10 percent of the natural gas supply in 10 years' time.
    As late as 2006, China was self-sufficient in natural gas; 
however, the country has been a net importer since then, with 
imports soaring to 550 billion cubic feet in 2010. Our forecast 
calls for imports of 1.5 trillion cubic feet by 2015, rising to 
4 trillion cubic feet by 2020, representing an import 
dependence of more than 30 percent by that time.
    Indeed by the end of decade, China may import more than 
total consumption today. China has three leading options for 
the import of natural gas: Central Asia, Russia, and LNG 
shipments. Overall, China's natural gas import prospects look 
promising from a diversity of sources, each with substantial 
supply capacity.
    The Chinese oil and gas sector comprises essentially of 
three companies: Sinopec, PetroChina, and CNOOC. Sinopec and 
PetroChina operate primarily in onshore fields and have 
refining and distribution operations. CNOOC specializes in 
offshore oil and gas exploration and production, although it is 
has diversified recently. All three Chinese majors are medium- 
to large-size oil companies and have a combined market 
capitalization of about $450 billion. That is about the market 
cap of Exxon. PetroChina, the largest of the three, has about 
the same capitalization as General Electric. The shares of all 
three companies are listed on the New York Stock Exchange and 
the companies provide standard disclosures in English, as 
required by the SEC.
    Our analysis suggests that Chinese oil majors act much like 
other companies to maximize revenues and profits to gain 
exposure to growth plays like shale gas; to partner with other 
oil companies to obtain capital and technical knowledge; and to 
diversify their portfolios to manage risk. We believe they do 
not represent the material risk on the supply side, but China's 
oil demand will likely keep pressures on oil prices for the 
indefinite future.
    I thank you for your attention and will try to answer any 
questions you may have.
    [The prepared statement of Mr. Kopits follows:]
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    Mr. Whitfield. Thank you, Mr. Kopits.
    Mr. Palmer, you are recognized for 5 minutes.

                  STATEMENT OF FREDRICK PALMER

    Mr. Palmer. Mr. Chairman, thank you very much. It is a 
delight for me to be here; it is a high honor and deep 
privilege.
    I am here to talk to you today about the growing use of 
coal around the world, the second Industrial Revolution now 
underway in the developing world, particularly in Asia, and led 
by China.
    I am chairman of the World Coal Association, the global 
voice of coal for international producers from the United 
States, Australia, South Africa, India, China, Europe and 
Indonesia.
    Shenhua, a state-owned enterprise in the People's Republic 
of China and largest coal producer in the world, recently 
joined World Coal Association. Coal-India is also a member. 
World Coal Association regularly collaborates with trade 
associations, with coal freight associations around the world, 
including the China National Coal Association. And I am happy 
to say we will have our first board meeting ever in Beijing 
this June.
    I present this testimony today in my role as chairman of 
the World Coal Association. I am also Senior Vice President of 
Government Relations at Peabody Energy, the world's largest 
private sector coal company, and a global leader in clean coal 
solutions, as an international coal producer in the United 
States and Australia.
    America and other mature economies have a unique 
opportunity to create a 21st century energy policy through 21st 
century coal technology, following the lead of China-led Asia, 
through the installation of state-of-the-art low carbon coal 
technologies and what we call ``green coal.''
    Energy is as essential as food, shelter, and clothing. The 
United States has linked life expectancy and income with per 
capita energy use. The World Resources Institute found that 
with every 10-fold increase in energy use, individuals lived 10 
years longer. Half the world population, 3.6 billion people, 
lack adequate access to modern power. As many of you know, 
energy disparities are growing in your own districts. Studies 
show that today's middle-class Americans pay a disproportionate 
amount of their after-tax income on energy, and it is due, with 
respect, to what we believe is a flawed energy policy in the 
United States.
    This energy inequality will only escalate as populations 
multiply and electricity use increases. The world is in the 
early stages of global hypergrowth and energy demand, as 
nations such as China, India and Indonesia industrialize and 
urbanize. The International Energy Agency projects that nations 
will require 40 percent more energy in the next quarter 
century.
    We believe coal is the only fuel with the low cost and 
large scale to satisfy this long-term need. Alternatives to 
coal are limited, strained, or centered in political 
flashpoints. Coal was widely disbursed, broadly available, 
easily transported, energy dense, and very affordable. In the 
U.S. the delivered cost of coal averages just one-half to one-
sixth that of more volatile natural gas. Oil hovers around $100 
a barrel and new nuclear construction brings unique risk, both 
physical and financial.
    By contrast, the world has trillions of tons of coal 
resources. That is why coal has been the fastest growing fuel 
in the world for the last decade, reaching about6.5 billion 
tons of coal consumption per year in 2010. Coal was the 
catalyst for economic growth, in the last 20 years has almost 
doubled with an increase of about 3 billion tons of coal per 
year. We know it can and will be a low-cost, low-carbon path 
for our environmental objectives.
    Of course we have choices in the United States. We can 
pursue complex and punitive regulations through the EPA with 
unintended consequences, or we can build advanced coal 
technologies that are available, affordable, and deployable 
today.
    Coal technologies in our country have always met 
environmental objectives. In the U.S., electricity from coal 
and GDP have more than tripled since 1970. At the same time, 
criteria emissions per megawatt hour declined more than 80 
percent according to the EPA. Today's efficient plants receive 
a CO2 rate that is typically 15 percent better than 
the existing fleet and as much as 40 percent better than the 
older plants.
    The world's leading economies have taken notice, and China 
models itself and patterns itself in their infrastructure and 
energy development after the United States. There are some 430 
gigawatts of supercritical and ultra-supercritical power plants 
in operation or under construction worldwide.
    China's coal consumption in the last 10 years has more than 
doubled to more than 3.5 billion tons in 2011, as the chairman 
noted. China alone is home to 36 percent of the world's most 
advanced coal fleet, and the growth of goal use will approach 
4.5 billion tons per year by 2015. That is up from about a 
billion tons from here in 5 years, or one U.S.
    China is investing in clean energy technologies on an 
unprecedented scale, as you will hear. And Peabody is part of 
this revolution advancing the next generation of clean coal 
technologies. Chief among these is the GreenGen project, near 
Tianjin, China, one of the world's largest near zero-emission 
initiatives, and Peabody is a partner in that. Peabody in fact 
is the only nonstate-owned enterprise partner in Tianjin.
    We also are advancing green coal partnerships on three 
continents. While the developing world is investing in energy 
innovation, the U.S. Is still debating options. My question to 
the subcommittee is simple and respectful: What are we waiting 
for?
    Advanced coal in the U.S. will combat energy poverty, and 
fuel an industrial rebirth. The U.S. should set a national goal 
to ensure at least half of all new generation is fueled by 
coal, and next-generation clean coal technologies are 
demonstrated and commercialized. These technologies should 
include coal for electricity generation, coal for natural gas, 
coal for liquids, coal for chemicals, and CO2 from 
combustion or gasification of coal, for a robust and enhanced 
oil recovery program primarily for the Gulf States and Rocky 
Mountain west. NTL says we can do 2-1/2 million barrels per 
day. This is the path for the People's Republic of China. It 
should be our path as well.
    Mr. Chairman, we appreciate the opportunity to appear in 
front of you today, belive strongly that coal alone has the 
power to address energy inequality, reindustrialize our 
economy, and improve the environment. Coal is energy, and 
energy is life. Thank you.
    [The prepared statement of Mr. Palmer follows:]
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    Mr. Whitfield. Thank you.
    Ms. Seligsohn, you are recognized for 5 minutes.

                 STATEMENT OF DEBORAH SELIGSOHN

    Ms. Seligsohn. Thank you, Chairman Whitfield and members of 
the committee, for inviting me to testify here today. My name 
is Deborah Seligsohn and I am Senior Advisor to the World 
Resources Institute's Climate and Energy program based in 
Beijing. We have an active program with Chinese partners, 
working on Chinese energy policy and transformation.
    I joined WRI 3\1/2\ years ago, coming from the U.S. 
Department of State, where I was in the Foreign Service for 21 
years, with over a decade at the U.S. Mission in China, 
completing my work there as the U.S. Ambassador science 
counselor in Beijing.
    In my time in China, which began actually in 1984, I have 
seen an incredible transformation in Chinese life and Chinese 
society. Riding my bicycle through the streets of Beijing in 
1984, I was often showered in coal dust, and the city was dark, 
and the sidewalks basically rolled up by 8 o'clock at night.
    I think you all know, either from seeing China firsthand or 
from reports on television, that China and Beijing are very 
different today, with world-class subways, the largest 
intercity rapid rail transport in the world, booming 
industrialization and urbanization. This has really changed the 
perspective in China and what people want from their country, 
from their community, and from their energy policy.
    I want to present to you today three ideas that perhaps 
challenge some of the conventional wisdom about Chinese energy 
policy. The first is that the Chinese are doing what they are 
doing on energy transformation because they are concerned about 
energy security and about their economic future.
    Secondly, China's energy policy has the result of curbing 
fossil fuels over time and expanding the use of multiple 
alternative sources. And finally, China is doing this because 
they see it as a real opportunity to dominate in the new 
industrial area.
    So turning to my first point, energy security has always 
been very important to China. As a number of people have 
already noted, China is very dependent on imported oil. It has 
also depended on trying to move coal around the country, which 
can be difficult, especially in snowstorms and dealing with 
rail capacity.
    China today is less than 10 percent of the global oil 
market and they are already concerned about the impact on 
relations with other countries and on that economic impact. But 
going beyond this traditional energy security concern, China is 
now concerned about what its future economy will look like and 
sees energy policy as part of the way to drive the economy in a 
transformation from heavy industry to higher value-added, more 
knowledge-based, more service-oriented economy.
    Looking at these things by working on energy efficiency, 
through its energy intensity targets, trying to reduce the 
amount of energy use per unit GDP, and by developing its 
nonfossil energy sources of all kinds.
    If you walk around in China, no one thinks there is room 
for U.S. levels of consumption. The country is simply too dense 
and crowded. There is no room for all that energy, all those 
cars and roads. And that is why they are really looking at 
trying to create a much more efficient country for addressing 
some of these issues.
    Secondly, the way they are doing that is by really trying 
to curb fossil fuel growth and expand alternatives. They are 
promoting this transformation through policy mandates at the 
national and local level.
    Now, I am not trying to present with you a naive idea that 
China is trying to abandon coal overnight. While it is true 
that China is building coal plants now, every 2 weeks; remember 
that 4 years ago it was two plants a week. So that is a rather 
rapid change. Efficiency is improving. They have the largest 
wind capacity in the world, and they are looking to have the 
largest nuclear capacity by 2020.
    Finally, they are doing this because they see it as an 
opportunity. China missed the Industrial Revolution, it was 
late to the IT revolution, and they see this new clean energy 
revolution as one where they can be first, and they do very, 
very well.
    If you think about an area like electric vehicles, China 
see this as a solution to its imported oil dependence and a way 
to domesticate its vehicle fleet. It also sees other countries 
as fairly late to the table in this area, and a real 
opportunity.
    We have talked about its lead in wind and solar industries. 
They are looking now at whether they should perhaps be doubling 
their solar goal again in this 5-year plan. They are leading in 
carbon capture and storage for a time when they may need to 
control the carbon emissions from coal. So they are looking 
across the board.
    So in conclusion, let me suggest that while China sees 
energy policy as critical to its economic future and it wants 
to dominate this global industry, this is not a game where the 
U.S. is going to be left out, unless we choose to. This is a 
game where we can win. We are a world technology leader; we 
have the skills and the innovation hub to do it. The question 
is do we have the supporting policies to make that possible 
here at home. And that is what is really going to make a 
difference, what kind of market do we create in the United 
States? Thank you very much. Thank you.
    [The prepared statement of Ms. Seligsohn follows:]
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    Mr. Whitfield. Thank you.
    Ms. Hutzler, you are recognized for 5 minutes.

                  STATEMENT OF MARY J. HUTZLER

    Ms. Hutzler. Mr. Chairman and members of the committee, 
thank you for the opportunity to appear before you today to 
discuss China's energy portfolio. I am a senior fellow with the 
Institute for Energy Research, a nonprofit organization that 
conducts historical research and evaluates public policies and 
energy markets.
    Secretary Chu and other officials tell us the U.S. is 
losing the race with China regarding clean energy. That is a 
very narrow picture of the energy situation in China. China is 
not leading a clean energy revolution, but instead is leading a 
global race for all fuels, to fuel an economy growing at 7 to 9 
percent per year and to provide a better life for its people.
    China has a goal of producing 15 percent of its primary 
energy consumption from carbon-free energy by 2020. It expects 
to meet that goal primarily with hydroelectric and nuclear 
technologies because non-hydro renewables, mainly wind and 
solar, supply only a small amount of energy on a primary 
consumption basis. China is planning on hydroelectric power to 
supply 9 to 10 percentage points of its 15 percent goal by 
reaching a capacity level of 300 gigawatts, about 50 percent 
more than it has today.
    At the pace China is adding hydroelectric capacity, it will 
have not trouble exceeding that goal by 2020. It currently has 
twice the amount of hydroelectric capacity as the U.S. has, and 
will have almost four times as much once it reaches its goal. 
China is expecting nuclear power to contribute up to 6 
percentage points towards its 15 percent goal in 2020. China 
has 13 nuclear reactors operating, and at least 25 reactors 
under construction, half of the units in the world's 
construction pipeline.
    Official China nuclear capacity projections are 70 to 80 
gigawatts by 2020, and 400 to 500 gigawatts of nuclear by 2050. 
If China meets its 2030 target of 200 gigawatts, it will have 
twice the amount of nuclear capacity as the U.S. The U.S. has 
not issued a construction permit for a new nuclear plant since 
1979.
    China's goal for wind in 2020 is 150 gigawatts, and it is 
almost one-third of the way there. As Mr. Waxman noted, China 
now has more installed wind power than any country in the 
world, but the U.S. is a close second. Because China's wind 
capacity is not all connected to the grid, the U.S. Has 30 
percent more usable wind capacity than China.
    China has one-fourth the solar capacity of the U.S. and 
generates a mere 1/100 of a percent of its electricity from 
solar. So China does not have much solar capacity. It leads the 
world in solar cell manufacturing, exporting 95 percent of its 
production. Because manufacturing costs are lower in China, 
some U.S. solar manufacturers are moving there.
    Part of China's goal is to be self-sustaining in energy 
technology, and it is learning from U.S. experts in solar 
energy, nuclear power, and other technologies. For example, 
China has a goal to enter the global nuclear marketplace by 
2013, just a few years from now.
    China relies on coal for over 70 percent of its energy and 
over 80 percent of its electricity. The U.S. relies on coal for 
21 percent of its energy and 45 percent of its electricity. 
According to the Energy Information Administration, China will 
be heavily reliant on coal 25 years from now, generating 74 
percent of its electricity from it. With its massive coal use, 
China will be emitting more carbon dioxide emissions than any 
other country in the world, over 30 percent of the world's 
total in 2035, and twice the amount the U.S. is expected to 
emit. China passed the CO2 emissions years ago, and 
recently in energy use.
    In summary, the Chinese are not fixated solely on green 
technology. China is a on a fast track to bring on line new 
generating units of all types. Because China is endowed with a 
sizeable amount of resources, and because coal is the cheapest 
energy source in China, coal-fired generating additions will 
far outpace those of other technologies.
    Thank you. I will be happy to answer any questions.
    [The prepared statement of Ms. Hutzler follows:]
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    Mr. Whitfield. Well, thank you, Ms. Hutzler. And thank you 
all for your testimony. We appreciate it very much.
    Mr. Palmer, I believe you said world energy demands will 
increase by 40 percent by what year?
    Mr. Palmer. 2030.
    Mr. Whitfield. 2030. Now in my view, it is impossible for 
the world to have any chance of meeting its electricity demands 
without using coal anytime in the near future. Would you agree 
with that, Mr. Kopits?
    Mr. Kopits. I would indeed.
    Mr. Whitfield. Mr. Palmer?
    Mr. Palmer. As certain as the lights in this room.
    Mr. Whitfield. Ms. Seligsohn?
    Ms. Seligsohn. There are technical ways, but it seems 
unlikely that that will be the choice that people make.
    Mr. Whitfield. Ms. Hutzler?
    Ms. Hutzler. Yes, they will.
    Mr. Whitfield. OK. Now, one the things that I am concerned 
about is we all recognize with that kind of increase and demand 
we are going to have to have energy from all sources. But I 
genuinely believe that this administration is adopting a policy 
to penalize fossil fuels. That is my belief just from the 
action being taken at EPA, particularly when you consider how 
clean our air already is compared to the rest of the world. It 
looks like we are adopting a policy to penalize fossil fuel. 
And I am concerned about that because of the increased cost of 
producing electricity and for us to remain competitive in a 
global marketplace as we try to seek jobs and to grow our 
economy.
    Ms. Hutzler, we have heard a lot about China's moving 
forward, making great strides in wind power and solar power; 
but even so, my understanding is that the U.S. over the last 
few years has actually produced more wind power and solar power 
than China, particularly if it is connected to the grid. Would 
you agree with that?
    Ms. Hutzler. Yes, certainly in terms of grid-connected 
capacity, we have.
    Mr. Whitfield. With all the wind power that they are 
building, how much of it--it is my understanding like 30 
percent of it is not connected to the grid.
    Ms. Hutzler. That is my understanding also.
    Ms. Seligsohn. Can I clarify that?
    Mr. Whitfield. Sure.
    Ms. Seligsohn. Basically China doubles its wind capacity 
every year, and so it is always running behind in connecting it 
to the grid. So they were 6 months behind a couple of years 
ago, they are now about 4 months behind, so they are catching 
up. It gets connected to the grid; it just runs late.
    Mr. Whitfield. OK. Now, the thing that really disturbs me 
about their development of wind power, and I may be wrong on 
this, but it is my understanding that under the Kyoto Protocol 
there was a clean development mechanism established so that 
countries from around the world, like the U.S. and other 
countries, their taxpayers would pay into this fund and that 
other countries would be able to utilize that fund to develop 
wind power, solar power, that would not be built without that 
fund. And so China, who has one of the strongest economic 
engines out there in the world, is taking taxpayer dollars from 
Americans to build wind power and solar power in China through 
this fund. Is that correct, Ms. Hutzler, or not?
    Ms. Hutzler. Yes. My understanding is that is the way China 
started their wind program.
    Mr. Whitfield. So U.S. taxpayers are subsidizing China's 
development in wind that many people in this country are 
applauding China for doing; is that correct?
    Ms. Hutzler. That is correct in terms of them getting off 
the shelf in terms of building wind power, yes. But my 
understanding, the U.N. has recognized that they were lowering 
their subsidies and that was why they were qualifying for the 
program. And that has stopped at this point.
    Mr. Whitfield. And then I read an article, I guess just in 
the last few days, that the World Bank is going to limit 
funding for coal-fired power stations. And it says primarily 
bowing to pressure from green campaigners to radically revise 
its rules, that the World Bank is planning to restrict money 
for coal-fired power stations. Now I would like for somebody to 
explain, How are we going to meet our electricity demands 
worldwide if we are going to stop funding coal-fired plants?
    Mr. Palmer. Mr. Chairman, if I might. I think the World 
Bank ought to careful what it asks for, because there is a bank 
called the Asian Development Bank. And like everything else in 
Asia, the growth of welfare at the World Bank over time will 
become irrelevant if it gets out of the business of funding 
developing-nation fossil projects, because there will be Asian 
banks that will absolutely do that. It is absolutely in our 
interest, the World Bank's interest, to continue as a World 
Bank, to be funding these projects. The projects will 
absolutely go ahead because the demand is there, and the 
resources are there, and these international entities that have 
been created in Asia, through ASEAN and other entities will 
supplant the United States and the OECD countries in terms of 
world leadership with the developing world, no question.
    Mr. Whitfield. Well thank you, Mr. Palmer. My time has 
expired. I recognize the gentleman from Illinois for 5 minutes.
    Mr. Rush. Ms. Seligsohn, your facial expression really 
indicated that you wanted to answer the question that the 
chairman asked Ms. Hutzler and you didn't have an opportunity. 
Would you like to expound upon that?
    Ms. Seligsohn. Yes. The United States is not a party to the 
Kyoto Protocol and the clean development mechanism is under the 
Kyoto Protocol so no U.S. money goes through the clean 
development mechanism. The money basically comes from private 
investors in Kyoto party nations, like in Europe, who choose to 
get some of their emissions credits through the clean 
development mechanism by investing in countries like China or 
India, or African countries, or developing countries around the 
world.
    The other thing I wanted to clarify, the World Bank isn't 
really needed for investing in coal-fired power plants in 
China. There is plenty of commercial money for investing in new 
power plants in countries like China. Both the World Bank and 
the Asian Development Bank are quite interested in working with 
the Chinese to invest in carbon capture and storage technology, 
and those next-generation coal-fired power plants would enable 
the Chinese to produce low emissions or zero emissions coal-
fired power plants.
    So there is a lot of interest in that area among the 
international banks. But the idea of those banks is to promote 
the kinds of things that private sector banks don't promote 
already.
    Mr. Rush. I understand that you live in China or have lived 
in China for a number of years.
    Ms. Seligsohn. I have lived in China for 17 of the last 27 
years.
    Mr. Rush. And in your prepared remarks, you made an 
observation that the international partnerships with Chinese 
clean technology companies are growing rapidly. And you go on 
to say that what makes China so attractive to U.S. 
international investors is a clear policy framework that gives 
businesses the certainty that they are looking for before 
investing.
    Can you expound on this observation and talk about how the 
political climate in China, where policymakers are actually 
engaging in short- and long-term comprehensive policy 
decisions, making investments more enticing than the 
environment that we have here in the U.S. With the lack of 
congressional leadership? Does the certainty that stems from a 
clear policy framework make it easier to attract foreign 
investment or domestic investment, or both, for clean energy 
technologies in China?
    Ms. Seligsohn. Yes, sir. I think one thing that all of us 
would agree on is that building a new power plant or a refinery 
or any other kind of energy infrastructure takes a number of 
years. And so the Chinese have a 5-year planning process that 
sets out clear goals for the next 5 years in terms of 
percentages of different fuel sources and what kinds of new 
policies they might be introducing, everything from energy 
service companies to new energy efficiency guidelines. They 
also have medium- and long-term goals; they have a medium- and 
long-term research and science plan, they have energy plans. 
They also have a renewable energy law that provides clear 
guidelines as well as targets.
    So the net result of all of this is that, yes, companies 
both domestic and foreign know what the policy picture is, know 
which kinds of energy projects are going to be supported over a 
number of years.
    Of course, there is also a certain amount of change from 
year to year. One of the changes that has happened is, for 
example, in the wind area; wind has grown much more quickly 
than policymakers imagined, even 4 or 5 years ago, and so they 
have actually increased the goals a number of times. But there 
are a number of supported policies and they tend to stay for a 
number of years; whereas, you know, in the United States, new 
energy developers have worried about tax breaks coming and 
going and that kind of thing. It is worth noting that in the 
United States 70 percent of all energy subsidies are to fossil 
fuels.
    Mr. Rush. Your 5-year framework over the years--on the 5-
year plan to reduce energy intensity stuff for dioxide and 
chemical oxygen demand, or COD. Can you tell the subcommittee 
if the Chinese have been successful in meeting these goals set 
forth in their reduction plans? Have they fallen short, met 
their expectations, or exceeded their expectations? And how 
have the Chinese been so successful if they met this goal and 
how have they met these goals?
    Ms. Seligsohn. The Chinese almost met the goal for energy 
intensity. They got 19.1 percent and the goal was 20 percent. 
This is a good sign that they were so clear about being just 
shy of the goal rather than trying to sort of meet it. They 
actually exceeded the sulfur dioxide and the COD goals in the 
last 5-year plan. The 10 percent goals were exceeded by both. 
And that was an extraordinary victory for the Ministry for 
Environmental Protection, which is China's newest Ministry. It 
only reached Ministry status in 2007.
    In earlier years they have had much more trouble enforcing 
their environmental targets. And this really reflects a change 
in Chinese society and in Chinese government, in just the last 
5 years, in focusing much more closely on these types of 
environmental goals.
    Mr. Whitfield. Mr. Terry, you are recognized for 5 minutes.
    Mr. Terry. Thank you, Mr. Chairman. First of all, I want to 
say that I am impressed with China's measures. I am impressed 
with the amount of electrical generation that they have been 
able to bring on rather quickly. Since pollution is a global 
issue, I am pleased that they are taking measures to reduce it. 
I just want to make sure, as we discuss and we put China up on 
a pedestal, that we are looking or comparing apples to apples 
here. And so--forgive me, Ms. Seligsohn, did I say that right?
    Ms. Seligsohn. Seligsohn.
    Mr. Bilbray. Deborah.
    Mr. Terry. Yes. When we talk about China meeting their 
goals for NOx and SOx and all of the particulates that we have 
already in our Clean Air Act, I don't want you to itemize, but 
would you supply to this committee a side-by-side of what 
China's particulate regulations are to the United States', 
because I want to see how they compare?
    Ms. Seligsohn. We would have to get that to you.
    Mr. Terry. I would appreciate that, because that will help 
us really look----
    Ms. Seligsohn. It is worth noting that NOx, for example, 
only comes in as a goal in this next 5 year----
    Mr. Terry. Well, out of all the particulates, particularly 
from electrical generation.
    Ms. Seligsohn. Well, my point is it is a work in progress. 
There definitely----
    Mr. Terry. And my point is we are not dealing with apples 
to apples, and I would like to know. Because I think it is 
unfair to have this discussion in generalities instead of 
specifics.
    The other question is, I am impressed with China's 
portfolio. In fact, that is part of the battles that we have 
had on this committee with past. I am embarrassed that we don't 
have a long-term energy policy, but then we haven't been able 
to use hydro, and China has a 22 gigawatt Yangtze River. That 
is impressive. But we can't do that in the United States 
because of environmental policies. We want to do coal and clean 
coal technologies, but any use of coal or mention of coal, my 
gosh, shall you would think that you were pillaging. And so we 
can't use coal or even clean coal technology.
    So, Deb, once again, you had mentioned in a very positive 
way that coal, gassification, capture, sequestration, zero 
emission, coal-fired plants that China is building, I want to 
do that, too. But we can't seem to get it off the ground here. 
The Obama administration, this administration, there has been a 
NexGen sitting on the books for years, but Bush didn't go 
forward with it because of environmental, and now our current 
President isn't going forward with it. So what is China doing 
that we can't do here?
    And then--well, let's go with that question, real quick. 
How can they build it so quickly over there and we can't even 
get a pilot project off of the ground?
    Ms. Seligsohn. There definitely is more of a policy 
consensus in China on the importance of developing new coal 
technologies for their portfolio. I think there are arguments 
on both sides here in the United States. There are people who 
really believe that it is going to be part of it, and there are 
people who recognize the enormous renewable resources we have. 
We do have more renewable resources than China does in terms of 
availability of wind and solar.
    Mr. Terry. In regard to building plants, how does China 
compare with environmental impact studies, permitting 
processes?
    Ms. Seligsohn. They are more streamlined. I mean, China has 
an EIA process, it has a permitting process, but it is 
definitely more rapid.
    Mr. Terry. Do they also have a right of citizen lawsuit? 
For example, when a wind project is designed in the sand hills 
of Nebraska or a pipeline and then citizens sue and stop the 
project--does China have that right?
    Mr. Palmer. They do not.
    Mr. Terry. Well, I am not asking you.
    Ms. Seligsohn. There are citizen suit rights. I can't give 
you more----
    Mr. Terry. The answer is no. Does China have citizen suits?
    Ms. Seligsohn. They have citizen suits for certain kinds of 
things like pollution, and I would have to get back to you with 
a specific range.
    Mr. Terry. Can they stop a project? Because that is part of 
our problem with even wind and solar projects. The 
environmental groups sue them.
    Ms. Seligsohn. I don't know whether it is legally 
conceivable. I do know that it is unusual for it to happen.
    Mr. Terry. I appreciate that.
    Does somebody else want the last 13 seconds?
    Mr. Palmer. I would just like to say on that, the process 
goes through the NEA, the National Energy Administration, and 
the NDRC, the National Development Resource Commission; and it 
as an application grant project. There is very--I have seen--
Peabody is active in China in a major way. I have seen no 
evidence of citizen activity in this process at all.
    Mr. Terry. Mr. Kopits, my time is up, but maybe----
    Mr. Whitfield. Mr. Waxman is recognized for 5 minutes.
    Mr. Waxman. Ms. Hutzler, you heard Ms. Seligsohn's answer, 
which was contradictory to yours, about this bank funding 
Chinese activities and whether U.S. taxpayers are contributing 
to it. She said that we are not because we never ratified the 
Kyoto Protocol. Do you agree with her?
    Ms. Hutzler. Yes, I do agree with what she said. But it is 
true that developed nations get credits for the clean 
development program, and that is how China started with their 
wind program.
    Mr. Waxman. But the United States is not one of those 
developed nations.
    Ms. Hutzler. That is correct.
    Mr. Waxman. OK. So your answer to the chairman was not 
correct. Because his question was, are American taxpayers 
subsidizing these activities in China; and the answer should 
have been no. Isn't that right?
    Ms. Hutzler. Yes.
    Mr. Waxman. The chairman said something that the government 
has policies that penalize coal. What policies does the U.S. 
government have that penalizes coal?
    Mr. Palmer.
    Mr. Palmer. There is a great controversy right now, 
Congressman, over the Environmental Protection Agency's 
proposed rules for particulate emissions from coal plants and 
also greenhouse gas emissions.
    Mr. Waxman. Do you think those were set in place to 
penalize coal or to protect the public health from particulates 
which can be a danger, to--
    Mr. Palmer. Mike Morris, who is the chairman of AEP, 
analogized it this way. He said, if you took the Convention 
Center in Washington, D.C., and filled it with ping pong balls, 
what EPA is trying to do is take out one ping pong ball, and we 
have----
    Mr. Waxman. In other words----
    Mr. Palmer. I am not finished, Congressman.
    Mr. Waxman. Yes, but I want to ask you this.
    Mr. Palmer. I am going to finish my answer.
    Mr. Waxman. No, it is my time, and you will answer my 
questions.
    Mr. Palmer. OK.
    Mr. Waxman. And my question is this: Is the EPA not going 
against other sources of particulate matter and only going 
after one? I gather the ping pong they are going after is the 
coal ping pong; is that a fair statement?
    Mr. Palmer. The study that I have seen in connection with 
the coal plants would result in a 15 to 20 percent increase in 
electricity rates in the heartland of the United States, 
damaging manufacturing, lost employment, and hurting people in 
their----
    Mr. Waxman. Is there another way we can reduce the 
particulate matter? Or should we ignore the harm it does to 
public health?
    Mr. Palmer. Well, first of all, Congressman, the issue of 
harm to public health is contradicted by recent figures that 
came out last week that show more people living better, living 
longer in the United States, even as coal use, coal consumption 
has----
    Mr. Waxman. You are really not an expert on public health. 
You are a representative of the coal industry. I would submit 
to you and to anybody watching this that the U.S. EPA has an 
obligation to deal with particulate matters which get into the 
lungs and can cause disease, whatever the source may be. So I 
don't think it is particularly singling out the coal industry 
when the EPA says that they want some technology that is 
already available, the best control technology to be used.
    But it is interesting, I haven't heard in these discussions 
the idea that China is not doing anything. That is what we 
usually hear: China is not doing anything, so why should we?
    Ms. Seligsohn, you testified China has a 5-year plan that 
actually calls for a number of significant actions to address 
carbon emissions. If this plan is implemented, will China be on 
track to meet its commitments under the Copenhagen Accord?
    Ms. Seligsohn. Yes. Actually, it will be ahead of the 
curve. It will be more than two-thirds of the way to the 
commitments made for 2020.
    Mr. Waxman. Now, why should we believe them? Have they met 
their targets they set in their previous 5-year plan?
    Ms. Seligsohn. They came quite close on some, and they 
exceeded on others.
    Mr. Waxman. Some of their energy policies appear to be 
quite aggressive. Is it true that China has shut down over 
70,000 megawatts of old, inefficient coal plants during the 
last 5 years and replaced those plants with newer, more 
efficient coal plants?
    Ms. Seligsohn. Yes.
    Mr. Waxman. And now China is planning pilot programs 
involving cap-and-trade and carbon taxes?
    Ms. Seligsohn. They are actively talking about it, and both 
were listed in the party's documents about the 5-year plan, so 
it seems likely that we will see them in the next 5 years.
    Mr. Waxman. Now, is China uninterested in jobs and economic 
growth? Is it safe to conclude that they would be adopting all 
of these climate and energy policies if they were killing jobs 
and slowing China's economic growth?
    Ms. Seligsohn. I think it is safe to say that they don't 
think so, that the wealthiest areas of China are the areas that 
face the highest energy prices, not the lowest energy prices, 
and that they think that transforming to a much higher value-
added society and not depending on heavy, dirty industry is 
part of their future.
    Mr. Waxman. I want to add my voice to all the members of 
the panel. I think we are going to continue to use coal for the 
foreseeable future. We shouldn't use coal--if we can get it to 
pollute less, if we can get cleaner coal, that would be great 
for this country and for the world. And we shouldn't put all of 
our baskets in coal. Because if we can develop alternatives in 
supplementing energy from coal, we have a chance to reduce some 
of these carbon emissions.
    I yield back my time.
    Mr. Whitfield. Mr. Bilbray, you are recognized for 5 
minutes.
    Mr. Bilbray. Thank you very much.
    Deborah, you wanted to answer a question to this guy; and 
he cut you off. The issue about--were you trying to say, when 
we were talking about the citizen litigation against that, it 
hasn't happened, but it could theoretically in the future?
    Ms. Seligsohn. I need to actually go check with an 
environmental lawyer. There are areas where there is actually 
limited citizen litigation. It is a very different system than 
ours and so--but it isn't simply the NDRC and the NEA. There is 
permitting from the Lands Ministry, the Environmental 
Protection Ministry----
    Mr. Bilbray. Right. The big issue, though, is the private 
action of where people actually can make money by litigating.
    Ms. Seligsohn. There have been a number of dams blocked by 
citizen protests and then, you know, Premier Wen Jiabao has 
actually---
    Mr. Bilbray. But what I am saying was that protest was 
actually grass roots, but it was not somebody suing and 
basically taking an action and then actually being able to make 
a living off of these--you don't have lawyers making--you know, 
you don't have large corporate firms that specialize in 
blocking these projects. Is that fair to say?
    Ms. Seligsohn. It is fair to say the Chinese legal 
profession is----
    Mr. Bilbray. OK. I am very impressed with the 5-year-plan 
concept. I will just tell you for a fact you could not do--you 
know, I have done methane recovery systems on landfills. You 
can't even get the environmental impact reports done in this 
country in 5 years. So it is really exciting to hear about a 
country that actually can have implementation plans in 5 years. 
And how long does it take to hook to the grid or to get the 
lines from the grid over to these wind generators?
    Ms. Seligsohn. Well, they generally run about 4 months 
behind. So they may be completed, and it may take another 4 
months to connect. They had a problem with connections in 
remote rural areas, and they put in an additional fund last 
year to build more rural lines.
    Mr. Bilbray. And how long would they take from the time 
that somebody asked for it to the time that it--or the time 
that somebody decides in government to build it and it actually 
ends up hooking up?
    Ms. Seligsohn. Well, it is pretty quick.
    Mr. Bilbray. How fast?
    Ms. Seligsohn. I would have to check to get you a number. 
What I can say is the average grid connection is 4 months after 
completion of the project.
    Mr. Bilbray. OK. I appreciate that.
    I mean, San Diego County, with 3 million people have been 
trying for 20 years to get another grid connection so that we 
could hook up to the outlying areas. We are trying to hook up 
to solar now out in the deserts. The trouble is getting the 
permit. So I think we are really on a big issue.
    The fact is, China does not have the gauntlet that we have 
in this where--the huge gap between the concept of 
implementation and the completion--or just getting the permit. 
You know, there is a totally different world here that we need 
to talk about.
    Let me just say this. Would you agree that if we are going 
to be as aggressive with this broad portfolio as China, those 
of us in government have to take a look at how we are managing 
our procedures to be able to make that possible in a timely 
manner?
    Ms. Seligsohn. Yes, but there a number of other countries 
like Germany, Denmark that we can look at for ideas. It is not 
that China, with all of its other governance problems, is going 
to be the model for how to address all of these issues.
    Mr. Bilbray. But then again, Germany doesn't have nuke, but 
it buys its energy from the nuclear power plants in France, 
right?
    Ms. Seligsohn. I am not actually sure about that. But I am 
just saying there are number of European countries, including 
France, that deal with these questions within a democratic----
    Mr. Bilbray. I know. And including France has proven that 
we can recycle and do a lot of other things. But China is the 
one we are really focusing on here. And that is where I just 
wanted to point out that we have some major, major differences 
between the regulatory structure in the United States and the 
regulatory structure in China. That is fair to say?
    Ms. Seligsohn. That is absolutely fair to say.
    Mr. Bilbray. Do you think that their streamlined regulatory 
structure has been a major contributor to their ability to be 
so aggressive at developing a broad spectrum of energy 
technologies?
    Ms. Seligsohn. I think it has been one way. But if you look 
at the gains in wind in other countries, there are ways to do 
it with more protections.
    Mr. Bilbray. But what I am saying is you are talking one 
over here, one over here. We keep talking about that broad 
portfolio where you don't just pick one technology, you draw on 
it all. And that seems to go into----
    Mr. Palmer, do you know if we have any nuclear--I mean, any 
coal plants left in California?
    Mr. Palmer. California buys coal. I think there may be a 
couple of very small units, but coal-based electricity 
operating. But I just think you are so right--correct in terms 
of identifying the regulatory morass in the United States in 
getting something built. Certainly you can't do it California.
    Mr. Bilbray. I think Richmond was our last coal-fired 
plant. In all fairness, I think you go to jail if you burn coal 
in California.
    Mr. Palmer. Well, you have to meet a natural gas standard, 
which is to say you have to have carbon capture and storage. 
And that is----
    Mr. Bilbray. I really look forward to that. I mean, I will 
tell you, with our State we actually developed the technology 
and the genetic research that allowed us to develop alternative 
fuels like algae. But our scientists at Scripps Institution of 
Oceanography and the University of California San Diego had to 
leave the State to go into production. Because you couldn't get 
a permit, not in 5 years, you couldn't get a permit in 
California in 10 years. OK? So, believe me, California, we 
understand the challenge. So thank you very much.
    Mr. Palmer. Let me just make one point, and that is China 
may not be a model. I know what isn't a model. The State of 
California is no model.
    Mr. Whitfield. Mr. Green, you are recognized for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman.
    Let me take a different line of questioning, I guess, 
because I am amazed that we are talking about how great China 
is in trying to compare it to our system. Do they have trial by 
jury in China?
    Ms. Seligsohn. No.
    Mr. Green. Freedom of speech?
    Ms. Seligsohn. No.
    Mr. Green. You know, freedom is expensive. And we may not 
have the lawsuit--they may not have the lawsuits we have, but 
at least we go to court instead of having to protest down at 
the local dam and threatening to overthrow or kill the local 
province officials for building that dam.
    Is that what typically happens? Is that the way the Chinese 
can protest a particular plant being built, or the 
expropriation of their land they have lived on for generations, 
actually owned by the government? Is that how it works?
    Ms. Seligsohn. Well, their protests--they don't usually 
involve threatening to kill anybody.
    Mr. Green. Well, I have heard other things. But that is 
their avenue to get the attention of their government. They 
can't go to the courthouse and sue their government.
    Ms. Seligsohn. As I said, there are areas where they can, 
and there are certain--there has actually been some quite 
successful environmental lawsuits. There is also a growing 
effort to use public hearings in China. There is also a system 
of petitions. But it is a work in progress, and the Chinese 
would be the first to say that they are trying to improve their 
governance in this area; it is not that they have a perfect 
system.
    Mr. Green. Well, and I am not--but, obviously, we don't 
have a perfect system. But I think if you have a command 
economy, you lose a lot of freedoms that I think both sides of 
the aisle we would enjoy and we enjoy in our country. So I 
think comparing how Chinese make a decision, that may work in 
China, but it really doesn't work with the history we have in 
our country since 1776. And so I think holding us up to--they 
are a command economy. If the leadership in China is sold on a 
certain idea, that is what they do. Is that correct?
    Ms. Seligsohn. It is more complicated than that, because it 
is--there are lots of different interests, and the companies 
are separate from government, and there is a lot of negotiation 
that goes on.
    Mr. Green. Well, I know some of the companies are not 
separate from government.
    Ms. Seligsohn. State-owned enterprises are separate from 
government ministries, and they do rival with each other quite 
a lot, actually.
    Mr. Green. Well, I guess it is--you know, a free enterprise 
economy, which is truly free enterprise and not controlled free 
enterprise, and I guess that is what bothers me.
    Ms. Hutzler, this chart that you put up from the Energy 
Administration Institute--or Administration--and I was a 
business major and went to law school, so I have to admit 
numbers sometimes get in the way. But I don't see how in 2007 
they produced a little over 3,000 billion kilowatt hours; in 
2035, they plan to over triple their kilowatt hours with 
reducing their coal by only 6 percent and going from 2 to 6 
percent nuclear. They are actually going to reduce their 
natural gas, reduce their coal, reduce their hydro, go from 
zero to four in wind power and zero to three in biomass.
    It seems like the expansion is actually in things that we 
know we want. We want wind, we want solar, we want biomass. But 
I wish I could tell you we are ever going to be able to turn on 
the lights in this room with wind, solar, and biomass.
    So I don't know. I am going to find out where these numbers 
come from, because I think some of them are questionable 
because it just doesn't seem like it adds up, that they can 
over triple their kilowatt hours by reducing from the 
traditional sources, whether it is coal or natural gas, and 
even only tripling their nuclear power. Because now they only 
have 2 percent nuclear power, and they are going to 6 percent.
    Do you know how much nuclear power our country produces, 
and we haven't built a plant since the '80s? I think we only 
produce about--what--20 percent, 22 percent?
    Mr. Palmer. That is about right, 20 percent.
    Mr. Green. So, even at 22 percent, we are way far ahead of 
where China is right now in nuclear power.
    Ms. Hutzler. That is right.
    Mr. Green. I know China, they have some natural gas from 
around the Xi-an area, because I was there a number of years 
ago. But they were pretty inefficient. I don't know if they 
have discovered additional natural gas domestically. I know 
they are buying a lot. In fact, they are bidding up the price 
around the world.
    I also know they are buying coal. Can China produce enough 
domestic coal to generate their electricity?
    Mr. Palmer. No. They are now a major coal importer, and 
that is new. There was a time of about 7 or 8 years ago when 
the fear in the seaborne market what that China exports would 
swamp. But they are very opportunistic.
    Mr. Green. I am almost out of time. Let me ask something. 
Those plants that China is building that are new coal plants--
we know we build coal plants today much cleaner and better than 
we did 30 years ago. What are they doing? Are we just not 
replacing our coal plants?
    Ms. Hutzler. Yes, that is correct. They are building 
supercritical plants at a very fast pace, but we are building 
coal plants at a very slow pace, if at all. We have built more 
in 2010 than since 1985. But then it is only about 6 gigawatts. 
They build 10 times as much as what we do in a year.
    Mr. Green. Mr. Chairman, I will close by saying I guess if 
the President and his Cabinet can decide they are going to 
build a coal plant in my area and not have to go through any of 
the local regulations or anything like that, and even take the 
land that I own to do it, which sometimes you can--but, again, 
they are a very command economy, as compared to a free 
enterprise and freedom economy that we are accustomed to.
    Thank you, Mr. Chairman.
    Mr. Whitfield. Mr. McKinley, you are recognized for 5 
minutes.
    Mr. McKinley. Thank you, Mr. Chairman.
    Ms. Hutzler, just a couple of quick questions. Can you 
compare the average wages for a Chinese worker and an American 
miner?
    Ms. Hutzler. They are vastly different. The Chinese work 
for a mere fraction of what they cost.
    Mr. McKinley. Both in the mining and energy production and 
China would be--I am told as much as a factor of 10 to 15 
times.
    Ms. Hutzler. I would believe so.
    Mr. McKinley. Do you have a sense of how many families are 
dependent, either directly or indirectly, on coal production in 
America?
    Ms. Hutzler. No, I don't have that number, but I can get it 
for you.
    Mr. McKinley. Have you seen that report that was produced, 
apparently by the EPA, that said that if all the greenhouse 
gases were fully implemented under the Clean Air Act that the 
global temperature would only drop less than a tenth of one 
degree?
    Ms. Hutzler. Yes.
    Mr. McKinley. So, from your viewpoint, is it worth all the 
expenditure and the distraction from our manufacturing and our 
base to spend that kind of money for a tenth of--less than a 
tenth of a degree?
    Ms. Hutzler. From my viewpoint, no, it is not.
    Mr. McKinley. Thank you.
    Maybe the question was asked, but if I could try again. I 
didn't hear all the questions. Do you have a record or has 
someone published anything about the number of coal-fired--
these super-critical facilities in China say over the last 5 
years? Do we have a sense? I have heard as much as one a week. 
I have heard four a month or two a month. Is there a reliable 
source of information on that?
    Ms. Hutzler. The source I use is the National Energy 
Technology Laboratory, and they are saying it is probably about 
one gigawatt a week, which would be one or two plants, one if 
it is a gigawatt and two if it is 500 megawatts.
    Mr. McKinley. And who provided that?
    Ms. Hutzler. The National Energy Technology Laboratory.
    Mr. McKinley. Thank you for bringing that subject up. You 
are aware that the President's budget slashes their research by 
over $800 million on coal technology.
    Ms. Hutzler. No, I wasn't.
    Mr. McKinley. For someone that we want to out-innovate, 
outproduce, we are going to slash the very thing that could 
create cheap----
    I am just curious--in a little bit of time, it just seems 
to me kind of self-evident with the Chinese energy production 
they have little environmental constraints on their water 
discharge, their greenhouse gases, their particulate matter, 
their fly ash, their wages are a fraction, like you just 
pointed out. Their health care is poor. Their retirement 
pension plans almost nonexistent, other than government-run. 
Their monetary system is being subsidized. Why do you think we 
keep using China as the poster child for energy?
    Ms. Hutzler. Well, probably because people would like to 
look at them as leading the clean energy race. But, as I tried 
to point out, they are leading the race in all fuels, and they 
are doing that to make a better life for their citizens and to 
keep their economy growing at the fast pace that it is growing 
now.
    Mr. McKinley. At the detriment of their people.
    Ms. Hutzler. No, I think you need all fuels for----
    Mr. McKinley. Really?
    Ms. Hutzler. Certainly.
    Mr. McKinley. Can you share with us--because one of the 
issues we are facing here in America, obviously, is the issue 
of fly ash, that the EPA has a knee-jerk reaction to a dam 
collapsing in Tennessee and they want to make it a hazardous--
treat it as a hazardous material. How does China treat its fly 
ash?
    Ms. Hutzler. I am not an expert on that. Maybe Mr. Palmer 
might know.
    Mr. McKinley. You spent 17 of your last 27 years--what are 
they doing with fly ash in China?
    Ms. Seligsohn. I don't know. I would have to check. I can 
get back to you.
    Mr. McKinley. OK. And if the production of power--if we 
don't have the ability to recycle fly ash, what do you think 
would happen to the price of power in America?
    Ms. Hutzler. It would increase dramatically.
    Mr. McKinley. Thank you.
    I yield back my time.
    Mr. Whitfield. Does the gentleman from Massachusetts seek 
recognition?
    The gentleman is recognized for 5 minutes.
    Mr. Markey. Thank you, Mr. Chairman, very much.
    So, Ms. Hutzler, we are really making tremendous gains in 
wind power in the United States, huh? Twenty-seven thousand new 
megawatts were installed in the last 4 years? And that is quite 
a number. Do you expect to see that growing dramatically in the 
years ahead?
    Ms. Hutzler. Yes. The Energy Information Administration 
sees about half of the increase in capacity in renewable 
technologies to come from wind.
    Mr. Markey. So what do you think by 2020 we could have? If 
it is 27,000 in the last 4 years, what do you think we can see 
by 2020 in installed wind capacity?
    Ms. Hutzler. I don't think they are projecting that, even 
though the increase is large, that will get more than 50 or 60 
gigawatts.
    Mr. Markey. Additional gigawatts?
    Ms. Hutzler. No, that is total. There is only about 20 
gigawatts extra.
    Mr. Markey. Only 20? So you are saying we have already 
passed the peak in terms of new wind installation?
    Ms. Hutzler. Probably.
    Mr. Markey. Well, I think you are 100 percent wrong on 
that.
    And how about in solar? How do you see solar going? There 
were 1,000 new megawatts this year. The solar industry says it 
should be 1,500 this year. Last year, it was 1,000 new 
megawatts; 1,500 new megawatts this year will be installed; and 
they are predicting 2,000 megawatts next year. Do you see that 
slowing down, too, after next year?
    Ms. Hutzler. No. Actually, solar, they have increasing 
more, but that is because we have very little today. We only 
have about one gigawatt today.
    Mr. Markey. Well, do you think we can have--well, there was 
one gigawatt installed in 2010, so we have more than that.
    Ms. Hutzler. One point three, something like that.
    Mr. Markey. So what do you see by 2020, the installation 
for solar?
    Ms. Hutzler. Maybe another 10 gigawatts.
    Mr. Markey. Ten altogether?
    Ms. Hutzler. Yes.
    Mr. Markey. So you are saying that last year's pace, 1,000, 
will just be the same pace, and it won't increase over the next 
10 years?
    Ms. Hutzler. Well, I am saying it is going to increase but 
not at the same rate.
    Mr. Markey. You only see 1,000 a year? Is that what you are 
saying?
    Ms. Hutzler. Actually, less.
    Mr. Markey. You see less than 1,000.
    Do you see the price of solar coming down over the next 10 
years, with the global investment in China and other countries? 
Or do you see it staying the same?
    Ms. Hutzler. It will come down, but it is going to come 
down as a basis of what is being built. And even the Chinese 
feel that solar is more expensive than other technologies, and 
they are pushing the non-solar ones.
    Mr. Markey. Actually, in the Bloomberg story here, China, 
the world's biggest energy consumer, will cut its 2020 target 
for nuclear power--this is a story from 2 days ago--nuclear 
power capacity and build more solar farms, following Japan's 
atomic crisis, said an official at the National Development and 
Reform Commission in Japan. It is going to cut its goal of 
80,000 megawatts by 2020 and, instead, it is going to 
dramatically increase its goal of 20,000 megawatts of solar. It 
is going to dramatically increase its goal by 2020 in China.
    So don't you think that the totality of all of the 
investment that is going to be made in China and Japan now and 
other countries is going to dramatically lower the price of 
solar and make it more competitive and not have it just be a 
grand total of 1,000 per year every year from now on but maybe 
2,000 or 3,000? You don't think that is going to happen?
    Ms. Hutzler. It has a long way to go. It is about three 
times as much as other technologies and even more than that of 
natural gas.
    Mr. Markey. I understand that. If the price is cut in half, 
do you see any increase above your 1,000 per year projection?
    Ms. Hutzler. There might be a slight increase, but it is 
going to be very difficult to get it down to that level.
    Mr. Markey. You are a very pessimistic person, 
technologically. You know, it is like talking to maybe the 
owner of a typewriter company in 1990 seeing no threats from 
computers over the next 20 years so we are going to double our 
investment in typewriters because how can we ever have all 
people using computers only in 20 years because the price is 
just not competitive with Underwood typewriters so I am 
investing all my money in Underwood right now.
    And you could go through other industries. But you can have 
these revolutions very quickly, as you know; and I just think 
that you are displaying an amazing amount of--let me say, you 
just don't believe in the market system.
    Ms. Hutzler. I most certainly do.
    Mr. Markey. Oh, no, you don't.
    Ms. Hutzler. I do.
    Mr. Markey. You are projecting today 10 years from now, 
even though there is a global investment that is being made in 
wind and solar that is going to drop the price and make it much 
more likely that there is going to be an investment, even as 
the market has been moving away from coal and moving towards 
renewables and natural gas. I mean, natural gas and wind have 
been the largest single additions to our grid in the last 4 
years. You agree with that.
    Ms. Hutzler. Yes, I do.
    Mr. Markey. But you see wind falling off and solar not 
contributing, and do you see coal increasing going forward?
    Ms. Hutzler. Yes, but very little.
    Mr. Markey. Yes. But larger than wind and solar?
    Ms. Hutzler. No, about the same, I would say.
    Mr. Markey. About the same. So you see wind kind of slowing 
down to the pace at which new coal is being installed in the 
country, and I kind of disagree with you on that. Just looking 
at the market forces over the last 4 or 5 years, I mean, the 
charts for wind and for solar and for natural gas are way up 
high and for coal and for nuclear is nonexistent, way down 
here. So the market has moved, Wall Street has moved, private 
investors have moved, and they have moved globally; and the 
more that there is a doubling of the installed capacity across 
the planet, the more you are going to see----
    Mr. Bilbray. [presiding.] The gentleman's time has expired, 
and the chair will remind the gentleman that we still are--as 
somebody who just made a purchase of solar panels myself, we 
are still using monocrystal, which is the same technology we 
have had for 30 years. The price is modified, and that is 
great, and the thin film has major--a lot more technical 
problems than what people talk about, and still monocrystal is 
still the cutting edge. And the same thing it was when we were 
in school and we started making those little kits. So, 
hopefully, we will see the balance where it is appropriate, 
where it is down.
    Mr. Markey. Mr. Chairman, the price has dropped 
precipitously from the time when we were kids. When we were 
kids, the price was $10 a kilowatt hour; and it is now down 
into the 20 to 25 cents. And that is all I am talking about. I 
am talking about the significant reduction in the price.
    Mr. Bilbray. I understand that. In San Diego, we have a 
major manufacturer of solar panels, owned by the Chinese, 
manufactured in the Chinese with their coal and then exported 
it and assembled in San Diego for the market that is basically 
being created by our government regs and subsidies.
    So, hopefully, the gentleman from Colorado, Yuma, might be 
able to enlighten us, too, about how maybe we ought to change 
our laws so people get on solar rather than having power lines 
required by government to be brought way out into the boonies 
of the plains of Colorado.
    I yield to the gentleman from Colorado at this time.
    Mr. Gardner. Thank you, Mr. Chairman; and, to the 
witnesses, thank you for your time and testimony today.
    Just a couple of points. I was reading an article recently 
in the Denver Post. It cited an author of a publication called 
Power Hungry. Robert Bryce, the author, reminded the audience 
that Americans get 140 time as much energy from coal, oil, and 
natural gas as they do from the clean energy sources such as 
wind and solar. Is that an accurate statement?
    Ms. Hutzler. Yes.
    Mr. Gardner. Do you see that changing dramatically in 20 
years? Will it be 140? Will it be 100? Will it be 5?
    Ms. Hutzler. It will change but very little.
    Mr. Gardner. So in 20 years from now you are still saying 
that we will get be 140 times more energy from traditional 
sources than some of the new sources that have been talked 
about today?
    Ms. Hutzler. Yes.
    Mr. Gardner. Thank you.
    And, Ms. Hutzler, just to continue with our conversation, 
what lessons can the United States learn from China's 
experience in constructing wind farms? And to further that a 
little bit, specific question, under what geographic and 
engineering conditions is wind generation appropriate and 
beneficial?
    Ms. Hutzler. Well, I certainly believe that we need all 
technologies. The trouble with wind is that you have better 
sites. There are good resources versus more difficult 
resources. And so, as you add on wind capacity, you eventually 
get to the point where it is going to cost you more because you 
have got sites that aren't as conducive in terms of 
constructing the wind units.
    Mr. Gardner. And do you see land use problems in the United 
States affecting our ability to access good wind sites?
    Ms. Hutzler. More than likely. I mean, certainly with solar 
we have people complaining about the massive land use issues 
there, so I imagine that will eventually happen with wind as 
well.
    Mr. Gardner. And does China have an equivalent of like a 
United States Department of Interior that prohibits the siting 
of certain wind opportunities or transmission lines?
    Ms. Hutzler. I am not an expert on China's government, so 
maybe Deborah could answer that question.
    Mr. Gardner. Thank you.
    And just, Mr. Palmer, to turn to you, what do you see is 
the biggest impediments to the United States to building new 
energy technologies? Not new energy in the sometimes modern-day 
acceptance, but just energy technologies overall.
    Mr. Palmer. Well, you asked me energy, Congressman. I 
apologize. I am a coal guy, so I am going to answer with coal.
    The impediments to coal right now are really regulatory, 
and that is really EPA, and it is the new source review. It is 
the best available control technology. It is where are we going 
with greenhouse gas regulations? Is it legal, the lawsuits that 
are going on, the efforts going on in the Congress to change 
that regime? And the need to put in----
    Our CEO, Greg Boyce, gave a talk last year to the World 
Energy Congress in Montreal and talked about the Peabody plan 
which is super-critical--ultra-super-critical--to replace the 
older units and to give us growth and to re-industrialize. And 
it is more efficient from a carbon standpoint, near-zero 
criteria pollutants, carbon capture ready as we develop CCS 
technologies and a regulatory regime and put the industrial 
heartland back to work, make the front range safe for coal 
again and your State, and we have been involved in natural gas 
wars there. And nothing against natural gas or shale gas, but 
it is no carbon answer. And the problem is Washington, D.C. You 
live outside the Beltway, people understand the need for coal. 
You come----
    Mr. Gardner. Thank you.
    And if I could just go down and get a yes-or-no answer from 
every single one of you. Do increasing energy prices pose a 
threat to our economy? Mr. Kopits.
    Mr. Kopits. Well, we haven't spoken about oil today. I am 
amazed we have been sitting here for, I don't know, about an 
hour and not nary a word on oil. And I was hoping Mr. Green 
from Texas would come up with an oil question.
    Right now, from where we sit, the U.S. has fallen into 
recession every time crude oil consumption as a share of GDP 
has exceeded 4 percent. And that is about $88. We are at $119--
--
    Mr. Gardner. I hate to interrupt. We only have about 50 
seconds. So do rising energy prices pose a threat?
    Mr. Kopits. The issue is that energy prices, particularly 
oil, are critical right now for the U.S. economy.
    Mr. Gardner. Mr. Palmer.
    Mr. Palmer. I would agree.
    Mr. Gardner. Ms. Seligsohn.
    Ms. Seligsohn. Without proper policies, it can be a 
problem, but there are ways to plan for that.
    Mr. Gardner. So the answer is, yes, rising energy prices 
pose a threat to our economy.
    Ms. Seligsohn. Well, China has coal prices above the world 
average, and it is doing oK right now. So I think there are 
indications that----
    Mr. Gardner. If that increases, they will be fine then? 
Prices increases?
    So, no, you do not believe that increased energy prices----
    Ms. Seligsohn. It can be a threat.
    Mr. Gardner. Ms. Hutzler.
    Ms. Hutzler. I agree.
    Mr. Gardner. And I want to cite a recent study by the 
Beacon Hill Institute at Suffolk University in Boston concluded 
that by 2015 consumers in Colorado will be paying about $1.4 
billion in higher energy costs as a result of the renewable 
energy standard. Do we see energy costs increasing as a result 
of that kind of policy?
    Mr. Hunter. Yes.
    Mr. Palmer. Absolutely. Skyrocketing.
    Mr. Gardner. Thank you.
    Mr. Bilbray. The gentleman's time has expired, and the 
chair would just say those of us in California really feel for 
your pain in Colorado.
    At this time, I will yield to the gentleman from Kansas.
    Mr. Pompeo. Thank you, Mr. Chairman.
    I will be happy to talk about oil there in just a second, 
but first I want to just make a comment.
    I heard Mr. Markey say to you, Ms. Hutzler, you are a 
pessimist because you didn't believe these things would happen. 
We have been investing taxpayer money in wind and solar since 
the Synfuels Corp. You can go back through the ages. And the 
typewriter is still around. That is, the energies we have been 
using for a long time are still around, and everything that I 
see from everyone on this panel suggests they are going to be 
around for an awfully long time. So you are dually noted that 
your pessimism is appropriate, given the reality of the energy 
situation I think that the world faces.
    Ms. Seligsohn, you said I think that 8 percent of the coal 
plants in China have been taken offline and replaced. Is that 
right? Is that the right number that I read from your 
testimony?
    Ms. Seligsohn. Yes.
    Mr. Pompeo. And that is not--a similar phenomena has not 
taken place in the United States?
    Ms. Seligsohn. By government mandate. Yes.
    Mr. Pompeo. And so what is it that has prevented us from 
doing that in the United States? What has stopped the United 
States from taking older coal plants off-line and putting new 
coal plants online?
    Ms. Seligsohn. That is not the way our laws are written.
    Mr. Pompeo. So it is a regulatory burden.
    Ms. Seligsohn. Well, no. I mean, this would be an 
additional regulation if you did this. It is the opposite.
    Mr. Pompeo. So you are suggesting mandate it. Today, we are 
doing just the opposite. We are penalizing companies that want 
to take off old power plants and want to put on newer, more 
efficient plants; is that correct?
    Ms. Seligsohn. Right.
    Mr. Pompeo. Let me give you an example. Mr. Palmer, maybe 
you can help me with this. Today, there is a plant in Kansas 
called the Holcomb plant. We have been trying to get Holcomb 
online in Kansas for a long time. Our former Governor, now 
creating havoc at Health and Human Services, stopped it. We are 
now starting to moving forward, and EPA has stuck their ugly 
hand in the cookie jar again. They are trying put on a newer, 
cleaner technology. Can you tell me what it is besides EPA that 
is stopping Holcomb from moving forward?
    Mr. Palmer. First of all, in my past, before Peabody, I was 
coal supplier to Holcomb. I knew the guys that built the first 
unit and had a great relationship. I love Western Kansas, and I 
won't go into that. But it is near and dear to me.
    Secondly, it is all about carbon, full stop. We have the 
super-critical, pulverized coal today. Your ultra-super-
critical gives you near-zero criteria emission pollutants--SOX, 
NOx, and Mercury. There is no argument over that. It is state-
of-the-art stuff.
    It is more efficient on carbon. But it is a carbon agenda. 
It has been since it started. It is right now. It will 
continue. And that is what is holding up the next generation of 
generation in the United States of America of coal generation, 
is this fixation on emission, carbon emissions above everything 
else as the driving policy here, not in China, in the United 
States.
    That is what is preventing Western Kansas from having an 
additional unit for Holcomb. And that electricity would go to 
the front range. And Tri-State, who is a part of my past as 
well, was going to build that transmission line; and they have 
been in the carbon wars on these plants since Governor Sebelius 
stepped into it. And now she skipped town, and she is here. But 
it is a bad day for Western Kansas, and it is a bad day for the 
U.S. when carbon emissions govern our lives every day, and that 
is what is going on.
    Mr. Pompeo. Let me just ask you a different question.
    Is there anything equivalent to EPA's new Utility MACT 
Rules in China?
    Ms. Seligsohn. Yes, there is review that--well, I mean, 
they do it independently. They close the old ones and then they 
have requirements on the new ones, including EIA----
    Mr. Pompeo. So if, by chance, the Chinese were going to 
follow the rules and there were Utility MACT Rules, you say 
they would still be able to build these new plants?
    The answer is no. They can't. I mean, Holcomb is going to 
be shut down by these new Utility MACT Rules. There are not 
going to be able to make it.
    Ms. Seligsohn. The point is the Chinese just shut down when 
they feel it ought to be shut down.
    Mr. Pompeo. Right. Precisely. Precisely. A government 
agency shutting it down. That is what is, unfortunately, not 
happening here. We are not allowing new technology to move 
forward, at least in Kansas.
    I have been to the Chinese oil fields, most all of them, 
spent a significant amount of time there. Are there any 
regulations, whether they are local, provincial regulations, or 
national regulations on fracking in China?
    Ms. Seligsohn. I don't believe they are yet. It is one of 
the things they are looking at, and they have a cooperative 
agreement with DOE that they signed during President Obama's 
visit to China 2 years ago.
    Mr. Pompeo. Do you think there will be better compliance 
with those new fracking regulations than, say, with IP rules 
today?
    Ms. Seligsohn. China's compliance in most areas of 
environmental governance has improved considerably in the last 
5 years. As I say, their ministry is new. This is a new area, 
and the rate of increase is quite impressive. But how fracking 
will work, I think it would be a little too early to tell.
    I would also note that the Chinese don't see climate change 
goals as in any way contradictory with all of their other 
energy and environmental goals. Climate change is the pillar in 
their 5-year plan.
    Mr. Pompeo. Thank you, Ms. Seligsohn.
    My time is up. I yield back the balance of my time.
    Mr. Bilbray. Thank you.
    There are no speakers on this side, so I will yield to the 
gentleman from Virginia, the Commonwealth of Virginia.
    Mr. Griffith. Thank you, Mr. Chairman.
    I was interested in Congressman Green's comments. I think 
he missed some of the sarcasm on this side when he thought we 
were holding China up as the example. I think the point was 
that so many of my colleagues were asking questions about China 
doesn't do this and China doesn't do that, and then they were 
being sarcastic when they said, well, don't you think it would 
be great if we did that?
    Because I think that everybody understands that the Chinese 
have a completely different governmental system than we do. But 
we are getting a little tired of having the administration, the 
current administration, and its allies come in here and say, 
well, China is great, and you ought to be like China. Because 
we are not going to move 22 million people out of their 
ancestral home areas in order to have a more efficient 
hydroelectric system, and we are not going to do some of the 
things that China has done. All we are asking for, I believe, 
speaking for myself, is that we have some reasonable 
regulations and not unreasonable regulations; and I don't 
believe the Chinese are anywhere near our regulatory scheme.
    And, in that regard, Mr. Palmer, can you tell me, are the 
Chinese anywhere near our regulatory scheme when it comes to 
coal, since you are the coal guy?
    Mr. Palmer. No, and I want to put in context my comments 
about China. Because I do go to China, and I have high 
admiration for what they have done there. I am not in here 
talking about political systems or ideology or any of that, but 
I see a society that believes in energy supply for people, to 
raise people up and out of poverty. And I think that is what we 
ought to do here.
    In terms of the specific question on the regulatory regime, 
they have a--you know, they have decided, as a matter of 
national policy, they have an ability to do it directly. They 
have the money in the bank that they have amassed very shrewdly 
over a period of time. They are putting in state-of-the-art 
clean coal technology. That is what they are doing. And they 
are driving carbon capture and storage research and development 
and this GreenGen Project that we are in, and that is what they 
are doing.
    From that standpoint, from the standpoint of getting our 
regulations right so we can use our own technology, we are 
state-of-the-art in terms of technology. We know how to do 
these things. That is our point, is that the value, the people 
value associated with low-cost, abundant, always available, 
reliable electricity, as opposed to high prices and scarcity, 
are values we ought to adopt. They have adopted. And we had it 
before, but, right now, in Washington, that is not popular to 
talk that way, period. Full stop. And we think that needs to 
change. That is why we come at it the way we do.
    Mr. Griffith. And if we continue down our regulatory 
scheme, you anticipate that we will have some scarcity or high 
prices?
    Mr. Palmer. Absolutely. It is designed to do that. If you 
look at the ideology behind the environmental community and you 
go back 10 or 20 years, it is absolutely designed to do that.
    Mr. Palmer. And when we do that, we not only drive 
businesses offshore, am I correct----
    Mr. Palmer. Yes, you do.
    Mr. Griffith. --but we also raise the cost of the average 
citizen of the United States to have the power to heat and make 
sure that their homes are reasonably----
    Mr. Palmer. And every metric says that low-cost electricity 
is a requirement for more people to live longer and live 
better; and if you take up the cost of energy, you drive down 
human health and welfare.
    So EPA has it exactly wrong in terms of how they come at 
this. Not to argue with the values on emissions, but there is 
no attention paid to the underlying value of the activity that 
creates the emissions. In other words, what are we making with 
this fuel that creates emissions and what are the benefits of 
that? They don't consider that, they don't look at it, and it 
is not relevant. And we are on a path to high prices in the 
United States. Absolutely, we are.
    Mr. Griffith. And would you agree with me that if you 
represented a district where the median household income was 
somewhere around $35,000 a year, that on the trajectory we are 
on on energy costs that I am going to have some people that are 
going to be cold in the wintertime; isn't that correct?
    Mr. Palmer. I would totally agree with you, and I would 
expect they will be pounding the table in the mornings when you 
are having coffee with them saying, go back to that city and 
tell them what is going on here.
    Mr. Griffith. And, in fact, we are already seeing it; isn't 
that correct? And are you aware that Appalachian Power has just 
asked the Commonwealth of Virginia for I think a 9.6 percent 
increase? I may be off a little bit.
    Mr. Palmer. I wasn't aware of that, specifically. But, for 
sure, the capital investment associated with this, what I 
call--people call a train wreck. We have friends in the 
railroad industry don't like that. I call it a tsunami.
    Mr. Griffith. It is just a mess.
    Mr. Palmer. It is a high-priced----
    Mr. Griffith. And the end result is you don't have to be an 
expert in health to understand that this is going to have a 
negative impact on the health of the citizens, particularly 
those who have less economic means than others.
    Mr. Palmer. I would agree. It is common sense.
    Mr. Griffith. Thank you.
    I yield back my 17 seconds.
    Mr. Bilbray. Thank you very much.
    I appreciate the discussion especially about keeping 
seniors warm. As a Californian, it was always interesting that 
this town talks a lot about helping to keep the seniors get 
enough fuel so they can stay warm, but they don't talk about 
those of us in California that our seniors need enough gas to 
get to the shopping center to be able to buy food. But it is a 
different world all around this country.
    Mr. Shimkus, you are recognized.
    Mr. Shimkus. Thank you, Mr. Chairman. I appreciate the 
panel for being here today, and I am sorry about running back 
and forth, as we all do on fly-in day and then are pulled out 
for another meeting. Obviously, we would like to go in numerous 
directions but have limited time.
    Does anyone know about the Judgment Fund? Can anyone tell 
me about the Judgment Fund?
    Mr. Palmer.
    Mr. Palmer. I know a little bit about it.
    Mr. Shimkus. Can you briefly explain what the Judgment Fund 
is?
    Mr. Palmer. I believe it is a path for NGOs typically----
    Mr. Shimkus. An NGO is a----
    Mr. Palmer. A nongovernment organization.
    Mr. Shimkus. An example of that would be----
    Mr. Palmer. Sierra Club or the NRDC or Friends of the 
Earth.
    Mr. Shimkus. And what happens in this process?
    Mr. Palmer. They sue the United States.
    Mr. Shimkus. OK.
    Mr. Palmer. On an environmental issue.
    Mr. Shimkus. Right.
    Mr. Palmer. Let's say an agency wants to settle that on the 
grounds that the environmental group is willing to settle it. 
They get their attorney fees that comes out of the Judgment 
Fund, is my understanding.
    Mr. Shimkus. And who funds the Judgment Fund?
    Mr. Palmer. The US of A, the Treasury. I think it is on 
automatic pilot. I think it is----
    Mr. Shimkus. Let me get this right. So you are saying that 
an NGO, a nongovernment organization, can sue the national 
government; and then they can, after there is the legal 
process, then maybe the agency decides to settle it----
    Mr. Palmer. Or the NGO wins the lawsuit.
    Mr. Shimkus. Then the NGO can go to this Judgment Fund, 
which is funded by taxpayers----
    Mr. Palmer. Correct.
    Mr. Shimkus [continuing]. To pay their legal costs.
    Mr. Palmer. Correct.
    Mr. Shimkus. So that taxpayers are funding these lawsuits 
against the private sector.
    Mr. Palmer. I wouldn't characterize. I will let you 
characterize it, Congressman.
    Mr. Shimkus. I am just asking questions.
    Mr. Palmer. For sure it is taxpayer money that is paying 
the legal fees for these lawsuits. No question.
    Mr. Shimkus. Ms. Seligsohn, does China have anything like a 
Judgment Fund?
    Ms. Seligsohn. No.
    Mr. Shimkus. OK. Thank you.
    Ms. Hutzler, I kind of like this. We do--you know, we have 
been preaching all of the above. Energy strategies, I think you 
mentioned that in some of the question and answers that what 
China is doing is trying to have more energy across the board, 
whether it is renewable, whether it is nuclear, whether it is 
coal. And I think it is important to put into perspective that 
this is 2035. Ten thousand billion kilowatt hours, 74 percent 
still being produced by coal. But that 74 percent, even though 
it is 80 percent, has to be much more coal use; is that 
correct?
    Ms. Hutzler. Yes, exactly.
    Mr. Shimkus. Do you have a percentage of the increase in 
electricity generation by coal for China in 2035?
    Ms. Hutzler. No, but I can get that for you.
    Mr. Shimkus. But it is pretty massive.
    Ms. Hutzler. Yes.
    Mr. Shimkus. And that is based upon the other question you 
had about a gigawatt, a coal-fired power plant every week, 
correct?
    Ms. Hutzler. Yes.
    Mr. Shimkus. And those are the stats we have used here for 
the last couple of years. So I find those very, very similar.
    The regulation was also discussed by my colleagues back and 
forth--and anyone who wants to answer this, if there is 
uncertainty of future regulation, what does that do to the 
capital markets to build new facilities? Anyone want to take a 
stab at that?
    Mr. Palmer. I think in our space, Congressman, in the 
context of the utilities, you can talk to co-ops, you can talk 
to Amron in St. Louis, you can talk to AEP, you can talk to 
Southern Company, but they look at the framework, and they say, 
I have got to put in 3 or $400 million on a 250 or a 300 or 400 
megawatt power plant, and I have still got out here greenhouse 
gas emission potential and----
    Mr. Shimkus. Sorry to cut you off, but I have limited time.
    The Morning Energy reported that the national air quality 
standard for ozone, boiler MACT, toxic standards for power 
plants, coal ash rules, and climate regs, a final report should 
be due August 1, 2012. Does that discourage----
    Mr. Palmer. It freezes everybody in their tracks.
    Mr. Shimkus. It freezes people.
    Mr. Palmer. Right. Freezes them. So the old units continue 
operating that are inefficient. No, you can't upgrade them, 
because you have got to go through----
    Mr. Shimkus. Well, it is interesting, because we talked a 
lot about super-critical power plants; and we are working with 
one now that is state-of-the-art, high-tech, and they are being 
frozen because of the transport rule. New reg, new power plant, 
state-of-the-art, unsure whether they can start because of 
transportation.
    Let me finish up. Mr. Kopits, because you have been pretty 
quiet since I have been up here. I was real interested in this, 
because it really kind of addresses this same issue about 
percentage increase. You project China's oil demand exceeding 
50 million barrels per day in 2025, 2030?
    Mr. Kopits. That is correct.
    Mr. Shimkus. And so how are they going to do that?
    Mr. Kopits. They are not. What you end up with is, in 2030, 
the range of forecasters put it at 105 million barrels a day 
that we can do. Chinese is about half of global demand growth. 
So if you take that, you just can't make the numbers work.
    Mr. Shimkus. So that supertanker coming from somewhere, 
China is going to bid against us if we don't do energy security 
here in this country. They are going to buy up the world 
demand--I mean, the world supply, I should say.
    Mr. Kopits. They already have. Yes. OECD consumption since 
the beginning of the recession is down 5 million barrels, and 
non-OECD consumption is up six million barrels.
    Mr. Shimkus. Great. Thank you.
    Mr. Whitfield. [presiding.] Thank you, Mr. Shimkus.
    Mr. Scalise, you are recognized for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
holding this hearing.
    We have spent a lot of time today going through the various 
changes in China's energy needs and how they are planning to 
meet it. I know many of us on this side are strong proponents 
of an all-of-the-above energy strategy for the United States. I 
have been very disappointed by this administration's failure to 
embrace that same kind of approach. In fact, frankly, I know 
more right now about, based on your testimony, about the things 
that China is planning over the next 20 or so years than I do 
about how this country is going to meet the energy needs, based 
on mixed messages we have gotten from the President, especially 
just over the last few weeks.
    Of course, I represent an area, South Louisiana, where we 
are still reeling from the impact of the President's 
permatorium, his refusal to let our people go back to work 
drilling safely in the Gulf of Mexico. Gas prices have nearly 
doubled since President Obama took the oath of office; and I 
think the fact that they are still holding so many vast 
reserves away from production in America----
    You know, the President said last week he wants to reduce 
imports by a third, and yet the week before that he said he 
wants to drill in Brazil. And the weeks and weeks before that 
he refuses to let our people go back to work drilling safely. 
And these are companies that had nothing to do with the BP 
disaster, companies that were drilling and exploring for energy 
in a very safe way that are not going back to work. In fact, 
12,000 jobs have been lost because of the President's refusal 
to let them go back to work drilling safely for domestic 
energy.
    So, Mr. Kopits, if you can talk about what you see in terms 
of the impact of especially the President's actions here in 
America and specifically as it relates to the Gulf of Mexico 
with the refusal to have a real consistent policy that lets 
people go back to work who never had any safety issues and the 
jobs that we have lost from it and the energy security we have 
lost from it.
    Mr. Kopits. Yes. The EIA forecasts production in the Gulf 
of Mexico to drop 600,000 barrels a day from May, 2010--so that 
is immediately following Macondo--to May, 2012. That is 11 
percent of U.S. crude production. So that is a very, very 
material number; and I would describe that drop as 
catastrophic.
    Mr. Scalise. The drop in exploration? What specifically 
would you characterize----
    Mr. Kopits. The drop in production.
    So we anticipate--this is government numbers. EIA 
anticipates U.S. crude oil production in the Gulf of Mexico to 
drop about 600,000 barrels a day from the day after Macondo to 
May, 2012. That is 11 percent of U.S. crude oil production.
    Mr. Scalise. And I know, again, getting back to these mixed 
messages----
    Mr. Kopits. The supply is about $30 billion. I think from 
memory it is about $30 billion of economic activity, it is 
about $8 billion in taxes, and I calculated about 65,000 man 
years.
    Mr. Scalise. Those are massive numbers. And, clearly, if 
the President wants to talk publicly about a strategy to reduce 
imports by a third, which, frankly, I think if we were actually 
utilizing an all-of-the-above strategy that I know our 
chairman, that many of us here would like to see us use, we 
could absolutely eliminate our dependence on Middle Eastern 
oil--and, of course, we have seen the volatility over there 
that is only increasing. But you don't get there by shutting 
off American resources and literally running these resources to 
other countries.
    We have been tracking the deepwater rigs that have left 
America because of the President's policies. Two of those rigs 
went to Egypt. Egypt. And so you have got employers saying I 
would rather do business in Egypt than in the United States of 
America exploring for energy.
    And so I will ask you, Ms. Hutzler. You had talked about--
and I know you have done some studying on this. But when we 
talk about the--looking long range and production and the 
President is bragging today about how high production is. Of 
course, production today is really an accumulation of efforts 
and exploration over years and years, in many cases, long 
before the President came into office. If you look at the drop 
in production, we would see, especially because of his 
policies, have y'all looked at how those policies, the lack of 
clear clarity on issuing permits, how that affects our ability 
to produce in America to meet those growing demands?
    Ms. Hutzler. I don't have a forecast on that. But certainly 
I agree with Mr. Kopits that the Energy Information 
Administration has shown that offshore production in the Gulf 
of Mexico has gone down dramatically because we are not 
drilling there.
    Mr. Scalise. And, again, I reiterate, we have lost over 
12,000 jobs. Another company just went bankrupt a few weeks 
ago. And with gas as high as it is, you would think--we know we 
have reserves--these companies would be out there working 24/7. 
And, in fact, because of the President's own policies, they 
can't even go back to work drilling safely.
    And I will just reiterate, companies that had absolutely 
nothing to do with the BP horizon. These are companies who had 
great safety records who are shut down today because of this 
President's policies. And then, you know, he gives these mixed 
messages, but we don't see a clear policy. So I appreciate your 
comments and yours, as well, Mr. Kopits; and, hopefully, we can 
get an all-of-the-above energy strategy.
    I yield back the balance of my time, Mr. Chairman.
    Mr. Whitfield. Thank you, Mr. Scalise; and I want to thank 
the panel today. We appreciate your being here very much. 
Obviously, the policies in China as it relates to energy has a 
direct impact on what we are doing in America as well as the 
rest of the world, and your testimony has been quite helpful.
    We will keep the record open for 10 days for any additional 
material.
    And, with that, this concludes today's hearing. And we look 
forward to working with all of as we move forward.
    [Whereupon, at 5:04 p.m., the subcommittee was adjourned.]

                                 
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