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

         ARE EXCESSIVE ENERGY REGULATIONS AND POLICIES LIMITING ENERGY
        INDEPENDENCE, KILLING JOBS AND INCREASING PRICES FOR CONSUMERS?

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

                                    HEARING

                                   before the

                                SUBCOMMITTEE ON
                         AGRICULTURE, ENERGY AND TRADE

                                     of the

                          COMMITTEE ON SMALL BUSINESS
                                 UNITED STATES
                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED TWELFTH CONGRESS

                                 FIRST SESSION

                                   __________

                             SEPTEMBER 19, 2011

                                   __________

                                    _____

                      U.S. GOVERNMENT PRINTING OFFICE
    71-325                    WASHINGTON : 2011
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    20402-0001

                Small Business Committee Document Number 112-035
                  Available via the GPO Website: www.fdsys.gov
                       HOUSE COMMITTEE ON SMALL BUSINESS

                         SAM GRAVES, Missouri, Chairman
                           ROSCOE BARTLETT, Maryland
                               STEVE CHABOT, Ohio
                                STEVE KING, Iowa
                             MIKE COFFMAN, Colorado
                         MICK MULVANEY, South Carolina
                             SCOTT TIPTON, Colorado
                             JEFF LANDRY, Louisiana
                       JAIME HERRERA BEUTLER, Washington
                              ALLEN WEST, Florida
                         RENEE ELLMERS, North Carolina
                              JOE WALSH, Illinois
                           LOU BARLETTA, Pennsylvania
                            RICHARD HANNA, New York
                           ROBERT SCHILLING, Illinois

                   NYDIA VELAZQUEZ, New York, Ranking Member
                             KURT SCHRADER, Oregon
                            MARK CRITZ, Pennsylvania
                          JASON ALTMIRE, Pennsylvania
                            YVETTE CLARKE, New York
                              JUDY CHU, California
                         DAVID CICILLINE, Rhode Island
                           CEDRIC RICHMOND, Louisiana
                            JANICE HAHN, California
                             GARY PETERS, Michigan
                              BILL OWENS, New York
                          BILL KEATING, Massachusetts

                          Lori Salley, Staff Director
                        Paul Sass, Deputy Staff Director
                          Barry Pineles, Chief Counsel
                      Michael Day, Minority Staff Director

                                C O N T E N T S

                                  ----------

                               OPENING STATEMENTS

                                                                       Page
    Tipton, Hon. Scott...............................................     1
    Critz, Mark......................................................     4

                                   WITNESSES

    Mr. James Martin, Administrator, Region 8, U.S. Environmental
      Protection Agency..............................................     6
    Ms. Helen Hankins, Colorado State Director, U.S. Bureau of Land
      Management.....................................................     8
    Mr. David White, County Commissioner, Montrose, CO...............    27
    Mr. David Ludlam, Director, West Slope COGA, Grand Junction, CO..    28
    Ms. Jennifer Bredt, Development Manager, RES Americas,
      Broomfield, CO.................................................    32
    Mr. James A. Kiger, Environmental Manager, Oxbow Mining, LLC, Elk
      Creek Mine, Somerset, CO.......................................    33
    Mr. Dick Welle, Manager, White River Electric, Meeker, CO........    36

                                    APPENDIX

    Prepared Statements:
        Mr. James Martin, Administrator, Region 8, U.S. Environmental
          Protection Agency..........................................    55
        Ms. Helen Hankins, Colorado State Director, U.S. Bureau of
          Land Management............................................    58
        Mr. David White, County Commissioner, Montrose, CO...........    63
        Mr. David Ludlam, Director, West Slope COGA, Grand Junction,
          CO.........................................................    69
        Ms. Jennifer Bredt, Development Manager, RES Americas,
          Broomfield, CO.............................................    74
        Mr. James A. Kiger, Environmental Manager, Oxbow Mining, LLC,
          Elk Creek Mine, Somerset, CO...............................    76
        Mr. Dick Welle, Manager, White River Electric, Meeker, CO....    87
    Questions for the Record:
        None
    Answers for the Record:
        None
    Additional Materials for the Record:
        ``Mesa County's job outlook poor'' Durango County Herald.....    50
        RES Americas Statement for the Record........................    52
        FY 1984-2010 Energy Lease Chart..............................    54

         ARE EXCESSIVE ENERGY REGULATIONS AND POLICIES LIMITING ENERGY
        INDEPENDENCE, KILLING JOBS AND INCREASING PRICES FOR CONSUMERS?

                                  ----------

                           MONDAY, SEPTEMBER 19, 2011

                      House of Representatives,
         Subcommittee on Agriculture, Energy and Trade,
                                   Committee on Small Business,
                                                        Washington, DC.
        The Subcommittee met, pursuant to call, at 10:02 a.m., in
    City Hall Auditorium, 250 North 5th Street, Hon. Scott Tipton
    (chairman of the Subcommittee) presiding.
        Present: Representatives Tipton and Critz.
        Chairman Tipton. Well, good morning, everyone. We thank you
    for joining us this morning, and our hearing will now come to
    order.
        I want to especially today thank each of our witnesses for
    being with us and taking time out of their busy schedules, and
    I look forward to your testimony.
        Also joining us today is the Ranking Member of the
    Subcommittee on Small Business over at Energy, Ag and Trade,
    Representative Mark Critz of Pennsylvania. Although Mark and I
    come from different parts of the country and we are of
    different parties, I know that he shares my passion for
    removing the hurdles that limit the growth and prosperity of
    America's entrepreneurs, and both of our districts have vast
    amounts of natural resources that make our country's uses of
    productive energy just that much more important.
        Mark, I really appreciate you making the trip out here
    today.
        And I do want to recognize, as Mark came in to Colorado, he
    was looking forward to having a good dinner, and by the time he
    got here last night he had to go to a gas station and get
    wiener schnitzel. [Laughter.]
        But he said it was great.
        So welcome to Western Colorado, Mark. We appreciate that.
        The purpose of today's hearing is to examine excessive
    Federal regulations and policies that are harming energy
    production in our country, killing jobs and increasing costs on
    all small businesses and consumers. The United States has been
    blessed with abundant energy resources and the technological
    capabilities to utilize these resources in an environmentally
    sound manner. Our growing dependence on foreign sources of
    energy, combined with intolerably high unemployment, demands
    that policymakers adopt an all-of-the-above approach to harness
    our domestic energy potential and create hundreds of thousands
    of desperately needed jobs in our country.
        Just last week, the House Resources Water and Power
    Subcommittee held a hearing on legislation that I recently
    introduced, the Bureau of Reclamation Small Conduit Hydropower
    Development and Rural Jobs Act, that I believe is just one part
    of the all-of-the-above solution.
        The people and small businesses of the 3rd Congressional
    District need jobs and affordable energy, and we need them now.
    Last Tuesday, the United States Bureau of Economic Analysis
    released a report ranking the unemployment situation in Grand
    Junction 362 out of 366, among the worst for the U.S.
    metropolitan areas in 2010.
        Unfortunately, there seems to be a disconnect between
    what's going on in Washington and on the ground in our
    communities. Several witnesses testifying before the Committee
    today will discuss how they would create jobs if only the
    government agencies would stop standing in the way.
        Additionally, business owners need long-term certainty from
    government in order to take the risks and to be able to make
    the investments necessary to create new jobs. More needs to be
    done to provide that certainty, because right now small
    businesses are scared to hire new employees, and investors are
    sitting on the sidelines.
        Congress and President Obama have our roles to play as
    well, and I am sincere in saying that it is important that we
    work together on real solutions to our nation's job and energy
    challenges. The President could contribute to this process by
    coming to terms with promises that he has made to reduce
    regulatory burdens on small businesses, with the onslaught of
    regulations that he and his administration keep proposing.
        More than 43 new major regulations were proposed last year,
    and another 219 regulations are in the pipeline, each costing
    more than $100 million. Additionally, the Administration
    proposed this year seven new regulations that would cost the
    United States economy, if implemented, more than $1 billion or
    more annually. Four of these were put forward by the EPA. A
    recent study showed regulation burdens to the American people
    cost about $1.75 trillion annually, with the cost to U.S.
    businesses of any size being approximately $160,000 each year,
    and the costs associated with small businesses for each
    employee to be on average $10,585 annually.
        Clearly, in too many instances, these regulations impose
    onerous burdens and costs on small businesses.
        Recently, my Colorado colleague, Congressman Corey Gardner,
    asked Assistant Administrator Mathy Stanislaus of the EPA if
    the agency's economic analysis appropriately considered the
    impact of proposed regulations on jobs. His answer? ``Not
    directly.'' Unfortunately, this is not the only instance, nor
    is the EPA the only government agency to have failed adequately
    to consider the effect of their proposals on small businesses
    and jobs.
        In Western Colorado, a number of small energy firms,
    including renewable energy firms, have reported that the Bureau
    of Land Management is implementing new regulatory burdens and
    barriers to producing energy on Federal lands. In a chart that
    I have submitted for the record from the BLM website, you will
    see that the number of new leases in Colorado in 2009 and 2010
    were the lowest totals in a 26-year analysis. The same trend
    can be seen nationally.
        [The information follows on page 54.]
        Experts in the industry tell me that this permitting
    process is slow, costly, and burdensome, often taking several
    years to be able to complete. Certain policies and procedures
    have held up development seven to eight months on an 11-month
    lease. This defies common sense. You wouldn't lease a car for
    11 months that you could only drive for the last three months
    of the year.
        I would now like to point out an article that I submitted
    for the record from the Durango Herald that featured unemployed
    oil and gas workers who used to earn upwards of $80,000 a year
    and were laid off as a result of new government regulations and
    policies.
        [The information follows on page 50.]
        These workers ate at our local restaurants, stayed at our
    local hotels, purchased pick-up trucks at our local dealerships
    and, most importantly, provided good-paying jobs for our local
    residents.
        In May of this year, Karen Kerrigan, president and CEO of
    the Small Business and Entrepreneur Council, testified before a
    House subcommittee that ``nearly three-quarters of small
    business owners report that hard times at the pump are
    affecting them and their consumers.'' Karen also stated that
    high gas prices are ``making it very challenging for small
    businesses to compete, to grow, and even to be able to survive
    in what remains a very difficult economic environment.''
        It is critical that we bring an economic conscience to the
    debate about environmental regulation. Environmental regulation
    does not have to kill jobs and raise energy costs for the
    American people. We all care about the environment, the impact
    of energy exploration and production. But it is essential,
    especially during these tough and difficult economic times,
    that we work toward practical solutions to protecting our
    environment while decreasing our dependence on foreign sources
    of energy. The Federal Government should foster an environment
    for increasing access to America's energy sources that promotes
    an all-of-the-above response and commonsense growth approach.
        We are fortunate to have appearing before the Committee
    witnesses who will testify to real-world examples of how
    onerous and duplicative regulations are harming opportunities
    for small businesses and local communities. The issues they
    will discuss are very important to small businesses. I would
    like to remind my colleagues that small businesses create four
    out of five new jobs in our economy. They are the engine for
    innovation and job creation.
        Again, I would like to thank each of you for being with us
    here today, and I would now like to yield to Ranking Member
    Critz for his opening statement.
        Mr. Critz. Thank you, Mr. Chairman. Just one quick comment.
    The chili dog and the chili burger I had at the wiener
    schnitzel was very good. I appreciate the breakfast at the
    Dream Cafe. I had a nice stay at the Main Street, and you have
    a wonderful town here. This is a beautiful--I have never been
    to Colorado, and Grand Junction is beautiful, a wonderful
    streetscape, although when you come in at 10:30 at night
    sometimes, there's not a whole lot open to go see. But with
    that, I appreciate you having me out here. It's a pleasure to
    be here.
        And with that, promoting a clean environment is critical,
    and nowhere is that more evident than here in Grand Junction.
    Like the people in my state of Pennsylvania, it is clear that--
    I hope I'm saying this right--Coloradoans? Or is it Coloradans?
        Chairman Tipton. Whichever way you'd like.
        Mr. Critz. Okay. It is clear that the people of Colorado
    place a high value on protecting land, air and water. This is
    not only a quality of life issue but also makes good business
    sense in areas like Colorado, where outdoor activities are
    integral to the economy. Pursuing these objectives must be done
    cautiously, making certain we balance benefits against costs.
        Unfortunately, in the areas of environmental land
    management regulation, this has not always been the case. Too
    often, environmental regulations saddle small businesses with
    new burdens. Firms with fewer than 20 employees spend more than
    $4,000 annually complying with environmental regulations. This
    takes money out of entrepreneurs' pockets, diverting resources
    from business expansion.
        There are laws on the books to address this problem, and
    while they have mitigated the impact of some rules, more must
    be done. Today we will examine a few notable examples at both
    the EPA and BLM.
        It has become clear that in developing its recent
    greenhouse gas rules, the EPA did not follow the law. This shut
    out small firms from being heard and deprived EPA the benefits
    of small business perspective. The agency's rationale for
    skipping this step was that they would instead write the rule
    in a manner sensitive to small firms.
        Despite those efforts, SBA's Office of Advocacy estimates
    that 1,200 small businesses would still be subject to the
    greenhouse gas rules. In a few years, this effect and the
    overall cost on small firms could become even more significant.
        This is the case for another critical matter which I know
    is a concern here in Colorado, as well as my home state of
    Pennsylvania. The EPA, in its consideration of regulations for
    coal combustion waste, has failed to consider the impact it
    could have on firms that recycle and use coal ash. Many
    entrepreneurs have found ways to incorporate coal ash into
    building and construction products. If EPA designates this
    waste stream as hazardous, it would stop such recycling
    enterprises. I have seen firsthand the benefits, including
    green spaces, that were replanted and reclaimed, and EPA could
    not be more wrong on this subject.
        While these problems deal with specific regulations, there
    is another matter I look forward to discussing with EPA and
    BLM. Like here in Colorado, in Pennsylvania we have discovered
    large reserves of subterranean natural gas. Bringing these
    resources online has the potential to make the U.S. less
    dependent on foreign energy. This, in turn, could reduce energy
    prices, a top concern for entrepreneurs.
        In a recent PNC Economic Outlook survey of small firms, 72
    percent responded a sustained rise in energy prices would
    negatively impact their business, potentially restraining
    growth. However, two issues could block natural gas from taking
    hold: continued bureaucratic delays in the issuance of drilling
    permits, and the potential for Federal preemption of state
    regulation.
        On the latter topic, we need EPA to work with the states,
    not overrule them in their own backyard. If handled improperly,
    this could halt gas exploration, leaving our nation more
    dependent on foreign energy.
        Although there are laws on the books, we have recently
    passed legislation requiring the EPA to examine the full cost
    of regulations. This would ensure the agency considers the
    burden not just on those emitting greenhouse gases, but also
    those that would see higher energy costs. It is critical this
    information be available as the discussion on greenhouse gases
    continues.
        We also took steps to extend these reviews to land
    management plans, bringing greater attention to BLM actions.
    Under the bill, agencies would have to consider the impact of
    regulations on energy prices for small businesses. By
    strengthening these protections, we can have regulations that
    not only protect our communities but also limit costs imposed
    on businesses.
        During today's hearing we will listen not only to
    regulators, but also to entrepreneurs who can describe their
    experiences with Federal agencies. Hearing small firms'
    concerns is critical. I hope EPA and BLM will take similar
    actions to expand this type of outreach.
        With small businesses generating two-thirds of new jobs, or
    I think Scott said 80 percent, it is essential that the Federal
    Government carefully balance the costs and benefits of
    environmental and land management regulations so that economic
    progress is not slowed.
        I want to thank the witnesses for being here, and with
    that, I yield back the balance of my time.
        Chairman Tipton. Thank you, Congressman Critz.
        Now I would like to explain--we have our lighting system in
    front, and explain how the lights work. Each of you will have
    five minutes for your testimony. The light will start out as
    green, and when you have one minute remaining, the light will
    re-turn yellow, and finally it will turn red, and at the end of
    your five minutes, if you could wrap up as quickly as possible,
    we would appreciate it, and we will try to be respectful of
    your time as well.
        Leading off our first panel is James V. Martin, who is
    Administrator for the EPA's Region 8, comprising Colorado,
    Montana, North Dakota, South Dakota, Utah, Wyoming, and 27
    tribal nations. He has worked in the environmental field for
    nearly 30 years, most recently as the Executive Director of the
    Colorado Department of Natural Resources and the Executive
    Director of the Colorado Department of Public Health and
    Environment.
        Prior to his career in public service, he managed a non-
    profit focused on energy, public lands, and water issues, and
    spent a decade as a senior attorney for the Environmental
    Defense Council. He also headed the Natural Resources Law
    Center at the University of Colorado School of Law. Mr. Martin
    has a Bachelor's degree from Knox College and a law degree from
    Northwestern Law School, Lewis and Clark College.
        Thank you for being with us today, Mr. Martin. If you would
    like to go ahead with your testimony.

       STATEMENTS OF JAMES MARTIN, ADMINISTRATOR, REGION 8, U.S.
    ENVIRONMENTAL PROTECTION AGENCY; HELEN HANKINS, COLORADO STATE
                DIRECTOR, U.S. BUREAU OF LAND MANAGEMENT

                       STATEMENT OF JAMES MARTIN

        Mr. Martin. Chairman Tipton, Ranking Member Critz, thank
    you for inviting me to testify about the effects on small
    businesses and communities of certain EPA regulations. And I
    might add, welcome to Colorado, Congressman Critz. I appreciate
    the opportunity to discuss some of EPA's proposals and to try
    to clear up some common misunderstandings about those efforts.
        First, with regard to coal combustion residuals, or CCRs,
    the EPA proposed last year to regulate the disposal of those
    materials to address the risks from disposal of such wastes in
    landfills and surface impoundments generated from the
    combustion of coal at electric utilities and independent power
    producers. That is an effort that was precipitated in no small
    part by the breach of a significant impoundment in Tennessee
    which led to the contamination of many acres and clean-up costs
    of several hundred million dollars.
        The agency proposed for public comment two options for the
    regulation of those materials. Neither option would change the
    May 2000 Regulatory Determination, commonly known as the Bevill
    exclusion, for CCRs or coal combustion residuals that are
    beneficially used. EPA continues to support the safe and
    protected, beneficial uses of CCRs.
        At this time, the agency is reviewing and evaluating more
    than 450,000 public comments that were received as a result of
    that proposal, and we are going to carefully review and examine
    all of those before deciding on the approach to take in the
    final rule.
        Second, with regard to power plants, EPA has proposed
    Mercury and Air Toxic Standards to control emissions of toxic
    air pollutants from power plants. Mercury, depending upon the
    form and dose, may cause neurological damage, including lost
    I.Q. points in children who are exposed before birth. As
    proposed, the Mercury and Air Toxic Standards would prevent
    17,000 premature deaths and 12,000 emergency room visits and
    hospital admissions annually. These proposed standards are
    affordable, they are achievable within the time for compliance
    outlined in the proposed rule, and they are roughly a decade
    behind schedule. Moreover, the investments in a cleaner energy
    sector required by these standards will keep people working and
    create jobs.
        With regard to greenhouse gas emissions, the agency is
    taking a commonsense, phased approach to meet our obligations
    under the Clean Air Act to reduce carbon pollution. Our focus
    is not on small sources, and I want to emphasize our focus is
    not on small sources and small businesses but solely on the
    largest emitters, and for the most part on the sectors that are
    responsible for the largest share of greenhouse gas emissions
    to the environment.
        Contrary to any claims you may be hearing, small sources
    are not covered by the greenhouse gas permitting program. In
    fact, EPA adopted regulations last year that will ensure that
    small sources are not subject to greenhouse gas permitting
    requirements.
        It is worth noting that the only greenhouse gas standards
    that EPA has issued under its current or its existing Clean Air
    Act authority will result in savings rather than increased
    costs for small businesses. Last year, EPA and the Department
    of Transportation issued greenhouse gas emissions and fuel
    efficiency standards for cars and light trucks for model years
    2012 through 2016. By ensuring that new vehicles are more fuel
    efficient, these standards will save American drivers money at
    the pump while reducing America's gas consumption, or oil
    consumption rather, by 1.8 billion barrels over the life of
    those vehicles. We estimate that the average American
    purchasing one of these vehicles will have a net savings of
    $3,000 over the lifetime of that vehicle.
        Finally, with regard to natural gas extraction, while
    natural gas is an important and growing part of our energy
    resource portfolio, we believe it is imperative that we access
    this resource in a way that protects human health and the
    environment. EPA has an important role in ensuring
    environmental protection and in working with Federal, state,
    and local partners to manage the benefits and risks of
    unconventional gas production, though I hasten to add only in
    the case of the use of diesel as part of the fracking fluid do
    we issue permits.
        We are committed to effectively addressing these concerns
    about the consequences of gas development using the best
    science and technology available. We believe that by doing so,
    as a nation we can establish a sound framework that allows for
    the safe and responsible development of a significant domestic
    energy resource with important national security,
    environmental, and climate benefits.
        I recognize--I would like you to acknowledge, sir, that I
    beat your schedule. I look forward to taking your questions.
    That is the sum and substance of my comments for this morning.
        [The statement of Mr. Martin follows on page 55.]
        Chairman Tipton. All right, Mr. Martin. Thank you.
        Our next witness is Bureau of Land Management Colorado
    State Director Helen Hankins. A native of Council, Idaho, Ms.
    Hankins joined the BLM in Albuquerque, New Mexico, serving as a
    clerk typist in the agency's student work study program in
    1970. She went on to serve in increasingly responsible
    positions in Durango, Colorado; Anchorage and Fairbanks,
    Alaska; Washington, D.C.; Elko, Nevada; and Phoenix, Arizona.
        Ms. Hankins oversees 800 employees and administers 8.3
    million acres of BLM public lands, and 27 million acres of
    mineral estate, which are concentrated primarily right here in
    my congressional district.
        She earned a Bachelor's degree in geology from the
    University of New Mexico and was one of the first two women to
    complete the BLM's five-month-long minerals law school program.
        Ms. Hankins, welcome back to our Subcommittee, and I
    appreciate you taking the time to be here, and we look forward
    to your testimony.

                       STATEMENT OF HELEN HANKINS

        Ms. Hankins. Thank you, Representative Tipton. And,
    Representative Critz, it is a pleasure to meet you also. I
    appreciate the opportunity to speak before the Subcommittee on
    Agriculture, Energy and Trade.
        BLM is responsible for the management of 240 million
    surface acres and more than 700 million subsurface acres across
    the country. Activities on these public lands and associated
    with Federal mineral resources are very important to the
    quality of our nation and to the economic health of our country
    and to rural communities across the West.
        Earlier this year, Department of the Interior published a
    report about the economic impacts of activities on public lands
    to the country. This is a summary of that report. I would like
    to address briefly those data related to the country as a
    whole, and also to Colorado. In my opening remarks, I will also
    touch very briefly on oil and gas leasing reform. More detailed
    remarks are in the written testimony previously submitted.
        With respect to conventional energy in our country, it is
    estimated that the economic impact is valued at $100 billion
    for activities related to coal and oil and gas exploration and
    development, resulting in some 420,000 jobs. $2.5 billion in
    royalties were taken in last year, and almost half of that was
    returned to the states where the activities occurred. In
    Colorado, that amount was about $112 million.
        Hard rock mining is also an important contributor to our
    country's economy, $14 billion in economic impact and some
    59,000 jobs.
        Oil and gas development is very important. It is important
    to us economically, and it is important to our path to energy
    independence. But economic development must be balanced with
    environmental concerns. Earlier this year, the BLM initiated
    oil and gas leasing reform. The purpose of this reform, which
    is a policy, not a regulation, is to provide a more open and
    environmentally sound approach to oil and gas leasing on public
    lands. The public has an opportunity to be involved much
    earlier in the process of determining whether we will lease or
    not lease a parcel.
        We believe that these reforms will lead to increased
    certainty for both the public and industry, and will also
    reduce the number of protests. In the last decade, protests on
    our oil and gas lease sales have gone from 1 percent to 49
    percent of the parcels. I believe you can understand that it is
    very costly to deal with protests and litigation on this scale.
        Early indications of the implementation of these reforms is
    that we are seeing a reduction in protests and a higher level
    of leases being able to be successfully issued.
        I would like to speak briefly now about Colorado. It is
    truly, as we all know, an amazing place. Public lands here are
    used for recreation, and many people gain their livelihood from
    public lands, whether it is ranchers, people in the mining
    industry, or in the oil and gas or coal industry.
        In Colorado last year, more than 3.8 million barrels of oil
    were produced, and more than 279 million mcf of natural gas.
    The economic impact of these activities to our economy was $4.8
    billion and some 17,000 direct and indirect jobs.
        It is important to note, though, that only about 10 percent
    of oil and gas exploration and development in Colorado occurs
    on Federal mineral estate. By far, the majority is on either
    state or private land.
        On the other hand, with respect to coal, 80 percent of the
    coal produced in Colorado comes from nine mines on Federal
    lands or Federal mineral estate. The economic impact of coal
    development in Colorado is about $1.2 billion, resulting in
    some 5,500 direct and indirect jobs.
        Hard rock mining is also important here, contributing some
    $26 million and some 5,000 jobs.
        Clearly, in Colorado, energy development is important, as
    is recreational use, livestock grazing, and other activities.
        In summary, approximately $6 billion is the economic impact
    of activities on public land in Colorado, and some 28,000 jobs.
    Thank you for the opportunity to participate in your hearing.
        [The statement of Ms. Hankins follows on page 58.]
        Chairman Tipton. Thank you, Ms. Hankins, for your
    testimony. We appreciate that.
        We will now start our question period, and I will begin.
        Mr. Martin, I would like to direct my first question to
    you, if I may. The Craig Power Station in Moffat County, the
    nuclear power station in Montrose County currently store dry
    coal ash. Are you aware that the coal ash is regulated as a
    hazardous material under the Resource Conservation and Recovery
    Act of the EPA, as they propose to do? The cost to operate
    these plants would increase significantly.
        And also are you aware, concerning these costs, there seems
    to be actually very little benefit associated with that? This
    would be passed on to rural electric consumers all over the
    Western Slope of Colorado in the form of higher electric
    prices.
        Before you answer, I would like to be able to convey to you
    just how important these facilities are to the Western Slope
    communities in which they reside. The Craig Power Plant is an
    example that employs 306 folks and 442 jobs in the Trapper Mine
    and surrounding area that are directly related to Craig's
    continued operation. Craig also generates $8.9 million in tax
    revenue for Moffat County and other local government entities.
    The nuclear station is one of the largest private employers in
    Montrose County. It employs 60 people with wages and benefits
    amounting to about $7.2 million annually. The nuclear generates
    about $1.1 million for Montrose County and other local
    government regions in the industry.
        Can you see really the benefit of some of this regulation
    going through, particularly when there is beneficial use for
    some of that ash?
        Mr. Martin. Well, Mr. Chairman, you covered a lot of ground
    in that question. I will do my best to respond.
        I visited with both Tristate and Xcel about the proposed
    rule and the two different avenues that the agency has to
    choose from in managing these wastes. I visited the Trapper
    Mine. I think I visited all of those different power plants at
    one time or another in my career, so I am familiar with their
    operations.
        I have conveyed to my colleagues in Washington, D.C. what I
    have learned from those conversations. I know that the
    Administrator is very carefully weighing and considering all of
    the factors that are involved here. She is committed to
    assuring that, in fact, we can continue beneficial use of these
    residuals, and I have explained to her that in most cases in
    the West we don't use wet scrubbers, we use dry scrubbers, and
    that makes for a situation different than is encountered
    elsewhere; for example, at the site in Tennessee where they
    experienced that very significant breach and the resulting
    impacts to both land and water resources and the expenditure of
    several hundred million dollars in clean-up costs.
        I know the Administrator is weighing all of those things. I
    will convey to her again the concerns that you have expressed
    on behalf of--well, I guess on Tristate's behalf.
        Chairman Tipton. I think that is absolutely critical
    because we are seeing a continued impact locally here in terms
    of some of the costs, and a lot of us, myself, and I'm sure
    Congressman Critz assures this, when it gets down to the
    ultimate consumer, senior citizens on fixed incomes, struggling
    families, as we have regulations that are increasing those
    costs on a per kilowatt hour basis, we are seeing real impacts
    that are coming through. And so I would appreciate you passing
    that on.
        Next question to you, Mr. Martin, is a number of
    stakeholders have questioned the agency's findings regarding
    the health benefits of the utility MACT rule. How does the
    agency determine the cost versus benefits of the proposed clean
    air rules?
        Mr. Martin. With respect, Mr. Chairman, principally to the
    Air Toxics proposal, or the MACT for utilities?
        Chairman Tipton. Yes.
        Mr. Martin. Okay. Well, over the course of a long period of
    time, the agency's process for identifying both costs and
    benefits associated with rules like this, and often with some
    significant assistance from the Office of Management and
    Budget, it has evolved and it has become progressively more
    sophisticated, I believe, and more precise.
        I would like to mention that back in the year 2000, it was
    a decision from the Environmental Protection Agency at that
    time that it was necessary to control mercury emissions in
    power plants. The last administration adopted a proposal for
    dealing with those emissions, and that was subsequently
    challenged in the D.C. Circuit. That is where these kinds of
    challenges are required to go, and the D.C. Circuit vacated
    that proposal, finding that it was inconsistent with the Clean
    Air Act.
        So we are actually doing our best to try and implement this
    statutory requirement, that should have gone into effect in
    2002, as carefully and thoughtfully as we can. I believe that
    the science of exposure to mercury and to other toxic gases is
    clear, and I believe that we have a very clear sense of which
    facilities are controlled and which are not. Forty percent are
    not; 56 percent are. We have controlled the other major sources
    of mercury, both medical, municipal waste combustors and
    medical waste incinerators. I think we can identify with a fair
    degree of confidence both the benefits, which range from $59 to
    $140 billion. So every dollar in investment yields about $5 to
    $13 in health benefits, and those range from reduced number of
    visits to emergency rooms to preventing that loss of IQ in
    fetuses that are exposed to mercury before birth.
        So there are significant health benefits both locally and
    at some distance from the source of mercury emissions. I know
    that during my term, tenure as Director of the Colorado
    Department of Public Health and Environment, one of my least
    pleasant tasks was to post lakes and streams, lakes
    principally, across the State of Colorado with warnings to
    pregnant women and others to limit their consumption of fish
    from those lakes. And we know for a fact that long-distance
    transport of mercury is one of the causes of that problem.
        So we are hopeful that as these regulations go into effect,
    we will be able to protect or prevent those health effects both
    in the immediate area around these particular sources, as well
    as some distance downwind.
        Chairman Tipton. I think we would all have unanimity of
    opinion that that is something we want to address. I was
    interested reading through some of your written testimony and
    other information that we have had available in terms of cross-
    state transportation, some of the heavy metals, and we are
    doing this on a science-based level.
        What is the suspension time for those heavy metals? How
    long can they stay up in the air? This may be unfair. You may
    not know the specifics.
        Mr. Martin. I confess I don't know the answer to that
    question with any kind of precision. I would be happy to try
    and find the answer for you.
        Chairman Tipton. I guess what I am really curious about is,
    you know, when we look at some of the industrial development,
    we have made great advances, great improvements here in the
    United States. But when we see some of the industrial
    development that is going on in China, India, are we seeing
    some of that residue coming in, and we are paying the price for
    it in the United States, expecting our industry to pay the
    bill? It is not ignoring the problem that may exist but putting
    pressure on those foreign countries to be able to address their
    operations.
        Mr. Martin. You may very well be right, Congressman, Mr.
    Chairman.
        Chairman Tipton. Does that enter into any of the
    consideration when we are asking our industry to be able to
    increase their ability to be able to screen out and to be able
    to filter impacts that are coming in that we simply are not
    able to control, and we would have a nominal impact in terms of
    increasing regulations on our industry? Does any of that in
    consideration?
        Mr. Martin. Mr. Chairman, with all due deference, I would
    beg to differ. I think that the proposal for reductions in
    emissions, air toxins from power plants, will have a
    significant effect on the burden both near the sites and long-
    distance from mercury and other toxics that are emitted from
    coal-fired power plants. So while it is clearly a global
    problem, these regulations will have a very significant
    beneficial effect in reducing----
        Chairman Tipton. Do you have a percentage on that?
        Mr. Martin. I'm sorry, sir?
        Chairman Tipton. Do you have a percentage of impact?
        Mr. Martin. I don't, but I am happy to get it for you, Mr.
    Chairman.
        Chairman Tipton. Okay. I think that would be interesting,
    and I would be interested to know if you can help us maybe
    achieve some of that, some of the impacts that we are feeling
    on our country coming in from outside of the United States, and
    the impacts actually on our businesses.
        When we are talking about some of the EPA's greenhouse
    emissions, during your testimony you were saying that there is
    going to be some cost/benefit ultimately to the consumer. This
    goes back a little bit to my opening statement when Gardner had
    asked the question do we do a cost/benefit analysis, and you
    were talking about the benefit of increased gas mileage,
    reducing some of the barrels of oil.
        How much will the new regulation be reflected in the cost
    of a new car that is passed on to the consumer?
        Mr. Martin. Mr. Chairman, I am not sure I understood your
    question.
        Chairman Tipton. Well, we are going to have a new
    regulation that cars are going to have to meet a certain
    standard. How much is that going to increase the cost of cars?
    We have $10,000 cars now. Are they going to cost $10,500,
    $10,250, $11,000? What is the cost to the consumer in terms of
    that vehicle?
        Mr. Martin. Mr. Chairman, I confess that I knew the answer
    to that question at one point, and if you give me a moment, I
    will try to dig it out. If I cannot find it in my briefing
    materials, I will submit that for the record as soon as we can
    find it. I know we have that data.
        Chairman Tipton. Okay. I think that is going to be, when we
    are looking at cost analysis, cost/benefit analysis, we need to
    make sure that some of those costs are included as well.
        Going on, when you are saying that the regs, going back to
    some of the mercury, heavy metals and what-not, in your
    statement you made the comment that the regs, the regulations
    are going to be affordable. What is going to be the increased
    cost to the consumer?
        Mr. Martin. For the Air Toxics Rule, Mr. Chairman?
        Chairman Tipton. Yes.
        Mr. Martin. For the consumer?
        Chairman Tipton. Yes.
        Mr. Martin. I don't remember, Mr. Chairman. I am happy to
    look it up for you if you give me a moment.
        Chairman Tipton. Okay. Yes, if we could find that out, I
    would appreciate that.
        And then when we are going a little bit into some of the
    fracking issues that are going on, just recently Governor
    Hickenlooper, he is a former petroleum geologist. He came to
    the Colorado Oil and Gas annual conference. This is his
    statement. He said, ``Everybody in this room understands that
    hydraulic fracturing doesn't connect to the groundwater. It's
    almost inconceivable that we would ever contaminate through the
    fracking process the groundwater.'' The governor went on to
    blame inaccuracies and misinformation on this subject being
    reported by the media, and he even called out the New York
    Times.
        Is it your opinion, do you agree with the governor? Was he
    accurate in his comments, and do you have any knowledge of any
    Federal regulations that may be proposed regarding fracking?
        Mr. Martin. I'm sorry. What was the last part of your
    question, Mr. Chairman?
        Chairman Tipton. Are you aware of any regulations that are
    being proposed or considered under the Federal Government that
    will be addressing fracking?
        Mr. Martin. The only regulations of which I am aware, Mr.
    Chairman--actually, they are not regulations, but we are
    working to identify the appropriate permitting structure for
    fracking operations that employ diesel, which is not part of
    the exemption adopted by the Congress when it otherwise
    exempted those kinds of activities from coverage under the Safe
    Drinking Water Act. But I am not aware of any other regulatory
    programs that are in the offing, Mr. Chairman.
        Chairman Tipton. And would you accept, do you embrace the
    governor's assessment of that process?
        Mr. Martin. I would have to take a closer look at what the
    governor said. I am not in the habit of disagreeing with any of
    my political leaders, but I have not had a chance to look more
    precisely at what the governor said. I know that he did
    accompany his statement with a recommendation that the Oil and
    Gas Commission here in Colorado adopt some fracking disclosure
    rules. I do not believe those have yet been proposed in any
    kind of definitive form, but we look forward to working with
    all of our state partners in dealing with all of these issues
    here in the West.
        Chairman Tipton. But would you concur that that probably is
    something better administered at the state as opposed to the
    Federal level?
        Mr. Martin. I believe that Federal, state and local
    governments all have a role here, and that I believe we are
    working in partnership with the states on these issues. But
    there are some issues where, for example, air emissions from
    the completion that follows fracking that are more likely more
    amenable to a national standard than to a local standard, Mr.
    Chairman. So I do not believe it is amenable to a yes or no
    answer.
        Chairman Tipton. Thank you, and I would like to now yield
    to Congressman Critz if he wanted to, and I have some questions
    for Ms. Hankins as well. But I will yield to Congressman Critz.
        Mr. Critz. Thank you, Mr. Chairman.
        And just so you folks know where I come from, I am from
    Southwest Pennsylvania, a long history of steel-making and coal
    mining. When I grew up, we had orange skies and orange streams,
    and we thought it was okay. But at some point, someone realized
    that that wasn't really good for our health. And in the years
    since, we have blue skies, we have clean streams that are now
    fishable, and we are doing really one heck of a job, and I
    think that you hit on it, Mr. Martin. It is everyone sort of
    working together. It is the Federal, the state, the local, it
    is industry, it is environmental, it is academia trying to work
    together to come up with solutions. And like I said, we have
    clean streams now. We have trails. Southwest Pennsylvania is a
    beautiful place to live.
        And also, the Clean Air Act actually started because of
    what was called the Donora smog in Southwest Pennsylvania, when
    several people died because of some sort of a blow-out at a
    local plant. So we are sort of the test case, and we have come
    a long way, and that is where I come to this point.
        And I have a couple of quick questions, just to make sure I
    understand. When we talk about the mercury rules, is the rule
    going to be that the mercury has to be in parts per billion? Is
    that correct, that it goes down, it is reduced to a parts per
    billion number?
        Mr. Martin. I believe that is correct, Mr. Chairman. We are
    talking about relatively small quantities. I'm sorry, Mr.
    Critz.
        Mr. Critz. That's okay. You can call me Mr. Chairman.
    [Laughter.]
        We have an agreement.
        Mr. Martin. We are talking about relatively small total
    quantities of mercury but which have significant effects on
    both the biology, the biota and humans. So I believe it is
    measured in parts per billion.
        Mr. Critz. Now let me ask you this, because what I have
    been told is that there is no way to measure parts per billion.
    Is that correct?
        Mr. Martin. Mr. Chairman, I don't--I'm sorry, Congressman
    Critz. I'm sorry, I don't believe that is correct. During my
    time at the Department of Public Health and Environment, we
    worked with a number of utilities, including Xcel Energy, to
    install continuous emission monitors, as well as to begin to
    install mercury controls, principally injected carbon, and I
    believe they were able to detect the quantities of mercury in
    the flue stream and to install effective emission controls. And
    for the benefit of the Coloradans in the room, that is a
    technology that was developed here in Colorado and which is now
    being marketed around the world.
        Mr. Critz. Okay. So it is--okay. So that is misinformation
    that I received.
        Mr. Martin. I would hesitate to suggest that it is
    misinformation. But we believe that you can detect mercury in
    the flue stream, and you can efficiently and relatively cost-
    effectively capture the mercury before it is emitted into the
    atmosphere.
        Mr. Critz. Okay. I like how you said ``relatively cost
    effective.'' But anyway, as I told you where I am from, talking
    about the MACT rule that is going to be implemented, one of the
    results of a heavy industry which we have had in Western
    Pennsylvania, we have giant piles of waste coal sitting all
    around our neighborhoods. And for those of you who don't know,
    in Pennsylvania what would happen is when a mine would open, a
    little town would pop up around it, and we would call them
    patches. So we have lots of patch towns all across Western
    Pennsylvania, and I know we have waste coal dumps across this
    country.
        And we have actually power plants that use that waste coal
    to generate electricity. And this MACT rule is going to shut
    those plants down because there is no way they can get that
    final--they clean up about 95 percent of the sulfur, but they
    cannot get the rest to meet the requirement based on the
    technology and cost-effectiveness. They cannot afford to do it.
        And what I would ask you is, is this picking winners and
    losers? In other words, we are going to shut these plants down
    because of the sulfur that they emit, but in the interim, or
    what that means really is that we are going to condemn all
    those people that live close to those coal ash piles, that they
    are going to have to live with them for generations to come. Is
    that a logical process that I thought through there, that those
    coal ash piles aren't going anywhere when these plants shut
    down?
        Mr. Martin. Congressman Critz, this is an issue that I have
    never been aware of before.
        Mr. Critz. Okay.
        Mr. Martin. I appreciate you bringing it to my attention. I
    will be sure to----
        Mr. Critz. Do you have waste coal piles out this way? Okay.
    So there are waste coal piles in your region.
        Mr. Martin. None that I am aware of, sir.
        Mr. Critz. Oh, is that right?
        Mr. Martin. I could be wrong, but none that I am aware of.
        Mr. Critz. Okay, okay. I thought there was. That is why I
    brought it up, because we have plants that burn them, but I
    will just move on.
        In answering actually your question, Mr. Chairman, about
    does the government take into account air quality that is being
    blown in off of our shores, we are experiencing actually in
    Western Pennsylvania, especially because we are right on the
    Ohio border, that a lot of the power plants that are in Ohio,
    the emissions that they create blow into Pennsylvania, and it
    actually affects what we are allowed to do in Pennsylvania.
        So I can't imagine that we are taking into account what is
    blowing across the ocean from China and India that is blowing
    into Washington and Oregon if we can't even do it state to
    state, because that is an EPA-regulated event as well. So I
    would investigate that, and I would be curious to hear if EPA
    is really taking into account what is blowing across the ocean
    when we talk about China, the pollution that they are creating,
    because we know that there is an impact in Washington, and I
    know that across state lines it is impacting what we are
    allowed to do in Pennsylvania, just what is based in Ohio.
        But also moving on to fracking now, when fracking first
    really became prevalent was in the late `60s, and they used a
    load of diesel to do the fracking process. Over the years they
    have really cleaned that up and it is a much more--we will call
    it a concoction of many, many items, diesel being I think--I
    don't know if diesel is even a part of it anymore. It might be
    somewhat of a part of it, but I don't know.
        But I was looking through some testimony, and I believe it
    was in 2004 the EPA reported that the risk was very small for
    hydraulic fracturing. Are you aware of this report?
        Mr. Martin. I am, Congressman Critz. It was a report
    prepared by the Environmental Protection Agency related
    principally, I believe, if not solely to coal bed methane and
    the use of fracking to access that particular resource. So it
    was not examining shale gas or other unconventional gas
    resources.
        Mr. Critz. But the fracturing is the same process, though,
    wouldn't it be?
        Mr. Martin. It has been my experience, Congressman Critz,
    having served on the Oil and Gas Conservation Commission in
    Colorado for almost four years, that different structures,
    different target zones, different operations all pose different
    risks and different benefits, and it is difficult to generalize
    across the spectrum of different unconventional gas resources.
        Mr. Critz. Okay, okay. Well, the reason I bring it up is
    that, you know, I try to make sure that, as you may be aware,
    and I think the Chairman mentioned it, or maybe he didn't, I
    mentioned it in my testimony that in Western Pennsylvania,
    actually in New York, Western Pennsylvania, Ohio, West
    Virginia, through the Appalachian region, we have the Marcellus
    Shale gas, and fracturing, hydraulic fracturing has become a
    huge sort of political football. And what I try to tell my
    constituency is that when you drill a hole--and I think in
    Western Pennsylvania we have sort of an understanding of this,
    is that it is heavy industry. This is not--they are not
    building a drill. They are drilling a hole in the ground to
    bring up natural gas. It is heavy industry, and there are going
    to be accidents. There are going to be--probably someone is
    going to die. Someone is going to get killed at some point or
    another. I mean, everyone doesn't want that to happen, but it
    is heavy industry. You don't drill a hole in the ground,
    flowers come out of it. I mean, that is the way it is.
        But it is in the industry's best interest not to have it
    contaminate the well through the water table or whatever,
    because it is a $5 to $7 million investment that then goes out
    the window if it is somehow fouled. So I think that, or my
    impression and what I have seen is that the industry is working
    very diligently not to have accidents, but it is going to
    happen.
        And it brings me back to the Tennessee coal ash issue, that
    that was a terrible issue, a terrible problem. I mean, when
    that impound burst through and contaminated, and you said $100
    million worth of clean-up, I mean, that is absolutely terrible.
        Does it make sense to change the regulations for an entire
    industry because of one incident, or is it smarter to make the
    enforcement and the penalty for not following the current
    regulations make more sense? You know, we have a tendency at
    this level to do a one-size-fits-all solution, and it rarely
    works at every level.
        So my question to you is, because of the Tennessee blow-
    out, did the regulations need to be changed because of that, or
    should the enforcement and the penalty for what happened be
    stronger so that it would prevent people from violating the
    regulations that already exist?
        Mr. Martin. Congressman Critz, that is precisely the
    question that the Administrator, my boss, is struggling with
    right now. We are going to carefully review all 450,000
    comments that we received. We are certainly taking a hard look
    at the comments we received from industry, as well as the
    industry that beneficially uses coal ash. There are clearly
    two, at least two options in front of the Administrator,
    neither of which will upset the Bevill Amendment, the 2000
    Bevill exception for these materials. But I can't, I honestly
    can't tell you what the Administrator is going to decide
    because she has not reached that point. I don't expect her to
    until into next year.
        Mr. Critz. Okay, all right. And just one last question and
    I will turn it back over to the Chairman because, Ms. Hankins,
    you have had a free ride, so we have got to do something here.
    [Laughter.]
        But I was reading that BLM is congressionally mandated to
    issue a permit 60 days after a competitive bid process, and I
    was curious if BLM is meeting that requirement out here in your
    section. And then I am going to ask both of you to answer a
    question, because we see sometimes in the industries that we
    are talking about permits taking multiple years to be issued,
    which if you are in business, I don't know how you project your
    costs, what the market is going to be when you get those
    permits, and I just want to find out from you what is a better
    way that we can address these ridiculously long permitting
    times.
        Ms. Hankins. When you say competitive bid process and a 60-
    day timeframe, are you talking about lease by application for
    coal, or are you talking about oil and gas? I'm not sure,
    because----
        Mr. Critz. Sided with oil and natural gas producers in
    ruling that while the Department of the Interior Secretary's
    discretion in issuing oil and gas leases still must comply with
    a 60-day time deadline established by Congress.
        Ms. Hankins. Okay. I believe you are referring to
    requirements in the Energy Policy Act of 2005, and there are
    several factors that affect the rate at which we can issue a
    permit. The first one is how complete is that permit
    application when we receive it, and we have 10 days to review
    it and identify to the applicant if there are any deficiencies
    in their permit. Once we do that, then they have a 45-day
    period to address any issues that we raise, and at the end of
    that time or whenever we get a complete permit from the
    applicant, we are expected to process that in 30 days.
        That includes an environmental review. It can also include
    litigation. And so sometimes we do not meet that 60-day
    timeframe for a variety of reasons. But I do understand that
    that is the requirement in the Energy Policy Act.
        Mr. Critz. Would you say that you meet it 50 percent of the
    time?
        Ms. Hankins. You know, I don't have that figure. Some of
    our offices meet it 100 percent of the time. Some I don't think
    meet it to that degree. But I can certainly provide you the
    data.
        Mr. Critz. Okay. But your estimation is that you do a
    pretty good job and you don't have ones sitting out there 120,
    150 a year?
        Ms. Hankins. There are individual instances for some of the
    reasons I stated that have been pending for more than the
    period of time you stated. But generally speaking, there are
    other factors that cause that. Sometimes, as I said, the
    application is incomplete. Sometimes there is other information
    we need. Sometimes there are environmental reviews that need
    more time. So there are a variety of factors why they may take
    more time, but there are a few instances where the period is a
    long time.
        Mr. Critz. Okay. Mr. Martin.
        Mr. Martin. Yes, sir.
        Mr. Critz. I have a lot of coal mining in my district. We
    have permits that were applied for five, six years ago. I don't
    understand. I mean, I don't understand how it could take that
    long to get a permit issued for a coal mine that will probably
    operate for two years.
        So in your region, do you have a set date that you have set
    that we need permits issued within two years, or we need
    permits issued--we either deny or we approve permits?
        Mr. Martin. Congressman Critz, we don't typically issue
    permits for coal mines other than for----
        Mr. Critz. Well, I mean any of your permitting issues.
        Mr. Martin. More generally?
        Mr. Critz. Yeah.
        Mr. Martin. The Clean Air Act, I believe, sets an outside
    limit of one year. We work very hard to efficiently process
    permit applications. We are a direct implementer in a number of
    places, including all of the American Indian reservations in
    our region. We have a significant permit burden, but we are
    working very hard at eliminating backlogs and processing them
    as effectively and efficiently as we can.
        We are actually the direct implementer for PSD for
    greenhouse gases in Wyoming, and I believe we are going to meet
    our goal of processing that part of the PSD permits in tandem
    with the state as it evaluates conventional air pollutants, and
    we will assure that there is no delay for those major sources.
    I think we have objectively been very efficient in evaluating
    other greenhouse gas air permits within our region.
        So that is my goal. We are a customer service agency, and I
    take that very seriously.
        Mr. Critz. Thank you.
        Mr. Chairman.
        Chairman Tipton. Thank you, Mr. Chairman. [Laughter.]
        I would like to drop back just a little bit. Just a couple
    more questions came to mind here, Mr. Martin. When you were
    talking about the 450,000 comments that came in, on specific
    instances were you receiving--if you had a comment on Prake,
    were you receiving comment coming in from New York on that, or
    do you give weight to local input more?
        Mr. Martin. Mr. Chairman, we weigh every comment equally.
    Sometimes we get the same comment from multiple individuals or
    multiple entities, and then we count that as a single comment.
    But we weigh every comment as seriously as every other comment.
        And if you don't mind, Mr. Chairman, I found the reference
    to at least one of the questions you asked me. You were
    inquiring about the cost impact of the Mercury Air Toxics
    Standards, and what I discovered is that we did, in fact,
    analyze that precise question, and our conclusion is that the
    MATS, the Mercury Air Toxic Standards, would raise electricity
    rates an average of 3.7 percent in 2015, and that would drop to
    2.6 percent by 2020. And as a result of that relatively small
    change in average retail prices of electricity, they would
    continue to be at or below 2009 levels even after absorbing
    those costs.
        Chairman Tipton. Okay. Just kind of curious. Have you ever
    seen prices go down once they go up, in reality, on your bill?
    I haven't either. So it's kind of a rhetorical question, I
    guess.
        Let's see. I had one other question, and it is going back
    to some of the mercury standards. It is a problem. We know
    there are some issues with mercury and what-not, but I do have
    a concern in terms of how much we attempt to look to the United
    States to fix the world's problems when we have a very
    responsible industry here in this country.
        Do we have any percentages of what Congressman Critz had
    asked on this again? I just wanted to clarify how much is
    coming in from foreign countries that is in our air impacting
    us. Is it half of what is up there? Seventy-five percent? Ten
    percent? Do we have any figures on that?
        Mr. Martin. Mr. Chairman, I am hesitant to hazard a guess.
    That is a number that we will get to you. I have written it
    down. It is a number that we will get to you. From my own
    experience at the Department of Public Health and Environment,
    I would say it is a much lower number, that this is principally
    a national and local issue here in Colorado.
        And I would like to add that here in Colorado during the
    debate during the last administration over how to structure
    that mercury regulatory package, the State of Colorado moved
    ahead. We put together a stakeholder process. I believe we had
    consensus from all of the utilities in the state, and we
    developed a mercury standard that is in the process of being
    implemented here in Colorado. We were ahead of the
    Environmental Protection Agency in that instance, and I don't
    believe we have encountered any significant obstacles in
    getting that done.
        We have had the ancillary benefit of stimulating the
    development of that industry here in Colorado that specializes
    in installing that carbon injection technology that does not
    require significant changes in the system in order to achieve
    very significant emissions reductions.
        Chairman Tipton. If you could get that number, I think that
    is important for us to know and to be able to reflect on.
        Mr. Martin. Be happy to do it.
        Chairman Tipton. Thank you. Appreciate that.
        Ms. Hankins, I don't want you to feel left out either. I
    did have a couple of questions.
        When I was reading through your testimony, you were talking
    about in terms of onshore production from public lands, in the
    year 2010 that production had increased by 5 million barrels
    from the previous fiscal year. More than 114 million barrels of
    oil were produced from BLM managed mineral estates, the most
    since fiscal year 1997.
        I was kind of curious about that given the comment that we
    continue to hear, particularly here in the Third Congressional
    District. Those producing facilities, when were those
    actually--when were the leases made, and when were they
    permitted?
        Ms. Hankins. I will respond to your question in a couple of
    different ways. The figures that you quoted are, of course,
    national figures, not specific to Colorado.
        You know, the main thing that controls how many leases we
    issue and how many wells are drilled is determined by the
    market and by the national demand for energy and the price of
    gas and the price of oil. And so those are factors in why we
    have seen less requests for leases and less proposals for
    applications for permits to drill in the last few years.
        And so I think it is important to keep those market
    conditions in mind. There are many reasons that industry has,
    and I think you have industry representatives later on your
    other panels that can talk about that as to when and where they
    choose to drill. But what we are seeing is that only about 70
    percent of the leases issued at the present time are being
    drilled, and those are choices that industry makes, not the
    BLM.
        So I think there are a range of factors, much driven by
    industry in terms of when they seek the lease, when they choose
    to submit an application for permit to drill, and when they
    decide to actually drill a well.
        Chairman Tipton. Right now, you know, I understand what you
    are saying. Since we are in the 3rd District in Colorado, this
    is your area. What are the Colorado numbers?
        Ms. Hankins. In terms of number of leases issued?
        Chairman Tipton. Productivity. In terms of that
    productivity. You were saying these are national statistics.
    What do we have for Colorado?
        Ms. Hankins. I don't have those immediately in my head, and
    I can certainly provide them. But our statistics, overall we
    have issued fewer leases in the last three or four years than,
    say, eight or ten years ago. We are also seeing less
    applications for permit to drill for some of the same reasons
    that I talked about nationally, and I will be happy to give you
    those exact numbers.
        Chairman Tipton. I think that is probably not fair for you
    to even have to comment on because it was a product of Colorado
    State Legislature in terms of oil and gas regulations. We see
    our friends in North Dakota with 3 percent unemployment right
    now. They simply left our state, because I think we can
    certainly make a profound argument at the gas pump. I filled up
    my truck the other day, you know, $80 bucks, and it had a
    quarter of a tank and then topped it off. The costs are there,
    and given the rationale that it is market driven, that is a way
    to be able to drive down actually some of those costs.
        I would like to go back a little bit to some of your
    testimony that you submitted to us in regards to coal. You said
    the BLM is currently processing six applications for
    competitive coal leases in Colorado. Can you tell us where
    those are at now?
        Ms. Hankins. I can provide you a detailed table that gives
    you the status of each one of those, but generally they are in
    some phase of the environmental review process: Some, the
    environmental review has been completed; some, it is ongoing.
    In one case, we completed the review, made the decision, and it
    is now being litigated. So it is variable, but I can present
    you a table that gives you the details for each one.
        Chairman Tipton. Okay. Yes, because I think that
    particularly when we get down to the coal industry, if you have
    a moving wall--we were talking about that--once you stop, it
    gets incredibly hard to get that going. So that permitting
    process and being able to expedite that and do it responsibly
    is obviously incredibly critical for us there.
        Ms. Hankins, a lot of people in our congressional district
    and across the nation feel that our country, and we see it
    right here in Mesa County in particular, 10.5 percent
    unemployment. We are experiencing both a job and an employment
    crisis, and in terms of an energy crisis as well for this
    country. A little later, and I would certainly invite and hope
    that both of you might be able to just listen in to some of the
    follow-up testimony from our next panel as well, because I
    think it is going to be insightful. The rules and regulations
    have real impacts on real people, real jobs, real costs,
    impacting consumers at home.
        But they will be testifying on the second panel, and they
    claim that we have the potential to rapidly create thousands of
    jobs and bring new energy supply to the market. But there are
    onerous and changing Federal policies, including those
    instituted by the BLM that are a barrier, and I think you
    understand that. There are issues, and we understand your
    mission.
        But what is the BLM doing to be able to reduce permitting
    times? We currently have an average of 206 days to the 30 days
    required, going to your question, Congressman Critz, required
    by the Energy Policy Act of 2005, 206 days versus the
    requirement of 30 days in terms of that permitting process. You
    have the lease. You have to be permitted to eventually turn
    that into production, a big span of time.
        So what is the BLM doing to reduce those permitting times
    right now, and how can the BLM enable job creation and economic
    development when we continue to have these extensive
    bureaucratic delays?
        Ms. Hankins. I will be happy to address that question. I
    don't believe that the figures that I have seen for the amount
    of time, once we have a complete application for permit to
    drill, are as high as you indicate, but I will verify that and
    send you the information that we have.
        With respect to issuing new leases and then subsequently
    processing applications for permit to drill, I think it is
    important to think about one of the reasons that we undertook
    oil and gas leasing reform, and that is that nearly half of the
    leases that we were offering for sale were being protested and
    in some cases litigated. When that happens, then we are not
    able to issue a lease or at least allow the company to exercise
    their rights under a lease until we resolve that protest or
    litigation.
        And so we were finding nationwide that that was a
    significant hindrance to issuing these leases because of all
    the protests and litigation that was occurring. We undertook
    oil and gas leasing reform with the idea that if we could
    involve the public earlier in the process and get their input
    on whether we should recommend a parcel for lease or not, and I
    stress get their input because the decision still rests with
    the agency, it has been our hope that that would reduce the
    number of protests.
        We have seen some indications in both Wyoming and Montana
    that that is the case. The percent of parcels being protested I
    believe in Wyoming is about 12 percent. In Colorado we are
    still in the process of implementing oil and gas leasing
    reform. Our situation is a little bit different than some of
    the other states because we are doing a lot of land use plans,
    and some of those are far enough along that until we actually
    get to the final decision about resource allocation in those
    plans, we won't be leasing some areas. So our situation is
    slightly different.
        But I think when we think about what leases we make
    available and where we can have drilling, first we have to
    think about oil and gas leasing reform is intended to make that
    process work better and more efficiently so that when we do put
    a parcel up for sale, then we don't get the opposition and we
    are able to proceed with presenting it.
        Once those leases are issued, another step I have taken
    since I have been here in the last 18 months is I have looked
    at the numbers for how efficient our offices are and have asked
    for an internal review. I received some of the preliminary
    feedback last week, although I don't have a report yet, and
    what that review tells me, as I indicated earlier, is in some
    of our offices we are doing exceedingly well in the processing
    of proposed parcels and the processing of APDs. In some other
    offices, I believe we need to increase our efficiencies, and it
    is my intention to work with those managers to help them do
    that.
        So it is front-end loading, the leasing process, and it is
    taking some steps internally to increase our efficiencies. So
    those are two things we are doing, I think, to help expedite
    the permitting.
        Chairman Tipton. Since you brought up the litigation end of
    it, I am just kind of curious. How much of the BLM's budget is
    consumed by litigation? Do you have a percentage?
        Ms. Hankins. No, I don't, although I wish I did. We have
    talked about that nationally because I can tell you that it is
    substantial. When we look at costs associated with responding
    to Freedom of Information Act requests, and then all the work
    associated with preparing administrative records, which is all
    the documentation related to a particular action, and then
    attorney time, both our solicitors and Department of Justice,
    plus whatever time in court or trying to work through
    settlements, it is extensive.
        Chairman Tipton. Is anyone running a study on that to try
    and find that out, just extract the numbers?
        Ms. Hankins. We have been talking about it at BLM at the
    national level, and they are starting to put together a
    database that will help us get at that information, but we
    don't currently have that. But I can tell you----
        Chairman Tipton. Just maybe one other thought when you are
    kind of pursuing that number, it might also be interesting,
    just given your comments in terms of some of the oil and gas
    reform, to be able to expedite these, if we could label it
    defensive medicine, to try and inoculate yourself a little bit,
    not just paying for the lawsuit. How much of your valuable
    resources which might be better used elsewhere are being drawn
    off to try and defend yourself, that we could actually get to
    address some of the permitting, to be able to expedite that,
    take it from 206 days down to the 30 days, to be able to
    achieve that.
        Ms. Hankins. That is a good comment.
        Chairman Tipton. Just a bit of a thought that you might
    want to look at.
        In 2007, the Department of Interior established a Federal
    advisory panel comprised of a number of government and non-
    government stakeholders and made recommendations on siting wind
    turbines on Federal lands. This advisory panel reached a
    consensus recommendation in 2010. In its recently issued draft
    guidance, the agency appears to have jettisoned actually many
    of the recommendations.
        Can you explain to us why the agency took this step and why
    the Federal agency's advisory committee's consensus
    recommendations are being ignored?
        Ms. Hankins. I don't have specific information about that.
    But what I can tell you is that the BLM completed a Wind Energy
    Programmatic Environmental Impact Statement approximately five
    years ago, and in that document we identified some 20 million
    acres of land the BLM manages that are suitable for wind energy
    development. Here in Colorado, we have had several requests for
    rights of way to conduct wind testing to put up meteorological
    towers to evaluate wind velocities in constancy and so forth,
    and most of those have been in southern Colorado but some in
    Western Colorado.
        To my knowledge, so far we have not received a single
    application from either an individual or a company to develop a
    wind farm in Colorado, and we certainly would be open to that.
    So I don't know that industry has defined that that is
    something that is economically viable for them here, but I
    would certainly be interested in seeing a proposal.
        Chairman Tipton. Okay. Again, if you could maybe get back
    with us in terms of--I guess I would like to know why, when
    some recommendations are made, it seems that the advisory
    committee is just going in the other direction.
        Ms. Hankins. Sure, I will be glad to.
        Chairman Tipton. Just one last question for you. I am kind
    of curious, when we are talking about the big scope, the
    obligations of your agency and the EPA nationwide. We have an
    energy project, say, in Colorado, and we receive public comment
    coming in. I am just curious. When you receive comment from,
    say, Pennsylvania in regards to a project going on in
    Colorado--and this is the same question I actually asked Mr.
    Martin as well--do we give more consideration to the local
    communities, the local input, as opposed to someone who may
    live 2,000 miles from us, commenting on whether or not a
    project should proceed?
        Ms. Hankins. You know, that is a question that I have been
    asked since I began with the BLM as a geologist and then as I
    moved into various management positions, because I think there
    is always a hope and a desire on the part of people who live
    closest to public lands that they should be the primary
    determiner for what should happen on those public lands.
        But the public lands that the BLM manages, they truly are
    the lands that belong to all of the American people. It is the
    taxpayers of all of our country who fund the management of
    these lands and who pay for improvements; for example,
    recreational facilities or other amenities.
        And so when we manage them, because they do belong to all
    of the American people, it is important that we get the input
    and consider, as Mr. Martin said, we consider the input of all
    Americans in our decisions. Sometimes local people have much
    more detailed knowledge of a particular proposal or a
    particular piece of ground, and so we clearly can factor that
    in in a different way because it is data and information that
    people from a distance don't have. But we, like the EPA, must
    consider all comments equally and evaluate them in the context
    of any of our actions.
        Chairman Tipton. Okay. I guess when you make the comment
    that local people have better insight, are more knowledgeable
    about it, but you are going to give equal value to somebody
    from wherever--you are right, these are our public lands, they
    have a right to comment. But I would certainly hope there would
    be a little more value given to people that are on location and
    their understanding of the situation that you are dealing with.
        So thank you, and I yield to Congressman Critz.
        Mr. Critz. Thank you. I just have one question. Ms.
    Hankins, you mentioned something that I think needs
    clarification, and this is also for you, Mr. Martin, because I
    guess the way to say this is what you were just commenting on
    the public lands, that they are the entire nation's, and our
    job, especially in this Subcommittee where we are looking about
    small business, is that we represent the people of this
    country, so we have an obligation to the people to protect, to
    make sure where things are going, but we also have to look at
    the big picture. So when you are issuing permits or you are
    issuing regulations that drive up energy prices, we look at the
    jobs picture. We look at companies that will not open here
    because energy prices are too high. So we have to do our best
    to balance things.
        So you made a comment, Ms. Hankins, that from the point
    when a permit application is complete. Now, I have heard from
    industry that they say sometimes they don't know when their
    application is complete only because they will fill out the
    application and then the agency comes back and says we need
    this, we need more, more than what they put in their initial
    application.
        And we are trying to be assets to both sides. We want to
    help you. We want to help industry as well. We are trying to
    balance these two things. So how do we help? And I am sort of a
    bare-knuckles brawler kind of guy. Let's get to the answer.
    What is the answer? If you are not going to issue a permit,
    then deny it. If you are going to issue a permit, then let's
    get to it.
        So how do we get to the point where it is not this
    adversarial relationship between the people who are after the
    permits and those of you who are issuing it? How do we shorten
    that timeframe efficiently? Not to miss anything, we do not
    want to miss anything, but how can we help you move that
    process faster and turn this from this sort of give and take,
    like okay, the industry applies, you give back comments, they
    answer the comments, they get more comments. I mean, this is
    where we find industry really complains, that you say from the
    time when the permit application is complete. Well, for them,
    it's from when they started, and that is where you get this
    protracted timeframe.
        So my question is how do we make this better, and how can
    we help make this better?
        Ms. Hankins. I think there are a few things that can
    improve the process. One is based on this internal review that
    I did, I think we need to educate some of our staff. We have a
    lot of new employees that are still learning, and I think part
    of our responsibility is to make sure they have the training
    and knowledge and understand all of their requirements.
        The other thing that I think is important is that old-
    fashioned thing, communication. One of the things that is
    sometimes problematic, not even just within the agency but with
    people in general, is that we don't sit down and have a
    complete conversation about many things, and I think when we
    have a permit that we think is incomplete, a permit
    application, then I think we need to sit down with that company
    and have a face-to-face discussion, here are the areas that we
    think need to be addressed in your application, and that needs
    to be a conversation, not an email or some other impersonal way
    of communicating.
        And then industry has the chance to ask questions, clarify
    what we want, and we have that same opportunity. So I think
    that is something that is really important.
        It wouldn't hurt to take a look at the regulatory
    requirements and make sure that they are not ambiguous and so
    that it is very clear what we want. I say that because I
    haven't personally looked at those in some time, but I think
    that is always an option, is to make sure what you are
    requiring is crystal clear.
        So those are three things I think we could all work on to
    help improve the process, and that communication thing is a
    two-way street. We have had some companies who have contacted
    me and some of our district managers and say these are things
    we think the BLM needs to address in a different fashion, and
    those kinds of conversations are very helpful to me and to our
    managers because then we are hearing directly from industry
    what would be useful to them, and I would encourage that as
    well.
        Mr. Critz. Thank you.
        Mr. Martin.
        Mr. Martin. Congressman Critz, I guess I have two
    observations. One is that under the statutes that the
    Environmental Protection Agency administers, the vast majority
    of permits are issued by state agencies under delegated
    programs from our agency. So while we very carefully monitor
    the permit backlogs that exist under different programs and in
    different states, or in some cases on reservations, the
    majority, the vast majority of the work is done at the state
    level, and we are responsible for overseeing only the work that
    they do.
        Having done that, for those permits that are issued by the
    regional office, we strongly encourage permit applicants to do
    a pre-permit application meeting with us so that we can better
    understand what they are proposing and make sure we do our best
    to explain what would be required to be contained within a
    permit. Throughout the permit process, we encourage a dialogue
    between our staff and staff for the permit applicant. We work
    as hard as we can to make sure that everybody understands what
    everybody else is talking about so that once the permit
    application is complete, we can process it relatively quickly
    and relatively efficiently.
        Sometimes, unfortunately, we have to say no, but we work
    very hard at saying yes with the appropriate emissions controls
    so that we can all move forward together.
        Mr. Critz. Two comments. Do you want to come work at Region
    3? No, just kidding. [Laughter.]
        But the comment would be is that everyone likes to push
    blame somewhere else, and one of the things that we try to do
    is make smart decisions based on knowledge, not based on what
    he said, she said.
        One suggestion I would make, because this happens in my
    area, is that everyone blames EPA for something that is going
    on, and it is true, and I had forgotten about that point, that
    most of the permitting happens at the state level, although
    they blame EPA for delays because they kick it to EPA and say,
    hey, EPA has had it for 60 days.
        It might not be a bad idea that--I don't know if you can do
    this--every time you get a permit, let the company know that
    you just got it so that they know that it wasn't you that was
    sitting on it, because sometimes the state agency might say,
    hey, we got to them 30 days ago when, in fact, they didn't do
    it.
        We are trying to get to the bottom of this, and you can
    obviously see from my questioning I have huge permitting
    issues. I mean, we are talking about years of permitting, and I
    don't understand how it could possibly take that long to issue
    a permit. I mean, all the regulations are in place.
        We do have some issues because it seems like regulations
    seem to be changing, and the Chairman told a story about
    sausage earlier today that sort of highlights. You have these
    regulations. Ten years later, we have new regulations. Ten
    years later, we have new regulations. In the meantime, industry
    has spent half a billion dollars to upgrade their plant or
    whatever, to meet regulations, and you come back, by the time
    you finish that, they are being told they have to do more. It
    is not a good formula.
        But, okay. I am trying to figure this out, and I appreciate
    your testimony.
        That is all I have, Mr. Chairman.
        Chairman Tipton. Well, thank you both very much for your
    testimony here today. Again, I would invite you, or at least
    have a member of your staff perhaps stay. I think our next
    panel can provide, I think, some insights that you may not hear
    on a regular basis. I appreciate your testimony.
        And I would now like to call up our second panel, if we
    may.
        [Pause.]
        Chairman Tipton. Thank you. I appreciate the second panel
    being able to attend here today, and we will just get right to
    it.
        First up on our second panel is Mr. David White, Montrose
    County Commissioner. He was elected to his position in 2008.
    Prior to his service to Montrose County in this capacity, he
    served as a member of the Montrose City Council from 2004 to
    2008, and also served as mayor of Montrose from 2007 to 2008.
        Commissioner White holds a Bachelor of Science degree in
    Business Administration from Auburn University and has attended
    graduate school in public affairs at the University of
    Colorado.
        So, David, Mr. White, appreciate you being here today.

     STATEMENTS OF DAVID WHITE, COUNTY COMMISSIONER, MONTROSE, CO;
     DAVID LUDLAM, DIRECTOR, WEST SLOPE COGA, GRAND JUNCTION, CO;
    JENNIFER BREDT, DEVELOPMENT MANAGER, RES AMERICAS, BROOMFIELD,
     CO; JAMES A. KIGER, ENVIRONMENTAL MANAGER, OXBOW MINING, LLC,
    ELK CREEK MINE, SOMERSET, CO; DICK WELLE, MANAGER, WHITE RIVER
                          ELECTRIC, MEEKER, CO

                        STATEMENT OF DAVID WHITE

        Mr. White. Thank you. I appreciate the opportunity to speak
    with both of you.
        Briefly, I would like to--I have submitted written
    testimony, but to briefly go over what is going on in Montrose
    County at this time.
        A little background. Montrose County is home to 42,000
    citizens, encompassing 2,242 square miles. We, fortunately or
    unfortunately, depending on your point of view, see that about
    69 percent of our county is controlled by Federal or state
    agencies, BLM, U.S. Forest Service, et cetera.
        Like so many areas of the country, we have experienced a
    substantial economic downturn, and that is reflected throughout
    Western Colorado and the 3rd Congressional District. Simply
    put, we need more private sector employment because we all know
    that county, city, state, and Federal governments are
    financially strapped. We have to do things ourselves as local
    citizens.
        I have had the opportunity to hear from many of my
    constituents firsthand about these problems. A classic example
    that we are currently faced with, Energy Fuels Resources has
    proposed building the Pinon Ridge uranium and vanadium
    processing mill in Western Montrose County, which is in my
    district. The new mill would create jobs that provide economic
    prosperity to an area that has been hit hard for many years,
    and many years before this current downturn.
        Energy Fuels demonstrated that it can build and operate a
    mill in a manner that is both protective of human health and
    the environment. Montrose County issued a special use permit
    for the mill after hours and hours of public testimony, after
    reviewing dozens of documents and having studies performed.
        The Colorado Department of Public Health and Environment
    conducted a comprehensive review considering short and long
    term impacts of the proposed mill, including radiological and
    non-radiological impacts to water, air, and wildlife, as well
    as economic, social, and transportation related impacts. CDPHE
    approved the radioactive materials license in January of this
    year.
        Despite these findings and permits, the EPA reopened a
    comment period on this proposal at the behest of an
    organization based outside of our county. This has held up the
    mill and caused unnecessary delays. CDPHE acted in conjunction
    with agreements with the Department of Energy and the Nuclear
    Regulatory Commission, yet EPA became involved.
        This is unfortunate because Energy Fuels Resources has
    indicated that the mill would directly employ close to 90
    people, with annual salaries between $40,000 and $75,000. The
    company also estimates 250 to 300 additional jobs. Yet we have
    this conflict with the Environmental Protection Agency and
    others.
        I would like to reemphasize that the Pinon Ridge mill would
    be built and would enforce safeguards mandated by current
    regulations. Regulations that govern nuclear power generation
    and its associated industries have been put into place by the
    DOE and the NRC.
        The point I'm trying to make is that with this, even when
    businesses are successfully able to comply with mandated
    regulations, additional interference from Federal agencies can
    create unnecessary delays in the process and hampers
    desperately needed job creation.
        Next up is solar energy. Our community is home to
    BrightLeaf Technologies, which is a company that has perfected
    a new generation of concentrated photovoltaic cells that have
    three times the efficiency of the chips found in solar flat
    panel systems. Taken as a package, BrightLeaf Technologies has
    performed very well with this new technology.
        The company currently employs 25 people and expects to
    staff up to 400 to 500 employees by 2015 in Montrose County.
    The people of Montrose and the Montrose Economic Development
    Corporation are excited about this opportunity. Yet again, the
    biggest contract that BrightLeaf has is with Pinon Ridge Mill,
    and until that mill is approved, those jobs will not be
    created.
        Lastly, we have in Montrose County Intermountain Resources,
    which is the largest and last of the large timber mills in
    Colorado. The Bureau of Land Management and the U.S. Forest
    Service have, through their policies, created a problem for the
    operation of the mill in that the mill is unable to obtain the
    resources that it needs in order to continue to process. Again,
    my written testimony outlines so much more of this.
        I appreciate the opportunity to speak to you all today.
    Thank you.
        [The statement of Mr. White follows on page 63.]
        Chairman Tipton. Thank you.
        Our next is Mr. David Ludlam, Executive Director of the
    Colorado Oil and Gas Association's West Slope chapter. As
    Executive Director, Mr. Ludlam is responsible for promoting and
    enhancing oil and natural gas production in the Piceance Basin.
    In this role, he represents the member companies throughout
    Western Colorado who operate in or provide services to natural
    gas and oil production in Piceance Basin.
        Prior to his current position, he worked as a public lands
    consultant in the energy and tourism sectors. Mr. Ludlam is a
    graduate of Mesa State College and resides here in Grand
    Junction.
        It is a pleasure to have you with us today here. Please
    proceed.

                       STATEMENT OF DAVID LUDLAM

        Mr. Ludlam. Thank you, Chairman Tipton and Ranking Member
    Critz, for this opportunity to testify before you in the 3rd
    Congressional District.
        Congressman Critz, with 10 percent unemployment, I fear you
    are not the only one who is going to be eating wiener schnitzel
    here if we don't get these burdensome regulations fixed and get
    our people here back to work. So thank you for coming to Grand
    Junction.
        Earlier this month the President of the United States
    submitted to you all a jobs plan for America.
        One of the things that really stood out for our
    organization was that no mention was made, and no meaningful
    policy was proposed, to allow America's energy sector to get
    busy doing what we do best, and that's making energy and
    creating jobs.
        Our organization can deliver you a much more practical jobs
    plan right now. It is simple. Appointed Federal agency heads in
    Washington should remove and reverse roadblocks to energy
    development in Western Colorado and throughout the West and
    stop bridling their hard-working field offices with
    implementing these roadblocks. That is a simple plan, and it
    can deliver thousands of jobs, it can deliver billions in
    revenue and help reduce the nation's trade imbalance, all the
    while getting our community here back to work.
        Colorado's Governor John Hickenlooper just engaged in a
    statewide economic development planning process, and unlike the
    White House's top-down jobs plan, the Governor's plan called
    for a county by county, bottom-up planning process. This
    refreshing project asked Colorado and its local communities a
    very simple question: How can Colorado get out of the way of
    job creation?
        If only the Secretary of the Interior could take a cue from
    the Governor and ask the same question.
        Northwest Colorado responded to the Governor's bottom-up
    process and our greatest need was made clear. The counties of
    Northwest Colorado asked the state to help pressure the Federal
    agencies to loosen their stranglehold on the expansion and
    approval of domestic energy jobs, and I have a feeling that
    your committee wants to help do the same thing.
        As a business sector, we have always pointed out that
    regulating for regulation's sake kills jobs, and there are some
    who would always claim that such positions are merely industry
    fear-mongering or posturing. But the Obama Administration's
    September withdrawal of EPA's ozone regulations is an
    affirmation of our point, and it is also a recognition by this
    administration that wrong regulations at the wrong time can and
    do prevent the creation of jobs.
        I have also submitted for the congressional record another
    document that liked the outcome of Governor Hickenlooper's
    bottom-up plan that provides a litany of examples where Federal
    regulations prohibit jobs and create uncertainty. This document
    is the Blueprint for Western Energy Prosperity. It was
    developed by the Western Energy Alliance. Released in July, the
    blueprint clearly describes the roadblocks to energy job
    creation in the West, and it proposes a way forward to remove
    them. By implementing their policy directives, the Alliance
    believes that America could create over half-a-million energy
    jobs by 2020.
        Stepping back for a moment, I imagine that part of the
    reason you are in Grand Junction today is because we are quite
    literally in the middle of the largest energy reserve in the
    world. Just to the north are the nation's largest oil shale
    deposit. To the south and west, as has been noted, are the
    nation's best reserves of uranium and vanadium. Across the way
    in Delta County, one of the nation's cleanest coal mines.
    According to data from NREL, Western Colorado has immense
    potential for geothermal and solar energy applications.
        But most important to our organization are the natural gas
    and oil deposits that exist in every direction from where we
    sit today, a resource that, as I mentioned, continues to reveal
    itself as an increasingly important catalyst for job creation.
        Mr. Chairman, if your committee is looking for a poster
    child of regulation and uncertainty standing in the way of job
    creation, then I urge you to look no further than Northwest
    Colorado. In Moffat County, the Department of Interior derailed
    a local, bottom-up land use plan for the energy-rich Vermillion
    Basin. It took seven years and a broad array of stakeholders in
    Moffat County to create the compromise. It took 24 hours and an
    interestingly timed press release to reverse it.
        According to the county and state projections, this
    decision alone eliminated the potential for $87 million in
    Federal revenues and hundreds, if not thousands, of local jobs
    in one of the most economically challenged regions of our
    state.
        In Garfield County, the Department of Interior has failed
    to approve the most balanced, studied, and debated energy
    compromise ever contemplated in Colorado, and likely the
    nation. This project is within the former Naval Oil Shale
    Reserve and is parochially known as the Roan Plateau
    Compromise. This shovel-ready project would result, by the
    agency's own analysis, in up to $1.3 billion in Federal revenue
    and would create thousands of local jobs.
        Rio Blanco County contains the richest oil shale reserves,
    and as you know, the devastating uncertainty created by the
    agency resulted in its own congressional field hearing last
    month.
        And in Mesa County and countless counties throughout the
    Rockies, a recent Secretarial order, a top-down initiative,
    would have created a de facto wilderness dubbed ``Wildlands''
    in many areas of our region that have natural gas underlying
    the surface.
        More generally and sadly, there are times throughout
    Western Colorado and, indeed, in the Rockies when even the most
    basic environmental review can take years to complete, if not
    decades. And policies aside, just the mere rhetoric from the
    Department of the Interior alone has often worked at cross-
    purposes for job creation.
        Recently, the Department of the Interior sent out a press
    release publically criticizing the industry for not developing
    existing Federal leases. Industry trade groups like ours were
    quick to note that it is the agency's own policies and
    permitting schedules that limit lease and project development,
    not the lack of will from the companies who risk their own
    capital to invest in them.
        But after the press release, the damage was done and the
    message was quite clear. Federal leasing for minerals would and
    has come to an intentional standstill.
        In fact, each lease sale in Colorado since the new reform
    act was instituted has been protested. Look no further than
    Colorado's last three lease sales to understand our concern.
        In March of 2011, two parcels were nominated. Both were
    postponed and one was deferred and then removed from
    consideration.
        In May 2011, 12 parcels were nominated. Of these 12, 10
    were deferred, all were protested.
        In August 2011, five parcels nominated, four deferred.
        And for the upcoming November 2011 lease sale, all of the
    parcels will be protested, as reported by the Grand Junction
    Daily Sentinel.
        This spells bad news for future long-term planning and
    investment for our member companies, who need certainty and who
    need the availability of Federal acres to invest in our public
    lands and create jobs.
        In another area of unpredictable Federal policy, there is
    potential to hamper job creation by limiting the use of one of
    the nation's most important technological advancements in a
    generation, hydraulic well stimulation or hydraulic fracturing.
    Hydraulic fracturing is used in the development of 90 percent
    of natural gas wells today in the United States, and any
    regulation that reduces or prohibits the use of hydraulic
    fracturing will reduce access to the country's vast energy
    potential.
        So as Federal agencies continue to analyze hydraulic
    fracturing, I would note that states have made incredible
    progress on hydraulic fracturing disclosure laws. Colorado,
    Wyoming, New Mexico, Arkansas, Texas are just examples where
    either a disclosure law exists or one is in the works, and
    anything that removes regulatory authority from the states and
    their experts and shifts to the Federal agencies we believe is
    bad for the energy sector and bad for job creation.
        While typically the voice of our organization stays within
    the confines of the valleys, canyons and plateaus of Northwest
    Colorado, our hope is that your committee advances our jobs
    plan, our simple jobs plan throughout the halls of Congress. It
    is a plan that doesn't require printing money. It is a proposal
    that doesn't require any stimulus. In fact, it is a plan that,
    when implemented, would create jobs in a matter of weeks and
    not years, and to implement that plan, all the Federal agencies
    have to do is allow our member companies to invest the capital
    in our public lands and in our Federal mineral estate to make
    energy and create jobs.
        Thank you for this opportunity. Your presence here today
    reinforces that some members of Congress are indeed committed
    to real job creation, a commitment that recognizes that the
    nation's energy sector must be at the foundation of our
    economic recovery.
        Thank you, and I look forward to your questions.
        [The statement of Mr. Ludlam follows on page 69.]
        Chairman Tipton. Thank you.
        I would now like to introduce Jennifer--is that Bredt?
    Okay, good. The Development Manager for Renewable Energy
    Systems America.
        Ms. Bredt has been in the renewable energy industry since
    2004, and has been in her current position with RES Americas
    since 2008. Her development region spans Western Electric
    Coordinating Council's region with emphasis on Colorado and
    Arizona. Prior to joining RES Americas, she worked for CH2M
    Hill as a renewable energy project manager. She also spent over
    three years working as a Tribal Renewable Resource Specialist
    for the Assistant Secretary of Indian Affairs at the Division
    of Energy and Mineral Development office in Lakewood.
        Ms. Bredt holds a Bachelor of Arts in Geological Sciences
    from the University of Colorado-Boulder, and a Master of
    Science in Global Energy Management from the University of
    Colorado-Denver.
        Thanks for being with us today.

                      STATEMENT OF JENNIFER BREDT

        Ms. Bredt. Thank you. Chairman Tipton, Ranking Member
    Critz, and members of the Committee, thank you for the
    opportunity to testify today. My name is Jennifer Bredt, and I
    am a Development Manager with Renewable Energy Systems
    Americas, also referred to as RES Americas in my testimony.
        Headquartered in Colorado, RES Americas has 250 full-time
    employees. We have built more than 10 percent of the operating
    wind farms in the U.S., and we currently have several thousand
    megawatts of wind and solar projects under development, which
    is enough to supply the electricity needs of more than two
    million average American homes.
        The Committee has asked RES to provide a statement
    regarding regulations that may be negatively affecting small
    businesses in the wind industry. In June, RES' CEO, Susan
    Riley, testified before the House Natural Resources Committee
    at an oversight hearing on ``Identifying Roadblocks to Wind and
    Solar Energy on Public Lands and Waters.'' RES' statement today
    will echo that testimony, with a few updates.
        We encounter many obstacles to developing renewable energy
    projects, but the number one obstacle our industry faces is
    uncertainty. When the uncertainty is created by an unclear
    regulatory regime, the negative consequences are particularly
    frustrating, because they could have been avoided.
        A recent example is the regulatory uncertainty created by
    the U.S. Fish and Wildlife Department's 2011 ``Draft Eagle
    Conservation Plan Guidance'' and ``Land Based Guidelines for
    Wind Energy.'' RES' written testimony from the June hearing
    referenced above provides greater detail about the many
    problems these two documents have created for the wind
    industry.
        Some progress has been made, particularly with regard to
    the Land Based Guidelines; however, several serious issues
    regarding the Eagle Guidance remain. Taken together, the eagle
    regulatory program created by the Land Based Guidelines and the
    Eagle Guidance affect wind projects throughout the contiguous
    U.S., and has placed an estimated $68 billion, with a ``B'', in
    wind energy investment at risk.
        RES has already suffered financial losses due to the
    uncertainty created by this eagle regulatory program, and those
    impacts have consequences for many of the other small
    businesses we employ in connection with our projects. It is not
    uncommon for RES to utilize the services of 25 to 50
    subcontractors and suppliers in the process of developing and
    constructing a wind or solar facility, and payments to these
    subcontractors and suppliers often run into the tens of
    millions of dollars. The types of small businesses involved
    span a wide range, from environmental consultants, to materials
    and equipment suppliers, to firms that pour the concrete
    foundations, build roads, build substations, and install
    electrical collection systems, to name just a few.
        RES Americas has several wind projects that are currently
    being directly impacted by the uncertainty surrounding the
    eagle regulatory program, and we believe that the changes to
    the permitting process regarding eagles will ultimately impact
    the majority of our projects, creating delays and millions of
    dollars of additional costs. Many other developers report that
    they are in a similar situation.
        The wind industry is appreciative of the commitment shown
    by Secretary Salazar and U.S. Fish and Wildlife Director Dan
    Ashe to finding a resolution to the problems identified.
    However, until the problems are actually resolved, our industry
    will continue to be negatively affected by the uncertainty they
    create.
        In closing, I would like to emphasize RES Americas' strong
    support for reasonable protections for wildlife. RES Americas'
    business is developing and constructing renewable energy
    projects that benefit the environment, and our corporate ethos
    is grounded in sustainability. So this isn't about cutting
    corners or trying to sidestep reasonable regulations, but the
    key word is ``reasonable.'' Both conservation and renewable
    energy are critical, but there has to be a balance between the
    two agendas.
        The American people want domestically produced, clean,
    renewable energy, and we want to supply it to them. But our
    industry faces market uncertainty at the national level, and we
    are thwarted by regulatory uncertainty during the development
    process. In the immediate term, the Eagle Guidance, combined
    with the Land Based Guidelines, are significant obstacles to
    our industry.
        The renewable energy industry has the power to drive
    investment--particularly in the manufacturing sector--and to
    create tens, if not hundreds, of thousands of jobs.
        Chairman Tipton, Ranking Member Critz, and other members of
    the Committee, we thank you for your interest in, and attention
    to, these issues, and look forward to any assistance you may be
    able to provide.
        [The statement of Ms. Bredt follows on page 74.]
        Chairman Tipton. Thank you.
        Our next witness, Mr. James Kiger, is Environmental Manager
    at Oxbow Mining, LLC, Elk Creek Mine. He has 32 years of
    environmental management experience in Colorado underground and
    in the surface coal mining industry, dealing with
    organizational management and diverse environmental mine
    permitting, supervision, and reclamation issues.
        His experience includes development and maintenance of
    environmental programs and coal leasing programs to maintain
    continuous compliance with the Clean Air and Water Acts, the
    Resource Conservation Recovery Act, the Surface Mining Control
    and Reclamation Act, and various other Federal, state and local
    laws and regulations.
        He received his Bachelor of Science in Wildlife and Range
    Management from Humboldt State University, and his MBA from the
    University of Phoenix.
        Welcome to the Subcommittee, Mr. Kiger.

                        STATEMENT OF JAMES KIGER

        Mr. Kiger. Thank you, Chairman Tipton and Ranking Member
    Critz, for the opportunity to speak with you today.
        Coal is an essential American industry that provides over
    45 percent of America's electricity at reasonable prices and
    provides 85 percent of the U.S. geo resource on a BTU basis.
    Thus, it creates economic opportunity for millions of American
    businesses and consumers.
        What I would like to do today is talk about how a number of
    agencies are creating head winds to the industry rather than
    tail winds to help it out, to provide roadblocks or at least
    hurdles to the development of our coal resources.
        The EPA, either alone or along with other Federal agencies,
    have launched a series of regulatory actions that directly
    affect our coal mines in this nation.
        Starting this year, we have had to start collecting
    greenhouse gas inventory information from our methane drainage
    that is used to ventilate the mines to provide a safe working
    environment for our miners. We have had to start monitoring
    those emissions, and we are understanding that next year we
    will have to file for a Title 5 Air Emissions Permit with the
    EPA and the State of Colorado. The outcome of that, we are not
    sure what will happen, but we believe eventually it will impact
    our ability to mine coal safely unless we put in retrofit
    technologies.
        Water quality standards are being modified, such as the
    arsenic values, which are below the detection limit of .02
    parts per billion. Many laboratories can't even analyze to
    those levels, and that level is a thousand times higher than
    drinking water standards. But that is an example of some of the
    water quality standards that the mines are going to have to
    start complying with in our discharge permits.
        We are also looking at stringent stream conductivity
    standards. We are looking at more stringent selenium values in
    receiving stream standards.
        The regulatory agencies are also pursuing more onerous
    process water classifications of routine surface storm water
    drainage from mining areas, which can impact our ability to get
    permits.
        The Corps of Engineers, along with being influenced by the
    EPA, is pursuing suspension of the Nationwide Permit 21 for
    surface mines in the Appalachian Region. Coal mines rely on
    Nationwide Permit 21 and Nationwide Permit 50 for underground
    mines to be able to meet Clean Water Act Section 404 permitting
    requirements in an expedited manner.
        The Office of Surface Mining has proposals that will
    increase their oversight over state programs. They are looking
    at doing inspections apart from when they used to inspect with
    the state regulatory agencies. They are proposing to change the
    10-day notice requirements to where they could revoke state
    permits with a 10-day notice program.
        OSM is looking at stream buffer zone requirement changes
    which could affect basic mining activities of fills, stream
    channel reconstruction, activities in ephemeral drainages, and
    construction of refuse piles.
        The EPA by itself, as you know, is working on changing
    national standards. There is the Cross State Air Pollution
    Rule, which requires 27 states to reduce air pollution. And we
    understand that PJM is the eastern distributor of electrical
    power. They are saying that this rule potentially could shut
    down 25,000 megawatts of eastern power plants.
        We as an industry here in Delta County in the North Fork
    mines, we ship at least 10 million tons of coal to those
    customers. So obviously that could impact our ability to mine
    coal if our customer base is reduced.
        EPA has revoked the 404 permit for the Spruce No. 1 mine in
    West Virginia arbitrarily after a number of years of
    environmental analysis and the mine had already opened. So
    those kinds of activities to revoke permits are creating a lot
    of uncertainty.
        In my comments I have provided a table at the end,
    compliments of Arch Coal, that kind of displays the train wreck
    that can happen with all of these conflicting regulations and
    timelines.
        The EPA has proposed a coal combustion rule where ash from
    power plants would be regulated, potentially regulated under
    Subtitle C rather than Subtitle D of RCRA.
        The EPA also entered into a consent agreement with the EPA
    to establish greenhouse gas emissions for electric utilities.
    But my understanding is now they have delayed that deadline,
    which was originally September 30th, the end of this month.
        Those kind of regulations will create uncertainties for the
    future of coal mining and the burning of coal.
        The efficiency of the Federal land management agencies has
    been problematic. The Clinton Roadless Rule has caused us
    issues when the rule itself has been enjoined by Federal court,
    and it is now in the 10th Circuit Court of Appeals, but we are
    still getting delays with the U.S. Forest Service on normal,
    routine permitting matters in IRAs.
        Nuisance lawsuits by the environmental community has
    delayed permit approvals. The representative from the BLM
    talked about a lawsuit that one of the mines is having to
    fight, and that is our mine. We have a small LVA lease
    application for merely 4 million tons of coal for one year of
    longwall mining, and it has been appealed by the LBA, and we
    are in the middle of that litigation.
        We believe that nuisance lawsuits and appeals by the
    environmental community need to be dealt with, and I think part
    of that is the Equal Access to Justice Act which creates the
    ability of many of these large attorney firms to fight these
    issues and get their lawsuits paid for by the Federal
    Government.
        Chairman Tipton. Mr. Kiger, if I could, I apologize. So we
    can stay kind of in some of our time commitments here, if we
    could have you wrap up. We have got our little lighting system
    there.
        Mr. Kiger. Okay. Thank you.
        That really takes care of my comments, and I do have my
    written comments that you could review.
        [The statement of Mr. Kiger follows on page 76.]
        Chairman Tipton. Thank you so much.
        Rounding out our second panel is Mr. Richard Welle, General
    Manager of White River Electric Association, located in Meeker,
    Colorado.
        WREA is a rural distribution cooperative with 33 full-time
    employees. He began his career at WREA in 1973, moving up
    through the ranks from journeyman lineman to operations
    manager, and in 2001 began his tenure as general manager.
        Mr. Welle has guided the cooperative from a total asset
    value of $16.2 million in 2001 to over $58 million in total
    assets in 2011, and over the past 10 years annual electric
    sales at WREA have grown from 138,243 megawatt hours to 977,862
    megawatt hours.
        Mr. Welle, thank you for testifying for the Subcommittee
    today.

                         STATEMENT OF DAN WELLE

        Mr. Welle. Thank you. Chairman Tipton and Ranking Member
    Critz, thank you for the opportunity to testify today.
        It is crucial for the U.S. House of Representatives and
    other interested parties to fully appreciate how government
    regulations affect the day to day lives of all Americans, and
    specifically White River Electric consumers. With that said,
    the answer to your question is yes, excessive energy regulation
    and policies limit energy independence, kill jobs and increase
    prices for consumers.
        The White River Electric service territory is about the
    size of the state of Delaware, with 935 miles of line, serving
    approximately 2,500 members and about 3,248 electric meters.
    These numbers result in an average of 3.46 consumers per mile.
    The natural resource diversity in this region includes open
    spaces, abundant fish and wildlife populations, lush forestry,
    various mineral deposits accompanied by agricultural, coal, and
    natural gas production. We live and electrically serve the
    energy-rich United States in our territory at White River
    Electric.
        Our electric load profile reflects this type of diversity
    with electric service to generational cattle and sheep ranches,
    wheat farms, coalmines, oil and gas producers, and Meeker's
    historical residential base.
        White River Electric was formed in 1945 in response to a
    national directive to electrify the rural west. The Federal
    Government and the founding cooperative members believed that
    reasonable and affordable access to safe and reliable
    electricity was necessary for economic and social
    sustainability and prosperity.
        The mission of White River Electric is to work to provide
    its member consumers with safe, reliable, and responsible
    electric energy and other services at the most reasonable cost
    possible, while remaining committed to customer and community
    service.
        Recently, in a customer satisfaction survey conducted in
    our service territory, our members indicated a satisfaction
    rate of 97 percent with White River Electric as an electric
    utility. We are very proud of that mark. They also indicated
    implicitly that they care about the environment and they wish
    to see innovation in clean coal technology and renewable energy
    sources, but they simply cannot afford to see their electric
    rates increase.
        The mandate for our leaders should not be how to regulate
    an industry so that it kills the industry and punishes the
    consumers. It should be how do our leaders create long-term
    energy policy and market stability so that the resources can be
    applied to energy innovation and job creation.
        I am here today to give voice to our membership and our
    mission in hopes that Congress hears our plea for balanced,
    reasonable regulation that improves and incentivizes the
    overall electric utility industry. Regulation that kills jobs,
    the economy, and jeopardizes the societal and economic
    prosperity that is at the historical heart of this industry is
    unacceptable.
        It is estimated that proposed EPA regulations will result
    in the closure of coal-fired power plants across the country,
    with an estimated capacity of 30 to 70 gigawatts. That is 10 to
    22 percent of the total generation capacity available in the
    U.S. today. Overreaching regulation that abandons scientific
    and common sense will be a direct threat to Northwest
    Colorado's economic stability and sustainability.
        In the past 10 years, White River Electric's annual sales
    have grown, as you had indicated earlier, to almost 10-fold of
    what we served in 2001. Response to increases in electric
    demand associated with natural resource extraction and
    processing in the Piceance Basin resulted in the construction
    of miles of new transmission lines and seven substations for
    enhanced service and reliability. Rising to these challenges
    and opportunities shows how a small company of 34 employees can
    surpass expectations through hard work and a can-do attitude.
        During my 10 years as general manager, White River Electric
    has passed on seven wholesale power rate increases to its
    membership. Wholesale rate increases since 1998 represent a 60
    percent increase in the total cost of a residential kilowatt
    hour. These increases impact every family's monthly bottom
    line.
        One general manager in the State of Colorado reports as
    much as 20 percent of their retail rate is allocated toward
    regulatory compliance.
        Today, I hope I will leave you with the commonsense
    philosophy of ``think before you vote.'' While the lofty goals
    for regulation may be public interest, public safety and the
    environment, every legislator should be challenged to ensure
    that each vote for further regulation is necessary based on
    common sense, and allows for industry innovation and excellence
    without punishing the end consumer and the economy.
        This balancing act is not easy. Our forefathers believed
    that electricity was essential for economic and societal
    stability and prosperity. We have the obligation to take that
    light bulb into the future.
        Thank you for your time today.
        [The statement of Mr. Welle follows on page 87.]
        Chairman Tipton. Thank you, sir.
        Appreciate all of you taking the time out of your day to be
    able to come in and testify.
        I'll start off with the questioning, and I guess it would
    be for Mr. White first, out of Montrose. Again, thanks for
    being here.
        Much of the land obviously in Montrose County, as we see
    throughout the West Slope of Colorado, I think on average we
    touch more of it, we can say with pretty good confidence that
    70 percent of our lands are either Federal, state, or tribal
    lands on the Western Slope of Colorado. When we are talking
    about government-owned land, Federal Government land, much of
    this land is obviously unavailable for direct development by
    local communities, so that means that very few tax dollars are
    generated to that local base. We are not able to count on
    payments coming in on a regular basis as well.
        So how important are the shared royalties that are provided
    throughout multiple energy sources? How important are those
    royalties for Montrose County?
        Mr. White. Well, they certainly help defray the costs. When
    you, again as we discussed, when you have 70 percent of your
    land mass that is still required by the county to maintain
    roads and other infrastructure, culverts and ditches and so on
    and so forth, it has a distinct impact from a revenue
    standpoint because the roads are still used by the public who
    access Federal lands, whether they are natural forest or BLM.
    The impact is also felt in some of the other districts, such as
    fire districts. They have to provide service. They have to use
    our roads to get there, and we don't have the revenue coming in
    from these other sources, whether it is the Federal Government
    or the royalties that are generated by mining activity that
    would take place on these lands.
        Chairman Tipton. And I wanted to follow up just a little
    bit, if we can, because you were going through the Pinon Ridge
    Mill Energy Fuels.
        Mr. White. Right.
        Chairman Tipton. And I just want to run through that again
    just real quickly to make sure I understand it correctly. The
    county, you approved it.
        Mr. White. We did.
        Chairman Tipton. You moved that forward. Then the Colorado
    Department of Public Health and Environment, they approved it.
        Mr. White. That's correct.
        Chairman Tipton. And now it is being stopped by----
        Mr. White. EPA.
        Chairman Tipton [continuing]. By the EPA.
        Mr. White. Correct. The CDPHE, as I mentioned, they have
    agreements with the Department of Energy and the Nuclear
    Regulatory Commission to, scientifically speaking, review all
    of the data, make sure that it complies with all of those
    agencies' requirements.
        Chairman Tipton. Do you feel--you are a commissioner. You
    live there. I know you. You care about the people that live
    there. The State of Colorado, are they responsible? Can we
    trust you to really care about our communities?
        Mr. White. I would hope so. I believe so. The State of
    Colorado certainly--as a former representative yourself, you
    understand what goes into the process and how agencies are
    structured, how they are regulated, and there are certainly
    innumerable laws on the books in the State of Colorado to
    protect the health and welfare of the citizens of this state,
    and I don't believe that anything that has been done so far
    would compromise the integrity of that process.
        Chairman Tipton. Just kind of curious. Do you have a
    general idea of--I don't want to put you on the spot--what the
    unemployment rate is right now in Montrose County?
        Mr. White. Well, it has certainly fluctuated. Right now it
    is just below 10 percent, but if you factor in the unemployable
    or the chronically unemployed, people that just quit looking
    for work, our best estimates are that 13 or 14 percent is a
    more accurate figure of the unemployment level.
        Chairman Tipton. So with comprehensive due diligence,
    concern for the community, you and the Colorado Department of
    Health tried to facilitate an opportunity to be able to create
    90 jobs, not to mention when we are talking about BrightLeaf
    Technologies, 25 employees that they deal with, whose primary
    customer, it is my understanding, their contract is with Pinon
    Ridge Mill.
        Mr. White. Right.
        Chairman Tipton. What is that, 115 jobs off the top. Is
    that important to Montrose County?
        Mr. White. Absolutely. Given the unemployment rate, given
    our population base, given the historical nature of the county
    with mining and mineral extraction, everything we have in this
    world, the monitor you are looking at, the desk you are sitting
    at, the dais I should say, everything comes from the earth, and
    we certainly have been and want to be good stewards of those
    resources.
        But at the same time, where are we going to be as a society
    and locally? We can't--our Health and Human Services Department
    is at capacity relative to the number of people that have
    applied for food stamps and assistance. Where does it stop?
        We have to bring our regulations into line, stop, put a
    moratorium on new regulations. As we said earlier, just when
    everybody is in compliance, here come some new regulations and
    everybody is out of compliance.
        Chairman Tipton. Moving goal posts.
        I just wanted to make a comment when you were talking about
    the timber mill. I know at our office, we have talked with the
    BLM, the Forest Service on the importance of the mill not only
    for jobs but for forest health, public safety, water quality,
    in the event that we were to have a massive fire, to be able to
    get in and be able to deal with that. So you brought up a very
    important issue as well, and I respect the challenges that you
    are certainly facing in Montrose. So thank you for being here.
        Mr. White. Thank you.
        Chairman Tipton. Mr. Ludlam, I would like to ask you. We
    have a lot of critics of natural gas drilling, and frequently
    the claim seems to be that the industry is essentially
    unregulated and that people don't care. I have actually gone
    out and toured some of the facilities, and I am seeing people
    that live here, work here, eat here, drink the water, breathe
    the air, they want to be able to do it right.
        I was just wondering, could you just perhaps give myself
    and Congressman Critz just a rundown of the Federal and state
    environmental laws and agencies that regulate the companies
    that you represent?
        Mr. Ludlam. I will.
        Chairman Tipton. A quick rundown?
        Mr. Ludlam. Chairman Tipton, I think I also would point out
    that very few sectors in the United States have come as far, as
    fast, as the natural gas and oil sectors have in terms of using
    technology to reduce environmental impacts and come up with new
    best management practices to reduce those impacts.
        As Daniel Yergen, the journalist and author of ``The Prize:
    A History of the Oil and Gas Industry'' pointed out, we do need
    strong regulation, and our industry agrees with that. We have
    to have a strong regulatory authority for structure, continuity
    of development, and to protect the public interest.
        But there are a tremendous amount of overlapping
    regulations that we deal with internationally, Federally, state
    and local, and even at the municipal level that constantly
    challenge.
        To talk about some of those regulations, the heart of your
    question, I think you would need a longer hearing. But I can
    just simply say that the regulatory authorities that we deal
    with at any given time would be the Forest Service, the BLM,
    the U.S. Fish and Wildlife, Army Corps of Engineers, Colorado
    Department of Public Health and Environment, county governments
    with their land use code, and I could go on and on and on.
        But I think the point to your question is that we are a
    heavily regulated industry, and we should be. But regulations
    have to have a measureable public health benefit, or otherwise
    they are just regulations for regulations sake.
        Chairman Tipton. Just a quick follow-up. It takes a lot of
    money to be able to develop some of these resources. Does an
    ever-changing regulatory environment impede the ability,
    increase costs ultimately to the consumers in terms of the
    products that we buy at the gas pump?
        Mr. Ludlam. Perhaps more than any other factor, uncertainty
    prohibits investment, more so than regulations that are
    difficult to comply with, I think in some cases more so than
    price, because both of those factors you can account for.
    Uncertainty is the number one challenge we face in Western
    Colorado, and I believe it is the number one challenge we face
    nationally within our sector.
        Chairman Tipton. Ms. Bredt was talking about that as well
    in regards to hers.
        Just one more question, if I may. You know, there is a lot
    of talk particularly in Washington, and it is my sense,
    Republican and Democrat, it makes no difference, we want to be
    able to get America back to work, and part of the process, the
    paths that we are going to go down in order to be able to get
    Americans back to work right now is simply that important. But
    a lot of talk recently was around shovel-ready projects.
        When we are seeing here an opportunity to be able to
    develop American resources on American soil, to be able to
    create American jobs and to be able to get our people back to
    work, and particularly here on the West Slope of Colorado and
    in our state, how many jobs do you believe could be created if
    the Department of Interior stopped throwing up regulatory
    barriers to be able to develop jobs right now and get people
    back to work?
        Mr. Ludlam. Chairman Tipton, I can state with confidence
    the examples that I gave you earlier in my testimony, that I
    believe there would be thousands just right here in our region.
    And if you extrapolate that to multiple basins in multiple
    states, which the Western Energy Alliance has done in the
    blueprint that I submitted for the record, I believe that, per
    their recommendation, we could get up into the half-million
    energy jobs by, I think--don't quote me on this, but if I look
    at my testimony I think it was by 2020.
        Chairman Tipton. Great. And I traveled this area so much. I
    have walked Main Street in Grand Junction and Craig, and when
    we are seeing businesses close up, it is not just the boots out
    in the field but the collateral jobs that are created as well
    that now are suffering that we could reinvigorate as well. So
    thank you for that.
        Ms. Bredt, could you go into a little more detail for us on
    how small businesses, independent contractors are used in the
    development of wind energy, and how some of the policy issues
    that we are discussing today might impact some of those
    businesses?
        Ms. Bredt. Absolutely. I will start with the second part of
    your question first. The bottom line is the uncertainty created
    by the eagle regulatory program is jeopardizing an estimated
    $68 billion in wind energy development, and that is a lot of
    work for small businesses and independent contractors that
    won't be created if those projects are not being created and
    built.
        Another sector I did not mention in my testimony is the
    supply chain. A single wind turbine contains some 8,000 parts,
    and many of these are manufactured by small businesses across
    the country. So the negative consequences for job creation and
    economic development are significant.
        In terms of specific examples in the development stage,
    qualified small businesses and independent contractors are used
    where available to perform wildlife, cultural, socioeconomic,
    and other development-related studies. During construction, RES
    has a habit or a process of holding job fairs in the
    communities in which we work to be able to use local content
    whenever possible.
        An example right here in Colorado which we are very proud
    of is our recently completed 250-megawatt Cedar Point wind farm
    which is located southeast of Denver, near Limon. This is a
    $535 million project, and it created 365 construction jobs.
    More than 230 vendors, including more than 30 local and
    regional vendors, were used to complete this project, and many
    of these are small businesses and independent contractors. An
    estimated $35 million has been directly spent in Colorado
    communities in relation to the Cedar Point wind farm, and
    that's just one example of one wind farm in Limon, Colorado.
        Chairman Tipton. Great. Thanks.
        I would just like to get your opinion, if I may. The U.S.
    Fish and Wildlife Agency drafted a siting guidance, an eagle
    guidance. Do they create overlapping layers of regulation, in
    your opinion?
        Ms. Bredt. They do to a certain extent. We have to do--
    similar to oil and gas, we have local permitting, state
    permitting, and Federal. So depending on who wants to defer to
    who, we could have overlap and kind of contradicting
    regulations or guidance.
        Chairman Tipton. I would like to open that maybe, if I may,
    to everybody, if you have an example of that, because I know in
    testimony before our Committee in Washington on natural
    resources as well, one of the issues which often comes up is
    you have one regulatory body with a set of regs that may be in
    conflict or overlapping, and if it is overlapping when you are
    trying to get an answer, you can never get an answer because
    they defer to the other party, and it goes back and forth and
    there is never a solution, never an answer.
        Would any of the rest of you like to comment, or do you
    have an example of that?
        Mr. Kiger. In any of our coal leasing activities, we will
    have to get input from Federal agencies like BLM, and
    oftentimes they have to get information from Fish and Wildlife
    Service on species or water use, those kinds of things. So one
    agency may delay another agency, which will then end up
    delaying state permitting and those kinds of things. So, yes,
    it can happen.
        Chairman Tipton. Has it been your experience when that
    happens--Congressman Critz and I were talking about you have a
    30-day requirement to be able to get a permit once it is in
    process, and that is extended to 206 days. A little different
    industry, obviously, but have you seen, because of those
    overlapping regulations, that further extending your ability to
    be able to get a project going and moving?
        Mr. Kiger. The way it works with the state agencies when we
    are permitting is that they have a time limit. But what they
    will do is ask us to extend that time limit so that they can
    get proper input from the agencies. So this can go on with
    multiple extensions. The option is they deny your permit for
    lack of information. So you have two choices, take it or leave
    it.
        Chairman Tipton. As long as you have your microphone on, I
    did have another question there. According to the Americans for
    Clean Coal Electricity, coal energy companies are expected to
    invest $125 billion through 2015 to comply with current air
    rules. That is investment that is coming out to comply. Do you
    believe that further regulation will doom coal as an energy
    resource?
        Mr. Kiger. Well, it will substantially reduce its ability
    to burn coal. The heartland is going to have to make an
    economic decision as to whether or not they can afford to
    retrofit and pass those costs on to their customers, or the
    option may be fuel switching. So they are going to have to make
    those decisions with all the power stations.
        Chairman Tipton. I would like to follow up on that retrofit
    or shut down. Are we in a position in this country right now?
    Winter is coming. We are going to have to turn up the heat, and
    we want the lights on. If we start having coal generation units
    that are simply not going to be cost effective to be able to
    retrofit, we are going to be able to shut this down, are we in
    a position right now to be able to fill that energy void that
    the American consumer frankly needs? And correct me if I am in
    error, but I believe that your per kilowatt hour cost is among,
    if not the most affordable energy source that we currently
    have.
        Mr. Kiger. Right. I think you are correct, that the cost
    per kilowatt hour for coal at our plants is the cheapest in the
    nation. I can't speak for all the power stations across the
    U.S., and particularly the Eastern U.S., but my understanding
    is that many of those grids are at their limit as far as
    electrical production, and if they have to start shutting down
    their power plants, that is going to create availability
    problems for consistent electrical energy.
        Chairman Tipton. We have some of the cleanest coal in the
    world, don't we, right here in Colorado?
        Mr. Kiger. Yes. We have low sulfur, super-compliant coal in
    Colorado, less than 1.2 pounds of SO2 per million
    BTUs, and it is also very low in mercury, and the coal in the
    North Fork Valley is over 12,000 BTUs, and I have heard it
    called the rocket fuel of coal.
        And so, yes, we have some of the best coal in the United
    States, and that is why it is in such high demand back East.
    They can use it as a blending fuel to meet Clean Air Act
    standards. But particularly like the MACT rule, it will require
    maximum achievable control technology. So my understanding is
    that will eliminate the ability to fuels blend. Rather than a
    fuels blend with low-sulfur Western coal and low-mercury
    Western coal, they will be required to absolutely place
    expensive controls on their power plants, which makes that
    decision non-economic.
        Chairman Tipton. I am consistently concerned because when I
    look at senior citizens on fixed incomes, young families trying
    to provide for their families right now, and the energy costs,
    do you think it would be fair to say, when we are talking about
    some increased energy costs, that we are really seeing taxation
    via regulation? It certainly gives me a lot of concern in terms
    of driving up costs for the ultimate consumer. Right now when I
    hear particularly some in Washington seem intent on just
    eliminating coal as an energy fuels source at all.
        Mr. Kiger. Well, there is no free lunch, and any time they
    have to retrofit or spend capital to do what they need to do to
    meet the new regulations, they have to pass those costs on, and
    it is the ultimate consumer that turns on their light switch
    that is going to pay the freight.
        Chairman Tipton. You commented in your written testimony
    that a member of your organization lost eight years on a ten-
    year lease just trying to comply with preliminary environmental
    review. Is there any recourse for companies when you lose that
    much time?
        Mr. Kiger. Well, there isn't. I mean, our particular
    alliance----
        Chairman Tipton. No extensions? Nothing?
        Mr. Kiger. No. With our coal resource the way it is, we can
    mine until about 2017, and then we are just done, and some of
    the coal resources we have tried to permit are resources for
    the end of the mine life. So rather than shutting down the mine
    in 2018 or 2017, we may have to shut it down sooner. That is
    your option.
        Chairman Tipton. Well, that gives us some concern. You hear
    concern right now about rolling blackouts across the country
    given the grid and the importance that coal plays as a vital
    clean energy source that we can actually be able to use in this
    country. So I thank you for your comments.
        Mr. Welle, from what sources do you get electricity?
        Mr. Welle. We are a member of Tristate Generation and
    Transmission here in Colorado. We are one of the 43 member
    systems, and primarily Tristate is a coal-based utility for its
    base load generation. I would say this year, probably 70 to 80
    percent of the electricity transmitted and purchased from
    Tristate was coal, probably 25 percent was hydro. There are
    some renewables in that mix.
        This was a big hydro year. Most of Western, Northwestern
    Colorado at least provided a lot of snow melt and springtime
    flows into the hydrology in that region. So those WAPA
    allocations lie with Tristate, so this year was a pretty big
    hydro year. But in general, 80 percent or greater would come
    from coal.
        Chairman Tipton. I think that is important. You may not be
    aware of it. There are some who do not count hydroelectric
    power as a clean, renewable energy source. In fact, legislation
    that I just introduced hopefully will be able to help along
    that on a variety of different levels, so that is interesting
    to know.
        Some have estimated that the EPA's greenhouse gas
    regulations would substantially increase the cost of
    electricity from coal-fired and natural gas generators. What
    kind of an impact would this have on the rural coops?
        Mr. Welle. As I indicated earlier, we have sustained about
    a 60 percent increase in wholesale power costs in the last
    decade. We are a non-profit, cost-based utility. So most of our
    costs, especially in the last decade, have come from power
    supply. So a lot of the costs that are being driven at the
    power supply is the uncertainty of regulatory process and other
    items.
        Chairman Tipton. So when you have that 60 percent increase,
    you are required, you have to pass that on.
        Mr. Welle. Yes, we do. We have an all-power requirements
    contract with Tristate. Obviously, we do have some influence
    with Tristate. We have a member of our board sits on their
    board, but it is cost-based as well. So that is a pass-through
    type rate increase that directly affects end consumers.
        Chairman Tipton. So a lot of the regulations, all of the
    regulatory costs that we are seeing right now are being passed
    on to the consumer, who is struggling to be able to pay their
    bills. We are increasing their costs right now, and we have an
    affordable energy resource.
        Mr. Welle. That is correct.
        Chairman Tipton. That is correct. Great.
        In terms of renewable energy sources like wind and solar
    energy, how forgiving is the grid to get these sources of
    energy to consumers?
        Mr. Welle. I think as Mr. Kiger interjected earlier, there
    are a lot of constraints in the existing transmission grid
    across the nation, and out here in the West, places that do
    test really good for solar and wind have got challenges of
    building transmission to get those resources to a market, and
    we are seeing several examples of that in Colorado today. And
    it doesn't have to be necessarily connected to renewable
    resources.
        Building transmission and getting renewables to a
    marketplace, plus for the lack of storage technology is another
    big roadblock for dispatchable electric type service in lieu of
    base load generation. The capacity we were talking about
    earlier of coal plants being shut down due to regulation, those
    are base load facilities in most cases, and there is not much
    base load generation capacity being built in this country right
    now, no matter what flavor you would prefer.
        So I think we are nearing a time where we are endangering
    the reliability of the transmission grid by losing coal-based
    resources at this time, especially due to regulatory mandates.
        Chairman Tipton. Well, thank you all very much, and I now
    yield to Mr. Critz for his questions.
        Mr. Critz. Thank you, Mr. Chairman.
        Mr. Welle, you had mentioned that 75 to 80 percent of the
    power is generated by coal-fired power plants. That means that
    anytime anyone uses electricity in your grid, 80 percent of
    that electricity is probably coming from coal at some point.
        Mr. Welle. Yes, sir.
        Mr. Critz. Okay. Mr. Kiger, you had mentioned that you have
    the rocket fuel of coal. Is that all of your mines? Is that
    most of the mines?
        Mr. Kiger. The three mines in the North Fork Valley, they
    produce--with a thousand miners, they produce about 13 million
    tons of coal a year. That's the best coal in the state. And so
    that would be the North Fork Valley mines.
        Mr. Critz. Okay. And you are selling the majority of that
    to the East, or does it sort of spread around this area as
    well?
        Mr. Kiger. I am told about 85 percent of it goes east to
    TVA or those kinds of customers back east. I don't believe this
    year we will have any coal sold in Colorado. It mostly goes
    east or southeast.
        Mr. Critz. Okay. Now, you heard some of my earlier
    questions to BLM and to the EPA folks about permitting issues
    and the timing and all that, and I heard when you were
    answering a question that the Chairman asked about the
    reference to litigation at BLM is actually your mine. Could you
    expound on that just a little bit?
        Mr. Kiger. We have a lease application, and the BLM went
    through the EA process, and they are prepared to go forward
    with the competitive lease sale subject to their 30-day appeal
    period, and an appeal was filed with the BLM. So now they are
    tasked with defending their decision, and most of the comments
    from the folks that filed the appeal, which is the
    environmental community, most of the comments centered around
    greenhouse gases and air emissions issues.
        Mr. Critz. Okay. How about have you--let me figure out how
    to phrase this. I have heard testimony from other sources that
    the EPA is, I guess, becoming more strident in some of the
    things they were doing. That has taken place really over the
    last decade, that through the '90s it seemed like things were a
    little more businesslike, and throughout the 2000s it is
    becoming tougher and tougher to get permits through the EPA.
    What is your impression?
        Mr. Kiger. Clearly, the State of Colorado, through the
    Department of Health, has to do a lot of the permitting issues.
    Their policies can be driven certainly by EPA mandates. BLM has
    had comments from EPA during the EA processes, recommending
    they analyze for greenhouse gases, that greenhouse gases to the
    EPA is an issue, so BLM has had to respond to that.
        Like I said in the early part of my comments, we are in the
    process of collecting greenhouse gas emissions information on
    our fans and our methane drainage wells, and we anticipate
    having to go through Title 5 air emission permits here in the
    next couple of years. The impact of that is uncertain, but
    clearly it is going to create some issues for us.
        Mr. Critz. And I think that you mentioned the methane, and
    I am assuming--I think I'm right in that a lot of that was
    driven because of the Massey Mine explosion. Is that----
        Mr. Kiger.That we ventilate the mine.
        Mr. Critz. Right.
        Mr. Kiger. And as we mine with longwall, the subsidence of
    the overburden, most of our methane is above the coal. It is
    not in the coal. So when we subside the overburden, a lot of
    that gas then is released from those layers, and they come into
    the mine. So what we do is, in addition to the normal mine
    ventilation to exhaust the mine--we move about a million cubic
    feet a minute--we also drill methane drainage bore holes on the
    surface, which are slotted pipe, fitted with a pump that as we
    mine through an area we can ventilate the subsided overburden
    areas to get the gas up to the surface and out of the mine
    rather than get it out of the mine through the ventilation
    system.
        Mr. Critz. Okay. Ms. Bredt, what has been the community
    reaction? You were talking about the half-a-billion dollar
    project you had to put up some turbines. What has been the
    community reaction while you were placing these? Are these so
    far out that they don't really impact residential areas or
    anything like that?
        Ms. Bredt. The community reaction varies from place to
    place. I think that Limon has been extremely welcoming to wind.
    Our project has 250 megawatts, and there is an additional 500
    megawatts proposed in that same area. So the actual turbines
    are being put in Lincoln County, and they are very receptive to
    it. They have seen the construction impacts, and they are going
    to start seeing tax payments, et cetera, coming in for the next
    20 years of this project, and the other 500 megawatts
    subsequent.
        There are other communities where I think it is a lack of
    understanding, really, of the wind industry because it is so
    new. So it takes--from a developer standpoint, I need to go in
    and educate and take what they have heard or what they have
    been told and say you are right on that, or here is really what
    is happening, here is really what we are going to do. So I
    think a lot of the hesitation, community hesitation can be
    fixed with education. It is just a simple unknowing fear that
    the community has.
        Mr. Critz. Well, the reason I bring it up is that we have
    some--we are on the Appalachian mountain range, and there is
    some rich talks that are being used, and we have actually had
    some areas of very vehement pushback from residents who wanted
    that beautiful blue sky and nothing in the way. And I thought
    that was interesting, as we try to get more renewables online.
        I have read that the goal is to get about 20 percent
    renewable energy, 20 percent I think of wind energy, to
    generate the electricity in the United States over the next
    maybe 15 to 20 years. What percentage does RES consider they
    will get? And I guess do you sell into the White River Electric
    grid, or where does your electricity go?
        Ms. Bredt. RES Americas has developed nationwide. So what
    we will typically do is develop a project and sell that power
    to a utility. So the Cedar Point wind farm in Limon, 100
    percent of that power is being bought by Xcel, Public Service
    Company of Colorado, and it varies from location to location.
    We do sell to the local utility typically. Going forward you
    might start to see power exported into the load areas of Vegas
    and Southern California.
        Mr. Critz. Okay, all right.
        Ms. Bredt. Up to this point, it has been to the local
    utility.
        Mr. Critz. Okay. All right. Mr. Ludlam, how is the natural
    gas industry--I don't know this area very well, so with you
    being on the oil and gas, is the industry moving forward? I
    think the price per cubic foot of gas right now is fairly low.
    It is about $3.60 a cubic foot, something like that. So has
    that had an impact on the industry here?
        Mr. Ludlam. It has indeed had an impact, not as much as
    regulatory uncertainty, but it has had an impact on operations
    throughout all of our basins.
        Mr. Critz. Okay. All right. Well, starting with Mr. Welle
    and working my left to right, your right to left, do you think
    that the U.S. government should play a role in subsidizing
    different industries, and in this case the energy industry, to
    give certain types of industry a leg up and get them started?
        Mr. Welle. Well, I am kind of a free market guy, but I
    understand that there are subsidies that exist in all energy
    forms. I would more rather see that government subsidies be
    utilized to definitely push forward technology and innovation.
    I think we are running into mandates or using some energy
    sources that will not sustain themselves in a free marketplace,
    and I think that is probably a bad signal to be sending to the
    American public.
        I know there are subsidies in coal, there are subsidies in
    other forms. It might be the time to start over and say no
    subsidies for any energy source and let them be free market
    based.
        But I would like to see significant money put forth for,
    like I indicated earlier, storage technologies for renewables
    that would make them dispatchable, would make them actually a
    base load resource instead of a variable resource, and I think
    that is going to be the day that renewables will really start
    taking a much larger role in the national electric supply.
        Mr. Critz. Mr. Kiger.
        Mr. Kiger. I am a free market kind of guy myself. A market
    economy should determine the winners and losers and not
    government. I do not believe that government should be making
    decisions. There is a role for government in basic research in
    technology to help out to move the research along through
    universities and those kinds of things, but then let the free
    market determine how best to use those technologies if they are
    developed and if they are competitive.
        Mr. Critz. Ms. Bredt.
        Ms. Bredt. The production tax credit, which is what the
    wind has primarily used, the one industry has primarily used,
    has really helped the industry grow. When the production tax
    credit is threatened, the wind industry slows down. So if we
    don't see the production tax credit go forward, the wind
    industry will--I don't want to say stand still because that
    scares me from a job perspective, but it will tentatively come
    to a halt, and that is seen in the graphs that show when the
    PTC is extended for multiple years or single years. There is
    hesitation on investment by the wind industry when they don't
    know the future of that production tax credit. So the tax
    credit has played an important role for our industry.
        Mr. Critz. Thank you.
        Mr. Ludlam.
        Mr. Ludlam. Thank you, Congressman. I think that the
    question speaks to a societal judgment that we are not
    necessarily always in the business of making. We are committed
    to producing clean natural gas for society to use in whatever
    way and manner that society dictates is necessary and whatever
    way the market calls for it.
        Mr. Critz. Okay. Mr. Commissioner.
        Mr. White. Well, in my world, which is probably not too
    different than yours, it is called stop the spending, and that
    is what we are being told. And so from my perspective, the free
    markets should reign, and let the best source win, and I think
    that will sort itself out, as it has historically.
        One of the messages that is being sent from the
    administration who is subsidizing the nuclear power industry
    with two new plants in Georgia on one hand, on the other hand
    agencies of that administration are interfering in the process
    of the mineral extraction that is necessary for those power
    plants to exist, and it is an energy policy decision on top of
    it. So from a subsidy standpoint, until there is some
    rationality coming from the Federal Government and from the
    administration, the current administration in particular, I
    don't see where anything is really going to change.
        You gentlemen can certainly foster some change from that
    standpoint, but markets will drive themselves if left alone.
        Mr. Critz. Okay. Well, the reason I asked that is that many
    people have seen the T. Boone Pickens plan to get more natural
    gas online and talking about the government stepping in and
    helping, and obviously with wind and solar subsidies as well,
    coal is sort of the target, the elimination of coal as an
    energy source, which I find unusual simply because we have so
    much of it. If you start doing research and let's figure out
    how to do it better, cleaner, more efficiently, I think there
    is a road ahead.
        And that is why I was curious, because we get a lot of--we
    hear a lot of white noise, people saying we want this, we want
    that, and we get it from all sides, and it is nice to see
    people in different sectors of this industry wading through it
    as well. It helps us make decisions.
        With that, I yield back. Thank you, Mr. Chairman.
        Chairman Tipton. I thank the Congressman.
        I will just follow up, I guess, with one last question. Ms.
    Bredt, if you could tell, do you know--and you may want to get
    back to us. I am not familiar with it, about the Cedar Point
    wind farm. Did that go through the permitting for that pretty
    quickly?
        Ms. Bredt. That wind farm--and I am glad you asked. That
    wind farm is 100 percent on private land.
        Chairman Tipton. On private land.
        Ms. Bredt. And we also have, in addition to the wind farm,
    which is 139 turbines, we have 41 miles of transmission, which
    you heard Mr. Welle speak about how difficult it is to permit
    transmission, and that is also on 100 percent private. Because
    of that, permitting was facilitated. Federal would take much
    longer.
        Chairman Tipton. Thank you. Again, I would like to thank
    all of you for taking the time today to give witness and
    testimony here.
        Energy production is vital for a nation's economic and
    national security. The evidence presented here today will help
    policymakers better understand the risks and challenges faced
    by energy producers and how decisions in Washington will impact
    our communities at the local level.
        I would like to especially thank my colleague, Ranking
    Member Critz, for making the trek out to Colorado. I look
    forward soon to being able to reciprocate in Pennsylvania as
    well. These are issues that impact us here at home, and in your
    home as well, that we certainly need to be visiting on and
    looking through a clear prism on.
        I would like now to ask for unanimous consent that members
    will have five legislative days to submit statements and
    supporting materials for the record. With no objection, so
    ordered. And our hearing is now adjourned. Thank you.
        [Whereupon, at 12:40 p.m., the Subcommittee was adjourned.]