[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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            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.] 




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