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



 
 THE AMERICAN ENERGY INITIATIVE, PART 26: THE ROLE OF FEDERAL AGENCIES 
            IN ALTERNATIVE TRANSPORTATION FUELS AND VEHICLES 

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 17, 2012

                               __________

                           Serial No. 112-166


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov

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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

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

                                 ______

                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
JOHN SULLIVAN, Oklahoma              BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               KATHY CASTOR, Florida
GREG WALDEN, Oregon                  JOHN P. SARBANES, Maryland
LEE TERRY, Nebraska                  JOHN D. DINGELL, Michigan
MICHAEL C. BURGESS, Texas            EDWARD J. MARKEY, Massachusetts
BRIAN P. BILBRAY, California         ELIOT L. ENGEL, New York
STEVE SCALISE, Louisiana             GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington   LOIS CAPPS, California
PETE OLSON, Texas                    MICHAEL F. DOYLE, Pennsylvania
DAVID B. McKINLEY, West Virginia     CHARLES A. GONZALEZ, Texas
CORY GARDNER, Colorado               HENRY A. WAXMAN, California (ex 
MIKE POMPEO, Kansas                      officio)
H. MORGAN GRIFFITH, Virginia
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

                                  (ii)



                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     1
    Prepared statement...........................................     3
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     4
Hon. John Shimkus, a Representative in Congress from the State of 
  Illinois, opening statement....................................     5
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     6
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     6

                               Witnesses

Howard K. Gruenspecht, Deputy Administrator, Energy Information 
  Administration, Department of Energy...........................     8
    Prepared statement...........................................    11
    Answers to submitted questions...............................    79
Margo T. Oge, Director, Office of Transportation and Air Quality, 
  Environmental Protection Agency................................    24
    Prepared statement...........................................    26
    Answers to submitted questions...............................    81
Kathleen Hogan, Deputy Assistant Secretary for Energy Efficiency, 
  Department of Energy...........................................    34
    Prepared statement...........................................    36
    Answers to submitted questions...............................    85


 THE AMERICAN ENERGY INITIATIVE, PART 26: THE ROLE OF FEDERAL AGENCIES 
            IN ALTERNATIVE TRANSPORTATION FUELS AND VEHICLES

                              ----------                              


                         TUESDAY, JULY 17, 2012

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 3:02 p.m., in 
room 2123, Rayburn House Office Building, Hon. Ed Whitfield 
(chairman of the subcommittee) presiding.
    Members present: Representatives Whitfield, Shimkus, Terry, 
Burgess, Scalise, Gardner, Pompeo, Griffith, Barton, Upton (ex 
officio), Rush, Castor, Markey, Green, and Waxman (ex officio).
    Staff present: Charlotte Baker, Press Secretary; Anita 
Bradley, Senior Policy Advisor to Chairman Emeritus; Maryam 
Brown, Chief Counsel, Energy and Power; Andy Duberstein, Deputy 
Press Secretary; Cory Hicks, Policy Coordinator, Energy and 
Power; Heidi King, Chief Economist; Ben Lieberman, Counsel, 
Energy and Power; Mary Neumayr, Senior Energy Counsel; Chris 
Sarley, Policy Coordinator, Environment and Economy; Charlotte 
Savercool, Executive Assistant; Lyn Walker, Coordinator, Admin/
Human Resources; Michael Aylward, Democratic Professional Staff 
Member; Phil Barnett, Democratic Staff Director; Greg Dotson, 
Democratic Energy and Environment Staff Director; Caitlin 
Haberman, Democratic Policy Analyst; and Alexandra Teitz, 
Democratic Senior Counsel, Environment and Energy.

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

    Mr. Whitfield. I would like to call this hearing to order. 
This is the 26th day of our hearings on the American Energy 
Initiative. Last week we held a day of hearings on the 
alternative fuels and vehicles that focused on nongovernmental 
perspectives. We did not complete that hearing so today we are 
going to hear three governmental perspectives: The Energy 
Information Administration and projections on alternative fuel 
and vehicle trends from them; the Environmental Protection 
Agency, which implements several rules and several fuels and 
vehicle programs, like the renewable fuel standard and CAFE 
greenhouse gas standards for cars and trucks; and the 
Department of Energy, which heads up the Federal research 
efforts on alternative fuels and vehicles.
    Among the things we hope to explore today is the proper 
role for the government in spurring innovation in alternative 
fuels and vehicles. Where the Federal Government is already 
involved, we need to monitor its progress and make revisions if 
necessary. For example, I believe that the renewable fuel 
standard created in the 2005 bill and expanded in the 2007 bill 
has worked well in several respects. The Nation has 
successfully ramped up ethanol and biodiesel production to meet 
the standards. Some believe there are challenges with the RFS 
that require congressional review.
    EPA is also involved in fuel economy greenhouse gas 
standards for cars and trucks, and indeed, we expect a final 
rule for light duty standards for 2017-2015 very soon. We do 
need to scrutinize the impact of these standards. While they 
are going to improve fuel efficiency and save money in that 
way, we know that they will also increase the price, the 
sticker price of automobiles, and we want to be sure that 
middle-class Americans can still afford these vehicles.
    The good news is that a variety of transportation 
alternatives are on the table; electricity, biofuels, natural 
gas, propane, et cetera. Each offers its own unique mix of 
potential economic, environmental or national security 
benefits, as well as cost and technical challenges that need to 
be overcome. So I look forward to our witnesses today on this 
last panel. I will introduce them right before we will receive 
their opening statements. And at this time, I would like to 
recognize the gentleman from California, Mr. Waxman, for his 5-
minute opening statement.
    [The prepared statement of Mr. Whitfield follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you, Mr. Chairman.
    We are holding our 26th day of hearing on the American 
Energy Initiative. And what we will hear from the Republican 
majority I think will be disconnected from reality as have the 
other 25 previous hearings. For 18 months, the Republicans have 
tried to talk about energy policy without even mentioning, let 
alone addressing, the problem of carbon pollution and climate 
change.
    Climate change is inextricably linked to our energy 
choices, and sound energy policy is critical to strengthening 
our energy security, boosting our economy, improving our 
international competitiveness, growing jobs, reducing pollution 
and protecting public health. We must tackle climate change and 
our other energy challenges together, or we will inevitably 
fail to achieve these goals.
    The Republicans' approach is like trying to make America 
more secure without acknowledging the threat of terrorism. It 
is like trying to improve our international competitiveness 
while pretending China doesn't exist. It is doomed to failure.
    And that failure has a very high price. We are now starting 
to get a clear picture of the cost of unchecked climate change. 
The recent wildfires, drought, heat waves and extreme weather 
events, even in Kentucky, are exactly the types of extreme 
events that scientists have been predicting and that this 
committee has been ignoring.
    According to the National Oceanic and Atmospheric 
Administration, more than 40,000 hot temperature records have 
been set this year. The past 12 months were the warmest 12-
month period ever recorded in the United States. At the end of 
June, more than 100 million people in the U.S. were in areas 
under extreme heat advisories. Two-thirds of the country is 
experiencing drought. And last week, the Agriculture Department 
declared a Federal disaster area in more than 1,000 counties 
covering 26 States, making it the largest disaster declaration 
ever made by the USDA. More than 2 million acres have burned in 
wildfires this year.
    A recent study by NOAA and the U.K. Hadley Center found 
that due to climate change, the odds that Texas will experience 
an extreme heat wave like it did last summer are now 20 times 
higher compared to the 1960s. According to economists at the 
Texas Agri Life Extension Service, last summer's drought caused 
Texas agriculture $7.6 billion. That is just a portion of the 
cost of one extreme event that was made far more likely by 
climate change.
    But instead of tackling this problem, the Republicans have 
refused to acknowledge it. Representative Rush and I have 
written to Chairman Upton and Chairman Whitfield 15 times this 
year to request hearings on various climate change reports and 
topics. We have yet to get a response.
    And the Republicans have done worse than just ignore 
climate change. They are actually pushing policies that would 
make it worse. The House Republicans have voted 81 times on the 
House floor to block action to address climate change and 
establish clean energy policies. Republicans have even voted to 
block the EPA carbon pollution tailpipe standards, which we 
will hear about today. As proposed, those standards will save 
consumers on average $4,400 at the pump, net a vehicle cost, as 
well as reduce carbon pollution by 2 billion metric tons and 
save about 4 billions barrels of oil.
    Only an extreme ideology can view these standards as a bad 
idea that Congress needs to stop.
    Mr. Chairman, 26 hearings in this subcommittee, and we 
continue to ignore the real and urgent problem of climate 
change. As Americans across this country continue to experience 
devastating extreme events which are becoming far more frequent 
as the earth warms, it is increasingly clear that we don't have 
any more time to waste. And I am not going to waste any more 
time and yield back my 19 seconds.
    Mr. Whitfield. Thank you very much.
    At this time, I recognize the gentleman from Illinois, Mr. 
Shimkus, for 5 minutes.

  OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Shimkus. Thank you, Mr. Chairman. And thank you for 
holding this hearing today and the follow-up with the hearing 
that we had last week on really the renewable fuels portion of 
our national energy security and standard.
    It was in this hearing room in 2005 that we established the 
renewable fuel standard, which has credibly helped in reducing 
our reliance on imported crude oil, and it has helped change 
the liquid transportation market to something other than 
totally a crude-oil-based economy.
    So the question is, Where do we go from here? We are still 
importing 60 percent of the crude oil to meet our needs for 
transportation. That is why in 2007, then again later, we 
continued to move the renewable fuel standard and portfolio 
even further. That is why always this is an opportunity to take 
advantage to highlight the bipartisan bill that Mr. Engel and I 
have dropped, H.R. 1687, which is the open fuel standard.
    And I think the hearing that we had last week really helps 
build on that piece of legislation. Because as I have been 
thinking about the hearing--and we all know there is a 
plentiful supply of natural gas available, and that is really 
going to help on electricity generation, on emissions and the 
like. Being from a coal State, I have obviously some concerns 
that my coal will be disenfranchised, but I do believe in the 
competitive marketplace. If the EPA wasn't making the 
additional cost so high, it would still be competitive, but 
that is an argument for another time.
    On the liquid transportation front, why can't we take the 
natural gas, move it into methanol, add methanol, add ethanol, 
encourage, incentivize, plead with the auto industry to have a 
one fuel standard for vehicles and then have real competition 
at the refilling stations, so that the individual consumer 
could go up and decide what is the best fuel at the best price 
and let market competition take over? As my friend said last 
week, we really have--we are still constrained, and I think 
some of the opening statements by our panelists will highlight, 
that we are still constrained and reliant on crude oil as a 
base feed stock for transportation fuels.
    What the open fuel standard says is, let's break that, we 
are still going to be highly reliant on crude oil, but let's 
bring other feed stocks and let the individual consumer choose, 
choose at the pump and fight. So I want to take this 
opportunity to highlight H.R. 1687, thank my friend Mr. Engel, 
who has actually been carrying this a lot longer than I was the 
primary sponsor. We appreciate the associations and the 
national defense folks, who are really involved with this 
because our reliance on imported crude oil throughout the world 
and the Strait of Hormuz, and we understand the firing from 
yesterday, so this is always a timely thing to discuss.
    And with that, Mr. Chairman, I do appreciate having this 
hearing, and I yield back the balance of my time.
    Mr. Burgess. Mr. Chairman, would you mind yielding to me?
    Mr. Shimkus. I would yield time to my friend from Texas.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. And I appreciate the gentleman for yielding. I 
just want to point out this last weekend we had our annual 
energy efficiency summit in my district back at the University 
of North Texas. Constituents are concerned about what they see 
as the increasing cost of electricity in their fuel bill, so 
this hearing is timely today. The keynote speaker for our event 
was our railroad commissioner, David Porter, who has the 
responsibility for regulating the oil and gas industry in the 
State of Texas, and he provided a great deal of insight how 
Texas is leading the way in energy technologies, particularly 
in the alternative shale formations, which are now so prevalent 
in our State and has been a boon to the region and much of the 
rest of the country. Lower costs to consumers are driving more 
people to drive hybrid vehicles and make their homes more 
energy efficient, all good things, without the need for 
government incentives to do so. That is how the market was 
designed to work, and we should be cautious at any moves that 
might distort the market.
    For the same reason, I have been concerned about the EPA's 
mandates in the renewable fuel standard. I have legislation out 
there, H.R. 424, The LEVEL Act, to keep the EPA from fast-
tracking the use of E15 in our fuel systems. The cost of 
consumers from this move both at the pump and at the mechanic 
shop is going to be significant. And we have yet to provide any 
satisfactory liability protection for the small retailer. I 
thank the chairman for the recognition and I yield back.
    Mr. Shimkus. And I yield back the time.
    Mr. Whitfield. That gentleman yields back the balance of 
his time.
    At this time, I recognize the gentleman from Illinois, Mr. 
Rush, for 5 minutes.

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

    Mr. Rush. Why, thank you, Mr. Chairman, for holding yet 
another hearing ad infinitum on this subject. Mr. Chairman, 
this is our 26th hearing on this particular subject matter, and 
we have not had a law passed yet, nothing has been signed into 
law yet. So, Mr. Chairman, at some point, this subcommittee 
needs to move away from holding partisan doomed-to-fail 
political messaging votes and get on with the business of 
working together to actually enact policies that will help move 
this country's energy policies forward and help move us away 
from the point of no return in regards to the serious matter of 
climate change.
    Yet another hearing, Mr. Chairman, and during last week's 
industry hearing, we heard that we faced most significant 
opportunities and challenges as we started to meet the goal of 
$36 billion of biofuels by the year 2022 as mandated by the 
renewable fuel standards, which was included in the Energy 
Independence and Security Act back in 2007.
    And Mr. Chairman, today more than ever, we see why it is 
extremely necessary to move our country towards a greater 
reliance on alternative and renewable sources of energy as 
opposed to carbon-intense fossil fuels that emit dangerous 
levels of greenhouse gases and contribute enormously to ever-
present climate change.
    Over the past few years, we have seen an uptake in severe 
wildfires and extreme weather events associated with global 
climate change that is occurring all around this Nation and 
indeed around the world. According to NOAA, the United States 
has set more than 40,000 high temperature records this year 
alone. And the last 12 months have been the hottest ever 
recorded in the history of this Nation. And at the end of June, 
Mr. Chairman, more than 113 million people in the U.S. were in 
areas under extreme heat advisories. And just last week, the 
U.S. Department of Agriculture declared a Federal disaster area 
in more than 1,000 counties, covering 26 States, making it the 
largest disaster declaration ever made by the USDA. Today two-
thirds of the country is experiencing drought in States from 
your home State of Kentucky to the Midwest, where I live, 
facing severe losses of corn and other crops due to lack of 
rain.
    On my way in from the airport earlier, one of the airport 
employees bemoaned the fact that corn, the corn crop this year 
would be disastrous and thereby was driving up the cost of 
enormous amounts of consumer goods to the American people that 
is hurting already under this economic times that we live in. 
Mr. Chairman, at least half of the Nation's grazing pastures 
are in poor or very poor condition, and up to 30 percent of the 
Nation's corn crop is in poor or very poor condition, which 
will impact, again, the price of food, consumer goods and 
ethanol. Dry conditions are taking a toll on the Great Lakes 
where water levels in four of the five lakes have plummeted 
this summer due to high evaporation rates and insufficient 
rainfall, which of course may pose a significant challenge for 
us who rely on the lakes for drinking water and other economic 
activities.
    Even here in the Nation's Capital two weeks ago, a storm 
caused over 1 million homes to lose power in the DC Region, 
while States from Florida to Minnesota have experienced some of 
the most damaging floods in history due to torrential 
downpours.
    Mr. Chairman, this is not about party. Regardless of party 
or geography or whether you like President Obama and/or his 
policies, this committee and this subcommittee can no longer 
afford to stick their heads in the sand and pretend that mother 
nature is not showing us the signs that we need to act. The 
scientists are also increasingly sounding alarms and informing 
us that these natural catastrophes are anticipating 
consequences of climate change and are expected to continue.
    Mr. Chairman, what are we doing here, when are we going to 
stop the charade, when are we going to move to bring forth 
meaningful bipartisan legislation to deal with real problems 
and real issues? With that, I yield back the balance of my 
time.
    Mr. Whitfield. The gentleman didn't have any time to yield 
back, but we appreciate your opening statement.
    I would like to introduce the witnesses on the first panel 
this afternoon. First of all, we have Mr. Howard Gruenspecht, 
who is the deputy administrator, U.S. Energy Information 
Administration. We have Ms. Margo Oge, who is director, Office 
of Transportation and Air Quality, U.S. Environmental 
Protection Agency. And we have Dr. Kathleen Hogan, who is the 
deputy assistant secretary for energy efficiency at the 
Department of Energy.
    We genuinely appreciate your being here today, we look 
forward to your testimony. And each of you will be given 5 
minutes for an opening statement, and then, at the end of that 
time, there will probably be some questions.

  STATEMENTS OF HOWARD K. GRUENSPECHT, DEPUTY ADMINISTRATOR, 
ENERGY INFORMATION ADMINISTRATION, DEPARTMENT OF ENERGY; MARGO 
  T. OGE, DIRECTOR, OFFICE OF TRANSPORTATION AND AIR QUALITY, 
  ENVIRONMENTAL PROTECTION AGENCY; AND KATHLEEN HOGAN, DEPUTY 
ASSISTANT SECRETARY FOR ENERGY EFFICIENCY, DEPARTMENT OF ENERGY

    Mr. Whitfield. So, Mr. Gruenspecht, you are recognized for 
5 minutes for your opening statement.

               STATEMENT OF HOWARD K. GRUENSPECHT

    Mr. Gruenspecht. Chairman Whitfield, Ranking Member Rush, 
members of the subcommittee, I appreciate the opportunity to 
appear before you today.
    The Energy Information Administration is the statistical 
and analytical agency within the Department of Energy. EIA does 
not promote or take positions on policy issues and has 
independence with respect to the information and analysis we 
provide. Therefore, our views should not be construed as 
representing those of the Department or other Federal agencies.
    The transportation sector and the use of petroleum fuels 
are tightly linked. In 2010, 71 percent of total U.S. petroleum 
consumption occurred in the transportation sector, while 
petroleum products provided 93 percent of total transportation 
energy. Light duty vehicles, both passenger cars and light duty 
trucks, accounted for 60 percent of total transportation energy 
use in 2010, with petroleum based fuels providing 94 percent of 
that. Gasoline-only nonhybrid vehicles had an 86 percent market 
share out of 10.8 new vehicles sold in 2010 followed by flex 
fuel, hybrid electric and diesel vehicles at 9 percent, 3 
percent and 2 percent respectively.
    EIA's annual energy outlook 2012 provides projections for 
the U.S. energy system through 2035. The reference case is a 
business-as-usual trend estimate using known technology and 
technological and demographic trends and the assumption that 
current laws and final regulations, including any applicable 
sunset dates, remain unchanged. Annual energy outlook 2012 also 
includes several alternative cases with market technology or 
policy assumptions that can significantly change the outlook 
for light duty energy use, including high and low oil price 
cases, a case that includes the fuel economy standards proposed 
by NHTSA and EPA for model years 2017 through 2025, an extended 
policy case that raises fuel economy standards beyond 2025 and 
a case that considers cost breakthroughs and battery 
technology.
    Although growth in the number of drivers and vehicle miles 
per driver results in a projected 35 percent growth in light 
duty vehicle miles of travel between 2010 and 2035 in the 
referenced case, projected light vehicle petroleum use in 2035 
is about 7.2 million barrels per day, 11 percent lower than in 
2010, due to changes in the fuel mix and improved fuel economy. 
In the CAFE standards case, overall light vehicle energy 
consumption decreases by 20 percent over the same time period 
with petroleum use falling to only about 5.8 million barrels 
per day.
    In both cases, petroleum products remain the dominant fuel 
for light duty vehicles, but biofuels are projected to provide 
a growing share of their energy use, driven primarily by the 
renewable fuel standard mandate that has been discussed in the 
opening statements. Electricity usage begins to grow but 
remains quite small. It grows much more rapidly in the high 
technology battery case.
    Our fuel economy case analysis indicates a marked increase 
in the efficiency of gasoline engines both with and without 
microhybrid technologies. My testimony discusses several 
challenges surrounding the Federal renewable fuel standard 
targets. First, since the Energy Independence and Security Act 
was first enacted, EIA has projected that rates of technology 
development and market penetration for cellulosic biofuels 
would likely fall short of the specified targets and 
timetables. We do believe that you get there 25 years from now, 
but you don't get there as quickly as the timetables are set 
up.
    Our near-term projections for cellulosic biofuels have been 
further reduced in this current addition of the outlook. 
Second, nearly all U.S. motor gasoline already contains 10 
percent ethanol, so increased absorption of ethanol into a fuel 
pool that is not growing fast requires market acceptance of 
ethanol blends up to 15 percent, which EPA has approved for use 
in model year 2001 and new or nonflex fuel vehicles or the 
increased use of E85 in flex fuel vehicles, both of which face 
some significant market obstacles.
    Another pathway involves the development and market 
penetration of drop in renewable fuels or renewable fuel 
components, such as biobutanol. Four key areas of uncertainty 
in the annual energy outlook projections, including fuel 
prices, technology costs, consumer acceptance and potential 
changes in policies, are addressed in my testimony. The impact 
of alternative assumptions about technology costs are 
particularly striking for battery technologies. Success in 
attaining DOE goals leads to a very significant increase in 
projected market penetration of hybrid electric vehicles, plug-
in hybrids and electric vehicles compared to the sales 
projected in the referenced case using our default cost 
assumptions and would likely be even more significant in the 
CAFE standards case.
    That concludes my statement, Mr. Chairman, and I would be 
happy to answer any questions that you or the other members may 
have.
    [The prepared statement of Mr. Gruenspecht follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Whitfield. Thank you very much.
    And Ms. Oge, you are recognized for 5 minutes.

                   STATEMENT OF MARGO T. OGE

    Ms. Oge. Thank you.
    Chairman Whitfield, Ranking Member Rush, and other members 
of the subcommittee, thank you so much for the opportunity to 
testify today. I would like to give you a brief overview of 
EPA's efforts implementing the renewable fuel standards and our 
efforts in developing the vehicle and truck greenhouse gas 
centers.
    In November 2011, EPA and NHTSA proposed vehicle standards 
for model years 2017 through 2025, calling for a CO2 standard 
of 160 grams per mile or equivalent 54.5 miles per gallon by 
2025. Now this builds upon greenhouse gas and fuel economy 
standards for model years 2012 through 2016. These regulations 
provide incentives for manufacturers to produce and sell the 
most advanced vehicle technologies. These standards will save 
an estimated $1.7 trillion for consumers and businesses in our 
country and cut our country's oil consumption by 12 billion 
barrels of oil while reducing greenhouse gas emissions by 6 
billion metric tons. Consumers on average will see fuel cost 
savings of about $8,000 for an average 2025 vehicle compared to 
an average 2010 vehicle over that vehicle's lifetime.
    Last year, the agencyalso completed the first greenhouse 
gas and fuel economy standard for model years 2014 through 2018 
for trucks and buses. These standards will reduce CO2 emissions 
by about 2 70 million metric tons and save about 530 million 
barrels of oil over the life of the vehicles that are built 
from 2014 through 2018.
    Now, I want to note that owners of a 2018 truck will enjoy 
net savings of $73,000 over the vehicle lifetime with a payback 
period for that cost for about a year.
    Also recognition of the introduction of advanced 
technologies in our vehicles and alternative fuel vehicles, EPA 
and DOT in 2011 jointly issued an overhaul of the EPA fuel 
economy label. These new labels have a lot of new information, 
but I want to highlight that for the first time, the labels 
will highlight the fuel savings or increased cost that the 
consumers will experience as compared to fuel costs for an 
average vehicle in the marketplace, whether that fuel is 
gasoline, diesel, electricity, hybrids and/or CNG. Now shifting 
over to biofuels, these fuels are a critical part of the 
evolving alternative fuel landscape.
    In 2010, EPA finalized regulations to implement the EISA 
revisions to the RFS program. Congress, as you know, set the 
target of 36 billion gallons by 2022. EISA requires EPA each 
year to publish an annual standard for total advanced biomass 
based diesel and cellulosic renewable fuels. As directed by 
Congress, each year EPA conducts a thorough review of the 
cellulosic industry including one-on-one discussions with each 
producer to determine its individual production capacity.
    We also consulted with our colleagues from EIA, our 
colleagues from DOE and USDA before we proposed the annual 
volume standards. As a result of these reviews, EPA reduced the 
cellulosic standard to about 6.5 million gallons for 2010 and 
2011 and 8.6 million gallons for 2012. That is about 98 percent 
below the EISA target for those years.
    This summer, we plan to finalize the 2013 biodiesel volume 
levels and propose the other 2013 RFS volume standards.
    I want to note that the biofuel sector is a dynamic one. We 
already have a significant list of qualified advanced and 
cellulosic biofuels for the oil transportation sector as well 
as jet fuel and heating oil uses. Last year, we added canola-
based biodiesel and a number of other new technology based 
pathways. Most recently, we took comments on a number of 
advanced and cellulosic biofuels, including grain sorghum, 
camelina, Napier grass, sugarcane and others, and we hope to 
finalize this analysis later this year. We are currently 
evaluating dozens, I want to say over 30 additional petitions 
for new biofuels, both feed stocks and different pathways.
    EPA recognizes the value of these fuels and the value of 
advanced vehicle technologies and we look forward to a 
successful development introduction of these new fuels and 
advanced technology to the marketplace. Thank you.
    [The prepared statement of Ms. Oge follows:]

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    Mr. Whitfield. Thank you.
    Dr. Hogan, you are recognized for 5 minutes.

                  STATEMENT OF KATHLEEN HOGAN

    Ms. Hogan. Thank you Chairman Whitfield, Ranking Member 
Rush, and members of the subcommittee. I do thank you for the 
opportunity to be here today.
    As part of the President's all-of-the-above approach to 
American energy, the department is advancing transportation 
innovations to do a number of things. That is to reduce our 
dependence on foreign oil and the nearly $1 billion we send out 
of the country for oil each day; helping our vehicle 
manufacturing industry, that accounts for 5 percent of GDP and 
millions of jobs, compete in this global industry; and then to 
provide consumers with more transportation choices and cost 
savings, as transportation is the second biggest monthly 
household expense.
    The DOE portfolio is broad spanning light, medium and heavy 
duty vehicles, and including advanced combustion electric drive 
biofuels, hydrogen fuel cells, lightweight materials and other 
efforts, and we are making important progress. Electric 
vehicles is one important focus. Electricity is cheaper than 
gasoline. At about $1 per gallon equivalence, it offers 
competitive performance at-home charging convenience, less 
pollution and is almost oil free. Other countries, of course, 
recognize these benefits and are making their own investments, 
and we here have a critical opportunity to grow U.S. 
manufacturing building upon our past successes.
    Today DOE-developed battery technology is in nearly every 
hybrid vehicle on the road. We have achieved a 35 percent cost 
reduction in the next generation of batteries, and we expect an 
additional 50 percent reduction by 2014. President Obama has 
announced a new EV everywhere grand challenge just this last 
March to enable U.S. companies to lead the world in producing 
plug-in EVs that are as affordable and convenient as gasoline-
powered vehicles, and to truly spur the U.S. to further reduce 
costs, extend vehicle range and improve performance and 
convenience. Biofuels are also important to reducing our 
dependence on foreign oil and developing a home-grown industry, 
and again we are making great strides with cellulosic ethanol 
production.
    In the past 2 years, four DOE supported commercial 
cellulosic ethanol biorefineries broke ground, and we have also 
developed the know-how to produce cellulosic biomass at about 
$2 per gallon when it is scaled, having reduced these costs by 
a factor of four over the last 10 years.
    Beyond ethanol, we are working to reduce the cost for 
cellulosic and algal based drop in biofuels, so that we can 
overcome some of the infrastructure issues, use our existing 
infrastructure and displace diesel, jet fuel and gasoline. Our 
goal here is $3 per gallon drop ins by 2017.
    Integrated biorefineries are a critical part of our work to 
help commercialize first-of-a-kind approaches. Currently 20 of 
24 DOE supported biorefineries are in construction or operating 
with an overall combined total of nearly 100 million gallons 
per year of advanced biofuel capacity expected by 2014.
    We also continue to work with hydrogen fuel cells to make 
them cost competitive. Here the global market has doubled in 
the last 3 years and offers important opportunities for U.S. 
manufacturing. Our goal is for automotive fuel cells to be cost 
competitive with internal combustion engines by 2017 and for 
renewable hydrogen to be competitive with conventional fuels by 
2020.
    Progress here includes the cost of automotive fuel cells 
being down 80 percent since 2002; hydrogen delivery costs down 
40 percent; 3 million monitored miles for fuel cell electric 
vehicles demonstrating good durability and more than twice the 
efficiency of today's gasoline vehicles; and manufacturers on 
track to commercialize some fuel cell electric vehicles by 2015 
in that timeframe; and many States developing stationery 
applications and infrastructure.
    Here--so I guess broadly the President has proposed the 
National Community Development Challenge to enable local 
communities around the country to accelerate the deployment of 
clean alternative fuel vehicles and infrastructure, helping 
communities use the technologies that best fit their local 
needs, whether it is electric drive, natural gas, biofuels or 
another fuel.
    So, just in summary, the transportation sector does offer a 
number of critical opportunities for the U.S. to meet major 
national objectives, such as reducing our dependence on oil, 
keeping America on the cutting edge of advanced manufacturing, 
as well as environmental issues. And so thank you for the 
opportunity to discuss this, and we welcome your questions.
    [The prepared statement of Ms. Hogan follows:]

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    Mr. Whitfield. Thank you, Dr. Hogan.
    And at this time, I will recognize myself for 5 minutes of 
questions.
    We appreciate your testimony.
    I want to start off with just a little editorial comment. 
You had mentioned that the President is committed to an all-of-
the-above energy policy, which he frequently does state 
wherever he goes. And I know we are focusing today on fuel and 
transportation primarily. But when he came out with his 
campaign Web site on energy sources, he neglected to even 
mention coal. And of course, we can't remain competitive in the 
global marketplace, unless we can produce electricity at a 
competitive rate. So I just wanted to throw that out there, 
even though that is not our subject matter today because he 
sometimes says he is for all the above, but some of his actions 
in my view do not indicate that.
    Ms. Oge, under the renewable fuel standard law, EPA is 
required to publish its required volume obligations for certain 
fuel categories on an annual basis. These obligations inform 
industry stakeholders as to the specific amounts of renewable 
fuel that must be produced, purchased, blended or imported in 
order to comply with the program.
    Now, you all are given discretion when it relates to 
biomass based diesel. And I can't get all of my dates exactly 
right, but at one point, you all had established proposed 
volumes for 2012 and called I think for 1.28 billion gallons of 
biomass diesel in 2013. However, when EPA issued its final 
rule, it included the 2012 volumes but omitted the 2013 volumes 
for biomass diesel. And we had actually written a letter to you 
all about that and was asking for an explanation of why was 
that omitted in the 2013 year.
    Ms. Oge. Mr. Chairman, you are absolutely right. We did 
propose a biodiesel level of 1.28 billion gallons for 2013. We 
received a lot of comments, especially in the area of the cost 
associated with increasing the volume from 1 billion gallons to 
1.28. So the agency had to go back and do additional analysis. 
So what we decided to do was to finalize the 2012 volumes, and 
we are in the process of finalizing the 2013. Actually, our 
final action has gone over to the Office of Management and 
Budget, and we expect the final release very soon to establish 
the 2013 volumes for biodiesel.
    Mr. Whitfield. Do you expect it to be released within a 
month?
    Ms. Oge. I hope so.
    Mr. Whitfield. OK. So you do intend to do it?
    Ms. Oge. Yes.
    Mr. Whitfield. And there were just some technical issues 
with it?
    Ms. Oge. Yes.
    Mr. Whitfield. OK. Well, thank you very much.
    Mr. Gruenspecht, I noticed in your testimony you talked 
about that by the year 2035, you projected the use of oil for 
transportation purposes being in the neighborhood of 5.8 
million barrels a day, which was significantly less than today. 
How did you conclude that that is the volume it would be in 
2035? What assumptions did you all use?
    Mr. Gruenspecht. Well, we develop estimates of the amount 
of travel. That is driven by the number of licensed drivers, 
travel per licensed driver.
    Mr. Whitfield. And a lot of it I am assuming would be 
improved fuel standards would help----
    Mr. Gruenspecht. A lot of fuel economy helps a great deal 
in that. So efficiency sort of offsets the growth in travel. 
And we also have a significant increase in the use of biofuels, 
so that also offsets petroleum use.
    Mr. Whitfield. One of the things that bothers me is we talk 
about electric cars. We talk about fuel cells. We talk about 
compressed and liquid natural gas. We have a multitude of fuels 
that we are looking at for our transportation purposes. All of 
them take a significant amount of infrastructure, which really 
is not out there right now. And I am just concerned myself on 
the availability of capital, the lack of this infrastructure, 
going off in so many directions. I mean, within your agencies, 
do you all ever discuss that fact, or do you just want to 
continue pursuing a multi-source fuel sources for 
transportation?
    Ms. Oge. Well, let me give you an example. We are in the 
process of finalizing the 2017 to 2025 greenhouse gas and fuel 
efficiency standard for light duty vehicles. We, again based on 
the Clean Air Act, we are using the Clean Air Act, our 
colleagues from NHTSA is using their law, we are looking at 
advanced technologies, existing technologies and advanced 
technologies that companies can use to achieve those standards. 
And just to give you an example, for the 2025 timeframe, we 
expect that the levels of standards that we have proposed, if 
indeed we finalize those standards, will be met, for the most 
part, over 90 percent of it will be met with existing 
technologies, gasoline and diesel. And less than 3 percent will 
be relied on electric power train, like electric vehicles and 
plug in hybrids.
    Mr. Whitfield. Less than 3 percent.
    Ms. Oge. Less than 3 percent. The remaining of it will be 
based on gasoline and diesel and hybrids.
    Mr. Whitfield. Well, I had planned to ask six questions, 
and I am already out of time so I will recognize Mr. Rush for 5 
minutes.
    Mr. Rush. I yield to the ranking member, Mr. Waxman.
    Mr. Whitfield. I am sorry. Mr. Waxman.
    Mr. Waxman. Thank you, Mr. Rush, for allowing me to go 
first with my questions.
    Dr. Gruenspecht, at a similar hearing last year, I raised 
concerns about EIA's analysis of the vehicle fuel efficiency 
and tailpipe standards. At that time, many of EIA's assumptions 
about vehicle technologies differed substantially from NHTSA 
and EPA projections, and EIA appeared to not have adequately 
engaged with NHTSA and EPA in developing the EIA analysis. The 
annual energy outlook 2012 reflects improvements in this area, 
but there are still some outstanding concerns about the 
underlying vehicle technologies, data and analysis used by EIA.
    For example, the California Air Resources Board has raised 
concerns that the EIA analysis still fails to incorporate the 
latest data and analysis into its models. CARB has worked very 
closely with EPA, NHTSA and the auto industry to develop what 
it describes as a most comprehensive, accurate and up-to-date 
database of efficient and low-polluting vehicle technologies 
anywhere in the world, along with associated modeling 
capability to project how automakers will comply with the 
standards.
    Dr. Gruenspecht, does EIA view the vehicle technologies 
data and analysis developed by NHTSA, EPA and CARB as a 
valuable source of information in this area, and if so, will 
you commit to working more closely with these agencies to 
inform your own models and analysis.
    Mr. Gruenspecht. We do consider that information to be very 
valuable, and we do consult with our colleagues, and we also 
consult with nongovernmental organizations and manufacturers, 
and we expect to continue to do so.
    Mr. Waxman. Thank you.
    Given the remarkable joint effort on the fuel efficiency 
and tailpipe rulemakings and the wealth of information it has 
produced, incorporating such information should produce a 
stronger analytic product. I think it is worth spending a few 
minutes on the tailpipe standards themselves, given their 
tremendous benefits.
    Ms. Oge, would you please summarize the full suite of 
benefits from the tailpipe standards?
    Ms. Oge. So, Congressman Waxman, on my opening remarks, I 
have to find the papers, my opening remarks I summarized the 
overall benefits of the two programs. But just to give you a 
brief overview of the benefits of the 2017 to 2025 program, 
which is the program that we have proposed and we are in the 
process of finalizing, based on the proposal, we expect that 
the cost on an average for the fleet, that doesn't mean for 
every vehicle, but on an average would be about $2,000 per 
vehicle on an average for 2025. However, the benefits, the net 
benefits that the consumer will achieve as a result of the fuel 
savings will be $4,400.
    Mr. Waxman. So, after accounting for any increased cost for 
the vehicle over its life, consumers would save on average 
$3,000 under the current standards and another $4,400 under the 
proposed standards. Consumers save this money because these 
vehicles use a lot less gasoline. The best way to save money at 
the pump is to drive right by it, but we are more used to 
thinking about savings at the pump in terms of gas prices.
    So I asked EPA to calculate how much lower gas prices would 
have to be to save a consumer the same amount of money. For a 
new 2012 vehicle, the net savings experienced by a consumer are 
equivalent to dropping the price of gas by $0.14 per gallon, 
and those savings will rise over time as the new vehicles 
become more efficient. By 2025, the proposed standards are 
equivalent to lowering gas prices for the consumer by $1.13 per 
gallon. As the fleet turns over, eventually every light duty 
vehicle driver on the road will experience these savings.
    Could you tell us, Ms. Oge, about EPA's heavy duty vehicle 
standards.
    Ms. Oge. So for the heavy duty vehicle standards, as I 
mentioned in my opening remarks, the cost for a tractor, let's 
say these are the heavy duty diesel tractors that you see on 
our highways, in 2018 will be $6,200.
    Mr. Waxman. These are significant benefits, but the House 
Republicans have already passed legislation that would block or 
imperil all of EPA's tailpipe standards and make Americans 
continue to spend more money at the pump, as well as exacerbate 
climate change and our dependence on oil. Next week, they are 
bringing a regulatory bill to the floor that would stop EPA 
from finalizing the proposed tailpipe standards until 
unemployment falls below 6 percent. This is nonsensical. 
Preventing Americans from saving money at the pump certainly 
isn't going to help our economy.
    Thank you, Mr. Chairman. I yield back my time.
    Mr. Whitfield. At this time, I recognize the gentleman from 
Texas, Mr. Barton, for 5 minutes.
    Mr. Barton. Thank you, Mr. Chairman, and thank you for your 
diligence in pursuing these hearings.
    My first question is to the representative from the 
Department of Energy. Could you tell us what the Department of 
Energy thinks the purpose of the renewable fuel standard is, 
what is the goal? I asked DOE, but if EPA wants to comment.
    Ms. Oge. I still work for EPA.
    Ms. Hogan. I believe there are multiple goals to the 
renewable fuel standard, and I think it includes improving our 
independence from imported oil, as well as addressing 
environmental issues.
    Mr. Barton. Does the EPA want to comment on that?
    Ms. Oge. Agree.
    Mr. Barton. Well, based on that assumption, it is not a 
mutually conducive goal. If the goal is to reduce oil imports, 
then clean coal technology and more use of natural, 
domestically produced natural gas should be a part of any 
discussion about a standard, although clean coal and natural 
gas are not renewable in the classic sense. Both of those, 
certainly natural gas, would reduce emissions. I mean, I am 
just a little, I am a little puzzled because I read the 
testimony and most of the--the gentleman from the Energy 
Information Agency is just talking about what has happened, 
which is kind of what EIA's job is to do. The EPA and to some 
extent DOE's testimony is talking about the increased use of 
ethanol. The problem with ethanol is that if you are looking to 
reduce greenhouse gases, ethanol goes the other way. Now, I am 
not--I don't believe that CO2 is the danger and the enemy that 
some people do, but if your goal is to reduce greenhouse gases, 
definitely CO2 is a greenhouse gas and you can't get there with 
ethanol. You can't get there with ethanol on a cost basis.
    So if the goal is to reduce foreign imports, then we look 
at natural gas as a transportation fuel, and we also look at 
using clean coal to produce diesel and things like that.
    Dr. Hogan, do you agree with that, what I just said?
    Ms. Hogan. I believe we are trying to address multiple 
objectives and you are trying to address them over the period 
of time of the RFS, which is over some period of time. And if 
you do look at the fuels that the RFS is promoting, clearly one 
of the things you are looking to do is to address carbon.
    There has certainly been a number of studies that have been 
brought forward on the carbon profile of ethanol. I think the 
most recent set of studies actually show about a 20 percent 
benefit from ethanol. And then what I mostly talked about in my 
statement was not corn-based ethanol but really cellulosic 
based ethanol which really gets you a very, very, very 
substantial carbon benefit. And certainly we can have a 
conversation of the multiple objectives we are trying to 
advance in this country. But as I understand the RFS, it was 
mostly, it was for carbon as well as oil imports and it is 
delivering on that. And as we look at the growing, I guess, 
requirements for cellulosic based ethanol we would see even 
greater benefits going forward.
    Mr. Barton. Well, my time is about to expire, but the 
statistic that I have in front of me is that ethanol contains 
only 61 percent of the energy of gasoline. It takes 1.64 
gallons of ethanol to do the same amount of work as a gallon of 
gasoline. That 1.64 gallons of ethanol emits 20.5 pounds of 
CO2. Ethanol emits 1 pound more of CO2 in the air than using a 
gallon of gasoline. Now, I don't know if that is a correct 
statement, but that is what my staff has prepared. Do you agree 
with that?
    Ms. Hogan. We can certainly share with you our 
calculations. I do know that the studies that we are engaged 
with take into account the energy value of ethanol versus the 
energy value of a gallon of gasoline, and we are happy to share 
our numbers with you.
    [The information follows:]

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    Mr. Barton. Well, I would encourage the department to look 
at both clean coal and also natural gas as a transportation 
fuel because they are both abundant domestic resources and, 
especially in the case of natural gas, definitely reduce the 
amount of CO2. And clean coal done properly also does that.
    And with that, I yield back.
    Mr. Whitfield. At this time I recognize the gentleman from 
Illinois, Mr. Rush, for 5 minutes.
    Mr. Rush. Thank you, Mr. Chairman.
    Mr. Chairman, when I was in the fifth grade in a history 
class, I was astounded when my history lesson mentioned the 
fact that Emperor Nero fiddled while Rome burned.
    Mr. Chairman, America is burning right now, and we, Mr. 
Waxman and I, have asked the Republicans 15 times in the matter 
of a few months to hold a hearing on climate change, and we 
have been rebuffed on each and every occasion.
    You are out of touch, Mr. Chairman. This is the committee 
of jurisdiction. And this committee is out of touch with the 
plight of the American people. In my opening statement, I 
mentioned that some of the most extreme weather events that 
America has ever faced are occurring right now: 40,000 high 
temperature records set this year. For the last 12 months, they 
were the hottest months on record; 113 million people in the 
U.S. in areas of extreme health advisory. America is burning, 
and this subcommittee is fiddling and twiddling.
    The U.S. Department of Agriculture declared a Federal 
disaster area in over 1,000 counties in 24 States. Two-thirds 
of the U.S. is experiencing a drought. One-half of U.S. grazing 
lands are in poor or very poor condition. America is burning, 
and this committee is fiddling and twiddling; 30 percent of the 
U.S. corn crop is in poor or very poor condition. And we are 
talking about burning coal when America's crops and corn, 
America's corn is burning. The Great Lakes have had low water 
levels due to lack of rain.
    Mr. Chairman, when is this committee going to get in touch 
with what is happening in America? I would like to ask the 
witnesses, Ms. Oge and Ms. Hogan, why is it important that the 
Federal Government play a role in steering energy policy in the 
direction of the IFS and CAFE standards? Again, my Republican 
colleagues like to say that we need to leave all this to the 
market, and everything will work out just fine. Why is it 
important that we have leadership from Congress to move energy 
policies toward greater energy efficiency, additional 
alternative fuels and diversity in the Nation's energy 
portfolio?
    Ms. Oge and Ms. Hogan.
    Ms. Oge. Let me just give you an example.
    Using the authority under the Clean Air Act, EPA working 
with our colleagues from NHTSA, we have undertaken three very 
significant programs in the last couple of years to address 
greenhouse gas emissions and improve fuel efficiency for our 
vehicles, our light duty vehicles, and for our trucks. I 
believe that these programs are a win-win situation. And you 
just have to take a look and see that these programs are 
supported--not just by the Federal Government and State 
government--they are supported by the industries. The car 
companies have supported this program, the truck companies, the 
American Trucking Association. And the reason for that is 
because these investments that they will make, they pay back to 
the consumer. So it is good for the consumer. It is good for 
the economy, but also it is good for our environment and for 
energy security.
    Mr. Rush. Ms. Hogan. Go ahead.
    Ms. Hogan. And, I certainly agree with what Ms. Oge had to 
say, and I think another aspect that the Department of Energy 
works hard to bring to the table is to support our 
manufacturing base here in this country. There is innovation 
happening all the time, and we want our manufacturing base to 
be competitive with the activities in these global industries.
    Mr. Whitfield. The gentleman's time has expired.
    At this time, I recognize the gentleman from Illinois, Mr. 
Shimkus, for 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman.
    And thanks again for coming. I--don't take this bad. I am 
friendly, friendly on this hearing.
    But I do want to ask Ms. Oge a question on your on EPA 
estimates on the cost of--with the new CAFE and greenhouse gas 
standards, by 2016, it will add another thousand dollars to a 
cost of a car. And then by 2025, you are projecting $3,000 for 
an additional car; is that correct?
    Ms. Oge. No, $2,000. So it is $900 for 2016 and $2,000 for 
2025. I think the total probably----
    Mr. Shimkus. Oh, yes. It is cumulative, I think, so we had 
one plus two, then. Then let me go on.
    And you also calculated, I think this is good for the 
record, that you are projecting that people will buy new cars 
and they will keep them, their lifetime will be about 200,000 
miles. Is that correct?
    Ms. Oge. Yes.
    Mr. Shimkus. OK. I think that is pretty generous, but I 
hope you are correct in that.
    For both Ms. Oge and Ms. Hogan, I am reading, I do believe 
that we are on the verge of getting close to the cellulosic 
goals and desires. I am very fortunate to have the National 
Corn and Ethanol Research Center at SIU, Edwardsville. And last 
month, they, the researchers at Southern Illinois University 
Edwardsville say they have successfully produced ethanol from 
cellulosic portion of the corn kernel by utilizing existing 
technology that you can find in the commercial marketplace, and 
then obviously they believe it is built on cellulosic ethanol 
reality, which--and I tried to do this last in the last hearing 
of last week. I kind of portrayed a, what is a kernel of corn, 
for the lay people and there is about six different parts of a 
kernel of corn, that some go to fermented ethanol, but the 
benefit of cellulosic is using another portion of that.
    I also tried to highlight in just the fuel food debate, 
that even when you are doing the fermentation, a byproduct is 
distilled or dried grains, which goes into the livestock feed 
market, and we actually ship that all over the world as a 
commodity product. But there is--that is why we have these 
hearings so that we can get out the full fact and full data and 
statistics on this.
    Ms. Oge, I was curious on the CAFE standards and trying to 
rectify that with what Eliot Engel and I are trying to do with 
the open fuel standard, which is that bill that I talked about. 
Basically it has a phase in of flex fuel vehicles, for the most 
part, to 50 percent by the vehicle fleet by 2014 and 80 percent 
by 2016. Under your ability to do that with, how would we go 
about that based on what you all have been able to do with CAFE 
and the greenhouse gas rules? How does that segue into that 
process?
    Ms. Oge. So, for the greenhouse gas standards, we, until, 
through 2016, we will provide the car companies the same 
benefit that they will get introducing flex fuel vehicles in 
the marketplace that they are getting under the CAFE program. 
As you know, those incentives go away in 2019 for CAFE.
    But EPA will continue to evaluate how much actually E-85 is 
used in the marketplace, and then we clearly know the car 
companies that they are selling flex fuel vehicles. And we will 
give them credit toward meeting the greenhouse gas standards 
for light duty vehicles.
    Mr. Shimkus. I just want to make sure I keep on record, I 
love fossil fuels, so I am not anti-fossil fuels. I am 
concerned about the 45 percent that we import and the national 
security implications. And I do hope that with Keystone and 
coal to liquid, and other things that we can also have more 
local supply but my focus has always been the national security 
ramifications of the sea lanes closing and that then the 
catastrophic events that could occur. So, for all of my crude 
oil folks and refineries and my coal guys, don't worry, I am 
still on board, and I am still part of the, part of the overall 
team.
    Ms. Oge, I want to ask--the last question is on the E-15. 
Can E-15 be introduced for some vehicles but not others without 
widespread misfueling? And then the agency has issued 
misfueling mitigation plan. Do you think that is adequate?
    Ms. Oge. So we have looked at the Clean Air Act, our 
existing regulations, and we believe, again, based on the law 
that is in front of us we have used the best legal 
specifications and scientific specifications to waive E-15 for 
the years of 2001 and newer vehicles. However there is lack of 
data. To what extent E-15 could potentially impact the 
environmental control systems for vehicles older than 2001 and 
off-road equipment. And that is what we need to look when we 
look, when we do these waivers; it is really to what extent a 
new fuel will impact the pollution control systems. And based 
on the lack of data, we have decided that we are not going to 
allow E-15 to be used in the marketplace for those older 
vehicles and off-road equipment.
    Now, what I have to say is that when we waive the use of E-
15 for 2001 and newer vehicles, we are not mandating it. So we 
are not requiring the marketplace to use E-15, but we are 
telling all of the parties involved that if you use E-15, there 
are a number of things that you need to do. And you need to 
make sure that there are products that transfer data that we 
can evaluate from point A to point Z. We want to make sure that 
there is an appropriate labeling at the stations. Clearly, 
there are issues that go beyond my office that have to do with 
dispensing units and to what extent are appropriate to be used 
with E-15, If they have not been designed to be used for E-15 
underground storage tanks. So there are a slew of issues that 
accompany the marketplace. We have to decide to what extent 
they are going to have to meet in order to market E-15 in the 
market place.
    Mr. Whitfield. At this time, I will recognize the 
gentlelady from Florida, Ms. Caster, for 5 minutes.
    Ms. Castor. Well, thank you, Mr. Chairman.
    And thanks to the witnesses. Actually, I think it is fairly 
remarkable, the chart that is attached to the EIA's testimony 
tells a very positive story, and frankly, you know, for 
decades, all you heard in America was, we are increasing our 
use of fossil fuels or increasing our use of oil; oil 
consumption has risen steadily until very recently. Until very 
recently, the Energy Information Administration has 
consistently projected that U.S. oil consumption would continue 
to rise into the future. And every President I can remember and 
past Congresses have talked about reducing our dependence on 
oil, but none has succeeded in doing so until now.
    This year's annual energy outlook projects that America 
will consume less and less oil for decades to come. And this is 
great news for the climate. It is good news for consumers and 
their pocketbooks, at a time when they need a little relief. It 
is very positive for America's energy security, and you have to 
say our manufacturing sector that has been improving, improving 
the last couple of months, a little shakier, but I think this 
is going to be an area where we will be able to create jobs in 
the future.
    Mr. Gruenspecht, how has the Obama administration's final 
and proposed fuel efficiency and tailpipe standards affected 
EIA's forecast for oil consumption over the coming years? You 
can get into a little more detail than your opening statement.
    Mr. Gruenspecht. Sure. Well, again, the projections for 
transportation energy use depend on economic activity, depends 
on the number of licensed drivers, how much they travel, the 
efficiency of the vehicles, which the fuel economy standards 
definitely have an impact. Light duty truck fuel economy 
standards started to be raised in the previous administration 
and then this administration came in and proposed first the 
model year 2012 to 2016. That chart that you referred to in my 
testimony by the way is for the reference case. It would look 
to be even lower energy consumption with the CAFE standards 
case. So, again, in my testimony, there is a little table that 
shows what difference the efficiency standards make. Certainly 
energy prices are also make making a difference. Less welcome 
to the American people in part. You know, if one is looking not 
only at petroleum consumption, if one is looking at imports, 
then energy production is also making a contribution.
    So we are both reducing our petroleum demand, if you will, 
both by greater efficiency and by substituting other fuels, and 
we are also increasing our domestic production.
    Ms. Castor. And clearly, these projected reductions didn't 
just magically appear. They are in substantial part the result 
of the administration's fuel efficiency and tailpipe standards. 
I think it is a tremendous achievement for the Obama 
administration. But even better, these standards also save 
consumers money and reduce our dependence on foreign oil.
    I thank my colleagues who have been here for a while that 
were oftentimes pushing past administrations, and a few years 
ago, the Congress, under Democratic control, gave a substantial 
push to, so to my colleagues who were there then, my hat is off 
to them as well.
    Ms. Oge, would you tell a little bit more about how the 
these standards will save Americans at the pump? And I can tell 
you just from personal experience, I have a relative that 
purchased one of these, and you see more and more of them on 
the road, and he loves the fact that he gets 50 miles per 
gallon. And, you know, when--gas prices have fallen again, but 
when they were up, he loved driving by the gas station and 
driving by it again and again because 50 miles per gallon, you 
know, I know that it cost a little bit more, but over the life 
of the vehicle and now with teenage daughters that may be 
looking to drive, I know they are going to save money. But go 
head.
    Ms. Oge. So, as you said, this program collectively,the 
2012 to 2016, greenhouse gas fuel efficiency improving 
standards for light-duty cars, 2015 to 2025 that is the 
proposal that we just made and the truck rule for trucks and 
buses are good for the users and the consumers, climate, energy 
security and innovation in this country.
    Just to give you an example: So our greenhouse gas fuel 
efficiency standards started this year. So actually this year, 
there are about a hundred models that you can go out and buy 
that meets the standards of 2017 of what we propose for 2017. 
So that tells you the innovation that is going on in our 
country. Developing this technology, and as you know, the car 
industry is doing extraordinary well----
    Ms. Castor. Well, my time has run out, but I do want to 
congratulate you and your whole team for the progress that you 
have made.
    And to close, Mr. Chairman, I would like to encourage you 
to call a hearing on climate change. And I think that the 
committee and the Congress could benefit from the testimony of 
many experts that could advise us on policy and what else we 
should be doing to address this serious problem.
    Mr. Whitfield. Well, I really appreciate that suggestion, 
and I might remind everyone over the last 5 years, we have had 
a multitude of hearings on climate change, and I am sure that 
we will in the future as well.
    At this time, I would like to recognize Mr. Terry for 5 
minutes.
    Mr. Terry. Thank you, Mr. Chairman.
    Mr. Gruenspecht, help me with a couple of things here. 
First of all, as energy usage is related to economy in a sense 
that if the economy is growing, well, the effect will be energy 
use grows. Is that a correct assumption?
    Mr. Gruenspecht. All else equal, economic growth does lead 
to more energy use.
    Mr. Terry. And a shrinking economy results in less usage of 
energy historically.
    Mr. Gruenspecht. We have seen that.
    Mr. Terry. You have seen that. In fact, we have seen it in 
the last 4 years.
    Mr. Gruenspecht. Well, I mean, well, we saw it for a 
portion of the last 4 years.
    Mr. Terry. Yes.
    Mr. Gruenspecht. And I think now the economy is growing, 
but there was a time certainly when the economy was not growing 
over the last 4 years, and energy use did fall dramatically.
    Mr. Terry. Yes. So if we want to, in general, compliment 
the administration for bringing down usage of gasoline, we 
should also then compliment them for our slow in recession, 
slow growth economy and recession. That is a rhetorical 
question. You don't have to answer that.
    Mr. Gruenspecht. Thank you.
    Mr. Terry. But you do have to answer this one. And this is, 
you know, when we were debating on the floor and developing the 
renewable fuel standard several years ago, there was an 
assumption that a good part of the growth would come from 
cellulosic ethanol. We haven't seen that yet today.
    So I am going to ask you both, you Mr. Gruenspecht and you, 
Ms. Hogan, why haven't we? Why, why aren't we seeing mass 
production of cellulosic energy in July of 2012?
    Mr. Gruenspecht. Well, I follow the data more, so I think 
Ms. Oge could go into the reasons, but, you know, we are, as 
suggested in Ms. Oge's testimony, we do every year in the 
legislation provide an estimate to EPA of our view of what 
might be produced. I think the estimate we provided them this 
past year for 2012 was 6.7 million gallons, which is a lot less 
than the 500 million that was envisioned in the statute.
    Mr. Terry. So instead of repeating back the statute, 
because, as you know, I have very little time----
    Mr. Gruenspecht. Right.
    Mr. Terry [continuing]. Educated in how to use that up. But 
if you would just answer, why aren't we seeing it? I am asking 
honestly.
    Mr. Gruenspecht. No, I am not trying to----
    Mr. Terry. I support it.
    Mr. Gruenspecht [continuing]. But I think it is hard. I 
think the technology--you know, that some plants are going to 
come on this year we believe. It will not be as high as what we 
thought. It will certainly not be as high as the legislation--
--
    Mr. Terry. Has EIA, in regard to biofuels and ethanol and 
biodiesel, began to factor in the consequences of the drought 
hitting the corn belt this year, and is that going to in any 
way affect fuel prices?
    Mr. Gruenspecht. It would affect ethanol prices to some 
extent. Corn is the major input to ethanol. One gets about 2.8 
gallons of ethanol per bushel of corn. So if the price of a 
bushel of corn would, would rise, that would tend to lead to an 
increase in the cost of producing ethanol. Ethanol is not the 
only product. Distillers dried grains are also produced, and 
those have some value. So it is not that the full increase in 
the price of corn has to show up in the cost of producing 
ethanol, but a lot of it will.
    Again, keep in mind that ethanol right now is about 10 
percent of the fuel, you know, the content of gasoline by 
volume so an increase of you know 50 cents per gallon of 
ethanol, which would be more than the impact, a lot more than 
the impact.
    Mr. Terry. So if it is only 50 cents, I think it would be 
lucky.
    Ms. Oge, do you have anything to add now with those two 
questions?
    Ms. Oge. You know, I asked the same question myself. So 
what I did this year is I asked the major cellulosic companies 
to come and talk to me, and I said, let's talk, let's figure 
out what is going on, because like you, you said what is going 
on? And this is what I have learned. What I have learned is we 
are talking about 5 years. EISA passed in 2007, So we are 
talking about 5 years. And I have concluded that significant 
progress has been made when you consider we are talking very 
advanced biofuels and technologies, from R&D to pilot 
demonstration to commercial availability, and this year, we are 
going to see commercial scale cellulosic plants in this 
country.
    The other thing that we need to keep in mind is that 
despite--this is what I learned from this company--despite the 
tough economic conditions that our country has been going 
through, significant private sector investments have been made 
in the sector. What I was told is that about $2.4 billion from 
venture capitalists have been, you know, invested for these 
fuels. And furthermore, what I am hearing is that we are 
moving, not only we are moving from pilot to large commercial 
scale, but when you talk to large companies, like BP and 
Dupont, that again are investing a significant amount of money, 
they are committed to bring large commercial scale of 
cellulosics in 2014 time frame.
    So I think we are beginning to see a move, significant move 
from pilot to commercial scale, and if that continues, I think 
that the hope of cellulosics will be realized.
    Mr. Terry. Thank you.
    Mr. Whitfield. At this time, I recognize the gentleman from 
Texas, Mr. Green, for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman, and I thank each of you 
for being here today.
    Ms. Oge, my questions today, just to reminisce, we had a 
subcommittee hearing in Oversight and Investigations last week 
on the RIN fraud issue. And Mr. Bunker and Mr. Brooks answered 
some of my questions, but I understand you also are involved in 
finding a solution to these problems. I wanted to make sure I 
look at the opportunity--took this opportunity to discuss this 
with you as well.
    The EPA maintains that petroleum refineries are expected to 
exercise good business judgment and use due diligence. I know 
that the obligated parties have been pressing the EPA for 
months to formally define what merits due diligence. And what 
do you expect from that? My first question is, will the agency 
be able to propose and finalize the rules so that programs can 
be in place before 2013?
    Ms. Oge. Congressman, we are working very hard to come up 
with solutions. The goal is to have the final actions taken 
place by the end of the year. We want to make sure that both 
sides of the industry, the biodiesel sector and the obligated 
parties, which is the refining industry, are working with us. 
And up to date, I want to let you know is that we have had very 
collaborative efforts. So I am very optimistic that we are 
going to be able to resolve this issue.
    Mr. Green. OK. And I know from our testimony last week by 
Mr. Bunker and Mr. Brooks, there is a cooperative effort. Is it 
possible for EPA to issue a separate expedited rulemaking to 
ensure that the rule becomes effective before 2013?
    Ms. Oge. We will work very hard and do our best, sir.
    Mr. Green. OK. If not, could EPA make some other type of 
administrative adjustment to help small biodiesel producers 
before 2013? We heard from some of them last week that a lot of 
refiners in my area are just not going to go to these folks 
because they don't know what due diligence is.
    Ms. Oge. Yes. Clearly the solutions that we are evaluating, 
and you can imagine that there are solutions and proposals from 
both sides, we want to make sure that we are not going to have 
unintended consequences, which is impact of small biodiesel 
producers.
    Mr. Green. OK. Aside from the notice of violations issued 
to three fraudulent biodiesel producers, how many invalid RIN 
producer investigations are ongoing? Do you know? I know we 
have three that are public, but do we have a number of other 
investigations ongoing?
    Ms. Oge. I don't know, sir. I am not overseeing the 
enforcement office at EPA.
    Mr. Green. OK. And do you know how many invalid RIN 
investigations were concluded that found no violation occurred?
    Ms. Oge. I don't.
    Mr. Green. OK. If you could, if you could check and get 
that back with us.
    In May of 2011, we held a similar hearing to this one, and 
I submitted a question for the record asking EPA for its 
estimate for misfueling was in the first few years of the E-15s 
existence at gas pumps. EPA responded that you didn't have 
enough information on the E-15 market penetration to make an 
estimate. But since then, EPA has registered over 65 companies 
to market E-15 and has approved over 50 companies' misfueling 
mitigation plans. Additionally, over 80 companies have enrolled 
in an approved national compliance survey. Are you in a place 
where you could now make an estimate on that question?
    Ms. Oge. My understanding is that there is only one station 
in the country that is introducing E-15. So, again, we don't 
have the data available to us given the limited introduction of 
E-15 in the marketplace. However, we did approve the misfueling 
mitigation plants from 60 to 80 of new biofuel producers, and 
we believe that these plants will minimize the misfueling 
concerns that you have expressed.
    Mr. Green. OK. Only one station in the country has E-15?
    Ms. Oge. That is my understanding.
    Mr. Green. I assume it is in Mr. Terry's district or Mr. 
Shimkus's.
    Mr. Oge. I believe it is in Kansas.
    Mr. Green. OK. That is close enough.
    I want to follow up on my colleague from Texas, Congressman 
Barton, because, again, some of the success we have had and we 
are seeing it slowly in natural gas to be a transportation 
fuel, and I know it is not a renewable fuel. But it is one that 
we are producing substantially in our country, and of course, 7 
years ago, I would not be talking about it because natural gas 
was $12.50 or $13 per million cubic feet. But now it is less 
than $3. Is EPA actually looking at that sustainable growth in 
using natural gas as a transportation fuel with the benefit of 
the clean air issues and the carbon issues?
    Ms. Oge. Clearly, we are looking at that as part of the 
2017, 2025 greenhouse gas rule. We have received a number of 
comments from the natural gas industry and OEM's about the 
potential benefits of natural gas vehicles. So we are in the 
process of evaluating these comments and suggestions that we 
have received. But natural gas is cleaner at the tailpipe, 
about 18 to 20 percent less carbon, so I think it can compete 
very well on this, for these new standards that we are planning 
to finalize sometime this summer.
    Mr. Green. OK. Well, appreciate the time.
    Thank you, Mr. Chairman.
    Mr. Whitfield. At this time, I recognize the gentleman from 
Texas, Mr. Burgess, for 5 minutes
    Mr. Burgess. Thank you, Mr. Chairman.
    Ms. Oge on that same line, there is a large tractor trailer 
manufacturing plant in Denton, Texas, the district that I 
represent, the Peterbilt Cooperation, that is actually 
producing an off the line natural gas vehicle for the long haul 
as well as short-haul applications, and my understanding is 
that is a little bit more expensive, but the expectation is the 
fuel cost recovery will happen in a very short period of time, 
12-18 months, which over the lifecycle of that vehicle is very 
manageable. And they are doing it all without Federal 
subsidies, without any Federal law. They are doing it because 
it is the right thing to do, and people are anxious to purchase 
that type of vehicle, and natural gas, of course, as we have 
seen the story on that from 10 years ago to now, the cost has 
come down tremendously.
    I am concerned and have been concerned since we had a 
briefing between Department of Energy and the Environmental 
Protection Energy on the E-15 gas. And you have approved that 
for models, automotive models that are later than 2001. But you 
haven't approved it for earlier engines. You haven't approved 
it for marine vehicles, for boats. And you haven't approved it 
for the small engines. So what are the problems with those pre-
2001 engines, boat engines, small engines? What are the 
problems that occur that led you to refrain from approving the 
use of E-15 in those engines?
    Ms. Oge. Is the question for me or----
    Mr. Burgess. Yes, for the Department of Energy.
    Ms. Oge. So, clearly, when we look at the data for older 
vehicles older than 2001, there was insufficient data to 
approve it, but also our engineering judgement was that, given 
the technologies that those vehicles were using--and again, we 
are talking about the emission control systems. We were 
sufficiently concerned that E-15 could potentially increase the 
emissions from those vehicles, so the agency decided not to 
approve those vehicles.
    Mr. Burgess. How many did you test?
    Ms. Oge. Excuse me?
    Mr. Burgess. How many did you test? Do you know?
    Ms. Oge. For the testing that took place was only under the 
Department of Energy for 2001 and newer vehicles, and Ms. Hogan 
can speak about, about the work that they have done.
    So when we approved the 2001 and newer vehicles, we had the 
data and we had significant additional data for newer vehicles. 
However, there is very limited information for older vehicles 
and off-road equipment so the agency decided, given on this 
lack of data or rather limited data, not to approve the use of 
E-15.
    Mr. Burgess. But, I mean, I am old enough to remember when 
unleaded gasoline became the norm, and you had the side-by-side 
fueling pumps, and you changed the nozzle sizes and all that 
stuff. But still there were mis--there were fueling accidents, 
misfueling applications that occurred. Do you have any 
experience from going back to the seventies, that serves as a 
template to prevent misfueling problems?
    Ms. Oge. I wasn't in the agency in the 1970s, but the 
agency does have experience. The only thing I want to say, 
there is, there is a difference between the unleaded gasoline 
and the E-15. Back in the 1970s, there was a mandate for using 
unleaded gasoline for certain even vehicles. Here E-15, you 
know, we are not mandating E-15 be used----
    Mr. Burgess. No, you are mandating a volume of ethanol to 
be blended with all of the gasoline that is sold in the 
country, and as a consequence, every snowblower, every 
lawnmower, every pump is going to be contaminated with E-15 
within a very short period of time, and you know that. I mean, 
that is going to happen. That is a sad reality of where we have 
gone, which is why, and I think, you know we have heard 
reference from Mr. Rush. This a tough summer. Grain production 
is way off. Why are we continuing to follow this foolhardy 
policy?
    I mean, it was done under President Bush and I acknowledge 
that, but I think it is time to recognize the limitations of 
this and move away from what really is a, it is not, it is not 
a policy that follows commonsense.
    Ms. Hogan, I just wanted to ask you a question. On your bio 
on the Web site, it talks that you were the, one of the 
principle overseers of $16 billion in stimulus funding at EERE, 
is that correct?
    Ms. Hogan. That is correct.
    Mr. Burgess. And I know you wouldn't have it with you 
today, but can we ask you to provide the committee with some 
detail on how that money has been spent, how much is left, what 
it was spent for? You referenced in your testimony the new law 
with new batteries that are going to be produced. I am having 
difficulty trying to calculate the cost per battery. It looked 
high, but I want to be fair about it. So could you provide us 
the line item budgetary detail on that $16.4 billion that your 
agency administered?
    Ms. Hogan. We absolutely can provide you with that detail.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Burgess. All right. Mr. Chairman, I appreciate that, 
and I will yield back the balance of my time.
    Mr. Whitfield. At this time, the chair recognizes the 
gentleman from Kansas, Mr. Pompeo, for 5 minutes.
    Mr. Pompeo. Thank you, Mr. Chairman.
    Thank you, witnesses, for coming out today.
    Ms. Oge, I read your testimony twice and I saw precious 
little discussion of cost and price for consumer. It was all 
about mandates and department investments and that kind of 
thing. And that always troubles me an awful lot when you don't, 
when you don't trust consumers to really do what is in their 
best interest. And that I think is what RFS is riddled with.
    Mr. Waxman mentioned price. He said that Republicans are 
preventing consumers from saving money. Do you think that is 
true?
    Ms. Oge. That is not my position to say what the 
Republicans or Democrats are doing, sir. I am a civil servant. 
I am not here representing any political views.
    Mr. Pompeo. Do you think if--yes, I am just repeating what 
he said. Do you think that folks who oppose some of the RFS 
standards, do you think that that is preventing consumers from 
saving money?
    Ms. Oge. I want to remind Congress that EPA is implementing 
a law that Congress passed in 2007. So we are looking at the 
law. We are using the best science and legal interpretation to 
implement the law.
    Mr. Pompeo. I appreciate that. I have seen some of that. An 
electric vehicle today, if a consumer was going to go out and 
purchase one, would it save that consumer money today?
    Ms. Oge. A new vehicle?
    Mr. Pompeo. Yes, ma'am. A new vehicle.
    Ms. Oge. A new vehicle today would be more fuel efficient 
than the vehicle of yesterday so on based on that analysis, the 
answer is yes. And the data that I have that--I cannot tell you 
about 2012--but the data that I have is for 2016. So if you buy 
a new vehicle in 2016, you will pay $950 more, but you will 
save $3,000 from fuel consumption savings and fuel, assuming 
that the gasoline prices in 2016, according to EIA, will be 
about the same level as it is today.
    Mr. Pompeo. Sure. And so consumers aren't choosing that in 
great numbers yet, you would agree with that?
    Ms. Oge. Yes.
    Mr. Pompeo. And the reason they are choosing more expensive 
vehicles that are available in the marketplace today is because 
of what set of circumstances?
    Ms. Oge. I didn't say that they are choosing more expensive 
vehicles.
    Mr. Pompeo. I will come back. They are not choosing a whole 
lot of electric vehicles, you would agree with that. Yet you 
said it was more economical for them to choose that today. How 
do you account for that disconnect?
    Ms. Oge. What I said is that the 2012 to 2016 greenhouse 
gas standards and fuel efficiencies standards are good for the 
consumer because the consumer on an average will save money at 
the pump that will more than offset the upfront cost of the 
vehicle. And that is the data that we have. Furthermore, what I 
want to note is that all the car companies have agreed on that, 
and they are supporting the program. So I think they know 
something more than I do.
    Mr. Pompeo. Could be. I am just trying to figure out how 
come consumers don't know as much as you do about what is good 
for them.
    How many cellulosic RINs have been generated over the life 
of renewable full standards?
    Ms. Oge. I don't have the number, but there were a number 
of cellulosic RINs that were developed as part of the RFS 1; 
that is the 2005 program. And I believe, for 2011, 20 percent 
have the cellulosic RINs were used to meet the cellulosic 
standard. But I need to get back to the specifics. But there 
were cellulosic RINs that have been developed.
    Mr. Pompeo. I would appreciate it if you could get that to 
us. I looked at the Web site. It looked to me like there had 
not been any during the entire course of the program. It looked 
like on the EPA's Web site, there had been no cellulosic RINs. 
So if I am wrong about that, I would appreciate you letting me 
and the committee know.
    Mr. Gruenspecht, if the RFSs fills 36 billion gallons--I 
have seen estimates that that would mean that we would need 40 
percent ethanol? Does that sound about right to you, assuming 
the CAFE standards are fully met? Sound about right?
    Mr. Gruenspecht. If it were all ethanol. We expect a lot of 
you know, renewable diesel, a drop in fuels as well, but it 
would be about 40 percent of the fuel cooled by volume if it 
were all ethanol.
    Mr. Pompeo. Right. And but today, the fleet can't handle on 
average 40 percent fuel volume; is that right?
    Mr. Gruenspecht. Not today. That would be right.
    Mr. Pompeo. And so, Ms. Oge, where are we going to put all 
of this extra ethanol?
    Ms. Oge. Well, again, the 2007 is a rule that did not 
mandate ethanol to be used. Congress did not actually mandate a 
specific biofuel. And I think there is a lot of progress that 
we have seen on drop-in fuels, biobutanal, bio master liquid 
for both biodiesel and gasoline. Biogas and bioelectricy. As I 
said, in my testimony, also we have seen uses beyond the cars 
and trucks, jet fuel and home heating oil.
    So I understand your concern, but again, I think there is a 
lot of innovation in fuels that are not going to be limited by 
this so-called blend war that has been----
    Mr. Pompeo. I hope you are right. I hope it can be done 
affordably. I am less optimistic than you are.
    Mr. Chairman, I am out of time.
    I yield back.
    Mr. Whitfield. At this time, I recognize the gentleman from 
Massachusetts, Mr. Markey, for 5 minutes.
    Mr. Markey. Thank you, Mr. Chairman.
    You know the thing about the auto industry is that they 
never knew what was good for them. Their CEOs were oblivious. 
They fought every year fuel economy standards in this 
committee. How do I know? Because I made the amendment every 
year, 2001, 2002, 2003, 2005, and the auto industry all sat out 
there all sending the signal up, no, we can't do it. It is not 
good for us.
    And they did it very successfully until they had turned 
themselves into technologically obsolescent companies heading 
toward bankruptcy that then asked the American taxpayers with 
hands out to please save us from the fact that no one wants to 
buy our vehicles. And none of those CEOs are around any longer 
because they all got canned because they did not know what was 
good for their companies. And unemployment just kept rising 
higher and higher in the automotive sector because no one would 
by their vehicles. Then the Federal Government came in and we 
gave them a loan to help bail them out.
    But moreover, out of this committee in 2007 and out in the 
House--or out of the conference committee, we passed a bill to 
increase full economy standards to 35 miles per gallon. By the 
way, all of the auto industry was saying they can't do it. So 
we actually gave them a couple of more years to go to 2020 in 
that bill. And then the Supreme Court ruled in Massachusetts v. 
EPA that, that the EPA had a responsibility to make a decision 
as to whether or not greenhouse gasses were dangerous to the 
planet, which it did, which then ultimately empowered the use 
of the California Clean Air Act.
    And to President Obama's credit, he never passed any laws. 
Let's be honest. He never filed any suits before the Supreme 
Court. Let's be honest. But what did do was he took the 
authority that we had given him, The Supreme Court had given 
him, and he acted on it.
    So here is where we are, ladies and gentlemen, back in 
2007, I looked around, I looked around. I was really trying to 
find a very good American hybrid sedan, and it was hard to 
find; Matter of fact, nonexistent. So I bought a Camry hybrid 
that got 33 miles per gallon, by they way, that is the EPA 
standard for the purposes of NHTSA, for the purposes of 
reaching 54.5 miles per gallon, which is really what we should 
be talking about here so that everyone understands that it is 
the NHTSA standard, not EPA. You should NHTSA down here, Not 
the EPA. Then my car as it is in a 2011 version is now getting 
47 miles per gallon, the Camry hybrid, today. And they have all 
the way until 2026 to take the single most popular sedan in the 
United States and figure out how to squeeze eight more miles 
per gallon out of it.
    . Now, can the auto industry figure that out? Well, the 
Republicans say, no, they can't do it; it is going to paralyze 
them. And so they are going to have a vote next week that 
strips the EPA from completing the regulation from 2017 to 2025 
that will get us to 54.5 miles per gallon when a Camry Sedan is 
already at 47 miles per gallon today, as you walk into the 
showroom.
    Now, how sad a commentary is that on the confidence the 
Republicans have in the innovation and the technological 
capacity of the automotive industry? Sad isn't it? And by the 
way, they bought into this American technological inferiority 
arguments for all of the time I have been on the committee. 
They just don't think America can do it. They don't think that 
our auto industry can do it, even though Toyota is already up 
to 47 miles per gallon for a Camry today.
    Now what is the consequence of them repealing this? I will 
tell you what. Between now and 2030, if we meet 54.5 miles per 
gallon, it is 3 million barrels of oil a day. You want 
sleepless nights for Saudi sheiks? That will do it. And it is 
4.7 million barrels by the year 2040. Why should we export 
young men and women over to the Middle East when we can be 
exporting fuel efficient vehicles all around the planet made in 
America. The unemployment rate is plummeting in the automotive 
sector because they are now making vehicles people want to buy 
because they are fuel efficient. And the Republicans are now 
going to go back to the old plan of technological obsolescence 
that led to the problem in the 1970s when I had to vote here to 
bail out Chrysler. Then I wait and I get a second chance to 
bail out Chrysler again in 2009. How fortunate am I that twice 
I get to see how little they understand about the need for 
continued innovation if they are going to be competitive on the 
open marketplace. But the tragedy is, let's be honest, it is 
the amount of oil that the Republicans are allowing to continue 
to be imported from the Middle East because that is where we 
put 70 percent of all of the oil we consume in our country in 
gasoline tanks. And the single greatest weapon we have is 
increased fuel economy standards, and they are going to repeal 
that next week? Well, you are going right at the heart of the 
number one national security vote that anyone is casting in 
Congress this year, and we are going to have a hell of a debate 
over whether or not that helps our country.
    I yield back the balance of my time.
    Mr. Whitfield. The gentleman's time has expired.
    At this time, I recognize the gentleman from Louisiana, Mr. 
Scalise, for 5 minutes.
    Mr. Scalise. I thank the gentleman for yielding and again 
thank this chairman for this continued conversation as we have, 
as we have looked over hearing and hearings for months now 
about ways that we can improve this country's woeful energy 
policy and also work to create jobs.
    I want to ask first, Mr. Gruenspecht, some of the data that 
comes out of the energy information administration, we have--we 
have viewed and you know, we look in the Gulf of Mexico at a 
lot of--a lot of slow down in exploration as well as 
production. And I understand that you all have come out with 
some reports recently looking at, using some data to look at 
production in the Gulf of Mexico. It is my understanding that 
you have got projections that show that this year production 
would be down roughly 30 percent from last year. Do you know 
what the data your agency has on that is?
    Mr. Gruenspecht. I would be, I would be surprised if that 
number--maybe something like 30,000 barrels--but 30 percent 
from last year to this year, that doesn't sound right to me, 
but I will go back and check.
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    Mr. Scalise. Do you have any data in front of you regarding 
where production is? Just start with the Gulf of Mexico, and I 
want to look at some other areas, too.
    Mr. Gruenspecht. I don't really have, I don't have the 
detail on the Gulf of Mexico in front of me. I know that for 
crude oil production as a whole, and again, the Gulf of Mexico 
has, as you know and I know, some issues that surrounded the 
moratorium, but for the U.S. As a whole, crude oil production 
rose by about 200,000 barrels a day in 2011.
    Mr. Scalise. Now you are counting private land, Federal 
land.
    Mr. Gruenspecht. Everything, right.
    Mr. Scalise. All right. If you just broke it down to 
Federal lands.
    Mr. Gruenspecht. Federal lands, I think in 2011, was down a 
bit than 2010.
    Mr. Scalise. What is a bit?
    Mr. Gruenspecht. I don't have it in front of me, but I 
would be glad to get it for you.
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    Mr. Scalise. So you know exactly how much it is up overall 
when you don't count Federal lands, but then you just 
conveniently don't know how much it is down when you actually 
talk about the areas that the Federal Government has control.
    Mr. Gruenspecht. Because I have a summary of the short-term 
outlook before me that doesn't have all of the regional detail, 
but I will definitely get it for you----
    Mr. Scalise. Well, when we are making policy in Washington, 
you know, there are States that have their own programs in 
place. You have people that have private land that are able to 
lease that private land out, but then where we really have the 
purview is over those areas where the Federal Government has 
control through both the Department of Energy, with the EPA. 
You have got of course the Department of Interior and all of 
these agencies control Federal lands, and what we have seen is 
that production is actually down in the areas where the Federal 
Government has control. Now, do you dispute that, or do you 
know----
    Mr. Gruenspecht. In 2011, it was lower than 2010.
    Mr. Scalise. And that is you know something I guess that 
perplexes a lot of us when we hear the President out going 
around the country bragging that production is higher and yet 
when you look at the areas where the President has control, 
production is actually down. The areas that he could help us to 
increase production, it is actually going the opposite way 
because of his policies.
    In fact, we just saw what the 5-year lease plan that was 
released. I am not sure if you have evaluated this. I know EIA 
has looked at it, but from the reports we have seen, the latest 
5-year lease plan in the Outer Continental Shelf that the 
President released actually closes off about 85 percent of the 
areas that were getting ready to come open for exploration. 
Have you seen that? Have you looked at that data.
    Mr. Gruenspecht. I have not looked at. I am aware that 
there is going to be some drilling in the Federal offshore off 
of Alaska, I believe, is planned for this year. And I believe 
and we are projecting a growth in the Gulf of Mexico production 
in the future, but there is no question that the aftermath of 
the Macondo disaster did have an impact
    Mr. Scalise. Well, but it was the--it was the aftermath 
that was based on the President's policies that went against 
actually some of his own scientists and engineers. It was a 30-
day report that the President put together a team of a 
scientists and engineers after the Macondo explosion to look at 
and evaluate what we do to increase safety. And then the 
President tried to use that report to impose the moratorium 
that you referred to. And the scientists and engineers, 
basically, they called a foul and said, no we did not suggest 
that and the White House recanted; somebody in the White House 
doctored the report. But the scientists and engineers actually 
said you will reduce safety in the Gulf. You will actually run 
jobs out of this country. And we have seen that. We have seen 
about almost 20,000 jobs, American jobs, that have been lost 
because of that policy, and we have lost some of our best rigs, 
Some of our most experienced crew base. So the President went 
against his own scientists and engineers by saying you will, 
you will reduce safety by having a moratorium. And so that may, 
may have something to do with the reduced production on Federal 
lands.
    I want to ask Ms. Oge, we have been talking about the E-10 
and increases potentially coming up, do you all work with gas 
stations, with car manufactures that do have concerns they 
brought up in this committee and other places about what 
liability issues there would be, of the costs that would be 
associated with, with going to a higher level? What kind of 
coordination do you have with them to address those valid 
concerns that they have.
    Ms. Oge. We have had extensive discussions with gas 
stations and extensive discussions with the car companies. And 
again the basis for the waiver is the Clean Air Act that 
requires the agency to evaluate the potential impacts on 
emission control systems and emissions from vehicles as a 
result of a new fuel, fuel additive. And that is the analysis 
that we have done.
    As far as the gas stations' concerns, we have incorporated 
misfueling requirements for the renewable fuel producers. And 
for the car companies, we, when we met with them and they did 
express concerns, we asked them to provide to us any data, any 
scientific data that they have that demonstrates that E-15 will 
undermine emission control systems for 2001 and newer vehicles, 
and they have not provided any data. So based on extensive 
scientific data that we have received, testing from the 
Department of Energy and other studies, the agency has 
concluded that E-15 will not have any impact when it comes to 
emission control systems for 2001 and newer vehicles.
    Mr. Scalise. Does that address--I am out of time. I yield 
back the balance of my time.
    Mr. Whitfield. At this time, I recognize the gentleman from 
Virginia, Mr. Griffith, for 5 minutes.
    Mr. Griffith. Thank you, Mr. Chairman.
    Sleepless nights for Saudi sheiks. In my part of the world, 
you give Saudi sheiks sleepless nights by looking at turning 
coal into gas. And I am just wondering what thoughts have gone 
into that and if there is any intent to support my alt fuels 
bill, H.R. 2036, which would allow for the alt fuels to include 
coal that has been turned into gasoline, and it looks like we 
can do it for about $94 a barrel, and we are the Saudi Arabia 
of coal. So I am just wondering when are you all going to get 
on that ship and sail with us to a better America?
    Ms. Oge. Sir, I am not familiar with your bill, but I can 
take your request back and take a look at it.
    Mr. Griffith. All right, and generally, if not my bill, 
some other bill regarding coal being converted into gas. What 
are your thoughts on that? You don't have to be familiar with 
my bill to have some thoughts on this, I assume.
    Ms. Oge. I don't have any views.
    Mr. Griffith. All right.
    We heard the President talk about algae and its potential 
and I'm just wondering if, if perhaps either of you can or any 
of you can give my some idea of where we stand on that. My bill 
also touches on algae. So it is not that I am anti-algae, I 
just don't know whether we are ready yet. Where do we stand on 
algae being converted into gasoline?
    Ms. Oge. EPA has qualified algae as a feed stock to meet 
the renewable fuel centers as with cellulosic. I know that 
there are significant efforts by a number of companies, 
including ExxonMobil, on algae research. I don't know to what 
extent these efforts will allow them to bring commercial 
available material into the marketplace any time soon
    Mr. Griffith. And so do we have any idea what level of 
production we have at this point?
    Ms. Oge. I don't believe there is any commercial available 
algae material.
    Mr. Griffith. Do we have any expectation of production by 
say 2015 or 2020?
    Ms. Oge. I don't know, sir.
    Mr. Griffith. So to be putting our money on algae at this 
point, although it certainly should be researched, would be a 
foolish bet for the next 15 or 20 years. Is that a fair 
statement?
    Ms. Oge. I am in no position to say that. Again, you know, 
a lot of resources have been spent, a lot of companies--maybe 
Ms. Hogan can speak to that. But for me to evaluate R&D efforts 
and to what extent they will materialize in the next 5 or 10 
years, I think that is an appropriate--that is not an 
appropriate position for me to take.
    Mr. Griffith. Ms. Hogan?
    Ms. Hogan. So the algal resource is certainly a part of our 
biomass R&D program where we are looking at a variety of sort 
of bio-based sort of starters. Where we are with algae is it is 
part of our drop-in fuels program, and that is one of the 
strong areas. And where we expect is to get to sort of cost 
competitiveness in about 10 years.
    Mr. Griffith. Cost competitiveness. Competitive with what?
    Ms. Hogan. With traditional fuels, gasoline
    Mr. Griffith. And we have been talking a lot about or there 
has been a lot of talk about electric cars, and of course, the 
question asked in my, in my part of the world is, how are you 
going to have all of these electric cars if you are not 
producing enough electricity and obviously a big part of our 
coal or part of our electricity is produced by coal.
    Mr. Gruenspecht, did I get close on that?
    Mr. Gruenspecht. Very close. Perfect.
    Mr. Griffith. All right. If we keep raising the cost of 
electricity, don't you think that will cause some concern or 
some diminution in the advantages of going to an electric car?
    Mr. Gruenspecht. I think my understanding is that the cost 
of electricity once you have the electric vehicle is very 
attractive relative to the cost of gasoline or diesel. The 
question with the electric vehicle is the cost of the of the 
electric vehicle.
    Mr. Griffith. Right but part of the advantage of the 
electric vehicle is that once you start using it, you have 
lower costs but just today, a part of my district got notice 
that their electric bill was going to go up because of 
innovations made at a new coal-fired power plant, and of 
course, that is state-of-the-art, but there won't be any more 
of those built because we are going to shift the country away. 
And just yesterday we had a hearing where the president of--or 
CEO of Dominion Power indicated that one of the ways they have 
been able to keep costs down for their customers is having a 
wide diversity of different ways to produce their electricity, 
and now coal is being taken away from them, away from them in 
that mix and they don't think that is going to work for the 
American consumers, and they believe electric costs are going 
to go up. And in fact, Kentucky utilities indicated 10 to 14 
percent in our region is going to be an increase just based on 
new regulations from the EPA. So when you start raising the 
cost of that electricity up, you are really going to damage 
that value, are you not?
    And I see my time is up, and I will yield back.
    Mr. Whitfield. The chair recognizes the gentleman from 
Colorado, Mr. Gardner, for 5 minutes.
    Mr. Gardner. Thank you, Mr. Chairman.
    And thank you to the witnesses for your time and 
participation in today's hearing.
    Dr. Hogan, I will start with you. As the Deputy Assistant 
Secretary for Energy Efficiency, what does that entail? Just a 
brief one-sentence job description.
    Ms. Hogan. Just overseeing our energy efficiency R&D and 
deployment portfolio.
    Mr. Gardner. And when you research study energy efficiency 
projects what do you take into account, aside from the energy 
efficiency aspect itself?
    Ms. Hogan. Certainly we are looking to find cost-effective 
opportunities to improve efficiency of our homes, our 
buildings, our transportation systems and our industry.
    Mr. Gardner. Do you take into account jobs that would be 
affected by the energy efficiency measures?
    Ms. Hogan. We are very interested in strategies that we can 
advance that will help build domestic jobs, jobs that cannot be 
exported overseas.
    Mr. Gardner. Do you take into account jobs that can be lost 
as a result of some of the measures that you are considering?
    Ms. Hogan. I think we try to look holistically at how to 
have a robust set of jobs in the energy efficiency field.
    Mr. Gardner. And obviously--my district in Colorado has a 
large agriculture base. It is the 11th largest agricultural 
district out of the 435 districts in Congress. A lot of the 
corn growers are very concerned about what is taking place 
around the country today. And I just got an email today from a 
farmer in Colorado who asked this question, and I will read the 
question to you; it says, a hearing talks about the EPA 
relaxing the ethanol mandate due to corn shortage. What are you 
hearing? And I know you have addressed this a couple of times. 
So is the EPA, do you have the statutory authority, are you 
considering relaxing the ethanol mandate due to the corn 
shortage?
    Ms. Hogan. I think I am going to share this one with my 
colleague.
    Ms. Oge. I am EPA. We are hearing the rumors also. Clearly, 
there is concern that has been raised because of the drought, 
so we have been in discussions with our colleagues from the 
USDA. What we are hearing actually, although the yield, USDA 
has lowered the yield by 10 percent, there are more acres and 
more corn produced this year than was produced last year. And 
actually, this year, we are going to have, based on the USDA 
data, the third highest of corn production in the record of the 
country.
    Now, EISA, the Congress passed in 2007, provides an 
opportunity for companies that are regulated under this law, 
including State Governors, to petition EPA to waive the volume 
of the renewable fuel standards based on a lack of availability 
of renewable fuels and significant cost impacts to the region 
or the State. We have not seen any petitions today. If we 
receive a waiver, there is a process that the agency has, which 
is a 90-day process to put the waiver out for comments and 
potentially public hearing and will act accordingly.
    Mr. Gardner. So there is no consideration at this point?
    Ms. Oge. Absolutely not.
    Mr. Gardner. And Dr. Gruenspecht, if I could ask you this 
question about hydraulic fracturing. Do you know what 
percentage of our energy production, oil and gas production, is 
developed or achieved through hydraulic fracturing?
    Mr. Gruenspecht. Well, I know that we are producing--excuse 
me. I believe that we are producing more than a third of our 
natural gas now from shale gas. And I think all of that 
involves fracturing, and there may be some fracturing 
additionally in some of the oil production and some of the 
other gas production, so I imagine it is pretty significant.
    Mr. Gardner. Could you get back to me with specific 
numbers?
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    Mr. Gardner. You have one for the natural gas, and then on 
the oil side, I would be interested as well because there is a 
lot of fracturing, hydraulic fracturing occurring in my 
district, including oil and gas development. One-third of 
natural gas. Could you also quantify the impact if hydraulic 
fracturing were to be restricted? Do you know the number off 
the top of your head what that would mean?
    Mr. Gruenspecht. I don't know off the top of my head but I 
will try to do that.
    Mr. Gardner. Could you get back to us?
    Mr. Gruenspecht. Yes.
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    Mr. Gardner. I yield back my time.
    Mr. Whitfield. The gentleman yields back the balance of his 
time.
    There are no further members for questions, so that will 
conclude today's hearing.
    Once again, we thank you. We appreciate you all being with 
us, we appreciate your testimony. And during the question and 
answer, there was some commitment on your part to provide some 
additional information, which we would appreciate. And we will 
keep the record open for a period of 10 days for any other 
material that might be inserted.
    And with that, we will conclude today's hearing. Thank you 
very much.
    [Whereupon, at 5:02 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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