[Senate Hearing 112-821]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 112-821
 
                          GREEN JOBS AND TRADE 

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

                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON GREEN JOBS AND THE NEW ECONOMY

                                 OF THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 15, 2011

                               __________

  Printed for the use of the Committee on Environment and Public Works

       Available via the World Wide Web: http://www.fdsys.gpo.gov

                               __________

                         U.S. GOVERNMENT PRINTING OFFICE 

85-226 PDF                       WASHINGTON : 2014 
-----------------------------------------------------------------------
  For sale by the Superintendent of Documents, U.S. Government Printing 
  Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800 
         DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001


               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                      ONE HUNDRED TWELFTH CONGRESS
                             FIRST SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
THOMAS R. CARPER, Delaware           DAVID VITTER, Louisiana
FRANK R. LAUTENBERG, New Jersey      JOHN BARRASSO, Wyoming
BENJAMIN L. CARDIN, Maryland         JEFF SESSIONS, Alabama
BERNARD SANDERS, Vermont             MIKE CRAPO, Idaho
SHELDON WHITEHOUSE, Rhode Island     LAMAR ALEXANDER, Tennessee
TOM UDALL, New Mexico                MIKE JOHANNS, Nebraska
JEFF MERKLEY, Oregon                 JOHN BOOZMAN, Arkansas
KIRSTEN GILLIBRAND, New York

       Bettina Poirier, Majority Staff Director and Chief Counsel
                 Ruth Van Mark, Minority Staff Director
                              ----------                              

             Subcommittee on Green Jobs and the New Economy

                   BERNARD SANDERS, Vermont, Chairman
THOMAS R. CARPER, Delaware           JOHN BOOZMAN, Arkansas
JEFF MERKLEY, Oregon                 JEFF SESSIONS, Alabama
BARBARA BOXER, California, (ex       JAMES M. INHOFE, Oklahoma, (ex 
    officio)                             officio)



                            C O N T E N T S

                              ----------                              
                                                                   Page

                           FEBRUARY 15, 2011
                           OPENING STATEMENTS

Sanders, Hon. Bernard, U.S. Senator from the State of Vermont....     1
Boozman, Hon. John U.S. Senator from the State of Arkansas.......     3
Merkley, Hon. Jeff, U.S. Senator from the State of Oregon........     5
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     5

                               WITNESSES

Gerard, Leo, international president, United Steelworkers........     7
    Prepared statement...........................................    10
Cicio, Paul, president, Industrial Energy Consumers of America...    17
    Prepared statement...........................................    19
Danner, John P., president and CEO, Northern Power Systems.......    24
    Prepared statement...........................................    27
Montgomery, W. David, Ph.D., vice president, Charles River 
  Associates.....................................................    30
    Prepared statement...........................................    32
Gordon, Kate, vice president for Energy Policy, The Center for 
  American Progress Action Fund..................................    46
    Prepared statement...........................................    49


                          GREEN JOBS AND TRADE

                              ----------                              


                       TUESDAY, FEBRUARY 15, 2011

                               U.S. Senate,
         Committee on Environment and Public Works,
            Subcommittee on Green Jobs and the New Economy,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:45 p.m. in 
room 406, Dirksen Senate Office Building, Hon. Bernard Sanders 
(chairman of the subcommittee) presiding.
    Present: Senators Sanders, Merkley, Inhofe and Boozman.

STATEMENT OF HON. BERNARD SANDERS, U.S. SENATOR FROM THE STATE 
                           OF VERMONT

    Senator Sanders. My apologies, as usual, there are eight 
things going on simultaneously.
    There is going to be a vote in a couple of minutes. My 
understanding is that Senator Boozman is down on the floor. So 
what we will do is, we will do some opening remarks. We will 
probably end up breaking for a very few minutes for votes, then 
we will open up to the panel. This is a really important 
discussion, we will have time to get into our issues at some 
length. I thank all of you for coming.
    So let me begin, if I might, with my opening remarks. 
Hopefully Senator Boozman will be here, we will break, and then 
we will do the panel.
    The issue that we are dealing with today is of great 
significance. The President has indicated, and I agree with 
him, that when we look at the future of our economy and how we 
can address the fact that we have millions and millions of 
people who are unemployed, that real unemployment today, in my 
view, is probably closer to 16 percent than it is 9 percent, 
that one of the areas that he sees real economic growth is in 
is moving toward sustainable energy. I would hope that most 
Americans would agree that it makes no sense at all that in our 
country today, we are spending $350 billion a year importing 
oil from foreign countries. That makes no sense from an 
economic perspective.
    I was in Saudi Arabia a few years ago, and trust me, the 
Saudi family is doing just fine. They do not need any more 
money from the American people. I think most Americans think it 
that would make a lot more sense, for a whole lot of reasons, 
for us to move to energy independence, to cut down on 
greenhouse gas emissions, deal with that very serious issue, 
and in the process, create over a period of years millions of 
good-paying jobs.
    Some of you may have seen a piece that appeared in the New 
York Times, I think it was yesterday, and that is that, as a 
Nation, there are more and more products that we do not 
manufacture in this country. I think what most Americans are 
very alarmed about, when they go into a store and they try to 
buy something, it is increasingly difficult to buy something 
manufactured in the United States of America.
    I was just recently dealing with the Smithsonian Museum of 
American History, where the busts of George Washington are made 
in China. Apparently we don't know how to make busts of George 
Washington.
    Just recently, according to the New York Times, the iPhone 
and iPad are made in China. In fact, 80 percent of the toys and 
the shoes sold in the United States are made in China. Eighty-
five percent of our bicycles are made in China. And 90 percent 
of U.S. furniture production has moved to China. China even 
makes half of our apple juice. Since September 11, 2001, over 
100 million American flags sold in the United States were in 
fact manufactured in China.
    So the issue that we are dealing with now is, what is not 
going to be made in China? Is in fact solar panels, wind 
turbines, or other important tools for sustainable energy, are 
those products, many of which were developed here in the United 
States, going to be manufactured in China? In my view, we can 
create good-paying jobs by investing in efficiency and 
sustainable energy, technologies that create more jobs per 
dollar than many other energy technologies.
    Wind and solar, and here is an important point, are getting 
more and more competitive. Prices are going down. Businesses 
understand that they provide stable energy costs, compared to 
volatile fossil fuel prices. Nobody in this room knows what is 
going to be happening in the Middle East in coming months. But 
what we can be sure of is the more volatility and political 
struggle that takes place is going to lead, in all likelihood, 
to higher oil prices.
    One example, which I think is an interesting example, of 
this country moving toward sustainable energy is that Wal-Mart, 
the largest employer in America, has ambitious efficiency and 
renewable energy goals and is adding solar to dozens of stores 
because, according to them, renewable energy ``reduces price 
risks.'' The price of solar energy is not going to go up, 
unlike oil from the Middle East.
    China understands the value of sustainable energy and is 
fighting as hard as they can to make sure they own this 
industry. If there is anything we are going to focus on today, 
I would hope that that would be it. In the process, they may 
well be violating WTO rules, as the United Steelworkers of 
America has pointed out.
    China now makes half of the world's solar panels and has 7 
of the top 10 solar manufacturers. This is a technology 
developed in the United States. We recently saw an example in 
Massachusetts where a major solar manufacturer is shutting 
down, moving to China. China controls nearly half of the $45 
billion global market for wind and has surpassed the United 
States in wind generation capacity, with more than 41,000 
megawatts. This is not an accident, and again, this s a point I 
hope we can discuss.
    China understands that sustainable energy is critical for 
economic development and for a cleaner environment. As 
Secretary of Commerce, Gary Locke, said, ``The Chinese are 
putting in almost $12 billion a month in the clean energy 
sector. That is an extraordinary sum of money. They are doing 
this because they really want to be the world's supplier of 
clean energy, and they recognize this will support millions of 
jobs.'' Gary Locke, Secretary of Commerce of the U.S. 
Government.
    China spends nearly three times more than the United States 
to finance sustainable energy, meaning solar developers get 
loans at 2 percent in China, while in some cases they pay 14 
percent in the United States.
    The point here is to understand that China knows that 
investing in sustainable energy is good economic development. 
They create jobs doing it. Unfortunately, there are some in 
this country who do not appreciate that. We have strong 
opposition in terms of extending the Clean Energy Manufacturing 
Tax Credit that would support tens of thousands of jobs. We are 
hearing complaints about incentives for wind and solar, et 
cetera.
    So I think what we want to talk about today is the 
relationship between investment and job creation and 
sustainable energy. What we also want to be talking about is 
what China is doing to lure American companies out of this 
country and into China, and how in fact they may be violating 
international trade agreements in the process.
    So there is a lot to talk about. What we will is, when 
Senator Boozman comes, we will give him the mic. But I think 
while we have the gun, I am here, there are no votes yet, so 
why don't we begin--the votes have started? All right, let me 
do this then. The votes have started. Let's take a temporary 
break. We will be back in 5 minutes. Thank you very much for 
your indulgence.
    [Recess.]
    Senator Sanders. Thank you all for your indulgence. I hope 
we can get down to work now.
    It gives me pleasure now to introduce the Ranking Member, 
Senator Boozman, for his opening remarks.

STATEMENT OF HON. JOHN BOOZMAN, U.S. SENATOR FROM THE STATE OF 
                            ARKANSAS

    Senator Boozman. Thank you, Mr. Chairman.
    First of all, I would like to ask unanimous consent to 
submit an updated copy of Dr. Montgomery's testimony for the 
record.
    Senator Sanders. Without objection, so ordered.
    [The referenced information follows on page 32.]
    Senator Boozman. In the interest of time, I am going to 
forego, ask unanimous consent to have my statement put in the 
record, the full statement. But I do want to say that I am very 
excited about being the Ranking Member, serving on this 
subcommittee. I want to thank Senator Inhofe for allowing me to 
do that. Also, I am looking forward to working with the 
Chairman.
    Someone has said that every day, every elected official 
needs to get up and think, how can we create jobs, how can we 
protect jobs, how can we protect savings and pension plans. 
That truly is the name of the game, and I know that that is 
what this committee is all about. I look forward to, again, 
pushing that forward.
    So to try and ingratiate myself with my Chairman and my 
Ranking Member, I yield back.
    [The prepared statement of Senator Boozman follows:]
Statement of Hon. John Boozman, U.S. Senator from the State of Arkansas
    Mr. Chairman, during this period of high unemployment, sluggish 
growth, and economic hardship for many families, I believe today's 
hearing is very timely. I look forward to the testimony of our 
witnesses.
    This is our first subcommittee hearing in the new Congress, and 
this is my first statement as subcommittee Ranking Member. So I would 
like to make a somewhat general statement before addressing the subject 
of today's hearing.
    First, I look forward to working with Chairman Sanders, Ranking 
Member Inhofe, and all members of the Committee. We may not always 
agree, but I hope we can disagree without being disagreeable. I hope we 
will look for areas of mutual concern and conduct thorough oversight of 
policies that impact our economy and our environment.
    Good policies will lead to net job creation, including the creation 
of so-called ``Green Jobs.'' Bad policies may create some jobs, but 
they will lead to greater job losses in other areas. We must consider 
which policies actually work and which policies have severe, 
unintended, negative consequences. Congress should not rubber-stamp 
every policy that is labeled ``Green.'' Heavy-handed government 
mandates and bureaucratic micro-management of the economy will not 
work. These policies amount to picking winners and losers. In most 
cases, there are far more losers than winners.
    I believe in conservation, and common-sense policies to protect the 
environment, reduce pollution, and protect human health. I agree with 
Senator Inhofe's statement during a Hearing in the last Congress: our 
objective should be to ``increase domestic energy supplies--including 
wind, solar, geothermal, as well as oil, gas, nuclear, and coal--to 
make energy cleaner, more affordable, more abundant, and more 
reliable.''
    We've seen and suffered the results of failed economic micro-
management. The so-called ``stimulus'' package has increased America's 
deficit and debt to unimaginable levels, without creating the promised, 
permanent, private-sector jobs. ``Green'' mandates in Europe have 
destroyed jobs, limited economic growth, and pushed manufacturing to 
countries with weaker environmental standards. As a result, we see a 
weakened Europe and no net decrease in targeted emissions.
    I agree with the written testimony from Mr. Cicio (Sis-E-O), which 
states: ``the focus on `green jobs' is too small and limiting for 
substantial economic and jobs growth. U.S. Policy should focus on 
supporting policies to reduce energy and regulatory costs and barriers 
to enhance the competitiveness of the `entire' manufacturing sector.''
    There are a lot of steps we can take to make sure our companies--
including companies in the green energy sector--are competitive. Let me 
give an example. In order to build hybrid cars, manufacture high-
efficiency electric motors, or improve wind turbines, our entrepreneurs 
need access to certain rare earth elements. Our country should increase 
the mining and production of these elements from domestic sources, 
rather than depend on unreliable Chinese supplies. Some may be critical 
of mining, but our mines must remain operational to supply the raw 
materials that are vital to American manufacturing jobs, including 
``green jobs.''
    The high-tech production of materials for the wind and solar 
industries should occur in the United States. I support the efforts of 
these industries to make products and create jobs, including in 
Arkansas. But for these manufacturers to succeed, they must have access 
to affordable energy. ``Green jobs'' are susceptible to the same high 
energy costs and regulatory burdens that threaten to destroy other jobs 
in our country.
    Dr. Montgomery, thank you for your written testimony. I appreciate 
your point that analysis of ``green jobs'' should be more than a 
``head-counting exercise.'' You explain that we must also weigh whether 
a particular policy translates into ``overall losses in average 
household spending power, and into reductions in GDP, relative to what 
they would be if no such policy were in place.'' (Montgomery Testimony, 
p. 8) You do a brilliant job of highlighting that intentionally 
favoring an industry with lower labor productivity directly leads to 
lower wages. (p. 9) Finally, you make helpful contributions addressing 
the impact of investment diversion and the resulting impacts on 
productivity growth. (p. 11) I hope you will have an opportunity to 
expand upon these points during today's hearing.
    Again, thank you Mr. Chairman for holding this timely hearing, and 
I look forward to hearing from our witnesses.

    Senator Sanders. Oh, you have ingratiated yourself 
immensely. This is wonderful.
    Brief remarks from Senator Merkley.

STATEMENT OF HON. JEFF MERKLEY, U.S. SENATOR FROM THE STATE OF 
                             OREGON

    Senator Merkley. Thank you, Mr. Chair. I am going to just 
withhold remarks. I am here because this is a very important 
topic, creating clean energy jobs in America.
    Thank you.
    Senator Sanders. Thank you.
    Senator Inhofe.

STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE STATE 
                          OF OKLAHOMA

    Senator Inhofe. Well, I won't try to ingratiate myself.
    Senator Sanders. Too late for that.
    [Laughter.]
    Senator Inhofe. This is one that I wanted to attend with 
the new Ranking Member and new Chairman of this committee. I 
understand that our Chairman had started out with some of the 
things that are happening in China. I would like to suggest 
what is also happening in China is they are very aggressively 
going after every fossil fuel they can get their fingers on. 
They are currently cranking out still, last time I heard, some 
two coal-fired generators a week. We have this, for anyone who 
wants to get into China in any detail, I have on my Website my 
China report. So you are welcome to get into that.
    I am concerned about this, and concerned, of course, about 
the green jobs. I will do the same thing, submit my statement 
for the record. But also, I had a chance to talk to Mr. Gerard 
before the meeting started, and he is very sensitive to it, and 
has documented a lot of the jobs that we have lost in some of 
these MACT programs, both Boiler MACT and Utility MACT. I see 
this as a real problem right now in this country, and I am 
spending quite a bit of my time on some of the over-regulation 
that is coming from the Environmental Protection Agency. We are 
going to try to do a better job.
    I will yield back.
    [The prepared statement of Senator Inhofe follows:]
       Statement of Hon. James M. Inhofe, U.S. Senator from the 
                           State of Oklahoma
    I want to welcome all the witnesses today, particularly Paul Cicio, 
Executive Director of the Industrial Energy Consumers of America, and 
David Montgomery of Charles River Associates. I look forward to your 
testimony.
    Today's hearing is about ``green jobs'' and ``trade'', though I 
suspect we will hear some discussion of a ``clean energy standard.'' 
This concept has a long pedigree, and it is now considered, at least by 
some, as the compromise approach in the wake of cap-and-trade 
legislation's demise. Some have asked me whether I support a clean 
energy standard. Of course, I readily respond by asking, among other 
things, ``How do you define `clean'?'' and ``What do you mean by 
`standard'?''
    Also, what is the motivation behind a national clean energy 
standard? Is it to reduce carbon emissions? If so, then, if you have a 
clean energy standard, what is the need for EPA's greenhouse gas 
regulatory regime under the Clean Air Act? For that matter, what is the 
need for each and every component of EPA's aggressive regulatory regime 
designed to shut down coal-fired powerplants? It would seem to me that 
one couldn't begin to have a rational discussion of a clean energy 
standard unless all of these regulations are ``on the table,'' so to 
speak.
    When ``standard'' is mentioned, I think first of ``mandate.'' Is 
that what proponents of a clean energy standard mean? I, for one, 
question the need for a new Federal energy mandate. If there is a 
mandate, what are the targets, what are the timetables? From what I've 
seen thus far, the targets and timetables proposed would bring about 
the same result as cap-and-trade: higher energy costs, fewer jobs, and 
lower productivity.
    Now on to what is ``clean.'' Wind, solar, and geothermal are 
generally considered clean. But I also believe, for example, that 
ultra-supercritical coal plants are clean: these plants can reduce 
sulfur dioxide and nitrogen oxides considerably relative to a 
traditional coal plant; and if you're concerned about CO2, 
they emit almost 40 percent less. But we can't build these plants in 
good measure because activist groups are blocking their construction.
    These are the same groups that call for clean energy, yet in the 
same breath ridicule clean coal as an oxy-moron; denounce hydropower 
because of dam construction; oppose emissions-free nuclear because of 
waste issues; worry that tidal energy harms marshes and mud flats; stop 
solar power because of concerns over endangered species; and block 
offshore wind farms because they are aesthetically distasteful. They 
also claim to support clean-burning natural gas, but want to stop 
domestic gas production.
    In short, they have a rather cramped definition of ``clean''. What 
I am thinking of includes clean coal--and here I'm not talking about 
coal with carbon capture and sequestration, or CCS, a technology whose 
commercialization depends on the construction of a massive 
infrastructure of storage sites and pipelines that is orders of 
magnitude larger than what supports oil and gas production. Activist 
groups, through lawsuits and other forms of obstruction, will never 
allow it to be built.
    Along with new modern coal plants, I want nuclear, natural gas, as 
well as the array of existing technologies that make up the rest of our 
energy economy. This ensemble is reasonable and also far broader and 
more congenial to energy security, jobs, a growing economy, and the 
environment than what we will hear about today.
    Today we will hear about ``green jobs'' defined as those largely in 
the business of supporting wind and solar power industries. These jobs 
are part of the so-called ``clean energy economy'' envisioned by the 
Obama administration, in which government will supposedly transform the 
energy market by taxing the energy we use and then subsidizing 
technologies that can't stand on their own. This bureaucratic-driven 
energy market will, so the logic goes, reinvigorate America's global 
leadership in technological innovation.
    But this is faulty logic, impaled on the sharp edge of experience. 
Consider Evergreen Solar, which at one time was all the rage in 
Massachusetts. Evergreen Solar was making the breakthrough technology 
that would supposedly transform the energy economy. State officials 
were so smitten that they forked over $60 million in taxpayer funds to 
build a plant in Devens, Massachusetts. But the plan, and the plant, 
failed. Michael El-Hillow, Evergreen Solar's chief executive, explained 
the plant's demise in stark terms: ``While the United States and other 
Western industrial economies are beneficiaries of rapidly declining 
installation costs of solar energy, we expect the United States will 
continue to be at a disadvantage from a manufacturing standpoint.'' 
[Emphasis added]
    What he means is that Evergreen's operating costs in the State were 
simply too high, even with the $60 million hand out. Evergreen Solar 
has shuttered the plant, has fired 800 workers, and is now moving the 
operation to China. As Massachusetts State Senator Jamie Eldridge 
asked, ``Should Massachusetts State government offer massive subsidies 
to large corporations as part of its economic development strategy to 
create jobs for residents?''
    I think we know the answer. But this is exactly what the Obama 
administration is proposing on a grander scale. Massive subsidies, more 
taxes, and more regulations--all imposed on the economy, on taxpayers, 
and all based on the fanciful notion that new jobs and industries will 
follow. Surely some will, but as David Montgomery, one of the Nation's 
foremost energy economists explained in his testimony, the 
Administration forgets or ignores the other side of the equation: those 
taxes, mandates, and subsidies will destroy jobs in other industries, 
raise energy prices, reduce wages, lower productivity, and displace 
investment. In short, we are worse off than when we started. Put 
another way, the Administration's ``green economy'' entails a net loss 
for America.
    Regulations now being imposed by this Administration are making 
businesses here--including solar and wind manufacturing businesses--
less competitive, unable to compete with those operating in China and 
India. Just take EPA's Boiler MACT rule, which affects thousands of 
industrial boilers. It puts nearly 800,000 jobs at risk in this 
country. According to the United Steel Workers Union, whose president 
is testifying today, ``Tens of thousands of these jobs will be 
imperiled. In addition, many more tens of thousands of jobs in the 
supply chains and in the communities where these plants are located 
also will be at risk.''
    This is no way to make energy and environmental policy, let alone 
run a country. Let's put aside talk of ``transformation''--the green 
economy as defined by the Administration is a failure. It's time to get 
back to basics: supporting and encouraging domestic energy production, 
onshore and offshore; removing tax and regulatory barriers to 
innovative clean energy technologies; and allowing all forms of clean 
energy to power the American economy. By the same token, we need to 
balance our regulatory policies so they protect the environment without 
sacrificing the jobs and businesses that make our economy grow and 
expand.
    These are the essentials and we know they work; without them, 
America will lose ground to other nations, and the promise of a 
brighter future will be in doubt. It's time to turn the ship, and 
return course back to growth, production, innovation, and leadership.

    Senator Sanders. Thank you very much. Thank you, Senator 
Inhofe.
    OK, let us begin with Leo Gerard. Mr. Gerard is the 
international president of the United Steelworkers of America. 
Thank you very much, and thank all of you very much for being 
here.
    Mr. Gerard, if you want to begin.

   STATEMENT OF LEO GERARD, INTERNATIONAL PRESIDENT, UNITED 
                          STEELWORKERS

    Mr. Gerard. As was mentioned, I am the international 
president of the Steelworkers Union. To the Steelworkers Union, 
clean energy economy promises, we believe, robust economic 
growth for the Nation that understands the value of the 
thousands of good-paying jobs, family supporting jobs that can 
and should be created in this sector, if we are prepared to 
lead. If we as a Nation do not seize this opportunity to lead 
in this sector, I can assure you that Communist China or 
someone else will, to the detriment of our children and to the 
detriment of our environment.
    Our Union has over 850,000 members who work hard every day 
making the products that have been the bedrock of our country's 
economic strength and security. But for our country to succeed 
in the global race to compete in the new clean energy economy, 
we must also ensure that these industries remain the foundation 
for the future. Our Union has long been one of the most active, 
if not the most active, organizations in America on the need to 
enforce our trade laws.
    The Steelworkers Union understands that all the incentives, 
market forces and money in the world will not create the jobs 
that we need if predatory, illegal practices by our foreign 
competitors are left unchecked. Sadly, our Union often is 
forced to act virtually alone to push for enforcement of our 
trade laws, as many companies and other group fall victim to 
the intimidation that is part of these coordinated attacks on 
our industries and American companies, and in particular, on 
American workers.
    In just such a case, Steelworkers filed a 301 petition, a 
301 action under the agreement we have with China with the U.S. 
Trade Representative, seeking an investigation into the illegal 
practices by the Chinese government that distort trade and 
investment in clean energy technology. Just a brief aside, I 
think in front of a committee just last week, USTR Ambassador 
Kirk pointed out that his agency doesn't have sufficient 
resources to do all of the investigations that need to be done 
on illegal trade. I wanted to make sure I mentioned that today.
    In October, the petition was accepted and an investigation 
was opened by USTR. It has now moved to the consultation phase 
with China and at the WTO on some other of these issues. This 
process may result in the formation of a dispute resolution 
panel if the agreement between the two countries is not 
reached.
    This investigation has generated a lot of attention and is 
the target of much propaganda by our opponents who seek to 
confuse the issue by implying that the United States is 
targeting all Chinese clean energy polices, even those we also 
have here. That is completely false, completely untrue, and 
today I want to set the record straight.
    This investigation is about five areas of illegal Chinese 
practices. They are: export restrictions of rare earth 
minerals; forced technology transfer; discrimination against 
foreign companies; prohibited export subsidies; and domestic 
subsidies designed to cause harm to China's trading partners. 
Each of these, Mr. Chairman, is a direct violation of 
international law and the commitments China made when it joined 
the WTO. Holding them accountable is not undue, nor is it 
unjust.
    Still I too often read about how we are supposedly 
attacking China's renewable energy standard and how unfair this 
is, since the Steelworkers support the same thing in the United 
States. Or how we are trying to stop China from supporting 
alternatives, and alternative vehicles, such as high-speed 
rail, both of which we support in the United States. This is a 
deliberate distortion of the facts and is again untrue.
    Does the United States support and encourage the 
development of clean energy? Certainly. But we do it WTO legal, 
and our hope is that the United States will continue to do so, 
and increase that investment in our domestic infrastructure. 
Does the United States restrict China's access to key raw 
materials? No, it does not. Does the United States pursue 
illegal export or domestic content subsidies? No, it does not.
    Does the United States discriminate against foreign goods 
and companies? No, it does not. Does the United States force 
Chinese companies to transfer technology to American ones at 
the cost of doing business here? No, it does not. Does the 
United States grant such massive subsidies that they by design 
distort the entire world market? No, it does not. China does 
all of these.
    The investigation that we have initiated does not target 
positive and legal policies, only illegal ones that subvert our 
shared goal of robust clean energy development.
    Mr. Chairman, thank you for holding this hearing. We look 
forward to working with you and this committee to ensure that 
American workers get the benefits of the clean energy economy. 
We know that this will be a huge undertaking, but we believe we 
can do it. President Obama is right: we do big things. This 
will be the biggest of our lifetime. It will be the biggest of 
our generation.
    On behalf of the Steelworkers, I would like to say, we are 
ready to meet this challenge. But we can't meet it while our 
markets are being destroyed. We can't meet it while China, 
using them as the poster child, does what it does at the 
expense of our industries, at the expense of the R&D.
    Let me just close with this. The modern wind turbine was 
invented and sophisticatedly created in Sandusky, OH. We cannot 
now build a wind turbine from start to finish with an American 
supply chain, and that is ashame. Thank you.
    [The prepared statement of Mr. Gerard follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Sanders. Thank you very much, Mr. Gerard.
    Now we are going to hear from Mr. Cicio. Mr. Cicio has been 
the president of the Industrial Energy Consumers of America 
since its founding. In 2008, the chairman of the Commodity 
Futures Trading Commission, appointed Mr. Cicio to the newly 
created Energy Markets Advisory Committee, representing 
industrial energy consumers. Thank you very much for being with 
us today.


STATEMENT OF PAUL CICIO, PRESIDENT, INDUSTRIAL ENERGY CONSUMERS 
                           OF AMERICA

    Mr. Cicio. Thank you, Mr. Chairman and Ranking Member 
Boozman. It is an honor to be here before you.
    IECA, the Industrial Energy Consumers of America, is a 
manufacturing trade association. When I say manufacturing, no 
electric utilities are members, no oil, no gas, no coal. We are 
real manufacturers that produce products. Most of the products 
that we produce are energy-intensive. So the cost of energy is 
very important for our ability to compete in domestic and 
global markets.
    Mr. Chairman, our country and the manufacturing sector are 
locked in fierce global competition. Both our country and U.S. 
manufacturing are not achieving the economic growth that we 
should. Make no mistake, U.S. manufacturing on many occasions 
is competing with governments, not just companies without 
government backing. In fact, we cannot take the manufacturing 
sector for granted. We must once again be a country that 
embraces manufacturing sectors with policies that foster 
capital investment, innovation and low-cost energy. I want to 
emphasize that low-cost energy and regulations that are cost-
effective have certainty.
    Renewable energy has an important role in our country but 
not through mandates and subsidies. For example, wind, 
unfortunately, the most economical of the renewable resources, 
is 80 percent more expensive than natural gas-fired power 
generation, according to the Energy Information Administration. 
These costs are passed on to us, and makes it more difficult 
for us to be competitive. Just a 1 cent per kilowatt hour 
increase in the price of electricity increases the price of 
electricity for all consumers in the country by $37.5 billion.
    When viewing renewable energy job creation, policymakers 
have failed to look at net job impacts. What we mean by that is 
jobs created by renewable energy production minus the jobs lost 
in manufacturers like us because of the higher price of 
electricity. Mr. Chairman, there are, fortunately, more cost-
effective ways to substantially improve the environment and 
create jobs that promote greater quantities of expensive 
renewable energy. For example, it is better to create jobs by 
saving energy with efficiency. Energy efficiency should always 
come before renewable energy, otherwise we are just needlessly 
increasing the cost of energy that we are wasting.
    We are focused on driving energy efficiency through every 
sector of the economy, is what we should be doing. For example, 
buildings consume 40 percent of all the energy in the country, 
70 percent of all the electricity. Common sense cost-effective 
things like fiberglass insulation, which by the way is energy-
intensive, it is glass, can save enormous amounts of energy. It 
is labor-intensive, by the way.
    For the industrial sector, a better alternative, the 
Industrial Energy Consumers of America's sustainable 
manufacturing growth initiative. It is a series of policies 
that we have put together that will improve the competitiveness 
of the manufacturing sector through energy efficiency. It 
utilizes combined heat and power, recovery of waste heat 
recovery and buildings. We have modeled the economics of this 
study and it would create $3.2 million man-years in 10 years. 
It would reduce 10 percent of all U.S. greenhouse gas 
emissions. It would increase GDP by $389 billion, and increase 
private fixed investment by $407 billion.
    So my point is that there are ways of increasing jobs, 
improving competitiveness in the country. Thank you.
    [The prepared statement of Mr. Cicio follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Sanders. Thank you very much, Mr. Cicio.
    John Danner brings more than 20 years of leadership 
experience to Northern Power, and was previously president and 
CEO of Codon Devices, a privately held high-growth 
biotechnology company. He is from Barre, VT areas, is that 
correct, John?
    Mr. Danner. That is right, Senator.
    Senator Sanders. Thank you very much for being with us.


STATEMENT OF JOHN P. DANNER, PRESIDENT AND CEO, NORTHERN POWER 
                            SYSTEMS

    Mr. Danner. Thank you. Good afternoon.
    Mr. Chairman and esteemed members of the subcommittee, 
thank you for the opportunity to share my perspectives on green 
job growth and trade with you today. My name is John Danner, I 
am the CEO of Northern Power Systems, a next generation wind 
turbine company based in the United States.
    Today I would like to cover three topics, a quick 
background of Northern Power, the opportunity from our vantage 
point for policymakers to truly create jobs and move our Nation 
toward a renewable energy economy, and then third, specific 
actions that our Government can take to quickly and 
meaningfully accelerate job creation in this renewable sector.
    So to begin, Northern Power Systems is the oldest 
continuously operated wind turbine company in the United 
States, founded in Vermont in 1974. Northern Power designs, 
manufactures and sells highly reliable, highly efficient wind 
turbines. Leveraging recent advances in computer technology and 
material science and electrical engineering, our company has 
developed state-of-the-art direct drive wind turbines. This 
technology is simpler, lighter, more efficient and more 
reliable than traditional wind turbines that use complex and 
high speed gear boxes.
    The result is that Northern Power wind turbines deliver 
more power more of the time for lower cost, thus furthering 
lowering the already competitive cost of wind energy. The wind 
turbine industry has historically been dominated by European 
companies, although in recent years we have seen a surge of 
Chinese companies entering the global marketplace. In 2008, 
Northern Power Systems was acquired by private equity investors 
whose vision was to create an industry-leading American-made 
wind turbine company, based on Northern's cutting edge direct 
drive technology.
    Since 2008, Northern has raised $113 million of private 
capital, opened three new locations, expanded our direct 
employee base from 78 to 160, and we now operate facilities in 
Vermont, Massachusetts, California and Michigan. We have sold 
wind turbines into 25 States and 6 countries. Last month we 
opened production operations for our new, state-of-the-art 
utility-scale wind turbine in what had been a vacant former 
automotive parts manufacturing plant in Saginaw, MI.
    While we are proud of what we have accomplished to date, we 
are confident that as we grow Northern Power into a leader 
within the global wind turbine industry, we will create 
thousands, if not tens of thousands, of jobs. Northern Power is 
but one example of the potential that wind power represents to 
the U.S. economy. Wind energy has the potential to 
simultaneously address the environment, energy security and of 
critical importance, job creation.
    Wind power is the only source of renewable energy with both 
a ubiquitous fuel source and a very competitive cost. In fact, 
I would like to submit for the record a cost comparison which 
was done by Goldman Sachs, run in the Wall Street Journal of 
September 13, 2010. It takes a directly opposite view of the 
Energy Information Administration cost estimates discussed 
previously.
    Simply stated, wind power is an economically viable path to 
substantially increase the amount of energy we generate from 
renewables. This has been evidenced by the fact that wind power 
was the leading type of new electrical generation capacity 
installed in both the United States and Europe in 2008 and 
2009, before economic conditions caused a pull-back in 2010. In 
some States, like Iowa, wind power account for nearly 15 
percent of the electricity today. So this can be done, and it 
can be done cost-effectively.
    The result can be a staggeringly positive impact to our 
economy where we need it the most, in high quality engineering 
and manufacturing job creation. While Northern Power has 
created nearly 100 direct jobs in the last 2 years from our 
relatively modest perch, the wind industry overall employs 
85,000 Americans today, 20,000 in manufacturing alone, 
suggesting a very substantial base from which to drive green 
job growth creation.
    In order to tap the tremendous benefits of wind energy to 
our economy, I would recommend that the U.S. Government pursue 
three avenues. First, increase the support for Ex-Im and DOE 
programs. In order to compete with the aggressively supportive 
Asian governments, the U.S. Government should strengthen its 
support to the Export-Import Bank and the Department of Energy. 
Programs like Ex-Im Bank's export finance program are critical 
to allowing Northern Power to compete on a level playing field 
in the export arena.
    Similarly, DOE initiatives, like the 1703 loan guarantee 
program are essential to helping American companies 
commercialize innovative new technologies, where our Asian 
competitors are oftentimes simply and directly funded by state-
owned institutions.
    Second, extend the production tax credit and section 1603 
cash grant in lieu of investment tax credit programs until 
2016. These programs help address the relative capital 
intensity involved with renewable energy projects and provide 
critically needed assistance in these difficult times when 
liquidity has not fully returned to our capital markets. In 
addition, other programs like the section 48(c) manufacturing 
tax credit and salary depreciation programs and the proposed 
Green Bank can all play pivotal roles in leveling the playing 
field.
    Third and finally, most importantly, adopt a national 
renewable or clean energy standard. Establishing a firm set of 
national renewable energy standards will provide much-needed 
certainty to private capital markets and will greatly assist in 
investment capital formation for domestic manufacturing. This 
public policy initiative will bring the full power of private 
financial markets to bear on stimulating this tremendous 
opportunity for our economy.
    In closing, I would like to restate that wind energy has 
the potential to simultaneously address the environment, energy 
security, and of great importance, job creation.
    Thank you for allowing me to share with you the story of 
Northern Power Systems and our perspectives on how the U.S. 
Government can best capture the benefits of wind power for this 
great Nation of ours.
    [The prepared statement of Mr. Danner follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Sanders. Mr. Danner, thank you very much.
    David Montgomery is our next panelist. Prior to joining 
Charles River Associates, Dr. Montgomery held a number of 
senior positions in the U.S. Government. He was Assistant 
Director of the U.S. Congressional Budget Office and Deputy 
Assistant Secretary for Policy in the U.S. Department of 
Energy. Thanks very much for being with us, Dr. Montgomery.

   STATEMENT OF W. DAVID MONTGOMERY, Ph.D., VICE PRESIDENT, 
                    CHARLES RIVER ASSOCIATES

    Mr. Montgomery. Thank you, Mr. Chairman and members of the 
subcommittee. I am also honored by your invitation to appear 
today.
    I am David Montgomery, vice president of Charles River 
Associates, as Chairman Sanders said.
    I am an economist. I have been working on subjects like 
this one for most of the past 40 years. I will today be 
discussing my own opinions, which are not necessarily those of 
my employer or any of its clients.
    I would like to concentrate, in these remarks, on a study 
of green jobs that was released week by Ceres, an institute at 
the University of Massachusetts referred to as PERI. I would 
like to use as an example of how studies in this genre have 
provided a biased and incomplete picture of the effects of 
regulations and of how jobs are created. I am quite critical of 
these studies.
    First, the regulations at issue, any of the regulations we 
are discussing, whether they are environmental or clean energy 
standards, undeniably raise the cost of doing business. 
Tradeoffs have to be made between these economic costs and 
environmental benefits in designing laws and regulations and 
pretending that there is no cost involved doesn't help those 
deliberations at all.
    Second, the PERI study and its like only reached their 
happy conclusions because they leave out of their calculations 
all the jobs that are lost in the rest of the economy because 
of the cost of regulation.
    Third, even PERI's calculations of direct jobs are 
exaggerated, because they assume that 100 percent of the 
required new equipment will be manufactured in the United 
States. Testimony we have just heard demonstrates how wrong 
that assumption is.
    Fourth, all of these green job studies that I have seen 
miss the fact that any increase in investment or Government 
spending will create jobs in a slack economy. Environmental 
regulation is a particularly costly way to promote job growth. 
Just a little bit of arithmetic applied to the PERI study shows 
that the new regulations on utilities that studied would cost 
over $300,000 for every direct job that they create. That is in 
an economy where the average wages and benefits for the average 
employee are about $50,000 a year.
    Beyond these problems with the approach of the PERI study, 
its analysis suffers from a number of more technical 
deficiencies I would like to mention. First, jobs are simply 
not a meaningful indicator of economic impacts. Economists have 
made the point for a very long time that just requiring every 
utility to hire 100 or 1,000 workers to dig holes in the ground 
next to each utility pole and fill them up again would equally 
well and much more simply create new jobs. You have to look at 
what the programs that are creating the jobs are actually doing 
and what they cost.
    Second, the PERI study actually does not use a model of the 
U.S. economy. It simply uses numbers that are called 
multipliers that add to the direct jobs that they have 
calculated for producing pollution control and generating 
equipment, and an estimate of the additional jobs involved in 
supplying the materials that are used in that production. That 
is all they do. But if PERI had used any comprehensive model of 
the U.S. economy, it would have been forced to account for 
where its $200 billion of that investment was coming from. That 
tells a very different story.
    When I used the same model electric power sector as PERI, 
and linked it to my company's broad model of the energy 
economy, I found exactly the opposite results from what PERI 
found. EPA's utility regulations would reduce, not increase, 
total macroeconomic investment. The reduction in investment 
that we estimate would be about $150 billion from 2010 to 2015. 
It is the same order of magnitude as what PERI was estimating, 
but the opposite sign. If I used PERI's multipliers, the result 
would be a net destruction of over a million jobs.
    Now, I am not espousing either plus 1.5 million or minus 1 
million jobs as a useful number. My point is that people would 
have had jobs doing something else if new environmental 
regulations were not put in place, and would be doing something 
that creates more wealth.
    My third point is that PERI ignores important effects. With 
our broader model, we estimate that in 2015, wholesale 
electricity prices would increase by 1 to 3 percent, average 
worker compensation would fall by $100 to $150, output in 
employment in autos, heavy industry and energy-intensive 
sectors would fall by about 1 percent, and coal output and 
employment would shrink by 20 percent. These are the effects of 
regulations that force utilities to spend $200 billion on 
pollution control equipment and on replacing 40, 50, 60 
gigawatts of coal-fired power.
    Fourth, studies like PERI want U.S. policymakers to favor 
industries that employ more workers per dollar of output. This 
is nothing more than the old Luddite program to save jobs by 
breaking up productivity-enhancing machines. Our economy is 
driven and our workers are made better off through improving 
productivity for workers to capital investment.
    Finally, I note that the logic of the PERI report also 
implies that the greater the unproductive investment cost by a 
regulation, the greater would be its impact on jobs. If that 
logic were really valid, rather than seeking cost-effective 
regulation, we should seek out the highest cost way to achieve 
environmental goals. The result is absurd, because the logic of 
this kind of economic analysis is nonsense.
    I will end with a quote from a friend, Professor Richard 
Schmalensee at MIT, who is much more quotable than I am. He 
observed that, ``As common sense suggests, we cannot regulate 
ourselves into prosperity.''
    Thank you for this opportunity to address the subcommittee.
    [The prepared statement of Mr. Montgomery follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Sanders. Dr. Montgomery, thank you very much.
    Kate Gordon is the vice president for Energy Policy at the 
Center for American Progress. Ms. Gordon was the co-director, 
previously, of the National Power Alliance, where she still 
serves as senior policy advisor. Thanks very much for being 
with us, Ms. Gordon.


STATEMENT OF KATE GORDON, VICE PRESIDENT FOR ENERGY POLICY, THE 
            CENTER FOR AMERICAN PROGRESS ACTION FUND

    Ms. Gordon. Thank you, Mr. Chairman and Ranking Member 
Boozman, thank you for letting me testify before you today.
    The issue of green jobs and trade is critical in light of 
the triple crisis America currently faces, the economic crisis 
that has left 14 million people unemployed, and the energy 
security crisis that leaves us vulnerable to every 
international incident and natural or man-made disaster, and 
the climate crisis that threatens the very planet we now live 
on.
    In true American entrepreneurial spirit, we at The Center 
for American Progress Action Fund believe these crises bring 
opportunity, but only if the United States decides to get off 
the bench and join the green jobs race already being run by 
most of the other developed and developing countries in the 
world.
    I want to begin by emphasizing that the phrase ``green 
jobs'' stands for much more than just the jobs themselves. It 
stands for a whole new set of industries and investments that 
will make us as a country more competitive and our economy more 
sustainable in the long term. We are in the process of 
switching our energy infrastructure over from capital-
intensive, risky and often highly polluting energy sources to 
sustainable, clean and more efficient sources.
    This is a transformation on the scale of the transition 
from horse-drawn carriages to engine-driven vehicles, from the 
transition of the Industrial Revolution or the more recent 
high-tech revolution. In each of these eras, we talked about 
economic transformation, competitiveness and job growth. We 
talked about the need to transition away from industries that 
were not sustainable, industries on the decline into industries 
of the future.
    We did not spend our time debating exactly how many jobs 
might be lost in, for instance, agriculture, if people moved to 
cities to work in factories in the Industrial Revolution, or 
how many blacksmiths might be out of work with the advent of 
the automobile. We saw these as transformative moments in 
American history, where we had the chance as a country to move 
forward toward a more advanced age defined by stronger 
industries, better infrastructure and a steadily growing middle 
class. In fact, in each of these revolutions, we saw workers 
applying current skills to new industries, blacksmiths, for 
instance, using welding expertise to become auto mechanics, the 
first auto mechanics, along with new workers, women especially, 
and immigrants, joining the work force for the first time and 
finding new opportunities in entering the middle class.
    The green jobs revolution has the potential to move us into 
yet another stage of American leadership in the world, with the 
added huge benefit of combating climate change that threatens 
not only this country but the entire planet. But the potential 
can only become reality with true political leadership and 
progressive action.
    The global clean tech market is expected to expand to at 
least $2.3 trillion by 2020. America is not currently seriously 
competing for a piece of this pie. However, countries like 
China and Germany are now focusing on clean tech industries as 
a critical part of an economic growth strategy. As you 
mentioned, Secretary Locke reports that China invests almost 
$12 billion a month into its renewable energy sector. In 
contrast, we spend about $5 billion a year for all R&D in all 
energy sectors in the United States. China is also importantly 
investing in education and work force systems, and in their 
low-carbon transportation infrastructure.
    Here at home, in contrast, we see current budget proposals 
that slash these very programs that have always underpinned 
America's innovative edge and that China is now investing in. 
Our decision not to invest in the green economy does come at a 
cost. Already we are seeing cutting edge solar power 
manufacturing companies close their doors, either permanently 
or to move to other countries with strong, dedicated clean 
energy markets. Iowa wind, you heard about earlier, Iowa wind 
manufacturers are seeing their orders decline with the lack of 
a strong Federal investment in growing demand in the clean tech 
sectors.
    As GE Chairman Jeff Immelt has said, these countries with 
strong demand for renewable energy products will naturally pull 
companies into their borders, because innovation and supply 
chain strength gets developed where demand is the greatest. 
Investors are moving their funds as well. Leading global 
financier DeutscheBank decided to move almost $8 billion in 
clean energy investments out of the U.S. energy market when it 
became clear that we would not be putting a price on carbon in 
the 111th Congress.
    All this points to me to a key question: do we want to be 
in the business of inventing the green technologies of the 
future, only to end up buying those back from countries that 
have successfully commercialized, manufactured and exported 
them? Do we want to be the world's great clean technology 
consumer while the rest of the world prospers? Is that the way 
truly to strengthen the American economy?
    Luckily, there has been some leadership at the State and 
local level. So we have seen that investments in strong policy 
and consistency on green jobs does bring results. My written 
testimony goes into a great more detail on this, what we have 
seen, for instance, in jobs growth in the green sectors in 
California, in Michigan and in Ohio, for three examples. I also 
wanted to point out that these investments have not just 
created jobs, they have created new infrastructure. Sometimes 
we say, oh, a million dollars only creates X number of jobs, 
and the wind industry is about 5.7 jobs per million dollars of 
investment. We forget that we are also creating a wind farm 
when we put a million dollars of investment into wind. We are 
creating long-term infrastructure to move renewable energy into 
our market in a more sustainable and stable way.
    Innovation and investment are essential building blocks of 
a strong U.S. economy, and there are several progressive 
proposals that we recommend Congress needs to take to heart to 
strengthen the economy and move us forward into this global 
race. Those include the need for a strong national clean energy 
standard to create demand, finance policies that can move 
public and private capital to innovators and to manufacturers, 
modernizing the infrastructure to move these products to 
market, investing in our science and math education and work 
force training, prompting fair and strong international trade 
policies, and helping regions learn how to race to the top to 
get their most innovative ideas into the national sphere.
    Thank you so much for letting me testify today. I really 
appreciate it.
    [The prepared statement of Ms. Gordon follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Sanders. Thank you very much.
    Let me first begin with Leo Gerard. Mr. Gerard, simply 
state, what do you see the potential in terms of the growth of 
green jobs in the United States if our country, as Ms. Gordon 
just indicated, is prepared to invest in research and 
development and if our trade policies are strong, so that 
countries like China do not break international law? Is there 
really an opportunity, in your judgment, for serious job 
growth?
    Mr. Gerard. Absolutely. In fact, our Union for quite some 
time now has seen this as the pathway to economic 
revitalization and regrowth of our manufacturing sector.
    Let me say, although my comments were about China's 
cheating, that isn't the only area that we have an interest in. 
We think that there needs to be an effort by the Congress to 
increase the allocation under Article 48(c), so that there can 
be more money to promote domestic manufacturing. We think there 
is tens of thousands, if not more, jobs in industrial 
retrofitting to make our industrial facilities more energy 
efficient. We will take carbon out of the air, we will make our 
industries more competitive and we will create jobs.
    We think that this Congress needs to have the guts to stand 
up for domestic content regulation that is no different than 
what other major countries are doing, consistent with our 
international obligations. We think retrofitting public 
buildings, you think this building is energy efficient? We have 
windows that were probably put in in the 1940s. What could we 
do about that? If we had domestic content regulations.
    So all of those things that we think the future is in 
enforcing and strengthening our trade laws. It is a longer 
answer to tell you that first, you have to have to lose jobs 
before you can win a trade case. You have to prove that the 
jobs have been lost. So we have to be down on our knees, 
begging for help, before we can get help in the industrial 
sector in this country. Whereas other countries can take action 
before that happens.
    So we have to enforce and strengthen our trade laws, and we 
have to believe that we are going to advance industrial 
manufacturing again in this country.
    Senator Sanders. Thank you very much.
    Let me ask Mr. Danner a question. Mr. Danner, in California 
just this past week, Southern California Edison announced that 
it had received bids for 250 megawatts of solar PV projects, 
all of which have contracted to provide power at less cost than 
an efficient natural gas plant. The American Wind Energy 
Association reports that wind is now providing electricity at 5 
to 6 cents per kilowatt hour, competitive with coal and natural 
gas.
    My question to you, in a general sense, is can sustainable 
energy compete with the more traditional forms of energy that 
we use in this country?
    Mr. Danner. Thank you, Senator. The answer is that it can. 
I think the date, especially when you look at the accurate 
data, which takes into account the capital costs, and the full 
costs, a metric called levelized cost that certainly Goldman 
Sachs used in the report that I entered into my testimony, 
suggests that that is exactly the case. In fact, that wind can 
be as low as 5 cents per kilowatt hour, as you mentioned, and 
that on a levelized cost basis, it is competitive with all 
other forms, including natural gas, including coal and 
including nuclear.
    So it is competitive today. The thing you need to keep in 
mind is that it is capital-intensive. So the cost dynamics are 
quite different. You put the capital in up front, and then, 
Senator, I believe as you mentioned in your opening comments, 
the fuel is virtually free. It is free for 20 years. In fact, 
we are designing our turbines for longer than that.
    So not only is it beneficial right now on a levelized cost 
basis, but it locks those economics in for a long, long time, 
providing economic security.
    Senator Sanders. Thank you very much.
    Let me ask Ms. Gordon a question. Speak a little bit more 
about your concerns about the future in terms of United States 
policy, in terms of investment and trade as opposed to China 
and Europe in supporting sustainable energies. How are we 
doing?
    Ms. Gordon. Well, you know, we have gone through phases. We 
were leaders in this industry, we have been in the past. We 
invented the solar panel in the 1950s as part of the space 
race, greatly improved it after the oil crisis of the 1970s. 
Invented wind turbines, as you heard, here. We have been 
leaders in innovation in this area. We have not been leaders in 
commercialization and production, except for in the last couple 
of years. I would say that is the Recovery Act. We saw the 
largest single investment of domestic investment in clean 
energy research development and deployment in this country and 
in job training, leading to a surge, in 2009, the most wind 
turbines ever installed in the United States in a year.
    However, with that money drying up, we have seen companies, 
we could each name companies that have closed their doors. We 
have seen companies struggle to maintain the orders that they 
need to keep manufactured parts on hand. We have seen many of 
these sectors just start to wonder what the long-term outlook 
is in the United States.
    I think the next 2 years will be critical for us. We really 
need to see demand grow in this country with strong national 
policies. We have seen great stuff at the State and local 
level. We have to scale that up and do what every other country 
that is competing with us in this space, every country in 
Europe, China, India and Japan have done, and say, ``Look, we 
need a national renewable or clean energy standard.'' Every one 
of them has that. We need a price on carbon. Nearly every one 
of them has that. We need sustainable policies to do production 
in these areas. We need an actual policy around clean energy. 
Every one of them has that.
    My concern is, we are already seeing the beginning of the 
decline.
    Senator Sanders. OK, thank you very much.
    Senator Boozman.
    Senator Boozman. Thank you very much. I enjoyed the 
testimony. It was very helpful, and I enjoyed reading it. I 
don't think that any of us here don't disagree that there is a 
place for green jobs. The key, though, is that it has to work. 
As we set policy, the numbers that were presented as far as the 
increased cost of electricity and increased cost of doing 
business and the loss of jobs is pretty staggering.
    Mr. Danner, you run an efficient company that is doing a 
great job. But probably, are most of your components, the steel 
and things that you are getting to put that together, most of 
that comes from overseas, I would guess, if it is like every 
other company in America. You look around, you see where you 
get the best deal as you assemble. Would that be an accurate 
statement?
    Mr. Danner. Senator, it is not actually an accurate 
statement now. We do have a global supply chain, we work hard 
to have as much U.S. content as we can, specifically in a place 
like Michigan, where we have opened our facility in Saginaw. I 
believe as Ms. Gordon stated, Michigan has been fairly 
aggressive in their economic development on green jobs. We are 
working hard to give those supply chain companies a fair shot. 
If they can be competitive with wherever else, we will take 
them preferentially over, certainly, an overseas competitor. We 
will try to help create a local supply chain in Michigan, as an 
example. But it is difficult, as you mentioned.
    Senator Boozman. I am not being critical of you at all. You 
are in business to make a profit, and you deal with the cards 
that are being dealt. That is the problem we have throughout 
the United States. As a result, because of different things, 
increased energy costs, this and that, it is hard to compete.
    Several of you mentioned, I think Mr. Cicio, Mr. Montgomery 
and Mr. Gerard mentioned about the onerous effects of increased 
regulation. Can you elaborate on that? I know some of the 
boiler things that are being talked about. Go ahead.
    Mr. Gerard. I am happy to comment, because I did not make a 
comment about the cost of increased regulation. What I did 
comment on is China's increased cheating.
    But let me say this: it is very difficult to develop a 
domestic supply chain when you don't have the national or State 
infrastructure that will help do that. Because you have to get 
the thing started. If we are looking at competing against Asian 
countries or European countries, they all have a manufacturing 
plan that is very, very rigid about their supply chain. I won't 
say that the Europeans cheat, they do it within the WTO rules. 
But I will say that China cheats totally.
    Senator Boozman. Does increased regulation, specifically 
the boiler regulations that are coming down the pike, does that 
help start the supply chain to help your guys?
    Mr. Gerard. I think if the Boiler MACT regulations are done 
properly, they will increase efficiency and they will increase 
jobs. If they are done improperly, and let me just tell you 
this. Our Union has supported the Clean Air and Clean Water 
Acts when our steel companies were resisting it, saying it 
would put them out of business. We would have not had a coke 
industry in this country had we not had a Clean Air Act, 
because the pollution abatement issue saved the industry.
    So done right, Mr. Boozman, it can lead to good jobs. Done 
wrong, it will cost jobs. We will oppose it being done wrong. 
We will support it being done right.
    Senator Boozman. I agree with that.
    Mr. Cicio.
    Mr. Cicio. Thank you, Senator. The industrial Boiler MACT 
is a really good example, because I have, all of my companies 
have boilers. Almost every manufacturer in the country of any 
size has a boiler. So it can have a huge impact on our ability 
to compete.
    Particularly, in your State, there is a good example of the 
unintended consequences of doing regulations that are not 
appropriate, or effective, I should say. You have a rice 
miller, a company that processes rice, serves 8,000 farmers in 
Arkansas, that has a co-generation unit that is part of their 
operation. Co-generation is at least twice as energy-efficient 
as the local utility.
    The Boiler MACT, industrial Boiler MACT, requires that that 
company meet a one part per million carbon monoxide level. They 
can't do it. It is impossible. So unless the EPA changes its 
proposed rules that we expect later this month, they will have 
to shut down this very energy-efficient co-generation unit and 
buy from the local utility, increasing emissions and damaging 
their competitiveness.
    Senator Boozman. Mr. Montgomery.
    Mr. Montgomery. Thank you, Senator. I would like to make 
two observations. One of them is that it really is necessary to 
look both at the direct jobs that are created by either a 
regulatory program to install pollution control equipment, or 
by a clean energy standard. You can see where people are out 
doing things in order to accomplish the requirements of that 
regulation.
    But then it is necessary to look to the other side and ask, 
for example, in the regulations that I was looking at, which 
are the four or five different major regulatory programs that 
the U.S. EPA is proposing for electric utilities, what does 
that do to the cost of electricity, and what does that in turn 
do to potentially exactly the same companies that are getting 
hired to build the pollution controls?
    I think the notion of the supply chain is a critically 
important one, because when we have looked at other policies 
that increase the cost of electricity, what we have found is 
that the upstream iron and steel industry is a particularly 
vulnerable part of the economy. That is, competitive effects on 
the U.S. economy really come from narrowly defined industries 
but ones which face global competition for a pretty homogeneous 
product. That is the U.S. steel industry.
    So at the same time that we find people going out 
installing pollution controls, if that drives up the cost of 
electricity significantly, the blast furnaces and electric arc 
furnaces in the United States will no longer be what is 
supplying that steel.
    Senator Boozman. Thank you, Mr. Chairman.
    Senator Sanders. Thank you, Senator Boozman.
    Senator Merkley.
    Senator Merkley. Thank you, Mr. Chair. I wanted to jump in 
on this cost question, because we had kind of a conflict 
between Mr. Cicio's presentation, which says that wind is more 
expensive, solar is more expensive, and the chart, Mr. Danner, 
which you supplied us with the study from Goldman Sachs which 
says that when you reflect all costs and strip away all 
subsidies, wind is competitive with and even cheaper in some 
cases than natural gas combined cycle.
    Mr. Cicio, in a short version, are we missing something 
here, or does Mr. Danner's Goldman Sachs study have a point?
    Mr. Cicio. I can only account for what the Department of 
Energy, the Energy Information Administration has said, and it 
has all the complete details and I would be happy to provide 
you with the details that wind energy is 80 percent more 
expensive than natural gas-fired generation, and 130 percent, 
if it is offshore wind, it is 130 percent more costly. That 
does not include the additional 1.5 cents production tax 
credit.
    Senator Merkley. Mr. Danner.
    Mr. Danner. As I mentioned, the levelized cost is a metric 
that was, as you mentioned, that analysis performed by Goldman 
Sachs and run in the Wall Street Journal. That does take into 
account all sources of cost, including capital costs.
    What that would not reflect is if you throw coal into a 
fully depreciated 50-year-old plant, is that cheaper than a 
wind farm that needs to have the capital installed and thereby 
providing both free fuel and locked-in energy costs for 20 
years.
    The EIA study is, and there has been quite a bit written on 
this, it directly was in contrast to a Government 
Accountability Office report which was more in line with the 
Goldman Sachs report. There are other analyses which fall in 
line with the Goldman Sachs analysis.
    One of the flaws in the EIA study was that it used the 2007 
incentives. It compared those against 50 to 60 years of 
capacity that has been installed. So it fundamentally biased 
any new generation sources that were installed. That is my 
comment.
    Senator Merkley. Thank you, Mr. Danner. I think the point 
you are making is that if you look at life cycle, then you are 
taking into account the fact that you are not giving the 
comparison free on one side, the established investment that 
you have already discounted, if you will, and yet charging the 
entire investment to the new entry by looking at the life cycle 
complete set of costs.
    I think it is important we look at that type of comparison, 
so that we have an unbiased understanding of how these 
different sources work over the long term.
    Mr. Cicio, I wanted to note that there is a program that we 
have had a lot of debate here about called Building Star. The 
idea is to use low-cost loans for energy-saving renovations. It 
has, there has been a variety of economic analyses that said 
this is the most bang for the buck in creating jobs, one, 
because our construction industry is under-employed, so it is 
available, and second of all, because the savings in the energy 
bills make a good share of the payments on the loans. Does that 
fit in with your vision for industry saving energy, investing 
in ways to save energy?
    Mr. Cicio. Yes, it does. Any of those types of programs, in 
our view, including reasonable new standards for building 
codes, is moving in the right direction. As I said earlier, 
when you have 70 percent of all the electricity in the country 
used by buildings, that is a good target. We support that.
    Senator Merkley. Great. Mr. Gerard, I wanted to turn to 
your noting a variety of unfair trade practices that are 
exercised by China. Indeed, we seem to have tolerated enormous 
numbers of strategies without responding. Even when we push and 
one gets changed, it seems like something else changes a few 
months later on some other piece of it.
    Do we have the appropriate tools in terms of the trade laws 
or the staff at the U.S. Trade Representative, or access to 
evidence, et cetera, to be able to actually enforce fairness in 
international trade?
    Mr. Gerard. My experience, that now goes 15 years, is that 
USTR, even when they are willing are understaffed or 
underbudgeted to enforce our trade laws, aggressively and 
quickly. The second part of your question about whether the 
laws are effective, I can state, I can try to do it quickly, I 
can give you an example of a case that we filed 4 years ago on 
coded free-sheet paper. We succeeded in providing that China 
cheats and that they had violated the rules. But we couldn't 
get an enforcement of the remedy, because we haven't been able 
to prove that we had been injured sufficiently.
    We filed the exact same case 3 years later with basically 
the same set of facts and we won. Do you know why? We lost 
7,000 jobs in that 3-year period. So the question about, are 
trade laws effective, no, they are not. Can they be enforced? 
They can be enforced. Does USTR need more support? Absolutely.
    Senator Merkley. Thank you very much, Mr. Gerard.
    Senator Inhofe, I believe it is your turn.
    Senator Inhofe. Thank you very much.
    First of all, let me get back to Mr. Gerard. You and I have 
talked before, and we have been concerned about some of the 
over-regulations. We hear an awful lot about China and what 
they are doing. One of the problems that we have in this 
country to make us non-competitive, relative to China and some 
of the other countries, India, is that they are not regulated 
the way we are. I think you were pretty outspoken on the Boiler 
MACT. I think your statement was that this thing is going to 
end up costing us, that is you, Steelworkers, tens of thousands 
of jobs direct and then tens of thousands of jobs in support 
industries.
    I would just think it is natural that higher energy costs 
will have a negative effect on the steel industry's ability to 
compete globally. You agree with that, don't you?
    Mr. Gerard. I think, with all due respect, Mr. Inhofe, you 
are putting a lot of words in my mouth that I am not sure I 
said.
    Senator Inhofe. Let me use the quotes, then, I am sorry.
    Mr. Gerard. Use it exactly, then.
    Senator Inhofe. I will. ``Imperil tens of thousands of 
jobs, that many more tens of thousands of jobs in the supply 
chains and in the communities where these plants are located 
also will be at risk.''
    Mr. Gerard. Exactly, that is what I said. What I was 
referring to is that at that point in time, there was improper 
application. In fact, we were looking at taxing. If my memory 
is right, we were looking at taxing those companies that 
created co-generation out of their boilers. That they would 
have to buy energy off the grid when they were already 
producing 70 percent of their energy themselves.
    Now, having said that, let me come back to the other 
comment you made about China. You are right, China does not 
enforce its environmental regulations, as lousy as they are. 
That doesn't mean that we shouldn't have the proper 
environmental regulations. I will take you back----
    Senator Inhofe. I am sorry, you are using almost all my 
time, and after we are through, if the Chairman would allow 
me----
    Mr. Gerard. I would just like to finish this one sentence, 
that says, we refuse to be the buffer between positive 
pollution control activity by the community and resistance by 
the industry. While the security of our jobs is not the price 
that we are willing to pay for aggressive abatement activity, 
the ruination of our health may well be the risk which will be 
taken by lack of action.
    That was said by our Union in 1969, and that has been our 
position all since that time.
    Senator Inhofe. But the current position, imperiling tens 
of thousands of jobs on Boiler MACT, that is what I am 
referring to, that is all.
    Mr. Cicio, I think just putting a price on carbon in terms 
of, it is kind of a euphemism for cap-and-trade and carbon 
regulations, would that make your members more competitive 
against firms that operate in China or in India and other 
places?
    Mr. Cicio. No, it would damage our competitiveness, most 
certainly. It would be an additional cost. It is the equivalent 
of higher energy costs. That is going to make us less 
competitive domestically, and increase our inability to compete 
overseas.
    Senator Inhofe. Do you think that would also make us less 
competitive when it comes to buying wind generation, solar 
panels?
    Mr. Cicio. Most certainly. As a matter of fact, what are 
the materials that it takes to produce a wind generator? You 
need steel, you need aluminum, you need plastics, you need 
cement. Every one of those is very energy-intensive raw 
materials. If the cost of energy goes up, or if we in 
manufacturing have higher cost of regulation, it increases the 
cost, it all shows up in the cost of those products and makes 
it harder for people like Mr. Danner to be competitive.
    Senator Inhofe. One of the frustrations I have, and Ms. 
Gordon, I appreciate your testimony very much, but it is nice, 
you look in the future at all the beautiful green jobs and 
these things, and that is good. Here is the problem, though. We 
in this country, and this wasn't true a year ago, but now it 
is, we have more recoverable reserves in coal, oil and gas of 
any of the nations in the world right now. Our problem is, our 
politicians won't let us, we are the only country that can't 
exploit our own resources.
    Now, take shale in the gas. We are looking right now at 
enough that we would have the reserves to run this country on 
natural gas for 110 years. My question is this. I go back to my 
State of Oklahoma, and people are pretty logical there, and Dr. 
Montgomery, they say, wait a minute, they don't like oil, they 
don't like gas, they don't like nuclear. How do you run this 
machine called America in the meantime, until technology and 
all that comes in, if it ever does come in? Give me a good 
answer to tell them.
    Also, I would like to have you elaborate a little bit more 
on this PERI thing. I felt you kind of inadvertently cutoff in 
terms of that particular, the PERI model that you were talking 
about.
    Mr. Montgomery. Thank you, Senator.
    First, yes, we need to find a balance of energy resources. 
I am very concerned, especially, about gas shales, and exactly 
what you are pointing out. I spent a lot of time debating with 
other energy economist and talking to clients about the 
expectation that natural gas will be $3 or $4, maybe $5 or $6 
per million Btu forever, because we could produce that out of 
the gas shales. The only way we will be able to do it is if 
access to the resources, if regulations on tracking and 
concerns about water are dealt with in a rational way by 
regulators. But that could easily be shut off to us.
    Senator Inhofe. A good case would be the hydraulic 
fracturing that is under attack at all the time.
    Mr. Montgomery. Exactly.
    Senator Inhofe. Without that, you can't get the close 
formations.
    Mr. Montgomery. You can't produce the gas from shales 
without that. If you can't produce the gas from shales, we are 
back in the world we thought we were in 3 or 4 years ago, of 
$10, $12, $14 gas. All of these costs work their way through 
the economy.
    In the long run, we are probably going to manage to employ 
all of the American workers, but we will be employing them at a 
much lower standard of living if we are forced to pay much 
higher costs for energy, because that simply means our capital 
and our labor that is going into producing very costly energy 
isn't available for producing the things that people really 
want. It takes twice as many workers and twice as much capital 
to produce a million cubic feet of gas. Then they are not going 
to be out there producing television sets or health care or 
other things that other people really want to have.
    Mr. Gerard. They are not producing television sets now.
    Mr. Montgomery. They are not going to be producing anything 
that we manufacture in the United States.
    On the PERI study, where I was ending up on that really was 
that the critical problem is that it is very one-sided. All the 
calculations of green jobs are very one-sided. They talk about 
who it is that is being employed doing particular things. They 
don't look at what is happening in all the rest of the economy. 
You have to take a comprehensive view, and the comprehensive 
view ends up focusing first on what we need to talk about, 
which is, what is it costing in terms of labor and materials 
and capital investment to achieve the changes that these 
regulatory programs are demanding.
    I guess I would end up with the notion that is not 
Government that creates jobs. Jobs, sustainable, productive 
jobs, are in American business. Business will create those 
jobs. What all these policies that are being debated are doing 
are simply asking, will the jobs be in the industries that are 
most productive, or will it be in the jobs be in industries 
that Government programs are favoring and pushing, whether they 
are the most productive or not.
    Senator Inhofe. Thank you, Dr. Montgomery.
    Thank you, Mr. Chairman.
    Senator Sanders. Thank you.
    I would like to continue the discussion. Are you guys up 
for it? Jim, more questions?
    Senator Inhofe. No, I don't have any more.
    Senator Sanders. Let me just begin.
    Mr. Gerard. Senator?
    Senator Sanders. Yes.
    Mr. Gerard. Could I just make one brief point? One of the 
previous speakers made some comment about the American steel 
industry not being able to compete. We are called the 
Steelworkers, I want to set that straight.
    The fact of the matter is that we could produce a ton of 
steel in America, any one of our North American steel 
producers. We could land it in China cheaper than they could 
produce it in China, even by their cheating. But we are not 
allowed to do that. We can't penetrate that market.
    So this illusion and delusion that somehow American 
industry can't compete, we can if we have a level playing 
field.
    Let me make this point also. There is 200 tons of steel in 
a small wind turbine. If we had domestic content regulations no 
different than China has for our domestic consumption, not for 
export, but for domestic consumption, we would create a 
domestic supply chain for the wind industry. We would be able 
to retrofit industrial facilities. We would be able to retrofit 
buildings, and we would put thousands of people back to work. 
As long as this Congress, this House of Representatives and 
this Senate, aren't prepared to stand up for American jobs, we 
will keep getting our butt kicked by the cheaters in China.
    Senator Sanders. That takes me to my next question. Mr. 
Danner, as an American company producing advanced wind 
technology here in the United States, in Vermont, Michigan and 
other States, what pressures are you under from competitors in 
China, and how can our Government create the right policies to 
attract and retain wind manufacturers here in the United 
States? Do you agree with what Mr. Gerard has said?
    Mr. Danner. Yes, thank you, Senator, and I do. Mr. Gerard 
made some very salient points.
    Right now, as a business person who is doing global 
business, if you look at the China wind industry, it cannot be 
ignored. In 2008, China installed about one half of the 
megawatts of wind that the United States did. In 2010, 24 
months later, they installed more wind than the United States 
did. So it is an exploding marketplace.
    As a businessperson, we need to figure out how to sell our 
wind turbines and our technology into China. Because I don't 
think we should only focus our discussion on how do we protect 
our home markets.
    Senator Sanders. Let me ask you this. Do you have a level 
playing field in being able to do that?
    Mr. Danner. It has been proven time and time again that no 
foreign company can go into China directly and sell the wind 
turbines the way the Chinese companies can come in here. So we 
are forced to partner in with a Chinese company to get our 
technology into China for use in the Chinese marketplaces.
    On the contrary, we are facing Chinese-made turbines 
directly in Indiana, Illinois and in Iowa, and I fear in 
Michigan. So it is absolutely not a level playing field. As I 
look to export, I have given up on the notion that Northern can 
go into China and sell.
    Senator Sanders. You have given up on the Chinese market?
    Mr. Danner. Well, Senator, to be clear, I have given up 
that we can do it the way that they do it here. We will simply 
have to partner into that explosive marketplace. We have come 
to accept that.
    Again, in Europe, which is a different situation 
altogether, I would love to buy U.S.-made steel in our better 
wind turbines and export them to Europe with Ex-Im Bank 
financing and be competitive against the Chinese. That can be 
done. But the Chinese do need to be held to WTO rules, and the 
U.S. Export-Import Bank needs to be absolutely aggressive in 
helping us compete.
    On our home turf here, just one last point that I believe 
Mr. Gerard alluded to earlier, which is a powerful point, which 
is, in the United States, there are no home content provisions 
at all. Ontario, Canada, they have a very strong home content 
provision for their feed-in tariffs. I am competing literally 
today in the State of Michigan for a request for proposal that 
their renewable energy standard in Michigan, which is a great 
public policy to drive their wind consumption up, is creating a 
bid. I am competing against European turbines. There is 
absolutely no benefit I have at all for building them in 
Saginaw, MI.
    So it is a complete level playing field for our home 
markets in a material way. Yet when we go overseas, especially 
into China, it is anything but a level playing field.
    Senator Sanders. Let me ask Ms. Gordon a question. I think 
it was Dr. Montgomery earlier who was referring to a study 
done. A lot of studies say a lot of things. There are studies 
funded, as you know, by the oil industry, by the coal industry, 
by people anonymously who represent those interests. Can you 
take a moment and share with us your views about some of the 
studies that have been conducted by these folks, and why some 
conservative group are so intent on undermining the notion that 
green jobs are good for America?
    Ms. Gordon. Sure. There have been a lot of studies, as you 
know, the Spanish study a couple of years ago was pretty well-
known and pretty well debunked. Then there have been a couple 
of recent studies. Many of these, I can't say all, we haven't 
looked into all of them, many of them have been funded by 
institutions that were essentially funded by the oil industry. 
So there is a fairly clear relationship between the content of 
the study, the funder and the content of the study.
    But more to the point, these studies tend to focus on a 
couple of specific points. One of them is this theory that 
investments in new industries like green industries just move 
jobs from one place to another. You are not creating new jobs, 
you are not investing over here, instead, you are investing 
over here. I think there are a couple important things on that.
    First, those arguments work best when you are dealing with 
an economy that is at full capacity. If everyone were employed 
and if all capital were moving in the economy, it is in fact 
true that somebody would probably have to move from a job over 
here to a job over here, when an investment was made. Our 
economy is nowhere near full capacity. We have a terrible 
unemployment problem, we have a lot of capital, we hear this 
from businesses all the time, that is tied up right now because 
of a lack of certainty in the marketplace, a lack of certainty 
there will be demand for these products, a lack of certainty of 
regulation and exactly how that will play out. So we don't have 
full capacity.
    Another point of that is that in the case DeutscheBank, I 
brought up earlier, DeutscheBank did move dollars from one 
place to another because of investments. They moved them from 
the United States to China because of investments. So we have a 
global financial marketplace. We are not just moving dollars 
within the United States, we are moving them much bigger. That 
is one of the major points that these studies make.
    I just wanted to take 1 second, if I can, to make a point 
about regulation. Because one of the studies we have talked 
about a lot is on regulation. There are some good examples, 
actually, of job creation from regulation. Just pointing to the 
China example, I was there last April visiting a company called 
Kota Automotive, which has partnered with Lee Shin Battery in 
China. American car company, California car company, making 
electric cars with Chinese batteries.
    But they are using two things that they are importing from 
the United States to China. One, electric drive trains, which 
were developed here in part because of fuel efficiency 
standards that really drove our auto industry to become more 
innovative. Two, they are importing the steel bar between the 
passenger front and back of the car, because out safety 
standards, if you want to sell in the United States, you have 
to have the right kind of steel for that bar, so that it 
doesn't crumple on impact.
    Those are two examples of regulation actually creating jobs 
in exports.
    Senator Sanders. Thank you very much.
    Senator Boozman.
    Senator Boozman. I agree, I think that we are not saying, 
certainly I am not saying that there shouldn't be any 
regulation. But it does have to be right, as we set these 
policies. You mentioned just now that one of the things that is 
keeping people sitting by the side, they don't know what the 
cost of regulation is going to be. We have had lots of 
examples, whatever industry you are in right now, of 
overreaching regulation. It does drive up costs.
    I agree with you, Mr. Gerard, while I think the whole panel 
would agree, in the sense that we need to have our trading 
partners, they need to be responsible. We need to have fair 
trade.
    One of the things I have seen, and you mentioned, we can 
compete. But where I see as I go through factories now, and I 
really think it is important that we get out and go through 
factories. I was on the school board for 7 years, I think they 
need to go out. Because there are two things that I am amazed 
it. I see these big old factories and there is nobody in them. 
It just does not take very many people, because we are 
mechanizing, as we have these pressures with increased 
regulation, increased energy costs and things like that, the 
reaction is, it doesn't matter what business you are in, 
whether you are running a Senate office or you are running your 
business, the cost is on personnel.
    So what we are doing is getting rid of personnel, we are 
mechanizing and moving in that direction. That is a bad 
situation.
    The other thing is, I am always amazed that, when I was 
growing up, the person on the line doesn't exist any more. That 
person now is using a computer, they are very savvy. We need to 
be educating people in that regard.
    Yes, sir.
    Mr. Gerard. Let me just say, I am not sure I heard you 
right, but we are the dominant manufacturing union in the 
country. We are in tire and rubber, paper, oil and gas.
    Senator Boozman. Your tire guys were in the other day.
    Mr. Gerard. I am sorry.
    Senator Boozman. I said, I visited with your tire guys the 
other day, Cooper Tire, they are great.
    Mr. Gerard. Yes. By the way, Cooper Tire is expanding 
because we had a 421 case against China that Cooper Tire was 
afraid to support, because the Chinese were threatening them. 
But that is a different hearing.
    The reality of what you said is, I think, is that the cost 
of labor and regulation is a factor. The most important thing 
in most of our industries is the cost of capital and access to 
markets other than our own. When you say that you support us in 
our effort, there is now a bill introduced in the Senate that 
you ought to support on Chinese currency manipulation.
    Senator Boozman. I voted for it in the House.
    Mr. Gerard. Great. It is part of our 301 petition.
    Senator Boozman. Well, like I said, I voted for it in the 
House. I don't disagree with you, that is part of it. That is a 
pressure.
    Mr. Gerard. Senator, when we can create a ton of paper or a 
tire, or a ton of steel cheaper and more efficiency under our 
rules with your concerns about regulation, cheaper than they 
can in China, yet we can't penetrate their market, and with all 
the things we have proven under 421 cases, under 201 cases, we 
have proven nine times in 2 years that China cheats. This 
Congress, the past one and this one, are dragging their feet on 
doing anything about it. As you do that, we have lost 53,000 
factories in the last 10 years.
    Senator Boozman. One of the first things I did as a new 
Senator was go to my big paper mill in Pine Bluff, AR.
    Mr. Gerard. Did you get any votes from our members there?
    Senator Boozman. Again, they tell me that under the new 
Boiler MACT, they get killed in regard to having to retrofit.
    Mr. Gerard. Did they tell you that with the black liquor 
that we got them that we saved the mill?
    Senator Boozman. Well, that is a great story. That is good. 
So like I said, I am not fighting.
    Mr. Gerard. Neither am I.
    Senator Boozman. These are all pieces of the puzzle that 
really are important. The purpose of this committee, we are 
trying to set policy and advise policy on these things. But 
they really do work together. Thank you.
    Yes, sir.
    Mr. Montgomery. Thank you, Senator. I would like to respond 
to something I think was an attack on myself. I think that I 
have indicated that I think green jobs, in my testimony, are a 
diversion from the serious questions we need to ask about costs 
and benefits, environmental regulations. They miss the point.
    But that is not the worst thing I think has happened to 
these regulations. The worst thing is the name-calling and the 
tendency to recommend to policymakers that they should make up 
their minds about what a witness says based on who they might 
have done their work for.
    I think that has truly damaged your ability to hear good 
analysis and process it. The fact is, I have worked on this 
subject for 40 years. I have worked on these issues in the 
Government, as an academic and now as a consultant. I have done 
exactly the same analysis in all of those positions for every 
client.
    Right now, my clients value my work because I will tell 
them exactly what my opinion is. It is based on analysis. I 
will debate the analysis for anyone, and I won't change it no 
matter what you pay me. The only place I was ever ordered to 
change my analysis or to do something to support what my bosses 
wanted was of course in the Government.
    The second point is about, now let me get back to jobs, and 
the notion that in the long run we are fully employed, but we 
have to adopt policies now in order to get ourselves out of the 
recession.
    Fiscal policy is a very important part of economic science. 
If you listen to people like Barry Bosworth and other strong 
economists who have worked in Democratic Administrations for 
many years, they will tell you what are effective fiscal 
policies for creating jobs. They will also agree environmental 
regulations are probably not those policies, and long-term 
plans for changing the nature of the electric power industry 
aren't, either.
    You can see this in the green jobs studies. There was one 
that was put out by PERI in 2007, which was talking about long-
term job creation from long-term environmental projects that 
were going to take a long time to be spent out a build. Then 
when the recession came along, they relabeled exactly the same 
study to point to, to talk about how you were getting fiscal 
stimulus from these same two things.
    You can't have both at the same time. The timing of 
expenditures is very important. By the time the expenditures we 
are looking at for many of these green policies start hitting 
the economy, we are going to be worry about inflation and 
overhearing the economy.
    Let me stop on that one. I think actually Kate made a very 
good point. The United States has technical barriers to trade 
too that is very hard for foreign manufacturers to produce 
things that can meet U.S. regulations for the auto industry, 
and that is why we don't import a lot of cool cars from other 
countries.
    Senator Boozman. Mr. Cicio, I need to yield back to the 
Chairman. He is going to rap me with the gavel in a second.
    Mr. Cicio. Mr. Chairman, can I have 15 seconds?
    Senator Sanders. Fifteen seconds.
    Mr. Cicio. The key is the capital investment. But we have 
impediments to capital investment. We in the United States 
invented environmental regulation and it cleaned up a lot of 
things. But we now have such a heavy burden of cost because of 
those regulations and what they have evolved to, you can't even 
permit a plant where you have a 2- or 3-year delay. Then 
companies give up. Or you have non-attainment areas that people 
don't even think about building there, because you know you are 
not going to get the permit.
    We need to reinvent our environmental regulations to bring 
these down to being cost-effective, so that we can attract the 
capital, that we have the certainty and create jobs.
    Senator Sanders. With that, I thought this was an excellent 
discussion, and I want to thank all of the panelists for their 
participation. We look forward to working with all of you.
    Thank you very much.
    [Whereupon, at 4:20 p.m., the committee was adjourned.]

                                 
