[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]






                      EPA POWER PLANT REGULATIONS:
                        IS THE TECHNOLOGY READY?

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

                             JOINT HEARING

                               BEFORE THE

                        SUBCOMMITTEE ON ENERGY &
                      SUBCOMMITTEE ON ENVIRONMENT

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            October 29, 2013

                               __________

                           Serial No. 113-51

                               __________

 Printed for the use of the Committee on Science, Space, and Technology





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              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                   HON. LAMAR S. SMITH, Texas, Chair
DANA ROHRABACHER, California         EDDIE BERNICE JOHNSON, Texas
RALPH M. HALL, Texas                 ZOE LOFGREN, California
F. JAMES SENSENBRENNER, JR.,         DANIEL LIPINSKI, Illinois
    Wisconsin                        DONNA F. EDWARDS, Maryland
FRANK D. LUCAS, Oklahoma             FREDERICA S. WILSON, Florida
RANDY NEUGEBAUER, Texas              SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas             ERIC SWALWELL, California
PAUL C. BROUN, Georgia               DAN MAFFEI, New York
STEVEN M. PALAZZO, Mississippi       ALAN GRAYSON, Florida
MO BROOKS, Alabama                   JOSEPH KENNEDY III, Massachusetts
RANDY HULTGREN, Illinois             SCOTT PETERS, California
LARRY BUCSHON, Indiana               DEREK KILMER, Washington
STEVE STOCKMAN, Texas                AMI BERA, California
BILL POSEY, Florida                  ELIZABETH ESTY, Connecticut
CYNTHIA LUMMIS, Wyoming              MARC VEASEY, Texas
DAVID SCHWEIKERT, Arizona            JULIA BROWNLEY, California
THOMAS MASSIE, Kentucky              MARK TAKANO, California
KEVIN CRAMER, North Dakota           ROBIN KELLY, Illinois
JIM BRIDENSTINE, Oklahoma
RANDY WEBER, Texas
CHRIS STEWART, Utah
VACANCY
                                 ------                                

                      Subcommittee on Environment

                    HON. CHRIS STEWART, Utah, Chair
JIM BRIDENSTINE, Oklahoma            SUZANNE BONAMICI, Oregon
F. JAMES SENSENBRENNER, JR.,         JULIA BROWNLEY, California
    Wisconsin                        DONNA F. EDWARDS, Maryland
DANA ROHRABACHER, California         MARK TAKANO, California
RANDY NEUGEBAUER, Texas              ALAN GRAYSON, Florida
PAUL C. BROUN, Georgia               EDDIE BERNICE JOHNSON, Texas
RANDY WEBER, Texas
LAMAR S. SMITH, Texas
                                 ------                                

                         Subcommittee on Energy

                  HON. CYNTHIA LUMMIS, Wyoming, Chair
RALPH M. HALL, Texas                 ERIC SWALWELL, California
FRANK D. LUCAS, Oklahoma             ALAN GRAYSON, Florida
RANDY NEUGEBAUER, Texas              JOSEPH KENNEDY III, Massachusetts
MICHAEL T. McCAUL, Texas             MARC VEASEY, Texas
RANDY HULTGREN, Illinois             MARK TAKANO, California
THOMAS MASSIE, Kentucky              ZOE LOFGREN, California
KEVIN CRAMER, North Dakota           DANIEL LIPINSKI, Illinois
RANDY WEBER, Texas                   EDDIE BERNICE JOHNSON, Texas
LAMAR S. SMITH, Texas




















                            C O N T E N T S

                            October 29, 2013

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Chris Stewart, Chairman, Subcommittee 
  on Environment, Committee on Science, Space, and Technology, 
  U.S. House of Representatives..................................     8
    Written Statement............................................     9

Statement by Representative Suzanne Bonamici, Ranking Minority 
  Member, Subcommittee on Environment, Committee on Science, 
  Space, and Technology, U.S. House of Representatives...........    13
    Written Statement............................................    14

Statement by Representative Cynthia Lummis, Chairwoman, 
  Subcommittee on Energy, Committee on Science, Space, and 
  Technology, U.S. House of Representatives......................    15
    Written Statement............................................    16

Statement by Representative Eric Swalwell, Ranking Minority 
  Member, Subcommittee on Energy, Committee on Science, Space, 
  and Technology, U.S. House of Representatives..................    17
    Written Statement............................................    19

Statement by Representative Lamar S. Smith, Chairman, Committee 
  on Science, Space, and Technology, U.S. House of 
  Representatives................................................    20
    Written Statement............................................    20

Statement by Representative Eddie Bernice Johnson, Ranking 
  Member, Committee on Science, Space, and Technology, U.S. House 
  of Representatives.............................................    21
    Written Statement............................................    21

                               Witnesses:

The Honorable Charles McConnell, Executive Director, Energy & 
  Environment Initiative, Rice University
    Oral Statement...............................................    22
    Written Statement............................................    24

Dr. Richard Bajura, Director, National Research Center for Coal 
  and Energy, West Virginia University
    Oral Statement...............................................    30
    Written Statement............................................    32

Mr. Kurt Waltzer, Managing Director, The Clean Air Task Force
    Oral Statement...............................................    40
    Written Statement............................................    42

Mr. Roger Martella, Partner, Environmental Practice Group, Sidley 
  Austin
    Oral Statement...............................................    60
    Written Statement............................................    62

Discussion.......................................................    69

             Appendix I: Answers to Post-Hearing Questions

The Honorable Charles McConnell, Executive Director, Energy & 
  Environment Initiative, Rice University........................    92

Dr. Richard Bajura, Director, National Research Center for Coal 
  and Energy, West Virginia University...........................    97

Mr. Kurt Waltzer, Managing Director, The Clean Air Task Force....   102

Mr. Roger Martella, Partner, Environmental Practice Group, Sidley 
  Austin.........................................................   105

            Appendix II: Additional Material for the Record

Fresh Tech, Difficult Decisions, Basin Electric has a history of 
  trying new technology, submitted by Representative Kevin 
  Cramer, Subcommittee on Energy, Committee on Science, Space, 
  and Technology, U.S. House of Representatives..................   112

Letter addressed to The Honorable Gina McCarthy, Administrator, 
  U.S. Environmental Protection Agency, submitted by 
  Representative Kevin Cramer, Subcommittee on Energy, Committee 
  on Science, Space, and Technology, U.S. House of 
  Representatives................................................   114

Potential Impacts of EPA Air, Coal Combustion Residuals, and 
  Cooling Water Regulations report submitted by The Honorable 
  Charles McConnell..............................................   118

Impacts of Seven EPA Regulations chart submitted by The Honorable 
  Charles McConnell..............................................   192

Impact of EPA Regulations report submitted by The Honorable 
  Charles McConnell..............................................   196

Peak Year Employment Losses Caused by EPA Regulations (Five key 
  regions of the U.S.) map submitted by The Honorable Charles 
  McConnell......................................................   197

Peak Year Annual Household Income Losses Caused by EPA 
  Regulations (Five key regions of the U.S.) map submitted by The 
  Honorable Charles McConnell....................................   198

Total Employment Losses Caused by EPA Regulations, 2013-2034 
  (Five key regions of the U.S.)map submitted by The Honorable 
  Charles McConnell..............................................   199

Total employment losses caused by EPA regulations over four-year 
  period, 2013-2016 map submitted by The Honorable Charles 
  McConnell......................................................   200

 
         EPA POWER PLANT REGULATIONS: IS THE TECHNOLOGY READY?

                              ----------                              


                       TUESDAY, OCTOBER 29, 2013

                  House of Representatives,
             Joint Hearing with the Subcommittee on
                 Environment and the Subcommittee on Energy
               Committee on Science, Space, and Technology,
                                                   Washington, D.C.

    The Subcommittees met, pursuant to call, at 10:07 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Chris 
Stewart [Chairman of the Subcommittee on Environment] 
presiding.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Chairman Stewart. The joint hearing of the Subcommittee on 
Environment and the Subcommittee on Energy will come to order.
    Good morning, everyone. Welcome to today's joint hearing 
titled ``EPA's Power Plant Regulations: Is the Technology 
Ready?'' In front of each member are packets containing the 
written testimony, biographies and Truth in Testimony 
disclosures for today's witnesses.
    Before we get started, since this is a joint hearing 
involving two Subcommittees, I want to explain how we will 
operate procedurally so that all Members understand how the 
question-and-answer period will be handled. After first 
recognizing the Chair and the Ranking Members of the 
Environment and Energy Subcommittees, we will recognize those 
Members present at the gavel in order of seniority of the full 
Committee, and those coming in after the gavel will be 
recognized in order of their arrival. And just as a side note, 
we had a Republican conference this morning, and that is going 
a little bit long. We expect other Members to be joining us 
shortly. And in the event that Ms. Lummis and others are not 
here for their opening comments, we will allow them to have 
that time allocated to them for their comments upon their 
arrival. I now recognize myself for five minutes for an opening 
statement.
    I would like to thank the witnesses for being here today. I 
have had the chance to introduce myself and to meet you, and we 
appreciate your time and your sacrificing in attending with us, 
and we have an excellent panel before us, but I am disappointed 
EPA didn't accept our invitation to join us, and perhaps Ms. 
McCabe will be able to join us in the future hearing on this 
topic.
    The significance of EPA's proposed New Source Performance 
Standards for new power plants simply can't be understated. As 
the first GHG standards for the statutory sources under the 
Clean Air Act, the rule does more than affect power plants. It 
sets the benchmark for standards affecting all industries, 
standards that will touch every aspect of our economy. Most 
troubling, however, is the proposal appears to be based on a 
hypothetical plant. This is a very dangerous precedent.
    Under the Clean Air Act, setting the standards is basically 
a three-step process: first, establish the universe of 
adequately demonstrated technology; second, determine an 
achievable level based upon on that technology; and third, we 
consider the cost. In its proposal, EPA conveniently skips over 
step one. It then heavily focuses its analysis on modeling 
scenarios that project the answers to the steps two and three. 
These model-only-based arguments are outlandish to experts and 
engineers and to the general public. We don't need to look 
further than the botched-out rollout of healthcare.gov to 
appreciate the consequences of disregarding testing of a full-
scale product. But EPA thinks it can get away with it due, 
primarily, I think to the court's deference.
    But the focus of this hearing, and the first question the 
EPA must answer, is not what standards do we set or even is 
this cost-prohibitive? Instead, our hearing today focuses only 
on step one, and that is, is the technology ready? This 
question exposes the soft underbelly of the rule. When the 
facts and experts make clear the technology is not ready, there 
is no need to model emissions levels or ask economists to make 
projections.
    To be clear, EPA relies on DOE modeling to conduct their 
analysis, and this is how they circumvent the step one ``is it 
ready'' question. They simply assume that it is ready and then 
they plow ahead. The model is only as good as the assumptions 
that go into it. Even a critical design review cannot account 
for irregular behavior in a full-scale product. Take, for 
example, the first Tacoma Narrows Bridge. Everything appeared 
to be operational until a 40-mile-an-hour wind toppled what was 
the third longest suspension bridge in the world.
    Here, because the technology isn't ready, all of EPA's 
subsequent claims are purely hypothetical. Its claims are mere 
conjecture that ignores the fact that, in DOE's words, the 
technology is unproven.
    After the Agency has finished looking into its crystal 
ball, analyzing an imaginary world, it tries to justify its 
claim of adequate demonstration with weak post hoc citations to 
cherry-picked literature, experiences with vastly scaled-down 
technology components and power plants that are under 
construction.
    In order to comply with EPA's rule, carbon capture and 
sequestration is required. CCS, as it is commonly known, is not 
one piece of equipment; rather, is it a complicated system of 
many separate technologies. Each piece of this chain, which 
includes capture, compression, transportation and 
sequestration, must work in a seamlessly integrated fashion on 
a full-scale power plant. No CCS project in the world meets 
these criteria.
    In its proposed rule, EPA points to several examples of 
fledgling CCS projects as proof that the technology is 
adequately demonstrated, but let us take a look at some of 
those examples. If you could look here to the screen, here are 
a few examples of the Texas Summit Clean Energy project, which 
in EPA's words is ``under construction.'' My favorite picture, 
which is coming up, is at the project's web page, ``small 
common grave by train tracks in Penwell.'' Actually, this is 
the only CCS currently occurring on the site.
    Emissions modeling and economic projections based on a 
hypothetical plant are irrelevant. EPA's rule won't be 
implemented in a fairy tale world. This rule will affect real 
power plants and real people. This hearing is about what 
unicorns, Bigfoot, and the adequately demonstrated CCS for 
power plants all have in common: they are mere figments of the 
imagination.
    Talk of emissions levels and cost based on a hypothetical 
modeling scenario is just a bunch of noise, a distraction from 
the fact that the technology isn't ready. EPA attempts to 
lawyer its way around this fact but ultimately, EPA cannot 
paper over the truth. To quote John Adams: ``Facts are stubborn 
things.''
    I look forward to our experts' discussion today on this 
step one question: is the technology ready?
    [The prepared statement of Mr. Stewart follows:]

   Prepared Statement of Subcommittee on Environment Chairman Chris 
                                Stewart

    I would like to thank the witnesses for being here today. While we 
have an excellent panel before us, I am disappointed EPA didn't accept 
our invitation. Perhaps Ms. McCabe will be able to join us for a future 
hearing on this topic.
    The significance of EPA's proposed New Source Performance Standards 
(NSPS) for new power plants cannot be understated. As the first GHG 
standards for stationary sources under the Clean Air Act, the rule does 
more than affect power plants. It sets the benchmark for standards 
affecting all industries--standards that will touch every aspect of our 
economy.
    Most troubling, however, is the proposal appears to be based on a 
hypothetical plant. This is a dangerous precedent. Under the Clean Air 
Act, setting the standards is basically a three step process: First, 
establish the universe of ``adequately demonstrated'' technology. 
Second, determine an achievable level based on that technology. Third, 
consider the costs.In its proposal, EPA conveniently skips over step 1. 
It then heavily focuses its analysis on modeling scenarios that project 
the answers to the steps 2 and 3.
    These model-only based arguments are outlandish to the experts, 
engineers and the public. We don't need to look further than the 
botched roll-out of healthcare.gov to appreciate the consequences of 
disregarding testing of a full scale product. But EPA thinks it can get 
away with it due to the court's deference.
    But the focus of this hearing--the first question that EPA must 
answer--is not ``what standards do we set?'' or even ``is this cost 
prohibitive?'' Instead, our hearing today focuses on step 1: ``is the 
technology ready?''
    This question exposes the soft under-belly of the rule. When the 
facts and experts make clear the technology is not ready, there is no 
need to model emissions levels or ask economists to make projections.
    To be clear, EPA relies on DOE modeling to conduct their analysis--
that is how they circumvent the Step 1 ``is it ready'' question. They 
simply assume that it is and plow ahead. A model is only as good as the 
assumptions that go into it. Even a critical design review cannot 
account for anomalous behavior in a full scale product. Take for 
example the first Takoma Narrows Bridge. Everything appeared 
operational until a 40 mile-an-hour wind toppled what was the third 
longest suspension bridge in the world.
    Here, because the technology isn't ready, all of EPA's subsequent 
claims--are hypothetical. Its claims are mere conjecture that ignores 
the fact that, in DOE's words, the technology is ``unproven.''
    After the Agency is done looking into its crystal ball, analyzing 
an imaginary world, it tries to justify its claim of ``adequate 
demonstration'' with post hoc citations to cherry-picked literature, 
experience with vastly scaled down technology ``components,'' and power 
plants ``under construction.''
    In order to comply with EPA's rule, carbon capture and 
sequestration (CCS) is required. CCS, as it is commonly known, is not 
one piece of equipment; rather, is it a complicated system of many 
separate technologies. Each piece of this chain, which includes 
capture, compression, transportation and sequestration, must work in a 
seamlessly integrated fashion on a full scale power plant. No CCS 
project in the world meets these criteria.
    In its proposed rule, EPA points to several examples of fledgling 
CCS projects as proof that the technology is adequately demonstrated. 
Let's take a look at one of those examples.
    Here are a few pictures of the Texas Summit Clean Energy project, 
which in EPA's words is ``under construction.



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




    My favorite picture is at the bottom of the Project's web page--
``Small common grave by train tracks in Penwell.''



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Actually, that is the only CCS currently occurring at the site.
    Emissions modeling and economic projections based on a hypothetical 
plant are irrelevant. EPA's rule won't be implemented in a fairy tale 
world. This rule will affect real power plants and real people. This 
hearing is about what Unicorns, Bigfoot, and ``adequately 
demonstrated'' CCS for power plants all have in common--they are 
figments of the imagination.
    Talk of emissions levels and cost based on a hypothetical modeling 
scenario is just a bunch of noise--a distraction from the fact that the 
technology isn't ready.
    EPA attempts to ``lawyer'' its way around the facts. But 
ultimately, EPA cannot paper over the truth. To quote John Adams: 
``Facts are stubborn things; and whatever may be our wishes., our 
inclinations, or the dictates of our passion, they cannot alter the 
state of facts and evidence.''
    I look forward to our expert panel's discussion of this Step 1 
question: Is the technology ready?

    Chairman Stewart. With that, I now recognize the Ranking 
Member, Ms. Bonamici, for her opening statement.
    Ms. Bonamici. Thank you very much, Chairman Stewart and 
Chair Lummis, for holding this hearing today. And to our panel, 
welcome to the Committee on Science, Space, and Technology.
    I join those who are very pleased by the proposal from the 
Administration and the United States Environmental Protection 
Agency to take the first steps to set carbon emission limits 
for all future natural gas and coal power plants. We have known 
for some time that dangerously high levels of carbon dioxide 
pollution are altering our planet's climate system. According 
to the latest statistics compiled by the EPA, American power 
plants released more than 2.4 billion tons of carbon dioxide 
into the environment in 2011. Fossil fuel power plants are 
responsible for a majority of these emissions, and coal-fired 
power plants emit more carbon dioxide than any other source.
    Last month, the Intergovernmental Panel on Climate Change 
released the global comprehensive scientific assessment 
confirming that it is extremely likely that human influence has 
been the dominant cause of the observed warming since the mid-
20th century. The report also confirmed that carbon dioxide 
increases are primarily the result of fossil fuel emissions, 
and have increased by 40 percent since the pre-industrial 
period. Addressing the effects of carbon pollution globally 
will require an international effort, but the United States can 
and must be a leader and set an example for other nations by 
reducing our own carbon pollution at home. We must do a better 
job of preventing the harmful effects of carbon dioxide 
emissions produced by natural gas and coal-fired power plants.
    The coal industry's claim that the new carbon rule will 
kill jobs and bring down our recovering economy are scare 
tactics that have no basis in reality. The EPA proposal will 
not apply to existing power plants. The new rule will only 
apply to new coal-fired power plants that will be built in the 
future.
    As we look forward to the EPA issuing the new carbon 
emissions standard, it is worth reminding ourselves of what we 
get with these standards: better air quality, which means 
better health for us, for our children, and for our 
grandchildren. In the four decades since it was signed, the 
Clean Air Act has saved thousands of lives and helped fuel job 
growth.
    Additionally, and importantly, the passage of the Clean Air 
Act led to innovative advancements in technology. Environmental 
protection technology industries created innovations like 
catalytic converters, and sulfur dioxide and nitrogen oxide 
control technology. When the EPA took steps to require the 
application of these technologies, the industry made claims 
against those rules similar to the contentions that the coal 
industry is using today to undermine the carbon emission 
standard for new fossil fuel power plants: that our economy 
would be weakened and the industry would be devastated. And as 
we know, that did not come to fruition. Those industries 
adjusted and incorporated the technologies into their 
operations and went on to be more profitable than they had 
been, and we got cleaner air and healthier children.
    The future of our planet and our environment depends on us 
making smart investments in innovative environmental protection 
technologies and reducing the amount of greenhouse gases we 
emit into our environment. The new EPA rule under the Clean Air 
Act will incentivize the development of these technologies that 
will in turn result in a safer, more secure and less carbon-
dependent energy future.
    And before I close, Mr. Chair, I want to clarify. It is my 
understanding that according to the EPA, they did offer to 
appear at a hearing in November. They were unable to appear 
today because once the government reopened after the shutdown 
which, as you know, lasted more than a couple weeks, they did 
not have enough time to prepare for today with the backlog from 
the shutdown. So I don't think they intended not to show; they 
did not get an invitation until September 27th, immediately 
before the shutdown.
    So thank you, Mr. Chairman. I look forward to the testimony 
and answers to our questions, and I yield back.
    [The prepared statement of Ms. Bonamici follows:]

   Prepared Statement of Subcommittee on Environment Ranking Member 
                            Suzanne Bonamici

    Thank you Chair Stewart and Chair Lummis, for holding this hearing 
today. And, to our panel of witnesses, welcome to the Committee on 
Science, Space, and Technology.
    I join those who are very pleased by the proposal from the 
Administration and the United States Environmental Protection Agency to 
take the first steps to set carbon emission limits for all future 
natural gas and coal power plants. We have known for some time that 
dangerously high levels of carbon dioxide pollution are altering our 
planet's climate system. According to the latest statistics compiled by 
the EPA, American power plants released more than 2.4 billion tons of 
carbon dioxide into the environment in 2011. Fossil fuel power plants 
are responsible for a majority of these emissions, and coal-fired power 
plants emit more carbon dioxide than any other source.
    Last month, the Intergovernmental Panel on Climate Change released 
the global comprehensive scientific assessment confirming that it is 
``extremely likely that human influence has been the dominant cause of 
the observed warming since the mid-20th century.'' The report also 
confirmed that carbon dioxide increases are primarily the result of 
fossil fuel emissions, and have increased by 40 percent since the pre-
industrial period. Addressing the effects of carbon pollution globally 
will require an international effort, but the United States can and 
must be a leader and set an example for other nations by reducing our 
own carbon pollution at home.
    We must do a better job of preventing the harmful effects of carbon 
dioxide emissions produced by natural gas and coal-fired power plants. 
The coal industry's claim that the new carbon rule will kill jobs and 
bring down our recovering economy are scare tactics that have no basis 
in reality. The EPA proposal will not apply to existing power plants. 
The new rule will only apply to new coal-fired power plants that will 
be built in the future.
    As we look forward to the EPA issuing the new carbon emissions 
standard, it is worth reminding ourselves of what we get out of these 
standards: better air quality, which means better health for us, for 
our children, and for our grandchildren. In the four decades since it 
was signed, the Clean Air Act has saved thousands of lives and helped 
to fuel job growth.
    Additionally the passage of the Clean Air Act led to important 
advancements in technology. Environmental protection technology 
industries created innovations like catalytic converters, and sulfur 
dioxide and nitrogen oxide control technology. When the EPA took steps 
to require the application of these technologies, the industry made 
claims against those rules similar to the contentions that the coal 
industry is using today to undermine the carbon emission standard for 
new fossil fuel power plants: that our economy would be weakened and 
the industry would be devastated. As we know, that never came to 
fruition. Those industries adjusted and incorporated the technologies 
into their operations and went on to become more profitable than they 
had ever been. And, we got cleaner air and healthier children.
    The future of our planet and our environment depends on us making 
smart investments in innovative environmental protection technologies 
and reducing the amount of greenhouse gases we emit into our 
environment. The new EPA rule under the Clean Air Act will incentivize 
the development of these new technologies that will in turn result in a 
safer, more secure, and less carbon dependent energy future.

    Chairman Stewart. Thank you, Ms. Bonamici, and regardless 
of the reasons why, we do look forward to subsequent 
conversations with the EPA, and we anticipate that they will be 
accommodating to us at that point.
    The chair now recognizes the chairwoman of the Subcommittee 
on Energy, Ms. Lummis, for her opening statement.
    Chairwoman Lummis. Thank you, Mr. Chairman and Ranking 
Member. Good morning, and thank you, witnesses, for joining us 
at today's hearing on carbon capture and storage technology. I 
do wish the EPA was here today, at least to listen to our 
concerns, and I consider an invitation extended on September 
27th for a hearing that is occurring about a month later to be 
pretty good time to prepare, especially since it is their own 
rules that we are asking them to defend.
    The EPA has proposed New Source Performance Standards for 
any future coal-fired power plant. These standards can be 
achieved only through the application of carbon capture and 
storage, a technology that is not currently in operation at a 
commercial-scale power plant anywhere in the world.
    Instead of basing these requirements on technologies that 
are actually proven achievable on a commercial scale, EPA is 
redefining and stretching the requirement that technology be 
adequately demonstrated. This leaves many unanswered questions: 
Will the carbon capture technology function as intended when 
installed in full-scale plants? Is the pipeline infrastructure 
available for transportation on a large scale? And what is the 
liability for storage of carbon dioxide over the long term? EPA 
ignores many of these questions as the rule only impacts future 
coal plants.
    The Obama Administration has spent much of the past few 
years casting coal as a villain. This regulation effectively 
bans the building of new coal plants, and fulfills President 
Obama's campaign promise to bankrupt coal companies.
    But this hearing is not only about the proposed regulation. 
It is also about the legal precedent of mandating unproven 
technologies. The distinction the agency makes between coal and 
natural gas plants is dubious at best. By claiming that carbon 
capture technology is adequately demonstrated for coal, there 
is scant justification, legal or technical, for not requiring 
it for natural gas units. If EPA is allowed to twist the 
definition of ``adequately demonstrated'' to include yet-to-be-
proven technologies for power plants, there is also little 
time--excuse me--there is also little to stop EPA from doing 
the same for other manufacturers like refiners, cement or steel 
plants. Not only would this throw our economy into a tailspin, 
it would force manufacturers to flee to countries with less 
restrictive environmental requirements, costing jobs and 
increasing global emissions.
    Coal is our country's most abundant and affordable energy 
source. Thanks to the deployment of proven technologies, its 
production is much safer and environmentally sound, and the 
Clean Air Act has worked. It has produced cleaner air every 
year since it was passed. Coal is not only our country's most 
abundant and affordable energy source, one that the President 
is making clear that his goal is to apply standards to existing 
plants as well, thereby making it difficult for existing plants 
to stay in business. This policy of picking winners and losers, 
of saying we are going to have wind and solar energy but not 
fossil fuel energy or nuclear energy, even though those are the 
only ones sufficient to create baseload, is reckless, and it is 
dangerous for our country if we want to advance economically 
and create jobs and return to a sound economy.
    I continue to support an all-of-the-above energy policy, 
not one based on politics, and all of the above means all of 
the above including fossil fuel and including wind and solar.
    From an economic outlook, none of this should be taken 
lightly. Affordable, reliable electricity is the backbone of a 
healthy economy. Rising electricity prices affect everything, 
the cost of basic commodities, like food to our competitive 
position in the world. And because increasing energy prices act 
are like a regressive tax, they hit the poor and those on fixed 
incomes the hardest. Just ask any single mother who pulls up to 
a gas station when the price of gasoline hovers near 4 bucks.
    America cannot afford to allow EPA edicts to control our 
energy policy. These new regulations will make life harder for 
working families, for single moms struggling to get by, and for 
anyone who lives paycheck to paycheck. This is something we 
should be guarding against, not encouraging.
    I look forward to the hearing. I look forward to this panel 
of witnesses. I want to hear you discuss the development of 
this technology, its potential as well as its limitations. I 
also want to understand the impact this rule could have on 
future advances in carbon capturing and also conversion of coal 
to liquids and other opportunities that create a cleaner future 
for our country while enjoying and utilizing our ingenuity and 
our abundant coal resources. If you really want to see whether 
somebody is affected by coal, I strongly encourage you to go 
out around 12:30 on the west front of the Capitol today. There 
is an American energy jobs rally. There are coal miners and the 
companies they serve here on the Capitol steps, and if you 
think that it is not going to matter or whether you can pass 
regulations that the technology is unproven but will suddenly 
appear and the prices that won't go up and that coal plants 
will continue to be built and those jobs will still exist, try 
listening to the people on the Capitol steps here today who 
will prove you wrong with their real-life stories.
    Thank you very much, Mr. Chairman. I yield back the balance 
of my time.
    [The prepared statement of Mrs. Lummis follows:]

  Prepared Statement of Subcommittee on Energy Chairman Cynthia Lummis

    Good morning and thank you for joining us for today's hearing on 
Carbon Capture and Storage Technology.
    The EPA has proposed New Source Performance Standards (NSPS) for 
any future coal fired power plants. These standards can be achieved 
only through the application of Carbon Capture and Storage (CCS)--a 
technology that is not currently in operation at a commercial scale 
power plant anywhere in the world.
    Instead of basing these requirements on technologies that are 
actually proven achievable on a commercial scale, EPA is redefining and 
stretching the requirement that technology be ``adequately 
demonstrated.'' This leaves many unanswered questions: will the 
installment of carbon capture technology be functional? Are there plans 
for transportation on a large scale basis? What is the liability for 
storage of carbon dioxide over the long-term?
    EPA would like Congress oversight of these standards to include 
only its impact on future coal plants. The Obama Administration has 
spent much of the past few years casting coal as a villain. This 
regulation effectively bans the building of new coal plants, and 
fulfills President Obama's campaign promise to ``bankrupt'' coal 
companies.
    But this hearing is not only about the proposed regulation. It is 
also about the legal precedent of mandating unproven technologies. The 
distinction the agency makes between coal and natural gas plants is 
dubious at best. By claiming that carbon capture technology is 
adequately demonstrated for coal, there is scant justification--legal 
or technical--for not requiring it for natural gas units.
    If EPA is allowed to twist the definition of ``adequately 
demonstrated'' to include yet-to-be-proven technologies for power 
plants, there is also little to stop EPA from doing the same for other 
manufacturers like refiners, cement or steel plants. Not only would 
this throw our economy into tail-spin, it would force manufacturers to 
flee to countries with less strict environmental requirements, costing 
jobs and increasing global emissions.
    Coal is our country's most abundant and affordable energy sources. 
Thanks to the deployment of proven technologies, its production is safe 
and environmentally sound. The President has already made it clear that 
his goal is to apply these standards to existing plants as well. This 
policy of picking winners and losers through environmental regulations 
is reckless and dangerous. I continue to support an all-of-the-above 
energy policy, not one based purely on politics.
    None of this should be taken lightly. Affordable, reliable 
electricity is the backbone of a healthy economy. Rising electricity 
prices affect everything--from the cost of basic commodities, like 
food--to our competitive position in the world. And because increasing 
energy prices act as a regressive tax, they hit the poor and those on 
fixed incomes the hardest.
    America cannot afford to allow EPA edicts to control our energy 
policy. These new regulations will make life harder for working 
families, for single moms struggling to get by, and for anyone who 
lives paycheck to paycheck. This is something we should be guarding 
against, not encouraging.
    I look forward to hearing the panel of witnesses discuss the 
development of this technology, its potential and limitations and the 
impact this rule could have on future advances. Thank you for joining 
us.

    Chairman Stewart. Thank you, Ms. Lummis.
    The Chairman now recognizes the Ranking Member of the 
Subcommittee on Energy, Mr. Swalwell, for his opening 
statement.
    Mr. Swalwell. Thank you, Chairman Stewart and Chairman 
Lummis, for holding this hearing, and I look forward to working 
with our witnesses today.
    I do have to say, I think it is unfair, Mr. Chairman, to 
accuse the EPA of not accepting the invitation to be here 
today. That invitation was extended right before the shutdown 
and they have offered to appear in November. I look forward to 
having them here, but you can't turn off the power and then 
complain that no one answered the phone, and that is what I 
think is happening right here, and I think that is an unfair 
way to start this hearing.
    Global climate change, though, is one of the greatest 
challenges that we face, and last month, the Intergovernmental 
Panel on Climate Change released a report which states with 95 
percent certainty that human activities are responsible for 
climate change. This report was based on a rigorous review of 
thousands of scientific papers published by over 800 of the 
world's top scientists. The report also makes it clear that if 
we do not take steps to halt this damage and make this change, 
the repercussions for humans and the environment will be 
catastrophic. We need to move forward and take the necessary 
steps to combat the warming of our planet before these impacts 
become inevitable.
    We know that humans are impacting the climate in a number 
of ways, through emissions from the vehicles we drive, 
deforestation and changes in agricultural practices among other 
things. But fossil fuel-based power plants are the biggest 
producers of greenhouse gasses, accounting for roughly a third 
of our total emissions last year.
    I have repeatedly said, just as Chairman Lummis has, that I 
favor an all-of-the-above approach to energy production. As I 
often say, if we can make it safe, let us make it happen. But I 
have to make it clear that we must take steps to make sure that 
we are reducing greenhouse gas emissions and lessening their 
impact on human health, the environment and global change.
    That is exactly what the proposed standards for new coal 
and natural burning gases aim to do, which is why I support 
their implementation. And like Ms. Bonamici, I want to 
reinforce that they will have no effect on existing plants, so 
we aren't going to see a wave of shuttered plants and massive 
layoffs as a result of their implementation, and if we can 
display the first slide? Slide number one that is going to be 
displayed shows all of the existing coal plants in the United 
States, approximately 600 of them. Slide two is a map of the 
United States, and it has on it all of the plants that are 
affected by these new standards. You don't need a magnifying 
glass to see that the number is zero. Zero plants are affected 
by these standards. Zero jobs today will be lost by these new 
standards. And I think it is important not to confuse the issue 
here.
    There are in-depth discussions underway about establishing 
standards for existing plants, which the EPA currently plans to 
propose next June, and there are ongoing, extensive engagement 
with all of the stakeholders to make sure that those standards 
will be flexible and won't have negative effects on state 
economies and job creation. I think we also cannot discount the 
value of certainty. The fact that there was uncertainty in what 
the regulations were going to be was also affecting job 
creation in existing plants and plans for new plants, and now 
that we have standards, that lends certainty to the 
marketplace.
    Finally, there is nobody I know in Congress who 
intentionally wants to destroy or kill a job. I think what we 
want to do here is to make sure that we have healthy air for 
our children to breathe, a healthy future, and mitigate the 
effects on the economy to the best degree possible, but if you 
want to count job-killing by the numbers, the cost of the 
government shutdown for 16 days: 120,000 jobs, $24 billion to 
our economy. There is no policy that we can create today or 
that the EPA has created today that will kill as many jobs as 
that or wreak as much havoc on our economy as that government 
shutdown, and I think if we want to compare the two, that is a 
stark, stark contrast.
    Finally, my colleagues on the other side of the aisle often 
say that our children and grandchildren will be left holding 
the bag if we do not reduce our deficits and national debt, and 
something I greatly agree with them about, but I think 
similarly, future generations will be the ones who will suffer 
if we do not take important and meaningful steps to confront 
climate change, but in this case, as the global scientific 
community has made clear again and again, the consequences of 
our inaction will be much, much more severe.
    And with that, Mr. Chairman, I yield back the balance of my 
time.
    [The prepared statement of Mr. Swalwell follows:]

   Prepared Statement of Subcommittee on Energy Ranking Member Eric 
                                Swalwell

    Thank you Chairman Stewart and Chairman Lummis for holding this 
hearing, and I also want to thank the witnesses for their testimony and 
for being here today.
    Global climate change is one of the greatest challenges that we 
face. Last month, the Intergovernmental Panel on Climate Change 
released a report which states with 95 percent certainty that human 
activities are responsible for climate change. This report was based on 
a rigorous review of thousands of scientific papers published by over 
800 of the world's top scientists. The report also makes it clear that 
if we don't take steps to halt this change, the repercussions for 
humans and the environment will be catastrophic. We now need move 
forward and take the necessary steps to combat the warming of our 
planet before these impacts become inevitable.
    We know that humans are impacting the climate in a number of ways--
through emissions from the vehicles we drive, deforestation, and 
changes in agricultural practices among other things. But fossil fuel-
based power plants are the biggest producers of greenhouse gasses, 
accounting for roughly a third of our total emissions last year.
    I have repeatedly said that I am for an ``all of the above'' 
approach to energy production as we transition to clean energy 
technologies. But I have also made it clear that, as part of this ``all 
of the above'' approach, we must take steps to ensure that we are 
reducing greenhouse gas emissions and lessening their impact on human 
health, the environment, and the global climate. That is exactly what 
the proposed standards for new coal and natural gas burning plants aim 
to do, which is why I support their implementation. And, like Ms. 
Bonamici, I want to reinforce that these are only proposed standards 
for any new plants that may be built and will have no effect on 
existing plants, so we aren't going to see a wave of shuttered plants 
and massive layoffs as a result of their implementation. There are in-
depth discussions underway about establishing standards for existing 
plants, which the EPA currently plans to propose next June, and there 
is ongoing, extensive engagement with all stakeholders to make sure 
that those standards will be flexible and won't have negative effects 
on state economies and job creation.
    It has been my hope that Congress would act on this issue 
immediately. Unfortunately, too many of my colleagues choose to ignore 
the scientific consensus that human beings are playing a significant 
role in the warming of our planet, so I'm not expecting that much will 
be done legislatively to sufficiently address this issue anytime soon. 
The President made it clear in his State of the Union Address back in 
January that, in the absence of Congressional action, his 
Administration was going to take the lead in efforts to reduce 
greenhouse gas emissions. These proposed standards reflect that 
commitment, and I fully support the President in this effort.
    My colleagues on the other side of the aisle often say that our 
children and grandchildren are going to be left holding the bag if we 
don't reduce our deficits and the national debt, and I agree that it 
would be irresponsible of us not to take serious steps to put our 
fiscal house in order. Similarly, future generations will be the ones 
who will suffer if we don't take immediate and meaningful steps to 
confront climate change, but in this case--as the global scientific 
community has made clear again and again--the consequences of our 
inaction will be far more severe.

    Chairman Stewart. Thank you, Mr. Swalwell.
    Very quickly, we understand that there are differences of 
opinion and we can discuss or argue among ourselves whether the 
EPA had adequate time, some of us feel that they did, others 
may disagree with that. What is really clear is that in a 
pattern that has been established for more than just this 
hearing but for, frankly, for as long as I've sat in this 
chair, we have had to struggle to get them to come and to 
participate in many of our hearings, and this is just another 
example of that. But as I said earlier, we look forward to 
working with them and getting their representatives to come and 
meet with us.
    With that, we will now turn to the Chairman of the full 
Committee, Chairman Smith, for his opening statement.
    Chairman Smith. Thank you, Mr. Chairman.
    Today's hearing will allow us to hear from top experts in 
energy and environmental fields and examine important technical 
issues associated with EPA's new power plant regulations.
    In the regulatory process, it is often difficult to 
separate technical issues from legal issues, and the technology 
question we focus on here today is also ultimately a legal 
question.
    If you take a look at the EPA's rule on air quality 
standards, the proposal looks more like a legal brief than a 
rule about protecting the air. It appears the EPA is up to an 
old legal trick: if you can't win the argument on the merits, 
start arguing about the definition of words.
    In this proposal, the EPA redefines the law to accommodate 
its ever-expanding regulatory agenda. By redefining what the 
term ``adequately demonstrated'' means in the Clean Air Act, 
the EPA is making another major power grab, one that reaches 
well beyond coal. That is because the New Source Performance 
Standards for power plants is the first greenhouse gas standard 
under the Clean Air Act. Consequently, it sets the precedent 
for all other sources, and underpins everything from the price 
we pay at the pump to the cost of electricity and food.
    If the EPA continues to play fast and loose with the law, 
we can expect to see more costly, heavy-handed rules that risk 
jobs and economic growth. Working families will bear these 
costs.
    Even more troubling is the way this proposal appears to 
intentionally block the courts from reviewing the rule. By 
claiming that no one will build coal-fired power plants anyway, 
the EPA wants to prevent the courts from reviewing the rule on 
its merits.
    Our founders recognized that elections alone may not 
provide adequate protection for the liberties they fought so 
hard to establish. They made sure that the Constitution 
provides a means for the American people to obtain a fair 
hearing before impartial judges. One of the most underrated 
rights Americans enjoy today may be the right to judicial 
review. This proposal is an attempt to prevent judicial review. 
Americans deserve to understand exactly what this proposal 
would do and retain the right to challenge it.
    Thank you, Mr. Chairman. Before I yield back, let me 
apologize at the outset. I have another committee that is in 
the middle of marking up legislation that I will go to and 
another committee is also having a hearing, so I will be 
shuttling back and forth but appreciate your holding this 
hearing. It is a very, very important one. Yield back.
    [The prepared statement of Mr. Smith follows:]

       Prepared Statement of Full Committee Chairman Lamar Smith

    Today's hearing will allow us to hear from top experts in energy 
and environment fields and examine important technical issues 
associated with EPA's new power plant regulations.
    In the regulatory process, it's often difficult to separate 
technical issues from legal issues. And the technology question we 
focus on here today is also ultimately a legal question.
    If you take a look at the EPA's rule on air quality standards, the 
proposal looks more like a legal brief than a rule about protecting the 
air.
    It appears the EPA is up to an old legal trick: If you can't win 
the argument on the merits, start arguing about the definition of 
words.
    In this proposal, the EPA re-defines the law to accommodate its 
ever-expanding regulatory agenda. By re-defining what the term, 
``adequately demonstrated,'' means in the Clean Air Act, the EPA is 
making another major power grab--one that reaches well beyond coal.
    That's because the New Source Performance Standards for power 
plants is the first greenhouse gas standard under the Clean Air Act. 
Consequently, it sets the precedent for all other sources, and 
underpins everything from the price we pay at the pump to the cost of 
electricity and food.
    If the EPA continues to play fast-and-loose with the law, we can 
expect to see more costly, heavy-handed rules that risk jobs and 
economic growth. Working families will bear these costs.
    Even more troubling is the way this proposal appears to 
intentionally block the courts from reviewing the rule. By claiming 
that no one will build coal-fired power plants anyway, the EPA wants to 
prevent the courts from reviewing the rule on its merits.
    Our founders recognized that elections alone may not provide 
adequate protection for the liberties they fought so hard to establish. 
They made sure that the Constitution provides a means for the American 
people to obtain a fair hearing before impartial judges.
    This may be one of the most under-rated rights Americans enjoy 
today: the Right to Judicial Review.
    This proposal is an attempt to prevent Judicial Review. Americans 
deserve to understand exactly what this proposal would do and retain 
the right to challenge it.

    Chairman Stewart. Thank you, Mr. Chairman, and you are 
welcome to participate as much as you can. Thank you.
    If there are Members who wish to submit additional opening 
statements, your statements will be added to the record at this 
point.
    [The prepared statement of Ms. Johnson follows:]

   Prepared Statement of Full Committee Ranking Member Eddie Bernice 
                                Johnson

    I want to thank Chairman Stewart and Chairwoman Lummis for holding 
this hearing to discuss the EPA's proposal to set national carbon 
emission limits for new natural gas and coal power plants. I also want 
to thank the witnesses for being here today to provide their input on 
this important topic.
    The benefits from the Clean Air Act are countless; they come in the 
form of lives saved, reductions in illnesses, technological 
advancements in environmental protection, and economic growth. I join 
my colleagues Ms. Bonamici and Mr. Swalwell in expressing my approval 
of the Obama Administration's and the EPA's first steps toward 
protecting future generations from the harmful effects of carbon 
pollution that threatens our health and is changing our climate system. 
And, they are making those steps by advancing clean energy 
technologies. We would all prefer to address these important issues 
with common sense legislation, but until we can agree on both sides of 
the aisle that climate change is a real and pressing problem, bi-
partisan collaboration on solutions does not appear to be possible.
    Throughout history industry has often resisted addressing 
environmental problems that emerge as a result of a greater scientific 
understanding of our impact on the environment and our health. And, in 
many of these cases, they simply will not do so without regulatory 
intervention and proper government oversight. I challenge industry 
leaders to be a helpful partner in reducing our carbon emissions going 
forward. If they will, we can have both a cleaner environment and a 
strong economy.

    Chairman Stewart. As our witnesses should know, spoken 
testimony is limited to five minutes, after which the Members 
of the Committee have five minutes each to ask you questions, 
and your written testimony will also be included in the record 
of the hearing.
    And I would like now to introduce our witnesses today, and 
I will introduce you individually. We will turn the time over 
to you for five minutes, then I will introduce the next 
witness.
    Our first witness is the Hon. Charles McConnell, Executive 
Directive at the Energy and Environment Initiative, Rice 
University. Previously, Mr. McConnell served as the Assistant 
Secretary for Fossil Fuel at the U.S. Department of Energy. At 
DOE, he was responsible for the strategic policy, leadership, 
budgets, project management, research and development of the 
Department's coal, oil and gas and advanced technology 
programs, and the National Energy Laboratory's Technology 
Laboratory. Prior to joining DOE, Mr. McConnell served as Vice 
President of the Carbon Management at Battelle Energy 
Technology. And Mr. McConnell, we turn the time over to you now 
for five minutes for your opening statement.

            TESTIMONY OF THE HON. CHARLES MCCONNELL,

                      EXECUTIVE DIRECTOR,

             ENERGY & ENVIRONMENT INITIATIVE, RICE

    Hon. McConnell. Thank you. It is an honor to participate at 
this hearing and have the opportunity to have a fact-based 
discussion about the science of CCS technology. I might also 
add, it is refreshing to prepare my remarks today without any 
OMB oversight.
    Let me start by saying that we do have a problem. CO2 
capture, utilization and storage technology is a requirement to 
meet greenhouse gas standards. It is a requirement to meet New 
Source Performance Standards, and it has not been commercially 
demonstrated at scale and cannot be deemed demonstrated 
technology.
    CCS is an environmental solution. It is an energy security 
issue, and it is also about economic competitiveness. All three 
of these things contribute to our success as a Nation. CCS has 
the potential to make us stronger and more successful as long 
as we don't forfeit that potential by rushing deployment of a 
technology that is not yet ready.
    The world is and will remain dependent for many decades to 
come on fossil fuels to provide low-cost, available and 
reliable energy. The International Energy Agency has already 
projected by 2050 the world's demand for energy will double. 
One point seven billion people in the world today live in 
energy poverty. And yet by 2050, because we will need every 
single megawatt, megatherm and energy source available to us, 
we will still have 85 percent of our energy in the world 
provided by fossil fuels. So having fossil technology isn't an 
option, it is a requirement, as is an all-of-the-above 
strategy.
    Commercial CCS technology is not available to meet the 
EPA's proposed rule. The cost of capture technology is much too 
high to be commercially viable, much the same as the economic 
threshold similar to subsidized carbon-free alternatives such 
as solar, wind, et cetera. We are investing in all of the above 
across the board because it is critical to our future.
    In June, the Administration released its Climate Action 
Plan, a comprehensive program of domestic GHG emission 
reductions. The President's plan can only be achieved through 
the broad deployment of low-cost, commercially viable 
technology for capturing and permanently and safely storing 
CO2 from all fossil sources.
    But it is about energy security as well. CCS is necessary 
to assure a sustainable, diversified domestic energy portfolio 
for our energy security. It enables a true all-of-the-above 
energy portfolio. It is also a business strategy. CCS, or CCUS, 
where the U means utilization of CO2 for purposes 
such as enhanced oil recovery, create a marketplace for 
implementation of these applications. It leads to broad 
deployment and it also gives us a commercial and business 
background to bring that technology to the marketplace. 
CO2 EOR has been practiced in this country for over 
50 years very successfully, and it includes the safe, long-term 
permanent storage of CO2. But as I said, the 
technology isn't ready yet. The technology exists for 
separation and capture of CO2 at the plant but it 
increases the cost of generated electricity by as much as 50 to 
80 percent, and that depends on the power plant or the 
industrial application in which it is being used. CO2 
pipeline and transmission systems are mature but they face 
incredible siting difficulties for expansion of this 
marketplace.
    DOE's regional carbon sequestration partnerships must 
continue to develop the needed database to help analyze the 
success of this deployment, and of course, the injection of 
CO2 faces regulatory barriers as well: unresolved 
property rights, long-term liability issues, all of the issues 
that in many cases the EPA is very involved in and needs to be 
supportive of to allow this technology to move forward.
    But the technology is being demonstrated. It is 
successfully deployed in some early first-of-a-kind projects 
but it is clearly not ready. It is really that simple. Focusing 
other questions are hypothetical but not about the demonstrated 
results of these plants or projects or the technology 
associated with it. The technology can be made ready over time, 
and will have to have the support of the EPA as well as the 
marketplace and industry.
    To summarize, in my opinion, it is disingenuous to state 
that the technology is ready, and at the same time, starve the 
R&D programs for our Nation's energy security, global 
competitiveness or our global leadership in terms of economic 
performance. Thank you.
    [The prepared statement of Hon. McConnell follows:]


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    Chairman Stewart. Thank you, Mr. Secretary.
    Our second witness today is Dr. Richard Bajura, Director of 
the National Research Center for Coal and Energy at West 
Virginia University. And Doctor, did I pronounce your name 
correctly?
    Dr. Bajura. Yes, sir.
    Chairman Stewart. Thank you. He has spent the past 21 years 
facilitating research programs in energy at West Virginia 
University, and during this time he developed and managed eight 
major interdisciplinary and interinstitutional research 
programs addressing a wide range of energy applications from 
research extraction to alternative fuels. And Doctor, we turn 
the time over to you now.

                TESTIMONY OF DR. RICHARD BAJURA,

               DIRECTOR, NATIONAL RESEARCH CENTER

               FOR COAL AND ENERGY, WEST VIRGINIA

    Dr. Bajura. Thank you, Mr. Chairman. Thank you for inviting 
me.
    I consider coal to be a valuable resource and I believe we 
should maintain technology options to keep it as part of our 
energy future. As proposed, I think the EPA regulations will 
stifle coal's continued involvement.
    I will summarize my comments in terms of lessons and 
observations that we have gained over the years of using coal 
technologies. Pulverized coal technologies are mature, 
integrating gasification and combined cycle technologies. There 
are only nine of them operating on coal in the world and only 
four in the United States. We have also learned that 
performance degrades with scale-up. What we learned in the 
laboratory doesn't always hold true when we go into the full-
scale system. Many gremlins occur. Also, we have observed that 
delays in implementing projects, financing, technology costs 
and meeting schedules are important in determining the 
deployability of a technology.
    The next topic deals with first-of-a-kind and nth-of-a-kind 
technologies. Over the years, we have developed what I will 
call learning-curve theory. What we find is the most expensive 
plant occurs on the first edition. By the time we get to the 
nth edition, the technology is mature and costs are reduced. 
Learning-curve technology for coal uses a factor that they call 
.06, which means that by the time you get to mature technology, 
you have reduced the cost by 25 percent. In the case of the 
Kemper plant, a $4 billion program, 25 percent reduction is $1 
billion. Also in the case of Kemper, we are talking about 
$8,000 a kilowatt for the cost of the plant versus $1,000 a 
kilowatt for a natural gas combined cycle plant.
    Coal is different from gas. Coal comes in three typical 
forms: bituminous, subbituminous and lignite. Natural gas, you 
can buy it anywhere. It is the same thing. Also, when you look 
at the deployment of technologies, what I learned on my 
technology is different from what you learn on your 
technologies. I don't share my results. As a result, while we 
might say we have different examples of technologies, they are 
almost first of a kind because they don't share the technology, 
they have different systems they apply to different coal. 
Technology integration is also important. We have to integrate 
a plant that has a new component with a pipeline, with a 
reservoir, and in many cases with the grid because we have to 
integrate the up-and-down performance of coal plants that might 
need changed from baseload to intermittent or peaking time of 
the situation.
    In terms of the demonstrations that we have talked about 
that relate to this hearing, there are nine demonstrations that 
are referenced. Three relate to chemicals production. Two are 
IGCC plants. One is them is based on the Kemper plant, which 
has not demonstrated, and the other one is a first of a kind as 
well. Saline aquifers are the kind of aquifers that I think we 
are looking at with future-gen deployments, and there is only 
one example of that, and that future-gen plant is not going to 
be onboard until 2017.
    We have heard that capture technology is very expensive for 
coal plants. Capture technology for the most part is based on 
amines. We know that works. But these technologies were 
developed for chemical plants where the products that you sell 
can justify the extra cost they would need to use those 
technologies. It is very expensive for a standalone coal plant.
    Also, we have issues concerned with legal and societal 
issues that also affect the cost of a plant and must be 
addressed. Cost and feasibility are not necessarily 
demonstrated. We can't find guarantees for the projects that we 
would want to put in place, and I am concerned with the 
legislation in the way it is proposed, it will stifle 
development and planning for new plants, and without a driver, 
there will be no technology developed. Our friends in China are 
very interested in developing coal-based technologies, they 
have strong government support and they are ahead of us in 
chemicals production, in power generation, and in their next 
five-year plan, they will be ahead of us in CCS deployment. We 
require strong Federal support to maintain coal's presence in 
the marketplace, and I believe Congress and the Federal 
Government and the Executive Branch should be more supportive 
of coal and maintaining it as part of our mix.
    In summary, I don't think the technologies that we are 
discussing are ready for deployment in the sense of being 
fundable by financiers or getting guarantees. I believe that if 
we are not keeping coal in our future mix, we will run out of 
workforce. People like me are getting older. And I believe 
Federal support will help us to achieve the kind of goals that 
we want in introducing new technologies. Thank you.
    [The prepared statement of Dr. Bajura follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Chairman Stewart. Thank you, Dr. Bajura.
    Our third witness is Mr. Kurt Waltzer, Managing Director at 
the Clean Air Task Force. In this role, he provides oversight 
and support of organizational management as well as ongoing 
development and implementation of organizational strategy. Mr. 
Waltzer has led the development of incentive policies for 
carbon capture that have been included in Federal legislative 
proposals and helped lead the NGO support for several carbon 
capture projects. Mr. Waltzer.

                 TESTIMONY OF MR. KURT WALTZER,

                       MANAGING DIRECTOR,

                    THE CLEAN AIR TASK FORCE

    Mr. Waltzer. Chairman Stewart, Chairman Lummis and Ranking 
Members Swalwell and Bonamici, thank you for the opportunity to 
testify today. My name is Kurt Waltzer, and I am the Managing 
Director of the Clean Air Task Force, an environmental 
nonprofit dedicated to catalyzing the development and global 
deployment of low-carbon energy technologies.
    First, let me explain why we believe CCS is needed. The 
world's power sector annual emissions are expected to double 
from 12 to 24 gigatons by mid-century. By 2015, China will have 
added 900 gigawatts of coal plants on top of our roughly 300 
gigawatts of coal plants in the United States. India and other 
developing countries are following suit. Without significant 
CCS deployment, we simply will not be able to achieve the deep 
reductions in CO2 emissions that are necessary to 
reduce the risk of catastrophic climate change.
    Returning to the question in front of the Committee, CCS is 
technically feasible in the context of this rule because the 
rule requires partial, not full CCS, and because the rule 
allows a plant up to eight years to meet this standard. The 40 
percent capture level is well within the experience of the 
technology. Moreover, if a plant intends to capture CO2 
on the day it opens and can't because of unforeseen issues 
with, for example,, completion of a CO2 pipeline, 
the air compliance flexibility provision allows the plant to 
meet the standard over a longer time frame. The partial capture 
and sequestration requirement and flexibility provisions along 
with the ability to store CO2 in conjunction with 
enhanced oil recovery, or EOR, helps ensure the rule can be met 
at reasonable cost, even before any Federal subsidies are 
considered.
    CATF undertook an analysis of the initial NSPS rule first 
proposed in April of 2012. As we can see by figure one on page 
8 of my testimony, the cost of electricity at a new coal plant 
that meets the partial CCS standard with EOR and takes 
advantage of the regulatory flexibility provision is only 13 
percent higher than that of a new coal plant without CCS. CCS 
has been adequately demonstrated over its 40-year history in 
the United States. Since the 1970s and 1980s, large industrial 
plants have captured and stored large amounts of CO2 
on a per-plant basis up to 7 million tons per year. This 
experience is migrating to power plants. Nearly all new coal 
plants plan to have some level of CCS installed when they open. 
These include projects like the 582-megawatt Kemper plant in 
Mississippi, the Texas Clean Energy project and the Sask 
Power's coal retrofit project in Canada, known as Boundary Dam.
    Each of the components of CCS have had a long history of 
use in the United States and around the world. Over 850 
megatons of CO2 have been stored underground in 
Texas for EOR operations over the last 30 years. There are 
currently 4,000 miles of CO2 pipeline connecting 
CO2 with enhanced oil recovery projects. Pre-
combustion capture technology has been commercially available 
since the 1950s and 1960s with over 200 plant applications 
across the world, and post-combustion capture has been 
successfully applied to natural gas and coal plants with 
commercial guarantees offered from several vendors.
    Does CATF also support incentives for CCS? Absolutely. Many 
technologies such as SO2 scrubbers that have been 
deployed based on emission limits have continued to receive 
subsidies in order to make the technology more efficient and 
less costly. The EPA has long recognized that such subsidies 
are appropriately considered in evaluating the real cost of a 
standard. CATF is a member of the National EOR Initiative, an 
unusual coalition of advocacy groups, industry and labor 
organizations that are coming together in support of self-
financing production tax credits for CO2 EOR sourced 
by power plants and industrial sources.
    I should note that in addition to EOR's value in reducing 
cost, it also provides significant potential scale. The 
National Energy Technology Laboratory estimates the technical 
potential to sequester CO2 through EOR in the United 
States is as high as 80 million barrels, or 4 million barrels a 
day, and require 20 gigatons of CO2. That represents 
about half of the total U.S. power sector emissions for the 
next 30 years.
    We believe that EPA's rules on sound legal and technical 
footing is not the end of coal. Instead, it is the beginning of 
CCS worldwide.
    I appreciate the opportunity to testify this morning and 
look forward to answering your questions.
    [The prepared statement of Mr. Waltzer follows:]


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    Chairman Stewart. Thank you, Mr. Waltzer.
    Our final witness then is Mr. Roger Martella, Partner of 
Sidley Austin Environmental Practice Group. He rejoined Sidley 
Austin LLP after serving as General Counsel of the United 
States Environmental Protection Agency, concluding ten years of 
litigation and handling complex environmental and natural 
resource matters at the Department of Justice and EPA. Mr. 
Martella served as EPA's Chief Legal Advisor, supervising an 
office of 350 attorneys and staff in Washington and 10 regional 
offices. Mr. Martella, welcome.

             TESTIMONY OF MR. ROGER MARTELLA, JR.,

             PARTNER, ENVIRONMENTAL PRACTICE GROUP,

                         SIDLEY AUSTIN

    Mr. Martella. Thank you, Chairman Stewart, Chairman Lummis, 
Ranking Member Bonamici and Ranking Member Swalwell for the 
opportunity. I am honored to be before you today with my 
distinguished witnesses, speakers as well.
    I am going to try to very briefly discuss the intersection 
of how these technical issues connect with the legal framework 
and try not to give you an entire legal dissertation on this 
but just hit the high points, and I will be happy to answer any 
questions you have.
    Very briefly, the whole reason we are here arises out of a 
2007 decision called Massachusetts versus the EPA by the 
Supreme Court, and in that decision, the Supreme Court said 
that EPA had to consider greenhouse gases alongside the other 
air pollutants in the Clean Air Act. I was general counsel at 
the time when the decision came down and was tasked with 
working with the EPA lawyers, most of whom are still there, and 
other talented lawyers in the Federal Government on coming up 
with a full range of legal options on how to implement the 
mandate in the Supreme Court's decision, and one of the things 
we looked at very closely, which was in a 2008 document 
released by EPA at the time, is the New Source Performance 
Standard program. If you look at, you know, the limited tools 
EPA has under the existing Clean Air Act to address greenhouse 
gases for stationary sources, the New Source Performance 
Standard program clearly stands out. It is the most flexible of 
the provisions. It has a history of driving environmental 
results. It considers cost-benefit considerations, and of 
course as we have talked about today, I think as everyone is 
familiar with, Congress directed EPA to focus on standards that 
were adequately demonstrated.
    So it is pretty obvious if you look at the 2008 document 
and work that has been done since that the highlight, the focus 
of attention on addressing greenhouse gases under the Clean Air 
Act has been on the New Source Performance Standard program 
when it comes to stationary sources, and so my critique is not 
with that as a general proposition, my critique is how EPA 
specifically proposed to go about this in September based on 
some of the technical concerns you are hearing today, and I am 
just going to again focus on the two words that matter the most 
for today's discussion, the words ``adequately demonstrated.''
    There is a maxim the law that when Congress uses specific 
words, it has to mean something, that you have to actually pay 
attention to the specific words that Congress provides in the 
statute, and I recognize that that is never necessarily a 
black-and-white thing, that everything is a continuum and even 
something such as ``adequately demonstrated'' does not lock 
anyone into any one interpretation but a continuum of 
interpretations unless you otherwise say that we shall do 
something or have to do something. So the question here is, 
where on the continuum does EPA's approach fall, and it is my 
position, it is my opinion that given the technical expertise 
of the folks here and other people that I have spoken to, that 
this does fall past the end points of what is considered 
adequately demonstrated, the notion of requiring a technology 
is adequately demonstrated that is not currently in operation 
by EPA's own record where EPA has said there is not a single 
facility in commercial operation today. About 18 months ago in 
April 2012 in the predecessor proposal they said that this 
technology was not likely to be adequately demonstrated for 
another ten years, that even if we look back on the last 30 
months of EPA's experience in granting permits for greenhouse 
gas emissions across the country, that it has actually rebuffed 
arguments by certain groups that CCS is currently adequately 
demonstrated. It came as a surprise to me, and I think it is 
past the continuum for them to say back in September that 
currently carbon capture and sequestration is within the realm 
of options they can consider in saying something is adequately 
demonstrated.
    Now, having said that, there has been some conversation 
already today about what is the precedent of this and what is 
the effect of this, does this really affect anyone, and I think 
the concern as a whole is from the precedential perspective for 
a few reasons. First of all, the result of this rule, if this 
rule is finalized as it exists, and I think it is fair to say 
that no coal-fired power plant could be built in the United 
States unless they could really demonstrated carbon capture and 
sequestration of the magnitude EPA requires, and the experts to 
my side here, some of them seem to think that is not possible. 
So the precedent of that is basically that this rule would have 
the effect of preventing an entire source of energy from being 
used in new facilities in the future, and so I think one of the 
questions that comes up is, is that within the legal authority 
of the Clean Air Act? Can the Environmental Protection Agency--
did the Congress intend for EPA to have that kind of authority 
to say we are going to basically phase out this type of energy 
going into the future. And while I recognize there is not an 
apples-to-apples comparison in terms of how this rule could 
impact existing sources or even sources in other sectors, I 
think it also has to be understood that there is no doubt that 
everyone is going to be looking to this rule as the baseline 
for how EPA will approach existing sources and how they might 
approach other sectors. I don't think they are going to start 
with a clean drawing board but they are going to be looking to 
other approaches here, even if it is not carbon capture and 
sequestration. So I think there is little debate that this will 
have precedent on how they are going to approach other issues, 
others types of facilities.
    So thank you for that, and I look forward to answering any 
questions you might have.
    [The prepared statement of Mr. Martella follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Chairman Stewart. Thank you, Mr. Martella.
    To all of the witnesses, thank you for your testimony. I 
would like to remind Members that Committee rules limit the 
questioning to five minutes, and the chair at this point will 
open up the round of questions, and the chair recognizes 
himself for five minutes.
    Mr. Martella and Mr. McConnell, I would like to come back 
to some comments that both of you have made. Mr. Martella, you 
said something I think a little more graciously than I would 
have in the sense of the meaning of words. I think that this 
all started a few years ago perhaps when we heard that famous 
phrase, ``It depends on what the meaning of the word is is.'' 
Redefining words away from their original and their obvious 
intent opens up just a Pandora's Box of craziness. Who knows 
where it will end, and who knows what the outcome eventually is 
going to be, which is the main point of this hearing. This 
isn't about climate change. This hearing isn't about the 
government shutdown and effects of that. It is not even about 
the costs of implementing this rule. This is about--and by the 
way, I have enormous concerns with the costs of implementing 
this rule, but we are not there yet. This is about one thing 
and one thing only: is the EPA being honest in their claim that 
a certain procedure has been adequately demonstrated. And in 
that, it is not adequately modeled, it is not adequately 
hypothesized, it is not adequately wished for. Is it adequately 
demonstrated? And demonstrated in the real world and 
demonstrated in a way that could be replicated somewhere else 
and in fact replicated in a lot of different places because it 
is going to have to be in order for it to be implemented like 
that.
    So with that, Mr. Secretary, I would like to come to you 
for just a minute. Let me ask first just some background. When 
did you leave your position at DOE?
    Hon. McConnell. February this past year.
    Chairman Stewart. And how long did you work for the current 
Administration?
    Hon. McConnell. Two years.
    Chairman Stewart. Okay. And I am sure that was a great 
experience for you, working for the Administration, and being 
here today, I suppose, you and I had a chance to have a short 
conversation before the hearing, and I recognize it may be 
somewhat uncomfortable for you in the fact that you have taken 
a position that is contrary to the current Administration.
    Hon. McConnell. Oh, I don't find it difficult at all. It is 
a truth that we are pursuing here, and the commercial viability 
and technical demonstration is all about what we were doing and 
continue to do with a pretty sizable Federal funding of the R&D 
that is going on. Now, it seems to me to be a little difficult 
to balance the fact that if something is already technically 
demonstrated and commercial available, why we would continue to 
fund R&D in that regard, it is a bit of a conundrum and it is 
puzzling to me.
    Chairman Stewart. Well, I appreciate that. That is a great 
point.
    To any of the witnesses, are any of you aware of any 
commercial-scale power plant in the United States that is using 
CCS right now, anywhere in the United States?
    Mr. Waltzer. Mr. Chairman, Plant Berry at First Southern 
Company supplies CCS on their units, a 25-megawatt project, and 
they are capturing about 100, 150,000 tons per year.
    Chairman Stewart. Okay, and 25-megawatt, is that a small- 
or a large-scale power plant?
    Mr. Waltzer. It is a slipstream project from the power 
plant.
    Chairman Stewart. So it is a very small production of power 
that is generated from there relatively speaking?
    Mr. Waltzer. From that unit, yes.
    Chairman Stewart. And that is really one of the primary 
concerns we have, and that is, the demonstrated scalability. 
You know, I was a pilot for a long time. I was the type of 
pilot at one point where we few test flights, and I am telling 
you, you can't take something and say it works here on this 
scale and then increase that scale by many factors and just 
assume that it is going to work exactly the same way; it won't, 
which is again one of our primary concerns here.
    Dr. Bajura, you mentioned that as well, the scaling up of 
technology. I would be interested in your thoughts on that and 
your concerns about trying to apply something that is as unique 
and complicated as it is and just assume--and if I could, and 
then I will allow you to answer this. Quoting from the EPA's 
own findings from just several year ago, a typical power plant, 
``there is considerable uncertainty,''that is their word, 
``considerable uncertainty associated with capacities at 
volumes necessary.'' Doctor, do you have comments on that?
    Dr. Bajura. Yes. We often test technologies from test tube 
size in a laboratory to pilot plant sized to commercial size. 
The comment you made earlier about the size of plants, we have 
put in place 12 plants in the last six years. The average size 
is one gigawatt. That is 1,000 megawatts. We don't do that 
casually. We do it by building up, and the reason we do that 
is, we learn things as we go from one size to another, the 
integration being the very important part.
    Chairman Stewart. Thank you. And again, I think the point 
there is stated in one fashion or another by the EPA 
themselves, that there is enormous concerns with the 
scalability on this, and with that, my time is expired.
    We now turn to the Ranking Member, Ms. Bonamici.
    Ms. Bonamici. Thank you very much, Mr. Chairman, and thank 
you all for your testimony.
    Mr. Waltzer, I wanted to talk a little bit with you about 
the different standards that we have been hearing about today. 
We have heard commercially available, technically ready, but 
the EPA really does look at whether the technology is 
adequately demonstrated, which of course is different in legal 
terms. Do you agree with that?
    Mr. Waltzer. Absolutely. The Clean Air Act very clearly 
allows EPA to consider how the technology applies and other 
related industries, and I think in some areas there is a bit of 
a gray area relating to your earlier question, Mr. Chairman. So 
for example, Dakota Gasification is an excellent example of a 
project which is a very large scale, captures 2 million tons of 
CO2 per year and sends it up a pipeline to 
Saskatchewan for EOR and sequestration. The methane that comes 
out of that coal gasification project is delivered in the 
pipeline to power plants. It is very similar to a power plant 
that was proposed by Tanaska, which would have simply taken 
that same industrial configuration and put the power plant 
closer to that methane, the coal-to-methane project. So from a 
practical perspective, it is not--the Dakota Gasification 
plant, I believe, clearly demonstrates that one could develop a 
power plant today with commercial guarantees with CCS. In fact, 
even though Kemper does have commercial guarantees, I think the 
Dakota Gasification plant clearly demonstrates that CCS at a 
power plant configuration is in operation today.
    Ms. Bonamici. Thank you. I am going to follow up on that a 
bit. If finalized, the rule would require that all new coal 
plants meet an emission rate between 1,050 and 1,100 points of 
CO2 per megawatt-hour. So that is an approximate 40 
percent reduction below uncontrolled emission levels, as I 
understand it.
    Mr. Waltzer. That is right.
    Ms. Bonamici. But in addition, the rule allows for up to 
eight years to meet the standard. Can you discuss how that 
provision was considered in EPA's determination of feasibility 
and cost?
    Mr. Waltzer. Sure. That provision is, from our perspective, 
one of the key aspects that makes this rule-- the design of 
this rule very smart and speaks to the technical feasibility of 
being able to comply with the rule. With that eight-year 
provision, that allows a project developer to do two things. 
First, it allows them to have flexibility as their building 
their first, second, third or nth-of-a-kind project. It also 
allows the developer market flexibility to be able to take 
advantage of operating the plant in the early years without CCS 
and adding CCS later, which might provide financial value. In 
fact, it is that second component which allows, as our cost 
analysis shows, for a project to be able to comply with that 
standard and have the cost of electricity at that coal unit be 
13 percent above the baseline cost of electricity for an 
uncontrolled coal unit.
    Ms. Bonamici. Thank you. I have another question I want to 
get in. So there was a project that American Electric Power was 
doing. Their chairman in 2011, Michael Morris, said that ``As a 
regulated utility, it is impossible to gain regulatory approval 
to recover our share of the cost for validating and deploying 
the technology without Federal requirements to reduce 
greenhouse gas emissions already in place. The uncertainty also 
makes it difficult to attract partners to help fund industry 
share.'' So I wanted you to address briefly the--unless we 
require carbon emission limits on new coal power plants, does 
the technology stand as much of a chance of wider deployment, 
and why?
    Mr. Waltzer. Well, I do agree with that, but let me address 
one important aspect of what you just raised. I would urge the 
Committee to consider that in fact this rule is good for the 
coal industry, and let me explain that counterintuitive view. 
First, the rule provides both certainty and flexibility for new 
coal plants regarding CO2 emissions. If you don't 
have that certainty, you are not going to be able to finance 
new coal plants. No financing, no plants. It is basically that 
simple. Second, the rule does something that might have been 
hard to imagine 30 years ago. For the first time, new coal 
plants and new gas plants are going to have the same emissions 
profile. That is important for coal's long-term sustainability. 
And third, gas prices are so low that no one is building new 
coal, and that is true without CCS, but this rule helps 
catalyze technology advancements so that when fuel prices are 
more advantageous, coal is even better positioned within the 
market.
    Ms. Bonamici. Thank you, and I see my time is expired. 
Thank you, Mr. Chairman.
    Chairman Stewart. Yes, Ms. Bonamici. And Mr. Waltzer, you 
almost by yourself require that we come back to a second round 
of questioning because I can't wait to engage you with your 
comments there about this is good for the coal industry.
    With that, then we turn to the chairwoman of the 
Subcommittee on Energy, Ms. Lummis.
    Chairwoman Lummis. Thank you, Mr. Chairman.
    Secretary McConnell, does it make any sense to you that EPA 
is concluding that CCS is adequately demonstrated or proven 
when the DOE modeling assumes carbon capture technology is 
unproven at commercial scales?
    Hon. McConnell. No, it doesn't make any sense to me, and in 
fact, in 2010, a roadmap was put forth that with demonstration 
projects and the development of the fossil program would 
produce a commercially ready, technically deployable CCS value 
proposition for the marketplace by 2020, and the expectations 
were that the demonstration projects, the knowledge, the 
understanding and the learnings that would be accomplished 
through all of that would produce something that would be 
marketplace-ready by 2020. And declaring it ready now, I don't 
see as something that makes any sense to me, no.
    Chairwoman Lummis. Mr. Waltzer, you mentioned this eight 
year period. Is that what Mr. McConnell is referencing? Should 
I be drawing a connection between the eight years that you 
mentioned and Mr. McConnell's statement about the year 2020 
applicability?
    Mr. Waltzer. Madam Chairman, from our perspective, just a 
quick reference. The original proposal actually had a ten-year 
delay. That was in the revision that was made eight years 
because that comports with the eight-year review period that 
relates to New Source Performance Standards. So I think that is 
really what is the--what is driving the eight-year review or 
flexibility provision within this rule.
    Chairwoman Lummis. Okay. So they are very different. I am 
trying to compare apples to oranges here.
    Mr. Waltzer. Right.
    Chairwoman Lummis. That is helpful. So if the technology is 
ready today, why the eight years again?
    Mr. Waltzer. From our perspective, we think it is valuable 
because we want to see projects built, and we think that kind 
of flexibility encourages projects. It reduces their costs. It 
provides them flexibility as they are developing pioneer 
projects. We like to say we want to avoid pioneer penalties. We 
want early-adopter rewards, and this, I think, is in vein with 
that concept.
    Chairwoman Lummis. Okay. So it is a pioneer situation?
    Mr. Waltzer. For any project that--well, there are multiple 
pioneer situations. For example----
    Chairwoman Lummis. But how does the word, your use of the 
word ``pioneer'' comport with the EPA's definition of 
``adequately demonstrated''?
    Mr. Waltzer. Well, ``adequately demonstrated'' as I 
mentioned before can be related to--or can refer to related 
industries. So, for example, I would consider--even though we 
have a fully commercial-scale gasification project at Dakota 
Gasification that is taking CO2 and sending it up to 
Alberta--excuse me, Saskatchewan. Locadia proposed a substitute 
natural gas program in Indiana, which is very similar. And we 
were supportive of that project because even though it wasn't a 
power project, it would have created a pipeline from the 
Midwest to the Gulf Coast. I would consider them a pioneer even 
though that technology is commercial.
    Chairwoman Lummis. I think you said CCS is being used today 
on natural gas units?
    Mr. Waltzer. CCS--well, CCS has been used on natural gas 
units for power plants.
    Chairwoman Lummis. Okay. So why not require this rule be 
applied to gas? Why is it just applied to coal?
    Mr. Waltzer. We are actively supporting CCS on natural gas 
projects. So, for example, Summit Power has a----
    Chairwoman Lummis. So why did the EPA just require it for 
coal?
    Mr. Waltzer. Well, from our perspective, and I will speak 
from our perspective, we see--we don't see this rule as the 
last step; we see it as the first step. So----
    Chairwoman Lummis. Oh, okay. That is helpful.
    Mr. Waltzer. For the eight year review, we would----
    Chairwoman Lummis. Dr. Bajura--excuse me because I have one 
more question. Dr. Bajura, the Interagency Task Force on CCS 
identified five barriers to commercial deployment of CCS. What 
has changed in the two years since their conclusion?
    Dr. Bajura. We have done some experiments to demonstrate 
storage at larger scale but we haven't done any integration to 
show how we could put that together with a power plant nor have 
we addressed the issue of long-term liability: who owns the 
CO2 for 50 years, who is going to take the 
responsibility for certifying that the technology was correct 
when it was put in the ground.
    Chairwoman Lummis. I want to thank all of our panelists. I 
hate to interrupt but my time is expired. Thank you all for 
being here.
    I yield back, Mr. Chairman.
    Chairman Stewart. Thank you, Madam Chairwoman.
    The chair now recognizes Mr. Swalwell.
    Mr. Swalwell. Thank you, Mr. Chairman, and actually, if we 
could put slide number one back up there, and Mr. Waltzer, good 
morning, thank you to you and all of our witnesses for being 
here. Slide one, I held it up earlier, and it will be on the 
screen in a moment, depicts about 600 coal plants across the 
country. Are you familiar with this map and these plants, and 
would you agree, Mr. Waltzer, that the proposed regulations 
that the EPA have put out will not affect a single plant that 
is on that map?
    Mr. Waltzer. Absolutely. Even before this rule was 
contemplated and even before gas prices went through the floor, 
there was no new coal plant that was proposed without CCS. Any 
new coal plant today that has been seriously proposed will meet 
the new coal plant standard. For existing units, this rule 
doesn't apply so it is not going to have any effect on them.
    Mr. Swalwell. And Mr. Waltzer, how many jobs at existing 
coal plants will be lost because of these regulations for 
future plants?
    Mr. Waltzer. There will be no--I think it is simple logic 
that if the rule does not apply to existing units, it will not 
affect jobs at existing jobs, so no jobs.
    Mr. Swalwell. And Mr. McConnell, would you agree that these 
regulations will not affect a single job at a currently 
existing plant?
    Hon. McConnell. No, I wouldn't.
    Mr. Swalwell. Okay. Would you agree--so it is your position 
that if I have a job today at a coal plant that is already in 
existence, I am at risk of losing my job at that plant because 
of rules for plants that have not been built?
    Hon. McConnell. I think if we focus the argument strictly 
on one particular pollutant criteria, we could build an 
argument around it but it is much more complex than that. It is 
the future uncertainty of rulings. It is the combination of 
NOX, SOX, sun particulates, mercury, all of the criteria 
pollutants and the landscape associated with that uncertainty 
going forward. You see a tremendous amount of retirements going 
on across the country today, some 50 gigawatts of retirement.
    Mr. Swalwell. But Mr. McConnell, the 600 plants that are in 
existence, you agree, these rules do not directly affect those 
plants?
    Hon. McConnell. No, I don't. Again, as I go back to the 
interconnection of all the rulings and the future uncertainty 
of it, that has a multiplying effect to the future of all of 
those coal plants.
    Mr. Swalwell. But you can't give me an accurate number as 
to how many jobs are going to be lost at a current plant 
because of regulations for future plants, can you?
    Hon. McConnell. No, I am not able to provide that kind of 
information, no, sir. Again, it is all part of the future that 
you or I can't predict.
    Mr. Swalwell. And you would agree, though, that 120,000 
jobs lost in 16 days during a government shutdown, that is 
probably greater than the amount of jobs we can say will be 
lost at existing plants?
    Hon. McConnell. I am not in a position to comment on that.
    Mr. Swalwell. I would hope, though, Mr. McConnell, that you 
could comment on something I think you and I may agree upon, 
which is that sequestration has affected our ability to make 
necessary investments in technology when it comes to carbon 
capture, use and storage technologies. Would you agree that 
that is not helping us learn more about what that technology 
could do?
    Hon. McConnell. What I could agree on was that when I took 
the job in 2010, and we projected for the next ten years that 
we would stay at a certain level of funding for fossil energy, 
to move forward and to achieve a commercially demonstrated 
technology by 2020, and then seeing the fossil budget cut year 
over year with the Administrator's requests going down while 
the overall Department of Energy goes up, that made it very 
difficult to achieve those targets, and makes it all the more 
difficult to understand how we can get demonstrated technology 
in place any earlier than 2020 certainly.
    Mr. Swalwell. Thank you, Mr. McConnell.
    And Mr. Waltzer, can you just go into detail for us about 
the current competition between the coal and natural gas 
industries and whether that competition is at least a partial 
reason, if not the primary reason, for the retirement and lack 
of construction of new coal plants across the country? And then 
can you just let us know what would the cost of doing nothing 
be? Suppose we threw out these regulations and just did 
nothing, what would the cost to the environment and economy be?
    Mr. Waltzer. So here is what I would say. Project 
developers today are building natural gas plants instead of 
coal plants, primarily because of where gas prices are. That is 
what is happening in the market. In terms of existing units, 
gas prices had gotten so low that we for the first time ever 
had seen coal power switch over to natural gas, which many of 
us thought would ever happen, but that is starting to come 
back. So as gas prices are going up, we are starting to see 
coal--existing unit coal generation come back on the system. 
But because of where gas prices are, we don't foresee, or at 
least looking at the market, the market tells us there are no 
plans for developing new coal projects because of where gas 
prices are today.
    Mr. Swalwell. Thank you, and Mr. Chairman, I yield back the 
balance of my time.
    Chairman Stewart. Thank you, Mr. Swalwell. You know, 
regarding your question about existing power plants and will 
they be affected, I think Mr. Waltzer, you answered that 
question in the previous round, and that is when you said you 
view this as just the beginning, and I think that is many of 
the fears that so many of us have.
    With that, to the Vice Chairman, Mr. Bridenstine.
    Mr. Bridenstine. Well, thank you, Mr. Chairman. I can tell 
you there are two coal-fired power plants in Oklahoma that are 
being shuttered because of EPA regulations, and I can also tell 
you that my constituents are facing 25 percent increases in 
their prices because of it, and these coal-fired power plants 
have, like, 30 years left in their useful lives and we are 
shuttering them because of these regulations.
    I would like to talk to Mr. Waltzer. You mentioned early-
adopter rewards. Can you talk about that for just one second?
    Mr. Waltzer. Sure. We would like to see--from our 
perspective, we want to see CCS move forward and we would like 
to see a suite of policies that help both deploy the technology 
and drop its costs rapidly.
    Mr. Bridenstine. Is the Kemper project one of those 
projects where you have seen early-adopter rewards?
    Mr. Waltzer. Well, in some respects, Kemper has received 
incentives, Federal incentives, to move forward. So in that 
context, it has gotten----
    Mr. Bridenstine. I would like to read you an article from 
the Wall Street Journal, and this is just a few weeks ago, 
Monday, October 14th, as a matter of fact. Mississippi Power's 
186,000 customers who live in one of the poorest regions of the 
country are reeling at double-digit rate increases, and even 
Mississippi Power's parent, Atlanta-based Southern Company, has 
said Kemper shouldn't be used as a nationwide model. Do you 
agree with that?
    Mr. Waltzer. I believe that the cost overruns associated 
with Kemper are not related to CCS. It is related to the fact 
that there are commercializing a new gasification technology, 
and so from that perspective, I believe Kemper could be a model 
for integrating CCS onto power systems.
    Mr. Bridenstine. It is interesting you should say that. 
They said that their cost overruns are from labor costs, steel 
pipe, concrete, other materials, and certainly if it wasn't for 
CCS, a lot of these materials wouldn't be required. Is that 
correct? And labor.
    Mr. Waltzer. I think most of the labor costs and piping 
that you are referring to really is based on the fact that they 
are effectively developing a refinery technology, which is not 
what power companies are used to doing.
    Mr. Bridenstine. So these costs, do you know how they are 
affecting not just--I mean, we are talking about some of the 
poorest people in America being affected by this. They spend a 
good portion of their budgets more as a percentage of their 
income on their electric bills, and their electric bills are 
going up. Do you have sympathy or empathy for them?
    Mr. Waltzer. I think that it is important to make sure that 
anytime we are moving technology forward, that we try to have 
the least amount of impact on the people who can least afford 
it. I think that is true in the United States and I think that 
is true globally. That is why we are supporting not just these 
performance standards but incentives at the Federal level that 
will help reduce the costs----
    Mr. Bridenstine. Real quick, I want to talk about these 
incentives. I am a Navy pilot and I flew in Meridian, 
Mississippi. I lived there for a period of time. I can tell you 
this, Meridian, Mississippi, just south of Kemper County, is 
not a wealthy part of the country. Mr. Newburn Atkinson, a 
gentleman, says that his Lucas Road art and jewelry gallery 
hasn't recovered from the recession. ``I am already on a 
shoestring budget and this economy,`` the 66-year-old says, 
``and this may be the deciding factor in me staying open.'' So 
here we have people saying that power plants are not being 
shuttered; in fact, they are. We have people saying that this 
is actually an early-adopter rewards program, which it isn't. 
It is punishing people. It is punishing the poor people. It is 
also punishing the investors, which prevents investment in 
further technologies like this, and then you talk about 
incentives. Let us talk about incentives.
    We have a chart--do we still have that chart, the 
Department of Energy chart about incentives for R&D for 
different areas? Do we have that chart? Well, while we are 
waiting for the chart to come up, I will share with you what is 
on this chart. On this chart, you have incentives for natural 
gas and liquid petroleum on the left. It is almost nothing. It 
is 64 cents per megawatt-hour. Nuclear is $3.14 per megawatt-
hour. Wind, $56 per megawatt-hour. And then solar on the far 
right, if the chart were big enough, it would go through the 
roof. For wind, it's $775 per megawatt-hour, or 64 cents for 
gas. Now, do you think it would be a good idea to maybe shift 
some of those incentives from wind and solar maybe over to the 
gas and fossil fuel side?
    Mr. Waltzer. We think we should have more incentives on the 
fossil fuel side, absolutely.
    Mr. Bridenstine. But you don't think it should be taken 
from--you know, it is 1,400 times more on solar energy. Do you 
think that that might be a good place to start?
    Mr. Waltzer. We are not--here is what I can say what we 
support. We support, as I mentioned before, the National EOR 
Initiative, which is focusing on a production tax credit for 
CO2-enhanced oil recovery from coal plants, gas 
plants, industrial sources, and what is really unique and 
interesting about that proposal is that because you are 
generating petroleum through EOR in the United States, you are 
also displacing foreign-oil production. That potentially could 
add new revenue to the U.S. Treasury, and so that is a really 
unique and interesting opportunity, and we think we should 
pursue that.
    Mr. Bridenstine. I am out of time, Chairman. It is your 
mic.
    Chairman Bridenstine. Thank you. I am going to return time 
now to Mr. Takano.
    Mr. Takano. Thank you, Mr. Chairman.
    Improving air quality and reducing greenhouse emissions is 
a matter that is vitally important to my constituents in 
Riverside County, which is located in southern California. I 
represent an area that has some of the worst air quality in the 
Nation. I remember days growing up when we weren't allowed to 
play outside on the playgrounds during my elementary and high 
school days for physical education class because the air 
pollution was so bad. It is because of the Clean Air Act and 
the work by the EPA that my region has seen a tremendous 
improvement in air quality. In fact, a study by the EPA shows 
that by 2020, the benefits of the Clean Air Act will outweigh 
the costs by more than 30 to one. The Clean Air Act has helped 
improve public health, and by 2020 it is expected to prevent 17 
million lost workdays.
    I appreciate hearing from our witnesses today about EPA's 
latest effort to limit greenhouse gas emissions under the Clean 
Air Act. My first question is for Mr. Waltzer. Mr. Waltzer, do 
you know of any other nations that are investing in CCS 
technology?
    Mr. Waltzer. Yes, several. The United Kingdom, for example, 
has a competition for what they call a contract for differences 
to build at least two large-scale CCS projects. But probably 
the most interesting and notable is China. They are investing 
quite a bit in CCS. In fact, Huaneng Power, their largest power 
company, has developed their own CCS technology that they are 
currently doing a feasibility study with Duke Energy on one of 
the Gibson units in Indiana to examine how those costs of CCS 
in China, which they claim are fairly low, about $30 a ton, 
would equate in the United States.
    Mr. Takano. And can you tell me about the overall budget 
for R&D for all of these all-of-the-above technologies? I mean, 
I understood that chart presented by my colleague from 
Mississippi about the distribution of R&D investment but what 
has been the size of that budget over the last 3 or four years 
and has it been increasing or decreasing?
    Mr. Waltzer. Well, the overall size of the DOE budget has 
been increasing but I would echo what Secretary McConnell said 
with respect to CCS. We believe that the DOE's budget on CCS 
should be increased.
    Mr. Takano. Now, you used the word ``pioneering'' in your 
answer to my colleague from Wyoming. Would you say that the 
strategy of the Department or the EPA is really about birthing 
this technology, that when we say we have an adequately 
demonstrated technology that really the rule is designed to 
birth it?
    Mr. Waltzer. That has been a role that the Clean Air Act 
has played through several pollution control technologies, and 
we feel that this is a role it can play here. Just to clarify 
some earlier remarks I made, we do see this as the first step. 
We do think CCS ought to be applied on natural gas units and 
another opportunity to do that will be in the eight-year review 
as well as looking at best available control technology through 
individual permits after the New Source Performance Standards 
are finalized. So we do see this as the beginning of a process. 
We don't necessarily anticipate that this is going to apply to 
existing units through any rules that are going to be put 
forward but we do hope and expect and we would advocate for in 
the future that this technology would be applied to natural 
gas.
    Mr. Takano. Now, real quickly, the Kemper plant is a coal 
gasification plant, but the existing coal plants, which will 
not be affected by this rule, are not attempting to gasify. 
They just strictly use the coal directly into the production of 
electricity. Is that correct?
    Mr. Waltzer. Right. Most existing units are coal combustion 
units.
    Mr. Takano. So when you talked about the increased costs at 
Kemper, it has to do with this newer attempt, this attempt to 
try to gasify the coal, but if coal plants in the future were 
to be straight combustion plants, you are contending that the 
CCS technology has been demonstrated in other areas and could 
work in the context of newer coal combustion plants?
    Mr. Waltzer. Well, actually, yes. In fact, the Boundary Dam 
plant is an interesting example because, in fact, it is a 
retrofit, but it is using the same technology that one would 
use if one were building a new coal combustion plant. 
Similarly, NRG in the United States is currently developing a 
retrofit, a CCS retrofit project, that could also apply to new 
coal combustion units.
    Mr. Takano. Thank you, Mr. Chairman. My time is up.
    Chairman Stewart. Thank you, Mr. Takano.
    Now Mr. Weber from Texas.
    Mr. Weber. Thank you, Mr. Chairman.
    I think we are going to affect coal plants because as that 
technology gets so expensive, more plants won't be built and 
older plants will retire, employees will lose their jobs, so 
that is a given. And look, I think it was Mr. Martella that 
said when Congress uses words, it means something. I think that 
was you that said that. Is that right, Mr. Martella?
    Mr. Martella. Yes.
    Mr. Weber. I appreciate that. It is kind of like, if you 
like your doctor, you can keep your doctor. If you like your 
insurance, you can keep your insurance. That is kind of what 
you are driving at, I suspect, and I guess that oil 
sequestration is an okay word, or carbon sequestration is okay, 
but when you talk about budget sequestration, that is a bad 
word. So it is interesting that we see a lot of word games 
going on up here.
    Let me ask you, are any of you familiar with the Valero 
plant in Port Arthur, Texas, in my district that has a carbon 
sequestration facility? Mr. McConnell, are you aware of that 
plant? Do you know the cost that was involved? Do any of you 
all know the cost of that plant? Let me give it to you real 
quickly. The Valero project cost $431 million, okay? The 
Department of Energy, through the stimulus, or what I call the 
spend-from-us, kicked in $284 million. Now, that is 66 percent 
of the cost of that plant. Does that sound it is capable of 
being duplicated? Does the government have to spend 66 percent 
of these facilities and these plants? Does the taxpayer get to 
be on the hook? Does that sound like it's capable of being 
duplicated? That is a rhetorical question. I will get back to 
you.
    Ed Holland, the CEO of Southern Energy, the owner of the 
plant built in Kemper, Mississippi, came and spoke to the House 
Energy Action Team, which I am a member of, about a month ago, 
and here is what he--let me tell you something about Southern 
Energy and the plant they are building. Four billion dollars. 
It creates 12,000 direct and indirect jobs for construction, 
1,000 direct and indirect permanent jobs. The project 
construction will create $75 million in state and local taxes, 
$30 million annually in state and local taxes. So this is a 
project that is extremely important and valuable to the 
community, and yet because of CCS, which Texas is a pioneer. 
One of you, I think it was you, Mr. Waltzer, or it might have 
been Mr. Martella that said there was already EOR underway. In 
other words, what you really said without knowing it was, 
industry was already on this. Industry was already on this 
without the mandate from the EPA because they will get it to 
work efficiently. They will make it work efficiently.
    Now, when Ed Holland from Southern Energy came and spoke to 
the House Energy Action Team, he said CCS is not capable of 
being duplicated. The cost overruns were enormous, and he 
attributed it to CCS. Now, to their credit, the company agreed 
to pick up all the cost overruns, and you don't see that very 
often when the government mandates something. That is a rarity. 
But the cost overruns were attributed to CCS. He told us that 
in the House Energy Action Team.
    Now, with what you know about Valero's costs, 66 percent 
picked up by the DOE, the taxpayers, and the cost overruns at 
Kemper, is there anyone on this panel that thinks that is 
really capable of being duplicated? Mr. McConnell, yes or no?
    Hon. McConnell. Well, I believe that is the reality of 
where we are today because it is not technically demonstrated 
and commercially available.
    Mr. Weber. Thank you. Dr. Bajura?
    Dr. Bajura. I support Secretary McConnell's comment.
    Mr. Weber. What he said. Mr. Waltzer, what they said?
    Mr. Waltzer. Can you clarify?
    Mr. Weber. Do you think those two experiences demonstrate 
that CCS of that magnitude, on the scale that the EPA is 
mandating here, is capable of being duplicated?
    Mr. Waltzer. I think we have seen CCS on the scale of 7 
million tons per year at projects like Valero.
    Mr. Weber. Does the cost or the cost overruns not even come 
into the EPA's----
    Mr. Waltzer. That is a purely commercial project.
    Mr. Weber. That is a purely commercial project, so when it 
comes, EPA is real big about attainment; we don't want noxious 
gases and we want most of the country to be in attainment, but 
they don't use the common sense of determining from a cost 
basis whether it is going to negatively impact industry and 
jobs. So would you agree with me then, Mr. Waltzer, that in 
that instance, EPA might themselves when it comes to common 
sense be in nonattainment?
    Mr. Martella, do you think that is duplicable?
    Mr. Martella. I have to put my lawyer's hat back on, and as 
a lawyer, you can only look at the record and what EPA itself 
relies upon in making these determinations, and I go back to my 
original opinion. Looking simply at things that they said in 
this record in the past 18 months or so, I think it is their 
own admissions that show none of these facilities are in 
commercial operation to the----
    Mr. Weber. Was that admission or emission?
    Mr. Martella. Admission.
    Mr. Weber. Okay. Well, they are putting out some emissions 
all right, the EPA is. But I appreciate that opinion, and I am 
overrun on my time.
    Chairman Stewart. Thank you.
    We now have Ms. Edwards.
    Ms. Edwards. Great. Thank you, Mr. Chairman, and to our 
Ranking Members as well for holding this hearing, and thanks to 
our witnesses.
    I just have a couple of questions I want to try to get to, 
but I want to point out that contrary to some suggestions that 
have been made here today, the President's energy strategy in 
fact has embraced the all-of-the-above approach. He said that 
on many occasions, even when some of us didn't want him to say 
all of the above. Indeed, the rulemaking envisions, I think, a 
21st century approach to fossil fuel power plants with the goal 
of reducing CO2 emissions in new power plants, and I 
think it is important to point out the word ``new.'' In the 
Recovery Act, the President committed $1.4 billion to this 
technology, even in the face of some of us who questioned 
frankly the technology, but that being as it might, the EPA has 
come up with a rule. It has a specific responsibility, a 
particular responsibility to protect our health and 
environment, and while industry considerations are interesting, 
that is not the principle responsibility of the EPA. But I 
happen to think that we can do both, that we can both protect 
the environment and we can grow jobs and we can grow an energy 
strategy that really embraces all of those responsibilities.
    My question, first question, goes to Mr. McConnell. 
Something you said kind of caught my attention about the jobs 
question. Were you referring to a specific empirical study, 
university study, industry study, that points to the number of 
jobs that would be lost by applying standards to new power 
plants versus old?
    Hon. McConnell. I can't quote any specific study here, only 
that I have been exposed to a number of studies from several 
different sources.
    Ms. Edwards. If you can get back to us on that and give us 
the particular studies, because I am a data person and I like 
to see the data that backs up your conclusions that jobs would 
be lost by applying the rule to new power plants versus old 
ones, and I would like to see those numbers.
    And then my next question goes to Mr. Waltzer. I notice 
that in the industry, the oil and gas industry receives 
subsidies to the tune of about $7.5 billion a year. Exxon Mobil 
made $7.5 billion in profits in 2012, Occidental, $7.1 billion. 
The numbers are really huge. It seems to me that if we have an 
interest in doing what Mr. McConnell points out in his 
testimony is the need to add $100 million a year into 
demonstrating these projects and research and development that 
$100 million could come out of that $7.5 billion in subsidies 
that the industry receives, and so I wonder, Mr. Waltzer, if 
you could tell us what the additional needs you see in terms of 
investment in R&D and whether we have made the kind of 
investments we need to go into the commercial side with these 
coal plants and the new regulations? Because if, for example, 
we needed to find more money, perhaps my colleagues on the 
other side in this very constrained environment would be 
willing to remove those oil and gas subsidies so that we could 
put the money into demonstrating new technologies.
    Mr. Waltzer. Thank you. Let me first go back to what we 
think is the most important objective. We think that CCS needs 
to be deployed globally and it needs to be affordable. So we 
need to move the technology forward as quickly as possible. So 
that brings us back to with respect to the oil industry, 
enhanced oil recovery as an opportunity in the United States. 
We could potentially have 100 gigawatts of coal plants, about a 
third of our coal plants, supplying CO2 for EOR that 
would produce domestically produced oil if we met the technical 
potential for EOR in this country. We believe that a self-
financing tax incentive is a very smart and effective way to 
move that technology forward.
    What is interesting about that number, 100 gigawatts, is, 
if you look with the history of scrubbers and other 
technologies, that--you can significantly push the cost down 
the cost curve of that scale. It is also going to bring new 
technologies into the market. So in terms of research and 
development, two interesting technologies, just an example. One 
is called chemical looping, which would dramatically increase 
the efficiency in coal plants and dramatically reduce the cost 
of CCS. Another would be advanced natural gas turbines. There 
is at least one company that has a design that would 
significantly drop the cost of CCS to the point they think they 
can compete in the market today. So it is that sort of mix of 
performance standards and incentives that could pull those new 
technologies into the market while getting the learning curve 
moving forward, and that is our vision for how we think we move 
this technology in the United States and how we think--and the 
value that that is going to have globally.
    Ms. Edwards. Thank you, and my time is expired, and so I 
would really love to see us move to a point where we are making 
investments through our tax code that are about new 
technologies and not just supporting an old industry that is 
making record profits. Thank you.
    Chairman Stewart. Thank you, Ms. Edwards.
    We now turn to the former full Chairman, Mr. Hall.
    Mr. Hall. I thank you, Mr. Chairman, and I really do think 
if we are having this hearing and working together, and if I 
understood your purpose, it is a little bit different to the 
five minute dissertation that Mr. Waltzer just gave us. It is 
not about gigawatts or anything else that he wants to decide 
but I think yours is about honesty and whether or not the EPA 
has been honest with this Committee and honest with the people. 
That is the first thing I say.
    I also admire Mr. McConnell, who chose truth as his purpose 
and his pursuit, and he is here with us today, and I want to 
point out that we did have hearings from the EPA during the 
time of my chairmanship. I think, Mr. Rohrabacher, we had them 
two or three times before us, and each time they testified for 
days and went all over the country looking for someone that 
would testify that fracking was ruining the drinking water, and 
if you are looking for honesty you can check them on that 
because either Mr. Rohrabacher or I asked the four who were 
administrative witnesses that came here, each of them 
testifying to the dangers of that, and the liberal press 
talking about the dangers of it. We asked this question in 
closing: can you tell us anywhere in the United States where 
fracking has ruined one glass of drinking water. Each of the 
Administration witnesses said no, all four of them. That is a 
record. You don't have to have somebody come in here and 
testify to that again. It is a record. They themselves said 
that. So they are not being honest with us, and I think if we 
get a President that will appoint a secretary of some of his 
administrations that will follow the law, why, we will take a 
good look at some of their testimony when they come before us 
and testify under oath, and they were reminded that they were 
under oath, that they were operating from the best science.
    Let me get to something a little more. This hearing sheds 
light on the technological basis for the EPA's conclusion that 
CCS has been ``adequately demonstrate'' in its proposal that 
CCS should be required for new coal-burning plants. Once again, 
the testimony has shown that the EPA's proposed mandate 
reflects flawed judgment again. I might ask you, Mr. McConnell, 
if you would like to expand on that.
    Hon. McConnell. Well, just to be brief, when something is 
mandated and determined to be technically demonstrated, 
commercially available and it isn't, that makes it impossible 
for industry to make an investment, and by virtue of that, it 
will eliminate the ability to build new coal generation in this 
country. And maybe more importantly, as we think about a global 
word that the energy is going to double over the next 50 years, 
to get that technology to other places in the world is 
incredibly important because this is a global issue, not just a 
U.S. issue.
    Mr. Hall. And I thank Chairman Lummis, who wished the EPA 
could be here and be here and testify again for you all to 
hear. I don't know how much time I have left, Mr. Chairman, or 
I have run out of time----
    Chairman Stewart. You have got about a minute and a half.
    Mr. Hall. All right, sir. Mr. McConnell, we in Texas are 
very proud to be leaders. Mr. Weber got onto that, and I 
certainly agree with his approach. I like the way he identified 
some of the President's promises. But the Texas Clean Energy 
project is a ``now gen.'' It is integrated classification 
combined cycle facility that will incorporate CCS as a 
commercially clean coal power plant, and it is my 
understanding, and I may be wrong, that this project received a 
$450 million award in the 2010 from the Department of Energy's 
Clean Coal Power Initiative and received a final air quality 
permit from the Texas Commission on Environmental Quality in 
2010. My question, I guess, once again, is to you, Mr. 
McConnell. Has this project begun?
    Hon. McConnell. No, sir. There has been no ground broken 
and no construction.
    Mr. Hall. What are some of the challenges associated with 
it?
    Hon. McConnell. The commercial viability as well as the 
concerns about the demonstrated technology have made it 
incredibly challenging to enable commercial realization, and 
that has delayed the start of that plant and construction for a 
considerable amount of time.
    Mr. Hall. And my last question. What about the status of 
other plants, CCS projects around the country? How far along in 
construction are they?
    Hon. McConnell. Outside of the Kemper plant that has been 
mentioned several times, none of them are operational or in 
construction, and every one of them require government 
subsidies at this point because of the technology readiness and 
commercial availability.
    Mr. Hall. Once again, I thank you, and Mr. Chairman, I 
thank you very much for having this hearing based on seeking 
honesty from people who come before us to testify. Thank you. I 
yield back.
    Chairman Stewart. Thank you, Mr. Chairman.
    We now turn to Mr. Massie.
    Mr. Massie. Thank you, Mr. Chairman.
    I have just a quick question for all of the witnesses. For 
given kilowatt-hour or gigawatt-hour production plant, if we 
had a typical state-of-the-art coal-fired plant and we had the 
same plant but hypothetically with CCS technology, and I say 
hypothetically because it doesn't exist yet, the two plants 
producing the same amount of energy, one has CCS and one does 
not. For each of the witnesses, which one burns more coal? Mr. 
McConnell?
    Hon. McConnell. To produce the same amount of electricity, 
the one with the CCS facilities obviously because of the 
parasitic load.
    Mr. Massie. Dr. Bajura?
    Dr. Bajura. I concur with the Secretary.
    Mr. Massie. The one with CCS burns more coal?
    Dr. Bajura. Yes.
    Mr. Massie. Mr. Waltzer?
    Mr. Waltzer. Yes, I agree.
    Mr. Massie. What do you agree with?
    Mr. Waltzer. The one with CCS burns more coal.
    Mr. Massie. And Mr. Martella?
    Mr. Martella. I agree.
    Mr. Massie. So we are all in agreement that CCS technology 
makes a coal plant less efficient. Do all the witnesses agree 
with that?
    Hon. McConnell. Yes.
    Mr. Massie. So I think that is important to start out 
there. Now, the coal companies--and let me tell you why I am 
motivated to ask these questions. I am from Kentucky. We are 
very proud of our electric generation in Kentucky. I don't have 
any coal mines in my district yet we have two electric arc 
furnaces. One produces stainless steel, one produces steel. 
Kentucky is a big producer of aluminum. And so this is not 
about coal for me per se, this is about affordable domestic 
energy, and this is a very serious step when we increase the 
cost of domestic energy.
    Mr. Waltzer, how much more costly per kilowatt-hour would 
it be to produce electricity with CCS?
    Mr. Waltzer. Our study that we submitted in testimony 
indicated that to comply with this rule, a new coal plant today 
would be about $100 per megawatt-hour, and the----
    Mr. Massie. On a percentage basis, what would it be? How 
much higher to produce?
    Mr. Waltzer. Well, and that was without CCS, and then the 
one with CCS would be 113, so it's 13 percent higher.
    Mr. Massie. You are saying 13 percent. We had a witness 
just about a month ago from the DOE say it was about 50 percent 
higher, and so is that because it burns more coal? Is that one 
of the reasons?
    Mr. Waltzer. So yes, and I can explain the difference 
between those----
    Mr. Massie. That is all right. I just wanted to check. And 
how much more coal does it burn to do CCS?
    Mr. Waltzer. Well, you--I would have to go back----
    Mr. Massie. At the 40 percent level, the Administration 
would receive reduction, correct?
    Mr. Waltzer. Depending on if it is 13 percent or 50 
percent, which number you are looking at, the amount of coal 
you have to burn is proportional to the percentage of energy 
penalty that you are paying.
    Mr. Massie. So what is the number to achieve the 40 percent 
reduction?
    Mr. Waltzer. I would have to go back and do the math but it 
is--it could be--I don't know. I don't want to speculate. I 
would have to go back and do the math.
    Mr. Massie. So the coal-fired generation plants in my 
district have done a tremendous job of decreasing sulfur 
emissions. Particulate, mercury, all of these things have gone 
down by probably a couple orders of magnitude in the last 3 
decades. But it still remains a fact, does it not, that those 
emissions are proportional to the amount of coal burned?
    Mr. Waltzer. If I understand your question correctly, is 
there an energy penalty on those pollution controls? 
Absolutely.
    Mr. Massie. What I am saying is, when you burn more coal, 
do you emit more sulfur for any given plants?
    Mr. Waltzer. It depends on the pollution control.
    Mr. Massie. Let me ask that question to Mr. McConnell. For 
a given pollution control on a plant, if you burn more coal, 
does it emit more sulfur?
    Hon. McConnell. Yes, and it would require more handling and 
more treatment to process that sulfur, yes.
    Mr. Massie. So all things being equal, the effect of 
implementing CCS technologies is, we are going to burn more 
coal, and with the same emissions controls on mercury, 
particulate, sulfur, NOX, we are going to be admitting more of 
those, given the Administration's goals?
    Mr. Waltzer. That is not necessarily correct. In order to--
--
    Mr. Massie. But given the same technology for all of those 
things, it looks to me like it would be the same. Let me also 
ask you--I want to move on. I have 26 seconds. Will we have to 
mine more coal to produce the same amount of power?
    Mr. Waltzer. Yes.
    Mr. Massie. So all of the externalities that the 
Administration associates with mining coal would be increased 
with CCS?
    Mr. Waltzer. Potentially.
    Mr. Massie. Mr. McConnell, would you like to comment on 
that?
    Hon. McConnell. I might suggest there may not be any coal 
mined at all because in fact, the plants will shut down and 
there won't be any need for coal.
    Mr. Massie. That is my concern. We have a plant in Kentucky 
that is shutting down. It is going to affect 139,000 consumers 
of electricity in my district, so I think it is a very 
important point to make, that CCS is not without costs to the 
environment. Thank you.
    Chairman Stewart. Thank you, Mr. Massey. We now turn to the 
gentleman from North Dakota, Mr. Cramer.
    Mr. Cramer. Thank you, Mr. Chairman, and thanks, members of 
the panel, for being here. It is hard almost to know where to 
begin. I have heard so many things this morning. But I am going 
to start with addressing from the North Dakota perspective this 
issue of whether or not New Source Performance Standards for 
new plants affects jobs in the existing plants, and let me 
assure you, it does because it is a further reflection of an 
attitude that has been pervasive by this Administration that 
tells anybody interested in fossil fuel development, we are 
going to punish you as much as we can, and so if you are 
considering building a new plant or retrofitting an old plant, 
the odds are against you, and it is not like it has been a 
hidden agenda. It has been a pretty far-out-there agenda.
    I appreciate as well--I am going to use this opportunity to 
put a few things into the record--that Mr. Waltzer has 
referenced several times the Dakota gas syn fuels plant at 
Beulah, North Dakota. I had the opportunity as an energy 
regulator for ten years not only to oversee electric rates but 
coal mining and pipeline development, and I sited the CO2 
pipeline, much of it, that goes to Saskatchewan, and we are 
very proud of that project. The company that owns it, Basin 
Electric Power Cooperative, which is one of the largest G&T 
cooperatives in the country, also owns a lot of electric 
generation, coal combustion generation, right near Beulah, and 
they engage with their own money in a demonstration project, 50 
percent funded by Basin Electric's members and 50 percent 
funded by the State of North Dakota through a tax on coal, and 
concluded after the feed study that it was in fact not 
demonstrated to be economical to do a carbon capture and 
sequestration project at this time, and this is in a community 
right on the edge of the Balkan where there is a lot of 
commercial application for CO2 should it enhance oil 
recovery. Obviously, all the incentives are there, and yet even 
at that, they concluded by their study that it was in fact not 
feasible to do it. So I want to put into the record, Mr. 
Chairman, with your permission and the permission of the 
Committee, a number of documents referencing this feed study by 
Basin Electric, if that is acceptable.
    And then I have a question for the panel because I think 
there is some premise for this. When we talk about this 
adequately demonstrated standard and other standards in 
previous Clean Air Act rules, whether it is SOX, NOX, mercury, 
that have applied certain standards, has there been a different 
or is there a benchmark or some historical lesson we can learn 
from previous rules and the availability of technology at that 
time versus what we are facing today? Is that a fair 
characterization for a reasonable question, Mr. McConnell, and 
would you be able to answer?
    Hon. McConnell. I think there is an interesting model to 
look back into the 1970s when we were all concerned about SOX, 
NOX, mercury and suspended particulate. The government and 
industry formed a successful partnership together, not at odds 
with each other but partnered with each other, to develop 
technology to reduce those criteria pollutants by 90 percent 
over the next 40 years while we increase the amount of coal-
generated power in this country by 200 percent, and that is 
through the miracle of technology. And in fact, I would hope 
that as we look to the future, we don't get simply bounded by 
what we know today in terms of performance and capabilities but 
we are mindful of the fact that the investment for the future 
is really where we will be and will need to be, and I certainly 
hope that rulings such as this don't promote a partnership 
between government and industry. They promote an adversarial 
circumstances and tends to block out an opportunity to advance 
coal, not promote it.
    Mr. Cramer. Doctor, would you agree?
    Dr. Bajura. I have concerns about the scale that we are 
talking about. I don't think the earlier technologies were as 
expensive as what we are discussing here, the earlier 
commentary about an energy penalty of 30 percent. It costs a 
lot of money when you are talking about a billion dollars per 
plant in excessive coal use. I agree with the Secretary. We 
need to find a way to move forward if we are going to solve 
this problem, and I think government support is essential.
    Mr. Cramer. With just the few seconds I have, Mr. Waltzer, 
if you could just answer this. You made reference to making 
coal cost more, and I am going to paraphrase it. You are going 
to have to straighten it out for me. But you are saying that 
this actually benefits the coal-generated electricity by 
positioning it well for when gas prices rise. Could you 
elaborate a little bit on that, how making it cost more 
positions it better should gas prices rise?
    Mr. Waltzer. So let me be clear. I don't know what gas 
prices are going to do. They may go up, they may go down, but 
if we take this first step to begin the process of deploying 
CCS technology and pushing it further down the cost curve, that 
will benefit coal in the future.
    Mr. Cramer. I see. I am out of time. Thank you, Mr. 
Chairman.
    Mr. Weber. [Presiding] Thank you, Mr. Cramer.
    Mr. Cramer. If I could, Mr. Chairman, I don't think it has 
been ruled on, my request to place into the record these 
documents from Basin Electric.
    Mr. Weber. Without objection.
    Mr. Cramer. Thank you.
    [The information appears in Appendix II]
    Mr. Weber. We are going to get our act together up here 
Dana. We just don't know when, but the gentleman from 
California is recognized for five minutes.
    Mr. Rohrabacher. Thank you very much. I have been running 
back and forth between hearings today. As usual, they schedule 
two of the most important hearings that I am interested in at 
exactly the same time, so I am sorry if I ask something that is 
repetitive that had been asked earlier.
    I would like to ask Mr. Martella, you had mentioned earlier 
in your opening statement that there was a court decision, 
Massachusetts, that the Supreme Court decided that the EPA has 
to consider or may consider CO2. You said ``has to 
consider.'' Does it say that they have to consider the CO2 
or just may?
    Mr. Martella. The way I interpreted the decision is, they 
have to consider greenhouse gases but they do not have to 
regulate them. The court made it clear, it was not forcing EPA 
to regulate greenhouse gases but it did have to consider----
    Mr. Rohrabacher. That is really an important distinction, 
and certainly, the Court did not mandate that they take steps 
to take the CO2 out of energy production, did they, 
or did they say that has to be considered but they didn't say 
they have to do it? Is that right?
    Mr. Martella. You are absolutely right. It is an important 
distinction. The Court said the EPA can't ignore the 
consideration of greenhouse gases but the Court also explicitly 
said we are not telling EPA it must regulate greenhouse gases, 
just that it has to look at----
    Mr. Rohrabacher. So this is not a mandate by the Court. 
That is something we have to understand. What we are talking 
about is a policy that has been determined that this is the 
direction that the Executive Branch wants to go because that is 
what they have determined is consistent with their policy 
goals, not necessarily with what the Court is saying, not in 
contrast to the Court but not in direction mandated by the 
Court.
    Carbon sequestration--now, I know you have had this 
question a number of times so I am assuming that you all agree 
that the CCS costs a lot more than if you didn't have to do 
that. Is that correct? I mean, everybody agrees to that. And 
let me note, our colleague, Ms. Edwards, who I deeply respect, 
from Maryland--I wish she was here now--talked about the EPA's 
responsibility for public health and environment. Well, most of 
the people who support this idea that we are going to do 
something about the CO2 and sequestration are 
thinking that it is being done, it is a pollutant and they are 
doing this in the name of protecting health. Now, am I correct 
that CO2 is not a threat to public health? Does the 
panel agree with that? CO2 does not affect human 
beings in the process of producing electricity. Is that 
correct? Is there some disagreement on that? I have been 
through many panels on this now. You would be the first one.
    Mr. Waltzer. So CO2 is not toxic but the 
temperature increases associated with greenhouse gases----
    Mr. Rohrabacher. That is a different matter, okay? So 
CO2 is not toxic. It is not a pollutant. But we are 
going to spend a lot more money on it because we have the 
global warming theory that basically CO2 will affect 
the climate of the planet. But most of the people and the 
public who are looking for more. They are looking at expenses 
now, especially when we are in this deficit. They are actually 
operating under the thought that what is happening with 
sequestration, etc., is being done to protect their health. 
Well, that just isn't the case. That is not the case what we 
have just heard. It is based on a world climate theory, not on 
a personal health concept, that we have to protect people's 
health.
    Let me just note that what we have just heard with the talk 
from Mr. Massey is that not only is this whole sequestration 
not being done in order to protect public health, but by his 
questioning, he made it clear, and from what your answers were, 
that it is actually detrimental to the public health because 
you are increasing the level, the amount of sulfur, mercury and 
other particulates, etc. that are going into the air because 
now you are actually----
    Mr. Weber. Will the gentleman yield?
    Mr. Rohrabacher. Yes, I certainly will.
    Mr. Weber. And I will give you some extra time. Unless the 
end goal is to do away with the coal industry. I yield back.
    Mr. Rohrabacher. All right. Well, I think that sometimes 
people are not totally upfront about what their end goals are, 
but we have to look at the policies they are advocating today, 
but I would say that what we have heard at this hearing today 
indicates that the Administration is rushing forward full steam 
ahead on this CO2 sequestration as part of an energy 
production guide states in a way that will actually damage 
public health but is consistent with their goal of trying to 
have a policy that affects the climate of the entire world, 
which I might add, is a very questionable theory and is getting 
more skeptics every day on that theory.
    So thank you very much, Mr. Chairman.
    Mr. Weber. Thank you.
    And I thank the witnesses for being here today, and that 
concludes----
    Ms. Bonamici. Mr. Chairman, if I may? Thank you very much 
for yielding for just a moment. There were some documents that 
were introduced today at the hearing that we did not see 
before, staff was not given ahead of time, and I would like to 
request that all staff remind Members that it is helpful to get 
those ahead of time so that we can raise appropriate 
objections, if any. So I just wanted to put that reminder on 
the record, that it is important for us to see the documents 
ahead of time rather than for the first time at a hearing. 
Thank you very much.
    Mr. Weber. Thank you, Ms. Bonamici. I appreciate that.
    And with that, this hearing is concluded.
    [Whereupon, at 12:07 p.m., the Subcommittees were 
adjourned.]
                               Appendix I

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                   Answers to Post-Hearing Questions



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                              Appendix II

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                   Additional Material for the Record



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