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



 
                  U.S. ENERGY ABUNDANCE: MANUFACTURING
             COMPETITIVENESS AND AMERICA'S ENERGY 
             ADVANTAGE

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

                             JOINT HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                AND THE

           SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 20, 2013

                               __________

                           Serial No. 113-58


[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]




      Printed for the use of the Committee on Energy and Commerce

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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania             GENE GREEN, Texas
MICHAEL C. BURGESS, Texas            DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee          LOIS CAPPS, California
  Vice Chairman                      MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia                JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana                  Islands
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
CORY GARDNER, Colorado               BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas                  PETER WELCH, Vermont
ADAM KINZINGER, Illinois             BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
STEVE SCALISE, Louisiana             BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               JERRY McNERNEY, California
JOSEPH R. PITTS, Pennsylvania        PAUL TONKO, New York
LEE TERRY, Nebraska                  EDWARD J. MARKEY, Massachusetts
MICHAEL C. BURGESS, Texas            ELIOT L. ENGEL, New York
ROBERT E. LATTA, Ohio                GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington   LOIS CAPPS, California
BILL CASSIDY, Louisiana              MICHAEL F. DOYLE, Pennsylvania
PETE OLSON, Texas                    JOHN BARROW, Georgia
DAVID B. McKINLEY, West Virginia     DORIS O. MATSUI, California
CORY GARDNER, Colorado               DONNA M. CHRISTENSEN, Virgin 
MIKE POMPEO, Kansas                      Islands
ADAM KINZINGER, Illinois             KATHY CASTOR, Florida
H. MORGAN GRIFFITH, Virginia         JOHN D. DINGELL, Michigan
JOE BARTON, Texas                    HENRY A. WAXMAN, California (ex 
FRED UPTON, Michigan (ex officio)        officio)
                                 ------                                

           Subcommittee on Commerce, Manufacturing, and Trade

                          LEE TERRY, Nebraska
                                 Chairman
                                     JANICE D. SCHAKOWSKY, Illinois
LEONARD LANCE, New Jersey              Ranking Member
  Vice Chairman                      G.K. BUTTERFIELD, North Carolina
MARSHA BLACKBURN, Tennessee          JOHN P. SARBANES, Maryland
GREGG HARPER, Mississippi            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    JOHN D. DINGELL, Michigan
DAVE B. McKINLEY, West Virginia      BOBBY L. RUSH, Illinois
MIKE POMPEO, Kansas                  JIM MATHESON, Utah
ADAM KINZINGER, Illinois             JOHN BARROW, Georgia
GUS M. BILIRAKIS, Florida            DONNA M. CHRISTENSEN, Virgin 
BILL JOHNSON, Missouri                   Islands
BILLY LONG, Missouri                 HENRY A. WAXMAN, California, ex 
JOE BARTON, Texas                        officio
FRED UPTON, Michigan, ex officio
  
                             C O N T E N T S

                              ----------                              
                                                                   Page

                               Witnesses

Paul Cicio, President, Industrial Energy Consumers of America....     2
    Prepared statement...........................................     4
Dean Cordle, President and CEO, AC&S Incorporated................    17
    Prepared statement...........................................    19
Phyllis Cuttino, Director, Clean Energy Program, The Pew 
  Charitable Trusts..............................................    28
    Prepared statement...........................................    30
Drew Greenblatt, President, Marlin Steel Wire Products...........    58
    Prepared statement...........................................    60
Andre De Ruyter, Senior Group Executive, Sasol Limited...........    67
    Prepared statement...........................................    69

                           Submitted Material

Article entitled, ``Exelon blames `subsidized' wind, markets for 
  derailing nuclear projects,'' 2013, by E&E Publishing, 
  submitted by Mr. Terry.........................................    96


  U.S. ENERGY ABUNDANCE: MANUFACTURING COMPETITIVENESS AND AMERICA'S 
                            ENERGY ADVANTAGE

                              ----------                              


                        THURSDAY, JUNE 20, 2013

                  House of Representatives,
                  Subcommittee on Energy and Power,
                                             joint with the
Subcommittee on Commerce, Manufacturing, and Trade,
                           Committee on Energy and Commerce
                                                    Washington, DC.
    The subcommittees met, pursuant to call, at 11:27 a.m., in 
room 2123, Rayburn House Office Building, Hon. Ed Whitfield 
(chairman of the subcommittee) presiding.
    Present from the Subcommittee on Energy and Power: 
Representatives Whitfield, Scalise, Shimkus, Terry, Cassidy, 
Olson, McKinley, Gardner, Kinainger, Griffith, Rush, McNerney, 
Tonko, Green, Matsui, and Waxman (ex officio).
    Present from the Subcommittee on Commerce, Manufacturing 
and Trade: Representatives Terry, Lance, Guthrie, Olson, 
McKinley, Kinzinger, Bilirakis, Johnson, Schakowsky, Sarbanes, 
McNerney, Rush, Barro, and Waxman (ex officio).
    Staff Present: Charlotte Baker, Press Secretary; Matt 
Bravo, Professional Staff member; Allison Busbee, Policy 
Coordinator, Energy & Power; Tom Hassenboehler, Chief Counsel, 
Energy & Power; Kirby Howard, Legislative Clerk; Jason Knox, 
Counsel, Energy & Power; Nick Magallanes, Policy Coordinator, 
CMT; Brian McCullough, Senior Professional Staff Member, CMT; 
Brandon Mooney, Professional Staff Member; Gib Mullan, Chief 
Counsel, CMT; Andrew Powaleny, Deputy Press Secretary; Shannon 
Taylor Weinberg, Counsel CMT; Michelle Ash, Minority Chief 
counsel, Commerce, Manufacturing and Trade; Alison Cassady, 
Minority Senior Professional Staff Member; Caitlin Haberman, 
Minority Policy Analyst; and Bruce Ho, Minority Counsel.
    Mr. Whitfield. I would like to call this hearing to order, 
and certainly want to thank those of you who are serving as our 
witnesses today. And I do apologize that we are, I guess, over 
an hour and a half late, or close to it, so thank you for your 
patience.
    And as you know, we do have difficulty with controlling 
time up here, and we were voting on the floor. So we do value 
your being here, and we look forward to your testimony on this 
important subject.
    Today's hearing is entitled, ``U.S. Energy Abundance: 
Manufacturing Competitiveness and America's Energy Advantage.''
    So I know that this is going to be extremely disappointing 
for you all, and I am sorry to say this, but we are not going 
to have any opening statements up here. So we are going to go 
right directly to you and listen to your opening statements. So 
each one of you will be given 5 minutes.
    And this is a joint hearing. Mr. Terry and I are both--our 
committees are hosting this hearing, our subcommittees.

    STATEMENTS OF PAUL CICIO, PRESIDENT, INDUSTRIAL ENERGY 
  CONSUMERS OF AMERICA; DEAN CORDLE, PRESIDENT AND CEO, AC&S 
INCORPORATED; PHYLLIS CUTTINO, DIRECTOR, CLEAN ENERGY PROGRAM, 
 THE PEW CHARITABLE TRUSTS; DREW GREENBLATT, PRESIDENT, MARLIN 
    STEEL WIRE PRODUCTS; AND ANDRE DE RUYTER, SENIOR GROUP 
                    EXECUTIVE, SASOL LIMITED

    Mr. Whitfield. So Mr. Cicio, we will go with you. You are 
recognized for 5 minutes for an opening statement.

                    STATEMENT OF PAUL CICIO

    Mr. Cicio. Thank you, chairmen Whitfield and Terry, Ranking 
Members Rush and Schakowsky. Thank you for the opportunity to 
be here.
    The shale gas revolution and lower natural gas and feed 
stock costs have launched the start of the manufacturing 
renaissance with announced manufacturing investments of over 
$110 billion. This is the first wave of investment. The second 
wave will be from our downstream customers who will relocate to 
be near their suppliers and reduce their costs. The Boston 
Consulting Group estimates that 5 million new jobs will be 
created in manufacturing by 2020. Every dollar's worth of 
natural gas run through our manufacturing economy creates up to 
$8 in added value. This is a superior economic use of natural 
gas than exporting LNG.
    The $110 billion investment will also create new natural 
gas demand between 7 and 9 Bcf a day, about an 11 percent 
increase. This is all good news.
    The most significant threat to the fulfillment of the 
manufacturing renaissance will be determined by the speed of 
LNG export terminal approvals and the volume of its shipments, 
which brings me to the key points of my testimony.
    Doing it right can be a win-win for producers and consumers 
of natural gas. Doing it wrong will result in spiking natural 
gas and electricity prices and an end to the manufacturing 
renaissance. We need to avoid what happened in Australia.
    IECA is not opposed to LNG exports but warns policymakers 
that careless due diligence by the DOE on the public interest 
determination of LNG export applications to non-free-trade 
countries is a real concern. LNG terminal approvals are for 30 
years. A lot can happen in 30 years.
    In this regard, we are asking members of these two 
committees to support your natural gas consumer constituents 
back home by urging the DOE to do a rulemaking to establish 
transparent criteria for decision-making for LNG export 
facilities. The public trust--just as the DOE did as they dealt 
with LNG imports a decade ago.
    Domestic demand is accelerating and LNG export demand is 
additive to that demand. For example, just six of the most 
likely export terminals would increase demand by 16 percent. 
The export demand would be on top of the AEO 2013 demand 
increase of 6 percent by 2020. Neither demand number includes 
the manufacturing renaissance of an 11 percent demand. 
Combined, this is a 33 percent increase. This is a huge 
increase in a very short time frame, and this does not include 
new demand that will occur from the EPA's utility mat and EPA's 
greenhouse gas regulations.
    The public interest determination for approval of LNG 
exports to non-free-trade countries is the law. The public 
interest test is really important, because it is a safeguard to 
ensure that decisions are being made correctly and with up-to-
date information.
    The responsibility for review of LNG export applications 
resides with the Department of Energy. In this regard, the DOE 
decision raises questions. On May 17th, in our opinion, the DOE 
failed in their judiciary responsibility under the Natural Gas 
Act in the implementation of the public interest determination 
for the Freeport facility. DOE cites three studies in approving 
the Freeport LNG export facility. All three use demand 
assumptions that are 2 and a half years old.
    However, we do agree with the comments in the conclusion 
portion of the approval. This is a quote: ``The reasons in 
support of proceeding cautiously are several. Number one, the 
LNG export study, like any study based on assumptions and 
economic projections, is inherently limited in its predictive 
accuracy. Number two, applications to export significant 
quantities of domestically produced LNG are a new phenomenon 
with uncertain impacts. And number three, the market for 
natural gas has experienced rapid reversals in the past and is 
again changing rapidly due to economic, technological and 
regulatory developments. The market of the future very likely 
will not resemble the market of today,'' unquote.
    Mr. Chairman, no one in your congressional district wants 
higher natural gas and electricity prices. We ask for your help 
in this matter.
    Lastly, decisions on LNG export applications need to be 
done on a case-by-case basis and sequenced to avoid price 
spikes. These are not unreasonable requests. Thank you.
    Mr. Whitfield. Mr. Cicio, thank you.
    And I neglected to say who Mr. Cicio is, but he is the 
president of the Industrial Energy Consumers of America.
    And we thank you for your testimony.
    [The prepared statement of Mr. Cicio follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Whitfield. Our next witness is Mr. Dean Cordle, who is 
the president and CEO of AC&S, Incorporated, a chemical 
company.
    And we are delighted that you are here, and you are 
recognized for 5 minutes. Mr. Cordle.

                    STATEMENT OF DEAN CORDLE

    Mr. Cordle. Good morning, Chairman Whitfield and Terry, 
Ranking Members Rush and Schakowsky, and members of the 
Subcommittee on Commerce, Manufacturing, and Trade, and of the 
Subcommittee on Energy and Power. Thank you very much for your 
leadership in holding today's joint subcommittee hearing on 
United States energy abundance and its tie to our manufacturing 
competitiveness and advantage.
    My name is Dean Cordle, president, CEO of AC&S, a chemical 
manufacturing facility located in Nitro, West Virginia, 
appearing on behalf of the American Chemistry Council.
    I am pleased to comment on the critical role that abundant 
and affordable oil and natural gas is playing in revitalizing 
the competitiveness of the U.S. chemical industry, driving 
enormous new investments in chemical manufacturing and creating 
hundreds of thousands of new jobs in the process.
    We are a very small company. We have over 40 employees. We 
started from humble beginnings back in 1988 as a railcar 
cleaning facility. Over the years, we have added chemical 
manufacturing, and today, we serve the refining, pharmaceutical 
and agricultural industry in producing intermediates and 
finished products for them.
    This shale gas revolution has transformed our company. We 
are putting steel in the ground, as we speak, we are nearing 
completion of a new production unit, and my focus right now on 
growth opportunities is certainly centered in the oil and gas 
industry and the downstream derivatives.
    The U.S. chemical industry is highly energy intensive. We 
use energy inputs, mainly natural gas and natural gas liquids 
as both our major fuel source and feed stock. About 75 percent 
of the cost of the producing petrochemicals and plastics is 
related to the cost of energy-derived raw materials. 
Consequently, our ability to compete in global markets is 
largely determined by the price and availability of natural gas 
and gas liquids.
    The consulting firm IHS forecasts that the U.S. has a 100-
year supply of natural gas. This abundant and affordable supply 
of natural gas has transformed the U.S. chemical industry from 
the world's high-cost producer 5 years ago to the world's low 
cost producer today. As a result, the U.S. enjoys a decisive 
competitive advantage in the cost of producing basic 
petrochemicals. For example, it costs less than $400 a ton to 
produce ethylene in the United States, whereas it compares 
$1,000 a ton in Europe and even more in Japan. As a result of 
this cost advantage, dozens of companies are making plans to 
invest in new U.S.-based chemical production capacity.
    ACC estimates that more than $72 billion in new capital 
expenditures will be invested in the U.S. between 2012 and 
2020. Roughly half of those investments will come from firms 
that are based outside of the U.S. The U.S. is emerging as the 
place to manufacture chemicals now. The supply response from 
shale gas will directly create tens of thousands of new jobs in 
the U.S. chemical industry.
    Policy will play an important role if we are to optimize 
our competitive advantage. These policies include implementing 
a true all-of-the-above energy policy that enables all energy 
sources, including energy efficiency, to fairly compete in the 
market. Second, we need to keep oversight of the unconventional 
oil and gas production in the hands of the States. In addition, 
we also need to expedite permitting and construction of 
infrastructure needed to move that gas and gas liquids to 
market.
    In closing, I want to thank this subcommittee for the 
opportunity to describe how abundant and affordable quantities 
of natural gas and natural gas liquids are creating a 
manufacturing renaissance in the U.S. Chemical industry. In a 
few short years, the U.S. chemical industry has moved from an 
industry in contraction to an industry facing an era of 
unprecedented expansion.
    Thank you, Mr. Chairman.
    Mr. Whitfield. Thank you, Mr. Cordle. We appreciate that.
    [The prepared statement of Mr. Cordle follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Whitfield. And our next witness is Ms. Phyllis Cuttino, 
who is the director of the Clean Energy Program at the Pew 
Charitable Trust.
    And we thank you for being with us, and you are recognized 
for 5 minutes.

                  STATEMENT OF PHYLLIS CUTTINO

    Ms. Cuttino. Thank you, Mr. Chairman, and fellow members of 
the committee. I am thrilled to be here to discuss clean energy 
as it relates to the energy transformation in the United 
States, advanced manufacturing and our competitiveness 
globally.
    Research by the Pew Charitable Trust has shown that clean 
energy technologies have entered the mainstream of global 
energy markets. In 2012, $269 billion was invested and clean 
energy deployment was a record 88 gigawatts, spurred by 
dramatic price declines.
    Companies and countries are turning to clean energy because 
it enhances energy security, protects the environment and 
represents a tremendous economic opportunity. Indeed, there is 
every reason to believe that private investment will continue 
to grow significantly as countries prioritize clean energy. In 
some markets, renewable energy systems are already the cheapest 
and best options. Even in oil-rich Saudi Arabia, they set a 
goal to obtain 30 percent of their electricity from solar 
power.
    The International Energy Agency predicts that clean energy 
technologies will provide more than half of electric generating 
capacity added over the next 25 years, and most forecasters 
expect trillions of dollars to be invested over the next 
several decades.
    In short, clean energy is a significant economic 
opportunity for U.S. manufacturers, but while the global future 
of clean energy is bright, U.S. competitiveness in the sector 
is cloudier. Although we lead in clean energy innovation, we 
are not manufacturing, deploying or exporting these 
technologies as we should be. Once the clear worldwide leader, 
policy uncertainty in this country has had an adverse impact on 
U.S. standing in the sector. China now leads the world in 
attracting private investment: $65.1 billion in 2012. In the 
same year, the United States, our investment fell to $35.6 
billion. We are now in second place. Simply put, America is 
underperforming in the clean energy sector.
    Last year, Pew organized roundtable discussions in New 
York, in Ohio, in Colorado, in Georgia, in Mississippi, and in 
Washington, D.C., with clean energy industry leaders in the 
areas of finance, manufacturing, innovation and deployment. 
They identified three key challenges facing the industry and 
six policies for overcoming them. These challenges are: policy 
uncertainty. This was described as the overriding impediment to 
clean energy investment and progress. The boom and bust nature 
of U.S. clean energy programs makes it hard for companies to 
succeed and develop the supply chains and business models they 
need.
    International competition was second. It is a tough time 
for producers, with fierce competition and worldwide 
oversupply. We should expect some bankruptcies and 
consolidation to occur, just as they have characterized every 
emerging sector, from automobiles to computers, but over the 
long term, this will result in a stronger, more efficient and 
cost-competitive industry.
    Tight credit markets are a third challenge. While not 
unique to clean energy, it is difficult to raise the capital 
needed to grow businesses and scale up technologies.
    Now, Congress has numerous options for addressing these 
challenges and bolstering U.S. competitiveness. Our roundtable 
participants identified six priorities for you all to consider. 
First, set a clear, consistent and long-term goal for the 
deployment of clean energy, thereby providing the certainty 
needed for inventors to invent, investors to invest and 
manufacturers to produce.
    Second, support energy R&D at higher levels and continue 
recent initiatives like ARPA-E and energy innovations hubs in 
order to maintain the pipeline of ideas and innovations for 
driving down the costs and ratcheting up the performance of 
advanced energy technologies. This is critical to U.S. 
competitiveness.
    Third, renew the production and investment tax credits for 
a few more years. Congress has provided incentives to incumbent 
technologies. The four permanent tax incentives in the code are 
for oil, gas and nuclear power. Our industry participants would 
welcome a multiyear but time-limited extension of clean energy 
tax credits to help ensure full market maturation.
    Fourth, level the playing field by addressing the barriers 
that impede industry progress. For example, pass the proposed 
MLP Parity Act, which would allow clean energy to qualify for 
the same tax treatment that is open to investments in the oil 
and gas infrastructure.
    Fifth, support manufacturing through advanced energy 
manufacturing tax credit and the Department of Energy's clean 
energy manufacturing initiative.
    And finally, sixth, strengthen and expand trade promotion 
for exports of American-made clean energy technologies to 
growing and emerging markets.
    In conclusion and in view of current and projected 
investment trends, U.S. competitiveness in clean energy 
warrants public and private sector priority and partnership.
    Mr. Chairman, policy matters. Encouraging innovation, 
deployment, manufacturing and trade of clean energy 
technologies through policy will help ensure America 
capitalizes on the substantial opportunity for the Nation's 
economic, environmental and national security prospects.
    We at the Pew Charitable Trust look forward to working with 
you and Congress to pass these policies and realize these 
goals.
    Mr. Whitfield. Thank you very much.
    [The prepared statement of Ms. Cuttino follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Whitfield. Our next witness is Mr. Drew Greenblatt, who 
is the president of Marlin Steel Wire Products.
    And we appreciate your being with us, and you are 
recognized for 5 minutes.

                  STATEMENT OF DREW GREENBLATT

    Mr. Greenblatt. Thank you. Good morning.
    The USA has hit the lottery. This energy blessing will 
create a lot of jobs. This is not controversial. This should be 
a unifying thing for our country to get behind.
    My name is Drew Greenblatt. I am the president of Marlin 
Steel. We are based in Baltimore, Maryland. Marlin Steel is the 
leading manufacturer of custom-made wire baskets, wire forms, 
and precision sheet metal fabrications. We make 100 percent in 
the USA in Baltimore City.
    We are a fast growing company. We have grown 7 years in a 
row, despite the recession. As a matter of fact, we are number 
162 of all manufacturers, according to Inc. Magazine.
    We use entirely recycled steel. And we export--and this is 
pretty cool--to China. We make it all in Baltimore. We use 
steel made in Illinois, made in Pennsylvania. And the thing I 
am most proud about is that we have gone 1,650 days without a 
safety incident. Twenty percent of my employees are mechanical 
engineers. And we succeed through innovation, investment. We 
have a wonderful team.
    I am representing today the National Association of 
Manufacturers. One in six private sector jobs are in 
manufacturing. These are great jobs; $77,000 a year on average, 
including benefits. And this is much better than most--than the 
average American employee makes.
    I bought Marlin Steel in 1998. We had $800,000 in sales and 
18 workers. Last year was our most successful year ever. We had 
over $5 million in sales, and now we employ over 29 people.
    One of the primary reasons for this growth is because of 
domestic energy production and these lower energy prices. There 
has been a lot of talk about economic growth out in the shale 
boom in North Dakota, Ohio, Pennsylvania, Texas, but this is 
starting to impact and trickle down to places that are not 
generating oil and petroleum, places like mine. Manufacturers 
across the country are benefiting from these lower energy 
prices and this increased industrial activity. We fulfill many 
orders that ship to the gas industry.
    How has the boom helped us specifically? Two ways. Number 
one, lower costs. We are paying less money for the energy to 
heat the factory, for example. We are paying less money for 
powder coating, so we are more competitive when we compete head 
to head against China, when we compete head to head against 
Japan and Germany and Canada.
    The second way is that it has increased our revenue; higher 
revenue. Higher revenue means more jobs. We are selling 
material handling solutions from steel wire baskets and sheet 
metal products to Schlumberger, Halliburton, Timken, and 
Caterpillar. This is what has propelled our growth.
    We are also aware that recently President Obama visited one 
of our colleagues a mile away: Ellicott Dredges. They are doing 
great because of the boom as well. They are making dredges for 
the Canadian oil sands.
    Think about it. There is a new steel pipe plant being built 
in Youngstown, Ohio. When was the last time a steel mill has 
been built in Youngstown, Ohio? Something is going on, and it 
is great, and we should be embracing this.
    For us, what happens is we hire unemployed local steel 
workers. We buy more robots. One of our robot makers is in 
Chicago; a second one is in Connecticut. We buy our steel from 
Illinois, from Indiana. We buy our steel from Pennsylvania. So 
it is--we are all in it together, and we are all growing 
together because of this wonderful fortune our Nation is 
blessed with.
    In conclusion, abundant low-cost energy is changing the 
landscape of the global marketplace. It is well positioning us 
U.S. manufacturers for years to come. We are increasing 
production. We are expanding our employees. We are hiring more 
people. And these workers are buying things, and this is having 
a positive ripple effect throughout the economy. With continued 
production and the right policies in place, U.S. manufacturers 
will continue to be the drivers of economic growth and 
prosperity. Thank you.
    Mr. Whitfield. Thank you very much, Mr. Greenblatt.
    [The prepared statement of Mr. Greenblatt follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Whitfield. And our final witness today is Mr. Andre de 
Ruyter, who is senior group executive for Sasol Limited.
    And thank you for being with us, and you are recognized for 
5 minutes.

                  STATEMENT OF ANDRE DE RUYTER

    Mr. de Ruyter. Chairman Whitfield, Chairman Terry, Ranking 
Member Rush, Ranking Member Schakowsky, members of the 
committee, thank you very much for the opportunity to be here 
today and present testimony. It is an honor.
    Sasol is an integrated international energy and chemicals 
company. We employ about 34,000 people in 38 countries 
worldwide. We operate large-scale fuel and chemical plants 
throughout the world, and we are listed on the Johannesburg and 
New York stock exchanges.
    We are not a stranger to the U.S. We have been doing 
business here for the past 20 odd years. We have headquarters 
based in Houston. We have also operations in that city, and 
furthermore, operations, plants in Arizona, in Louisiana, and 
also in the State of California.
    The U.S., and Louisiana, in particular, offer a business-
friendly climate with a predictable regulatory structure. More 
importantly, though, the U.S. shale gas revolution has created 
attractive opportunities for Sasol's investment into the U.S. 
market.
    Sasol is uniquely positioned to monetize U.S. natural gas 
through our gas-to-liquids, or GTL, technologies, and 
consequently, Sasol announced in December 2012 that it was 
going to move forward with the next phase of investing in a 
world scale ethane cracker and gas-to-liquids facility in 
Westlake, Louisiana. It is estimated that the combined 
investment comprised by these two projects will amount to 
between 16 and 21 billion U.S. dollars. This will make it one 
of the largest foreign direct investments into manufacturing in 
the U.S. in history.
    The ethane cracker is anticipated to produce some 1.5 
million metric tons of ethylene per annum, with associated 
downstream ethylene products produced, and the GTL plant will 
be producing gas-to-liquids diesel as well as associated 
chemical products.
    While natural gas is a major energy source for global power 
generation, it has up to now lacked the versatility to embrace 
transportation needs. With our proven GTL technology, we can 
fundamentally alter the chemistry of natural gas so that we can 
convert it to approximately 100,000 barrels per day of gas-to-
liquids diesel for use in transportation, thereby maximizing 
in-country value add. And this contrasts with the technology of 
LNG, which essentially repackages natural gas for export to 
other countries as a form of energy.
    Unlike other alternative fuels, GTL diesel is fully 
fungible with conventional diesel and requires no adjustment to 
engine technology or to distribution infrastructure. GTL 
diesel's high quality makes it highly suitable for use as a 
blend stock by crude oil refineries to upgrade their products 
into high quality fuels; however, when gas-to-liquids diesel is 
used neat, it has the added benefit of leading to lower 
emissions of particulates and other pollutants as a result of 
the fact that it contains essentially zero sulfur and very low 
aromatic compounds. And this helps to improve air quality and 
meet emission mandates.
    Although this GTL gas-to-liquids facility will be the first 
of its kind in the U.S., it is important to emphasize that this 
is not an experimental technology; this is not new. Sasol has 
been manufacturing fuel using essentially the same technology 
for more than 60 years. And together with our partner, Qatar 
Petroleum, we have produced more than 45 million barrels of 
diesel fuel for export into the international market since the 
commissioning of our ORYX gas-to-liquids facility in Qatar in 
2007.
    When we proceed with these projects, it will have a very 
substantial impact on the U.S. economy. We anticipate that we 
will create more than, 200 direct jobs, with an average annual 
salary of $88,000; 7,000 construction jobs will be created 
during peak construction. And this will in turn lead to 
thousands of indirect jobs.
    Our commitment, however, goes beyond these projects and 
extends into the local communities, where we intend to continue 
to be a good neighbor and to conduct our business in a safe and 
socially and environmentally responsible manner.
    The U.S. will also see increased tax revenues and GDP and 
an improved balance of trade.
    Sasol's U.S. projects are a compelling example of how 
bilateral trade between Africa and the U.S. can yield 
substantial foreign direct investment into the U.S., which 
represents a win-win for both the U.S. and also the South 
African economies, and we are proud to be driving the next 
phase of our growth into the U.S. And we encourage Congress to 
continue to promote policies that stimulate the development of 
natural gas, and we really look forward to taking advantage of 
this opportunity.
    Thank you, Mr. Chairman. I will take any questions.
    Mr. Whitfield. Mr. de Ruyter, thank you very much.
    [The prepared statement of Mr. de Ruyter follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Whitfield. And thank all of you for your testimony.
    We have the farm bill on the House floor today, and we are 
going to be going to vote again soon, so we are going to 
allocate to every member 3 minutes for questions only. And so I 
would like to start my 3-minute time now. I am going to 
recognize myself for 3 minutes, but I am--before I--and on my 
questioning time, I am just going to make a few comments.
    First of all, this is a very important hearing. We are 
seeing this renaissance of manufacturing in America, and we 
know that it is caused primarily because of low cost energy 
that has come about of the shale gas and shale oil finds that 
we have recently had. So, in order to keep this going and to 
address the job and the sluggish economy we have in the U.S., 
and I notice today the Federal Reserve board yesterday, I 
guess, said they are going to kind of stop our easy money 
policy, so we may see interest rates start edging up soon.
    So the policies that the U.S. Government adopts are going 
to have a dramatic impact on the cost of energy. And energy 
costs are a key component for continuing to grow our 
manufacturing base and create jobs. And so when we talk about 
that, we are talking about the regulations, we are talking 
about an all-of-the-above energy policy, which many of you 
talked about specifically in your testimony, but I would remind 
everyone once again that the Obama administration says an all-
of-the-above, but they systematically are trying to eliminate 
some fossil fuels, particularly coal.
    And I notice--I was reading the Federal Register footnotes 
on the proposed greenhouse gas new source performance standard 
for new electric generating units. And in the register, it says 
the Department of Energy National Energy Technology Laboratory 
estimates that when that rule becomes final, that the 
technology that the coal industry would have to use to meet the 
emissions standards would add 80 percent to the cost of 
electricity; that one standard, 80 percent increase.
    So we are all excited now and we feel good about these low 
energy costs, but as we move forward, we have to think about 
the policies and the impact, because I, for one, as many of you 
said in your testimony, do believe we need all of the above. 
Green energy alone is not going to get it done.
    So thank you very much for your testimony. I look forward 
to working with all of you as we move forward.
    And at this time, I would like to recognize the gentleman 
from Illinois, Mr. Rush, for 3 minutes.
    Mr. Rush. I want to thank you, Mr. Chairman.
    We do have an incredible opportunity here to address both 
the threat of climate change and to secure U.S. leadership and 
U.S. jobs in a clean energy industry worth trillions of 
dollars.
    Today's witnesses testified about how low-cost natural gas 
benefits the economy and is leading to a manufacturing 
renaissance in the U.S., but natural gas, Mr. Chairman, is not 
the only domestic energy source creating good manufacturing 
jobs in this country. Last year, the U.S. wind industry 
employed more than 80,000 Americans, including more than 25,000 
in manufacturing jobs. The solar industry employed more than 
119,000 U.S. workers, including more than 29,000 in 
manufacturing sectors. Many predict that the clean energy 
sector will be the most important energy industry of this 
century.
    And my question is directed to Ms. Cuttino.
    Ms. Cuttino, how large is the global clean energy market, 
and how much is it anticipated to grow in the future?
    Ms. Cuttino. Well, thank you, Mr. Ranking member. Mr. Rush, 
most forecasters are saying that there will be between $5.9 
trillion and $7 trillion that will be invested over the next 10 
to 15 years in the sector. The International Energy Agency 
predicts that 50 percent of all new capacity additions across 
the world are going to be renewable. Other estimates are that 
it is as much as 70. Here in the United States, last year, 49 
percent of the new installed capacity was renewable; 30 percent 
was gas. So together, these two things actually work very well.
    So I think it represents a very significant opportunity, 
particularly as a country that has invented these technologies 
and can ship and export them and sell them around the world. 
Thank you.
    Mr. Rush. What role should Federal funding for advanced 
energy technology development play in rebuilding America's 
competitive advantage in clean energies innovation, and where 
should we focus our investment?
    Ms. Cuttino. Well, Mr. Rush, that is a very good question. 
We--in talking to clean energy leaders across the country, 
business leaders, have said time and time again that policy 
uncertainty is an impediment to their progress. It is the 
single largest factor that chills greater investment and 
deployment, export and manufacturing. This committee has heard 
many times business talk about uncertainty as it relates to 
regulations and policy, and clean energy is no different. It is 
just another form of technology.
    So if we want to support this sector, and we should, we 
need to put together a long-term policy signal that will give 
investors the signal they need to invest, to move capital off 
the sidelines and for manufacturers to scale up and produce 
those technologies that we can sell around the world.
    Mr. Rush. Thank you.
    I yield back.
    Mr. Terry [presiding]. Thank you, Mr. Rush.
    Now I recognize myself for my 3 minutes. I appreciate all 
of you being here.
    Since 2008, during the great recession, we lost over 5 
million American manufacturing jobs. We are seeing an uptick. 
We have had--500,000 new jobs were created within the last year 
to 2 years, and a lot of them are in the industries that are 
heavy energy users, particularly natural gas. So it is 
interesting--or that is the purpose of having the hearing here. 
We want to see, A, is it the low cost of natural gas that is 
generating this resurgence in manufacturing jobs? Are there 
other reasons? And so I am going to kind of flip it over, the 
question here, and flip it over to the other side of the coin 
and ask, we have had the testimony about pro natural gas. What 
are the other obstacles that you have observed in your 
expansion within your own industry of any barriers, speed 
bumps, or whatever that maybe we can address?
    Mr. Cicio, you go first, and then we will just go from my 
left to right. And make it quick.
    Mr. Cicio. Speed bumps for energy-intensive manufacturers 
are many, including regulations. Regulations, for example, the 
industrial boiler MATS. Hugely expensive. Manufacturers in 
terms of the next speed bump are concerned about what happens 
to electricity costs as a result of EPA regulations on the 
electric utility sector that is forcing coal to gas, but the 
costs of those environmental regulations all get pushed onto 
us. In the future, regulations of greenhouse gases.
    Mr. Terry. Mr. Cordle.
    Mr. Cordle. Well, I will just echo the previous gentleman. 
I think regulations are an important part of something that we 
need to address. Drilling permits on Federal lands, onshore and 
offshore, we need to make sure that those are expedited and 
streamlined, as well as leaving the regulations of the 
extraction to the States. Thank you.
    Mr. Terry. Mrs. Cuttino, do you have anything? It is a 
little bit out of----
    Ms. Cuttino. Well, I would offer something positive, which 
is I think everyone on the panel and I would agree that one 
thing that our manufacturers need is support for industrial 
energy efficiencies, such as combined heat and power or waste 
heat recovery. This, as you know, reduces the cost of energy, 
and they are installed here in America by American labor, and 
they spur tremendous private investment as well as making all 
the products more competitive around the globe. So I think that 
is something that this committee could certainly support, is 
combined heat and power industrial energy efficiency.
    Mr. Terry. Mr. Greenblatt.
    Mr. Greenblatt. I agree with all the impediments that were 
just mentioned. Another big impediment is that it is a global 
economy, and we are competing against Canada. We are competing 
against Germany and Japan, and our tax rates are not 
competitive. We are in the 40 something percent, 70--40 percent 
tax bracket, and we are competing against Canada, which is at 
15 percent. That is hard to welcome. We need your help to get a 
level playing field so we can grow jobs in Baltimore.
    Mr. Terry. Mr. de Ruyter, I am going to cut you off, 
because my time is gone, but I am only doing so because I know 
Mr. Scalise is very anxious to just talk to you.
    At this time, I recognize the gentlelady from Illinois for 
her 3 minutes.
    Ms. Schakowsky. Thank you, Mr. Chairman.
    I wanted to ask you, Ms. Cuttino, there has been a lot of 
talk about all of the above, but in terms of Federal 
investment, how does, how do clean energy technologies compare 
to fossil fuel investments?
    Ms. Cuttino. Well, we have seen that certainly for 
incumbent technologies, there are permanent tax incentives in 
the code, some more than 100 years old, some more than 50 years 
old. By contrast, the investments or the tax incentives we have 
seen for clean energy technologies have been episodic at best, 
uncertain. And, you know, certainty is a word that everyone on 
this panel has said is critically important, leveling the 
playing field, reducing barriers. All of these issues apply for 
clean energy as well. So we need to have the same assurances 
for clean energy as we do for the incumbent energy 
technologies.
    Ms. Schakowsky. Thank you. I just want to use my remaining 
time in saying that this panel actually frightens me a bit and 
the discussion frightens me a bit. There will come a time in 
the future history not yet written of our planet where we say, 
whoa, when we had an opportunity to move toward clean energy, 
not just for the competitiveness of the United States or for 
the advantages of manufacturing, but for the ability of human 
life to survive on our planet, that we had an opportunity to 
really do something about this in a significant way.
    The world can afford to burn, we are told, about 565 
gigatons of carbon dioxide over the next 50 years before we 
reach 2-degree Celsius increase and disaster that could follow. 
And we already have, in terms of proven coal and oil and gas 
reserves, about 2,795 gigatons of carbon dioxide; in other 
words, about five times as much as we can actually afford to 
put into the atmosphere.
    And I feel an obligation at this moment in history to my 
children and my grandchildren and future people on this planet 
that we need to shift toward clean energy technologies to 
prevent calamitous consequences in this world.
    So, Mr. Greenblatt, I am happy that you have the jobs in 
Illinois, and I am happy that you embrace the idea that Ms. 
Cuttino talked about that we could be more energy efficient, 
but this idea now, hooray, we have got all of this, you know, 
natural gas, this abundance, we can be an exporter of fossil 
fuels to the world; we can be an exporter, make a lot of money 
by developing and exporting clean technologies, which are the 
technologies of the 21st century, I hope.
    And I yield back.
    Mr. Terry. Thank you.
    And now we recognize the--Mr. Scalise, you are recognized 
for 3 minutes.
    Mr. Scalise. I am sure you meant to say the gentleman from 
Louisiana, right, Mr. Chairman?
    Mr. Terry. The gentleman from----
    Mr. Scalise. I appreciate you yielding. And let me start by 
saying this panel excites me. I think the fact that we are here 
in a committee hearing in Congress talking about how technology 
and energy is revolutionizing our country, and not only 
creating tens of thousands of really good high-paying jobs, 
which is something that we ought to be focused on every single 
day, but also allowing our country to be energy independent. 
Here is one case where we have got the opportunity to reduce 
our dependence on, in many cases, Middle Eastern countries who 
don't like us, where we are spending billions of dollars to 
countries who use that money against us, to kill Americans in 
many cases. And so the revolution in energy is, I think, one of 
the most important things if we want to get our economy back on 
track, get our country moving again, create jobs and create the 
energy security I think that Americans expect and deserve. And 
so I think it is important that we talk about just what is 
happening in the real world with some of these new technologies 
in energy.
    And, again, it is exciting to see what has happened. I know 
in my State of Louisiana, we have seen it in these shale plays 
and up at Haynesville shale, up in--north Louisiana, you drive 
up and down the interstates and you see trucks moving pipe, you 
see people working, you see very low unemployment, and we are 
creating American energy.
    And again, I mean, if we want to have an economy--if we 
want everybody to live in squalor and poverty, you know, then 
we go with the old economy. If we actually want to create jobs 
and manufacture, make things in this country so that we can 
create jobs and increase everybody's lifestyle, not just in 
America, but in other countries, it starts with energy, and 
safe and secure energy, and that is what this is all about.
    And so I want to shift it over to you, Mr. de Ruyter. You 
know, following the lead from my distinguished chairman, Mr. 
Terry, and he knew I had a number of questions, but I want to 
first thank you for the commitment that you have made to 
Louisiana and to America, because you could have put this 
plant, this liquefaction plant, the cracker in another country, 
too. You decided to do it in America; $21 billion of 
investment; those are great jobs, over a thousand jobs. And 
when you see what this all can do for our country, I want to 
ask you about the process right now. How is it going, and are 
there any impediments that are placed before you in the 
regulatory process that Congress can help remove so that you 
can get these jobs created quicker, so you can create this 
energy in America quicker?
    Mr. de Ruyter. Thank you, Mr. Scalise.
    I think the two potential impediments that we see is, as 
some of the other panelists have remarked, is the need for 
regulatory certainty. We need to have a stable regulatory 
regime that is predictable and that we can anticipate to remain 
stable for the long term. Once we have that, I think we will be 
in a very good position to make these very large investment 
decisions.
    I think as well what would be very useful is to the extent 
that we are dependent on various authorities for the granting 
of permits, we would like our applications--and I must stress 
that we are not asking for any waivers or exemptions. We intend 
to fully comply with all the environmental legislation, but we 
would like our permits to be considered and approved, to the 
extent that they comply, in an expeditious manner.
    Mr. Scalise. I think those are very reasonable requests, 
and we are fighting in this committee to try to create that 
certainty so that your company and so many others throughout 
this country can go and create those jobs and create that 
American energy. So thanks for what you are doing, for all of 
you on the panel.
    And I yield back the balance of my time.
    Mr. Terry. Thank you, Mr. Scalise, or the gentleman from 
Louisiana.
    At this time the chair recognizes the full committee 
ranking member, Mr. Henry Waxman. The gentleman from California 
is recognized for 3 minutes.
    Mr. Waxman. Thank you very much, Mr. Chairman.
    The United States pioneered many of the clean energy 
technologies being deployed around the world today, but in 
2012, China attracted more clean energy investment than any 
other country. In the United States, private investment in the 
clean energy market actually fell.
    The clean energy technology market will be pivotal as the 
world moves toward a lower carbon global economy. It seems like 
the United States, once a leader in this market, is losing 
ground.
    And Ms. Cuttino, your organization held a series of 
roundtable discussions with industry and experts that discussed 
impediments to clean energy investment in the U.S. What did 
these experts identify as the overriding impediment?
    Ms. Cuttino. Thank you, Mr. Waxman.
    Their overriding concern was the policy uncertainty that 
they face in the current policy environment. They talked about 
a number of things, but that really was the biggest impediment 
to them being able to raise private capital, being able to 
scale up to manufacture. And, frankly, they have said, look, 
energy is a place where Congress has set goals in the past 
and----
    Mr. Waxman. What makes China a safer bet than the United 
States right now in terms of clean energy investment?
    Ms. Cuttino. China leads the world in not only installed 
capacity, sir, but they also lead the world in terms of 
attracting private investment. This is--America used to lead 
the world, frankly. We created many of these technologies. And 
in a study that we conducted looking at the U.S.-China trade 
relationship, there are clear advantages that the United States 
has, advanced manufacturing, innovation, while China's 
advantages are really low cost assembly.
    Mr. Waxman. But it all comes down to the uncertainty, the 
lack of consistent clean energy plan, and investors can't rely 
on policy to provide direction? Is that----
    Ms. Cuttino. Yes, sir.
    Mr. Waxman [continuing]. What you found? Now, in your 
roundtable discussions with industry, did the participants 
identify EPA regulations as an impediment to investment in the 
United States?
    Ms. Cuttino. They did not.
    Mr. Waxman. What about setting a carbon cap or putting a 
price on carbon? Would that provide clean energy investors with 
greater certainty about the purpose and direction of our energy 
policy? What were their views on that?
    Ms. Cuttino. That is certainly one policy that would 
provide certainty, sir.
    Mr. Waxman. That is one. What else?
    Ms. Cuttino. Well, setting some kind of a clean energy or 
renewable energy standard. Opening up private pools of capital 
to clean energy the way that oil and gas can capitalize on 
them. This is Master Limited Partnerships, a real estate 
investment trust. Certainly providing longer term tax 
incentives to the production tax credit or the investment tax 
credit, the same kind of certainty that we have given to other 
incumbent technologies. And then investing, frankly, in energy 
R&D. As you know, this country has invested significantly in 
defense and health, but energy R&D is woefully low.
    Mr. Waxman. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Terry. Thank you, Mr. Waxman.
    Now the chair recognizes the gentleman from Kentucky, Mr. 
Guthrie.
    Mr. Guthrie. Thank you, Mr. Chairman.
    First of all, as to the carbon cap, I think there would be 
more certainly for clean energy, because it would make 
incumbent energy more expensive, which is kind of what we are 
discussing here today, how America's energy boom has helped in 
manufacturing.
    My family is in manufacturing, and I can tell you from 
firsthand experience, my father walked into a Ford plant as a 
union operator and ended up owning his own business. The 
pathway to the middle class for our family and for most 
families is right through the manufacturing floor. I mean, we 
have seen it throughout.
    And in Kentucky, we have seen two--we are the number one 
aluminum State in the country and we used to be one of the top 
textile States in the country. And textiles in the 1990s moved 
offshore because it was high labor intensive. Aluminum has 
stayed in Kentucky, because it is high energy intensive. So our 
competitive advantage is, for the aluminum industry anyway, 
which is what my family is a part of, is that fact that we have 
cheap energy rates. Particularly in Kentucky, as a coal state. 
So I don't have coal in my district. I don't think I have a 
lump of coal in my district, but 94 percent of Kentuckians get 
their power from coal, and that has attracted the investment 
and jobs that pay $65,000 to $70,000 a year for hourly workers 
in the aluminum industry. And so it is very serious when we 
talk about raising the price.
    And I would love to see clean energy be as competitive. And 
equalizing the tax and incentives, if one group gets it, I 
think that is a fair point to make. But raising the price of 
incumbent energy to get some other type of energy to be 
competitive is something that would concern me.
    And I don't know if anybody wants to talk on specific 
regulations that you have dealt with, I know we had kind of in 
general with Mr. Terry, that you have dealt with that has 
actually--the EPA has done this, and it has raised the cost of 
your energy and made you less competitive.
    Mr. Cicio. As a matter of fact, aluminum, about 35 percent 
of the cost of producing aluminum is the cost of electricity or 
energy. Relatively small changes to the price of electricity 
has an immediate impact on their competitiveness. And in 
Kentucky, for example--well, Kentucky or anywhere else, you 
find coal-fired power plants, you will find lots of 
manufacturers. Why? Because coal provides low cost BTU power. 
And we compete globally with all types of companies, including 
companies that are owned by sovereign states. So costs are 
everything. And EPA regulations on these coal-fired power 
plants and the proposed regulations, greenhouse gas regulations 
on new and existing facilities are of great concern.
    Mr. Guthrie. And I know companies that looked at Mexico to 
invest, but the difference in energy did not make up for the 
differences in labor. So they are able to pay people higher 
wages because they are driven more by energy costs than they 
are by labor costs. And that is--anybody else have--I have only 
got 7 seconds. I guess I will yield back.
    Mr. Terry. The gentleman yields back. And we recognize Mr. 
McNerney, the gentleman from California, for 3 minutes.
    Mr. McNerney. Thank you, Mr. Chairman.
    Mr. Cordle, briefly, if you would, just to satisfy my 
curiosity, how is the natural gas mostly used? Is it used as a 
chemical, as a solute? Is it used to create heat through 
burning, or is it used to create electricity? Just curiosity, 
so if you could give a brief answer, I would appreciate it.
    Mr. Cordle. In two primary ways. We use natural gas to fire 
our steam boilers in our chemical production facility.
    Mr. McNerney. Right.
    Mr. Cordle. And the overall lowering of that cost has 
certainly helped us dramatically. In the overall chemical 
manufacturing industry, it is a raw material, it is an 
ingredient in what we make in terms of our products.
    Mr. McNerney. So is that what most of the natural gas is 
used, as an ingredient in the product?
    Mr. Cordle. Well, the natural gas, when it comes out of the 
ground, it has several components. It has ethane, propane, and 
a few other things. And the ethane is the key raw material that 
is cracked and turned into ethylene, ethylene oxide, and then 
eventually it comes into polyethylene in the plastics that we 
use every day.
    Mr. McNerney. Thank you.
    Ms. Cuttino, I am very sympathetic to your comment about 
predictability. I was in the industry for many years and I saw 
boom and bust cycles because the production tax credit and so 
on. We would lay off people and our suppliers would go away, 
and you would have to rebuild every cycle, all your suppliers. 
It is a very difficult--so I sympathize with that. I think we 
need to be sensitive to that here in the committee.
    Could you tell me what advantages, what policy advantages 
that the fossil fuel industry has that the renewable industry 
does not have?
    Ms. Cuttino. Certainly. A couple of things. One, they have 
enjoyed the benefits of permanent tax breaks in--or tax 
incentives in the Tax Code.
    Mr. McNerney. Specifically?
    Ms. Cuttino. Oil and----
    Mr. McNerney. Specifically.
    Ms. Cuttino. Specifically? Oil and gas.
    Mr. McNerney. Tax breaks, which ones.
    Ms. Cuttino. Tax incentives. For oil and gas, it has been 
more than 100 years, for nuclear power----
    Mr. McNerney. What do the incentives look like? What 
specifically do the incentives look like?
    Ms. Cuttino. In total? More than $500 billion----
    Mr. McNerney. Let me----
    Ms. Cuttino [continuing]. Or what some estimates have been.
    Mr. McNerney. What do they look--what form do they take? 
What do the incentives look like?
    Ms. Cuttino. They take the form of tax incentives. I am 
sorry.
    Mr. McNerney. Right. Are they production tax incentives, or 
are they depletion----
    Ms. Cuttino. Yes. Yes. I am sorry. Exploration for 
extraction, yes.
    Mr. McNerney. Andre de Ruyter, on the GTL process, what is 
the energy balance of the GTL liquids; that is, energy in your 
product, divided by energy into the process and energy in the 
natural gas? What does the balance look like?
    Mr. de Ruyter. Thank you, sir. We use about 9.5 Bcf per day 
to produce 100,000 barrels of diesel per day. So you could work 
out the balance from that.
    Mr. McNerney. You don't have a number--a balanced number.
    Mr. de Ruyter. It is a ratio between gas--natural gas in 
and diesel out on the other side of the process.
    Mr. McNerney. Plus, energy into the process.
    Mr. de Ruyter. Well, that includes the consumption of the 
energy.
    Mr. McNerney. Mr. Chairman, I ran over already.
    Mr. Terry. Thank you.
    Now the chair recognizes the gentleman from West Virginia, 
Mr. McKinley.
    Mr. McKinley. Thank you, Mr. Chairman.
    In 3 minutes, we are going to have to run pretty quickly 
through this.
    Ms. Cuttino, just quickly, with a question to you--and I 
like your comments about the clean energy technology and 
research. And you know, with National Energy Technologies 
Laboratories, they have been very focused on trying to get that 
accomplished. Yet you are aware that their research budget was 
cut by 41 percent. So when the President did that, would you 
agree with that?
    Ms. Cuttino. I think it is our opinion and the opinion----
    Mr. McKinley. It is a yes or a no.
    Would you agree with the President to slash research, R&D, 
on fossil fuels?
    Ms. Cuttino. On fossil fuels or clean energy? We think----
    Mr. McKinley. Well, it is all one in the same. I am going 
to take that as a no.
    Mr. Cicio, if we could run down with you quickly with this. 
In the 112th Congress, the EPA continually talked about during 
their hearings that they thought that more regulations were 
actually going to help the manufacturing industry. They 
suggested that for every million dollars spent in more 
comprehensive regulations, for each million, it created 1 and a 
half jobs. Would you agree that there are 1 and a half jobs 
created for every million dollars in new regulation?
    Mr. Cicio. No. And I don't think any manufacturer would.
    Mr. McKinley. Mr. Cordle, your thoughts.
    Mr. Cordle. No, I wouldn't agree with that.
    Mr. McKinley. From yours, from Marlin Steel.
    Mr. Greenblatt. It would be a big job loser.
    Mr. McKinley. Thank you.
    How about from Sasol?
    Mr. de Ruyter. I can't support that statement.
    Mr. McKinley. I am sorry?
    Mr. de Ruyter. I cannot support that statement that it will 
create more jobs.
    Mr. McKinley. Back also on uncertainty, we are trying to 
find a level of certainty. I agree. As a small business owner 
myself, we were always searching for that. But now we have the 
issue of Obamacare coming upon us in our manufacturing.
    Mr. Cordle, with 40 employees, you are faced with if you 
cross over 50, you are going to be meeting new guidelines or 
new requirements. How is your company adjusting to Obamacare?
    Mr. Cordle. Well, certainly, the cost of health care has 
gotten to the point it has been very difficult to make ends 
meet. I think right now a family plan costs over $3,000, and 
our company carries about 80 percent of that on behalf of the 
employee. And we have been seeing anywhere from 10 to 30 
percent increases on an annual basis. I met last week with our 
insurance company for our union side--we employ steelworkers--
and they are frustrated because they don't even have the rates.
    Mr. McKinley. Weren't you told it was going to decrease 
insurance costs?
    Mr. Cordle. I don't know how that relates to Obamacare, Mr. 
Congressman, but I can just tell you from my experience that 
health care costs in general are going to become very difficult 
on a small business.
    Mr. McKinley. My time is expired. I am sorry. Thank you 
very much.
    Mr. Terry. Thank you.
    The chair recognizes the gentleman from Maryland for his 3 
minutes.
    Mr. Sarbanes. Thank you, Mr. Chairman.
    I want to thank the panel. I want to acknowledge Drew 
Greenblatt, who has a very successful business that he has 
described in Baltimore, and we are very proud of the work he 
has done in manufacturing.
    There are a lot of issues that are packed in here. And, of 
course, we have less time than usual to address them all.
    But the boom in natural gas exploration and production, of 
course, is presented as a real opportunity. Everything is 
relative when it comes to energy and the impact it has on our 
economy and on our public health and so forth. I had embraced 
the idea that natural gas is an important bridge from 
traditional fossil fuels, dirtier fossil fuels, toward a clean 
energy, renewable energy future.
    The challenge is that the boom has produced now a scenario 
that is being embraced by many that this is sort of the end of 
our problems. That it will allow for ultimate energy 
independence for the country, and we may be less motivated to 
get across that bridge now to the other side in terms of a 
renewable energy portfolio in the future.
    So I think that is where some of the anxiety from the boom 
comes from. Having said that, I certainly appreciate that the 
manufacturing sector sees a real benefit in the lower prices 
that are being generated from this and maybe as between having 
those prices increase, because we turn to an export strategy 
for that versus having them increase maybe because we move to 
some better way of capturing the impact of that on our 
environment, or we put more safety standards in place with 
respect to the industry. I guess most would choose the former.
    But let me ask you, Mr. Greenblatt, you are certainly 
benefiting from the natural gas boom and the impact that is 
having. But I would imagine you also over the long term aspire 
to take advantage of clean energy and renewable energy 
opportunities that may be able to be inputted into your 
operation. Maybe the pricing isn't there yet. But you are 
innovative enough and creative it. I imagine you have got that 
on the horizon. I thought you might want to talk about that.
    Mr. Greenblatt. We have explored it. It is something we 
would love to do. We have looked at putting solar panels on our 
roof. The math isn't there yet. It would be a wonderful thing 
for it to occur. But we are not there yet.
    Mr. Sarbanes. My hope, as I yield back my time, is that we 
can strike the right balance so that it is cost effective to 
pursue a number of these different opportunities and that we 
can safeguard, as I said, public health and other concerns that 
we have.
    With that, I yield back.
    Mr. Terry. Thank you.
    The chair recognizes the gentleman from Ohio, Mr. Johnson.
    Mr. Johnson. Thank you, Mr. Chairman. I am going to move 
quickly here because I have got several topics I would like to 
address.
    Mr. Cicio, I notice that you have a list of new projects 
listed in your testimony that could be at risk if the U.S. 
approves applications to export liquid natural gas to non-free-
trade agreement countries. I was surprised by some of these 
companies that you listed, but one in particular caught my eye, 
and that is the Vallourec and Mannesmann factory, or V&M Star, 
expansion in Youngstown, Ohio. So my first question is, do you 
know what they make there?
    Mr. Cicio. Of course.
    Mr. Johnson. OK. They make the very steel and the tubes 
that are going to be used to transport liquid natural gas to 
market. They are going to benefit from the exporting of liquid 
natural gas. Why would you suggest that they are going to be 
hurt by the exporting of liquid natural gas?
    Mr. Cicio. Well, my testimony, I guess, is not clear 
enough, but it says we are not opposing exports. It is how the 
DOE----
    Mr. Johnson. Why do you list that company as one that is 
going to be hurt by the exporting of liquid natural gas?
    Mr. Cicio. Because if you export a lot of natural gas, it 
increases the price of domestic natural gas and electricity.
    Mr. Johnson. But the companies that make the materials that 
export the natural gas, they are going to benefit from this.
    Let me move on. Because I don't want to get into a debate 
here. We have a fundamental disagreement.
    Let me ask you this. You list a number of chemical projects 
that will actually benefit from increased natural gas 
production in your testimony. A recent ICF study projected that 
employment in the chemical sector would actually increase with 
LNG exports due to the need to process greater natural gas 
liquids. Do you agree or disagree with the ICF study and 
conclusions?
    Mr. Cicio. We disagree.
    Mr. Johnson. You disagree.
    There are a lot of ethane cracker plants being planned all 
across the country. If all of the cracker plants get built, 
wouldn't the rest of the natural gas users see increased prices 
for natural gas and ethane?
    Mr. Cicio. If there is increased production of ethane, it 
doesn't--you will get residual increases of supply of natural 
gas, but not necessarily higher prices.
    Mr. Johnson. I will take that as a yes.
    There is a nearly an almost limitless supply of natural 
gas, if the Federal Government doesn't mess up the opportunity, 
and from a manufacturing perspective, if we aren't forced to 
use gas for power generation instead of cheaper coal. You 
mentioned that a little earlier. I would just suggest that your 
time and the time of your members would be better spent helping 
us make sure that the administration doesn't stamp out the coal 
industry, which is the most cost affordable, reliable form of 
energy on the planet.
    With that, I yield back.
    Mr. Terry. Thank you, Mr. Johnson.
    At this time, I ask unanimous consent that each side has 
one more set of questions. So the next person on both sides 
will be the last. Then we will close, gavel the hearing.
    One more each side. Unfortunately, you got beat out by one, 
Gene.
    Unless Ms. Matsui wants to split it with you.
    Mr. Green. No, I don't want to take Doris' time. But I also 
know some of us have been here, and obviously, it is an 
important panel.
    Mr. Waxman. Mr. Chairman, I object to the unanimous 
consent.
    Mr. Terry. The alternative is we will come back at 2:30.
    Mr. Waxman. Let's go with the questions and see if we can 
get it done.
    Mr. Terry. Ms. Matsui, you are recognized.
    Ms. Matsui. Thank you, Mr. Chairman, and thank the 
witnesses for being here today.
    As we continue the broader debate on energy exports, we 
must not overlook clean energy technologies and the strong role 
they will play in transitioning our country to a clean energy 
economy, mitigating climate change, and strengthening our 
national security. While exporting LNG is certainly an issue 
worth delving further into, I want to assure that it is just 
one piece of a larger export strategy, a strategy that also 
includes clean energy technology exports.
    My home district of Sacramento is home to over 220 clean 
technology companies, many of which are small and medium-size, 
who are exploring ways to expand their businesses by exporting 
their products to foreign markets. However, unlike large 
companies, small businesses simply do not have the resources, 
time, and manpower to effectively promote their products 
abroad. They need proper assistance to compete in the 
international marketplace.
    To this end, I have introduced the Clean Energy Technology 
Manufacturing and Export Assistance Act. This legislation would 
create an export assistance fund to help clean technology 
manufacturers navigate foreign markets. Additionally, it would 
develop and implement a national clean energy technology export 
strategy.
    Ms. Cuttino, included in your testimony is a policy 
recommendation to expand markets to U.S. clean energy goods and 
services. Do you believe developing a national clean energy 
technology export strategy would help achieve this goal, and 
what do you believe are factors that should be considered in 
any sort of export strategy and why?
    Ms. Cuttino. I absolutely think we ought to have a national 
strategy to export clean energy goods. Mr. Scalise earlier 
talked about American-made energy in Saudi Arabia or countries 
in the Middle East. We can export to these countries. Saudi 
Arabia is going to spend a hundred billion dollars on solar. 
And they ought to buy American-made solar. So there is a huge 
opportunity to do that. And I think any strategy ought to be to 
open up markets and to ensure that small businesses have the 
same access that large businesses do.
    Ms. Matsui. Thank you. So do our international competitors 
help their small- and medium-sized clean tech businesses 
facilitate exports to the United States?
    Ms. Cuttino. Yes, they do.
    Ms. Matsui. How can U.S. clean energy exports benefit the 
quality of life for people in emerging economies?
    Ms. Cuttino. One-third of the world's population is without 
electricity. And we are seeing a very aggressive push in many 
areas around the world. Distributed energy is already the best 
and cheapest option in many of these locations. We know that 
there is going to be a compound growth in areas of Africa, 
Latin America, and Asia, in terms of energy growth and clear 
energy investment. So we should be there and exporting to these 
emerging markets.
    Ms. Matsui. Thank you.
    I think I yield back whatever I have.
    Mr. Terry. Thank you.
    At this time the chair recognizes the gentleman from 
Colorado.
    Mr. Gardner. Thank you, Mr. Chairman.
    Mr. Cicio, emerging reports from nonpartisan think tanks 
like BPC and Brookings are talking about and suggesting that it 
is domestic natural gas prices that will drive exports and not 
exports driving natural gas prices. So it is actually the 
natural gas prices will drive exports, not exports driving 
natural gas prices. Do you agree with that?
    Mr. Cicio. Well, low natural gas prices relative to foreign 
markets, yes, will drive exports. Of course.
    Mr. Gardner. So, Mr. de Ruyter, do you agree with that?
    Mr. de Ruyter. Absolutely, I agree.
    Mr. Gardner. I just wanted to get that cleared up. And I 
would yield my time to Mr. Olson.
    Mr. Olson. I thank my colleague from Colorado.
    Welcome to the witnesses. With the short time, I will 
attempt to curb my instincts as a Texan and brag about the Lone 
Star State. But here it goes.
    I represent a suburban Houston district. We have 125 
companies operating in the refining and petrochemical 
industries in Houston. The region is expecting $35 billion in 
new capital investments over the next 3 years. The construction 
from these investments will create over 100,000 jobs and 
contribute over $800 million in taxes. Those are big numbers, 
even for Texans.
    I have a few questions about cheap natural gas bringing 
competitors, foreign companies, to our soil.
    Mr. Greenblatt, I am thrilled to hear about the growth of 
your company in Baltimore because of increased shale gas 
production. I am wondering how to bring your business to Texas.
    But I love the fact, too, you are exporting to China. Do 
you think foreign competitors, maybe one from China, will come 
and bring their operations to the United States due to lower 
energy costs and probably some favorable tax treatments from 
home countries?
    Mr. Greenblatt. I think lower energy costs is going to be a 
boon to, is going to create a boom in foreign direct 
investment. I think many companies will reposition and look at 
the globe and think of us differently and in a very positive 
way because of our cheap energy prices.
    Mr. Olson. Thank you.
    Mr. Cordle, sir, could you discuss in a little bit of 
detail here, with the limited time, what the shale revolution 
means for foreign manufacturing here in the United States? 
Foreigners come to our country to manufacture.
    Mr. Cordle. Certainly. It has been a tremendous increase in 
investment in the United States. I believe BASF TOTAL are 
investing in your State, in Port Arthur, a billion dollar 
project. And we have had almost $70-plus billion in capital 
announcements in the last couple of years. This really is a 
game changer. Never before has the competitive playing field 
been tilted in our favor. It has always been the other way. And 
we need to put in the policies that will ensure that this is 
long-lived, it is real, it is here, and we appreciate what you 
are doing today, and the rest of the committee, regarding this 
issue.
    Mr. Olson. I am out of time. One final comment. Go Spurs.
    Mr. Terry. Object.
    The gentleman from Texas, another prideful Texan.
    Mr. Green. Well, thank you, Mr. Chairman.
    Unlike my neighbor and colleague, it doesn't take a Texan 
too much time to brag about Texas.
    I represent a district in the Houston area, and it at one 
time had the largest petrochemical complex in the country. 
Every one of our chemical plants in our district in East Harris 
County are announcing expansions.
    I know one on the list that Mr. Cicio had was 
PetroLogistics. It took a mothballed chemical plant in our 
district and because of the propane coming off the Eagle Ford, 
and they were serving literally the market in the Houston area. 
But last year, they contacted me and wanted to know what they 
could do to get a carbon permit because States are not issuing 
them in Texas. You have to go to EPA. Because they wanted to 
double their capacity and get in the international market. So 
we are seeing that literally all over the petrochemical 
complexes, from the Mississippi River down to Corpus Christie, 
Texas.
    I know, Ranking Member Waxman, I know China is expanding on 
their greener energy production. But they are also, they and 
India, are building 76 percent of the coal plants in the world. 
So China is doing everything. They are somewhat free 
enterprise. But we also know they are a command economy. So 
they can do things that we have to deal with typically with 
free market or with government assistance on a limited basis. 
Although some of my plants think the EPA orders them around, 
but we do know there is an appeals process for that. And in 
China, there may not be that.
    Mr. Cordle, are you seeing similar expansion in West 
Virginia like I am seeing in East Harris County?
    Mr. Cordle. Not to the scale that you are seeing, but we 
are very hopeful. We are working very hard as a State in an 
industry to attract foreign and domestic investments in the 
region. In the Kanawha River Valley we do, as you know, we have 
a rich tradition in chemical manufacturing.
    Mr. Green. I noticed--in fact, I got to visit some of the 
chemical plants along the Ohio River, both in Ohio and in West 
Virginia. You mentioned the supply response for shale gas has 
directly created 46,000 jobs in the chemical industry due to 
expanded chemical production. What is the average salary for 
those jobs?
    Mr. Cordle. I believe we are around $77,000, $78,000 for 
those jobs.
    Mr. Green. Must be nationwide. Because I know in my area, 
our work source talks about the average salary is about $86,000 
for those chemical plant jobs and refinery plant jobs. Because 
they are also expanding.
    What policies are needed to maintain the long-term, low-
cost energy advantage? I understand that I have that industrial 
complex, but I also have a lot of service companies who 
actually continue to work, like Eagle Ford and all over the 
country, literally. But, for example, has the Federal 
Government made it difficult to use hydrofracking? What would 
that mean to some of your businesses?
    Mr. Cordle. In terms of hydraulic fracturing, I think the 
States are best suited to handle the regulation of that 
activity on the extraction side.
    Mr. Green. Are we close to the time?
    Mr. de Ruyter, one last question. You talked about the link 
to the gas-to-liquids facility that you are building in 
Louisiana. You also talked about Sasol currently operating, and 
you estimated the greenhouse gas savings associated with 
blending GTL diesel in U.S. Refineries. Has GTL technology ever 
been used here, and would our refineries have to add or update 
their equipment to handle it?
    Mr. de Ruyter. The refineries would not have to update or 
change their equipment. They can use it straight as a blend 
stock. In fact, it would improve the quality of traditional 
crude-derived diesel by blending in gas-to-liquids diesel.
    Mr. Green. Has it ever been used in the United States?
    Mr. de Ruyter. Yes. We have in fact exported diesel to the 
U.S., and we have also supplied GTL jet fuel to the Department 
of Defense, who uses it for experimental purposes.
    Mr. Green. I appreciate it. I appreciate the opportunity.
    Mr. Terry. Thank you, Mr. Green.
    You have to say. I have a unanimous consent request to 
submit an article from E&E on ``Exelon Blames Subsidized Wind 
Markets,'' article.
    Hearing none, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Terry. Now your job is done.
    I want to thank our entire panel here. All of you were 
awesome and your testimony very informative.
    Members have 10 days to submit their questions.
    Panel, I would appreciate if we submit questions to you, 
that you answer them within a timely manner. Timely is not 
several months.
    With that, we are adjourned.
    [Whereupon, at 12:45 p.m., the subcommittees were 
adjourned.]
    [Material submitted for inclusion in the record 
follows:]gs,d533
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