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

                        SCIENCE OF CAPTURE AND STORAGE:
                       UNDERSTANDING EPA'S CARBON RULES

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

                                 JOINT HEARING

                                   BEFORE THE

                         SUBCOMMITTEE ON ENVIRONMENT &
                              SUBCOMMITTEE ENERGY

                  COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                            HOUSE OF REPRESENTATIVES

                                 SECOND SESSION

                                   __________

                                 MARCH 12, 2014

                                   __________

                               Serial No. 113-68

                                   __________

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

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

           Available via the World Wide Web: http://science.house.gov

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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 COLLINS, New York
    VACANCY
                                     ------

                          Subcommittee on Environment

                     HON. DAVID SCHWEIKERT, Arizona, 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
    JIM BRIDENSTINE, Oklahoma
    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

                                 March 12, 2014

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

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

                               Opening Statements

    Statement by Representative David Schweikert, Chairman,
      Subcommittee on Environment, Committee on Science, Space, and
      Technology, U.S. House of Representatives......................    10
        Written Statement............................................    10

    Statement by Representative Suzanne Bonamici, Ranking Minority
      Member, Subcommittee on Environment, Committee on Science,
      Space, and Technology, U.S. House of Representatives...........    11
        Written Statement............................................    13

    Statement by Representative Eric Swalwell, Minority Ranking
      Member, Subcommittee on Energy, Committee on Science, Space,
      and Technology, U.S. House of Representatives..................    14
        Written Statement............................................    15

    Statement by Representative Cynthia Lummis, Chairman,
      Subcommittee on Energy, Committee on Science, Space, and
      Technology, U.S. House of Representatives......................    16
        Written Statement............................................    17

    Statement by Representative Eddie Bernice Johnson, Ranking
      Member, Committee on Science, Space, and Technology, U.S. House
      of Representatives.............................................
        Written Statement............................................    17

                                   Witnesses:

                                    Panel I

    David Hawkins, Director of Climate Change Programs, Natural
      Resources Defense Council
        Oral Statement...............................................    18
        Written Statement............................................    20

    Robert G. Hilton, Vice President, Power Technologies for
      Government Affairs, Alstom Power Inc.
        Oral Statement...............................................    45
        Written Statement............................................    48

    Robert C. Trautz, Senior Project Manager, Electric Power Research
      Institute
        Oral Statement...............................................    62
        Written Statement............................................    64

    Scott Miller, General Manager and CEO, City Utilities of
      Springfield Missouri, American Public Power Association
        Oral Statement...............................................    72
        Written Statement............................................    74

    Panel I Discussion...............................................    86

                                    Panel II

    Janet McCabe, Acting Assistant Administrator, Office of Air and
      Radiation, U.S. Environmental Protection Agency
        Oral Statement...............................................   106
        Written Statement............................................   108

    Panel II Discussion..............................................   115

                 Appendix I: Answers to Post-Hearing Questions

    Robert G. Hilton, Vice President, Power Technologies for
      Government Affairs, Alstom Power Inc...........................   136

    Robert C. Trautz, Senior Project Manager, Electric Power Research
      Institute......................................................   142

    Scott Miller, General Manager and CEO, City Utilities of
      Springfield Missouri, American Public Power Association........   149

    Janet McCabe, Acting Assistant Administrator, Office of Air and
      Radiation, U.S. Environmental Protection Agency................   156

                Appendix II: Additional Material for the Record

    Article submitted for the record by Cynthia Lummis, Chairman,
      Subcommittee on Energy, Committee on Science, Space, and
      Technology, U.S. House of Representatives......................   190

    Letter submitted for the record by David Schweikert, Member,
      Subcommittee on Energy, Committee on Science, Space, and
      Technology, U.S. House of Representatives......................   195

    Letter submitted for the record by Ralph Hall, Member, Committee
      on Science, Space, and Technology, U.S. House of
      Representatives................................................   197

    Article submitted for the record by Ralph Hall, Member, Committee
      on Science, Space, and Technology, U.S. House of
      Representatives................................................   201

    Study submitted by Representative Randy Neugebauer, Member,
      Subcommittee on Energy, Committee on Science, Space, and
      Technology, U.S. House of Representatives......................   204

    Letter submitted by Representative Kevin Cramer, Member,
      Subcommittee on Energy, Committee on Science, Space, and
      Technology, U.S. House of Representatives......................   211

    White paper submitted by Representative Randy Weber, Member,
      Committee on Science, Space, and Technology, U.S. House of
      Representatives................................................   218

    Report submitted by Representative Jim Bridenstine, Member,
      Subcommittee on Energy, Committee on Science, Space, and
      Technology, U.S. House of Representatives......................   222

    Letter submitted by Representative Jim Bridenstine, Member,
      Subcommittee on Energy, Committee on Science, Space, and
      Technology, U.S. House of Representatives......................   229

                        SCIENCE OF CAPTURE AND STORAGE:
                        UNDERSTANDING EPA'S CARBON RULES

                                  ----------

                           WEDNESDAY, MARCH 12, 2014

                      House of Representatives,
       Subcommittee on Environment and 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. David
    Schweikert [Chairman of the Subcommittee on Environment]
    presiding.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Schweikert. The joint hearing of the Subcommittee
    on Environment and the Subcommittee on Energy will come to
    order, and there is the gavel.
        I want to thank everyone for joining us today. Welcome to
    today's joint hearing titled ``Science of Capture and Storage:
    Understanding EPA's Carbon Rules.''
        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 to all the Members and understand how the
    question-and-answer periods are going to work. After
    recognition of the Chair, and Ranking Members of the
    Environment and Energy Committee, we will recognize those
    Members present at the gavel in order of seniority on the Full
    Committee? Okay. It probably should be--well, we will go with
    the full Committee because that is how we wrote it before. And
    those coming in after the gavel will be recognized in order of
    arrival.
        Let me recognize myself for just a couple minutes as sort
    of an opening statement. And I always drive staff a little nuts
    when I do this. I am going to go somewhat off script. I spent
    the last two days trying to read everything I get my hands on,
    the individual testimonies, data and information provided from
    the EPA and other just random articles. Fascinating subject
    area.
        But my fear is, let us see if I can find an elegant way to
    express this, is sort of the law of unintended consequences. So
    as we are having the weaving of the discussion, what I would
    love woven into that discussion is the underlying technology,
    the underlying science. And symbolically, let us see if I can
    make this make sense. At home in my desk, I have the first-
    generation iridium phone--many of you remember that--will a
    little plaque on it saying just because you can engineer it,
    doesn't mean you should do it. That actually sort of weaves
    through this. We have much of the scientific capability, at
    least theoretically, but have we stressed it? Do we truly
    understand the unintended consequences? Do we also understand
    what carbon sequestration, or ACO2, as it is often
    referred to in the literature, where we would be 50 years from
    now, 100 years from now, even after some of those capturing
    facilities have been shuttered? Where are we truly technology-
    wise? And then also then the weaving of the discussion of the
    proposed rule sets and are those rule sets appropriate, robust,
    and what is the cost curve on those for adoption, you know,
    have we made the cost curve something where now it is a
    theoretical discussion that we have now actually priced out of
    practice.
        [The prepared statement of Mr. Schweikert follows:]

         Prepared Statement of Environment Subcommittee Chairman David
                                   Schweikert

        I want to thank the witnesses for being here today. Your expertise
    is invaluable in helping this committee understand the practical and
    sometimes negative and damaging effects of EPA rulemaking. We are here
    to learn the facts about carbon capture and storage. And more
    specifically, we are here to see whether those facts support what EPA
    has proposed.
        When I look at the EPA's new source performance standards proposal,
    I'm reminded of the Air Force's plans to develop a nuclear powered
    plane. That's right--a nuclear powered plane! They called it Project
    Pluto or ``The Flying Crowbar.''
        Americans knew the power of atomic weaponry and military tools. The
    components had been tested. We had jet planes and nuclear reactors.
        But something happened in moving from a dream to reality. The
    reality was that nuclear power worked, but only under specific
    controlled conditions, and in limited applications. And with a lot of
    supervision, testing and well trained staff.
        Of course in hind sight, we understand that ``Project Pluto's''
    nuclear powered aircraft would have been a disaster--and we luckily
    avoided that. We never built a fleet of ``Flying Crowbars.'' In this
    way, Carbon Capture Storage is similar. It might work under specific
    conditions, but not everywhere. And we have no reason to believe it
    will work at the scale EPA is expecting us to believe.
        This Administration has made no secret that it is an enemy to
    affordable fossil fuels, including coal. From what I have witnessed it
    appears the Administration would rather see carbon capture and storage
    fail altogether.
        It was candidate Obama who famously said that if you want to build
    a coal plant you can--it's just that it will bankrupt you. With this
    rule it looks like the President is keeping that old campaign promise--
    to bankrupt coal. But at least they are being upfront about CCS for
    coal power. What's more troubling is what's hinted at but left unsaid.
    I want to know what this rule will really do, not just today but five,
    ten, twenty years down the road.
        While the Administration likes to tout the economic benefits the
    natural gas revolution is bringing us, they are simultaneously
    attacking this affordable and renewable energy source. Likewise, this
    rule is at odds with the Administration's claimed goal: addressing
    global CO2 concentrations. The EPA's rule on carbon capture and storage
    would actually halt CCS research and development.
        These rules are simply a thinly veiled attempt to prevent new coal
    power and eventually take down natural gas.
        Does the EPA think Americans cannot see past their empty rhetoric?
    There are towns and communities all across this nation that want this
    administration to uphold their all of the above energy strategy.
        But even if environmental extremists could prevent American's from
    enjoying reliable and affordable fossil fuels, developing countries
    have no intention of giving up fossil fuels. So an EPA rule that
    derails carbon capture and storage development will be disastrous.
        Here's the bottom line: The Administration's rhetoric is
    disingenuous at best.
        America is long overdue for a frank conversation about the future
    of our domestic energy solutions. No more hiding-the-ball. Let's take a
    step back from the end-of-the-world-scenarios-on both sides. Gather the
    facts. And have an honest discussion about the consequences of our
    policy choices. EPA's new source performance standards rule requires
    something that doesn't exist yet-full-scale power with at least 40%
    carbon capture and storage.
        The Agency largely justifies the proposal on an assumption that
    captured CO2 will be used in enhanced oil recovery (EOR) operations.
        The EPA has touted that the sale of CO2 would help offset the
    incredible costs of the capture side of CCS systems. But EPA's new
    source performance standards for power plants require full scale power
    with at least forty perfect carbon capture systems. In addition, the
    standards add new requirements to enhanced oil recovery options that
    effectively remove it as a compliance option.
        These Oil Recovery operators can't comply, leaving power plants
    with no option but geologic sequestration. But permanent geologic
    sequestration has serious, unresolved scientific, legal, and regulatory
    problems.
        This rule twists the clear language of the Clean Air Act and allows
    the EPA to require energy producers to use unproven technology. It sets
    up obstacles to compliance that undercut the very technology it claims
    to promote. This isn't about climate change. It's about expanding
    federal power and it sets a dangerous precedent.
        Let's have a discussion that plays this rule out to its logical
    conclusion. Then we can consider if that's a place we want to go as a
    nation.

        Chairman Schweikert. So with that as an opening statement,
    I will turn to my Ranking Member, Ms. Bonamici, for her opening
    statement.
        Ms. Bonamici. Thank you very much, Mr. Chairman, and thanks
    to the Chair of the Energy Subcommittee--I know Ms. Lummis is
    on her way--for holding this morning's hearing.
        Today we are going to be discussing the performance
    standards proposed by the Environmental Protection Agency --
    EPA--for carbon dioxide emitted from new power plants. This is
    a hearing that is similar to one we held last fall, but this
    time we have the opportunity to hear directly from the EPA
    about this important issue, and I would like to thank Acting
    Administrator Janet McCabe for being here today and I would
    also like to thank the witnesses on our first panel for their
    thoughtful testimony, which I have reviewed.
        Last year, President Obama laid out an agenda to address
    one of the biggest environmental challenges of our time:
    climate change. A key component of that plan, and any effort to
    reduce the amount of carbon emitted by the United States, is
    the need to significantly lower the amount of carbon produced
    during electricity generation. Emissions from power plants
    represent about a third of the greenhouse gases produced by the
    United States, and EPA's proposed rule takes an important first
    step in tackling this major source of carbon pollution.
        To emphasize: the proposed rule sets carbon limits on new
    power plants, not existing plants or those under construction.
    Looking at current and future market conditions, especially
    competitive natural gas prices, it is likely that many if not
    most new power plants will be able to meet the proposed carbon
    limits. It is the market, not the proposed rule, that is
    contributing to the proliferation of natural gas power plants
    over coal. In my home State of Oregon for example, our last
    coal plant is scheduled to be closed by 2020, and some of that
    generation capacity will be replaced with a natural gas plant.
        The proposed EPA rule will create a market incentive for
    the continued development and promotion of carbon capture and
    storage, or CCS, technologies. The advancement of CCS
    technologies is essential if new coal power plants are to
    operate in the low-carbon future we must achieve.
        I also want to point out that when EPA determines the best
    system of emission reduction, it is actually required to
    promote the development of technology. I am sure we will hear
    much more on the state of CCS technologies from today's
    witnesses. That technology development is good for the economy
    and good for the earth.
        Last week, we debated the EPA's proposed carbon limits on
    the House Floor. Some called into question whether CCS was
    adequately demonstrated because the technology is not
    commercially available. There is a difference between the two.
    The legal requirement is ``adequately demonstrated,'' and the
    EPA has met that burden.
        Let me close by saying that I know many of my colleagues
    across the aisle are skeptical about whether humans contribute
    to climate change. But the scientists, overwhelmingly, are not.
    And my constituents are not, and indeed they are seeing the
    impacts of climate change and asking policymakers to act. This
    winter's reduced snowpack not only means a shorter ski season
    and less of an economic boost from tourism, but it means less
    water for agriculture and salmon migration this spring and
    summer. The acidity of the Pacific Ocean is increasing, putting
    Oregon's fisheries and shellfish industries at risk. Warmer
    temperatures are leading to increased outbreaks of the mountain
    pine beetle, harming the Northwest's forest industry. And
    warmer temperatures are making it more challenging to grow our
    region's famous Pinot Noir grapes, a big part of the economy in
    Oregon.
        So the impacts are real and we must do all that we can to
    mitigate the effects of climate change. The carbon dioxide we
    release now will affect generations to come. I am supportive of
    the Administration's efforts to transition the United States to
    a lower-carbon economy, and the EPA's proposed rule for new
    power plants is a critical step in that direction.
        Thank you. I yield back, Mr. Chairman.
        [The prepared statement of Ms. Bonamici follows:]

     Prepared Statement of Environment Subcommittee Ranking Member Suzanne
                                    Bonamici

        Thank you, Mr. Chairman, and thanks to the Chair of the Energy
    Subcommittee, Ms. Lummis, for holding this morning's hearing.
        Today we will discuss the performance standards proposed by the
    Environmental Protection Agency (EPA) for carbon dioxide emitted from
    new power plants. This hearing is similar to a hearing we held last
    fall, but this time we have the opportunity to hear directly from EPA
    on this important issue. I'd like to thank Acting Assistant
    Administrator Janet McCabe for being here today. I'd also like to thank
    the witnesses on our first panel for their thoughtful testimony.
        Last year, President Obama laid out his agenda to address one of
    the biggest environmental challenges of our time-climate change. A key
    component of that plan, and any effort to reduce the amount of carbon
    emitted by the United States, is the need to significantly lower the
    amount of carbon produced during electricity generation. Emissions from
    power plants represent about one-third of the greenhouse gases produced
    by the United States, and EPA's proposed rule takes an important first
    step in tackling this major source of carbon pollution.
        To emphasize--the proposed rule sets carbon limits on new power
    plants, not existing plants or those under construction. Looking at
    current and future market conditions, especially competitive natural
    gas prices, it is likely that many if not most new power plants will be
    able to meet the proposed carbon limits. It's the market, not the
    proposed rule, that is contributing to the proliferation of natural gas
    power plants over coal. In my home state of Oregon, our last coal plant
    is scheduled to be closed by 2020, and some of that generation capacity
    will be replaced with a natural gas plant.
        The proposed EPA rule will create a market incentive for the
    continued development and promotion of carbon capture and storage, or
    CCS, technologies. The advancement of CCS technologies is essential if
    new coal power plants are to operate in the low carbon future we must
    achieve. I also want to point out that when EPA determines the ``best
    system of emission reduction,'' it is actually legally required to
    promote the development of technology. I am sure we will hear much more
    on the state of CCS technologies from today's witnesses. That
    technology development is good for the economy and the earth.
        Last week, we debated the EPA's proposed carbon limits on the House
    floor. Some called into question whether CCS was ``adequately
    demonstrated'' because the technology is not commercially available.
    There is a difference between the two. The legal requirement is
    ``adequately demonstrated,'' and the EPA has met that burden.
        Let me close by saying that I know many of my colleagues across the
    aisle are skeptical about whether humans contribute to climate change.
    But the scientists, overwhelmingly, are not. And my constituents are
    not, and indeed they are seeing the impacts of climate change now and
    asking policymakers to act. This winter's reduced snowpack not only
    means a shorter ski-season and less of an economic boost from tourism,
    but it means less water for agriculture and salmon migration this
    spring and summer. The acidity of the Pacific Ocean is increasing,
    putting Oregon's fisheries and shellfish industries at risk. Warmer
    temperatures are leading to increased outbreaks of the mountain pine
    beetle, harming the Northwest's forest industry. Warmer temperatures
    are making it more challenging to grow our region's famous Pinot Noir
    grapes.
        The impacts are real and we must do all that we can to mitigate the
    effects of climate change. The carbon dioxide we release now will
    affect generations to come. I am supportive of the Administration's
    efforts to transition the United States to a low carbon economy. The
    EPA's proposed rule for new power plants is a critical step in that
    direction.Thank you and I yield back.

        Chairman Schweikert. Thank you, Ms. Bonamici.
        Mr. Swalwell.
        Mr. Swalwell. Thank you, Chair, and thank you for holding
    this hearing today, and I agree with my colleague, Ms.
    Bonamici: global climate change is one of the greatest
    challenges of our time, and last September the
    Intergovernmental Panel on Climate Change released a report
    which states with 95 percent certainty that human activities
    are indeed responsible for climate change, and this report was
    based on a rigorous review of thousands of scientific papers
    published by over 800 of the world's top scientists. And this
    report makes it clear that if we don't take steps now, if we
    don't take steps today to halt what is causing climate change,
    the repercussions for humans and the environment will be
    catastrophic.
        And the problem, as I see it, is that right now too few
    recognize that this is happening. I was giving a college
    lecture just 2 nights ago, and a student asked me, well, isn't
    it that Republicans think climate change isn't happening and
    Democrats think climate change is happening and it is caused by
    mankind, and I told the student, I look at this as I would look
    at my cases when I was a prosecutor, and as a prosecutor, if I
    was proving a homicide and I had DNA evidence, I wouldn't sit
    in a witness chair and testify, I would call an expert DNA
    analyst to the witness chair and that expert, based on that
    expert's training and experience and education, would tell the
    jury that indeed the DNA evidence was present and relevant, he
    is qualified as an expert. And here as I look at it with
    climate change, it is no different. We have called in the
    experts, and the experts are Republican scientists and the
    experts are Democratic scientists, and they have reached a
    bipartisan, nonpartisan, actually, conclusion, which is that
    humans are affecting climate change, and I think the sooner we
    all agree on that, the sooner we all sing off of the same sheet
    of music, the better off we will be and the better suited we
    will be to address what we can actually do to reduce its
    impact.
        And so I have repeatedly said on this Committee 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 this all-of-the-above approach we must make sure
    that we are taking steps to reduce our greenhouse gas emissions
    and lessening their impact on human health, the environment,
    and global climate.
        And so I want reinforce also that the proposed standards
    going forward are only for new plants that may be built and are
    not intended and will have no effect on existing plants, so we
    are not going to see a wave of shuttered plants and massive
    layoffs as a result of their implementation. So again, I want
    to repeat this for folks in the coal industry who rightfully
    may be fearful of what this means. These regulations from the
    EPA are for future plants, not for existing plants. And there
    are in-depth discussions underway right now about establishing
    standards for existing plants, which the EPA currently plans to
    produce in June, but there is an ongoing, extensive engagement
    with all the stakeholders to make sure that those standards
    will be flexible and won't have negative effects on state
    economies and job creation.
        So my colleagues on the other side of the aisle often talk,
    and I think for good reason, about not wanting to saddle our
    children with our national debt, and for that same reason, that
    same principle, I think we want to make sure that we do not
    saddle our children with the effects of climate change. So I am
    interested in what this hearing produces and what our witnesses
    have to say about carbon sequestration and what we can do to
    address climate change.
        And with that, I yield back.
        [The prepared statement of Mr. Swalwell follows:]

     Prepared Statement of Energy Subcommittee 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 September, 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 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 electricity
    generation is the biggest producer of greenhouse gasses, accounting for
    roughly a third of our total emissions.
        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 in 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 has made it clear that, in the absence of Congressional
    action, his Administration is 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, and in this case--as the global scientific
    community has made clear again and again--the consequences of our
    inaction could be far more severe.
        With that I yield back the balance of my time.

        Chairman Schweikert. Thank you, Eric--I mean, excuse me,
    Mr. Chairman--or excuse me, Ranking Member, and let us hope it
    stays that way.
        Chairwoman Lummis.
        Mrs. Lummis. Thank you Mr. Chairman. I want to congratulate
    you on your new position on the Committee, and I look forward
    to working with you through the rest of this year. Our
    Environment and Energy Subcommittee joint hearings should be
    interesting, and I am happy to have you on board.
        Last fall, the Science Committee held a similar hearing on
    the status of technology for carbon capture and storage. It was
    confirmed that CCS is not operating in any commercial-scale
    power plant in the United States and thus should not be
    considered adequately demonstrated technology under EPA's New
    Source Performance Standards.
        Today we will also discuss the transportation and storage
    of captured carbon and what viable solutions currently exist
    for industry. I look forward to the hearing and hearing from
    EPA witness as well on the storage options under the proposed
    NSPS. Is recycling carbon in enhanced oil recovery possible on
    a large scale or will untested long-term geological
    sequestration be needed?
        The EPA has implied that the rule does not need to speak to
    the issue of sequestration, that the cost and feasibly of
    carbon storage is outside the scope of their rulemaking.
    Staying silent on the last steps of the process proves the lack
    of demonstrated commercial viability.
        Instead of focusing on real solutions, the EPA assumes this
    proposed rule will result in negligible CO2
    emissions changes, quantified benefits, and costs by 2022.
    Since it effectively bans the building of new coal plants, it
    has no impact.
        The EPA is ignoring the consequences of their rulemaking to
    instead set a legal precedent for mandating unproven
    technologies. They need to go back and assess the impacts of
    this rule on non-air issues. There is no science behind the de
    facto mandated storage requirement. This is a policy of picking
    winners and losers through environmental regulations. New
    natural gas-fired units, boilers and heaters and existing plant
    standards are next. We need to see an all-of-the-above energy
    policy, not one based purely on politics.
        I look forward to hearing from this first panel of
    witnesses on the larger effects of this rulemaking to the
    energy supply chain from research to delivery. I thank you for
    joining us.
        I might also comment that in my State of Wyoming, in
    Gillette, Wyoming, the Neil Simpson coal-fired power unit will
    be shut down on March 21st, just in about 10 days. That is a
    unit that is only shutting down because of EPA regulations on
    industrial boiler MACT. The maximum obtainable control
    technologies don't exist to allow that boiler to continue
    through its remaining useful life of ten years, so it is going
    to be shut down. They are going to run it right up until the
    day that the EPA rules take effect because it is the most
    economical way to deliver affordable energy to the consumers it
    serves. It will be replaced by something more expensive. So
    rather than allowing it to continue through its useful economic
    life, it is being retired. It will be disassembled. It will be
    moved to another country. It will be reassembled and burn in
    another country. This is not sound policy.
        So I am looking forward to hearing what sound policy that
    we can derive as a result of EPA's work.
        Thank you, Mr. Chairman, and thank you, panel, for joining
    us.
        [The prepared statement of Mrs. Lummis follows:]

       Prepared Statement of Energy Subcommittee Chairman Cynthia Lummis

        Thank you Chairman Schweikert. I want to congratulate you on your
    new position on the Committee and look forward to continuing our work
    through environment and energy Subcommittee joint hearings this year.
        Last fall, the Science Committee held a similar hearing on the
    status of technology for Carbon Capture and Storage. It was confirmed
    that CCS is not operating in any commercial scale power plant in the
    U.S. and thus should not be considered adequately demonstrated
    technology under EPA's New Source Performance Standards (NSPS).
        Today we will also discuss the transportation and storage of
    captured carbon and what viable solutions currently exist for industry.
    I look forward to hearing from the EPA witness on the storage options
    under the proposed NSPS. Is recycling carbon in enhanced oil recovery
    (EOR) possible on a large scale or will untested long-term geological
    sequestration be needed?
        The EPA has implied that the rule does not need to speak to the
    issue of sequestration--that the cost and feasibly of carbon storage is
    outside the scope of their rulemaking. Staying silent on the last steps
    of the process proves the lack of demonstrated commercial viability.
        Instead of focusing or real solutions, the EPA assumes ``this
    proposed rule will result in negligible CO2 emissions changes,
    quantified benefits, and costs by 2022.'' Since it effectively bans the
    building of new coal plants, it has no impact.
        The EPA is ignoring the consequences of their rulemaking to instead
    set a legal precedent for mandating unproven technologies. They need to
    go back and assess the impacts of this rule on non-air issues--there is
    no science behind the ``de facto'' mandated storage requirement.
        This is a policy of picking winners and losers through
    environmental regulations. New natural gas fired units, boilers and
    heaters and existing plant standards are next. We need to see an all-
    of-the-above energy policy, not one based purely on politics.
        I look forward to hearing from this first panel of witnesses on the
    larger effects of this rulemaking to the energy supply chain--from
    research to delivery. Thank you for joining us.

        Chairman Schweikert. Thank you, Chairwoman Lummis.
        If any of the Members wish to submit additional opening
    statements, your statements will be added to the record at this
    point, and I believe you can do that for--in this Committee, it
    is seven days? Or two weeks. to be able to add an opening
    statement.
        [The prepared statement of Ms. Johnson follows:]

       Prepared Statement of Full Committee Ranking Member Eddie Bernice
                                    Johnson

        Thank you Mr. Chairman. I am pleased that we will be able to hear
    testimony on this very important topic, and I want to thank the
    witnesses for appearing before us today.
        Our climate is changing. These changes are resulting in more
    extreme weather, rising sea levels, and altered food webs. We must
    accept these new climate realities and be open to solutions if we are
    at all serious about protecting the health of American families. So I
    am happy to join my colleagues Ms. Bonamici and Mr. Swalwell in
    expressing my approval of the steps being taken by the Administration
    and by EPA, to advance clean energy technologies and protect future
    generations from the harmful effects of carbon pollution.
        Throughout history industry has often resisted addressing
    environmental problems that emerge from a greater scientific
    understanding of how human activities impact the environment and our
    health. And in many of these cases, industry simply refuses to act
    without regulatory intervention and proper government oversight. The
    technology which we are discussing today, carbon capture and storage,
    or CCS technology, is an example of the type of innovative solutions
    that will not be implemented without a regulatory incentive to lower
    the amount carbon being emitted.
        I, like many of my colleagues, wish that Congress would enact
    legislation to address climate change. Unfortunately, the current
    political realities will not allow us to act. So I say let us not stand
    in the way of EPA and necessary change. Let the Administration continue
    to move us forward, so that the U.S. can be a leader and we as
    Americans can do what we always do--rise to the challenge and move with
    great purpose to solve this crisis. I challenge industry to be leaders,
    and be a helpful partner in reducing our carbon emissions going
    forward.
        I look forward to the testimony of our witnesses. Thank you again,
    and I yield back the balance of my time.

        Chairman Schweikert. Having read all of your statements,
    you are all very, very bright and you are very smart. I will
    beg of you as we go through this hearing, I see this is a
    technical hearing, help us raise our level of technical
    understanding of this technology. And so instead it is less
    policy, it is more math and science, shall we say.
        Our first witness is David Hawkins, Director of Climate
    Change Programs at the Natural Resource Defense Council. He
    joined NRDC in 1971 as one of the organizers' first staff
    members. In 1977, Mr. Hawkins was appointed to be the Assistant
    Administrator for Air, Noise and Radiation at EPA under the
    Carter Administration. In 1981, he returned to NRDC's Air and
    Energy Program, and in 2000 became director for NRDC's Climate
    Center. Instead of introducing everyone at once, I thought we
    will introduce each person as they get ready.
        Mr. Hawkins, five minutes. And you know the routine: yellow
    light; talk faster.

                      TESTIMONY OF DAVID HAWKINS,

                  DIRECTOR OF CLIMATE CHANGE PROGRAMS,

                   NATURAL RESOURCES DEFENSE COUNCIL

        Mr. Hawkins. Thank you very much for inviting me to testify
    on behalf of NRDC. Several points I would like to make.
        First, as numerous scientific and industrial organizations
    have concluded, we have to act with urgency to bring low-carbon
    electricity resources to market. We can't protect the climate
    without them.
        Second, the Clean Air Act, passed by a bipartisan vote and
    signed by President Nixon, calls on EPA to set standards for
    pollutants like CO2 that present a danger to health
    and welfare. Now, Congress did not give EPA free rein in
    setting these standards but it did not tie EPA's hands either.
        The Act sets sensible limits on EPA's authority for these
    standards. First, EPA must show that the technology is
    available that could be applied to meet the proposed standards,
    and second, it must show that the cost of meeting those
    standards is reasonable. The EPA proposal is on solid ground
    legally and technically in the standards for new coal plants
    that it has proposed based on the capability of carbon capture
    and storage, or CCS, because in writing the Act, you did not
    require that EPA must point to a technology that is already in
    use in the regulated industry. To have done so would have been
    to put the polluters in charge of deciding whether they would
    ever have to clean up. Instead, the law directs EPA to survey
    approaches that can work in a given sector, even if there is
    little or no current use of those approaches in the category
    that is being regulated, and that is a commonsense approach.
        As my testimony details, carbon capture and storage is
    proven technology at industrial scale with decades of
    experience for each of the component processes. Even without a
    standard in place, there are several vendors who are already
    offering commercial carbon capture systems and pipeline
    transport and geologic storage of CO2 is fully
    commercial. EPA in its record has established a substantial
    body of evidence to support its technology conclusions, and the
    courts will review those conclusions when they consider
    challenges to the rule.
        Turning to costs, EPA conducted a comprehensive analysis
    using Department of Energy research and concluded that the cost
    of making electricity at a new coal plant with CCS would fall
    in the range of the costs for new nuclear or biomass energy
    plants. Now, compared to production costs of a new coal plant
    with CCS to a new coal plant without CCS, the costs of the
    plant with CCS as EPA found would be about 20 percent higher,
    and that is without considering any revenues for enhanced oil
    recovery. But customer rate impacts would be much less than 20
    percent, and that is because the cost of any given single unit
    is diluted by being folded into the rate base for that system.
        Now, some in the coal industry and some owners of coal
    plants are lobbying Congress to intervene and try to block
    EPA's standards. This would be profoundly bad policy. If we
    prevent EPA from setting sound standards, that will not allow
    us to escape the threat of climate disruption. That will
    continue no matter what laws Congress tries to enact. Instead,
    it would perpetuate uncertainty about what investments should
    be made in the power sector. Investors who are asked to commit
    billions of dollars to a new power plant will not believe that
    a Congressional bar on action by EPA, in the very unlikely
    event that such legislation were signed into law, will be a
    stable basis for making those billions of dollars of
    investments. New coal plants take ten years to build and
    another 15 or 20 years to earn their investment back in the
    best of times, and if you believe that there are investors out
    there that are willing to take the risk that no limits on
    carbon pollution will be forthcoming during that long period of
    time, I suggest you hold another hearing and invite them to
    testify.
        My advice to Members of Congress who are genuinely
    interested in creating space for coal to play a continuing role
    in the American economy would be to reject these efforts to
    hamstring EPA and instead support efforts that could enjoy
    bipartisan support to provide financial incentives for CCS used
    for enhanced oil recovery, for example. NRDC is on record
    supporting those kinds of initiatives, and we would be happy to
    work with Members that are interested in pursuing that approach
    to this important problem.
        Thank you very much.
        [The prepared statement of Mr. Hawkins follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Schweikert. Thank you for that.
        Today's second witness is Mr. Robert Hilton, Vice President
    of Power Technologies for Government Affairs at Alstom Power,
    Inc. Mr. Hilton has been in the air pollution control field for
    over 30 years. In his current role, Mr. Hilton provides
    information and technical data on power technology to state and
    federal regulators. He holds 15 U.S. and foreign patents and
    has authored numerous technical publications.
        Mr. Hilton, five minutes.

             TESTIMONY OF ROBERT G. HILTON, VICE PRESIDENT,

               POWER TECHNOLOGIES FOR GOVERNMENT AFFAIRS,

                           ALSTOM POWER INC.

        Mr. Hilton. Good morning. I would like to thank the
    Chairman and the Chairwoman and the Ranking Member the
    opportunity to present this testimony.
        Alstom is a global leader in the world of power generation,
    transmission and transportation infrastructure. We are a leader
    in the field of carbon capture, having completed work on four
    pilots and 10 pilot, validation and commercial-scale plants
    that are in operation, design and construction. These projects
    include both coal and gas.
        It is critical to be at commercial scale to define the risk
    of offering the technology. This will define contractual
    conditions and standard commercial terms including multiple
    performance guarantees, reliability, availability and other
    contractual guarantees.
        Finally, our customers would be reluctant to invest in
    carbon capture technologies that have not been demonstrated at
    full commercial scale. Based on these criteria, Alstom does not
    currently deem its technologies commercial, and to my
    knowledge, no one else is willing to offer this full suite of
    guarantees. I emphasize, however, that the technologies being
    developed by Alstom and others work.
        Let us take a look at the Clean Air Act criteria for best
    system of emission reduction. As proposed by EPA, feasibility,
    looking at the projects they cited, Kemper is under
    construction and not demonstrated. Sask is under construction
    and not demonstrated. Summit, HECA, Parish haven't even started
    construction. AEP Mountaineer was only 2.3 percent of the plant
    gas stream and does not qualify as significant. Dakota
    Gasification is producer of natural gas and fertilizer plant
    and not a power plant. Four of the six projects are gasifiers
    and high-pressure technology not suited to pulverized coal or
    natural gas combined cycle plants, which are atmospheric
    pressure, which really represent 95 percent or more of the
    fleet. These atmospheric technologies are not operating at
    significant scale at any site.
        Cost--Alstom cannot comment in detail on the status of
    projects proposed by other companies, but based on facts in the
    public domain, I am aware of no CCS projects that would be
    considered cost-competitive in today's energy economy. The five
    capture and sequestration projects cited in NSPS proposal all
    rely on either EOR or byproduct revenues and/or federal
    subsidies. EPA should consider the typical power plant, which
    will not have federal subsidies and will not likely have access
    to chemical and EOR revenues. EPA needs to recognize that both
    chemicals and EOR are niche opportunities.
        Then next comes the size of CO2 reductions. EPA
    admits in its rule that it will not achieve significant
    reductions; in fact, it will simply slow the rate of
    acceleration.
        As far as technology goes, this regulation will essentially
    stop the development of CCS since the proposed regulation
    provides a significantly lower cost alternative, natural gas,
    to the application of CCS on coal. There is unlikely to be a
    market for at least ten years. Industry-based R&D based on
    return on investment will stop. One only needs to look at the
    slowing pace already reported by the GCCSI.
        We differ with EPA on the notion that NSP regulations will
    spur development. Let us really look at the industry has done
    for the Clean Air Act. When they wanted to do particulate
    matter, the EPA had been--rather, industry had been doing
    precipitators and collectors since the 1920s. When they went to
    do sulfur dioxide, the first full-scale scrubbers were built in
    1942. I personally worked on one in 1970. When the NOX SIP call
    came in 1999, we had been doing reduction technologies since
    the 1980s. When mercury came in 2010, the industry had been
    deploying these since the mid-1980s, and in this case, we
    actually worked with EPA to revise the rule.
        NSPS is different. The issue we are now faced with is that
    industry did not in earnest begin work on CO2 from
    atmospheric gases until the early 2000s. The technology is not
    fully developed and the regulation proposed is ahead of the
    technology. It should be noted that this is a larger, more
    complex and technically sophisticated technology compared to
    any of the others in the Clean Air Act.
        With no new power generation being built, it is our view
    that this presents a real threat to the U.S. economy both in
    terms of employment and the industries that build and supply
    coal plants as well as the mining, transportation and
    maintaining the necessary technology leadership. The true state
    of the technology on conventional power plants is that today
    there have been a handful of small demos such as AEP's
    Mountaineer and Southern Company's Plant Barry on coal. There
    are two small pilots in Mongstad, Norway, on gas. EPA indicates
    it has done literature searches and reviews of other sources of
    information to determine all the components are available.
    However, an important point that EPA misses is that the true
    risk and the complex multistage process is in the integration
    of all of the processes.
        Let me make just a couple of quick points on that. How does
    the capture process respond with generation load? How does it
    respond when it is slaved to the unit? There are others that I
    could go on and on technically. I also would point out that DOE
    has developed a comprehensive roadmap and timeline for the
    commercialization of CCS technologies, which points to general
    deployment in the 2020s. We would encourage EPA to look at
    that.
        Finally, it is the issue of cost, and we do not believe in
    this market and our experience shows us that the public utility
    commissions, the regulators are trying to maintain lowest cost
    of electricity to ratepayers. It is highly unlikely that they
    are going to approve the development and/or deployment of CCS
    with coal when they can do it much cheaper with a natural gas
    plant.
        Thank you.
        [The prepared statement of Mr. Hilton follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Schweikert. Thank you, Mr. Hilton.
        Our third witness is Mr. Robert Trautz, Senior Technical
    Leader at the Electrical Power Research Institute. He has over
    30 years of experience in research and applied geology and
    hydrology involving CO2 storage. In his current
    capacity, Mr. Trautz manages demonstration projects funded by
    the Department of Energy, EPRI and other industry groups. Mr.
    Trautz has previously worked at Lawrence Berkley National
    Laboratory and the U.S. Geological Survey.
        Mr. Trautz, five minutes.

                     TESTIMONY OF ROBERT C. TRAUTZ,

                        SENIOR PROJECT MANAGER,

                   ELECTRIC POWER RESEARCH INSTITUTE

        Mr. Trautz. Thank you very much, Mr. Chairman.
        My name is Robert C. Trautz. I am a Senior Technical Leader
    at the Electric Power Research Institute. EPRI conducts
    research related to the generation, delivery and use of
    electricity for the benefit of the public. EPRI is working with
    the Southern States Energy Board within the Southeast Regional
    Carbon Sequestration Partnership program to assess CO2
    storage opportunities in the southeastern United States. My
    testimony reflects the independent views of EPRI and isn't
    defined by SSEB or SECARB.
        At the heart of the proposed New Source Performance
    Standard is a mandatory reduction in CO2 emission
    intensity using CCS technology that will require coal-fired
    power units to reduce CO2 emissions to less than
    1,100 pounds per megawatt-hour gross. To place EPA's emissions
    limit in perspective, the amount of CO2 that will
    need to be stored to meet the limit is approximately 40 percent
    of the CO2 output from a pulverized-coal plant. For
    a moderate-sized, 1,000-megawatt plant, this equates to about
    3.1 million tons per year. Over a 40-year lifespan, for this
    example, the plant will need to store over 120 million metric
    tons of CO2.
        To understand the significance of storing this quantity of
    CO2, I offer the following storage example for
    illustrative purposes only. Using the Lower Tuscaloosa
    Sandstone located within the Gulf Coast region of the United
    States, injection of 120 million tons of CO2 into
    this regionally extensive saline reservoir would create a
    CO2 plume with a subsurface area of several square
    miles. This example illustrates the importance of
    characterizing and utilizing large regional reservoirs for
    CO2 storage due to the very large quantities of
    CO2 that we are talking about for multiple plants.
        The U.S. Department of Energy estimates there are
    approximately 226 billion metric tons of CO2 storage
    capacity in depleted oil and gas reservoirs and up to 20
    thousand billion metric tons in saline formations in the United
    States and Canada. The stark contrast in these storage
    estimates reflects the widespread distribution and importance
    of saline reservoirs. The potential use of depleted oil and gas
    reservoirs for CO2 storage could be adversely
    affected by potential regulatory requirements associated with
    CO2 storage. Preliminary feedback from oil producers
    indicates that a requirement for EOR operators to monitor and
    certify CO2 storage under subpart RR of the EPA's
    mandatory greenhouse gas reporting requirements could be a risk
    that many companies may not be willing to take. Thus, such
    requirements may have the unintended consequence of
    discouraging the use of depleted oil and gas reservoirs. The
    limited geographic distribution and storage capacity of these
    reservoirs in any case will eventually limit their long-term
    use. One of the benefits of using depleted oil and gas
    reservoirs for CO2 storage is the wealth of geologic
    knowledge available for these reservoirs. In contrast, little
    is known about saline reservoirs because they currently have
    little to no economic value. To date, there are only three
    large-scale saline storage projects in the world that have or
    are currently injecting CO2 at a rate approaching 1
    million metric tons per year. It is important to note that
    these projects involve CO2 separation from natural
    gas and store an annual amount equal to about a third of the
    CO2 from a single 1,000-megawatt power plant. From a
    geologic storage perspective, these projects are very important
    for the following reasons.
        The Sleipner Project in the North Sea is the flagship of
    the global CO2 saline storage project injecting
    CO2 at a sustained rate of 1 million metric tons per
    year for nearly 20 years. The Snohvit Project in the Barents
    Sea is injecting at a rate of 820,000 metric tons per year.
    Initially, however, this project found that the formation
    permeability was too low and pressures climbed rapidly,
    requiring injection into a different zone. The In Salah Project
    in central Algeria suspended CO2 injection in 2011
    after monitoring data indicated that the lower caprock above
    the storage reservoir had likely fractured due to injection.
        The projects illustrate the risks and geologic uncertainty
    associated with selecting a saline storage site. They also
    illustrate the need to gain experience at scales commensurate
    with full-scale commercial power projects. The DOE's field
    demonstration projects are invaluable because of their ever-
    increasing storage scale. However, given that the NSPS is
    clearly focused on reducing emissions from fossil fuel-fired
    plants, further government investment in research is needed
    that integrates power projects with capture and saline storage
    at full scale. Only two of the DOE demonstration projects
    fielded to date have included small-scale capture and saline
    storage on coal-fired units of less than 100,000 tons each, and
    only one large-scale, million-ton-per-year saline injection
    project is currently planned.
        In addition, given that more is known about oil and natural
    gas reservoirs, future storage research and funding may need to
    focus more on saline reservoirs to help close the knowledge
    gap.
        Thank you for the opportunity to testify before you today,
    and I welcome your questions.
        [The prepared statement of Mr. Trautz follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Schweikert. Our fourth witness today is Scott
    Miller, General Manager and CEO of City Utilities of
    Springfield, Missouri, a member of the American Public Power
    Association. Mr. Miller joined the City Utilities in 2002 as
    the Associate General Manager for Electrical Supply and was
    named General Manager and CEO in 2011. Mr. Miller also serves
    on the board of directors of the American Public Power
    Association and the Missouri Joint Municipal Electric Utility
    Commission. He has 27 years of experience in the utility
    industry.
        Mr. Miller, five minutes.

                       TESTIMONY OF SCOTT MILLER,

                        GENERAL MANAGER AND CEO,

                CITY UTILITIES OF SPRINGFIELD MISSOURI,

                   AMERICAN PUBLIC POWER ASSOCIATION

        Mr. Miller. Thank you, Mr. Chair.
        I have been in the industry 27 years. I represent City
    Utilities of Springfield. We are a municipal utility. We offer
    electric, natural gas, water, broadband and transit services to
    the Springfield area. We have over 1,100 megawatts of
    generation and we serve over 220,000 customers. I am also a
    member of the board of directors at APPA, and we represent the
    interests of over 2,000 community-owned utilities, not-for-
    profit utilities, that provide services to over 47 million
    Americans. We provide locally controlled, low-cost, reliable,
    efficient and environmentally responsible energy.
        The public power utilities are concerned about the
    potential for likely impacts the EPA regulating greenhouse gas
    emissions from new power plants by establishing New Source
    Performance standards under the Clean Air Act. In particular,
    public power utilities strongly disagree with EPA's conclusion
    that carbon capture and storage is the best system of emission
    reduction, or BSER, for reducing CO2 emissions. The
    conclusion is premature, given that there are no commercially
    operating coal plants using this technology, and the agency's
    failure to address the variety of regulatory hurdles that are
    impeding sequestration and CO2 in the United States.
        City Utilities was recently involved with a carbon
    sequestration project within our state. Our experience
    highlights some of the issues that would be addressed before
    CCS could be deemed as adequately demonstrated. In 2005, we got
    together with the generating utilities across the state to
    determine what were we going to do if carbon emissions were
    regulated. At the time, over 70 percent of our generation came
    from coal-fired generation. Much of the research that we had
    seen did not address shallow sequestration issues that we would
    have had for geologic formations within our state. In 2008,
    City Utilities received $4.7 million of federal funding
    administered through DOE so that we could do the Missouri
    Shallow Carbon Sequestration Project. City Utilities with
    Kansas City Power and Light, the Empire District Electric,
    Ameren Missouri, and Associated Electric Cooperative also
    matched funds of $1.2 million, so we had our customers' money
    involved with the project. The project's purpose was to
    evaluate the feasibility of onsite sequestration at the power
    plants. The project targeted sandstone formations that were
    approximately 2,000 to 3,500 feet, which mean that we would be
    injecting in a gas phase as opposed to the liquid or
    supercritical phase. The original plan targeted saline
    aquifers, which we just heard about, and small injections of
    food-grade CO2 to see how that would be encapsulated
    within the formation. Our research was conducted by Missouri
    State University, Missouri University of Science and
    Technology, and our DNR within the state.
        The John Twitty Energy Center at City Utilities was the
    primary site. The drilling was conducted and we reached the
    Precambrian level at about 2,200 feet, but we were not allowed
    to inject because what we found was the water quality in that
    area was potable. We were expecting saline and it was potable
    water. So federal regulations stopped us from injecting at that
    point. We had to change our project, and we decided to go to
    other sites within the state in the northwest, north central
    and near the St. Louis area so that we could determine if they
    were actually saline aquifers in a shallow formation within our
    state.
        In summary, we spent about $5.8 million for the testing. We
    found one area of the state that has now been eliminated
    because of the quality of the water. We have two others that we
    have identified in the state that we believe are acceptable,
    and we were also able to identify three areas where the
    confining layer looked to be a positive where it would confine
    the CO2 within the aquifer. However, we were not
    allowed or were not able to complete our pressure testing or
    aquifer permeability because of cost limitations, so we were
    not able to substantiate through CO2 injections that
    we had the ability for long-term storage within our state.
        Based upon the results of this project and others that we
    have seen across the United States and across the world, CCS
    technology is not really a realistic option for utilities
    seeking to reduce their CO2 emissions in the near
    future. As a CEO of a municipal utility, one of my
    responsibilities is to our city and our customers, that if we
    are going to spend their money, we need to know that it is
    going to go towards something that will function for them, and
    we do not have a high degree of confidence that CCS will do
    that for us.
        In looking at all the CCS research that is out there, it
    appears there is no factual basis that EPA may assert that
    carbon sequestration technology has met the Clean Air Act's
    three-part test, which is the technology needs to be adequately
    demonstrated, it needs to be widely available and it needs to
    be shown to be technically and economically feasible, and we
    don't believe that that is out there.
        Thank you.
        [The prepared statement of Mr. Miller follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Schweikert. Thank you, Mr. Miller.
        As all of you know, your written testimonies are being made
    now part of the record. I am going to turn to Chairwoman Lummis
    for the first five minutes of questions.
        Mrs. Lummis. Thank you, Mr. Chairman.
        First, I would like to ask all of our panelists for a show
    of hands, how many of you live on $1,226 a month right now? The
    record reflects that none of you raised your hands.
        Let me tell you about this woman who was written about in
    the day before yesterday's New York Times, and Mr. Chairman, I
    would like to without objection submit the New York Times
    article ``Coal to the Rescue but Maybe Not Next Winter'' to the
    record.
        Chairman Schweikert. Any objections on either of those?
    None heard.
        Mrs. Lummis. Thank you.
        [The information appears in Appendix II]
        Mrs. Lummis. Well, let me tell you about this article. This
    woman had on her $1,200-a-month income her utility bills go up
    $100 just in one month. This article by Matthew L. Wald states
    that ``At the end of the harshest winter in recent memory, the
    bill is coming due for millions of consumers who are not only
    using more electricity and natural gas but also paying more for
    whatever they use, and there might not be relief in future
    winters as the coal-fired power plants that utilities have
    relied on to meet the surge in demand are shuttered for
    environmental reasons.''
        Question, Mr. Miller. If the Nation's existing coal
    capacity cannot be replaced due to EPA's proposed New Source
    Performance Standards rule, where will you turn for new
    generation?
        Mr. Miller. We don't have a lot of options. I mean, coal is
    a foundation within our state. We would have to look to natural
    gas and we would have to look to purchases on the market, which
    would rely on mostly natural gas generation that would be
    coming online. The issue that we saw this winter is that we
    don't have the infrastructure for the natural gas for power
    generation at the same time that we are trying to make sure
    that people's homes stay warm. So when you have those in
    competition recently during the cold spell, we had to curtail
    our natural gas generation so that we had enough gas for people
    to heat their homes. So obviously it has a huge impact, and we
    have seen that push the price of natural gas up. So in general,
    I am not sure we have the natural gas infrastructure to support
    the transition from coal to other generation that is out there,
    and we have the same issue that you have--that was in that
    article. We have 22 percent of our customers that are living at
    the poverty level, so any time that you have additional costs
    implied through regulations, it goes right to their bottom
    line, and they are trying to figure out how to pay their bills.
        Mrs. Lummis. Thank you.
        Mr. Trautz, your testimony states that the new subpart RR
    requirements in the proposed rule could be a risk that EOR
    companies are not willing to accept. Where does this leave a
    power provider looking to invest in coal or natural gas if the
    EPA decides to require CCS for gas?
        Mr. Trautz. So for--the only thing that they would probably
    turn to is to saline reservoirs because those are broadly
    distributed and probably much closer to where the power plant
    is located, so they would turn to those reservoirs, which I
    indicated in my testimony, we know--we don't know as much about
    those reservoirs as we do the EOR fields.
        Mrs. Lummis. So there is no good demonstration of the
    efficacy of saline reservoirs for storage?
        Mr. Trautz. Well, we have the Sleipner Project, which I
    mentioned in my testimony, that's on a natural gas separation
    but we currently do not have a full-scale project that is
    planned for saline storage. That would be an integrated project
    with a power plant.
        Mrs. Lummis. Mr. Hilton, can you expand on your statement
    that NSPS hurt the development of CCS?
        Mr. Hilton. It is fairly simple. I mean, all of R&D is
    driven by what the market demands, and if there is no demand
    for CCS on gas and there is only on coal and coal is not built
    as a result of that, it becomes a decision, does industry
    continue to invest because we are already seeing frankly that
    DOE has run out of money to invest in it. They don't have any
    large funds available. So it is up to the individual companies
    whether they want to continue to invest, and 10 or more years
    of waiting for a market is a long time.
        Mrs. Lummis. Can you also discuss the importance of
    commercial guarantees and the commercial deployment of CCS?
        Mr. Hilton. Yeah, everything we do--our industry has been
    incredibly successful and has lulled us all into the fact that
    there is all the power in the world that we ever want, and so
    as suppliers to that industry, we are expected to meet not just
    performance, and there are multiple performance guarantees on
    energy, on additives, on--there is also availability and
    liability guarantees with this equipment, and those come into
    potentially billions of dollars of liability. And that is why
    we need to have this demonstrated, to know that the integration
    works because there is no one that is going to accept that
    billions of dollars of liability otherwise.
        Mrs. Lummis. Thank you, gentlemen.
        I yield back, Mr. Chairman.
        Chairman Schweikert. Thank you, Cynthia--Chairwoman Lummis.
        Ranking Member Bonamici.
        Ms. Bonamici. Thank you, Mr. Chairman.
        Mr. Hawkins, thank you for bringing your years of expertise
    to the Committee. On your testimony, you talk about how
    regulation has led to the development of technology. I think we
    are talking about a chicken-and-egg thing here. You note that
    CCS systems like sulfur scrubbers, mercury controls, fine
    particulate controls, nitrogen oxide controls, for example,
    were not used until they were regulatory requirements to
    control those pollutants. So I want to talk just a little bit
    about how the legislative history of the Clean Air Act supports
    the EPA's proposed rule on new power plants, and it is my
    understanding that the Senate committee that crafted Section
    111 stated that the section was designed to promote constant
    improvement in techniques for preventing and controlling
    emission from stationary sources and an emerging technology
    used as the basis for standards of performance need not be in
    actual routine use somewhere. So can you please discuss how EPA
    regulation has in the past led to the development of critical
    environmental technology?
        Mr. Hawkins. Yes, ma'am. The regulation as a driver of
    technology is well documented both in academic literature--I am
    thinking of reports by Ed Rubin of Carnegie Mellon University.
    The fact is that in the power sector in particular, it is a
    very competitive sector in terms of the hours of operation of
    individual power plants. So a power plant that has a
    fractionally higher cost of electricity production is not going
    to run as much, and that is going to lose money or not earn as
    much money for the owner of that power plant. So power plant
    operators are extremely reluctant to do anything that has the
    slightly increase, even if it would be invisible in the
    customer's bill because it determines the hours of operation
    and what is called the dispatch order of that power plant.
        So regulation or money are the essential ingredients to
    make advances, and if you don't have money, then you need
    standards, and that is why the Nixon Administration proposed
    what became the New Source Performance Standard in the 1970
    Clean Air Act to advance technology deployment in new sources
    of air pollution, and the power sector is an excellent example
    of how that has worked very well. The coal industry and the
    power industry tout in ads how much of a reduction in the
    conventional pollution has been achieved at the power sector,
    and they are correct. What they don't say is it all came about
    because of regulation. It came out because of regulation
    requiring scrubbers, it came about because of regulation
    requiring bag houses for particulate matter, it came about for
    regulation requiring nitrogen oxide controls, and most
    recently, mercury and other toxin controls, and the same
    process will happen as we turn to carbon dioxide. Carbon
    dioxide is just another chemical. There are industrial
    processes for separating it just as there have been for
    conventional pollutants, and the sooner we get on with it, the
    better off we will all be.
        Ms. Bonamici. Thank you. And I wanted to ask you also, Mr.
    Hawkins, to follow up on the discussion that we have been
    having about the research that has been done to be able to
    determine appropriate locations for carbon storage. Could you
    please respond to some of the comments that have been made
    about whether there are appropriate locations for storage?
        Mr. Hawkins. Yes. President George W. Bush's Administration
    began what has been a comprehensive approach to surveying the
    site availability for geologic storage. And fortunately, the
    United States is blessed with huge amounts of the geologic
    formations that are appropriate for storage of CO2.
    Essentially you need--as Dr. Trautz has indicated, you need a
    porous formation that is sufficiently below the surface of the
    earth to keep the injectant pressurized, and then on top of
    that, you need a permeable formation, and we have done surveys
    of the extent of these types of formations in the United
    States, and we have huge volumes of them, enough for more than
    100 years of all current power plant emissions as was----
        Ms. Bonamici. I want to get one more quick question in to
    you, Mr. Hawkins. How much will the proposed CCS reduce carbon
    emissions if you compare a plant with CCS and compare a plant
    without it?
        Mr. Hawkins. If you compare it with and without, it would
    be about a 50 to 60 percent reduction in that power plant's
    carbon dioxide emissions, and that is a very substantial
    emission reduction and one that would demonstrate world
    leadership and provide a market for U.S. manufacturers as this
    technology was deployed.
        Ms. Bonamici. Thank you. I see my time has expired. I yield
    back. Thank you, Mr. Chairman.
        Chairman Schweikert. Thank you, Ms. Bonamici.
        Mr. Miller. Mr. Chairman, may I respond to that first
    question?
        Chairman Schweikert. Actually, as we work our way around,
    we will get there, and I appreciate some of the technical
    responses. Actually, I am going to give myself a few minutes
    here and just sort of do a little bit of digging, because I
    wanted to try to get my head around some of the mechanics.
        And you corrected me before. Is it Trout?
        Mr. Trautz. It is Trautz, like the fish, spelled different.
        Chairman Schweikert. That is not spelled like it. You need
    to change your name and spell it the right way.
        Mr. Trautz. It is the German spelling. Sorry.
        Chairman Schweikert. In the notes on the mechanics that
    have been given to me, my understanding is, not too long ago in
    front of the Science Advisory Board at the EPA, there was a
    discussion that the sequestration of ACO2 just had
    to sort of demonstrate the adequacy and the achievability. But
    yet, you know, I am being sent letters, and here is one from
    the American Water Works Association, and without objection, I
    would like to put it into the record. No objections? Oh, good.
    Because I always hate to object to myself. I will put that in.
        [The information appears in Appendix II]
        Chairman Schweikert. And part of the question they are on
    is saying do we really have enough data of our threat to
    potable water supplies, and we heard Mr. Miller talk about his
    experience in his state where they thought they had a saline
    level and it turns out it did not work. Do we have a robust
    literature that says what our threats are and what they are not
    to potable water supplies?
        Mr. Trautz. So the answer to the question, there have been
    a number of research studies that have looked at CO2
    and the potential impact if it were to leak out of a reservoir,
    what the potential impact would be on potable groundwater.
        Chairman Schweikert. Can you answer this too? Tell me the
    nature of the studies
        Mr. Trautz. One of the studies EPRI performed, it was a
    field study where we actually introduced CO2 in the
    dissolved phase and groundwater into a potable reservoir and
    looked at the impact.
        Chairman Schweikert. And what scale was that done at?
        Mr. Trautz. It is a very small scale. It just was there to
    simulate hypothetical release of CO2.
        Chairman Schweikert. And when you are doing that sort of
    study, and this is just me sort of getting myself technically
    up to speed, you use actually human--I guess the term is food-
    quality, food-grade CO2?
        Mr. Trautz. Yes, food-grade CO2.
        Chairman Schweikert. As part of your test mechanism?
        Mr. Trautz. That is correct.
        Chairman Schweikert. And what were the conclusions? What
    did the model tell you?
        Mr. Trautz. So what happened was the CO2 as it
    dissolves in the groundwater, it lowers the pH, and the pH can
    then start to dissolve mineral phases that are in the aquifer
    materials themselves and it can release heavy metals. It can
    also release heavy metals from the disassociation or the
    surface complexes that are on clays and other minerals. It can
    dissolve and come off of those surfaces and into solution, so
    heavy metal contamination is one of the biggest issues.
        Chairman Schweikert. Mr. Trautz, let us say you and I
    tomorrow were building a modern power generation facility that
    was using coal. How much CO2 would it produce for
    this model? Because you were telling me in northern Europe we
    have a couple projects that have been up and running for a
    while but they max out at about a million.
        Mr. Trautz. A million tons per year, yes.
        Chairman Schweikert. And that is metric tons?
        Mr. Trautz. Metric tons, yes.
        Chairman Schweikert. What would a modern facility produce?
        Mr. Trautz. Again, a 1,000-megawatt power plant, a
    pulverized-coal plant, would produce about 3.1 million metric
    tons per year and over a lifespan of 40 years, the example
    given in the testimony was 120 million metric tons.
        Chairman Schweikert. And do we have models that would say
    we even have places to do such storage that we would be safe
    and comfortable and long after the shutting down of such a
    facility we would have no fissures or other----
        Mr. Trautz. Yes, we do have geomechanical models that can
    be used to predict the behavior of pressurizing a reservoir, so
    those are available.
        Chairman Schweikert. And then to move on beyond the models,
    what demonstration projects do we have at scale?
        Mr. Trautz. As I mentioned in my testimony, on saline
    reservoirs only, the two that we have is the Mountaineer
    Project. That was about 37,000 metric tons total. And then
    there's Plant Barry, which is part of the SECARB Project, which
    EPRI is part of, and that is a little over 100,000 metric tons
    at this point.
        Chairman Schweikert. Okay. So in many ways, our
    demonstrations are still sort of fractional in scale?
        Mr. Trautz. They are very, very fractional, yes.
        Chairman Schweikert. Okay. If I were to look around the
    world, you are telling me right now that the largest scale we
    have is at a million metric tons, and that is a million metric
    tons on an annual basis?
        Mr. Trautz. That is correct.
        Chairman Schweikert. And for how many years?
        Mr. Trautz. The Sleipner Project has been going on since
    1996, so almost 20 years. It is the longest experience. The
    Snohvit Project has started up in 2008. The In Salah Project
    started up in 2008 and shut down or was suspended in 2011. We
    have one other large CO2 project that is coming
    online that will also be a gas separation project, and that is
    the Gorgon Project in northwestern Australia. That will be on
    the order of a power plant.
        Chairman Schweikert. Okay. So that we actually will have
    some demonstration coming on a large scale?
        Mr. Trautz. On natural gas, yes.
        Chairman Schweikert. Why was the one shut down in North
    Africa?
        Mr. Trautz. Because the CO2 pressure was too
    high and it ended up fracturing the lower part of the cap.
        Chairman Schweikert. And their models didn't predict that?
        Mr. Trautz. No, apparently not.
        Chairman Schweikert. Okay. All right. I am actually
    somewhat over my own time, so I am going to yield to Mr.
    Swalwell.
        Mr. Swalwell. Thank you, and Mr. Chair, I am moving left. I
    was over there, I am here, and by the end of the hearing I will
    be right here.
        I just want to start by asking our witnesses just a yes or
    no, and I will go down the line and start with Mr. Hawkins. Do
    you agree with the 97 percent of the scientists who say with 95
    percent certainty that climate change is happening as a result
    of activity by humans? Mr. Hawkins?
        Mr. Hawkins. Yes.
        Mr. Swalwell. Mr. Hilton?
        Mr. Hilton. Yes.
        Mr. Swalwell. Mr. Trautz?
        Mr. Trautz. Yes.
        Mr. Swalwell. Mr. Miller?
        Mr. Miller. I am not a scientist to say yes or no on that.
        Mr. Swalwell. Okay. So I want to start, Mr. Hilton, you
    stated that you had concerns that DOE is out of money and does
    not have enough money to implement this, and were you aware
    that back in December they announced an $8 billion loan
    guarantee for these programs?
        Mr. Hilton. Absolutely, but a loan guarantee doesn't give
    you money. It guarantees failure and recoup of the loan. The
    problem is to do a project and then get it financed, and you
    might notice, there has been no carbon capture projects
    applying for the $8 billion.
        Mr. Swalwell. Would hundreds of millions of dollars though,
    that we have for R&D that is proposed in the budget, would that
    be sufficient?
        Mr. Hilton. Well, there is only something on the order of
    about less than $100 million in the CCS program. What I am
    talking about is the kind of programs that lead to the
    demonstrations like the proposed Summit Project, the projects
    that have been delayed, where they put, our--if you will, our
    project at American Electric Power. But we had $450 million but
    the public utility commission refused because there was no
    regulatory requirement to allow the utilities to recover any
    costs on the project, so those are the kind of funds we need
    and those don't exist in the DOE budget.
        Mr. Swalwell. Mr. Hawkins, does NRDC, one of the country's
    most respected environmental organizations, believe that there
    is a role for coal in our Nation's energy future, and if so,
    why, if not, why not?
        Mr. Hawkins. We do believe that there is a role for coal.
    How long that role will last is a matter of conjecture. It
    will, in our view, depend on a combination of factors including
    whether coal can be brought into the 21st century and perform
    as an energy resource that is consistent with our other needs:
    to protect our society's dependence on a stable climate. Right
    now, it is not consistent, and whether it becomes consistent is
    precisely the topic of this hearing, and we thank you for
    holding it.
        Mr. Swalwell. Do you think that EPA standards are putting
    coal plants out of business or the clean natural gas boon
    putting coal plants out of business?
        Mr. Hawkins. The biggest challenge to coal investments
    today is the marketplace. We have slack power demand, in part
    due to the continuing effects of the recession, in part due to
    good things like energy efficiency and the improved renewables
    production, and we have abundant, low-cost natural gas, and
    that makes it very difficult for investors to look at a new
    coal project and say this is where we should put our money. It
    is just not attractive.
        Mr. Swalwell. And Mr. Hawkins, do you believe that it would
    be appropriate for the EPA to establish standards requiring
    implementation of CCS at existing plants? And I draw the
    distinction between those plants existing now and the proposed
    regulations for the future.
        Mr. Hawkins. We think that CCS should be permitted as a
    compliance technique for any regulation of existing power
    plants but we have not seen an analysis that would suggest that
    it should be required across the board and meet economic tests.
        Mr. Swalwell. And Mr. Hawkins, how can EPA determine that a
    technology is adequately demonstrated if it not yet
    commercially available? Any thoughts on that?
        Mr. Hawkins. Yes. The difference between commercial
    availability and adequate demonstration is very specific to the
    sector that is being looked at. So commercial availability asks
    the question, is there a vendor that can--that is willing to
    provide a commercial product to a particular type of industrial
    source, and if there is no market for it, the answer is often
    no. Actually in this case, there are vendors who provide
    commercial carbon capture systems for power plants so in this
    case, there is commercial availability, there just isn't
    commercial use because there is no reason for the power plant
    operators to use it.
        Mr. Swalwell. Great. Thank you, Mr. Hawkins.
        And with that, I will yield back the balance of my time.
        Chairman Schweikert. Well, you don't have any more. Thank
    you.
        Mr. Hall.
        Mr. Hall. I thank you, Mr. Chairman, for holding this
    combined hearing and very capably so.
        I appreciate hearing from the witnesses, or at least I
    appreciate hearing from some of them, their major concerns, not
    just concerns but major concerns with the proposed rule. Some
    of those concerns have been raised by the Attorney General of
    Texas. He has filed some 30 suits, I think, against this
    Administration, who seems like can't tell the truth, can't even
    call a terrorist a terrorist. But he has filed a number of
    suits, and not just him but the Attorney Generals from
    Oklahoma, Alabama, Michigan, Nebraska, South Carolina, Wyoming,
    in their February 28th letter to Administrator McCarthy.
    Without objection, I would like to enter their letter into the
    record.
        Chairman Schweikert. Without objection.
        Mr. Hall. Thank you, sir.
        [The information appears in Appendix II] MISSING
        Mr. Hall. I would like to commend the Texas Attorney
    General one more time, Mr. Greg Abbott, who has worked
    tirelessly to stand up against this Administration's what we
    call advanced federalism. Mr. Abbott and the other states'
    Attorney Generals are concerned about the EPA's draft
    underground injection control program guidance on transitioning
    class II wells to class VI wells. To move it would interfere
    with the authority granted to the states under this program.
    The proposed new class of wells, class VI wells, would create
    new regulations in connection with prospective carbon capture
    and storage operations. The Attorney General's letter states,
    and I quote, ``Notwithstanding this new class of wells intended
    to accommodate the underground injection of CO2,
    many oil and gas producers operating class II wells have been
    injecting CO2 for the past 40 years to manipulate
    well pressure and enhance the recovery of oil and gas. This
    process, commonly referred to as an enhanced oil recovery, has
    been used in more than 10,000 wells, about 7,000 of which are
    currently active, and EOR represents a critically important
    part of our state's and our country's energy infrastructure and
    plays an essential role in our Nation's economic stability and
    energy. The concern raised is that class II wells for EOR
    operations could be reclassified as class VI wells under the
    EPA's draft guidance, a situation that is creating an
    unnecessary level of uncertainty and risk to a mature area of
    industry that is already well regulated.'' So I join the
    Attorney General in calling for the EPA to take immediate
    action to rectify this situation created by the draft guidance
    and eliminate the uncertainty and ensure strict adherence to
    the applicable law. So I ask you a question, Mr. Trautz. Did I
    say that correctly, sir?
        Mr. Trautz. Trautz.
        Mr. Hall. That is what I said, I thought. Sir, in your
    testimony you noted that geology is not uniform. What
    specifically are the differences in geology that might make it
    more or less difficult to sequester carbon in different regions
    of the country?
        Mr. Trautz. Yes, so the geology is not created equal, so to
    speak. If you go to the northeastern United States, there is
    bedrock, crystalline rocks that will not hold CO2
    capacity. There isn't sufficient capacity up in the Northeast,
    so they make for poor reservoirs, and there is very limited
    availability of storage. Go to other areas of the United States
    and you will find much better reservoirs like in the Southeast.
        Mr. Hall. Let me ask you this. Are there parts of the
    country that simply does to have the geology for storage?
        Mr. Trautz. Yes, sir. The Northeast is one of those.
        Mr. Hall. And what other options would power plants in
    those locations have for managing carbon dioxide? Can they
    simply store the CO2 on site?
        Mr. Trautz. No, sir, because of the volume, but they would
    have the possibility of creating a pipeline that would then
    take that CO2 to better storage reservoirs.
        Mr. Hall. Do you think the EPA's proposed rule will put
    specific states and regions at a competitive disadvantage in
    terms of compliance?
        Mr. Trautz. In terms of compliance?
        Mr. Hall. Yes.
        Mr. Trautz. No, I don't think in terms of compliance.
        Mr. Hall. Well, then, let me ask you this. Do you believe
    CO2 pipelines can solve this problem?
        Mr. Trautz. That has been one of the possible avenues, yes,
    sir, because we do have CO2 pipelines that stretch
    down from Colorado into the Permian Basin in the----
        Mr. Hall. Thank you, and my time is just about up. I would
    also like to note that although environmentalists are
    supporting EPA's proposed New Source Performance Standards
    rule, I would like to enter into the record an article written
    this week explaining the Sierra Club and the other
    environmental groups that are actually opposing the Kemper
    Project that the EPA cites as an example of CCS.
        Chairman Schweikert. Without objection.
        [The information appears in Appendix II] MISSING
        Mr. Hall. With that, Mr. Chairman, I thank you and I yield
    back.
        Chairman Schweikert. Thank you, Mr. Hall.
        Mr. Veasey.
        Mr. Veasey. Thank you, Mr. Chairman.
        I wanted to touch on a little bit what Congressman Hall was
    just talking about a little bit. I know that many of the
    witnesses today have touched on the viability of storage
    technology for CO2, especially in EOR, and in Texas,
    you know, we have been doing this for a while, as it was
    already stated, particularly in the Permian Basin, and we have
    a complete pipeline structure that has been built around this
    process with the newest one being the Green Pipeline Project
    that was completed a short time ago transporting CO2
    from Louisiana to Texas, and the process has become so
    economically viable that now there is a shortage of
    CO2, raising the price upwards to about $30 per ton.
    I wanted to ask Mr. Hawkins and Mr. Miller, while CO2
    storage may not be feasible in one area of the country as it
    was stated a little bit earlier, aren't there other areas such
    as the Gulf Coast that actually have a high need and capacity
    for CO2 storage?
        Mr. Hawkins. Yes, Mr. Veasey. EOR is a great win-win-win
    opportunity for energy security, climate protection and I would
    argue for other environmental protection. We have lots of oil
    that is stranded in existing oil fields. It is not economic to
    get it out. It could be gotten out starting tomorrow if the
    CO2 were available. The CO2 isn't
    available because it is all going up into the air from
    uncontrolled industrial sources. We have an easy fix, which is
    to find a way of working the economics so that we put carbon
    capture on these power plants and then we use a pipeline
    network and expand pipeline networks, and the pipelining of
    this is easy. It is being done today. It goes hundreds of miles
    from southern Utah down into west Texas. It goes hundreds of
    miles from North Dakota up into Saskatchewan. Oil field
    operators are making money when the CO2 is
    available. This is proven technology. And in terms of
    distances, you know, the idea that it might rule out some
    locations in the United States for coal, that just doesn't hold
    water. We transport coal thousands of miles from Wyoming to the
    southeastern United States. We can transport the CO2
    from that same coal a few hundred miles back to EOR, no
    problem.
        Mr. Miller. My response would be on multiple levels. Number
    one, natural gas, or CO2 pipeline is feasible.
    Technologically, it is out there and it is happening. They are
    expensive. You run into some ``not in my backyard'' issues as
    you are putting in the pipeline, but they can be put in. You
    have--now you are transporting your CO2 to another
    area so you have a variety of environmental liabilities that
    you are going to be taking on and moving to another area of the
    country and so there is liability that goes back to your
    community.
        And then finally, on the EOR side--and this is not my
    specialty but what I have been reading on that is, CO2
    is a very expensive product and people are buying that and they
    are using that as a working fluid, but they are capturing that
    CO2 back out and continuing to use that as a working
    fluid. So it is not really a sequestration technology, it is a
    technology that is used to capture energy and recover energy
    and gas, so I don't see EOR as sequestration as much as a use
    of the CO2, and that is what is driving up the
    costs. They are trying to get that. They are using that fluid.
    But once they inject it in, they try to get that back out so
    they can use it again.
        Mr. Veasey. I think that both of you would agree that Texas
    has had a long history of using CO2 in plugged oil
    wells with very little environmental damage, and wanted to ask
    you specifically about the regulations for EPA's New Source
    Performance Standards. Based on what we heard from Mr. Hawkins
    just a second ago, wouldn't there--wouldn't we create more of a
    market under these regulations for CO2?
        Mr. Hawkins. Well, I think there would. The recycling that
    the witness mentioned is correct but it is only a fraction.
    About 30 percent of the injected CO2 comes up in the
    oil, and industry practice is to put that back down. But there
    is a net additional injection of about 50 million tons a year
    now, so it is storing lots of CO2, and yes, the oil
    industry would love to have additional supplies of CO2
    but we have a disconnect in the marketplace because there is no
    policy requirement to capture CO2, and given the
    other aspects of the marketplace, there is no economic
    rationale because the costs of capture are high enough that you
    can't earn money back in the typical situation for selling it
    for EOR. Now, there are some niche situations where you may be
    able to make a profit even today without a regulation, but to
    make this expand, you will need regulations to drive it.
        Mr. Veasey. Thank you. Thank you, Mr. Chairman.
        Chairman Schweikert. Thank you, Mr. Veasey.
        Mr. Rohrabacher.
        Mr. Rohrabacher. Thank you very much.
        First and foremost, we need to recognize that this debate,
    this discussion is predicated on certain premises that I
    disagree on, and those of us who think that the concept of
    global warming is fraudulent and that it has not been proven,
    we obviously are much more--those of us who don't accept the
    idea that there are--for example, when we hear that 97 percent
    of the scientists, we hear something like that quoted, we go my
    goodness, do 97 percent of the scientists believe that? Well, I
    am sorry but 97 percent of those scientists who replied from
    that questionnaire said that, not 97 percent of all the
    scientists as we hear repeated over and over again. It used to
    be repeated that we had global warming and now it is called
    climate change because it didn't get any warmer. We in fact had
    all of the people, those of us who have been around long enough
    to remember how adamant it was that there was going to be a 5-
    degree jump in the temperature over the last 15 years, and
    instead we have had absolutely flat temperatures. So there is a
    premise that those of us on this side may disagree that maybe
    the whole basis of the discussion is wrong but let us get into
    the debate of the discussion today, which is we are talking
    about CO2 and the sequestration that is being pushed
    on us in the name of stopping global warming where they now
    call it climate change because the global warming stopped 15
    years ago.
        The gentleman from Texas just presented us a good picture
    of how in Texas they are utilizing CO2 in the
    production of oil. Now, let me ask the panel: If we then change
    the nature of the CO2 from being a natural source of
    CO2 put into the ground and we now are mandating
    that it is a byproduct of coal, the use of coal, that
    CO2, doesn't that change the regulatory mandates
    that the industry has to put up with and wouldn't that so
    dramatically change those regulatory mandates that it would
    make it almost impossible then to use even the coal that is
    our--even the CO2 that is now being used by the
    industry if you would intermix the CO2 from coal
    production with natural CO2? Does anyone on the
    panel know anything about that?
        Mr. Hilton. I think that the issue that you are addressing,
    sir, is, what has been expressed by people like Denbury is, you
    know, they would not choose to overlay the costs and the
    difficulty of subpart RR in regulations and they would--if they
    continued to use natural CO2, they are subject to
    those regulations.
        Mr. Rohrabacher. Right.
        Mr. Hilton. But if they were to bring in any CO2
    from a power facility, they would become subject to those
    regulations, and as I said, Denbury has issued a public
    statement saying that they would not use that because of cost
    and the impact on operations.
        Mr. Rohrabacher. So what we just heard from our very
    sincere colleague from Texas about--it would destroy the very
    thing that you are bragging about. The fact is, it would put a
    whole new regulatory burden just to utilize this CO2
    byproduct of coal production into the natural CO2
    would prevent or at least dramatically increase the cost of the
    very thing that you were talking about, which is CO2
    is used now by the oil industry.
        Yes, sir, go right ahead.
        Mr. Hawkins. Yes, Mr. Rohrabacher. Let me read a very short
    sentence from the Denbury Web site. ``CO2 EOR is
    increasingly being viewed as a strategy to reduce carbon
    emission from various current and proposed industrial
    facilities. Our CO2 process provides an economical
    and technically feasible method of CO2 disposal.''
    So Denbury is holding itself out as being a source for disposal
    of industrial CO2, and we don't think it is
    sustainable for them at the same time to say if they are
    required to report on what happens to that CO2, they
    will refuse this business. We just don't think that washes.
        Mr. Rohrabacher. Well, we don't think it washes, but
    obviously there are a lot of people in business who have to put
    up with the regulations and the bureaucrats and the mandates
    and the government intrusions into the decision-making and the
    extra costs that government mandates will have have said we are
    concerned about that, and actually you are bringing a whole new
    set of fundamental laws that have to be dealt with by combining
    natural CO2 with a byproduct of coal. All of a
    sudden CO2 then is treated not as a natural material
    but as some sort of a toxic substance. As a toxic substance, it
    is highly regulated and a situation that would add dramatically
    to the cost and complication of doing business.
        Of course, it would be very well intended. Obamacare was
    very well intended as well. Thank you very much.
        Chairman Schweikert. Thank you, Mr. Rohrabacher.
        Mr. Neugebauer.
        Mr. Neugebauer. Thank you, Mr. Chairman, and thank you for
    holding this joint hearing.
        Mr. Miller, you know, this panel and previous panels have
    testified pretty consistently that CCS is not adequately
    demonstrated and not necessarily completely commercially
    available. So if that is the fact, then what are the
    implications for your customers, you know, City Utilities,
    retire older plants and need to add new sources of power? What
    is going to be the consequence if EPA moves forward with these
    regulations?
        Mr. Miller. Well, it could go a variety of directions but
    ultimately we have the obligation to serve our customers, and
    as a municipal utility, the money we spend is not shareholder
    money, it is our customer money, and so first of all, if we are
    in a retirement mode where we retire assets, it was mentioned
    earlier that some assets will be retired before the end of
    their useful life but you are still paying on those. Your
    customers have paid for those assets, so that is a loss of
    money there. Now you have to find either the ability to install
    not demonstrated technology--and I have been on the end where I
    have had to install demonstrated technology, whether it be a
    scrubber or selective catalytic reduction, and you buy those
    from vendors that are commercial. They have guarantees, and
    they are designed by nationally recognized engineers, and when
    you go to install those, you get surprises. Even commercial
    equipment, you still get surprises and there are some
    additional costs, and those costs flow back to your customers.
    So you are going to--our customers will pay more because you
    have assets that are retiring. You are putting in non-proven,
    non-demonstrated technology which ups the amount of risk that
    you are going to take on that you are going to find problems as
    you implement that technology, and that is cost. So those are
    all driving cost, increasing cost to customers, and so whether
    you buy it from the market or whether you install the
    technology that is not demonstrated, and when you retire the
    assets, that all flows back in our case right back to our
    customers. And so we are very protective of that because we
    have that obligation to serve, and they own us.
        Mr. Neugebauer. And so the next step of that is, okay, so
    you have those options out there, assuming that you have those
    options, it could increase the cost because of the increased
    cost in technology. Here is my question: If we keep going down
    this path of, you know, being anti-fossil fuel for the
    production of electricity in this country, whether it be coal
    or natural gas, you know, doesn't that begin to limit our
    options? In other words, your utility is not the only utility
    in the country that is, you know, facing this issue, and so we
    this massive consolidation of all these different communities
    or providers for communities looking for power sources, and if
    we begin to limit the choices, how do we keep the lights on?
        Mr. Miller. You are basically shrinking your subset of
    options, and these--as was mentioned earlier, it takes a long
    time to get these generating sources on and up and operating,
    and so you start limiting your capacity and you start running
    the potential of having reliability problems, not only in your
    region--or in your area but in the region, and you are putting
    a lot of pressure on these much reduced options available to
    your customers.
        So the answer is, we still have that obligation to serve.
    We are still going to do everything we can but you increase
    your risk of reliability issues across the Nation, and it also
    drives costs into the business world, and so your economic
    development picture changes too. Instead of adding jobs in your
    community, you might be freezing jobs or you might be reducing
    jobs or moving them elsewhere. So it impacts our low-income
    customers but it also impacts our economic development within
    our communities.
        Mr. Neugebauer. Mr. Miller, you were reading my mind
    because the next question I have is, okay, so we have got
    reduced capacity so we got a reliability factor and probably
    got a lot of price pressure then because you have got all of
    these people competing that have these contracts to deliver
    power, and they are looking for that power. And so the question
    is--and you mentioned it--is that, you know, job creation, you
    know, the impacts on businesses, manufacturing businesses, all
    kinds of business. It is pretty hard to run a business in this
    country without power.
        And so that is the reason I am going to ask unanimous
    consent, because Heritage just recently did a study that I
    think is important to the record, Mr. Chairman, and I will just
    read a little bit from that. It said that according to the
    report, by 2023 we can expect to see nearly 600,000 jobs lost
    nationwide with Texas losing 25,000 jobs and over 330,000
    manufacturing jobs could be lost because of this rule, and in
    my district alone we could expect to see maybe 400 people lose
    their job. So without objection, Mr. Chairman, I would like to
    put the Heritage report as a part of the record.
        Chairman Schweikert. Any objections? So ordered.
        [The information appears in Appendix II]
        Mr. Neugebauer. And I yield back the time I don't have.
        Chairman Schweikert. Thank you, Mr. Neugebauer.
        Mr. Cramer.
        Mr. Cramer. Thank you, Mr. Chairman, and I thank the
    witnesses for your testimony today.
        Before I forget, I want to do it right upfront or I almost
    certainly will, I want to place into the record without
    objection a letter from the North Dakota Industrial Commission
    that represents their comments on this rule. The Industrial
    Commission of North Dakota is made up of three separate elected
    officials who come together on the Commission. They are the
    Governor, the Attorney General and the Commissioner of
    Agriculture. So I would like to place that in the record.
        Chairman Schweikert. Without objection, so ordered.
        [The information appears in Appendix II]
        Mr. Cramer. Before I speak about what the Commission has
    written about, I am very pleased to know, Mr. Hawkins, that the
    Natural Resource Defense Council supports interstate pipelines,
    international pipelines even. Your reference to the CO2
    line from the Dakota gasification facility in North Dakota,
    which I helped site when I was on the Public Service
    Commission, to Weyburn, Canada, for enhanced oil recovery--by
    the way, when we sited it, we had a hearing and not a single
    person showed up. That is the way it is in North Dakota with
    good ideas.
        And so I am--however, your comment that pipelining is easy,
    I have to take some exception with. If building international
    and interstate pipelines was easy, we would have a lot more of
    them right now. We would have----
        Mr. Weber. Like Keystone.
        Mr. Cramer. Yes, for example. By the way, Chairman Hall,
    North Dakota's Attorney General is engaged so far in 12
    separate lawsuits against their federal Government, the EPA.
        In the comments that the Industrial Commission writes that
    North Dakota really focuses on this issue of CO2 as
    an asset. It is an asset. It is a resource. The EPA treats it
    as waste, same with the pore space. We treat it as an asset.
    The EPA treats it as waste and consequently there is tremendous
    regulatory confusion as a result, and so I know I might be a
    little redundant but I want to flesh this out even a little
    further. Maybe, Mr. Trautz, you could help me with this. Mr.
    Hilton made reference to it earlier. Can you describe the
    requirement that EOR operators, you know, have to operate under
    differently than, say, traditional sequestration? Can you maybe
    flesh that difference out a little bit for us so that I have a
    better scientific understanding and why should it be that way,
    if you think it should or why it shouldn't.
        Mr. Trautz. The difference between the reporting
    requirements on the greenhouse gas mandatory reporting
    requirement is under Subpart RR. That is for geologic storage
    or sequestration. There is a--sort of a burden of proof that
    you have to do a mass balance on the CO2 that you
    put into the ground. You have to ensure or at least look at,
    put through a monitoring program that it isn't coming back up
    to the surface.
        Mr. Cramer. Um-hum.
        Mr. Trautz. Under Subpart UU it is--the burden of proof is
    frankly not even there. It is really just monitoring the
    CO2 that goes into the field, as well as fugitive
    emissions from your operations or facilities, so there isn't
    the same level of reporting that is required in certainly
    monitoring.
        Mr. Cramer. Maybe, and this could be for all of the
    panelists because there was reference earlier to previous rules
    and previous technological advancements. I think mercury was
    specified, I think some of the others, I mean SOx, NOx. Is the
    commercially available or perhaps even the standard adequate
    demonstration of technology equal in this case in carbon
    capture as it was then with mercury and others, anybody or all
    of you? Mr. Hilton?
        Mr. Hilton. Congressman, I can really address that. The
    answer is we were doing the technologies required either not in
    this country or in other industries that everything that was--
    that has been required under the Clean Air Act except for this.
    I mean, as I pointed out, we did scrubbers. The first scrubbers
    were at Battersea and Bankside, and they were there to protect
    the erosion of, you know, all of the buildings there. So we
    built these things for years.
        And as I said, I worked on my first one before the Clean
    Air Act existed. So I mean it is--you know, we have done these
    things. NOx reduction was developed in Japan, not here, but the
    technology was there. And I know because my company was a
    licensee of those companies.
        And so this is the first time we are dealing with something
    where we have nothing out there to show. And, you know, we are
    running down a path where Europe is not pushing this issue,
    China is not pushing this issue, India. We are alone out here.
    And so the technology has got to be developed here, you know,
    because--so I think, you know, this is the first issue where we
    haven't had the ability to--like in waste and energy where we
    had full-scale plans on mercury in the '80s.
        Mr. Cramer. Well, I thank you. I look forward to the day
    when the technology does catch up because I would love to burn
    more than, you know, that 30 million tons of coal we burn in
    North Dakota every year. We have an 800-year supply of it, so I
    would like to burn it for 800 years and use it to get even more
    oil out of the ground. That is a noble goal.
        Thank you.
        Chairman Schweikert. Okay. Thank you, Mr. Cramer.
        Mr. Hultgren.
        Mr. Hultgren. Thank you, Chairman. Thank you all for being
    here today for this really important hearing as we continue to
    assess technology as well as increased cost that EPA is
    mandating on the American people.
        While the Administration and EPA continue pushing for the
    uncertainty of a closed-door regulatory approach as opposed to
    the balanced long-term solution our legislative body is
    supposed to provide for the American people, it is crucial that
    Members of Congress understand the technologies being mandated,
    as well as how EPA made their decisions.
        While it is often hard even for Members of Congress to get
    answers from EPA, we unfortunately are the ones that have to go
    home and explain to our constituents what many see as
    unjustifiable. I am certainly glad to have such a diverse panel
    before us today, and it will be beneficial to have experts
    before us that understand the technology and can explain to us
    the process and hurdles of energy technology innovation.
        Mr. Hilton, I wanted to address my comments and questions
    to you if I may. Just to get an idea about how long the
    technology development process takes for energy technologies, I
    would like to discuss one of your projects with DOE that you
    briefly touched on in your testimony, the chemical looping
    combustion prototype for CO2 capture with the
    National Energy Technology Laboratories.
        I know that in December 2012 NETL technology readiness
    assessment for the Clean Coal Research Program, your chemical
    looping combustion prototype was given a technology readiness
    of five out of nine. I wonder if you could explain to the
    Committee what a technology readiness level is and wondered if
    you could also talk about how valuable TRL is in assessing the
    viability of technology to perform on a commercial level.
        Mr. Hilton. Well, it is basically assigning a level. There
    are characteristics to each level and assign how you move
    through the development into what is ultimately a commercially
    viable product. And chemical looping--and we really started on
    this and it depends when you really want to trace the roots,
    but let's say we started in earnest in chemical looping as we
    know it now in the '90s, and if all goes well, we expect it to
    be commercial in the early '20s, 2020, because what we have to
    do is solve the problems of chemical looping, moving the solids
    around, extracting the solids, extracting the CO2,
    auto thermal ignition, you know, because in early stages you
    provide the heat to make things work.
        So you get through this and then you have to bring them up
    from our current 3 megawatt unit to a 50 megawatt unit
    hopefully to something larger and eventually a full-scale
    because, as I said, when we go full-scale commercial, to get to
    that last level, that is what DOE and everybody else wants to
    see. So it is a long process in our industry.
        Mr. Hultgren. Yeah. I want to follow up on that a little
    bit. You mentioned the '90s. It is my understanding that your
    technology started bench tests in 1996. What would be the
    expected time frame for a project such as this? Could you go
    from bench testing to demonstration and then final commercial
    sale? Is that the 2020 number that you would say, so basically
    a 25-year to 30-year process?
        Mr. Hilton. That is pretty typical--
        Mr. Hultgren. Okay.
        Mr. Hilton. --for a process like this.
        Mr. Hultgren. And how often do technologies get the
    prototype scale before realizing they will not work on the
    commercial level?
        Mr. Hilton. More often than I would like to admit to, but
    R&D is--you know, it is kind of--to not have failure in R&D is
    just--is not an option--
        Mr. Hultgren. Right.
        Mr. Hilton. --I mean because it wouldn't be R&D. You would
    already know the answers.
        Mr. Hultgren. Right. Since EPA is charged with determining
    whether a technology has been adequately demonstrated and DOE
    already has a process in place to assess technology readiness
    levels, it seems to me that EPA should rely heavily on the
    scientists who understand the technology. At what TRL would you
    consider a technology to be adequately demonstrated?
        Mr. Hilton. Essentially, it should be toward the upper
    level of nine. I mean that is when you know things work and
    that is when you have built something that is large enough to
    say that this is something that can be applied.
        Mr. Hultgren. Okay. Well, thank you very much. Mr.
    Chairman, I yield back the balance of my time to the Chairman
    if you have any other questions. Otherwise, I would yield back
    my time.
        Chairman Schweikert. Thank you, Mr. Hultgren.
        Mr. Weber.
        Mr. Weber. Thank you, Mr. Chairman.
        EPA claims that enhanced oil recovery will bring costs down
    for power plants and for domestic energy reduction, but the
    reporting requirements on EOR operators will make it
    prohibitive for these companies to use CO2 from any
    future coal-fired power plants. These requirements will in fact
    inject, no pun, or maybe I should say pun intended, the EPA
    into a process that has long been successfully regulated by the
    states, especially my State of Texas.
        As our colleague over there, dare I say on the right; I
    should say over on the left, Marc Veasey, alluded to. CO2
    has been used for over 40 years in enhanced oil recovery.
    According to a detailed white paper, Mr. Chairman, which I have
    here from Denbury Resources, an EOR operator located in Texas,
    ``the proposed NSPS rule will foreclose, not encourage''--I
    repeat--``will foreclose, not encourage the use of CO2
    captured by emission sources in EOR operations.''
        And, Mr. Chairman, I would like to submit this white paper
    into the record.
        Chairman Schweikert. Without objection.
        [The information appears in Appendix II]
        Mr. Weber. Thank you.
        Denbury Resources does use enhanced oil recovery, captured
    CO2. I have the--and that I know of, the largest and
    only CCS carbon capture and sequestration storage facility in
    my district in Texas, Port Arthur. It is--it was built/managed
    by Air Products at a cost of about $400 million. Sixty-six
    percent of the funding came from the Department of Energy or
    the American Reinvestment and Recovery Act, 66 percent of the
    funding.
        Now, if you read Air Products' news release on May the
    10th, 2013, about that, let me quote from their product--their
    press release. ``This unprecedented achievement comes by way of
    an Air Products innovative technology is the first of its kind
    operating at such a large scale''--and here is the key phrase--
    ``and has not been accomplished anywhere else in the United
    States.'' Further, down here they read--it says, ``this
    project''--they state that this project ``would not have been
    achievable without the support and involvement of the
    Department of Energy.''
        To call this something that is capable of being duplicated
    in a viable process in the United States is a laugh. It is an
    absolute laugh. For the witnesses, are there any of you all who
    get 66 percent funding in your salary or that would admit it?
        Let the record show there is none, Mr. Chairman.
        Are any--there are. We have business people at the table,
    right, that are in business. Any of you all whose businesses
    get 66 percent funding from the federal Government and would
    admit it?
        Let the record show there are none.
        Kemper, the project over in Mississippi, Kemper County,
    Southern Energy, the CEO came to the House Environmental
    Action--Energy and Action Team, which I am a member of, and
    testified some months--last year some months back and he said
    it is such a huge cost overrun and it is not applicable in--
    anywhere else in the United states. And that is with Denbury
    having a pipeline right in their backyard so to speak, which,
    fortunately comes over into my district in Texas.
        Am I losing my microphone? No.
        So for us to say that this is duplicable and that this has
    been demonstrated as a--capable of being duplicated process,
    for the EPA to say that is unbelievable in my opinion.
        We have seen from testimony today the prices for energy--
    Mr. Miller, for your customers, those that--as what Chairman
    Lummis said, demonstrably at the lowest economic rung will
    negatively impact those customers. Do you agree with that?
        Mr. Miller. Yes, sir, I do.
        Mr. Weber. You know, it seems to me it is irony of all
    ironies. We have got tax dollars, 66 percent of the project
    that the EPA alludes to, by the way, funding a process that we
    cannot duplicate that is going to hurt, you want to give new
    meaning to the term double jeopardy. We are using taxpayer
    dollars to fund a process that is going to hurt those who can
    least afford it at the bottom rung, maybe triple--let me just
    say maybe triple jeopardy.
        I would submit for this panel, for this body that we are
    going to jeopardize, number one, those who can least afford the
    energy cost. We are going to jeopardize investment. There will
    be no new jobs at a time when we need it, and we are going to
    jeopardize our national security because we are going to need
    energy to operate the things, our military. We are going to
    need energy to produce goods, products, services, and we are
    going to be triple jeopardized by trying to do this process the
    very economy in the greatest country in the world that is
    great, and I would ask any of you to disagree because we have
    the most solid, most affordable, most reliable, best supply of
    energy on the planet and we worked hard to get it that way. And
    this is going to undermine the very process. Does anybody
    disagree with that?
        Mr. Hawkins. I disagree.
        Mr. Weber. You--that----
        Mr. Hawkins. I disagree that it will undermine all----
        Mr. Weber. I know. Well, I am--Mr. Hawkins, I am so glad
    you are here, glad to hear that, as my colleague over here
    said, you support pipelines. You said in your statement earlier
    that these regulations would help oil companies operate more
    profitably. I am so glad you are concerned about the oil
    companies. That is just something that is very admirable on
    your part.
        And, Mr. Chairman, I have gone over my time so I yield back
    what I don't have.
        Chairman Schweikert. Thank you, Mr. Weber.
        Mr. Weber. Thank you.
        Chairman Schweikert. Mr. Bridenstine.
        Mr. Bridenstine. Mr. Hawkins, I just wanted to ask, can you
    explain a little bit about how EOR offsets the cost of carbon
    capture and storage?
        Mr. Hawkins. Yes. Currently, oilfield producers pay
    suppliers of CO2 that--they buy the CO2;
    they use it for injection. I don't know what the current
    price--going price is but it is more than $12 a ton of
    CO2, something like that. It might be as high as $20
    a ton. Contracts sometimes specify it as a percentage of the
    price of oil, so as the price of oil goes up, the price that is
    being paid for CO2.
        So the proposed builders of power plants like the Summit
    power plant project in Texas are negotiating arrangements with
    off-takers of that CO2.
        Mr. Bridenstine. Is the regulation required to enhance that
    market for the carbon dioxide?
        Mr. Hawkins. Either regulation or lots of money that we
    don't have is required because the market will not support it
    given the current market structure.
        Mr. Bridenstine. Is that an official policy of NRDC?
        Mr. Hawkins. Which aspect, sir?
        Mr. Bridenstine. The regulation would be required to create
    the market for the CO2 for EOR.
        Mr. Hawkins. That is our belief that--based on an analysis
    of market conditions that it won't happen without a
    requirement.
        Mr. Bridenstine. Can you share with me the difference
    between a Class II well and a Class VI well?
        Mr. Hawkins. I would be happy to provide you with our
    comments on Class II and Class VI, yes.
        Mr. Bridenstine. I have a document here from NRDC that
    suggests that Class II wells are insufficient for EOR but
    certainly Class VI wells would be better? But it seems like
    there aren't very many, if any, Class VI wells, is that
    correct?
        Mr. Hawkins. Our position is that for geologic
    sequestration activities where the company is proposing to
    permanently retain the CO2 underground, there ought
    to be some demonstration beyond what is required under current
    Class II rules that the CO2 will actually stay
    underground. That is our position.
        Mr. Bridenstine. So on the one hand we need EOR to make the
    market for CO2 viable; on the other hand, we want to
    severely limit EOR for the extraction of oil, is that correct?
        Mr. Hawkins. No, it is not correct, sir. Requiring
    companies to do reasonable monitoring and reporting will
    increase confidence that this----
        Mr. Bridenstine. But the reality is----
        Mr. Hawkins. If I might finish, it will increase confidence
    in the public that this is in fact a secure solution and that
    the operators are behaving responsibly.
        Mr. Bridenstine. If you limit EOR, it cannot be used to
    offset the cost of carbon capture and storage.
        And, Mr. Chairman, I would like to submit this document
    from the NRDC as far as the difference between Class II and
    Class VI wells and why NRDC seems to believe that it is
    necessary to limit EOR.
        [The information appears in Appendix II]
        Mr. Bridenstine. I would like to just, I guess, ask the
    panel. Mr. Miller, if you would share with me as somebody who
    operates utilities. We have an issue in my State of Oklahoma
    where, you know, we are literally closing down coal-fired power
    plants, and it is going to cost consumers in my district in the
    Tulsa area. We are going to see rates go up. Some people are
    saying it is going to go up six percent, some people are saying
    20, some people as much as 40 depending on the time horizon.
    Over the next 10 or 20 years it is going to be a significant
    increase.
        The challenge here is that coal is stable, the price is
    stable, and natural gas, we are seeing spikes across the
    country in very specific regions when it gets cold, which it
    still does get cold in places. In New York we saw it, the price
    of natural gas went up to, you know, over $90 in certain areas.
    That creates a huge risk in my opinion, $90 per thousand cubic
    feet. It is a huge risk. In Colorado it went up recently, you
    know, $45 per thousand cubic feet. This is now something that
    we are going to have to deal with in Oklahoma because of the
    shuttering coal-fired power plants. Would you share with me
    your thoughts on that?
        Mr. Miller. Well, we just experienced that in your state.
    In our region just a week or so ago we had a cold spell and
    there were plants that were supposed to run during that coldest
    day going from Sunday into Monday, and when they went to run,
    there wasn't enough gas supply.
        So within our region, Oklahoma, Missouri, and Arkansas
    area, we had plants--we had up to 1,700 megawatts that were
    supposed to run that they--that did not, and then we saw
    natural gas prices go from about $5 up to $20 plus for a couple
    days in a row and it was because we had constraints in pipeline
    and we had generating units that couldn't run because we didn't
    have the gas that can be delivered to them.
        And as we see more of these regulations come on in 2015 and
    '16, you will see a more generation--coal generation come off-
    line, but I am not sure where that capacity is to replace it.
    So we will be feeling the pressure within the marketplace over
    the next few years.
        Mr. Bridenstine. Thank you. I yield back.
        Chairman Schweikert. Thank you, Mr. Bridenstine.
        Ms. Bonamici had something quick she wanted to share.
        Ms. Bonamici. Thank you very much, Mr. Chairman.
        As we conclude the panel, I wanted to thank every one of
    you for coming here today to inform us.
        I also wanted to say something about a comment that was
    made earlier about thanking or appreciating only some of the
    witnesses today. All of you have spent a lot of time preparing
    for this hearing, traveling here to inform us, to share your
    years of expertise, and even though every one of us might not
    agree with everything that every one of you said, you all
    deserve to be thanked and appreciated.
        Thank you, Mr. Chairman. I yield back.
        Chairman Schweikert. Thank you, Ms. Bonamici.
        And I want to thank the witnesses for their testimony and
    the Members for their questions. And we will ask you to respond
    to those questions in writing.
        You know, there are so many things--this is one of those I
    wish I could have a day with no one else because there are so
    many odd technical things I would like to understand of, you
    know, the optionality that is available in these technologies,
    what is robust, what isn't, and even just the whole discussion
    on EOR and the practicalities of how do you both incentivize
    that but at the same time do some of the regulatory approaches,
    do we change the cost structure in a way where we lose that
    opportunity?
        So with that, this panel is dismissed. Thank you for your
    valuable time today.
        I think we are going to take about 90 seconds and everybody
    grab a cup of coffee and we will move on.
        Okay. I would like to introduce our second panel, which
    is--and it is pronounced McBride?
        Ms. McCabe. McCabe.
        Chairman Schweikert. McCabe, sorry.
        Our second panel witness is Janet McCabe, Acting Assistant
    Administrator of the Office of Air and Radiation in the
    Environmental Protection Agency. Previously, she was at the
    Office of Air and Radiation, Principal Deputy to the Assistant
    Administrator. Prior to joining the EPA, Ms. McCabe was the
    Executive Director of Improving Kids' Environment, Inc., a
    children's environmental health advocacy organization. She also
    previously served in several leadership positions in the
    Indiana Department of Environmental Management Office of Air
    Quality.
        Ms. McCabe, you have five minutes. You know the routine,
    yellow light, talk faster.

                       TESTIMONY OF JANET MCCABE,

                    ACTING ASSISTANT ADMINISTRATOR,

                      OFFICE OF AIR AND RADIATION,

                  U.S. ENVIRONMENTAL PROTECTION AGENCY

        Ms. McCabe. All right. Thank you, Mr. Chairman.
        Chairman Schweikert and in absentia Chairman Lummis,
    Ranking Members Bonamici and Swalwell, and Members of the
    Committee, thank you for the opportunity to testify today.
        Climate change is one of the greatest challenges of our
    time. Our changing climate already threatens human health and
    welfare and economic well-being through the increased intensity
    and frequency of severe heat waves, a rise in sea level
    affecting our coastal businesses and communities, and a
    combination of rising temperatures and changing precipitation
    that leads to increased droughts and wildfires. If left
    unchecked, climate change will have devastating impacts on the
    United States and on the planet.
        Last June, President Obama issued a national Climate Action
    Plan directing the EPA and other federal agencies to take steps
    to mitigate the current and future damage caused by greenhouse
    gas emissions and to prepare for the climate changes that have
    already been set in motion. Climate change is also a global
    challenge, and the President's Plan recognizes that the United
    States must couple action at home with leadership abroad.
        Today, you have asked me to focus on the critical role EPA
    plays in implementing one of the central activities in the
    Climate Action Plan: cutting carbon pollution from new power
    plants. In March of 2012, the EPA first proposed carbon
    pollution standards for future power plants. After receiving
    over 2.5 million comments, we issued a new proposed rule based
    on this input and on updated information.
        In September of 2013, the EPA announced its new proposal.
    The proposed standards would set the first uniform national
    standards for carbon pollution from future power plants. They
    will not apply to existing power plants. The proposal would set
    separate national limits for new natural gas-fired turbines and
    new coal-fired units.
        These standards, which are proposed under Section 111 of
    the Clean Air Act, are based on an evaluation of the technology
    that is available to limit carbon pollution emissions at new
    power plants. EPA proposed these standards by following a well-
    established process to determine the ``best system of emission
    reduction, adequately demonstrated'' to limit pollution,
    otherwise known as BSER.
        These proposed standards reflect the demonstrated
    performance of efficient, lower carbon technologies that are
    currently being used today. They set the stage for continued
    public and private investment in technologies like efficient
    natural gas and carbon capture and storage. The proposal was
    published in the federal Register on January 8, and the formal
    public comment period is now open. In fact, the EPA recently
    extended the comment period to May 9 to ensure that we get as
    much public input as practicable. We look forward to robust
    engagement on the proposal and will carefully consider the
    comments we receive as a final rule is developed.
        As noted, the proposed rule would apply only to future
    power plants. For existing plants, we are engaged in extensive
    and vigorous outreach to a broad group of stakeholders,
    including states, who can inform the development of proposed
    guidelines. EPA expects to issue these proposed guidelines by
    June of this year.
        These guidelines will provide guidance to states, which
    will have the primary role in developing and implementing plans
    to address carbon pollution from the existing plants in their
    states. We recognize that existing power plants require a
    distinct approach, and this framework will allow us to
    capitalize on state leadership and innovation while also
    accounting for regional diversity and providing flexibility.
        Responding to climate change is an urgent public health,
    safety, national security, economic, and environmental
    imperative that presents great challenges and great
    opportunities. As the President and Administrator McCarthy have
    stated, both the economy and the environment must provide for
    future and current--current and future generations. We can and
    we must embrace cutting carbon pollution as a spark for
    business innovation, job creation, clean energy, and broad
    economic growth.
        The continued global leadership of the United States and
    the success of the Clean Air Act over the past 40 years make it
    clear that public health protection and economic growth go hand
    in hand.
        Thank you again for the opportunity to testify, and I look
    forward to answering your questions.
        [The prepared statement of Ms. McCabe follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Schweikert. Thank you, Ms. McCabe. And you just
    did that very efficiently.
        And going over your testimony, can I drill down on just a
    couple of things I had some curiosities on? As you head
    towards, what is it, the May 9 ending of public comment----
        Ms. McCabe. Right.
        Chairman Schweikert. --you actually had the discussion of
    demonstrated technologies, particularly as we speak of the
    ACO2 standards. And some of this I know I am asking
    for sort of technical observation, but in the previous panel
    there was a lot of concern on the quality of demonstration,
    demonstration at capacity, demonstration at stress,
    demonstration of saline and other types of sequestration. Yet
    the rule set that you have produced basically in many ways is
    written as if the demonstration is done, that the technology is
    robust and ready to go, and yet the previous panel was pretty
    crisp even from right to left that there is still some real
    concerns on the technology itself. How do you do the rule set
    in that environment?
        Ms. McCabe. Well, that goes to the heart of the proposal,
    Mr. Chairman. We do believe that the proposal we put forward
    meets the requirements of the Clean Air Act for determining
    technology that is appropriate. And I want to clarify that what
    we do in a New Source Performance Standard is we set a
    performance standard, an expectation in the amount of CO2
    that these facilities can emit. We don't specify a particular
    technology. That is one of the beauties of how the Clean Air
    Act has worked over the years is that it provides room for
    innovation and flexibility and smart people, like you heard
    from the previous panel, finding better and less costly ways to
    do things.
        But when it comes to the technology that we based those
    numbers on, we believe that if you look across all the
    information and data that is available, that there is adequate
    and robust data showing that the various components that we
    base that standard on are in use, have been in use, and will be
    ready----
        Chairman Schweikert. But even in many of your own
    documents, and, look, this is just sort of an academic
    discussion I am trying to--there is discussions of
    demonstration projects but none of them are near the types of
    scales we are talking about with also the geographic,
    geological diversity. It is a little trucky--excuse me--it is a
    little tricky writing a rule set to something that is still I
    think a long way from scaled demonstration. And so from a
    personal concern, as we heard in testimony and then it was
    actually corrected by a couple of the other folks, almost all
    other clean air technologies that have been adopted had
    actually been around for years in some type of full scale
    before it actually hit clean air rule sets.
        Can I just walk through one other--and this is one I am
    genuinely trying to get a better--wrap my head around is we
    keep having the discussions that EOR may be one of the
    financing mechanisms of, you know, ACO2 types of
    capture. But at the same time as we look at some of the
    discussions, what is it, RR? I will just refer to it as number
    six well regs. Doesn't this discussion over here dramatically
    change the economics of EOR and even just the discussion of it
    creates sort of a potential cost liability that even if you are
    going to say, hey, we are willing to sort of enter into these
    future agreements for an EOR capture mechanism, but all of a
    sudden if we end up in this new regulatory environment, we have
    just destroyed the economics of such type of agreement.
        Ms. McCabe. Well, there was a lot in your question, Mr.
    Chairman, so I will try to--I will go----
        Chairman Schweikert. And sorry about that. It was a linear
    line of thought.
        Ms. McCabe. Yeah. No, I understand. Let me talk about the
    last part of your question first. The people are doing EOR.
    People have been doing EOR----
        Chairman Schweikert. For decades.
        Ms. McCabe. --for decades very successfully. And though--
    the regulations that people have been speaking about, the RR
    regulations had actually been around for a number of years as
    well and----
        Chairman Schweikert. But like number six----
        Ms. McCabe. --people have been using them----
        Chairman Schweikert. But has there ever been an--and I am
    sorry; I know I just interrupted and I hate it when I do that--
    an EOR which actually--where there is a number six sort of well
    standard?
        Ms. McCabe. Well----
        Chairman Schweikert. Because something like that doesn't
    exist anywhere.
        Ms. McCabe. The number six well standard is for situations
    where people are injecting CO2 into the ground
    solely for the purposes of sequestering it there and leaving it
    there.
        Chairman Schweikert. Okay.
        Ms. McCabe. EOR is a completely different application.
        Chairman Schweikert. So EOR would fall more under the RR?
        Ms. McCabe. So that is the Class II well----
        Chairman Schweikert. Okay.
        Ms. McCabe. --EOR.
        Chairman Schweikert. So if I was doing EOR, I would be able
    to stay--you are telling me stay within Class II well standard
    and the RR enhanced regs side would not affect me?
        Ms. McCabe. No, the RR regulation--monitoring regulations
    do apply when an intent is to leave CO2 in the
    ground and it is intended to provide that additional
    information and assurance that the CO2 actually is
    remaining in the ground.
        Chairman Schweikert. So if I did EOR but part of it was
    also as a capture mechanism, I would still at least--I would
    fall under the----
        Ms. McCabe. That is right.
        Chairman Schweikert. --future monitoring?
        Ms. McCabe. That is right.
        Chairman Schweikert. Okay. Thank you.
        And with that, just because I know I am over time and you
    have some time restraints on you, hopefully we will get a
    second round.
        Ms. Bonamici.
        Ms. Bonamici. Thank you very much, Mr. Chairman. Thank you,
    Ms. McCabe, for your testimony.
        When you listened to the prior panel--and I have to say
    that there seems to be some mixing of the standards of
    adequately demonstrated and commercially available. I went back
    and looked at some of the discussion when Section 111 was
    implemented--when it was passed and implemented, and I found a
    discussion from the Senate Committee that says that it was
    designed to promote constant improvement in techniques for
    preventing and controlling emissions from stationary sources,
    and an emerging technology used as the basis for standards of
    performance need not be in actual routine use somewhere.
        And also a D.C. Circuit Court interpreted ``adequately
    demonstrated'' to be ``technically feasible'' stating that the
    section looks toward what may fairly be projected for the
    regulated future rather than the state-of-the-art at present
    since it is addressed to standards for new plants. So could you
    talk just a little bit about how this section has spurred
    technology development previously? And we heard some testimony
    before about if the regulation is there, that the technology is
    developed, but without that requirement, the technology is not.
    So if you could address that and then I have another question.
        Ms. McCabe. Sure. You are exactly right, and the history
    and the description that you have given of Section 111 is
    exactly what we understand the Clean Air Act and Congress to
    have intended, which is that technology will move and innovate
    when there is a requirement to do so. We heard a lot of
    discussion about that today.
        But there are many examples going back through time where
    Section 111 was the mechanism that took emerging technologies
    and brought them into the mainstream. And in fact, there is--
    Mr. Chairman, I do have to take issue with your comment a
    minute ago that in all prior 111 rules technology had been
    around for years. That is really not the case. One example I
    can cite for you is selected catalytic reduction technology,
    which is a NOx reduction technology, and it had been used in
    one type of application but it had never been used for
    industrial boilers.
        Chairman Schweikert. To that point, actually, the catalytic
    converter----
        Ms. Bonamici. It is my time, Mr. Chairman.
        Chairman Schweikert. I won't take it out of your time.
        That catalytic conversion technology had been around a
    century, you know, using--you know, in the high temperature
    adjustments, maybe not in the way you described it, but it had
    been around for quite a long time.
        Ms. McCabe. It had not been used in this particular--and
    the particular sector----
        Chairman Schweikert. But the basic technology has been
    around for decades and decades.
        Ms. McCabe. And similarly here we have technology that has
    been around for decades and decades and used in a variety of
    applications. So you do find that Section 111--and when these
    requirements are put in place, it does drive that technology
    development and then it becomes more widespread, the costs go
    down, and it becomes part of the mainstream.
        Ms. Bonamici. I wanted to ask you also--thank you for your
    testimony--that you mentioned in your testimony that the EPA
    plans to issue proposed guidelines to lower carbon pollution
    from existing power plants by June of this year and that the
    Agency recognizes that existing power plants require a distinct
    approach. In fact, the EPA's website states that the standards
    that will be developed for currently operating sources are
    expected to be different from and less stringent than the
    standards proposed today for future sources. Can you please
    discuss EPA's process for developing guidelines for existing
    power plants and why the guidelines will be less stringent and
    more flexible than the standards for new plants?
        Ms. McCabe. Absolutely. We are operating under two distinct
    elements of the Clean Air Act here, and the Clean Air Act
    traditionally has had a very different approach to regulating
    existing sources. In fact, for the most part, existing sources
    are regulated under state plans, and that is exactly what will
    happen here.
        So EPA's job here is to set guidelines for how the states
    will go about developing plans to address their own power
    plants. And the expectations for what would be appropriate
    technology for existing plants that are in place, that are
    located where they are, that have whatever remaining life they
    have are very, very different.
        And, for example, and the Administrator has said this on
    numerous occasions, we do not have any expectation that carbon
    capture and sequestration would form the basis for any
    expectation relative to existing plants.
        Ms. Bonamici. Thank you. And one more question. There has
    been some discussion today about the potential increase in
    costs if the carbon capture and storage rule is--when it is
    implemented. Can you talk about some of the costs associated
    with the lack of action to address climate change and
    increasing emissions? Thank you.
        Ms. McCabe. Yes. It is a very good question. There are
    costs to our economy and to society from the impacts that
    climate change are already having. In 2013 there were seven
    extreme weather events, which I think is kind of a nice way of
    saying great big huge horrible storms, that cost the economy
    over $1 billion each. And this is a real economic impact on our
    communities, on our families across the country.
        Ms. Bonamici. And healthcare costs might be----
        Ms. McCabe. And healthcare costs and disruption to families
    and to all communities.
        Ms. Bonamici. Thank you. My time is expired. I yield back.
        Thank you, Mr. Chairman.
        Chairman Schweikert. Thank you, Ms. Bonamici.
        Chairwoman Lummis.
        Mrs. Lummis. Thank you for being here, Ms. McCabe.
        Are you here to testify then that these weather events
    absolutely were caused by climate change?
        Ms. McCabe. There--the scientific community has identified
    a number of impacts of climate change. Among those are
    increased intensity and frequency of weather events----
        Mrs. Lummis. So are you sure that these specific weather
    events that you cite are caused by climate change?
        Ms. McCabe. I can't--I am not a meteorologist. I can't
    speak to any specific weather event and----
        Mrs. Lummis. Thank you. Why is the EPA requiring a CCS
    analysis for new natural gas-fired units, including power
    plants, as well as boilers and heaters within manufacturing
    plants?
        Ms. McCabe. The EPA is proposing a performance standard for
    new fossil-fired power plants. We have one standard for gas and
    one standard for coal. Those standards are based on our review
    of the data that is available about what technologies are
    available for those plants to use going forward and----
        Mrs. Lummis. Can you outline for us today the specific
    condition under which EPA would require CCS for either natural
    gas-fired utility units or non-utility boilers and heaters?
        Ms. McCabe. The rule does not require any specific
    technology. The rule sets a performance standard.
        Mrs. Lummis. Well, why is the agency requiring this
    analysis?
        Ms. McCabe. We are not requiring anybody to do an analysis.
    We are setting a performance standard that new plants will need
    to meet----
        Mrs. Lummis. Does CCS need guidance? Is that the same
    thing? Are we speaking about the same thing?
        Ms. McCabe. Perhaps we aren't. I thought you were talking
    about the proposed New Source Performance Standards rule. Is
    that not correct?
        Mrs. Lummis. That is correct.
        Ms. McCabe. Okay. The New Source Performance Standards
    rule, which we proposed last fall and is in the comment period
    now, addresses new, not-yet-built, not-yet-started coal and
    gas-fired power plants, and that rule sets a performance
    standard that the companies then will figure out how they will
    meet.
        Mrs. Lummis. Wouldn't an EPA policy memorandum stating that
    CCS is not required for new natural gas plants reduce this
    regulatory uncertainty and help expedite permitting decisions?
        Ms. McCabe. For natural gas plants? The----
        Mrs. Lummis. This is for EPA--you are requiring CCS
    analysis for LNG facilities, too, correct?
        Ms. McCabe. Congresswoman, I think you may be talking about
    the Prevention of Significant Deterioration program.
        Mrs. Lummis. Yes.
        Ms. McCabe. Okay. So that is a program that when new plants
    come in, require them to go through an analysis of what the
    best technologies are out there and then employ that as part of
    their project. And so that is what I think we are talking about
    here.
        Mrs. Lummis. The distinction between EPA's analysis of best
    system for emission reduction for coal versus natural gas
    escapes me. Are there any pulverized coal projects you can cite
    like post-combustion CCS?
        Ms. McCabe. So there are several plants that have been
    using carbon capture--power plants that have been using carbon
    capture, for example, the Shady Point plant, the Warrior Run
    plant. There are also several plants that have been discussed
    today that are in construction that will be using this
    technology.
        Mrs. Lummis. Are there any post-combustion natural gas
    projects?
        Ms. McCabe. Using CCS?
        Mrs. Lummis. Yes.
        Ms. McCabe. Not that I am aware of.
        Mrs. Lummis. What about pre-combustion CCS projects on coal
    plants?
        Ms. McCabe. You are getting a little bit beyond my level of
    expertise, Congresswoman, but we would be glad to answer those
    questions for you after the hearing.
        Mrs. Lummis. Okay. Thank you.
        The President's budget includes 25 million to fund natural
    gas CCS projects. Now, if one of these projects becomes
    operational, would that be sufficient for EPA to begin
    requiring CCS as part of the NSPS or the PSD permitting
    process?
        Ms. McCabe. I think it would--those are very fact-specific
    determinations and we would have to take a look at the
    particular facts when and if that happened.
        Mrs. Lummis. My time is expired. Thank you, Ms. McCabe.
        I yield back.
        Chairman Schweikert. Thank you, Mrs. Lummis.
        Mr. Hall.
        Mr. Hall. Thank you, Mr. Chairman.
        Ms. McCabe, I feel a little guilty and that I have been
    here a long time and I was here when we passed the Clean Air
    Act and Clean Water Act, and knowing the oil and gas people, I
    felt, and most of us Republicans and Democrats alike felt that
    they needed some oversight and--but they also needed some
    federal help. And I do not find that they have been conducive
    to fairness now in ordering a lot of companies to do things--to
    do the impossible and not give them time even to do the
    possible. And that is the major problem that I have seen, but I
    know that you are Acting Assistant Administrator, so you have
    been there several years, have you?
        Ms. McCabe. Yes, sir.
        Mr. Hall. Okay. Well, then in the EPA's first New Source
    Performance Standard proposal in 2012 you were there. The EPA
    determined that carbon capture and storage technology was not
    the best system of emissions reduction for new coal power
    plants, correct? That is what it says. That is----
        Ms. McCabe. Yeah. That is the proposal that we withdrew,
    Congressman.
        Mr. Hall. Well, I am getting to that. A year later in your
    latest proposal EPA says it is now the best system for
    emissions reduction. You just changed your mind overnight?
        Ms. McCabe. No, sir. We revised our proposal----
        Mr. Hall. It took you a month or so to do it then?
        Ms. McCabe. No, sir. We revised our proposal based on the
    information that we had available to us at those points in the
    process.
        Mr. Hall. Okay.
        Ms. McCabe. And we felt--and we got a lot of input on the
    first proposal and we felt that a different approach was the
    appropriate one given all of that information that we obtained.
        Mr. Hall. What has changed so dramatically in one year to
    allow the EPA to reach a different conclusion on the technical
    and economic feasibility of CCS?
        Ms. McCabe. We actually felt that the revised proposal
    provided a much clearer and more appropriate path for gas-fired
    facilities and coal-fired facilities, and that was the basis
    for our decision to change the proposal.
        Mr. Hall. Well, I guess I was hoping that you could help me
    understand the EPA's position with respect to the Clean Air
    Act's requirement that it can only mandate the use of emissions
    reduction systems that have been ``adequately demonstrated.''
    Would you agree, yes or no, that there isn't a single utility
    scale power plant in the world currently operating with CCS?
        Ms. McCabe. Not--I am sorry. Can you repeat the last part
    of that?
        Mr. Hall. Would you agree that there isn't a single utility
    scale power plant in the world currently operating with CCS?
        Ms. McCabe. There are small facilities operating.
        Mr. Hall. There are small--what do you----
        Ms. McCabe. There----
        Mr. Hall. How do you distinguish that?
        Ms. McCabe. Well, there are a variety of sizes of utility
    boilers and there are operating facilities that are small that
    are using this technology now.
        Mr. Hall. Okay. Well, then would you agree, yes or no, that
    the law's requirement that a technology system be ``adequately
    demonstrated'' is past-tense, not future-tense? You are having
    a hard time with that one.
        Ms. McCabe. Well----
        Mr. Hall. Do you want me to go onto the next one?
        Ms. McCabe. Well, no, sir. I would agree that the law
    requires that we look at technology that is in use and make a
    judgment based on whether that is feasible and available for
    the particular sector that the rule covers.
        Mr. Hall. That it is adequately demonstrated?
        Ms. McCabe. That it is adequately demonstrated.
        Mr. Hall. The Clean Air Act requires that the entire system
    of a new technology be adequately demonstrated, not just the
    individual components. How does EPA's decision to mandate that
    power plants employ a technology system that has never been
    fully and adequately demonstrated considered legal under the
    Clean Air Act? How can you justify that?
        Ms. McCabe. We believe that the system has been adequately
    demonstrated looking at the variety of applications that have
    been used and are in use and have been used for many years.
        Mr. Hall. Well, maybe you can and this next--you can
    provide any other example of a ``demonstrated'' technology
    required by EPA regulations where the technology was not used
    on a commercial basis?
        Ms. McCabe. The--our--the--our rule and the technical
    documents that accompany it go through all the examples of
    existing uses of the various technologies that we base of the
    rule on and we are happy to provide those to the----
        Mr. Hall. Okay. Let me close. I just have two seconds left.
        Ms. McCabe, at a hearing before the Energy and Commerce
    Committee on September 2011, Administrator McCarthy had this to
    say: ``I certainly don't want to give the impression that EPA
    is in the business to create jobs,'' one of the most cruel
    statements I have ever heard. Do you agree with the
    Administrator's statement?
        Ms. McCabe. I don't know--I am not familiar with that
    quotation. That is not how the Administrator feels. We are very
    concerned about----
        Mr. Hall. It is just the way she talks----
        Ms. McCabe. --jobs that are created----
        Mr. Hall. --but not the way she feels?
        Ms. McCabe. I wasn't there----
        Mr. Hall. I know you weren't.
        Ms. McCabe. --Congressman. She is very concerned about----
        Mr. Hall. I don't believe you would have said----
        Ms. McCabe. --jobs in this country.
        Mr. Hall. --anything like that. I would like to think you
    wouldn't because I left her space to correct that or to
    apologize for it or to say she was misquoted.
        I yield back. I don't have time. Thank you.
        Chairman Schweikert. Thank you, Mr. Hall.
        Mr. Hultgren.
        Mr. Hultgren. Thank you, Chairman.
        Thank you, Ms. McCabe, for being here today. It really is
    crucial that we on the Science Committee have a thorough
    understanding of the science behind the technological
    development necessary for your agency to accomplish the goals
    the President has set out.
        While Administrator McCarthy has come before this committee
    touting science as the backbone of everything you do at EPA, I
    am worried that this has not been the case in regards to the
    technologies your agency is essentially mandating with your
    proposed regulations.
        When designing the rule for the New Source Performance
    Standards, I assume EPA was in close consultation with the
    National Energy Technology Laboratory when deciding whether or
    not technology was adequately demonstrated. Was that the case?
        Ms. McCabe. Well, we do work closely with them but it is
    EPA's job to make the determination about whether technology is
    adequately demonstrated. That is my----
        Mr. Hultgren. So there--and that specifically adequately
    demonstrated but there was not cooperation or consultation with
    the National Energy Technology Laboratory?
        Ms. McCabe. There was consultation and much discussion with
    them about the types of technologies that are out there and
    various scientific and technical discussions about them, but
    the determination within the law is EPA's to make.
        Mr. Hultgren. As of December 2012 NETL report on the
    Technology Readiness Assessment for clean coal research
    programs, NETL had 285 projects underway developing
    technologies related to CCS. Only one project had a TRL above 6
    and 77 percent of the projects were at 4 or below. The only
    project above 6 was a regional carbon sequestration project
    that is not widely applicable across the United States.
        The DOE fossil energy description of plant technology as
    TRL 6 is engineering scale models or prototypes are tested in a
    relevant environment. Pilot or process development unit scale
    is defined as being between 0 and five percent final scale. I
    wondered how did EPA reconcile the obvious differences between
    what you are calling adequately demonstrated and what the
    administrative agency charged with developing the technology
    has clearly defined as being at five percent or less of the
    final scale?
        Ms. McCabe. Well, there is a lot of information available
    about the types of technologies that we are talking about here,
    and in fact, the Secretary of Energy has indicated on many
    occasions that he is comfortable that this technology is
    available and ready for use and should be employed.
        So these are all the kinds of discussions that we have with
    technical experts in and outside of government to make a
    determination about adequately demonstrated.
        Mr. Hultgren. Well, the frustration for us is there is a
    clear differentiation and it seems like ignoring many of those
    who should be listened to.
        One of the reports that helped spur DOE to begin assessing
    technology readiness came from GAO, the title, ``Major
    Construction Projects Need a Consistent Approach for Assessing
    Technology Readiness to Help Avoid Cost Increases and Delay.''
    While this report focused on the cost overruns and delays for
    DOE projects but did not assess whether or not a technology was
    ready before construction began, it only makes sense that the
    private sector would experience the same problems developing
    and integrating the vast amount of unready systems necessary
    for a commercially viable plant to begin operating.
        My concern is that we are rushing this out before it is
    ready at the detriment of long-term technological advancements
    and cost decreases. What evidence does EPA have showing the
    private sector is better dealing with these cost increases and
    delays when developing and integrating unready technologies?
        Ms. McCabe. Well, Congressman, I think you are reflecting
    the history of the way technology has in fact developed under
    the Clean Air Act. And as we heard earlier, there are projects
    moving forward today where private sector commercial operations
    are competing essentially to provide this technology to
    projects going forward. So we are seeing it in the marketplace
    and this is the way technology develops. It is the way it
    developed with scrubbers; it is the way it developed with SCRs
    and many other examples of technology. It starts with a few
    projects and then it grows.
        Mr. Hultgren. For me it is a privilege to serve on the
    Science, Space, and Technology Committee. As I started
    questioning, talked about again how we have heard over and over
    again that science is the backbone of everything you do at EPA.
    Again, just from the few questions I have had and from what I
    have heard today, I think there are real concerns of that is
    not the case, that there are other agendas pushing ahead of
    what the science says. We are concerned about that. I want to
    get back to truly seeing science as the backbone of everything
    EPA does.
        With that, Mr. Chairman, I yield back.
        Chairman Schweikert. Thank you, Mr. Hultgren.
        Mr. Rohrabacher.
        Mr. Rohrabacher. Thank you very much.
        Mr. Chairman, yes, it is important that we get our science
    right here because what we are doing is mandating costs and
    mandating, how do you say, goals that our business has to
    achieve in order to provide services and products and jobs for
    our people.
        Let me just note that for the record, Mr. Chairman, I would
    like to put in for the record an article by Professor Matt
    Collins of the United Kingdom's Meteorological Office, a
    professor at Exeter University, suggesting that his analysis
    that there is no evidence to suggest that weather is any more
    ferocious or frequent than it ever has been in the past. I
    would like to put that into the record at this point.
        Chairman Schweikert. Without objection.
        [The information appears in Appendix II]
        Mr. Rohrabacher. So we see and we also heard earlier about
    97 percent of the scientists that quoted again and of course,
    as I suggested during the last time I had a chance to ask
    questions, that was 97 percent being presented to us as 97
    percent of all the scientists is actually 97 percent of the
    scientists who replied to a questionnaire in which the people
    who were asked were actually decided upon and then it was just
    the people who replied to the questionnaire, much less 97
    percent of all scientists.
        You don't believe that 97 percent of all scientists agree
    with the manmade global warming theory, do you?
        Ms. McCabe. Congressman, there is overwhelming support in
    the scientific community----
        Mr. Rohrabacher. That is not my question. The 97 percent
    that we hear, overwhelming could be 60 percent, could be 50
    percent. I don't even believe it is overwhelming, but you don't
    believe it is 97 percent, do you?
        Ms. McCabe. I don't know that it is helpful to talk about--
    --
        Mr. Rohrabacher. Well, I am asking you a question.
        Ms. McCabe. Right.
        Mr. Rohrabacher. Do you believe that this is clear--this 97
    percent figure is thrown at us all the time. You don't believe
    that, do you?
        Ms. McCabe. I don't believe it or disbelieve it,
    Congressman.
        Mr. Rohrabacher. You don't want to answer the question, do
    you?
        Ms. McCabe. No, it is just--it is not a----
        Mr. Rohrabacher. Why can't you answer the question then? I
    am asking you whether you believe that this figure that is
    presented to us as the 97 percent an accurate or inaccurate
    figure?
        Ms. McCabe. Ninety-seven percent of the studies on this
    issue conclude that climate change is real and happening.
        Mr. Rohrabacher. That wasn't my question. My question was
    do you believe that 97 percent of the scientists believe that
    global climate change is happening because of human activity?
        Ms. McCabe. Well, the premise of your question, the 97
    percent----
        Mr. Rohrabacher. Okay.
        Ms. McCabe. --doesn't come from----
        Mr. Rohrabacher. Okay.
        Ms. McCabe. --number of individual scientists; it comes
    from the number of studies.
        Mr. Rohrabacher. Okay. So in other words, the people who
    have been throwing the 97 percent figure at us have been wrong?
        Ms. McCabe. I don't know who has been saying what----
        Mr. Rohrabacher. Well, we just heard it earlier, didn't we,
    in this--so you weren't listening to the----
        Ms. McCabe. I was----
        Mr. Rohrabacher. All right. All right.
        Ms. McCabe. --listening.
        Mr. Rohrabacher. Okay. You don't want to answer that
    question. I got it.
        Well, and you believe then that the weather is more
    ferocious. I just put a very reputable scientist who obviously
    doesn't agree with you. He is probably not apart of that 97
    percent of that you don't want to comment on. Do you believe
    that the weather now is more ferocious and do you disagree with
    that scientist's findings?
        Ms. McCabe. I am not familiar with that particular study so
    I don't want to speak to it in particular. I am also not a
    climate scientist myself----
        Mr. Rohrabacher. All right.
        Ms. McCabe. --so I don't want to hold myself out as an
    expert on that, but I pay attention to----
        Mr. Rohrabacher. Okay. Now, with that said, if all of the
    mandates that we are talking about and the change in regulation
    that we are talking about happen, I take it is--and we keep
    hearing that it is motivated on trying to save the climate and
    this--change the climate of the planet to make sure that we
    aren't changing the climate of the planet, how much effect on
    the climate of the planet will these regulations have?
        Ms. McCabe. So these regulations are intended to control
    the amount of CO2 that is emitted----
        Mr. Rohrabacher. Right.
        Ms. McCabe. --by future power plants. We know that
    CO2----
        Mr. Rohrabacher. Um-hum.
        Ms. McCabe. --is a key contributor to what is happening in
    the climate and that we must reduce the amount of CO2
    in the atmosphere in order to have an impact.
        Mr. Rohrabacher. Um-hum.
        Ms. McCabe. This is a global pollutant.
        Mr. Rohrabacher. Right.
        Ms. McCabe. It is a global problem.
        Mr. Rohrabacher. Right.
        Ms. McCabe. There are many, many sources of it. These are
    significant sources of it and----
        Mr. Rohrabacher. So there will be a significant change in
    our climate if we follow these new guidelines, is that correct?
        Ms. McCabe. These guidelines are an important part of an
    effort in this country and globally to make the kind of changes
    that are needed to address climate change.
        Mr. Rohrabacher. Okay.
        Ms. McCabe. You will not be able to----
        Mr. Rohrabacher. That is a good way not to answer the
    question. How much effect will it have on the climate?
        Ms. McCabe. You will--no individual rule will be able to be
    traced----
        Mr. Rohrabacher. Very little----
        Ms. McCabe. --because this is----
        Mr. Rohrabacher. So it will have very little impact----
        Ms. McCabe. It is----
        Mr. Rohrabacher. --is that right----
        Ms. McCabe. It is an----
        Mr. Rohrabacher. --if any?
        Ms. McCabe. It is an important aspect of the effort to
    reduce CO2 globally.
        Mr. Rohrabacher. All right. Again, you don't want to answer
    the question.
        Listen, when I ask a question in a debate, I am willing to
    debate the things that I disagree with. You have dodged almost
    every question that I have asked you. I am sorry. That is not
    the way we should be handling ourselves here.
        But with that said, I think there is an honest disagreement
    as to whether human activity is changing our climate. It is an
    honest disagreement. We need to be more forthright and willing
    to actually confront the points being made by each side of this
    debate, and I don't think you have been that way with us today.
        Thank you very much.
        Chairman Schweikert. Mr. Cramer.
        Mr. Cramer. Thank you, Mr. Chairman. Thank you, Ms. McCabe,
    for your testimony, for being with us during this long morning
    into the afternoon.
        There was some confusion I sensed when Chairman Hall asked
    about current use or current demonstrations of CCS. How many
    coal plants use carbon capture now, coal-fired electricity
    plants?
        Ms. McCabe. So I actually don't add these up. Do we have a
    number?
        Mr. Cramer. Can you name some? Could you name some?
        Ms. McCabe. Yeah. Yeah. So the Warrior Run power plant, the
    Shady Point power plant, there is a power plant in Germany
    called to the Vattenfall Schwarze power plant.
        Mr. Cramer. Do you know what the average size or how many
    megawatts they produce?
        Ms. McCabe. I don't have that information with me,
    Congressman, but we can get it for you.
        Mr. Cramer. Okay. Because I have to be honest. Now, I am
    going to respect the Ranking Member who has very effectively
    tried to discern the difference between adequate demonstration
    and commercially available, and yet without something being
    commercially available, I don't know how you demonstrate it. In
    other words, if it is not being done at a commercial level, at
    a level that would be equivalent to what we are asking here and
    what we are suggesting in terms of new power plants, it is hard
    for me to comprehend how it has been adequately demonstrated.
    But I respect the difference.
        How are we going to determine whether something is
    adequately demonstrated if it is not commercially deployed at
    the scales that we are applying the rule to?
        Ms. McCabe. Right. Well, I think that is the debate that is
    concerning the Committee here. The Clean Air Act does not use
    the term ``commercially available.'' It uses the term
    ``adequately demonstrated.'' And as Congresswoman Bonamici
    cited some of the history of that section and the way it has
    been applied, it has been--it was clear that Congress intended
    for this provision to be--to put the United States on the
    forefront of developing technologies. And so it is not an
    expectation that technology be wide--in widespread use, and
    that has been clearly demonstrated over the years.
        Mr. Cramer. But in the most recent proposal, you actually
    do state that carbon dioxide emissions from new power plants
    are from CCS has not been implemented and that we believe there
    is insufficient information to make a determination, these are
    quotes from the EPA's proposed rules regarding technical
    feasibility. It seems to me that the same exact thing applies
    here to coal, that if it has not been done with CCS, or with
    combined cycle, it has not been done with coal, why the
    difference?
        Ms. McCabe. Well, there is a difference. There is a
    difference in the information that is available and there is a
    significant difference in the ways in which these technologies
    are deployed and are being used in the coal versus natural gas
    situations. There are also technical differences between the
    operations of those plants where we do not have information on
    the natural gas side that we do on the coal side, and that is
    the basis of our proposal.
        Mr. Cramer. As you know, in order for this, if we had the
    carbon capture technology and if it was adequately demonstrated
    and it became commercially available and it was economically
    feasible to do it, and to meet the growing demand--by the way,
    in North Dakota where I live and where I was once a regulator,
    we have a demand of over 2,000 megawatts right now that is
    being unmet to meet the growing economy that we have as a
    result of our more reasonable regulatory touch I might add.
        But the EPA has specifically cited the North Dakota Weyburn
    CO2 pipeline from the----
        Ms. McCabe. Um-hum.
        Mr. Cramer. --great Synfuels plant----
        Ms. McCabe. Yeah.
        Mr. Cramer. --Great Plains Synfuels plant, which I was just
    at a week ago Friday with the Administrator.
        Ms. McCabe. Yeah.
        Mr. Cramer. We had a very good meeting there. But that
    requires an international pipeline. You perhaps heard me
    discuss it earlier today. This is day 2,000 of the Keystone XL
    pipeline's review process, which the EPA has largely criticized
    and opposed, continues to throw up sort of barriers I guess. Is
    EPA prepared to, you know, support CO2 pipelines all
    over the country and perhaps even across international lines?
        Ms. McCabe. There are CO2 pipelines across the
    country and we are----
        Mr. Cramer. I am very familiar with that----
        Ms. McCabe. Yeah. Yeah.
        Mr. Cramer. Yeah.
        Ms. McCabe. And we believe that that is an important part
    of moving this technology forward and putting in place things
    that will be able to take carbon dioxide out of the air.
        Mr. Cramer. I just hope the EPA is this cooperative when it
    actually comes time to siting some of these CO2
    pipelines should we need to get them to market.
        I am just going to wrap up, Mr. Chairman, by saying that
    the EPA also notes that natural gas prices--and they have
    claimed natural gas prices have been the real determining
    factor in the marketplace, and yet we are--here we are coming
    off of the winter where PJM actually had to seek relief from
    FERC from its $1,000 per megawatt hour price cap because
    natural gas prices spiked as a result of a cold winter. It is a
    very volatile fuel. I support it but I don't think we should
    displace coal with it.
        Mr. Bridenstine. [Presiding] The gentleman yields back.
        Mr. Weber from Texas.
        Mr. Weber. Thank you, Mr. Chairman.
        Ms. McCabe, should the President issue a red line on
    CO2 emissions? Would that help?
        Ms. McCabe. I am not sure I understand your question.
        Mr. Weber. Well, when he declares that there is a red
    line--or would that further erode the Administration's
    capability in a, pardon the pun, storm of controversy? It seems
    like the global warming religion has been bought into hook,
    line, and sinker by this Administration. You talked about the
    Administration's credibility and EPA's credibility. Are you
    aware of the three fracking cases where they issued a statement
    to the fact that they had contaminated water in three areas of
    the country here, a year or two back? Are you familiar with
    those three cases?
        Ms. McCabe. I am not sure I know specifically what you are
    referring to.
        Mr. Weber. Okay. But you are aware that it did happen?
        Ms. McCabe. I am aware that there have been issues related
    to----
        Mr. Weber. Right, and they had to retract their statement
    that in fact fracking had contaminated three areas of drinking
    water?
        Ms. McCabe. I am actually not familiar with the specific
    statements that you are----
        Mr. Weber. Well, I am glad----
        Ms. McCabe. --referring to.
        Mr. Weber. --I can inform you of that today. That makes me
    feel like today was in some fashion worthwhile.
        You mentioned in your prepared remarks, I have got a copy
    of it here in front of me, that EPA would like to be able to
    approach on--I am sorry--that you would be able to capitalize
    on state innovation in dealing with these regulations. And if
    you look up the word capitalize, there are a couple different
    definitions. It says take advantage of, turn something to one's
    advantage, and then the other one is supply with capital, as in
    dollars and cents. And you were, I think, in the backroom
    watching the previous panel, is that right?
        Ms. McCabe. Yes.
        Mr. Weber. I don't know if you saw my comments about the
    carbon capture and sequestration and storage facility in my
    district in Port Author by Air Products where it was a 400 and
    something million dollar project, but the EPA--or the DOE
    rather supplied 66 percent of the funding. You are aware of
    that project?
        Ms. McCabe. I am aware of the project and I heard your
    statements earlier.
        Mr. Weber. Okay. And you don't disagree with what I said in
    that regard?
        Ms. McCabe. I don't have independent knowledge of the
    amount.
        Mr. Weber. Okay.
        Ms. McCabe. I will take your word for it.
        Mr. Weber. But it sounds reasonable. So in Texas we have
    been doing enhanced oil recovery for about 40 years, as was
    alluded to by our colleague on the left, Marc Veasey, earlier.
    And we do a good job of it. And so you want--in your earlier
    comments, you said you wanted to capitalize on the stakeholder
    input and the states', I guess, experience. Texas has a great,
    great history of experience in EOR and in producing an economy
    that is arguably the 11th largest in the world if it was a
    country. Why wouldn't you want to follow Texas' model when it
    comes to enhanced oil recovery, when it comes to air quality
    permitting? I realize that is--we are in a little bit different
    realm there----
        Ms. McCabe. Um-hum.
        Mr. Weber. --but why won't the EPA acquiesce to following
    the TCEQ in Texas? Do you have any knowledge about that?
        Ms. McCabe. Well, our job under the Clean Air Act when it
    comes to setting standards for new----
        Mr. Weber. Um-hum.
        Ms. McCabe. --power plants is to do that, is to set
    standards for new power plants. What I was referring to in my
    testimony was the provisions dealing with existing power plants
    where we do very much intend to look to states that have been--
    --
        Mr. Weber. Thirteen hundred people a day are moving to
    Texas. We have created more jobs than the other lesser 49
    states in many years combined----
        Ms. McCabe. Um-hum.
        Mr. Weber. --and we are the country's leading state
    exporter of products for like 11 years running. We get it in
    Texas. Less onerous government regulations, we have got wide-
    open spaces with clean air and great drinking water, and so I
    hope that the EPA will really take that into account and follow
    Texas' model on that.
        Are you here today to testify that you think that what was
    done at the Air Products plant in Port Arthur, Texas, a $400
    million project with 66 percent government funding, that that
    proves and demonstrates that this is a viable project to be
    done or a process in business? Are you here to testify to that?
        Ms. McCabe. Sir, I am here to speak about our proposal,
    which is based on a variety of information, not any----
        Mr. Weber. And do you think that that is----
        Ms. McCabe. --one single project.
        Mr. Weber. But--all right. Well, can you tell me of another
    carbon capture and sequestration storage facility that is that
    big or of that magnitude?
        Ms. McCabe. Well, there is--I am not as familiar with the
    specifics of that project as you are certainly, but there are
    places where carbon is being injected into the ground. There is
    lots and lots of EOR going on everywhere around the country and
    indeed around the world----
        Mr. Weber. So you don't have an opinion about whether that
    adequately demonstrates this as a duplicable process?
        Ms. McCabe. I do have an opinion that we set forth in our
    proposed rule that when you look at all of this information
    that is available, all the projects that are out there, that we
    do believe that the technology has been adequately demonstrated
    to support the performance standard----
        Mr. Weber. Well, would you----
        Ms. McCabe. --that was proposed.
        Mr. Weber. --agree with the fact that the technology to put
    a man on the moon has been adequately demonstrated?
        Ms. McCabe. Adequately demonstrated is a legal term within
    the meaning of the Clean Air Act----
        Mr. Weber. Well, let me----
        Ms. McCabe. --and I wouldn't want to apply it----
        Mr. Weber. --put it this way. Did we put a man on the moon?
        Ms. McCabe. We did.
        Mr. Weber. Okay. But you would not want to mandate that all
    airlines need to have that technology, putting a man on the
    moon, right?
        Ms. McCabe. With respect, Congressman, I am not sure it is
    a valid analogy----
        Mr. Weber. Well, what I am saying is you are taking this
    plan based on the funding and the model that was done in the
    Air Products plant and you are saying that that adequately
    demonstrates that it ought to be in the rules.
        Ms. McCabe. I am saying that the whole body of information
    that we have is--supports a finding that the technology has
    been adequately demonstrated----
        Mr. Weber. And the EPA never takes funding into account, do
    they, the cost?
        Ms. McCabe. We do take cost into account, very much we do.
    And as our documents show underlying the rule, the cost--should
    I finish?
        Chairman Schweikert. Please finish----
        Ms. McCabe. Okay.
        Chairman Schweikert. --your thought.
        Ms. McCabe. The cost of building a new coal plant with all
    the technology that we have looked at, partial capture and
    sequestration is comparable with other non-natural gas-
    powered----
        Mr. Weber. Well, we are going to have to disagree.
        Thank you, Mr. Chairman.
        Chairman Schweikert. Thank you, Mr. Weber.
        And Arizona is getting about 350 people a day, but we are a
    lot smaller.
        Mr. Bridenstine.
        Mr. Bridenstine. Thank you, Mr. Chairman.
        I had a couple of thoughts and questions. Over the past
    several months, we have seen a troubling trend of the EPA
    deliberately avoiding transparency and accountability. When
    members of EPA's own Science Advisory Board raised serious
    questions about the NSPS rule, astonishingly, the Agency
    claimed that storage is beyond the scope of this rule. In other
    words, the EPA wants people to believe that carbon capture and
    storage systems don't have to consider where the carbon goes
    and neither does the Agency. It is misleading and dangerous for
    the EPA to quietly dismiss inconvenient facts. Do you agree?
        Ms. McCabe. We--I have to disagree with the premise of your
    question, Congressman. We very much respect the role of the
    SAB. We engaged with them in a very open process. All the
    conversations we had with them were completely open to the
    public and on the record.
        Mr. Bridenstine. Okay. I would like to submit this letter
    for the record. This is a letter from the EPA's Science
    Advisory Board. I will just read one sentence here, actually, a
    couple sentences. It says, ``the portion of the rulemaking
    addressing coal-fired power plants focuses on carbon capture
    and that the regulatory mechanisms for addressing potential
    risks associated with carbon sequestration''--carbon capture--
    ``are not within the scope of the Clean Air Act.'' And this is
    the advisory board.
        ``Carbon sequestration, however, is a complex process,
    particularly at the scale required under this rulemaking, which
    may have unintended multimedia consequences. The Board's strong
    view''--the Board's strong view--``is that a regulatory
    framework for commercial-scale carbon sequestration that
    ensures the protection of human health and the environment is
    linked in import systematic ways to this rulemaking.'' This
    letter has been submitted in the record.
        Even though the EPA officials sought to, you know,
    obviously not take this into account, the EPA science advisors
    continue boldly to call for a thorough review of the science in
    the science underlying this rule. Will you commit to me today
    that you will heed your own science advisors and await a full
    review of the serious concerns raised by the Science Advisory
    Board before finalizing this rule?
        Ms. McCabe. We will of course work with our Science
    Advisory Board, but what I will reflect to you, Congressman, is
    what the Board recognized was that within the four corners of
    this proposed rule, the regulatory approach and the--the
    sequestration and storage is not within the four corners of
    this rule; it is addressed in other regulatory programs--
        Mr. Bridenstine. So real quick----
        Ms. McCabe. --that have been mentioned today.
        Mr. Bridenstine. --the law doesn't require the Agency to
    examine non-air environmental consequences of CCS systems?
        Ms. McCabe. That is a provision of the law.
        Mr. Bridenstine. Okay. But it is not a provision of what
    you deem appropriate in this rule?
        Ms. McCabe. No, not at all. Not at all. I was trying to
    clarify that the Science Advisory Board recognized that
    sequestration, underground injection of carbon, is addressed in
    other regulatory programs, not in this one.
        Mr. Bridenstine. Okay. Does the Agency consult with the
    U.S. Fish and Wildlife Service to determine if this rule would
    impact, endanger, or threaten species?
        Ms. McCabe. We have not consulted with the U.S. Fish and
    Wildlife on this provision.
        Mr. Bridenstine. Do you intend to?
        Ms. McCabe. We are--we will apply--we will comply with all
    applicable requirements, including that one if it is deemed to
    be applicable here.
        Mr. Bridenstine. So, again, will you commit to me that you
    will not go forward with this rule until you have, you know,
    examined the environmental consequences for non-air, you know,
    parts of the environment?
        Ms. McCabe. I will commit to you that before we finalize
    this rule, we will assure ourselves that we have satisfied all
    the legal requirements associated with this particular
    rulemaking.
        Mr. Bridenstine. Although I understand the proposal does
    not currently require carbon capture and storage for gas or oil
    power, can you assure me that the Agency will not consider
    requiring CCS for gas-fired power plants in the future?
        Ms. McCabe. We do not have a factual basis that suggests
    that that is an appropriate thing, which is why we did not
    include it in this rule.
        Mr. Bridenstine. Can you assure me that the Agency will not
    consider requiring CCS for gas-fired power plants in the
    future?
        Ms. McCabe. We do not have present plans to move in that
    direction.
        Mr. Bridenstine. Can you assure me that the Agency will not
    consider requiring CCS for gas-fired power plants in the
    future?
        Ms. McCabe. I can't commit the Agency indefinitely into the
    future, Congressman. I can tell you where we are right now and
    we do not foresee that.
        Mr. Bridenstine. One other thing that I think is important,
    you know, there is potentially the application of the new SPS
    standards or similar assumptions of reasoning to existing
    plants that are modified and reconstructed. Can you assure me
    that the Agency will not require CCS for modified and
    reconstructed coal-fired power plants?
        Ms. McCabe. That is a rule that will come out as a proposal
    later this spring, and that rule will lay out what the
    expectations are that are there. I will tell you that we are
    looking at those facilities which are existing in a different
    way than we look at brand-new un-built power plants.
        Mr. Bridenstine. You mentioned one project that is in
    Oklahoma, Sandy Point, as one of the projects that is a
    demonstration of the capability in the technology. How many of
    these projects are there?
        Ms. McCabe. I cited three.
        Mr. Bridenstine. Are they all power plants?
        Ms. McCabe. Those three are power plants. So the three I
    cited are power plants. There are many other industrial
    applications of the technology as well, but I was asked
    specifically about power plants.
        Mr. Bridenstine. And, for the record, can you submit what
    the current size and the status of those power plants are? My
    time is expired.
        Ms. McCabe. Sure. We will follow up with that information.
        Chairman Schweikert. Thank you, Mr. Bridenstine.
        You had requested a UC, there are only two of us so I guess
    there is no objection.
        [The information appears in Appendix II]
        Chairman Schweikert. It is always wrong when you object to
    your own Member. Yeah.
        Give me just a couple seconds. I want to make sure that we
    touched on a couple other externalities that I wanted to make
    sure we had touched on.
        I may submit a couple other more technical questions to you
    in writing.
        Ms. McCabe. Sure.
        Chairman Schweikert. I know these are always sometimes
    mentally taxing and the preparation that goes into it.
        This is the first time I have ever said this in my short
    time here in Congress. I am a little disappointed at some of
    the intellectual capital we have shared because I was somewhat
    hoping to do something much more technical on where are we
    really on the science. What is the, you know, I come from the
    world of the law of unintended consequences is when we don't
    think things through--how many major projects have we all
    stepped into, we have watched our government and industry step
    into and we are here a few years from now and we go, ``we
    missed that.''
        You know, if we were holding this hearing 12 years ago,
    part of your opening would have been about peak oil and the
    world running out of energy and fossil fuels, and today, we
    know we had our data absolutely wrong. And how do we make major
    decisions like this that have a series of economic effects and
    hopefully environmental effects and make sure we are doing it
    in the most technically rational, thought-out, disciplined, and
    properly economically incentivized fashion? And so hopefully we
    can send you over some more questions and some of your team can
    respond to them.
        And with that, I want to thank you for your testimony and
    do be prepared that the Members may have additional questions
    for you. And we will ask you to respond to those in writing.
    The record will remain open for a couple weeks for additional
    comments and written questions from Members.
        And with that, thank you for participating with us today.
        Ms. McCabe. Thank you, Mr. Chairman. We will be happy to
    follow up----
        Chairman Schweikert. And with that, the----
        Ms. McCabe. --with any questions.
        Chairman Schweikert. And with that, the hearing is closed.
        [Whereupon, at 1:01 p.m., the Subcommittees were
    adjourned.]
                                   Appendix I

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                       Answers to Post-Hearing Questions

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