[Senate Hearing 116-289]
[From the U.S. Government Publishing Office]
S. Hrg. 116-289
THE ELECTRICITY SECTOR
IN A CHANGING CLIMATE
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HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
MARCH 5, 2019
__________
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Printed for the use of the
Committee on Energy and Natural Resources
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
35-558 WASHINGTON : 2020
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming JOE MANCHIN III, West Virginia
JAMES E. RISCH, Idaho RON WYDEN, Oregon
MIKE LEE, Utah MARIA CANTWELL, Washington
STEVE DAINES, Montana BERNARD SANDERS, Vermont
BILL CASSIDY, Louisiana DEBBIE STABENOW, Michigan
CORY GARDNER, Colorado MARTIN HEINRICH, New Mexico
CINDY HYDE-SMITH, Mississippi MAZIE K. HIRONO, Hawaii
MARTHA McSALLY, Arizona ANGUS S. KING, JR., Maine
LAMAR ALEXANDER, Tennessee CATHERINE CORTEZ MASTO, Nevada
JOHN HOEVEN, North Dakota
Brian Hughes, Staff Director
Kellie Donnelly, Chief Counsel
Brianne Miller, Senior Professional Staff Member and Energy Policy
Advisor
Chester Carson, Senior Professional Staff Member
Sarah Venuto, Democratic Staff Director
Sam E. Fowler, Democratic Chief Counsel
Renae Black, Democratic General Counsel
Luke Bassett, Democratic Professional Staff Member
C O N T E N T S
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OPENING STATEMENTS
Page
Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska.... 1
Manchin III, Hon. Joe, Ranking Member and a U.S. Senator from
West Virginia.................................................. 7
WITNESSES
Kelliher, Hon. Joseph T., Executive Vice President, NextEra
Energy, Inc.................................................... 9
Schutt, Ethan, Chief of Staff, Alaska Native Tribal Health
Consortium..................................................... 18
Tierney, Dr. Susan F., Senior Advisor, Analysis Group, Inc....... 23
Medlock III, Dr. Kenneth B., James A. Baker, III, and Susan G.
Baker Fellow in Energy and Resource Economics, and Senior
Director, Center for Energy Studies, James A. Baker III
Institute for Public Policy, Rice University................... 35
Jacobson, Lisa, President, Business Council for Sustainable
Energy......................................................... 48
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
CoilPod LLC:
Letter for the Record........................................ 131
Jacobson, Lisa:
Opening Statement............................................ 48
Written Testimony............................................ 50
Responses to Questions for the Record........................ 125
Kelliher, Hon. Joseph T.:
Opening Statement............................................ 9
Written Testimony............................................ 12
Responses to Questions for the Record........................ 86
Manchin III, Hon. Joe:
Opening Statement............................................ 7
Medlock III, Dr. Kenneth B.:
Opening Statement............................................ 35
Written Testimony............................................ 37
Responses to Questions for the Record........................ 113
Murkowski, Hon. Lisa:
Opening Statement............................................ 1
Charts titled ``Daily Sea Ice Concentration Analysis, NWS
Alaska Sea Ice Program'' -- January 25, 2019 and March 02,
2019....................................................... 3
Chart titled ``March 01, 2019 Sea Ice Concentration AMSR2''
by @AlaskaWx............................................... 5
Schutt, Ethan:
Opening Statement............................................ 18
Written Testimony............................................ 20
Responses to Questions for the Record........................ 94
Tierney, Dr. Susan F.:
Opening Statement............................................ 23
Written Testimony............................................ 25
Responses to Questions for the Record........................ 99
THE ELECTRICITY SECTOR
IN A CHANGING CLIMATE
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TUESDAY, MARCH 5, 2019
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:05 a.m. in
Room SD-366, Dirksen Senate Office Building, Hon. Lisa
Murkowski, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. LISA MURKOWSKI,
U.S. SENATOR FROM ALASKA
The Chairman. Good morning, everyone. The Committee will
come to order.
Over the past couple weeks here, we have had hearings that
looked at the energy markets of today, what could be the
breakthrough energy technologies of tomorrow, and then
worldwide forecasts from the International Energy Agency, IEA.
In each of these hearings we have heard about the effect that
climate change is having on decisions within the electricity
sector. Today, we are here to consider those trends in greater
detail.
Our nation's energy mix has changed significantly over the
past decade, largely driven by the shale revolution and the low
cost of natural gas, but also federal and state policies that
have boosted low or zero emission energy technologies.
Now we all know that the electricity sector is just one
piece of the puzzle when it comes to climate change, but also,
quite possibly, the most visible and all encompassing. Reliable
electric power is central to our very way of life. It powers
our homes and our businesses, charges our cell phones,
sometimes our vehicles, allows us to run our air conditioners
and plug in our electric blankets, which I needed last night
because I had no heat in my house here, so I felt like I was
back home.
Senator Manchin. Back in Alaska.
The Chairman. It was good; I slept well.
[Laughter.]
But as more renewables come online and the mix of baseload
power changes, our Committee will focus on maintaining grid
reliability and resiliency. We will prioritize keeping energy
affordable, and we will be working to advance cleaner energy
technologies that can help reduce greenhouse gas emissions.
So a focus on what we can do with these technologies, how
we can push out the R&D, how we can work to encourage the
developments in the CCUS, what we can be doing more of when it
comes to efficiencies, particularly for our buildings. And this
has to be a priority, I think, for all of us.
Certainly, in Alaska we view that there is no choice here.
In the Arctic, we are seeing warming at twice, over twice, the
average of the rest of the Lower 48. It is directly impacting
our way of life. Diminishing sea ice and melting permafrost are
real world challenges that we are contending with today.
We are seeing wildlife migration patterns that are changing
as the bowheads move further north. We are seeing changes
within our fisheries as we are seeing different species in more
northern waters than we have before. It is impacting
subsistence, it is impacting food security, and it is certainly
impacting our economy with our fisheries.
There was a story, just very prominent, in yesterday's
clips, and it detailed the drought extent across Southeastern
Alaska. Southeast is where I grew up. It is the Tongass
National Forest. It is a rainforest. And within Southeast are
the communities of Wrangell and Ketchikan, where I lived, and
Petersburg. These are hydro communities that are now relying on
diesel-powered generation. People are actually having to talk
about water conservation, literally, in a rainforest. It is
having an impact. The headline of this particular story was
``Hatcheries are the Canary in the Coal Mine as Drought Extends
across Southeast Waters.''
Because what happens is they have the little fry in the
hatcheries and they are seeing warmer waters coming down from
out of the rivers, and they need to keep these fry cool. So
they put them out into the ocean. Well, they are putting them
out a full month earlier. So what does that mean then to their
ability to survive out there? So it is a very, very real
condition and situation.
Yesterday, on the front page of our largest newspaper, the
Anchorage Daily News, there was a story about the extent of the
sea ice, and how for the first time in many memories we are
seeing open waters in and around the area here around St.
Lawrence Island and Diomede Island up here.
[The information referred to follows:]
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The Chairman. This chart shows the sea ice about a month
and a half ago, January 25th. And then just a couple days ago,
March 2nd, you have had this much ice that has broken up,
pushed off and gone further to the North.
So it is dramatic. It is not just climate change. It is not
that it warmed up that quickly but you have a series of
conditions that you see with the wind and the warming and the
water.
The other map is one that shows, again from the same
article, the same graphic by AlaskaWx.
[The information referred to follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
The Chairman. This is the sea ice concentration in the
Chukchi and Beaufort, in terms of the depth and the
concentration of the ice. But it speaks to the reality that we
are facing up North.
I was home this weekend for one of my favorite events,
which is the Iditarod race, which is a 1,000-mile, actually
1,100-mile, race really all about tough Alaskans and grit and
how humans and animals interact together. It is an iconic race,
and the route has changed a little bit as we have seen the
conditions on the ground changing.
In the Norton Sound area, where usually the teams will
cross the frozen ocean, it makes for a very exciting but really
a grueling trek because of the winds that are out there. Well
now that is open water and so they have had to reroute the race
to hug the shoreline.
So as we deal, again, with these very real realities, it is
not just things like a sled dog race. We have a number of
communities that need to relocate in order to survive the
encroaching seas as we are seeing greater sea ice move out in
more open water.
But our reality is that we don't, at this point in time,
have a clear or effective federal plan to ensure that can
happen on a timely basis. And that is something I hear from my
constituents a great deal about.
Another challenge is that many of our remote communities in
Alaska are heavily reliant on expensive diesel fuel for heating
and power. Integrating cleaner energy technologies, often with
a microgrid, can decrease reliance on diesel and provide for
greater reliability. It can also reduce costs, which is
critical for unlocking local economic opportunities. And of
course, it is certainly much better for the environment.
So I am very pleased that as part of today's panel we have
Ethan Schutt, a friend, a leader. He is with the Alaska Native
Tribal Health Consortium to provide his perspective about many
of these challenges and to provide some details about what work
is being conducted in Alaska today.
In addition to Ethan, we have Mr. Joe Kelliher, a former
Chairman of the Federal Energy Regulatory Commission (FERC) and
currently the Executive Vice President of Federal Affairs for
NextEra Energy. Mr. Kelliher has been before the Committee many
times, but it is good to have you back.
We also have Dr. Susan Tierney. She is with the Analysis
Group. We welcome you.
Dr. Kenneth Medlock is the Senior Director for the Center
of Energy Studies at Rice University. It is good to have you as
part of the panel.
And Ms. Lisa Jacobson, who is the President of the Business
Council for Sustainable Energy (BCSE).
I thank each of you for being here.
Now I think it is important to point out, we know here on
the Committee that we have jurisdiction in certain areas. We do
not have complete jurisdiction over climate change, we
recognize that, but we do have a considerable role to play in
developing reasonable policies that can draw bipartisan support
that I think will be a pragmatic contribution to the overall
discussion. What we can add to that conversation about
research, about innovation, and efficiency, I think you will
likely see these as subjects of further discussion within this
Committee.
This morning, we will begin that conversation. I am very
pleased and encouraged that in working with Senator Manchin we
have been able to have good conversations, the two of us and
our staffs, about where we want to lead the Committee in this
very, very important area. I appreciate his leadership on this
as well.
Senator Manchin.
STATEMENT OF HON. JOE MANCHIN III,
U.S. SENATOR FROM WEST VIRGINIA
Senator Manchin. Thank you, Chair Murkowski, and thank all
of you for coming today to be with us at this very, very
important meeting.
I might add, this is the first hearing on climate since
2012 in the ENR Committee, almost seven years. We all talk
about it every day. We know it is impacting our lives. First
hearing. So I want to thank you, Chairwoman Murkowski, because
this is excellent timing for this.
Our shared focus on identifying pragmatic solutions to the
urgent problem of climate change makes the work of this
Committee vital to our nation. I believe it sets a model for
working together to come to an agreement on a bipartisan path
forward, in spite of partisan rhetoric.
I also want to thank our distinguished panel for joining
our Committee to share your insights with us today.
For years I have argued we need to be working from an
agreed upon set of facts about the climate crisis in order to
move forward quickly with real world solutions that protect our
communities and workers from unnecessary economic harm. You
really cannot play a game of darts if you can't agree on where
the bullseye is. And that is what we are dealing with here.
People--I have never seen in any one town such as this--
people will basically set their opinions and try to justify
their opinions based on what they want the facts to be, not
based on what the facts are and try to work toward an agreed
position. To that end, we are seeking to use this hearing to
identify what emission reductions the power sector has achieved
and what the power sector must do to contribute in near-term
and long-term emission targets. I believe the focus must be on
the path toward innovative power generation technologies that
will keep the lights on, our economies humming and achieve the
emission reductions we so desperately need.
First, man-made climate change is real and it is a serious
threat to our citizens, to our economy, to our environment and
to our national security. In 2016, a devastating flood took the
lives of 23 West Virginians, unparalleled in any other time in
history in West Virginia. Over the last four years I have asked
the White House for emergency funding six times as a result of
severe flooding. My office deploys an emergency response page
during severe weather, and we have posted it dozens of times
over the past few years.
In Alaska, my dear friend and colleague here, Chairwoman
Murkowski, there have been 4 communities that needed to
immediately pick up and move and 12 more actively planning for
a partial or total community relocation due to climate change,
as Mr. Schutt will tell you about in his testimony.
Climate impacts have also forced people to leave their
communities permanently in the wake of storms like Hurricane
Maria after which nearly 130,000 people left Puerto Rico
according to the Census Bureau. And if you just look on the
news today what happened in the last couple days as far as
horrific tornadoes down in the south and southwest.
According to the Fourth National Climate Assessment, the
U.S. has experienced 44 weather and climate disasters since
2015. The cost has neared $400 billion with a B, $400 billion.
Second, all communities, including those in energy
producing states like West Virginia and Alaska, are
experiencing the harmful impacts of the climate crisis. These
impacts are often felt disproportionately in West Virginia
communities which are already suffering from the downturn in
the coal production, resulting unemployment and negative
effects of coal company bankruptcies on retirement and health
care benefits. Therefore, the path to a climate solution must
offer states like West Virginia opportunities, not additional
economic burdens. The Chairwoman and I share a deep concern for
our rural communities and seek to use this Committee as a means
of identifying and legislating pathways to ensure our
constituents have a role in the clean energy future.
And third, the solutions must be grounded in reality which
requires a recognition that fossil fuels are not going anywhere
anytime soon. The IEA predicts that up to 51 percent of China's
power could come from fossil fuels in 2040 depending on energy
policies that are adopted. That number could be as high as 57
percent for India. This is the real world we are living in.
The role of fossil fuels in the global economy is growing,
and the U.S. must lead the world in pursuing the solutions that
will allow us to burn fossil fuels in a cleaner, more cost-
effective and more efficient manner.
What we were told by Dr. Birol is that the age of the
plants in Asia is about 11 years old for all the fossil fuel,
about 11 years is the average. They are going to amortize those
plants out. They are going to run them until they are 40 to 50
years of age. That is just the economic facts.
In America, we have plants that are much older. It is much
easier for us to convert than it is for Asia, and that is just
what we are dealing with today. It does not mean that we should
set aside work increasing efficiency or advancing nuclear
storage or renewables such as solar, wind and hydropower. But
it does mean that we have to double down on innovative
solutions for the clean use of fossil energy in the electric,
industrial and transportation sectors, and we must do it today.
Just last week, Dr. Birol, the leader of the International
Energy Agency, told this Committee that the rest of the world
and particularly countries in Asia will continue to use fossil
fuels for decades to come. He stated, and I quote, ``Last year
global CO2 emissions, once again, increased and the
main driver for that increase came from Asia.''
As I have said before, just as West Virginians don't want
to drink dirty water or breathe dirty air, neither do citizens
of other countries. As India continues to build new coal power
plants to provide electricity to more and more of its people,
the U.S. should find ways to ensure that they have the
technologies and policies needed to eliminate any resulting
pollution and that technology is developed and manufactured
here in America. That is where we can truly be the game
changer.
Similarly, as China becomes the world's largest natural gas
importer and continues consuming large amounts of coal and oil,
the U.S. should respond to these developments by leading on
carbon capture utilization and sequestration technologies.
It is a fact that our country has the greatest energy
resource of all. Our brilliant researchers and developers can
do and must do the job. That is something nearly every witness
we have heard from this year has highlighted.
As Secretary Ernie Moniz has said best, ``Clean energy
innovation supports malleable national goals, economic
competitiveness, environmental responsibility, energy security
and national security and it is at the heart of American
economic success and optimism.''
I am optimistic about our country's ability to innovate and
implement climate change solutions, because we fundamentally
share these goals and have the know-how to tackle them
together.
I look forward to the Committee taking up this discussion
about energy innovation and expanding it across all
technologies needed to address the climate problem, and we
cannot wait another seven years to continue these meetings.
With these facts in mind, I look forward to today's
discussion of the trends in the U.S. electric sector, how they
affect and are affected by climate change and how this
Committee can continue this important dialogue and take action
on the technology and policies needed to address it.
With that, Chairman Murkowski, I look forward to our
hearing and thank you so much for calling it.
The Chairman. Senator Manchin, thank you.
We will now turn to our panel. I think I have introduced
each of you.
I would ask that you try to limit your comments this
morning to about five minutes. Your full statements will be
included as part of the record, but this will allow us an
opportunity for dialogue afterwards.
With that, we will turn to you, Mr. Kelliher. Welcome.
STATEMENT OF HON. JOSEPH T. KELLIHER, EXECUTIVE VICE PRESIDENT,
NEXTERA ENERGY, INC.
Mr. Kelliher. Thank you.
Chairman Murkowski, Senator Manchin, members of the
Committee, I appreciate the opportunity to testify today on the
dramatic changes that are occurring in the electricity sector.
I appear today on behalf of NextEra Energy, one of the largest
electric generators in the U.S., generator with the most
diverse electricity supply in the country and the world's
leading generator of renewable energy.
The electricity sector is undergoing an unprecedented
degree of change. That change has resulted in significant
customer benefits, in the form of lower prices, lower price
volatility, and improved operational performance. Our
electricity supply mix has become younger, cleaner, more
diverse, and more flexible.
A collateral benefit of the transition in our electricity
supply mix is that emissions from the sector have declined
sharply.
The electricity sector transition is being driven by market
fundamentals, including a dramatic increase in U.S. natural gas
production, a sharp and sustained fall in natural gas and
wholesale power prices, displacement and retirement of
inefficient fossil generation, lower than expected demand, the
addition of modern, efficient gas generation, and accelerated
entry of renewables. Contributing to these market forces are
federal and state policies encouraging renewables, as well as
stricter environmental requirements on generation facilities.
As a result of these factors, the U.S. electricity supply mix
has changed significantly over a very short period and there is
now more diversity in the U.S. electricity supply than at any
point in the past.
The coal share of our electricity supply mix has declined
from 47 percent in 2005 to 27.5 percent last year. The natural
gas share rose from 22 percent to 35 percent, and the wind and
solar share quadrupled, now accounting for roughly 11 percent
of our supply.
FERC wholesale competition policy played a critical role in
this transition, and in my view, competition policy, wholesale
competition policy, has been a major success.
The same cannot be said about retail competition, however.
Retail competition has largely been limited to states that
historically had very high retail rates. And in many of these
states, retail competition has been a failure, at least for
residential customers, resulting in higher rates from
competitive suppliers than those rates charged by regulated
utilities.
One of the primary drivers of the transition in the
electricity sector is the surge of new technologies. The
electricity industry is now experiencing a greater degree of
technology entry than at any point in the last 100 years.
While federal and state policy did encourage renewable
energy, renewable entry is the result of technological
improvements and lower cost. Since 2009, the cost of wind
generation has declined 69 percent and solar PV costs are down
88 percent. The low cost of solar is encouraging even faster
entry.
For example, recently Florida Power and Light, one of our
principle subsidiaries, announced a ``30 by 30'' plan to
install more than 30 million solar panels by 2030, making
Florida a world leader in solar energy.
Battery storage is a breakthrough technology that promises
many benefits. Storage can provide power during grid failures
and weather-related outages, it can relieve transmission
congestion, and it can integrate renewables. It really is the
most flexible product that we see in the electricity industry.
Storage economics have also improved dramatically with battery
costs falling 80 percent since 2010.
Now increasingly, electricity companies are looking for a
way to combine these new technologies in order to better serve
customers. Recently, our competitive power company, our other
principle subsidiary, NextEra Energy Resources, announced a
partnership with Portland General Electric in Oregon to develop
the nation's first project that integrates wind and solar
generation with storage, at the same site, the Wheatridge
Renewable Energy Facility.
The changes that are sweeping across the industry have not
just lowered prices, they've lowered emissions. Electricity
sector emissions of carbon in 2017 were 28 percent below 2005
baseline and that compares very favorably to the goals of the
Clean Power Plan which were a 32 percent reduction by 2030.
Importantly, the primary cause in the decline of
electricity sector emissions are generation retirements and
lower output from higher-emitting resources attributable to
market fundamentals. New environmental regulations were only a
secondary factor in these emissions reductions along with lower
electricity demand.
Market fundamentals have resulted in the retirement of a
host of inefficient fossil plants since an inefficient plant
not only uses more fuel to produce the same electric output, it
produces greater emissions. These retirements have had an
outsized impact on emissions reductions.
In conclusion, U.S. electricity markets are undergoing a
fundamental transition driven by market fundamentals. The
transition is likely to continue, producing an increasingly
diverse and more reliable electricity supply and this
transition has resulted in environmental benefits, from sharply
lower emissions from a generation fleet that is younger,
cleaner, more efficient, more diverse, and more flexible in
performance.
Thank you very much. And I look forward to answering your
questions.
[The prepared statement of Mr. Kelliher follows:]
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The Chairman. Thank you, Mr. Kelliher.
Mr. Schutt, welcome. Thank you for traveling all this way.
STATEMENT OF ETHAN SCHUTT, CHIEF OF STAFF,
ALASKA NATIVE TRIBAL HEALTH CONSORTIUM
Mr. Schutt. You're welcome. I'm happy to be here. Thank you
for inviting me to provide perspective from Alaska.
My name is Ethan Schutt. I'm the Chief of Staff for the
Alaska Native Tribal Health Consortium. We serve in Anchorage
in operating the Alaska Native Medical Center which is a large
hospital in Anchorage, and then we also support a statewide
health system serving Alaska Native American Indian IHS
beneficiaries.
In that role we also have a Department of Environmental
Health and Engineering that assists in environmental health
matters which is primarily clean water and sewer projects in
rural Alaska. Most, the vast majority of the communities we
serve in that capacity are not road connected, meaning that
they have seasonal barge access and then everything else comes
and goes by airplane.
In that environment you have extremely high costs for
energy, and it also happens to be the place where climate
change impacts are most dramatically felt. Many of those
communities, again, almost all of them, are coastal or on
rivers. And with the dramatic changes in seasonal patterns and
ice conditions that Senator Murkowski showed at the beginning
of the hearing here on the map, those dramatic changes in ice
conditions have very profound impacts on communities and their
infrastructure. It's causing dramatic changes to coastlines.
I mentioned in my written testimony that there has been
coined a new word in the federal emergency management lexicon
to describe the condition where permafrost is melting so
rapidly that it creates dramatic effects at the surface.
Largely, this again happens at the coastal area at this point,
but it is a dynamic situation.
Senator Murkowski also mentioned something in my written
testimony about the number of communities that are affected
that require immediate action. There are officially four
communities that need complete community relocation at this
point because of the threat of storm surge or coastal erosion
and the dramatic, life-threatening conditions that come along
with that condition. There's also, officially, a dozen, 12,
that are just behind that.
I think the condition on the ground is so dramatic that
those numbers are not numbers that I'm confident in. I think
those numbers change day to day with the dramatic retreat of
the seasonal sea ice still well within the winter storm system
in Western Alaska, and I think we will see additional dramatic
coastal erosion and storm-caused problems in our coastal
communities.
We address these issues through a number of adaptation
measures, specifically permafrost protection through the
insulation of these active/passive systems that help preserve
the permafrost underneath community infrastructures so that the
ground underneath the community does not melt or at least the
ground underneath the community infrastructure does not melt.
We also work with coastal protection and river bank protection,
trying to protect the banks of these communities.
In addition, we are involved at some level in mitigation. I
don't proclaim us to be the leader in mitigation activities in
Alaska, but we do assist our rural communities in installing
renewables and addressing conservation and efficiency matters,
particularly with the water and sewer utilities.
These communities spend an inordinate amount of their
disposable income and community income on energy, and a large
portion of that goes into actually keeping the water in the
water and sewer system thawed and not frozen. It turns out that
often there's inefficiencies in how those systems are installed
or operated and basic repairs and maintenance can save
communities 50 percent of their annual budget on their water
and sewer system for things like running too much heat tape and
having it on 24/7/365 when you really only need it during
certain cold periods. So our engineers help these communities
by assessing those conditions and rectifying those small
operational inefficiencies or installing new equipment and
repair.
I think that that nexus between water and energy is
important as a policy matter as this Committee considers energy
and emissions--there's an extraordinary nexus between water and
energy. And one of the facts I learned a couple of years ago
was that as California went through its extreme drought period
here a couple of years ago, it turns out that the water
conservation measures saved more energy than all of the other
state investment in energy conservation directly. And so that
single fact highlights the need to address multiple sectors and
to pay close attention to energy and water.
Thank you for my time.
[The prepared statement of Mr. Schutt follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Mr. Schutt.
Dr. Tierney, welcome.
STATEMENT OF DR. SUSAN F. TIERNEY, SENIOR ADVISOR, ANALYSIS
GROUP, INC.
Dr. Tierney. Good morning, Chairman Murkowski--and I
mispronounced, I dropped a syllable, I apologize--Murkowski,
Ranking Member Manchin--I think I got the right number of
syllables on that one--members of the Committee, it's such a
pleasure to be here. Thank you for inviting me to join the
panel. I personally, as a citizen of the United States,
appreciate that you are holding this hearing on climate change.
So thank you very much.
I would like to talk a little bit about the electric
sector, but Mr. Kelliher has said almost everything that I was
going to say. My written statement includes a number of charts
and figures which amplify those points, so I'll try not to
repeat.
But I will say that I would agree with him that there is
very good news in terms of what we're seeing happening in the
electric sector. As he said, the system is much more diverse
than it was in the past. We have retained incredible, reliable
service, including in Hawaii where you are on the edge of
renewable energy and other things. So it's great.
Consumers are seeing electricity bill savings associated
with the changes we've seen in the past and for every dollar we
spend on electricity, we are getting much more gross domestic
product output. This is a great piece of news for the American
economy.
And of course, all of that is happening at the same time
that emissions have declined in the electric sector by 28
percent since 2005. That is great news.
The power sector emissions are coming from almost every
state in the United States which is also great news. This gain
in efficiency, productivity of our electricity dollars are
spreading across the United States and that's great.
There are many developments that are underway that are
contributing to these. You have heard about those. States have
adopted renewable energy standards. States have adopted goals
for greenhouse gas emissions. They have also innovated. You
have supported technology research at the Department of Energy.
All of that is great.
And we also see corporations, cities, counties, doing a
tremendous amount of work to meet their own commitments and
people like me have rooftop solar coming up all over the
country which is great. And that's, in part, because the costs
of those technologies are going down. And again, I think that
that is a product of the innovation that we have spawned in
this country.
Another point I want to mention is that every indication in
surveys of the American public is that people believe climate
change is occurring and that increasingly Americans at the
level of 75 percent think that it is a problem. So it's a
strong word of encouragement for the actions of this Committee
and others to think about what to do.
But even with the successes that we've seen, there is not
all good news. And the troubling news is that not everyone has
benefited from these changes as Ranking Member Manchin has just
said. There have been parts of the country which have seen
dislocations and there is much, much more to do.
So first, the electric sector is both a contributor to the
problem and a helper to the problem, but it is also affected
tremendously by climate change itself. And so, there is a lot
of infrastructure that is at risk associated with flooding, sea
level rise; a lot of electric infrastructure is on the coasts,
in low level waterways. And so, the thing that we're depending
upon to help us actually is exposed to climate change at the
same time.
Additionally, climate change, greenhouse gas emissions
reductions are not occurring as fast as they need to. In fact,
in the last year, emissions in the electric sector went up for
the first time in a decade. And so, that's a little bit
troubling news. And so, we need, looking ahead, to see more
significant action. And that's why I'm very glad that you're
holding this hearing and your others to look at solutions
coming up.
So the current progress we've made, I think, is so helpful
because it tells us what is doable and it helps us be ambitious
in terms of what we can do next.
One of the things that I want to underscore is a point that
Ranking Member Manchin said about the importance of looking
across the board at a variety of portfolios. One of the things
that I would encourage the Committee to do is not to
prematurely limit options that are needed in order to address
this issue. Everything that I have read from the literature on
decarbonizing the electric sector which is a cheaper way to
address the emissions of greenhouse gases, that's needed in
order to electrify other sectors such as the vehicle sector.
And all of those contribute to an approach. But if we do that,
the literature says, we need to keep all options on the table
at the moment.
So, thank you very much.
[The prepared statement of Dr. Tierney follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Dr. Tierney.
Dr. Medlock, welcome.
STATEMENT OF DR. KENNETH B. MEDLOCK III, JAMES A. BAKER, III,
AND SUSAN G. BAKER FELLOW IN ENERGY AND RESOURCE ECONOMICS, AND
SENIOR DIRECTOR, CENTER FOR ENERGY STUDIES, JAMES A. BAKER III
INSTITUTE FOR PUBLIC POLICY, RICE UNIVERSITY
Dr. Medlock. Thank you. It's a pleasure to be here to talk
about this. I agree with Susan, this is a very important topic,
and I'm glad that the Committee is actually undertaking a
broader discussion of these issues.
When I was approached about testifying, the title of the
hearing, sort of, caught me by surprise. It was, sort of, like
a big wow moment, right? Because, you know, in the discussion
it was mentioned that cost, technology, emissions, to the
extent that they could be addressed, via the jurisdiction in
this Committee, were all raised. And one of the things that I
commented about was that is a massive undertaking. But it's an
incredibly important one because it runs the gamut in the
electric power sector from capacity investment options to
operations to grid design. It ends up getting into discussions
about the future of the utility. And when you start having
those kinds of conversations, it's often important to look back
and think about where we've been and why we are where we are
today.
Nationally, as has been indicated already, there's been
significant progress made, but it's important to understand
why. And I think this is a really, really important point
because it highlights why some regions are different than
others.
Legacy is an incredibly important word when we start
talking about transitions in any energy space, much less the
electric sector alone. Coal-fired generation capacity in this
country is aging. And we are actually at a point now, given the
last time there was a major expansion of coal-fired generation
capacity which was in the late '70s, early '80s where we're
nearing the 40th birthday of a big chunk of capacity in this
country.
And that presents a very serendipitous situation, namely in
particular with low cost natural gas but declining costs of
renewables, it means that generators and utilities have a
choice, they can retire and replace or they can upgrade and
retrofit. And economically, that's a real easy decision to make
right now.
So it's important to understand what's driving the change.
It's certainly got elements of policy in it at a national
level, but it also has a tremendous amount to do with economic
realities on the ground.
An interesting point about all this is that what we see at
the national level, some of the trends that have already been
highlighted, has really been driven by what's occurring at a
local level. State renewable portfolio standards have certainly
played a role in accelerating the adoption of renewables but it
goes beyond just states. You also have in certain states,
municipal renewable portfolio standards.
So, you know, there's an old saying, ``Politics are
local.'' And I think you're seeing that play out with regard to
power generation, choices that are being made across the
country in different municipalities. The power of revealed
consumer preferences also playing a role in states where you do
have things like retail competition. For example, you're seeing
individuals prefer to contract for long-term supplies of green
energy, and what that actually does is it transmits a signal
all the way through to the wholesale level that actually drives
contracting and ultimately construction for things like wind
power which you've seen a tremendous amount of investment in
the State of Texas, where I'm from.
So, all of these things are really important to recognize,
but it's also important to recognize that it goes beyond just
investments in generation capacity. Grid design is also
incredibly important. Infrastructure related to the ability to
move power from one state to the next is incredibly important
because, for example, and this is highlighted in my written
testimony. The State of New York is actually seeing a
precipitous decline in the use of coal for power generation but
most of that has actually been facilitated by an increase in
imports into the state. And so, that's where you have to, sort
of, look farther, sort of, back upstream and figure out where
that's coming from to understand what the ultimate impact is.
But the more grid-connected different regions are, the more
options they're presented with when they start to address the
issues that we're all confronted with.
Various incentives have been incredibly important. And
that's not just true in the United States because you look
around the world, actually look at Europe. You look at, you
mentioned the address of Dr. Birol last week, thinking about
the different policy options that are confronted, are
confronting countries like China, India, other countries, in--
where there are massive populations, 3.3 billion people,
collectively, trying to grow and achieve the levels of economic
prowess that we enjoy in the West. Those options, those policy
options are going to be incredibly important in shaping their
future, but they also need to see some direction. And this is
actually where some of the things that can come out of this
Committee can be very beneficial because leading by example is
often the best way to lead. But one of the things that we
really need to think seriously about is basic R&D because
research and development really does pave the way of the
future.
I like to say that the next great innovation is in the mind
of a four-year-old somewhere playing with Legos. We don't know
what it's going to be, but we need to actually create pathways
so that those innovations can make their way to the future and
pave the way to a brighter future for us all.
Thank you.
[The prepared statement of Dr. Medlock follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Dr. Medlock.
Ms. Jacobson, welcome.
STATEMENT OF LISA JACOBSON, PRESIDENT,
BUSINESS COUNCIL FOR SUSTAINABLE ENERGY
Ms. Jacobson. Yes, thank you very much.
Chairman Murkowski, Ranking Member Manchin and members of
the Committee, again, I want to commend you on putting forward
this very important hearing.
I'm here representing the Business Council for Sustainable
Energy (Council). The Council is a coalition of companies and
trade associations in the U.S. energy sector with a specific
focus on energy efficiency, natural gas and renewable energy.
The BCSE also has a small business arm, the Clean Energy
Business Network and together the Business Council and the
Clean Energy Business Network represent a broad range of the
clean energy economy from Fortune 100 companies to small
businesses working in all 50 states.
On behalf of the Council, I'd like to express our
appreciation for the longstanding, bipartisan support and
approach and the accomplishments of this Committee. Looking
back, the 2005 and 2007 energy bills and the strong, sustained
and bipartisan support for research, development and deployment
initiatives at the Department of Energy, have helped shape the
current energy landscape.
My testimony will refer to the findings of the 2019
Sustainable Energy in America Fact Book which was released last
month by the Council and Bloomberg New Energy Finance.
In its seventh year, the 2019 Fact Book provides up-to-date
facts on the U.S. energy landscape. It is not a forecast and it
does not advocate for policies.
Based on Fact Book data, I would like to highlight four
main points: the U.S. electricity sector is transforming and is
utilizing a diverse portfolio of resources; the U.S.
electricity sector is decarbonizing due to increased investment
in energy efficiency, natural gas and renewable energy; the
U.S. electricity sector has low cost and is enhancing our U.S.
competitiveness. In 2018 while greenhouse gas emissions rose in
all sectors of the economy, the power sector's carbon intensity
continued to decline due to the low and zero carbon resources
being used to generate power and investments in energy
efficiency. It was a 2.5 percent decline in carbon intensity.
The electricity sector is changing in other ways as well both
in terms of technology integration, digitization,
decentralization and its inner connection with buildings and
transportation. Further, grid-connected buildings and vehicles
are responding to electricity system needs providing new
sources of system flexibility. Finally, the sector is also
being impacted by natural disasters and it is facing the threat
of cyberattacks.
Though I am, you know, kind of, closing the panel here, I
will reiterate some important facts about the changing
electricity sector that some of my panelists have said before.
First, natural gas accounts for 35 percent of electricity
generation in the country. That is up 25 percent over a five-
year period.
Renewable energy at the end of 2018 accounts for 18 percent
of U.S. generation. This is nearly on par with the nation's
nuclear fleet.
U.S. spending on energy efficiency from utilities, energy
savings performance contracts, and property assessed clean
energy programs climbed to a record level of $15 billion at the
end of 2017. That's the most recent data we have.
On the consumer side, they devoted a record low share of
their household spending in 2018 toward electricity. And these
records started about 1960.
And the energy efficiency, natural gas and renewable energy
sectors support over three million jobs across the country. New
data on energy sector jobs will be available tomorrow. So, I
encourage everybody to look at that, looking for changes in
that dataset.
Further, corporations are driving change in the energy
sector. Companies in many segments of the economy contracted
record volumes of renewable power through direct contracts
amounting to 8.6 gigawatts of capacity in 2018 alone, and this
is being driven increasingly by economic factors including low
renewable power prices and the ability to lock in predictable
electricity prices over a period of time.
An important area of focus for this Committee is research,
development and deployment (RD&D) programs at the Department of
Energy. A range of clean energy and energy efficiency
technologies have benefited from the full spectrum of federal
RD&D support in many cases in partnership with the private
sector. This includes early stage programs like ARPA-E as well
as applied RD&D programs. Specific examples include initiatives
to lower solar soft cost, the longstanding public-private
partnership that led to shale gas production and energy
efficiency technologies such as LED lighting.
In addition, the BCSE appreciates the Committee's support
for modernizing the U.S. electricity system. This includes grid
infrastructure as well as policies that seek to streamline and
increase the efficiency of permitting and siting procedures.
The Council looks forward to continuing to work with this
Committee as it moves forward on policy solutions. And again,
thank you for holding this hearing today.
[The prepared statement of Ms. Jacobson follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Ms. Jacobson.
I appreciate all that you all have contributed this morning
in reminding us what the role of this Committee is in this
broader debate. And the fact that you all speak to the R&D
piece of it, how important it is to be building out these
technologies that will allow us to reduce our emissions, just
be more responsible environmental stewards as a general
practice.
I like to say that we should have a ``no regrets'' policy.
Regardless of the direction that things go, you know, we are
doing the right thing for the right reasons. So you have
reminded us of that.
My colleague, Senator Cassidy, has to relieve another
colleague on the Floor of the Senate here in just a few
minutes, so I am going to yield my time to him.
Senator Cassidy.
Senator Cassidy. Thank you.
I have been floating in and out, but I have really enjoyed
your testimony. By the way, my staff gave me some other
interesting stuff.
Mr. Medlock, first let me just say that four-year-old who
will find the next innovation is currently playing with Legos
is clearly my grandson. Okay? I will just tell you that.
[Laughter.]
So, Sam, if you are listening out there on TV to Papa, we
are relying on you, buddy.
The other thing I will point out. You mentioned and I am
struck how New York will not allow pipelines to be built
through New York to bring natural gas to New England, and you
point out though that New York has benefited by transitioning
off of coal, among other ways, by using natural gas. My staff
pulled together for me the average monthly industrial bill, the
cost per kilowatt. In New York it is 5.92 cents. In New England
it is 12.54 cents. And so, the inability to get cheap natural
gas to New England has given New York a competitive advantage
in attracting industry. This is economic warfare by other
means. Now I see why Governor Cuomo is so stringent upon that.
And I will share this with you, Senator King, because it is
remarkable. The average price of kilowatts, industrial in New
England is 12.54 cents and in New York it is 5.92 cents. Why
would an energy intensive enterprise move to New England? In
Maine, in particular, it is 9.20 cents, and you were the
cheapest. Consider poor Rhode Island at 14.57 cents. So anyway,
that said, Governor Cuomo has a good thing going.
Ms. Jacobson, you mentioned this and so--no, I am sorry,
let me stay with you, I think it is Mr. Medlock--let me go back
to the testimony.
Taking the different pathways of California and Texas and I
think I see here the industrial cost in California is 20 cents
per kilowatt-hour. No, 12.73 cents per kilowatt-hour, and in
Texas it is 5.45 or something such as that. Clearly that would
have an impact upon the industrial base.
Ms. Jacobson, I think you were speaking to that. To what
degree do the costs per kilowatt-hour influence whether
industry will establish itself in one state versus another or,
indeed, one country versus another?
Ms. Jacobson. Well, thank you very much for the question
and I would just note, looking at the nation across the board
to start, the Fact Book has really good data on how we compare
with our retail electricity prices versus other competing
nations.
Senator Cassidy. But hang on, but stay with the industrial.
Ms. Jacobson. Yeah, sure.
We're number two to Canada amongst our major global
competitors, because we have low electricity prices as a
country.
In terms of state-to-state decisions, I mean, of course,
there's a lot that goes into what would determine whether one,
you know, facility would go into one location versus another.
But certainly having low, predictable electricity costs is key.
And I think----
Senator Cassidy. So let me stop you for a second.
If you exclude hydro, it does seem as if the cost basis for
states more relied upon renewable tends to be higher than the
cost basis for those who are reliant upon natural gas.
I have been struck, say, the Green New Deal which is
obviously a hot topic of conversation. I have read a report by
academics that it would cost, if we were to decarbonize between
now and 2060, it would cost, what was it? Thirty trillion
dollars or something? Trillions of dollars and that is over 50
years as opposed, or 40 years, as opposed to over 10 years.
If we were to say that decarbonizing would dramatically
increase the cost of transmission and of production and
therefore, of use, what would that do to the United States
industrial base?
Ms. Jacobson. Well, when I look at the data, I see a very
different story. We have a diverse electricity sector now and
costs for business and consumers are near record lows.
Senator Cassidy. Well, I accept that.
Ms. Jacobson. So----
Senator Cassidy. But that is with, I think I mentioned both
you and Dr. Medlock spoke about natural gas, kind of, allowing
that transition to a lower carbon footprint but at the same
time keeping those prices a little bit lower. Did I
misunderstand you?
Ms. Jacobson. No, I agree the portfolio is essential. And I
think if Congress is going to make forward looking policies, it
should do it recognizing we need all the resources available to
us and not to pick a technology over another. We really need to
have the ability to evolve and, you know, we can't anticipate
the future.
Senator Cassidy. Got it.
Dr. Medlock, any comments on that? To what degree do, I
mean, we just have to provide jobs for working Americans and
obviously lower cost electricity is part of that. To what
degree could we completely transition away from fossil fuel and
still have a low enough rate structure as to facilitate the
creation of those jobs?
Dr. Medlock. Well, this is exactly why I highlighted the
role of innovation, the role of R&D, because if we're going to
talk seriously about long-term economic health of this country,
it's got to be a combination of, to use a trite phrase, ``all-
of-the-above.'' But the only way to do that and address a lower
carbon footprint is through basic R&D in things like carbon
capture, energy efficiency. All of these things matter.
In fact, when you start talking about energy transitions in
addressing local community needs, it's not just about clean
energy. It's also about urban planning. It's also about how you
actually think about things like infrastructure resilience.
Senator Cassidy. And so, to play off of what Senator
Manchin was saying in his opening statement, knowing that Asia
will continue to use coal, part of that innovation will be, as
you say, what do we do about the carbon footprint of a resource
that is going to be used, period, end of story.
Dr. Medlock. That's precisely the point, yes.
Senator Cassidy. Yes.
I am out of time, and I yield back. Thank you for----
The Chairman. Thank you, Senator Cassidy.
Senator Manchin.
Senator Manchin. Thank you very much, Madam Chairman.
And also, I have one of my dear friends and colleagues who
has to run to another meeting because she chairs also. I want
to relinquish my time right now to Senator Stabenow.
Senator Stabenow. Thank you very much, Senator Manchin.
I first want to thank both our Chair and Ranking Member for
an excellent hearing on an incredibly important topic that we
are all facing and having to work together on in order to be
able to get action on carbon pollution. I am very impressed
with the hearing and appreciate the leadership of both of you.
I also do want to debate, unfortunately Senator Cassidy
just left, but it is actually my six-year-old grandson who is
going to provide----
[Laughter.]
He is unbelievable. He is putting together robots with
Legos and making them talk. I am not sure how he is doing that,
but I am looking forward to his leadership as well as all of
our young people.
First, let me just say welcome to all of you.
And Mr. Schutt, when you talk in your testimony, written
testimony, about describing new words that are now needed to
explain what is happening on climate change, boy is that real
in Michigan right now.
We have been the epicenter, whether it is the polar vortex
and what is happening because things are heating up, the cold
air is floating down. We are getting hit with it. I know those
are not scientific terms, but that's how I view it.
Secondly, last weekend we had something, a new term called
a ``bomb cyclone'' which was 60-mile-an-hour-plus winds, and I
had never heard of that term before. It is extraordinary what
is happening.
And so, we have a lot of work to do, and there is a real
sense of urgency about it. And even though there are those,
including the Administration, that continue to deny climate
change--we all know--and the business community is moving
forward, others are moving forward as we need to, aggressively
on this.
So I am really glad NextEra, and I am glad that in Michigan
our two utilities, DTE and Consumers, are aggressively moving
forward on wind and solar. I think they are real leaders. They
have a plan to reduce carbon emissions by 80 percent and at
least 50 percent clean energy by 2030. And we are a state that
until recently was 70 percent coal production. So, in terms
of--I don't mean production--reliance on coal, so Michigan is
now the leader in the Midwest.
I would just say to my Ranking Member that we are creating
jobs, those clean energy jobs that we have all been talking
about. And I want them all in Michigan, but we would be happy
to let a few go to West Virginia but there are 8,000 parts in a
big wind turbine and we can make every one of them in Michigan.
And when I last was in Alaska, I saw some, actually wind
turbines made in Michigan which I was very proud to see.
So, Dr. Tierney, and I think also Dr. Medlock, you
mentioned this as well, but when we look at what is driving the
reduction in coal generation at this point, rather than it
being federal regulations, would you comment again on the fact
that low natural gas prices, sharp drop in costs of renewable
energy, is that, in fact, what is driving it? And secondly, if
the answer is the latter, what are the environmental benefits
of deploying electric vehicles, near and dear to my heart in
Michigan in terms of our leadership, with a generation mix that
is rapidly becoming cleaner which I know is essential to that
in terms of carbon pollution reduction?
Dr. Tierney. Thanks for that question.
And with all due respect, Mr. Owen Cory Tierney is going to
be the one playing with Legos.
Senator Stabenow. Oh, well.
Dr. Tierney. He's only one.
Senator Stabenow. Competition.
[Laughter.]
Dr. Tierney. But they're all going to be there. It's great.
Senator Stabenow. They are. They really are.
Dr. Tierney. Your question tees up a central issue for the
jurisdiction of this Committee. It's about technology and
innovation and markets.
When I think about the Committee's jurisdiction over both
FERC and encouraging competitive markets on the electric side
and on the gas side, and when I think about the innovations
that have come through funding, through authorizing activities
at the Department of Energy, it goes to your question
perfectly.
First, we've had flat electricity demand in huge part as a
result of the energy efficiency technologies as well as
standards that have been set by the Department of Energy.
Second, when you think about the cost reductions that have
taken place on the renewable energy side, again, that has been
driven in large part by investments to increase the
productivity and performance of renewables.
And in fact, when Senator Cassidy asked about the
competition between electricity, excuse me, natural gas and
renewables, I'm thinking of Senator Gardner because in
Colorado, Xcel Energy procured renewables at lower cost than a
supply from a natural gas facility.
But all of those activities, including the production of
natural gas, have been accomplished through investments in
applications of advanced technologies. So, that's cool. Those
are all contributing to the story on the electric side and now
on electric vehicles. They are very cool.
If one wants to reduce greenhouse gases and one wants to do
it affordably, then cleaning up the electric sector is key and
then using electricity to fuel other things like vehicles.
So if that's the only goal, that's a terrific one for
Americans. But the goal of economic development is also really
key, of course, you want those jobs. And for the U.S. to remain
positioned in an international market where foreign companies
from Europe, from Asia, on the Asia side not only Japan and
Korea, but also China, they are going with electric vehicles.
So for the U.S. to remain competitive in an international as
well as domestic market, this is a great opportunity.
Senator Stabenow. Thank you very much.
Thank you for allowing me to jump ahead. Thanks.
The Chairman. Thank you, Senator Stabenow.
Let me just very quickly turn to you, Mr. Schutt.
I often use the State of Alaska as a case in point for why
the innovation and technology, R&D, particularly microgrids,
can make a difference in real time in a place like Alaska.
Senator Cassidy mentioned some of the prices that some are
paying in the Northeast and in New York. As we know, we have
some communities in our state that pay in excess of $1.00 a
kilowatt-hour. These are obviously not sustainable and so that
drives a level of innovation that, I think, most people don't
recognize and don't appreciate.
In your written testimony you describe the Rural Energy
Initiative. You have indicated how we are utilizing some
systems to deal with permafrost to keep the permafrost cold
through these passive systems.
You have innovation that is happening within the sewer and
water systems, recognizing that in far too many of our
communities, we still lack basic sanitation. We don't have
running water. We don't have a place where you can flush a
toilet, and you have a washateria that the community uses to
bathe and wash their clothes in. So we deal with some pretty
tough conditions.
Can you just quickly speak to what we are seeing from the
Rural Energy Initiative and how, again, through the innovation
and the pioneering that we are seeing in some far away spaces,
oftentimes working with our national labs, how we are working
to not only reduce the cost of energy but improve the lives of
people because when you have safe drinking water, when you have
the ability to just stay warm in your house that isn't filled
with mold and contributing to respiratory issues, what it means
for a family?
Mr. Schutt. Sure. Thank you for your question.
I think Alaska is something of a national lab for these
innovative technologies around energy.
The pipe penetration of renewables into microgrids which
doesn't seem like it's a close relation but as the deployment
of renewables on, particularly, solar PV on rooftops of
businesses or homes gets more and more pervasive within the
system, the physics behind the substation at a distribution
level look a lot like an isolated microgrid in a rural
community in Alaska.
And so, we have, as a state and as energy leaders in the
state and researchers have done a lot of research around the
integration and high penetration of a variety of renewables,
not just wind, not just solar, but heat pumps, hydrokinetics,
micro wind, which is, I think, a little bit different,
geothermal and also storage. And I think within that space we
have two communities that stand out at a larger scale for doing
things that are, sort of, unheard of and not thought of at some
level.
One is--Kodiak is effectively a 100 percent renewable
electric utility, Kodiak Electric Association. Now that, I
recognize, requires a unique set of circumstances and driven in
part by the economics of being otherwise a diesel-reliant
community. And so, they have a large hydro resource, but they
also have nine megawatts of wind and they have also had to
bring on two different forms of electric storage in order to
make this whole system work.
The other is Cordova which is a little bit smaller, but
they have 100 percent buried distribution of the transmission
grid which is, sort of, unheard of also. And I think that as
you have these more dramatic climate change weather events, the
resilience of a completely buried distribution system is quite
different and quite a bit more resilient and reliable for the
community.
So we are doing a lot of interesting things, and we do have
a lab in Fairbanks at the Alaska Center for Energy and Power at
the University of Alaska Fairbanks that does a lot of research,
primary research with these, kind of, balance of plant and
other technologies that are around the energy technology
itself.
I think we have an applied lab in Alaska in both a formal
lab sense as well as in rural communities where, kind of, the
desperation of the local economic reality drives innovation and
innovation drives the reality of practical applied engineering.
The Chairman. That was well said.
We invite everybody to come up.
Senator Manchin.
Senator Manchin. Thank you, Madam Chairman.
I am so glad that we are having this hearing, and Senator
Murkowski and I have talked about it. And a lot of people, you
all probably have evolved over the years of how you believe or
where you get your information. You might have changed your
position on climate. Is climate change real? Is it biblical
proportion time or--the last, I think the last century there is
no doubt that humans have made a tremendous impact on what we
are dealing with.
Very quickly, can you tell me where you get, basically,
where you get your facts that support your position? If I just
know where you are coming from, because we are trying to get to
where we are all on the same sort of facts and where we are
getting our information. And you all, being the experts you
are, might have a better insight. So if you could quickly go
down the line and just tell me where your facts come from.
Mr. Kelliher?
Mr. Kelliher. Mine come from the U.S. Energy Information
Administration, part of DOE. Some of the cost decline
projections come from Lazard analysis that looks at the
levelized cost of energy. The one I cited was from November of
last year. And then there's also the analysis on battery
storage that came from BNEF.
Senator Manchin. Mr. Schutt?
Mr. Schutt. I get my facts from a variety of the government
sources, U.S. EIA, private industry, BP's Annual Energy Outlook
and then, what my wife would call, an inordinate amount of time
on the Internet trying to figure out what's real and what's not
and----
Senator Manchin. I mean, here is the only thing, as you all
go down here. People basically that differ with you or disagree
with you are getting their facts or saying they are getting
facts from different sources. Have you looked into those
sources saying, that's not real news? That is just not real
facts. That might be the distorted facts.
So, yes sir, Joe.
Mr. Kelliher. Can I respond to that?
Senator Manchin. Yes.
Mr. Kelliher. One fact that is frequently misstated, I have
to think knowingly or maybe it's a matter of faith----
Senator Manchin. Okay.
Mr. Kelliher. ----that our electricity supply is losing
diversity. The exact opposite is true, and you can prove that
mathematically----
Senator Manchin. Okay.
Mr. Kelliher. ----by taking, summing the squares of the
different components of our electricity supply in different
points, different years.
Senator Manchin. Yes.
Mr. Kelliher. And I did that recently and it's, we are 50
percent more diverse.
Senator Manchin. You were able to diffuse that, right?
Mr. Kelliher. We're 50 percent more diverse----
Senator Manchin. Diverse than we were.
Mr. Kelliher. ----mathematically, objectively using GI
data, than we were in 2005. So, that----
Senator Manchin. You debunked that one, okay.
Dr. Tierney? Where do you get your facts?
Dr. Tierney. I spend all my time looking at facts. So, on
the energy side----
Senator Manchin. Which ones do you believe?
[Laughter.]
Dr. Tierney. I follow data collected by the U.S. Government
through the Energy Information Administration.
Senator Manchin. EIA.
Dr. Tierney. It provides a tremendous range of facts that
are provided by industry----
Senator Manchin. And you have cross-checked that to make
sure that it was accurate? You feel the accuracy of what you
are getting is by cross-checking?
Dr. Tierney. I am quite familiar with it. I was the
Assistant Secretary for Policy at the Department of Energy. I'm
very familiar with the EIA and its work. They do great work.
Senator Manchin. Okay.
Dr. Tierney. I have followed the IEA, the International
Energy Agency.
Senator Manchin. Yes, there is a little discrepancy between
the two in some of the information we have received.
Dr. Tierney. In forecasts, yes.
Senator Manchin. Okay.
Dr. Tierney. I think there's a lot of historical
information that is quite----
Senator Manchin. The IEA was more accurate than our EIA
when they forecasted in 2012 or 2015 that the United States
would be the leading producer of natural gas. No one thought
that would ever happen.
Dr. Tierney. That's true.
Senator Manchin. How did they hit it right and we missed
it?
Dr. Tierney. The EIA, when it forecasts which is different
than facts for historical records.
Senator Manchin. Okay.
Dr. Tierney. Which is what I was talking about originally,
when they forecast, they forecast based on known policy as it
exists today----
Senator Manchin. Yes.
Dr. Tierney. ----in the United States.
Senator Manchin. Gotcha.
Dr. Tierney. And so, there's some differences.
But may I just also say----?
Senator Manchin. Very quickly.
Dr. Tierney. I get my facts on what's happening with the
climate change from the International Panel on Climate Change,
IPCC.
Senator Manchin. Okay.
Dr. Tierney. As well as the National Climate Assessment. I
was a co-author of the Energy Chapter of that. They do great
work.
Senator Manchin. Dr. Medlock?
Dr. Medlock. A variety of sources. I use government
sources. I use IEA. I use research networks. I actually
participate in conferences with people who are involved in
climate research. So----
Senator Manchin. Have your opinions changed since more
facts have come out? Have you changed your opinion on climate
change?
Dr. Medlock. I don't think I've ever had an opinion on it.
Senator Manchin. Okay. Or your support of it, or your
belief.
Dr. Medlock. It's really, it's a data-informed exercise.
And you know, scientifically, we've known, you know, that
CO2 is a forcing agent for a century. This is not
new information. It's always been about, you know, what's the
degree to which it's actually impacting things? And that's
where research is opening doors, opening things.
Senator Manchin. Great.
Ms. Jacobson?
Ms. Jacobson. Thank you.
Business Council and its members get a lot of the same
information from the same datasets and we decided about seven
years ago to put it together in a free basis for the public and
for policymakers.
It also, I think it's important to check in with industry,
the historical data is very strong. We're really blessed by the
investments that our government has made.
And you know, just a plug for one other opportunity, you
know, this jobs data that we're seeing is very significant and
the U.S. Government has supported that type of endeavor before
to track U.S. jobs across the board. I hope that the U.S.
Government will continue to look for areas to capture that
data. It's now being done by outside sources. But again, this
Fact Book and we brought copies for everybody, the Committee
and their staff, is again available for free online and it uses
government sources, industry, other independent analysts.
[The Fact Book referred to is available at: https://
bcse.org/wp
-content/uploads/2019-Sustainable-Energy-in-America-
Factbook.pdf]
Senator Manchin. It is a website.
Ms. Jacobson. Off of the Business Council's website. It's
done independently by Bloomberg New Energy Finance. We
commission it each year, but it's BCSE.org.
Thank you.
Senator Manchin. BCSE.org.
Ms. Jacobson. But again, we have copies for anybody who
would like one.
Senator Manchin. Thank you all so much. We have more
questions coming.
The Chairman. Thank you, Senator Manchin.
Senator Gardner.
Senator Gardner. Thank you, Madam Chair.
Ms. Jacobson, if you could just talk a little bit more, in
your testimony you talked about energy savings performance
contracts. This Committee, myself along with a number of my
colleagues, have tried to pursue additional energy savings
performance contracts (ESPC). Could you talk about a few steps
the government could take to encourage even more ESPC success?
Ms. Jacobson. Well again, this is an area where I want to
commend the Committee for its attention. I mean, as you know
well, I mean, one of the benefits of energy savings performance
contracts is because of the efficiency opportunities we have in
the economy.
The private sector can partner with building owners and
others that are looking to enhance their energy infrastructure
and buildings and without any outlays by those property or
facility owners, they can partner with companies that will go
in, just based on the energy savings alone, and provide those
retrofits and a guaranteed performance of those facilities.
So that what the Federal Government can do is, you know,
they've already permanently authorized that ability for federal
facilities to utilize that mechanism. And there's also a
utility counterpart mechanism.
But leadership, I mean, that was a huge driver in the last
five to seven years for uptake in ESPCs. If the Federal
Government would once again take on an ESPC challenge, I think
it would regalvanize the energy around using that mechanism in
federal facilities again.
Senator Gardner. Should we take an approach that may be
like requiring different agencies to meet certain targets
either through a dollar amount, a percentage amount of ESPCs?
Ms. Jacobson. Well, I wouldn't want to dictate what the
appropriate discreet mechanism is, but we need a pathway to
invest on and something that will drive the market to looking
at ESPCs. So I would say anything that you can do to provide
that direction.
And then, the reporting and accountability is critical. We
can set a goal, but if there isn't a mechanism to check and
make sure that we're achieving those goals and learning from
where we are doing well and where we're falling short, then we
won't really capture the benefit of that type of mechanism.
Senator Gardner. Because we are talking billions of dollars
in energy savings, correct, and thousands of private sector
jobs that can be created if we do this in an expanse that we
could?
Ms. Jacobson. Yes.
And again, and not on the taxpayer burden.
Senator Gardner. Right.
Ms. Jacobson. I mean, this is things that taxpayers don't
have to put the outlays for but I would just say also, it's
just thinking about the roles of government either serving our
veterans or helping with basic services. You know, we are just
improving the quality and performance that the Federal
Government investments are providing to U.S. citizens by using
mechanisms like this.
And I would also say it can enhance our resilience as a
country.
So making these kinds of investments in buildings and in
government facilities as well as in our schools and hospitals
and other critical infrastructure is extremely important.
Senator Gardner. Thank you, Ms. Jacobson.
Mr. Kelliher, you talked about the shale revolution, how
it, in your testimony, the dominant driver of recent changes in
electricity markets and the reduction as well that we have seen
in solar and wind costs both being contributing factors to,
sort of, this electricity matrix that you are talking about.
Do you suppose that the last 30 years, can you comment on
how the last 30 years' worth of DOE R&D investment, research
and development investments in both new extraction technologies
as well as investments in solar and wind, might have helped set
the stage for those technologies? I mean, when I grew up ``damn
wind'' was one word. And now it is nice to see that we are
actually utilizing what was such a common resource in Eastern
Colorado.
Mr. Kelliher. Sure. Thank you.
I would actually love to know the answer to that question.
I've always wanted to know what was the contribution from DOE's
R&D program and what was from the private sector's R&D. I don't
know the answer to that. But I think--I don't think it all came
out of DOE, the DOE labs, but I think they played an important
role.
Senator Gardner. No doubt they played an important role.
Mr. Kelliher. Yeah, I think they did. I just, I've always
wanted to know what was the relative contribution.
Senator Gardner. Right.
Mr. Kelliher. I don't know the answer to that.
Senator Gardner. Would sort of the same focus that we took
on research and development through DOE and perhaps other
agencies, if we made that sort of investment in carbon capture
or advanced nuclear technologies to help make and add more
carbon free choices, would that be a boost to our efforts?
Mr. Kelliher. I think it would be. I think that the same
sort of line of thought that the future technological
developments won't all come out of the DOE labs but some of it
will and a lot will come from the private sector.
I will try to find the answer to your question though. I'll
try to follow up and find out is there analysis that shows what
was the contribution of the labs to the improvements in wind
and solar technology.
Senator Gardner. Senator Heinrich and I have been working
ITC investment tax credit language for adoption of new
technology in storage. Would something like that help as well
as we develop new renewable clean energy technologies?
Mr. Kelliher. Yes, and that's, sort of, there's a little
hurdle for storage to qualify for some of the current tax
incentives. And that's something that could be addressed
because I think Congress--storage really is a fundamental
change. Electricity is the one commodity that cannot be easily
stored. But battery storage can change all that.
Senator Gardner. Very good. Thank you, Mr. Kelliher.
Mr. Kelliher. And tax incentive might help.
Senator Gardner. Thank you.
Thank you, Madam Chair.
The Chairman. Thank you, Senator Gardner.
Senator Wyden.
Senator Wyden. Thank you, Madam Chair. And Madam Chair, to
you and Senator Manchin, thank you for putting together this
very important hearing.
Mr. Kelliher, first of all, thank you for your kind words
about what Oregon is up to in terms of wind, solar and storage.
We took special note of that.
I am going to ask a question of you, if I could, Ms.
Jacobson, because you have essentially been making the argument
and making it for some time that a smart tax policy would
really generate growth in innovation in clean energy in the
years ahead.
As the Ranking Democrat on the Senate Finance Committee, I
have essentially proposed taking the 40 energy tax provisions
that are on the books now which, in my view, basically
subsidize the dirty energy relics of yesteryear. I propose
throwing them in the trash can and substituting one for clean
energy, one for clean transportation fuel and one for energy
efficiency because I think this would make a real difference in
promoting innovation, cleaner energy, helping us to shake the
carbon habit.
So the question I wanted to ask of you, because I don't
want to get you in the how do you feel about this bill or that
bill and endorsing pieces of legislation because I know that
with your organization that is problematic. So let's just talk
conceptually. From a conceptional, concept standpoint, don't
you think that there would be even more innovation and more
opportunities to grow clean energy if Congress basically junked
the energy provisions in the tax code and replaced them with
what I think you and I would call a ``technology neutral
approach?'' What is your take on that?
Ms. Jacobson. Well, thank you very much for the question
and as you know well and you know, federal tax policy has been
a major energy policy of the last several decades. And when you
look at what's happened through the production tax credit or
the investment tax credit when they're active, when they're not
active, when they've been extended for a short period of time
versus a long period of time, the market responds very quickly
and affirmatively.
So, I think, I'm looking, you know, at the legislation that
you introduced last year but has been contemplated for a good
number of years, the Clean Energy for America Act as an
example. As you've described, you've tried to articulate a
policy that's not looking at one technology versus another but
how can we set a goal for the electricity sector and for energy
efficiency and enable a long-term investment pathway
incentivized by the tax code to support the types of
investments that Congress is seeking.
And by putting it on a longer timeframe and setting a
common metric, we're moving away from the uneven policies that
we've had before that hit different industries and different
businesses in very different ways.
And even though things like the production tax credit or
the investment tax credit have sought to deploy a grouping of
technologies, because of those businesses and investment
cycles, not all have benefited. I mean, hydropower is a good
example, but we could look at biomass. We could look at waste
to energy. Now this conversation on storage.
New technologies are coming into the marketplace. And these
policies, you know, need to adapt to the marketplace of today.
So I really commend your leadership on thinking about a
revised, refreshed and current framework for energy tax policy.
And I very much look forward to having our members further
comment on your proposal and seeing it move through the
Committee process.
Senator Wyden. Well, thank you and we are going to want to
work closely with you and, obviously, the Chair and the Ranking
Member.
To me, and I see one of our colleagues, our Senator from
Nevada, who just joined the Committee, I think that if you are
running a company and you make a change on your factory floor,
you are always going to buy something that is more innovative,
more energy efficient and cleaner because you are not going to
be able to explain to your investors if you are doing
otherwise. And so, it seems to me this would be a benefit
across the board and my sense is, and I am exploring this, if
you are running a public company, I am not sure you even meet
your fiduciary obligations in a public company if you were to
buy something less energy efficient and dirtier than what was
already on the factory floor.
So thank you for your straightforward and supportive take
of a technology neutral tax policy in the energy space. We are
going to be calling on you often and, of course, working
closely with the Chair and the Ranking Member and my new
colleague on the Finance Committee from Nevada who has had a
great interest in clean energy as well.
I appreciate the Chair, again, and Senator Manchin, for
holding this important hearing.
The Chairman. Thank you, Senator Wyden.
Senator Cortez Masto.
Senator Cortez Masto. Thank you, and thank you, Madam Chair
and Ranking Member. This has been incredible, this discussion
so far.
Actually I was going to lead with that question. Let me
just clarify because when you, Ms. Jacobson, in your written
testimony, say to address climate, global climate change,
alignment is needed between the private sector and policies at
local, state, regional and national levels, is that what you
were referring to in your conversation with Senator Wyden, that
type of alignment or is there more that we can do to align, to
address climate change?
Ms. Jacobson. I think at the broadest level, it's to be
mindful of what's going on at all these different levels of
investment decision-making. So in part, it's what's going on
with private companies when we're seeing increasingly, they're
taking advantage of low renewable power prices and procuring
record levels of renewable power.
We are seeing states and cities and regional bodies take
action across the board as it relates to energy and
electricity, and some of those are environmental policies and
some of them may be a range of other policy objectives.
But from a tax perspective at the federal level, you're
sending a very strong signal of what you're trying to encourage
through tax policy. And as we've seen over the last several
decades, energy tax policy has been very powerful and
effective.
Senator Cortez Masto. Right, right.
Ms. Jacobson. So if we're looking at that as one of the
options to drive either greenhouse gas emissions or other
energy sector investments, I think the benefit of having a
forward-looking policy that hopefully is long-term enough so
that all technologies can participate and that allows all
technologies to participate is key.
So it has to be in line with the investment cycle. So
that's the alignment with the private sector. It needs to be
mindful of the trends in the country which we've been talking
about which are, you know, looking to decarbonize the
electricity sector.
And it has to be factoring in, you know, how the Federal
Government's role can be and the tax code, you know, is
probably, I wouldn't say the most important, but certainly one
of the most important drivers the Federal Government has to
direct investment.
Senator Cortez Masto. Okay.
Are there any other drivers or anything else we should be
looking at other than utilizing the tax code?
Ms. Jacobson. Definitely.
Senator Cortez Masto. What else?
Ms. Jacobson. I mean, I think research, development and
deployment which we've talked about.
Senator Cortez Masto. We have talked about, yes.
Ms. Jacobson. I think, you know, other opportunities to
streamline investment in the electricity sector is key. You
know, we talked about the oversight this Committee has with
FERC. There's a tremendous amount of activity going on there.
Things like building codes and standards for the energy
efficiency industry are really critical to enable cost benefits
for consumers, as well as environmental savings.
So there's complementary energy policies that might go
along with things in the tax code or maybe very specific
policies. We haven't really talked about it much here, but you
know, market-based mechanisms to address carbon emissions.
Senator Cortez Masto. Right.
Ms. Jacobson. So, you know, there are tax policies being
contemplated. There are, you know, cap and trade type policies
being contemplated.
So there might be some very discreet policies that might be
looked at, you know, not alone in this Committee, obviously.
This Committee's jurisdiction is not on emissions but EPW and
other committees may be looking at discreet policies that will,
again, send that market signal throughout the economy to lower
our greenhouse gas emissions.
Senator Cortez Masto. Thank you.
Mr. Schutt, thank you for being here.
Let me just say, I was looking at your website. I so
appreciate you being invited today, because I think there is
this nexus between what is happening in our climate and health
care, health care to individuals, health care to individuals
and we don't talk enough about it. So I appreciate you being
here.
I noticed under your website you have a Center for Climate
and Health. Can you talk a little bit about what that center
does? Does it address the health care needs of members in your
community or, if you don't mind, kind of, just expanding on it
a little bit?
Mr. Schutt. Sure.
So that center is addressing a number of the health care
impacts in rural Alaska. A lot of it does relate to the water
and sewer issues and in support of the development of new water
and sewer projects or the rehabilitation of existing projects,
the energy efficiency that I mentioned earlier in the
operations of the existing projects. But there are also other
initiatives around indoor air quality and other factors,
environmental health factors that impact human health.
So one of the ironies around energy conservation and
efficiency is that the more you insulate a house, particularly
in a retrofit type of a situation, the more you contend to
create indoor air problems. So there are other initiatives
around air circulation and getting fresh air into the homes. So
that particular group is fairly small and they deal with a
whole host of practical and applied issues, but you are correct
around the basic thrust of what they do.
Senator Cortez Masto. Thank you.
I notice my time is up. Thank you.
The Chairman. Thank you, Senator.
Senator King.
Senator King. Thank you, Madam Chair.
First, I want to thank you and the Ranking Member for this
hearing. It has been absolutely fascinating and important, very
important and thank you for inviting me to Alaska so I could
see some of these issues.
I still tell people about arriving at a remote village by
driving on a frozen river. That I had never experienced before.
And a lot of these issues are right on the front lines of the
people of Alaska.
Ms. Tierney, I loved your testimony and some of the graphs
that you present are just really fascinating. One that really
struck me was Figure 5 where it basically has a line that says
this is where we would have been if nothing had happened in
terms of utilization of electricity and sources. And what it
shows is that 50 percent of the reduction in carbon output was
because of efficiency which we don't think of. We talk about
solar and wind and natural gas and all these other things, but
just using electricity, the cheapest, cleanest kilowatt-hour is
the one that is never used.
I think we need to remind ourselves of that and your chart
was one of the most powerful. Half of the reduction was from
more efficient use of power, one-fourth is from switching to
natural gas and one-fourth is to the growth of renewables. So I
think that is an important point. I want to thank you for that.
With regard to natural gas, the concern I have, and I have
always been an advocate of natural gas, particularly as a
transition fuel because it is so much cleaner. But it is
growing so significantly. In New England now, it is 50 to 60
percent of our electricity source. I worry about
overdependence.
I think diversity is very important and we are talking
about a commodity that is at a very low price, but it is a
price that can change. And that dependence, it seems to me,
could create a serious problem if the price changed because of
world commodity markets. Do you share that concern?
Dr. Tierney. Yes. It may not be obvious but I spent 35
years in New England. I lived in Boston for many years and am
very familiar with the circumstances associated with increasing
reliance on natural gas.
Senator King. Like me, as a New Englander then, you are
probably happy that when the Patriots won the World
Championship it ended a terrible three-month drought between
world championships for Boston and New England.
Dr. Tierney. Woo-hoo.
[Laughter.]
Senator King. No, go ahead, sorry.
Dr. Tierney. So yes, they're, I think, becoming too
dependent on any fuel is not a great idea. And the story that
you're describing of New England's rising concerns about the
extent to which competition for a limited amount of natural
gas, especially during winter, is a problem. You're either
going to have to put it in homes, industries and/or power
plants.
So New England has been trying to diversify by looking at
alternatives, as you know. And I think that's one of the
messages I hear from everybody on the panel which is don't
choose some horses and then ride only those horses.
Senator King. Diversity of supply is a key.
Dr. Tierney. Absolutely.
Senator King. Mr. Medlock, I want to ask you a question.
Does the grid itself need substantial modification to support
greater electrification?
Now it seems to me, for example, in transportation most
people are going to charge their cars at night. And as you
know, there is significant additional capacity available on the
existing grid at night and on off-peak hours.
Talk to me about what we are going to need, if anything, in
terms of modification to the grid itself. I am not talking
about energy sources, I am talking about transmission and
distribution, in order to accommodate greater electrification.
Dr. Medlock. There is a significant amount needed with
regard to grid infrastructure upgrades, new investment and the
like.
I think if you talk to anybody who has, you know, spent
their career in the electric power sector, you never plan to
the optimum, you plan to the suboptimum.
And so, you made a statement, everybody is going to charge
their cars at night. Well, that is what we hope would be the
case but that might not be----
Senator King. Mine is charging right now----
Dr. Medlock. Well, there you go, so but the point is, is
you actually have to have a grid that's flexible enough to
accommodate, you know, the whims of the consumer which are very
difficult to predict.
Senator King. So there will be infrastructure needs.
I would appreciate it for the record if you could supply
some thoughts on that, what might be needed. Not for now, not
now because my time is running out.
Dr. Medlock. Sure.
Senator King. But if you could give us some thoughts.
Mr. Kelliher, it seems to me, I mean, one of the things
that has come out of this, storage is the big deal. It will
unlock vast amounts of potential renewable power.
You mentioned battery prices have come down. Where do
battery prices have to go in order to make, to be totally
competitive with say, a wind and solar plus battery storage
system, as you describe in Oregon?
Mr. Kelliher. Yeah, I think they're at a good price now
where they make sense now. We're the biggest renewable company,
wind company, solar company, in the world.
When we respond to an RFP for wind, we've started to say
well, we'll give you wind plus solar, or if we're responding to
an RFP for solar, we're saying here's solar plus storage. And
they look at it. So we're giving them, offering them, a product
different than what they asked for and we also offer them the
pure wind or solar product. And they'll look at the
capabilities and it will invite a discussion about well, what
do we get with this combined product? And there's actually a
lot of interest. It really comes down to with storage is what's
the discharge period you're looking for?
Senator King. Right.
Mr. Kelliher. And how----
Senator King. In New England we need some batteries that
would last two weeks in January. That is different than an
afternoon peak.
Mr. Kelliher. Exactly. Yeah.
And we are actually building a storage project in Maine.
Senator King. I know. And you are building a major solar
project in Maine.
Mr. Kelliher. Yes, sir. Yes, sir.
So I think----
Senator King. So battery cost per kilowatt-hour of output
is getting to the place where it is competitive?
Mr. Kelliher. It's competitive for certain uses.
Now, there's not a two-week, you know, battery storage
project.
Senator King. Right.
Mr. Kelliher. It's, you know, that's what's changing is it
used to be, kind of, a two-hour product, then a four-hour
product and so people are looking at well, when will it be
eight hours? When might it be longer? What will the costs of
that be?
But the costs are still declining. I mean, if you look at
solar PV cost declines, they've been----
Senator King. $70 to $.50.
Mr. Kelliher. But--and storage is experiencing a similar
cost decline and it's still going, it's still declining.
Senator King. And just to tie a bow on it, research money
is critical. Tax policy is critical to encourage this
development?
Mr. Kelliher. Yes.
Senator King. Yes. Thank you.
Dr. Tierney. Not just on batteries but other kinds of
storage.
Senator King. Other kinds of storage, sure. Pump storage,
thank you.
Thank you, Madam Chairman.
The Chairman. Thank you, Senator King.
So a good conversation about the need for diversity of
supply and technology neutral and how we build out a grid that
works.
You asked the question about is our grid sufficient as we
work to integrate these new sources of supply. I think
everybody has spoken to that, that you have a combination of
policy mechanisms here, market forces, consumer demand, and
that has pushed us in the direction where we are seeing the
level of natural gas rising and the wind and the solar
generation and then the decline in the more traditional
baseload resources.
Can we just have a conversation about what that may mean to
reliability of the grid? We use the term resilience around here
a lot of times. As much as we all want to ensure that we are
moving toward reduced emissions, we are lowering the cost. We
all want to make sure that when we need it, it is there because
when it is not, it is cold and it is dark or it is too hot. Do
any of you share the concern that with this, because I think
the transformation has been pretty rapid in this past decade
here. Does the speed with which we are moving to change up this
fuel mix, does it pose greater grid reliability challenges that
we are not prepared for?
You mentioned the transmission aspect of it, Mr. Medlock,
but anybody jump in here.
Mr. Kelliher. I don't think there's a threat to resilience
from the developments that have been occurring, particularly
the changes in the electricity supply mix. And part because the
newer technologies, they're much more flexible on performance.
They don't have long startup times. They don't have long,
minimum run periods. So they're just much more flexible in
performance. And I think there's a relationship between
diversity and resilience.
And it's also important to remember that resilience really
isn't driven by the generation fleet so much as by the wire
system, the distribution system and the transmission system.
There's a really excellent analysis that showed that the
outage hours resulting from fuel supply emergencies were, this
is from the Rhodium Group--Senator Manchin has asked, was
curious about sources, it's not my number--is 0.0007 percent. I
think that's seven ten-thousandths of a percent of our outages
were a result of a fuel supply shortage onsite. Everything else
is caused by failures of the wire systems.
So I think the wire system, the delivery system, is the
real resilience issue and we need continued investment, because
today's grid was designed in the past for yesterday's
electricity supply. We need a different grid as the supply mix
changes.
Dr. Tierney. Could I add?
I have just left a committee meeting over at the National
Academy of Sciences where there is a new committee, of which
I'm honored to be a member, on grid modernization. This
committee's membership exemplifies the terrific work that's
being done at lots of different windows into the resilience and
reliability issue. There are aspects of it that are associated
with what's your mixture of generation because each type of
power plant has really different functionalities. So you need a
mix, and I'm going to keep coming back to a mix and the
diversity issue.
On the transmission system there's tremendous work being
done by the national labs, the Department of Energy's Grid
Consortium, Grid Modernization Consortium, is doing great work.
They are keeping up ahead of the curve.
There are a lot of people looking at cyber issues, and they
are a huge portion of the resilience question. And of course,
extreme weather events are critical to all of this.
So we think about integrating more flexible, variable
resources and that is a new challenge, and we are finding that
the grid operators are handling those issues and keeping ahead
of the curve. But, and the industry is so mission-oriented to
addressing these other ones. So there's a lot of work being
done. And the big challenge is trying to have a grid that can
handle a perturbation from any of those kinds of things.
The Chairman. Dr. Medlock?
Dr. Medlock. Yes.
So one thing I want to highlight is handling the
introduction of variable sources of supply, non-dispatchable
sources of supply, is not just about the grid. It's also not
just about having other flexible forms of generation on the
grid. It's also about other market responses such as voluntary
load reduction programs.
So large industrial consumers that are connected to the
grid actually have the ability to ramp down, and they typically
get preferential rate treatment when they do something like
this when there's a resource adequacy issue on the grid.
So grid operators are doing a really good job of handling
the challenges that are presented, but as we go forward it's
going to be important that we increase interconnectivity
because that, ultimately, allows for areas that are short
resources to draw on areas that are long resources. And that's
going to be a very, very important point as we go forward.
The Chairman. Good, thank you.
Senator Manchin.
Senator Manchin. The National Climate Assessment says
within the next ten years if we don't make drastic changes as a
globe, as the world, as seven billion of us living on Planet
Earth, if we do not do something within ten years it could be
irreversible of the damage that's done to the climate. Are you
all in agreement with that statement, the ten years?
And next of all, if that is the case, you have China over
60 percent reliant on fossil, coal, you have India almost 70
percent reliant. They are not changing any time soon. What do
we do?
Just jump right in.
Dr. Medlock. I'm happy to jump on that one.
I will preface my remarks with the following statement. At
the Baker Institute we have had the opportunity to host over
the last six years, on average, 23 different international,
administrative level delegations for conversations about energy
and environment. And the one thing that is just remarkably true
about every one of those conversations is that they're all
different.
And that's eye opening because we all view the world from
where we sit. And the reality on the ground in China is very
different than the reality on the ground in India, is very
different than the reality on the ground in London and in New
York, then in Washington, DC.
And the challenges that those governments, local and
national, are faced with are in many ways very different. What
one group considers the next big crisis may not be considered--
--
Senator Manchin. I mean, is a ten-year cycle, is that a
fair statement?
Dr. Medlock. Well that's what I'm getting to. The ten-year,
the point about ten years, I don't believe that the world is
going to end in ten years, no.
But I think it's important that sitting in the United
States in a developed part of the world, we actually lead by
example which is why I've highlighted the role of R&D because
you look at countries like China, for example. There's 254
gigawatts of coal-fired generation capacity under construction
right now. That is larger than the entire U.S. coal fleet at
the moment.
Senator Manchin. Correct.
Dr. Medlock. So when we think about that, we think about
CO2 as being a problem of the global commons, it
really means that we need to lead by example.
Senator Manchin. But Doctor, if we are leading by example,
we have done scrubbers, low NOX boilers and
baghouses.
Dr. Medlock. Absolutely.
Senator Manchin. They are not implementing any of those.
Dr. Medlock. I agree with you 100 percent.
Senator Manchin. Well then, how do we lead by example?
Dr. Medlock. The scrubber issue though, is not a
CO2 issue. That's a local air pollution issue.
So I agree with you 100 percent, and that's where it
actually comes, it comes down to cost.
Senator Manchin. So, basically----
Dr. Medlock. You've got to address things. And this is
where innovation has actually been vital. You know, what's the
parasitic load of these technologies as we attach them to
existing power plants? And that's one of the reasons why
they're not actually operated in some places in China, because
that lets the costs up.
Senator Manchin. It is all cost. I know that.
Dr. Medlock. It's about economics.
Senator Manchin. Same thing with carbon capture and
sequestration, because it is not basically economically
feasible to----
Dr. Medlock. It's not economically feasible now, but
neither was shale in 1985.
Senator Manchin. Correct.
Dr. Medlock. Right?
And that's my point.
Senator Manchin. But I am just saying you said we lead by
example. For the last 20 years we have removed particulates
from the air in America.
Dr. Medlock. Yes, we have.
Senator Manchin. We have closed the old coal-fired plants.
They still have not followed our example because either we have
to use our trading policies and our, basically, the tariffs
that we charge to get into our market to give them an incentive
to do what they don't want to do because of cost factors.
Dr. Tierney. Could I add to this?
Just one sec, I spent a lot of time on China's energy
outlook.
China is actually an unsung story on a lot of innovations
and I think that the part, the main point of what I'm about to
say is that the U.S. needs to continue to advance technology
leadership so that we don't get our----
Senator Manchin. I think Dr. Birol said basically if we
don't do something, basically----
Dr. Tierney. They will.
Senator Manchin. We sat on our hands for the last decade
and did not do anything----
Dr. Medlock. Well, I will say this, if you look at federal
in real dollars. I have a colleague that's actually written
about this. He was a former science advisor to the Clinton
Administration.
In real dollars, federal R&D spending has been declining
for the last 30 years, and that doesn't make any sense.
Dr. Tierney. And they are building advanced reactors. They
have huge wind construction. They are dealing with the air
pollution, tragic air pollution issues associated with their
choices.
They are doing a lot, and we need to step it up so that we
don't lose to them on these competitive technologies. So,
that's a reason----
Senator Manchin. They are not using them though.
Dr. Tierney. What?
Senator Manchin. They are not using them. They are turning
off their scrubbers. It is not CO2 killing people in
China.
Dr. Tierney. Oh, I know that.
Senator Manchin. It is basically particulates.
Dr. Tierney. Oh, of course, of course.
Senator Manchin. And they are not. So, you know, in that
type of a country.
Dr. Medlock. These are bigger issues than just China.
I was just in Seoul, and I had a really interesting meeting
at the Ministry of Foreign Affairs with the Director of their
Climate and Energy Program. And he said on the worst days, 80
percent of the PM in the atmosphere in Seoul is from Beijing.
That's remarkable. So transboundary issues are incredibly
important, and that's where governments around the world have
to come to----
Senator Manchin. The final question I wanted to ask, very
quickly because my time is running out, is that basically,
regulated versus deregulated states on the PSC, Public Service
Commissions, and all that.
We have a regulated state. So basically, energy that we
need, we produce, we regulate that. We do not have the market
in a rural area. Deregulation has not worked in rural America,
I can assure you. We have gotten screwed every time.
I don't know how you all look. And Joe, I know you were in
on that. How do you look about regulated versus deregulated?
How it is working in the marketplaces? I think you just all
said it has not driven down prices. It has not brought more
competition in.
Mr. Kelliher. Retail competition has largely been limited
to states that had very high retail rates to begin with. It
also was states that typically had large industrial customers
and those industrial customers felt like cost properly
attributed to residential customers, real people, were being
assigned to them. They wanted to flee those costs.
So industrials typically have been the driving force behind
retail competition, not surprisingly, they've also been the
primary beneficiary. And in many of these states, residential
rates are higher from a competitive supplier, the offerings
from a competitive supplier, than they are from the regulated
utilities. There have also been marketing and fraud
investigations of some competitive suppliers in a number of
states--New York, Connecticut, Massachusetts, Rhode Island, I
think. So there are some questions about the competitive
suppliers.
Dr. Medlock. I'll just add one thing to that, real quick.
We recently did a study looking at the Texas situation. And
I think it's dangerous to paint with a broad brush, because the
introduction of liberalized markets looks different in every
single application.
Texas is a case, actually, where retail rates have declined
relative to regulated rates. And you actually see side-by-side
regulated utilities and competitive enterprise and you've seen
successes there, so.
The Chairman. Thank you, Senator Manchin.
Senator Cortez Masto.
Senator Cortez Masto. Thank you.
Let me follow up with a question that I also asked. Being
from a western state, water is very important to us. I am
curious, how is the energy sector at large compensating for
changes in water availability and the potential declining
supply of water? I am curious. I would just open it up to the
panel, if this has been a consideration.
And just to put it in perspective, most of the western
states, as you may or may not know, we are in drought mode
right now. Obviously the utilization of water for everything we
do within our communities is scarce but most important for how
we move forward with the innovation and this technology.
Nevada is an innovation state. We are moving forward with
technology. We have solar, geothermal, some wind, but I am
curious if you would touch on that a little bit and whether
that has been incorporated into your analysis?
Dr. Tierney. The portions of the state where there is
either high reliance on hydroelectric power, where snowpacks
and their decline and drought conditions are really affecting
it, you know, that is your part of the world, that's my part of
the world. And those utilities are quite mindful of that.
Some of the implications are that they have to add other,
thinking about adding other supplies to make up for reserves
and contingencies.
But additionally, water is also used for cooling
technologies for power plants and as a result of that we have a
situation in Texas where the water in the rivers was so hot
they couldn't take the outflow from a power plant and they
couldn't operate the power plants.
So there are a variety of different kinds of effects on
this, and that is affecting the need to add for a robust mixed
supply of resources. It keeps being the theme.
Senator Cortez Masto. Okay. Thank you.
The Chairman. Senator King.
[Senator King shook his head no.]
The Chairman. I wanted to ask a question of you, Mr.
Kelliher, because I think it is notable what we have seen with
a number of utilities that have voluntarily pledged to reduce
their emissions. Xcel Energy committed to reducing 100 percent
of carbon dioxide emissions by 2050. Your company, NextEra's
Florida Power and Light, has committed to reducing over 65
percent. And notably, these have been done in the absence of
any federal mandates. In your testimony you cite--you just say
driven by market fundamentals.
I guess the question to ask is, you have some leaders that
have stepped up and have taken these positions. We are seeing
more coming on. But we have had a little bit of discussion
about the benefits of tax credits moving forward, different
policy initiatives. The whole debate regarding mandates versus
incentives, I think, is an important part of this discussion.
And as much as we would like to think that technology is
going to be driven by all of these brilliant grandkids and when
I have a grandkid, he or she will also be in this mix, but the
reality is that we can influence it in different ways here.
And one of the ways that I certainly hope we don't go is by
picking the winners and losers, because I think we always pick
wrong and I don't think that is the way to advance. That is why
I love using Alaska as this model of innovation because it is
just, kind of like, go out there and figure it out. You have
some duct tape and some imagination, and we are making some
great pioneering things happen.
But what incentives do work? I think we have heard tax
credits. Mr. Kelliher, if you can speak to what more we might
be able to do to see more utilities moving forward voluntarily
and then this whole discussion of mandate versus incentives.
I would like to have that as part of our closeout here.
Mr. Kelliher. Sure.
First of all, I think utilities really are moving forward,
and we're helping them because we will develop projects and
typically sell to the local utility.
But many utilities are actually buying more than they're
required to by the state renewable portfolio standard. They're
doing it because it makes economic sense. The price has
declined so much that it's not something being forced upon
them. They're volunteering to buy that additional increment.
And it's also because their customers want clean energy.
So, the customers are asking for it.
And in terms of general approach, assuming there's some
consensus that develops around carbon policy, what's the
conceptual way to attack it?
And one is to embrace a certain technology or fuel, but
that always makes me think of the Fuel Use Act of 1978,
probably the most embarrassing federal law ever enacted where
Congress deemed that we were running out of natural gas and so,
therefore, we had to outlaw the use of natural gas for
electricity generation. Today natural gas is the number one
source of our electricity generation.
So blessing a technology is assuming perfect, a Cassandra-
like ability to see into the future.
But also, like laying out a number, I also don't think is
the right approach. That makes me think of like the Waxman-
Markey bill from a few years ago. You start with a number.
What's the basis of the number?
The Bingaman bill from a few years ago, around the same
time of Waxman-Markey, I thought, was a sounder approach. What
it was saying there was well, what are the actions that will
lower carbon emissions, what are the activities that will
result in lower emissions that we want to incent, we want to
encourage, we want to lower barriers to? And the Bingaman bill
didn't have a number, didn't have a percentage target but it
embraced a suite of policies that would have the effect of
lowering carbon emissions. I just think conceptually that's a
better way to go, typically if it's a technology neutral
approach.
And I do like the state renewable energy standards. They're
sometimes criticized as a mandate. But one thing they did that
was very effective that isn't really recognized is they
promoted competition between and among renewable technologies
and between suppliers. So it worked differently than PURPA with
qualifying facilities. And the end result is the lower cost
technologies have prevailed over time. Solar collector, for
example, really isn't being built anymore because solar PV
proved to be just much more cost-effective.
So, sort of, encouraging competition among technologies not
blessing a technology, not laying out a number, I just think
is, you know, encouraging investment, encouraging activity,
lowering barriers. That, conceptually, is just--I think it
would be a more successful approach.
The Chairman. Mr. Schutt, what would it mean on the ground?
More incentive? More mandate? I am thinking you are not going
to say mandate.
Mr. Schutt. I agree with Mr. Kelliher.
I think incentives work better than mandates and technology
agnostic incentives and policies help if the end objective is
to reduce carbon emissions and other emissions than what does
it matter what the technology is.
There are a number of different areas within this complex
sector where you could theoretically achieve better
efficiencies or conservation or, you know, primary production
from new and potentially unknown technologies.
So looking out into the future 10 or 20 years is very, very
hard and, you know, durable tax policy with good incentives and
that is agnostic to technologies is the preferred choice, I
think.
The Chairman. Dr. Tierney?
Dr. Tierney. There's just two things I would add to the
conversation on your question.
One of them is I have not heard anyone yet talk about the,
what I'll call preciousness of existing nuclear technologies
such that if we lose the existing fleet of nuclear reactors
quickly, we will be, we are going to raise electricity rates
and we are going to have terrible problems from a greenhouse
gas replacement.
The Chairman. I agree. I am glad you mentioned that.
Dr. Tierney. The second thing is I'm thinking of the CEO of
Xcel Energy when he announced his 100 percent aspirations for
zero carbon supply in 2050. He did say, I don't know how I'm
going to get there yet and he needs R&D. So I'm not speaking
for him, but I heard him say that. And for this Committee, I
think that's an important message.
The Chairman. Yes, you can talk about it, but you can't get
there unless you have the R&D and then the commercialization.
Dr. Medlock?
Dr. Medlock. So you could talk about incentives which, I
think, are generally a better approach than mandates but you
should also, I think, be open to disincentives. And I know tax
is a three-letter word, but if you're trying to alter the
economic landscape, typically one of the best ways to do that
is through pricing mechanisms and tax is actually a viable
approach.
Unfortunately, we tend to want to, in various ways,
subsidize all sorts of things from upstream oil and gas all the
way through to renewables. And one of the things that I think
would be a really interesting experiment to run is to remove
all of those subsidies and see what wins. I know that's sort of
a----
The Chairman. That is neutral.
Dr. Medlock. ----pie in the sky wish, right? But I think it
would be interesting.
The Chairman. Ms. Jacobson?
Ms. Jacobson. Thank you.
I guess I'll just end, you know, agreeing with a lot of
what has been said here.
I think what's key for all of you is building bipartisan,
durable policies that the market can invest on. And there's
tremendous leadership and knowledge in this Committee to offer
the full Congress and the Administration to move forward
because if these policies are not cost-effective, and that,
kind of, gets to your question about mandates or incentives,
and incentive or a mandate that is providing economic harm, you
know, is going to be rejected over time. And then we're back
where we are now, to some degree.
And I actually shouldn't say that because I've been so
impressed over the past several months seeing the conversation
on climate change. And this hearing today is just another
example of bipartisan interest and a refreshed, robust serious
conversation on what the Federal Government, aligned with other
policymakers in the private sector can do. And so, again, back
to this question of, you know, mandates or incentives? Whatever
is chosen needs to leverage private sector activity.
We're at this moment where we're seeing tremendous
leadership by the private sector capturing the benefits of RD&D
for low cost electricity. And so, now that we've seen this
progress, even just looking at the past decade, how do we take
that to the next level?
And so, back to where we started with research, development
and deployment in all these areas that we seek. There's so much
that we can do. And maybe we build out from there. But we
shouldn't take for granted the fact that we've had strong RD&D
budgets. It wouldn't happen without your leadership here.
You know, we were in a very different position, maybe, four
to six years ago. And now, as we've heard over and over, we
need to do much more.
So, I just don't want us to take for granted the current
political environment and bipartisan support that we've had for
RD&D and now how do we accelerate it as we move through this
Congress and the years ahead.
And then the last thing I would say because it was kind of
incomplete, I mean there is an opportunity on incentives, on
tax policy. There's a number of energy efficiency tax credits,
tax credits for non-wind PTC technologies like hydro,
geothermal, biomass, waste to energy. There are other tax
incentives that have, you know, basically moved off the books
in the last couple of years while other industries have
benefited from stable tax environments.
We need to rectify that in the very, very short-term and
Chairman Grassley and Senator Wyden introduced a bill last week
that would extend. So, it's not just energy related. It's
across the economy.
But there are many energy incentives that need to be
extended immediately while we look toward policies in the
future.
The Chairman. Well, I appreciate the contributions from
each of you and particularly, Ms. Jacobson, when you remind us
that this Committee has a role.
Clearly the effort here is to get a bipartisan conversation
going. I think that the rhetoric surrounding the issue of
climate and climate change can be so heated and so animated and
so oftentimes just a very toxic discussion that you cannot get
to focusing on the solutions, on where we are going in a
positive way on what it is that we should be focused on which
is what are the technologies either or today or that we will be
coming up with tomorrow and the day following. I think that is
the role that we clearly play within this Committee is leading
and leaning in on these technologies.
Senator Manchin, he just could not tear himself away from
the Committee.
Senator Manchin. I have a group of fellow West Virginians
in the anteroom right here. We are working on and talking about
energy and the effects of energy.
Let me just say that the hearing that we had today, and I
want to thank Chairperson Murkowski because we talked about
this. No one would have expected her and I coming from the
largest producing states of fossil, coal, and natural gas in my
state, the amount of oil that we rely on from Texas--from
Alaska. I know, Texas, that was a mistake.
[Laughter.]
The Chairman. You are talking about that small state.
Senator Manchin. That little state down south.
Anyway, so for us to be able to say, listen, we are all in
this together.
The thing I always felt was wrong in the tax policies and
all these incentives and Dr. Medlock, you mentioned, yes, they
could just wipe the slate clean. Let's find out who survives.
I understand trying to help a developing or a maturing
industry. I understand that.
I heard my father one time and people, my grandfather
especially, they used to give credit and help people. He had a
little grocery store. And he told a guy one time, the guy said,
Papa, can you carry me for a while? And he said, Honey, your
mother already carried you for nine months. So he was trying to
say, when is enough, enough? Okay? We cannot wean ourselves off
in America. We just don't whether it is on food stocks or
whatever it is. The thing about it is we are shifting a little
bit right now. We are not weaning away from fossil. We are
shifting the fossil utilization more to gas now than we have
been. And I think, Joe, you mentioned that and showed we almost
doubled.
With that, the concern I have because we have an ocean of
gas under us in West Virginia, an ocean of gas and it is coming
on strong all the time. We have not even tapped into
Rogersville yet. We are still in Marcellus and Utica, and it is
going to come on even stronger.
But I am concerned that they are taking this for granted,
because there is so much supply of that left that they are not
looking at how do we protect our drilling? How do we basically
capture our methane? How do we transport safely? How do we make
sure that it is not interruptible by sabotage?
Because it is not, it is not a baseload fuel if you look at
the interruption that can be caused from the pipelines to the
storage to, basically, our pump stations which can freeze up in
adverse inclement weather. All these things have to be
considered.
The other thing I want to tell all of my friends who
believe that we can switch immediately. I said that if you are
saying that renewables are 18 percent, then tell me what five
hours of the day you want your electricity or your energy? As
long as we come to the facts that we have to have an all-in
energy policy and transition ourselves into a much better
place.
The other thing I wanted to say was policy under, there was
a previous president and he and I had very lively
conversations. I said, if you are going to change your energy
policy that it might not be as realistic of what we are dealing
with in demands we have on the energy sector, can't you at
least use your credits in states that have lost a tremendous
amount of energy jobs, traditional energy jobs whether it is
going to be oil production, whether it is going to be in coal
production, whatever? Because the tax credits should basically
leave nobody behind. If we are transitioning to a new fuel or a
new energy provider, then you should not leave the people
behind. Because I guarantee you, and I have said this, a coal
miner will build you the best darn windmill you have ever seen.
They will build you the best solar panels. They survived
underground for hundreds of years. They know what to do, and
they are all experts in their fields. And this is what we have
not done well in these policies.
So the only thing I would say, we are going to rely on you
a good bit in this Committee, I would assume. This is just the
beginning. It is not the ending, one and done. This is
something we have to face. What we have to do is make sure
those people who believe that we can switch immediately. I have
not heard one testimony from a professional that this ten-year
cycle can happen. You can be decarbonized in ten years. Well,
you can decarbonize it, reduce your carbon footprint by the
technologies through research and development which we have not
done for the last ten years.
The only thing I would say is I hope that we are keeping
our eye on the ball as we move to different sources of energy
and that we are doing it in the cleanest fashion and using the
technology that the rest of the world should be following
because right now, they are not. And unless we use the whole
carrot and stick mentality, what is in it for them if they do
this, even though they don't have an incentive to do it, other
than we want to be in our market. They want to be, basically,
open to our markets in a much more advantageous way. I think
they will be more--especially India right now, I worry about
them because I know how hard they are coming on strong with
more power plants, I think coal-fired plants, than anyplace in
the world--I think that could be accurate. And they are doing
it with less pollution controls than anyplace else in the
world. And we have the technology to prevent that from
happening.
I just want to say, Madam Chairman, thank you again. This
is so well timed and I think it would lead to the Energy and
Natural Resources Committee leading the way and showing that we
can, coming from Alaska and West Virginia, we are very much
inclined to make the changes that have to be made, but also in
a realistic way and pragmatic way.
Thank you.
The Chairman. Thank you, Senator Manchin.
I think, as Senator Manchin has just reminded us, that this
is an issue or these are issue spaces that this Committee will
occupy within our jurisdiction recognizing that, again, it is
shared by many of the committees that are here. But I do think
this is one of the exciting areas where we can truly make a
difference for our nation's economy, for our nation's
environment and, really, for our nation's health. And we do it
through really smart, innovative people creating good jobs.
There are a lot of wins to have, there are a lot of challenges,
but we have a good opportunity within this Committee to help
shine a spotlight on it.
So thank you all, ladies and gentlemen, for your time this
morning to appear before us on this panel but also for the work
that you have done over the decades in these important spaces.
With that, the Committee stands adjourned.
[Whereupon, at 12:12 p.m. the hearing was adjourned.]
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