    [Senate Hearing 116-302]
    [From the U.S. Government Publishing Office]

                                                          S. Hrg. 116-302

                     OPPORTUNITIES FOR ENERGY INNOVATION AND
                      OTHER POTENTIAL SOLUTIONS TO HELP
                      ADDRESS GLOBAL CLIMATE CHANGE

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

                                    HEARING

                                   BEFORE THE

                                  COMMITTEE ON
                          ENERGY AND NATURAL RESOURCES
                              UNITED STATES SENATE

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 APRIL 11, 2019

                                   __________

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                           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
    36-264                      WASHINGTON : 2020

    --------------------------------------------------------------------------------------

                   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
                Chester Carson, Senior Professional Staff Member
                          Jed Dearborn, Senior Counsel
                    Sarah Venuto, Democratic Staff Director
                    Sam E. Fowler, Democratic Chief Counsel
               Luke Bassett, Democratic Professional Staff Member

                                C O N T E N T S

                                  ----------

                               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..................................................     3

                                   WITNESSES

    Majumdar, Dr. Arun, Jay Precourt Provostial Chair Professor,
      Department of Mechanical Engineering, and Co-Director, Precourt
      Institute for Energy, Stanford University......................     5
    Silverman, Abraham, Vice President and Deputy General Counsel,
      NRG Energy, Inc................................................    12
    Ladislaw, Sarah, Senior Vice President; Director and Senior
      Fellow, Energy and National Security Program, Center for
      Strategic and International Studies............................    40
    Sandalow, Hon. David B., Inaugural Fellow, SIPA Center on Global
      Energy Policy, Columbia University.............................    56
    Bryce, Robert, Senior Fellow, Manhattan Institute................    67

              ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

    Alexander, Hon. Lamar:
        Hearing Statement: ``One Republican's Response to Climate
          Change:
          A New Manhattan Project for Clean Energy''.................    84
    Barrasso, Hon. John:
        S. 2614, the Greenhouse Gas Emission Atmospheric Removal
          (GEAR) Act from the 110th Congress.........................   117
    Bryce, Robert:
        Opening Statement............................................    67
        Written Testimony............................................    69
        Responses to Questions for the Record........................   157
    Cassidy, Hon. Bill:
        Transcript of a YouTube video (TEDxDanubia) entitled, ``Why
          renewables can't save the planet,'' by Michael
          Shellenberger, dated January 4, 2019.......................   100
    King, Jr., Hon. Angus S.:
        Map entitled, ``Nobody Lives Here: The 4,871,270 U.S. Census
          Blocks with zero population (2010)''.......................   110
    Ladislaw, Sarah:
        Opening Statement............................................    40
        Written Testimony............................................    42
        Responses to Questions for the Record........................   149
    Majumdar, Dr. Arun:
        Opening Statement............................................     5
        Written Testimony............................................     7
        Responses to Questions for the Record........................   133
    Manchin III, Hon. Joe:
        Opening Statement............................................     3
    Murkowski, Hon. Lisa:
        Opening Statement............................................     1
    Sandalow, Hon. David B.:
        Opening Statement............................................    56
        Written Testimony............................................    58
        Responses to Questions for the Record........................   154
    Silverman, Abraham:
        Opening Statement............................................    12
        Written Testimony............................................    14
        Responses to Questions for the Record........................   145

     OPPORTUNITIES FOR ENERGY INNOVATION AND OTHER POTENTIAL SOLUTIONS TO
                       HELP ADDRESS GLOBAL CLIMATE CHANGE

                                  ----------

                            THURSDAY, APRIL 11, 2019

                                           U.S. Senate,
                     Committee on Energy and Natural Resources,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:04 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.
        We are here to continue our ongoing dialogue and
    conversation about the electricity sector, climate change and
    opportunities for innovative technologies that will further
    reduce our greenhouse gas emissions.
        During a hearing we held in March, we discussed the
    reductions that have already taken place in the electricity
    sector, largely driven by nearly flat demand growth, low cost
    natural gas and the declining cost of renewable technologies
    like solar. Although we saw an uptick in 2018 driven by robust
    growth, U.S. emissions have declined in seven of the last ten
    years and are now 14 percent lower than in 2005. We know that
    that is impressive, but we also know that these trends are not
    always being replicated around the world. In fact, we know for
    a fact they are not.
        When Dr. Fatih Birol, who is the Executive Director of the
    International Energy Agency (IEA), appeared before the
    Committee in February, he noted that global demand for
    electricity is on track to increase by 60 percent by 2040. As a
    result, electricity is now the ``largest target for energy
    investment.''
        Greater use of electricity will almost certainly lead to an
    increase in global emissions. The opportunity we have in front
    of us is to foster an innovation ecosystem here in the United
    States that can lead to energy breakthroughs that deliver
    cleaner, more affordable and more reliable energy technologies.
        The United States leads the world in energy innovation. Our
    national labs and universities, as well as the private sector,
    are developing technologies that could be deployed around the
    world to reduce our emissions. And that could occur through a
    number of pathways, whether it is advanced nuclear, carbon
    capture, utilization and storage, energy storage or a
    technology that is just starting to show its potential.
        We have seen firsthand the opportunity for moving to lower-
    emission technologies realized in my state. In Igiugig, an
    Alaskan village with a year-round population of about 70
    people, a little bit more in the summer, they are installing a
    turbine system that will create emission-free electricity using
    river currents. The City of Kodiak generates nearly all of its
    electricity, almost 100 percent, from renewable resources,
    including hydropower and wind. In Southeast Alaska, the Haines
    Brewing Company is going to add more solar to their facility to
    power more of their beer production. And it is just kind of an
    added benefit that they make really great beer on top of it.
        [Laughter.]
        Alaska is feeling the effects of climate change, but our
    communities are making strides to responsibly reduce their
    emissions. Alaskans are pioneers, and we kind of view ourselves
    as this ``living laboratory'' for innovation. We figure if you
    can prove the technology out there in a sometimes harsh
    environment where it is very remote, if it works in the Arctic,
    trust me, it can probably work just about anywhere else.
        We also recognize the transition to cleaner resources will
    take time. There is no overnight, magic-wand solution, as much
    as many would want it to be that way. But we simply do not have
    unlimited amounts of taxpayer dollars. We cannot simply replace
    markets with mandates and call it good. So even as we take real
    steps to promote clean energy, know that I am going to be
    working to fully protect our energy security as well as keeping
    our energy costs affordable.
        This is a timely discussion, but also a nuanced one on the
    policy side. We have some impressive witnesses with us this
    morning to join the conversation.
        We have Dr. Arun Majumdar, Co-Director of the Precourt
    Institute for Energy at Stanford. You have been a frequent
    visitor here before the Committee, and we are very pleased to
    have you back and for your leadership here.
        We have Ms. Sarah Ladislaw, who is the Director and Senior
    Fellow at the Energy and National Security Program for the
    Center for Strategic and International Studies (CSIS). We are
    pleased to have you here.
        Mr. Abe Silverman, we are kind of going back and forth
    here, Vice President and Deputy General Counsel at NRG Energy.
    It is good to have you before the Committee.
        Mr. Robert Bryce, at the end, is a Senior Fellow at the
    Manhattan Institute, and Mr. David Sandalow is the Inaugural
    Fellow at the Center for Global Energy Policy at Columbia
    University.
        So we have a great panel to help us discuss innovative
    solutions that will work to reduce our greenhouse gases.
        With that, I turn to my friend and Ranking Member, Senator
    Manchin.

                  STATEMENT OF HON. JOE MANCHIN III,
                    U.S. SENATOR FROM WEST VIRGINIA

        Senator Manchin. Chair Murkowski, thank you so much for
    convening the Committee and second hearing on climate change
    for this Congress, and we are very proud about that. And thank
    you all for being here. We really appreciate you bringing your
    expertise to the Committee.
        I understand that we will also be having tech-focused
    hearings in the near future to take a hard look at carbon
    capture, nuclear, energy efficiency, renewable and storage
    technologies. I appreciate your ongoing commitment to
    innovation as a key solution to the climate crisis. I think
    this Committee has begun a very productive conversation. I am
    looking forward to continuing that with our witnesses today and
    in hearings ahead.
        This year the Committee has begun to establish the facts
    about greenhouse gas emissions, particularly in the power
    sector, and we are looking at this problem from both domestic
    and international points of view. So far, the expert testimony
    we have heard has clearly stressed the need for technological
    advances to tackle the issue here at home but also strengthen
    America's position as a global leader in this space.
        Since our last hearing on climate change, the International
    Energy Agency issued a report that showed energy demand around
    the world grew by 2.3 percent over the past year. Fossil fuels
    filled a lot of that demand, including in Asia, where coal-
    fired power plants have an average age of 12 years which means
    they are going to be around for a while. They are not going to
    retire any time soon.
        Here in the United States we need to focus on
    commercializing technologies that can be used on our fossil
    fuel power plants and exported to markets around the globe.
    Projects like Petra Nova and NET Power capturing carbon dioxide
    from coal and natural gas power plants are shining examples of
    what is possible.
        We need a moonshot to get carbon capture technologies to
    commercialization, and I am very happy to be introducing a bill
    today, along with my friend here, Chairman Murkowski, that will
    set the ambitious authorization levels that are needed. Our
    bill will focus the Department of Energy (DOE) on coal and
    natural gas technologies, carbon utilization and storage and
    atmospheric carbon removal.
        The DOE and our national laboratories play an essential
    role in leading low-carbon energy innovation. Just last week
    Secretary Perry testified to the outstanding capabilities of
    the DOE and the labs in bringing new technologies to life, and
    many of those developments have kept our energy cost affordable
    in much of the country while reducing greenhouse gas emissions.
        Programs like DOE's Advanced Research Projects Agency for
    Energy, or ARPA-E, and the Title 17 loan programs invest and
    demonstrate those technologies across the U.S. The Department's
    investment in solar research and development, for example, led
    to advances in solar panels that when demonstrated with
    financing from the loan programs kickstarted fast growing
    utility scale solar plants across our country.
        The DOE plays a critical role in advancing innovation, and
    I believe their good work can be amplified through public-
    private partnerships. For example, Chairman Murkowski's Nuclear
    Energy Leadership Act (NELA), which I co-sponsored, will
    leverage these partnerships to build demonstration reactors
    that will play a vital role in decarbonizing the industrial
    sector. I believe in innovation, not elimination.
        Now as former Energy Secretary Ernest Moniz has said, we
    need a ``green real deal.'' As he, Bill Gates and other
    innovation champions have pointed out, we need a practical plan
    to address climate change that does not take technologies off
    the table or leave workers and communities stranded.
        At the end of the day we need reliable, dependable and
    affordable power. So let's make headway on carbon reduction
    technologies for fossil fuels while also moving ahead with
    advanced nuclear and storage technologies. Let's also take a
    closer look how we manage the growing additions of renewable
    energy with a need for electric infrastructure and reliability.
        We need to continue pushing the limits on research and
    commercialization so that every region finds the solutions that
    work best, because it is not a one-size-fits-all.
        In that vein, I also believe it is our duty to recognize
    the historical contributions of energy producing states like
    West Virginia and Alaska. And I know we seem like maybe the
    couple talking about what we need and what needs to be done,
    but when you look at the devastating effects that climate has
    had in our states, it is real. It is not a myth. I will
    continue to say this, if the solution to climate crisis leaves
    West Virginia coal communities behind, then it is not a
    solution in any community that is left behind. As we move
    forward with the climate conversation, I am going to continue
    to consider global, national, regional perspectives.
        With that, Chairman Murkowski, I think we have a big job
    ahead of us to find solutions, but I think that we are up to
    the task. And as part of the movement toward pragmatic
    solutions, I look forward to hearing from each and every one of
    you on this distinguished panel that we have assembled today.
        So thank you for coming.
        The Chairman. Thank you, Senator Manchin.
        We do have a great deal to talk about this morning, and I
    look forward to the respective contributions from each of you
    followed by questions from our panel here.
        I am particularly pleased that the Senator from Tennessee
    is here because he has laid down, as he usually does, a little
    bit of a road map from his perspective on some of these issues.
    So I look forward to the exchange.
        I introduced each of you a little bit earlier, so let's
    just go straight into it.
        Dr. Majumdar, if you would like to lead off the panel?
        We would ask you to try to keep your comments to about five
    minutes. Your full statements will be included as part of the
    record.
        Welcome.

     STATEMENT OF DR. ARUN MAJUMDAR, JAY PRECOURT PROVOSTIAL CHAIR
        PROFESSOR, DEPARTMENT OF MECHANICAL ENGINEERING, AND CO-
      DIRECTOR, PRECOURT INSTITUTE FOR ENERGY, STANFORD UNIVERSITY

        Dr. Majumdar. Chair Murkowski, Senator Manchin and all the
    members of this Committee, thank you for inviting me and giving
    me the honor to speak out here.
        Just a little bit about my own background. I was the
    Founding Director of ARPA-E and also the Acting Under Secretary
    for Energy in the Department of Energy and thereafter was the
    Vice President of Energy at Google and now running the Stanford
    Precourt Institute for Energy. And I've been involved as
    advisor to many businesses and governments on this particular
    issue.
        I just want to talk about four things: Number one is the
    impact and urgency of climate change, very briefly. The
    technology innovation that is needed for a transition to a low-
    carbon economy and how to get there. And then two policy
    innovations. One is a new infrastructure initiative to provide
    the infrastructure to deliver the low-carbon solutions to our
    people, and some market and regulatory policy to create the
    demand for low-carbon technologies. And finally, a booster shot
    on education because we need our people to be able to provide
    these services and be beneficiaries of this transition.
        Very quickly on climate change. We normally talk about 1.5
    or 2 degrees which is accurate, but I think we miss the point.
    It is the extreme that these weather events create that really
    hurts the people and our agriculture and our economy and our
    livestock. And I think we should be talking about the extreme
    weather condition. These extremes are happening more often, and
    we know that is going to happen. The uncertainty is we don't
    know where it's going to hit next. So we are really exposing
    all our citizens to a game of Russian Roulette.
        To avoid the extremes, we have really, if you want to keep
    the temperatures below two degrees, we have really 20 years or
    less. That's the urgency that we have. And after that, the
    emissions have to be zero. That's the challenge that we have.
        The question is what do we need to do? What are the
    technology innovation solutions? Well, we know about the good
    news stories. ULTRA achieved solar and wind. We know about the
    batteries that is leading to electrification and some of the,
    and the unconventional oil and gas.
        That's all terrific but we still have 80 percent of our
    energy coming from fossil fuels around the world. And we need
    new technologies, grid-scale storage at one-tenth the cost of
    lithium-ion batteries, small modular nuclear reactors, new ways
    of air conditioning, zero net energy buildings at zero net
    cost, carbon-free hydrogen that can enable the steel and
    concrete industries to decarbonize and, of course, carbon
    capture and sequestration and utilization and finally, I would
    also add the use of the food and agriculture sector, not only
    to increase the food productivity but also to suck out carbon
    from the atmosphere and keep it and store it on the ground.
        This is, if you think about it, this is essentially a new
    industrial revolution. It is a remake of much of our global
    economy. We're talking about electricity, oil and gas,
    transportation, steel-concrete construction and food and
    agriculture. That's about $10 trillion per year of global
    economy. And this is a global race. No question about it.
        And so, if you are to take the lead in this effort, it will
    decide the economic growth, the environment, the geopolitics
    and international security of the 21st century. That's what is
    at stake. And so, we must seize this opportunity.
        As I've said many times before, we need to invest in R&D,
    ARPA-E. Budgets should be about $1 billion a year, but also the
    applied energy programs of the basic energy sciences in the
    Department of Energy.
        As was pointed out, we have some of the best universities
    and national labs. The scientific infrastructure that we have
    in the United States is the best in the world. And we have
    amazing--as the Director of ARPA-E, I realized how much of an
    amazing capacity we have in the United States to innovate and
    deliver on these investments.
        The two-policy innovation. Quoting Justice Brandeis, ``Our
    states and local government act as laboratories of democracy.''
    I think the diversity of energy needs that I have seen around
    the country in your states can offer this. This is the strength
    that we have to become the laboratories of this low-carbon
    industrial revolution that I was talking about.
        In 1936 we had a Rural Electrification Act for the way the
    Federal Government provided low interest loans while local
    electric power cooperatives to bring electricity services to
    millions of Americans around the country and that transformed
    America.
        We need a 21st century initiative to infrastructure to
    provide these low-carbon services to our people, and I've
    talked about what those technologies are. We need federal,
    state and local governments, along with the private sector to
    create the innovation pipeline for technologies and also to
    convene and create the permitting and speed up the permitting
    processes and create innovative policies to stimulate private
    sector investments.
        The markets and regulation, I think there's a lot of
    discussion on carbon pricing. I think that will accelerate the
    transition of the carbon, the price on carbon.
        And lastly I would say that education and training, we need
    the people to be able to get the benefit of this and provide
    the infrastructure that we need for this low-carbon economy.
        Let me stop here.
        Thank you very much.
        [The prepared statement of Dr. Majumdar follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you, Dr. Majumdar.
        Mr. Silverman, welcome.

       STATEMENT OF ABRAHAM SILVERMAN, VICE PRESIDENT AND DEPUTY
                   GENERAL COUNSEL, NRG ENERGY, INC.

        Mr. Silverman. Thank you. Good morning. My name is Abraham
    Silverman, on behalf of NRG Energy.
        NRG is a 100 percent competitive power company which means
    that we have no captive customers and it is our shareholders,
    not ratepayers, that fund all of our initiatives. We have over
    three million retail customers nationwide with a large
    generation fleet that spans the dispatch order. We have
    nuclear. We have coal. We have carbon capture. We have natural
    gas. Battery, solar, wind and demand response. I think that's
    everything. So we bring a very practical practitioners view to
    this discussion today.
        You know, when we think about climate change, we really
    start from two fundamental premises. The first is in order to
    avoid the worst consequences of climate change, we need to
    rapidly decarbonize our energy sector at a price consumers can
    afford. If we don't have affordability, we will fail. The
    second premise is that clean energy is not exempt from the laws
    of economics, nor should it be. You know, we look at American
    history and we see innovation and competition and competitive
    forces drive down prices, increase service and drive innovation
    in every possible sector. Markets are not broken. They simply
    need to be retooled for the 21st century needs and our concerns
    about carbon.
        So when we think about what we need to do to drive the
    innovation, we need to refocus those markets on two primary
    goals.
        One is competitive choice and the other is competition. So
    when we--we sell a lot of green product nationwide. Let's talk
    about choice. Our customers want this product. Let's give it to
    them. Right now, government, at many levels, restricts our
    ability to sell green power to customers and restricts the
    customer's ability to buy the power that aligns with their
    values. Why do we do that? We should get out of the way and let
    people shop and pick who they want to deal with. They want to
    fire your utility? Go ahead. Why not allow that?
        We hear a lot of talk these days about big tech and, you
    know, problems, trust concerns, about them operating a platform
    and then selling products on the very platform that they
    dominate. That is exactly what happens today in the energy
    sector.
        Everything we do when we innovate, we know that if we take
    it into a new market, outside of Texas which will solve this
    problem, we know that the local monopoly utility is likely to
    sell the identical product and compete with us, often using
    ratepayer funds. It's very difficult to innovate in that
    environment.
        And whether we talk, whether we work toward ensuring a
    commercial environment free from unfair competition and
    domination by utilities, that's what the green new deal says or
    whether we want to quarantine the monopoly, as conservative and
    free market advocates put it. There's a shocking amount of
    consensus that enabling consumer choice will drive green
    outcomes faster and with less government regulation.
        So step two, and these two steps are inseparable. Step two
    is that we need a robust, competitive market for free--for
    clean energy with understandable and predictable rules,
    operating is free as possible from intervention by government
    policymakers who want to pick politically driven winners and
    losers.
        I attached a white paper to my testimony that lays out some
    specifics for, I think, a very innovative clean energy program
    that could be implemented at the state or federal level, but
    I'm going to give you three highlights.
        First is we need to define the clean energy attribute that
    we want our market to get. Let's start there. We could use the
    available climate science to set targets and we will use the
    competitive market to achieve those targets in the least
    possible cost.
        Second, the environment doesn't care how a carbon-free
    megawatt of electricity is generated. So why pay more if
    there's lower cost green options available?
        We should have a market that rewards all innovators and all
    carbon-free megawatts equally.
        Fourth, let the competitive market work because it will
    drive down prices and get us to where we need to be.
        Unfortunately, the very concept of a pro-innovation,
    competitive approach to energy markets is under attack. In the
    absence of federal leadership, many states are falling prey to
    subsidies and to parties and companies that would rather
    compete for subsidies than compete in the market to deliver
    power, clean power, at the lowest possible cost.
        So three, sort of, rules of thumb. One, don't redistribute
    precious tax dollars or ratepayer dollars via subsidies for
    technology that once it leaves the R&D phase. Second, don't
    lock customers into excessively priced contracts for specific
    clean energy technologies when clean energy, when other lower
    cost--when lower cost sources of clean energy are available.
    And three, certainly don't provide corporate welfare to
    existing power plants that are profitable under the guise of
    promoting carbon-free power.
        I'll go ahead and stop there.
        Thank you.
        [The prepared statement of Mr. Silverman follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you. You have a lot more there, and we
    will have an opportunity to pursue that in the questions. So
    thank you for that, Mr. Silverman.
        Ms. Ladislaw, welcome.

     STATEMENT OF SARAH LADISLAW, SENIOR VICE PRESIDENT; DIRECTOR
    AND SENIOR FELLOW, ENERGY AND NATIONAL SECURITY PROGRAM, CENTER
                FOR STRATEGIC AND INTERNATIONAL STUDIES

        Ms. Ladislaw. Thank you, Chairman Murkowski, Ranking Member
    Manchin and members of the Committee. Thank you for the
    opportunity to appear before you today.
        I'd also like to additionally thank the Committee for its
    commitment to fostering a constructive dialogue on the urgent
    need to tackle global climate change challenges.
        The United States is one of the most energy and innovation-
    advantaged nations on the planet. I firmly believe that we have
    every conceivable tool at our disposal to chart a viable
    pathway to a net zero emissions, resilient energy system at
    home and also provide global leadership in the strategies and
    technologies that can bring sustainable and affordable energy
    supplies to the growing and developing populations of the
    world. We simply need to decide to do it.
        Your previous hearings on this topic have been robust and
    very useful. I have four major points to add to the already
    strong and important messages that you've received.
        First, as both of you mentioned at the outset, energy is
    playing an increasingly important role in how states and
    regions think about economic opportunity. The state level
    interest can be an important catalyst for innovation in climate
    solutions as well as creating the economic opportunity sought
    by states.
        Federal level policymakers should pay close attention to
    how energy development, innovation clusters, worker retraining
    programs and energy policies and incentives in general fulfill
    or fall short of delivering on the expected economic outcomes
    at the state level.
        Most pertinent to this hearing, there are important lessons
    learned about how to create successful innovation clusters and
    help make the most out of R&D spending at the state level.
    Federal involvement in these clusters can help shape them to be
    more successful.
        Second, it's true that innovation defines the art of the
    possible when it comes to meeting society's basic energy needs
    and it's at the heart of U.S. economic competitiveness. But
    innovation is the means to a solution and not a solution in and
    of itself. Innovation in this context, must be harnessed to
    achieve certain societal goals, and it is in setting these
    goals that the biggest disagreements often exist.
        Currently, the international community has organized itself
    around three energy relevant goals. Reduce emissions for the
    purposes of dealing with climate change, eradicate energy
    poverty, and ensure secure and resilient energy systems.
        The second important takeaway for this Committee is to use
    these agreed upon global goals to drive the relevant
    conversations around climate change both within your
    jurisdiction and across the committees with whom you work.
        Too often, these three challenges are pitted against one
    another to suggest that achieving one means neglecting or
    working against the other. While tradeoffs do exist, the
    solutions are not mutually exclusive and innovation and climate
    policies should work toward solutions that contribute to
    achieving all three goals simultaneously and reject the notion
    that one goal is more important than the other.
        The third main message is that we need to seriously commit
    to a robust innovation agenda, and Senator Alexander's bill is
    one example of how to do that.
        Relative to the challenges we face that all-of-the-above
    energy challenge is in the danger of becoming a cliche for
    muddling along without making any decisions. We need an all in
    on the all-of-the-above strategy where we redouble our
    commitment to make every resource compatible with the needs of
    a 21st century energy strategy, low-carbon, cost competitive
    and secure.
        Among experts there is a great deal of agreement about the
    suite of technologies we need to drastically reduce emissions.
    Supporting all of these solutions includes but should not be
    limited to increased R&D spending.
        Moreover, in a world where we're confronting large-scale
    industrial competition from other countries, particularly
    China, we should consider more deliberately creating an
    industrial strategy around certain technologies where we want
    to compete for a host of climate competitiveness, security and
    economic reasons. Advanced nuclear, carbon capture and
    sequestration, battery storage and electric vehicles are all
    areas that immediately come to mind.
        The fourth and final takeaway for this Committee is that
    moderate climate policy need not be mediocre. In my written
    testimony I give two examples. Greater support for energy
    efficiency through DOE programs, efficiency standards,
    regulations and tax incentives and also, the implementation of
    policies like a clean energy standard. They're all places where
    moderate federal climate policy could make a really big
    difference.
        The key to moderate climate policy is to use policy and
    regulatory mechanisms that people recognize, trust and use
    today but be ambitious about their targets and implementation.
    There will be ongoing efforts to build support for economy wide
    strategies like a carbon tax which will be necessary as part of
    a suite of policies to develop deep decarbonization.
        But there are things that we can do to make notable
    progress on this issue right now and are needed to supplement
    the impacts of a more robust approach to innovation.
        Thank you.
        [The prepared statement of Ms. Ladislaw follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you, Ms. Ladislaw.
        Mr. Sandalow, welcome.

      STATEMENT OF HON. DAVID B. SANDALOW, INAUGURAL FELLOW, SIPA
          CENTER ON GLOBAL ENERGY POLICY, COLUMBIA UNIVERSITY

        Mr. Sandalow. Thank you, Chairman Murkowski, Ranking Member
    Manchin and all members of the Committee on Energy for the
    opportunity to testify today.
        I've been privileged to appear here several times before,
    and I've observed your long tradition of constructive,
    bipartisan dialogue.
        I've worked on the topic of today's hearing, energy
    innovation and climate change, for many years on the White
    House staff, as an Assistant Secretary of State, as an
    Assistant Secretary of Energy and as Acting Under Secretary of
    Energy. Today I'm honored to be the Inaugural Fellow at
    Columbia University Center for Global Energy Policy.
        My testimony today will have three core points.
        First, energy innovation is central for fighting climate
    change. In the past decade dramatic innovations have begun to
    change the energy sector. Solar and wind power costs have
    fallen dramatically, for example, but more is needed. To help
    cut carbon emissions at the speed required in the decades
    ahead, we'll need innovation in many areas. The highest
    priorities, in my view, include energy storage, floating
    offshore wind, industrial heat, heavy duty road transport,
    aviation, carbon capture, utilization and storage including
    direct air capture of carbon dioxide and cheap, passably safe
    nuclear reactors. I discuss each of these areas in more detail
    in my written testimony which is submitted for the record.
        My second and perhaps most important point is that
    innovation alone won't solve climate change. Innovation is
    essential for fighting climate change, but it's not enough. The
    most innovative low-carbon technologies won't help fight
    climate change unless they're deployed, and widespread
    deployment of low-carbon technologies often requires a range of
    policies. The building sector offers a classic example. Many
    simple technologies for improving the energy efficiency of
    buildings are readily available, but they sit unused due to
    features of the real estate market. Policies such as building
    codes and appliance standards are necessary.
        More broadly, access to low cost capital is especially
    important for moving innovative technologies to market.
    Historically, this has been a significant challenge for low-
    carbon technologies and without government programs to reduce
    capital costs, many innovative low-carbon technologies will
    never make it to market. Removing subsidies enjoyed by fossil
    fuel technologies so that low-carbon technologies can compete
    on a level playing field is an especially important tool for
    moving innovative low-carbon technologies from the lab to
    market. And finally, global engagement is essential for solving
    climate change. Policies to promote the global deployment of
    low-carbon technologies are essential.
        My third core point is that as a nation we should build on
    our strengths and address our weaknesses when it comes to
    energy innovation. The United States has an extraordinary
    record when it comes to energy innovation. And Madam Chairman,
    as you said, our strengths include our great universities, our
    national lab system and our entrepreneurial culture.
        At the same time, I believe we have weaknesses that inhibit
    our ability to promote energy innovation. One is our broken
    politics. You know, U.S. politics has always been rough, but in
    recent years polarization has been especially extreme. A second
    weakness is a lack of respect for science. It's ironic that in
    a nation with such extraordinary universities and national
    labs, the envy of much of the world, science receives such
    little respect. Top leaders and significant minorities of the
    public reject scientific conclusions on topics as wide-ranging
    as climate change and vaccinations. In my travels in Asia and
    Europe, I often encounter people who are deeply puzzled by this
    phenomenon. And a third weakness I would point to is our short-
    term focus both in government and in many parts of the
    investment community.
        So, what can we do to build on our strengths and address
    our weaknesses? Step one, increase federal budgets for energy
    innovation and I applaud Senator Alexander's call to double
    federal funding for clean energy innovation. Second, channel
    U.S. entrepreneurial spirit toward meeting the climate
    challenge. Policies that improve the returns that businesses
    earn from deploying innovative energy technologies are
    essential, that could include tax credits, performance
    standards, eliminating fossil fuel subsidies and a price on
    carbon. Third, build long-term thinking into federal decision-
    making on energy innovation with multiyear planning processes
    and investors focusing long-time horizons on their investments.
        So my testimony today has had three core points. First,
    energy innovation is essential for fighting climate change.
    Second, innovation alone won't solve climate change. And third,
    as a nation we should build on our strengths and weaknesses
    when it comes to energy innovation.
        Thanks for the opportunity to testify. I look forward to
    answering your questions.
        [The prepared statement of Mr. Sandalow follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you, Mr. Sandalow.
        Mr. Bryce, welcome.

     STATEMENT OF ROBERT BRYCE, SENIOR FELLOW, MANHATTAN INSTITUTE

        Mr. Bryce. Good morning.
        Electricity is the world's most important and fastest
    growing form of energy. The electricity sector is also the
    biggest single contributor to global greenhouse gas emissions.
    My third point, that right now at current rates of growth,
    about four percent per year, global electricity demand will
    grow and it will rather double in just 18 years. So given those
    facts what should we do?
        Well, first of all we cannot rely on renewables alone.
    Numerous environmental groups and politicians are pushing for
    all renewable energy systems, but the hard truth is that these
    100 percent renewable energy scenarios are nothing more than
    politically popular distractions. These scenarios are neither
    doable nor desirable. These scenarios ignore basic math and
    simple physics. Worse yet, they perpetuate what I call, the
    ``vacant land myth,'' the idea that there's endless amounts of
    land out there in flyover country that's just waiting for all
    kinds of renewable energy infrastructure to be built on top of
    it. Nothing could be further from the truth.
        By my count, since 2015 some 225 government entities from
    New York to California have moved to reject or restrict wind
    energy projects. New York has a 50 percent renewable
    electricity mandate by 2030 but dozens of local governments in
    New York have either passed measures restricting or outright
    rejecting wind energy projects.
        You won't read about this in the New York Times, but the
    towns of Yates and Somerset as well as three upstate New York
    counties, Erie, Orleans and Niagara, have spent the last three
    years fighting a proposed 200-megawatt lighthouse wind project
    which aims to put dozens of wind turbines near the shores of
    Lake Ontario. New York's offshore wind plans are being
    vigorously opposed by the state's commercial fishing groups.
        California has a 60 percent renewable electricity mandate
    by 2030, but in 2015 the Los Angeles County Board of
    Supervisors banned wind projects in the county. In February of
    this year, San Bernardino County, the largest county by area in
    America, banned large scale renewable projects throughout much
    of the country. San Bernardino County is the home to two of the
    largest thermal solar projects in America, Abengoa Mojave and
    Ivanpah. Today California has less installed wind capacity than
    it did in 2013.
        Last year high voltage transmission projects designed to
    transport renewable energy across New Hampshire and Arkansas
    were both canceled due to state-level opposition.
        In short, renewable energy alone cannot provide the vast
    scale of energy that the U.S. and global economies demand at
    prices consumers can afford.
        So what is the best approach? In my view, it is N2N,
    natural gas to nuclear. These sources provide the best, no
    regret strategy because they are low-carbon, scalable, and
    affordable.
        Thanks to innovations in the shale revolution, the U.S. has
    become the world's biggest and most important natural gas
    producer. Natural gas helps reduce or helps decarbonization,
    because it emits half as much CO2 during combustion
    as coal and about a third less than fuel oil or diesel fuel.
        Natural gas has helped cut U.S. CO2 emissions
    which in 2017 were at their lowest level since 1992. Last year
    the U.S. exported LNG to 30 different countries including
    Kuwait and the United Arab Emirates. It's an open secret in
    Houston that Saudi Arabia is now seeking a long-term LNG supply
    contract with American companies.
        What does the U.S. natural gas sector need in terms of
    federal policy? In my view, nothing. Where federal policymaking
    is needed and needed in a big way is in the nuclear energy
    sector. There is no credible pathway toward widespread, large-
    scale decarbonization that doesn't include large increments of
    new nuclear capacity.
        Congress should develop a strategy that includes preserving
    existing plants and nurturing the development and commercial
    deployment of the next generation of smaller, safer, cheaper
    reactors. The Federal Government should support nuclear energy
    because it is emissions free, has extraordinarily high-power
    density, meaning it requires very little land, and it helps
    diversify the electric grid.
        Let me be clear, the nuclear industry faces myriad
    challenges, opposition from some of the biggest environmental
    groups in America including Sierra Club and the Natural
    Resources Defense Council are among them. Many existing
    reactors cannot operate at a profit. New reactors cost way too
    much and, of course, Congress continues to doddle when it comes
    to the issue of nuclear waste storage and disposal.
        But I will reiterate my point. There is no reasonable or
    affordable pathway to decarbonization of the electric sector
    here in the United States or around the world that does not
    include big chunks of new nuclear capacity. If Congress wants
    to foster innovation in nuclear energy, Republicans and
    Democrats will have to forge significant, long-term, and by
    that I mean decadal, commitments toward making that goal a
    reality.
        Thank you.
        [The prepared statement of Mr. Bryce follows:]
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        The Chairman. Thank you.
        Lots, lots to begin with here this morning. I appreciate
    the contributions of each of you. And clearly, there is an
    agreement that technology is how we address these issues of
    increased emissions or worldwide, global emissions. But as you
    have pointed out very, very clearly, Ms. Ladislaw, you can have
    all the great technology but if we do not have the deployment
    out there, we have not even started to leave the house yet. So
    how we make that leap is part of our discussion here.
        The other thing that I have underlined from your testimony
    that I really appreciate is this recognition that we need to be
    all in on all-of-the-above. When we determine here in Congress
    through our policies, or perhaps our policies by default, that
    we are going to favor one over another by way of subsidies or
    credits or what happens, as you point out, Mr. Bryce, with
    state policies that say we want to have renewables, except we
    do not want your kind of renewable, that is where we start to
    get in our own way here.
        The question that I would pose to you all as a panel is,
    there is no shortage of good ideas with the technologies that
    are out there but we are stumbling in the deployment end of it.
    What should our role be here in the Congress to help facilitate
    to a better level this deployment? I am all in on what Senator
    Alexander has proposed in terms of increasing the funding for
    research and development and doubling up on ARPA-E, but outside
    of the obvious, what more do we need to be doing?
        [The information referred to follows:]
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        The Chairman. You have indicated, Mr. Sandalow, that we
    need to be focusing on longer-term visioning so that investors
    then are interested in coming to the table. But help me out.
    Let's have this conversation.
        Go ahead, anyone can jump in here.
        Ms. Ladislaw. Well, I'll offer just a couple of ideas. I
    mean, I think, you know, there was a Wall Street Journal
    article that had most of the prominent economists saying that
    the carbon tax is probably the most efficient way of trying to
    send that signal to market.
        I would say most of the people that I talked to in the
    energy field somewhat agree, right? I mean, I've had people
    tell me, CCS wouldn't actually be terribly hard if you had a
    high enough carbon price to at least, you know, be trying more
    of it in the field, right? And so, however those economists
    aren't in Congress, right? That's not, they don't exist here--
    --
        The Chairman. Well, that goes back to Mr. Sandalow's point
    about politics.
        Ms. Ladislaw. Yeah, so I think that if you look at like
    policies like a clean energy standard, most states have
    renewable portfolio standards. A lot of them are revising them
    now. They know what they are. They know what they do.
        You could have a federal level clean energy standard that
    tries to build on that, that says well, let's try and--you
    could probably do most of the work that you need in the
    electric power sector, in terms of decarbonizing through a
    policy like a clean energy standard.
        So there are lots and lots of performance-based energy
    standards that you can put in place that say I don't care how
    you get there, but here's the target, here's the goal.
        And we apply some of those standards in our innovation
    programs, right? I mean, be supporting those national
    standards. We just need them echoed out there in the market as
    well.
        The Chairman. Mr. Sandalow?
        Mr. Sandalow. I completely agree with Ms. Ladislaw.
        You know, these clean energy standards, or renewable
    portfolio standards, have been very successful at the state
    level. Applying that to the federal level would be a big step
    forward.
        In some ways, even an easier step could be eliminating
    fossil fuel subsidies. I mean, why are we subsidizing fuels
    that are polluting the atmosphere? If we could get rid of
    those, that would provide a level playing field for some of
    these clean energy technologies.
        And then I would point to the point I made about planning
    in my testimony. You know, it's striking to me some European
    governments, some Asian governments, they set 5-, 10-, 15-year
    targets on these long-term issues and then they adjust as they
    go forward. In this country, we celebrate it when we pass a
    one-year appropriations bill. I think we can to better. And we
    should work to have 5-, 10-, 15-year targets. The Department of
    Energy has tremendous expertise to help with that and really do
    long-term planning in a way that we don't today.
        Mr. Silverman. I was just going to add to that, you know, a
    green grid is largely an economics problem frankly, not a
    technical problem. We can get to, you know, 10, 20, 30, 40
    percent, whatever the standard that we need, whatever the
    climate change science tells us we need to do, we can get to
    that standard. The market can get there using economic
    principles and that really does mean choice and then going
    through and creating the kind of durable market structure that
    will actually attract private capital.
        I know there's always a temptation to want to subsidize and
    to use tax dollars, but really we will be much better if we
    have a public-private partnership where we have a durable
    market structure that drives that kind of private investment.
    You really want to unleash that and bring it into the market.
        And again, that comes back to having that nice, solid
    market. And unfortunately, you know, we've seen really a
    retreat from markets as if somehow markets and green outcomes
    are incompatible. And so, I would love to see this Committee,
    sort of, go at that, go at that issue head on.
        The Chairman. Doctor?
        Dr. Majumdar. If I could just add.
        Energy infrastructure lasts for 50, 60, 70 years. We have
    to think about this as the 21st century game, and we have to
    take the lead on this because the rest of the world also has to
    change.
        Given that, coming back to the planning, the long-term
    planning, I completely agree with some of the things that Mr.
    Bryce was talking about and I outline that in my written
    testimony. This whole idea of looking at 1936 Rural
    Electrification Act, if he could create a similar kind of thing
    to get the clean energy services deployed into our cities and
    towns and villages, that will require the federal, state and
    local governments to come together and streamline the
    permitting and the regulatory process to expedite it.
        We need to create, figure out, how to get private capital
    into the energy system. And there is, Senator Coons and others
    have put a Master Limited Partnerships Parity Act which will
    essentially put everything on a level playing field.
        Talking about the price on carbon. Where markets work, they
    are efficient. We could either have a direct price on carbon or
    an indirect price whether it's a clean energy standard, it's an
    indirect price on carbon. But we need to have to accelerate
    that. Technology innovation is not enough. We need the market
    pull.
        But there are places where the markets don't work. And we
    know. And there are market failures in energy efficiency.
    That's why we have appliance standards. That's why we have
    clean fuel efficiency standards.
        And I would go full force in creating, not just building
    codes which are for design, but actual performance-based
    standards for the buildings across the United States. I think
    if you could do that and provide the infrastructure to deliver
    these solutions, I think that's the transition path that I see.
        The Chairman. Very good.
        Mr. Bryce, you are the only one that has not spoken. We are
    out of time, but go ahead.
        Mr. Bryce. Yes, ma'am.
        My quick comment would be what is the priority? It would,
    I'm sorry I'm a one trick pony here. It's a sense of urgency on
    the deployment of nuclear energy at scale.
        The United States is not the world. The coal sector,
    globally, in the global electric sector, coal's share of
    electricity generation has stayed at about 40 percent for 30
    years. What can supplant coal in developing countries as
    baseload form of electricity generation? It would be nuclear,
    but the U.S. has to play in that game and right now that game
    is being dominated by the Russians, the Chinese, the Indians
    and the South Koreans.
        And that is where the U.S., I think, could make a long-
    term, lasting contribution but it would have to be done with
    urgency and it would, it's going to require significant federal
    involvement.
        The Chairman. Thus, the need for NELA.
        [Laughter.]
        Senator Manchin.
        Senator Manchin. First of all, I think, and do you agree,
    that we need increased funding for the DOE as far as technology
    research and development? Everybody agrees on that, okay.
        Mr. Silverman, on the Petra Nova company's carbon capture
    facility in Houston, I had a chance of visiting them. I really
    enjoyed this visit.
        Petra Nova is the only U.S. power plant currently
    generating electricity and capturing carbon dioxide in large
    quantities, about 5,200 tons per day, and I understand over a
    million tons within the first ten months.
        And so, I would ask, of all of you, you have the only
    commercialized experience in that realm. How does it work? What
    have you learned from it? Can it be done? And should it be
    continued?
        Mr. Silverman. Absolutely, it could be done because we're
    doing it. It's an incredibly exciting project, and we're all
    very proud of it.
        I mean, CCS is one of the--carbon capture and sequestration
    is one of the potentially least cost methods of getting to
    fight climate change. You know, it is an experimental project.
    It is absolutely dependent on federal R&D dollars and, you
    know, it is a difficult and frankly, you know, any time you
    deploy a new technology, it always takes a while to get it
    right.
        But you know, when we look forward to a market structure
    that really is an all-of-the-above, if we want carbon-free
    power, let's talk about including letting nuclear compete
    against renewables, compete against carbon capture and
    sequestration, compete against repowering or shutting other
    facilities down.
        If we have that transparent price in that market mechanism,
    we really are looking at an all-of-the-above because we're
    talking about having a market structure that will allow us to
    come in and finance that kind of innovation, particularly as it
    gets more commercialized. I don't think we're there yet. But as
    it gets more commercialized, if we have that transparent market
    structure then all of these technologies will compete and we
    really will find the least cost solution out there.
        Senator Manchin. What I am hearing from all of you is that,
    basically, there is a challenge with renewables, as far as
    where we should go and wherever we are going with it may have a
    road block. I think, Mr. Bryce, you have pointed out the road
    blocks that are out there.
        Now I am for getting it up to the level of power sources
    that we are going to need in order for the country to have what
    it needs, I understand that. What about China and India and
    Asia, where they are coming on so strong with coal, what are
    they going to rely on? That is my concern.
        Global climate is not the U.S. climate, and it is not North
    American climate. And for some reason we lose sight of that. We
    think that if we can basically penalize, or whatever, the rest
    of the world is going to follow suit. I don't see, from what I
    understand, the average coal-fired plant in Asia is what, 11,
    12 years of age? They plan on running them for another 30
    years. What are you all planning to do there? How do we get
    them onboard?
        Mr. Sandalow. Thank you for raising the issue, Senator.
    It's absolutely fundamental to solving this problem.
        You know, the United States is the largest cumulative
    emitter of carbon dioxide over the past 100 years.
        Senator Manchin. Right.
        Mr. Sandalow. With the second largest in the world, but
    last year the vast majority of greenhouse gases came from
    outside the United States.
        Senator Manchin. Absolutely.
        Mr. Sandalow. When you say there's no solution without
    engaging China and India, one core piece is U.S. leadership.
    One thing I hear all the time when I travel is, we think you're
    not doing anything on climate change right now because your
    political leadership is denying the reality of it. And I say,
    that's just not true. Look at the statistics, look at what
    we're actually doing. But that type of political outlook is
    extremely important.
        Then, innovation in low-carbon technologies, I mean when we
    produce cheap solar innovations, when we produce innovations in
    a variety of other areas, they spread around the world. And
    that's going to be a core part of the solution.
        Senator Manchin. Let me just interject, if I could----
        Mr. Sandalow. Please.
        Senator Manchin. ----because our time is running short.
        If that is the case and carbon tax, or carbon pricing, a
    carbon pricing to find the solution for carbon emission is one
    thing. Carbon pricing to basically restructure or redistribute
    the wealth and does not find the solution, does not make any
    sense to me at all. It just really does not make sense to me
    that you are saying we are going to put a carbon price on but
    we are not going to use to find the solution. There is no way
    that China or Asia is going to use this, because they are not
    going to do the same. That is going to be a self-inflicted
    wound.
        Anybody want to jump in on that?
        Ms. Ladislaw. I think there are ways of mitigating the
    impact of a carbon price, and it depends on the pricing
    mechanism, right? So, cap and dividend is a lot of what people
    are focusing on now because----
        Senator Manchin. That is popular, give them a price. Okay,
    fix the problem.
        Ms. Ladislaw. Well, to be honest with you, like, I think
    the appropriate way to think about China is that they're both a
    leader and a lagger in emissions, right? They emit a ton, but
    they're the largest market for low-carbon energy, right?
    They're making that market----
        Senator Manchin. Unfortunately, they are still emitting
    more than we will ever emit. They are polluting more than has
    ever been polluted.
        Ms. Ladislaw. And I think that that's true.
        Senator Manchin. And you think they are going to put a
    carbon tax on?
        Mr. Sandalow. They have, Senator.
        Ms. Ladislaw. They have.
        Senator Manchin. They have?
        Mr. Sandalow. Yes.
        Ms. Ladislaw. Well, they have cap and trade programs and
    their demonstration programs and largely, I think, that that's
    part of----
        Senator Manchin. They won't even run their emissions at
    night. They are not even taking--I mean, their nighttime
    emissions, look at the emissions they have at night versus day.
        Ms. Ladislaw. Right.
        So, quick analogy. I'm from New England so I do hockey
    analogies, right? And I think part of the challenge on climate
    change and technology is to skate to where the puck is going. I
    think that they're investing a ton of money in markets that are
    about low-carbon technology with----
        Senator Manchin. We are talking within a ten-year span, and
    the only way you are going to do it is decarbonizing the use of
    fossil fuels through technology and more nuclear. That is the
    only way I see to quickly get at a ten-year to where we can
    save the planet.
        Ms. Ladislaw. Sure. Just get them into the market.
        Senator Manchin. Go ahead.
        Mr. Silverman. Senator, one thing to keep in mind is the
    greatest threat to our existing coal facilities is subsidies
    because we cannot compete if a state has started handing out
    free money to our competitors. That will kill our coal
    facilities faster than anything else.
        Senator Manchin. Do you mean subsidies to coal plants?
        Mr. Silverman. No, not to--subsidies to coal plants,
    frankly, don't work either, but for a different reason. But
    what I'm talking about are competitors getting subsidies
    whether it be renewable or nuclear subsidies.
        Senator Manchin. I got you.
        Mr. Silverman. They do not work with the competitive
    market, and we rely on the competitive market.
        So the reason a carbon tax actually is preferable from our
    point of view isn't that it's good for coal plants, because
    it's not, but what it does is it has a market mechanism that we
    can then compete against. And it preserves the integrity of the
    existing competitive markets and that actually allows us to
    deploy capital in a much more sensible way because, you know,
    if we are faced with our competitors, other technologies,
    operating basically for free, then there is no more competitive
    market. Ratepayers and consumers have lost the benefits. And
    you know, I would much rather have a tough competitive market
    that I can actually compete in than a market that I can't
    compete at all.
        Senator Manchin. Thank you, Madam Chairman.
        The Chairman. Thank you, Senator.
        Senator Alexander.
        Senator Alexander. Thank you, Madam Chairman.
        Thanks to the panel.
        Ms. Ladislaw, I heard a California physicist who switched
    from being a climate skeptic to a climate believer say this. He
    said, ``When we were little our mothers told us to clean our
    plates because the children in India were starving.'' That was
    a good thing to do, but it did not help the starving children
    in India. He said, ``Climate is a lot the same. We can do
    everything here, but the problem is there.''
        If you look at the statistics, we have reduced carbon
    emissions more than any other country in the last 15 years.
    China has tripled. India has doubled. So if we are looking at
    the near-term, why wouldn't we try to help the rest of the
    world do in the near-term what we have done in the last 15
    years?
        It seems to me what we have done in the last 15 years is
    maintain our nuclear reactors, that is 60 percent of our
    carbon-free emissions, and introduced natural gas and
    conservation in smokestacks and tailpipes. It looks to me like
    natural gas and conservation has been the reason for our
    reduction. What can we do in the next near-term to help the
    rest of the world do that?
        Ms. Ladislaw. There's a lot that we can do. I think selling
    other countries our technology, exporting some of the energy
    that we produce here is a good example.
        I think your focus on if we want nuclear to be part of the
    solution, the United States is going to have to work much, much
    harder to bring some of those advanced nuclear technologies out
    into the field. It's not competitive now, and we're not
    competitive internationally to do that. So I think there are a
    lot of those, sort of, very smart things that the U.S. can do
    to promulgate and, quite frankly, has done that around the
    world.
        We run a project where we connect U.S. states and Indian
    states to try and----
        Senator Alexander. Well, why don't they use natural gas and
    conservation in India and China?
        Ms. Ladislaw. Well, they're trying. I mean----
        Senator Alexander. Well, if it worked for us why wouldn't
    it work for them?
        Ms. Ladislaw. Well, I mean, to be honest with you we've had
    the largest surge in natural gas production over a ten-year
    period of five.
        Senator Alexander. Oh, I know, well why don't they?
        Ms. Ladislaw. Well, they would love to if they could.
        Senator Alexander. Why can't they?
        Ms. Ladislaw. Well, we have a giant industrial base of
    natural gas companies and a huge resource here.
        Senator Alexander. If you can make money there, can you not
    make money in India?
        Ms. Ladislaw. Yes, the resource base isn't there in India
    for unconventional gas.
        Senator Alexander. But I am saying it looks like the
    problem is there in the solution.
        Mr. Bryce, let me move to nuclear with you. Nuclear is 60
    percent of our carbon-free emissions. The estimates are that 15
    to 20 of our reactors, of our 100 reactors, will close in the
    next ten years. Let's say 30 close. That eliminates, by my
    math, 18 percent of our carbon-free emissions. That is the
    total amount of carbon-free emissions that wind produces in the
    United States after 25 years of billion dollars of subsidy.
        So a great many people who are urgently concerned about
    climate change are switching their view to say it is really
    wrong not to emphasize nuclear.
        So you and I believe that. Exactly what should we do in the
    next near-term, in addition to the advanced reactors which are
    down the road, for results? What should we do to keep 15 to 20
    reactors from closing in the next ten years and to producing
    more nuclear power in our own country?
        Mr. Bryce. It's a very difficult problem, Senator, and Mr.
    Silverman and his company is facing this.
        I think, to me, one of the simplest ways to address it is
    do a contract for difference. If these nuclear plants can show
    that they're operating at a loss, subsidize them to the point
    where they can compete and/or get made whole in the wholesale
    market.
        But the U.S. electricity market is extraordinarily
    fragmented. There are a lot of players and there is going to be
    a lot of opposition to that kind of, call it what it is, a
    subsidy.
        But I agree with you that if those plants close, they're
    going to be replaced by natural gas-fired power plants. I'm
    pro-gas but that means an increase in CO2 emissions.
        Senator Alexander. Right.
        Let me use my last question for Dr. Majumdar.
        As you know I have always thought that carbon capture is
    the holy grail of what we are talking about because if we ever
    could commercially capture it at a cost that mattered and find
    something to do with the result of what we had captured, why,
    we could burn coal everywhere in the world and since we know
    how to deal with sulfur, nitrogen and mercury and that would be
    carbon.
        You worked on that some at ARPA-E. What did you find? Is
    that ever going to happen? I don't mean sequestration. I mean
    some other physical, biological invention that I am not smart
    enough to know about. Is that ever going to happen?
        Dr. Majumdar. Well, Senator Alexander, I think one of the
    last reports we wrote as part of Secretary Moniz's Advisory
    Board was on exactly this issue--how do you do global carbon
    management and carbon capture is absolutely the right in it.
        Today if you'd look at a coal-fired power plant and tried
    to capture the carbon, it costs about $60 a ton. That needs to
    come down to about $30, $20-$30 a ton because there is a market
    on carbon for enhanced oil recovery et cetera, which is about
    roughly $30. So, if the cost is lower than the price in this
    business and so, that needs research, that needs new
    technologies to be created.
        And so, I think this is absolutely the right thing to do
    and, in fact, in talking with India since I go there once a
    year, and every time I go there to New Delhi, to meet and talk
    to the government and the businesses. They're looking for
    technology. They realize that they have to shift. They're
    looking at their air pollution, and they realize that they
    cannot survive this way.
        And so, they're looking for technology and I think if you
    look at China and India broadly at an international level, they
    look at this 21st century shift and they want to be part of the
    supply chain which is going to be a new supply chain. And I
    think we need to think strategically to see how we can capture
    a large value of the supply chain in the United States and part
    of that is technology innovation.
        Senator Alexander. Thank you, Madam Chairman.
        The Chairman. Thank you, Senator Alexander.
        Senator Stabenow.
        Senator Stabenow. Well, thank you, Madam Chair and Ranking
    Member, for holding another very important and thoughtful
    hearing. I really appreciate this, and I appreciate the fact
    that we are focusing on the opportunities of addressing climate
    change as well as the serious impacts on carbon pollution. I
    appreciate we are actually talking about climate change as a
    real thing and that we need to actually do something about it
    which is a wonderful conversation at least to have.
        Given the volatility of the weather, which is getting worse
    all the time because of carbon pollution, and what we are
    seeing in the atmosphere in the warming of the atmosphere and
    holding more snow, holding more rain, I mean all of this is
    happening. Coming from a state with a large agricultural
    presence I know it is dramatically changing what is happening
    for us and not in a good way.
        I also just want to raise for us, to me, even though this
    obviously is a global issue, it starts with American leadership
    which means we should be in the Paris Climate Accord and as a
    voluntary leader. But it also means that we are impacted right
    now.
        We have a disaster assistance bill on the Floor, another
    one, billions of dollars. Taxpayers in America are paying. It
    is a question of are we going to pay for innovation and jobs or
    are we going to pay for picking up the pieces because of all of
    the volatility in the weather and what has been happening.
        So it is not a surprise that I, coming from Michigan, am
    focused on ways in the transportation sector to be able to
    address this, as well as other areas. And we know from the
    United States' perspective this is the largest source of
    emissions.
        And so, yesterday I was very pleased with Senator
    Alexander's and our peers and Senator Collins to introduce the
    Driving America Forward Act to extend the tax credit for the
    purchase of electric and fuel cell vehicles. We need to do that
    until there is a broad enough adoption that we can actually see
    the price come down, which it eventually will, but we do know
    that this creates jobs. It is creating jobs in my home State of
    Michigan and is a very important part of the all-of-the-above
    structure.
        Let me just say that electric vehicles can reduce carbon
    pollution by up to 70 percent and as the power sector becomes
    more increasingly green, life cycle emissions will drop
    further. This is a good thing.
        Also, hydrogen fuel cells, I don't think we have focused
    enough in that area. I know that we have global competitors in
    China and Japan that are investing heavily and have even
    shorter refueling times and longer driving ranges for electric
    vehicles.
        I do want to say on the hydrogen fuel cell, and because
    this is part of our legislation, when I talk hydrogen fuel
    cells people often think of the Hindenburg and we are not
    talking about dangerous fuel here. In fact, in many ways, it is
    safer than gasoline. The army now, in Michigan, tactical, our
    U.S. Army research arm is working with the Department of Energy
    on developing fuel cell tactical vehicles, and that is very
    exciting to see what they are doing.
        So when we look at this, but my concern--let me just ask
    Mr. Sandalow, when we look at how we bring down the cost in
    terms of deployment and so on, we know that the battery
    accounts for about 30 percent or more of the cost right now in
    an electric vehicle. And in fact, McKinsey is reporting today
    that about the importance of lowering battery cost. I am
    wondering for yourself and Mr. Majumdar, how can Congress, the
    Federal Government, speed up the commercialization of this? I
    mean, we are hearing that it could be 20 years before we see
    the research necessary on battery technology. That is just not
    fast enough.
        Mr. Sandalow. Senator, thank you for the question.
        I think the bill you submitted yesterday is a great start
    on this. I think one of the lessons from our experience with
    the reduction of costs of solar power is that scale makes a big
    difference. Once these technologies are deployed in large
    volume, the costs come down.
        Senator Stabenow. Right.
        Mr. Sandalow. And the same thing is going to be true with
    electric vehicle batteries. I've seen projections that are more
    optimistic than the one you just related.
        Senator Stabenow. Good.
        Mr. Sandalow. Projections that say that the purchase price
    of electric vehicles is going to be competitive with the
    purchase price of comparable conventional vehicles in the
    middle part of the next decade.
        Already electric vehicles are probably cost competitive on
    a total cost of ownership basis over the life of a vehicle
    because it's cheaper to drive on electricity than on fuel. But
    people don't buy cars that way. They look at the sticker price.
    And so, once we get that purchase price comparable, it's going
    to make a big difference. And so, I think deployment policies
    are what's absolutely central here.
        Senator Stabenow. Well, let me just add that infrastructure
    is also absolutely critical because right now people want to
    know how are they going to be able to charge their vehicle. If
    they can do that at work and they can feel comfortable at home,
    I think we will see much more rapid deployment.
        I know I am out of time but Mr. Majumdar, I am not sure, I
    am so sorry if I am pronouncing that incorrectly. If you just
    had a sentence or two you wanted to add to that in terms of
    what we should be doing?
        Dr. Majumdar. I think with any new technology, as we do
    more, the cost comes down. That's the learning curve. And
    sometimes initially it is a little too high, maybe just maybe a
    little higher and cannot compete. So, they need a first market.
        I come from Silicon Valley and people think Silicon Valley
    was created by venture capitalists. It's wrong. It was created
    by the Dean of Engineering of Stanford, Fred Thurman, who used
    to work in the Department of Defense during the World War. When
    he went back to Stanford, he asked the Department of Defense to
    create the market for the Hewletts and the Packards, et cetera.
        So the government has a role to play to create the first
    market. We are the biggest, the government is the biggest user
    for energy in the United States. And I think if you could use
    that power, the market demand power to bring down, to increase
    the scale and bring down the cost in the United States, you
    will then see the supply chain of manufacturing, et cetera, to
    be established out here. And I think that's one that should be
    on the table as we speak about this.
        Senator Stabenow. Thank you.
        Thank you, Madam Chair.
        The Chairman. Thank you, Senator.
        Senator Cassidy.
        Senator Cassidy. You know I am a physician so I look at
    things empirically. I have to admit that some of what has been
    said does not seem, and I mean this by no offense, some of what
    has been said does not seem to empirically hold up.
        I mention that because this is such an important issue and
    it can't be, kind of, don't we wish this would be reality. It
    has to be the reality.
        I will point out that if you look at that portion of our
    usage which is the industrial base of the grid, that is mobile.
    If you increase the cost of their input, they move and they
    move their jobs overseas. Indeed, since 1994 when the EU cap
    and trade and the U.S. regulatory system began on carbon,
    industry moved to China. And the increase in emissions by China
    exceeds the decreases in the EU and the U.S. put together.
        Carbon leakage. And you can see what happened in Great
    Britain. They have achieved their success principally by the
    employment of natural gas versus coal and by carbon leakage.
    Now carbon leakage means you are moving to China which has coal
    at 63 percent of its fuel base despite voluntary, voluntary,
    voluntary regional cap and trade systems to China which
    continues to build, I think they are building coal-fired
    plants, not only in their own country but in 17 other countries
    simultaneously. They show no true commitment to this.
        And a carbon tax? We would have to have a border adjustment
    carbon tax aside from WTO problems, empirically this is going
    to be complicated because of international supply chains.
        Let me just say that is a preamble because this is too
    important to, kind of, hope. It has to be something embedded in
    empiricism, and empirically, frankly, Mr. Bryce, you seem to
    have it most.
        No offense, sir, but if we look back and said 15 years ago,
    we are going to have a national, not market driven, but a
    national kind of priority, natural gas was $13 per MCF 15 years
    ago. Natural gas would not have been part of your fuel base
    because at that time industry was moving their fertilizer
    plants to Chile because they could not afford $13 per MCF. Now
    it is $2.50 and that same natural gas plant is moving back. So
    I think empirically, I think market forces are going to be that
    which is most.
        And the renewables, it depends on how you define renewable.
    I understand renewable can be nuclear because it is always
    there. It can be natural gas because, gosh, it always comes out
    of the ground. It could be wind and solar. But I think I know
    the physics limit the solar and wind from achieving anything
    beyond a marginal improvement in generation.
        Mr. Bryce, any kind of comment on that?
        Mr. Bryce. Well, just a couple ones which is that when
    you're talking about, I have solar panels on the roof of my
    house. I have eight kilowatts of solar on the roof of my house.
    Solar is growing and growing rapidly. I'm bullish on solar. But
    it still has major land requirements.
        Wind energy, they're reaching the limit. It's known as the
    Betz limit in physics which limits the amount of energy they
    can harness from the wind. So the only way to dramatically
    increase energy production from wind energy is by increasing
    the footprint of the wind turbines.
        And as I testified, this backlash against the wind energy's
    encroachment is happening coast to coast and it's happening in
    my home State of Oklahoma. I talked to the Mayor of Hinton,
    Oklahoma, three days ago. They got sued by Next Air Energy
    because they passed an ordinance that prohibited the
    construction of wind turbines within two miles of their town's
    borders.
        Senator Cassidy. So, let----
        Mr. Bryce. They beat Next Air but I agree with you, sir, in
    terms of the growth of natural gas it's really a truly American
    success story.
        Just to give you a couple of quick metrics. Just the growth
    in gas production in the U.S. from 2005 to today is roughly 44
    billion cubic feet per day. That's two times Iran's gas output.
    It's four times Saudi Arabia's output.
        Senator Cassidy. So the degree to which the U.S. exports
    natural gas and coal use, India and China use our natural gas
    versus their coal, is the degree to which we will achieve
    significant decreases in global greenhouse gas emissions.
        By the way, let me also point out that if you look at the
    academic journals, all of China's coal-fired plants on the
    Pacific Coast emit SOX and NOX that blows
    over the Pacific and lands on our Pacific Coast. The idea that
    we are going to somehow increase the price of energy on the
    grid and industry will not move to China and we won't have
    SOX and NOX blowing over on our country,
    I think, empirically is wrong. So I do think natural gas is the
    way to go.
        Let me also say, I have never done this before, Madam
    Chair. I would like to submit a YouTube video for the record.
        [Laughter.]
        The Chairman. Are we capable of receiving that?
        Senator Cassidy. I don't know that.
        [Laughter.]
        [YouTube video transcript from Michael Shellenberger
    follows.]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Cassidy. It is by Michael Shellenberger who was
    formerly involved with the Obama Administration, who now goes
    on and says, listen if we are going to achieve a carbon-free
    future it cannot be solar and wind because the footprint
    required is requiring destruction of Joshua Tree, pulling
    turtles out of the ground, all of whom die, and cutting the
    forest and that that footprint cannot be expanded much further.
    Therefore, he, if you will, working with the Obama
    Administration, has said that we cannot go in that direction if
    we wish to achieve our goals. That said, thank you all for your
    testimony and I appreciate it.
        The Chairman. Thank you, Senator. We will figure out how we
    put that video into the record. But thank you for that.
        Let's go to Senator Hirono.
        Senator Hirono. Thank you, Madam Chair.
        Mr. Majumdar, sorry, we seem to be doing damage to your
    name, I apologize.
        I was particularly taken by the portion of your testimony
    that really points to a sense of urgency that we should have
    and particularly when you note that climate change is resulting
    in extreme weather conditions such as extreme heat and cold,
    droughts, excessive rainfall and we certainly saw that on the
    island of Kauai where more rainfall fell on that island in a 24
    hour period than in the entire history of our country. That is
    saying a lot. The President had to declare a national disaster
    declaration. So, flooding, all of that.
        And that a rise of the temperature, average temperature to
    two degrees Centigrade, and we are at 1.2 degrees Centigrade
    right now, would be devastating to the world and, by your
    calculation, it would just take us another 20 years to get to
    the point of a two-degree Centigrade temperature. And then
    thereafter, the emissions must be zero. So I think that the
    sense of urgency is there.
        You noted in your testimony also that research alone is not
    sufficient to bring innovative technologies from the laboratory
    to a commercial scale where they can benefit people. Do you
    think the Department of Energy should support demonstrations,
    demonstrations of new technologies to improve the performance
    of the electric power grid to handle large amounts of renewable
    power, energy storage, electric vehicles and other needs?
        Dr. Majumdar. Senator, that's a great question.
        I think that, so Department of Energy, in terms of ARPA-E,
    the applied energy program, energy and sciences, they're
    supporting research.
        When it comes to demonstration, I think we should look at
    the needs of our states. We should look at the energy
    requirements and the diversity of what's required, because
    there's no one solution to climate change, as we all know. We
    have a diversity of solutions and there's a diversity of needs.
        I think we should use the states' needs and create federal-
    state partnerships with the private sector to create the
    environment for demonstration projects so that they actually
    prove out and de-risk the technologies so that then the markets
    can look at that and say that that's what we want, not just
    U.S. markets but international ones. So I think we should use a
    leverage of states to demonstrate, to create demonstration
    projects.
        Senator Hirono. I think that is a very good point and, in
    fact, there are a number of bills that would support public-
    private partnerships to demonstrate, for example, innovative
    grid technologies so the grid can accommodate more renewables.
    We are always told by the utilities that their grids cannot
    accommodate more renewables, so that is really an area that I
    think we should focus on and I have a bill to do just that,
    strangely enough. But I do thank the Chair for including such
    demonstration grants in her Energy and Natural Resources Act
    last Congress.
        Mr. Silverman, you spoke about using a carbon tax and Ms.
    Ladislaw, you spoke about a national clean energy standard to
    provide a way to recognize that we shouldn't allow fossil fuel
    plants to continue emitting carbon pollution for free. What are
    your views on applying a cap and trade system to set a limit on
    carbon pollution?
        Mr. Silverman. So we are very much in favor of an economy-
    wide carbon price, because it's very difficult to have
    competition across sectors if you don't have some common
    language. So, we do think that makes a lot of sense.
        In terms of in the electricity sector, you know, we really
    do think the low-hanging fruit is choice. Let people buy it if
    they want. Senator Heinrich left, but businesses are actually
    some of our biggest customers demanding green power.
        Senator King. Heinrich is right here.
        Mr. Silverman. I'm sorry, Mr.----
        Senator Hirono. Cassidy.
        Mr. Silverman. Apologies. Thank you.
        So, anyway, businesses are some of our best customers who
    want green power and, you know, not everywhere in the country
    can they buy it and that's very frustrating.
        Now in terms of cap and trade we could, you know, this
    panel could go on forever talking about the various benefits of
    putting a price on carbon, absolutely. We tend to think that
    you actually have to make a policy choice between the lowest
    carbon grid tomorrow in which case a price on carbon is very,
    very effective or are you really interested in driving
    investment directly to zero carbon resources? Those are two
    different policy outcomes.
        If you want the lowest carbon grid tomorrow, absolutely put
    a price on carbon. But if your goal is to drive investment in
    clean tech, actually it's a more direct subsidy or more direct
    means of getting it if you establish a market that values the
    clean energy attribute and then says, okay, we're open for
    business. Any technology that wants to come in can compete,
    because, of course, the climate doesn't care where we're
    getting our clean megawatts from. And so, we really do like
    having that direct price signal where the money goes directly
    to support clean energy investment as opposed to a carbon tax
    but we're very much in favor of sort of using both tools in
    conjunction where the use case makes sense.
        Senator Hirono. Madam Chair, could I ask Ms. Ladislaw to
    also give us her comments?
        Ms. Ladislaw. Sure. I think a carbon tax, cap and trade
    system clean energy standard, there's public policy ways of
    designing each of these programs to meet a variety of different
    needs. So I have no problem with the cap and trade program.
        I think there's a little, there's more in just today in,
    sort of, a tax and dividend scheme because it speaks to paying
    people back, right? And there's a concern that the tax, the
    increased cost for energy might harm people. And so, it really
    just is about priorities. And we've seen different states have
    cap and trade programs and they work well.
        I think that the issue is we really need to kind of pick
    one and do it in earnest because a lot of time has been wasted
    sort of debating about the mechanisms and we, kind of, just
    need to do something.
        Senator Hirono. Thank you.
        The Chairman. Senator Heinrich.
        Senator Heinrich. I am going to stay on the same thing and
    just first start, I am curious how many of you agree that
    putting a price on carbon pollution either indirectly or
    directly is a good thing? Anybody no? Okay. That is not bad.
    That is not 100 percent, but 80 percent is pretty good.
        When it comes to if we put a price on carbon and in
    particular, Mr. Silverman and then also Ms. Ladislaw, that next
    step of how to use that price because one step is introducing
    the price on carbon. The next step is, is it a tax? If it is a
    tax then you use that to fund government. If it is a dividend
    or a fee, it goes someplace else next, either back to a
    consumer, for example, where you target it to the most exposed
    energy consumers to make sure that they don't bear the price of
    us cleaning up our grid or it goes someplace like into research
    or into the transitioning the workforce.
        So do you have strong opinions on what that next step
    should look like?
        Mr. Silverman. Yeah, well, I have a 15-page version
    attached to my testimony. I'd be happy to talk about it more.
        Where you sort of start getting really wonky, it's about
    setting up a market structure that delivers what we need at the
    least possible cost. Our wholesale markets, overseen by FERC,
    are just viciously competitive.
        Senator Heinrich. Absolutely. I hear where you are going
    with that, but so what we are doing up here is we are trying to
    marry what the economists all agree on with what the world of
    the political possible is and also trying to avoid, you know,
    what Macron just went through in France where the wrong people
    bore the cost of that transition.
        Mr. Silverman. Yeah.
        No, and my only point about the competitive markets is the
    FERC angle has been completely ignored.
        Senator Heinrich. Absolutely, yes.
        Mr. Silverman. We have basically sidelined the people who
    are the best market designers in the world.
        Senator Heinrich. And that brings me to transmission which
    I disagree with this footprint issue. I mean, we have a lot of
    footprint to offer in New Mexico, and we are happy to sell
    clean power all day long to hungry markets.
        We have one wind project that is about to break ground that
    is over half a megawatt or half a gigawatt, excuse me, not to
    mention all of the other projects in the pipeline right now.
        But maybe one of the biggest challenges here is that there
    are very long lead times for actually creating the transmission
    to be able to marry those projects with where the demand is. Do
    you have strong opinions on what we ought to be doing on
    transmission right now?
        Mr. Silverman. You know, I will just say, a little bit like
    a broken record, but competitive markets because if there is
    the cheapest way to----
        Senator Heinrich. The market failure there is where we hear
    about these issues where one state in between the market that
    wants to sell and the market that wants to buy says no. So
    there has to be some sort of backstop approach to this that
    addresses when the market failure exists.
        Mr. Silverman. I think that would be great but, and here's
    the but. Let's take the grid as it is and say if we put an
    appropriate market in place and let private capital and
    companies fight those battles because if we say that carbon is
    particularly valuable in this place or that there is a, you
    know, a set pot of dollars that we can go out and finance
    against, the private capital will find a way. I mean, it's
    never pretty, but that's okay. And if the technology is less
    expensive, if wind is less expensive in one place and
    transmission in another, we need to have a price that lets the
    market----
        Senator Heinrich. If one state or one municipality, someone
    along the way, is not sharing in that, is not a participant in
    that market, they can just say no. Right now, we have a failure
    as a result of that.
        I am curious, maybe switching gears a little bit to Mr.
    Majumdar, long-term storage, getting beyond the four-hour
    lithium-ion place that we are now. What are you most excited
    about? Is it compressed cryogenic air? What are you seeing in
    that space that is going to be the next extended, long-term,
    even seasonal solution to storage?
        Dr. Majumdar. Well, I mean, the question is a great
    question. What should be the cost of storage if you want to do
    multi-day storage which if you are at 80 percent renewables or
    70 percent, you will need that.
        Senator Heinrich. Have to, yes.
        Dr. Majumdar. And that is on the order of about $10 to $20
    a kilowatt-hour because we're not going to use it enough in
    cycles of it to pay it off. And that's about a factor of ten
    lower than lithium-ion batteries. So lithium-ion battery is not
    going to cut it.
        Senator Heinrich. Yes.
        Dr. Majumdar. And the cheapest way to store electricity at
    that cost level is pump hydro. And then we have compressed air.
    Those are scalable things.
        Senator Heinrich. Right.
        Dr. Majumdar. If you're looking at batteries,
    electrochemical batteries that are coming onboard, there are
    lots of very exciting things that are happening. Iron sulfur
    batteries, these are low cost of materials, cost of bill of
    material batteries. They are still in R&D. Some of them are in
    the pilot stage.
        Senator Heinrich. Right.
        Dr. Majumdar. Many of them funded by ARPA-E when I was
    there. And so, I think that's the pipeline that you've seen
    coming onboard. It's actually very positive, but we should not
    ignore pump hydro and compressed air.
        Senator Heinrich. Great. Thanks.
        The Chairman. Thank you, Senator Heinrich.
        Senator King.
        Senator King. Thank you, Madam Chair. I am loving this
    hearing. I really appreciate your putting it together.
        A little bit of background. I spent most of my adult life
    in energy. I have worked, I have made my living in hydro,
    biomass, energy efficiency and wind, so this is very familiar
    to me.
        The first thing I want to say is I want to match, I want to
    see Senator Cassidy's video and raise him by a map.
        [Laughter.]
        Senator King. And the map is called----
        The Chairman. We can handle maps.
        Senator King. The map is called ``Nobody Lives Here.''
        [Nobody Lives Here Map follows.]
        [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Senator King. Forty-seven percent of the census tracks in
    the United States have zero population. I urge him, if he
    thinks we are out of room for solar and wind projects, to look
    down when he is flying home to Louisiana tonight. To say that
    there is no place for these projects to go just, you know, as
    much as I love the Senator from Louisiana, that just does not
    pass the straight face test.
        Secondly, my experience in energy is there is no free
    lunch. Every form of energy has some drawback, some questions,
    some cost, whether it is environmental or economic, and I
    understand that.
        It seems to me though that Senator Heinrich's last
    question, there are several really important goals here.
        One is storage. Storage unlocks enormous potential for
    renewables. And by the way, the other place Senator Cassidy
    ought to look is in the Gulf of Mexico, the offshore wind has
    enormous potential, higher capacity factor, higher efficiency,
    larger turbines, less environmental impact, less neighbors
    impact. So, enormous potential. But storage unlocks huge
    potential for solar and wind.
        Number two is efficiency. The cheapest, cleanest kilowatt-
    hour of all is the one that is not used. My experience in the
    energy efficiency business is the problem is energy efficiency
    investments have insufficient return in and of themselves at a
    fairly low energy cost. There has to be some subsidy. My
    suggestion is that utilities could pay customers to do energy
    efficiency which would lower their cost of acquiring new power.
    In other words, new energy efficiency is a ``negawatt,'' if you
    will.
        Carbon capture, I think, is also critical. We have this
    huge coal resource. We have huge energy resources. Carbon
    capture has got to be part of the future, it seems to me.
        Number four is nuclear. I agree with you, Mr. Bryce. I
    think the problem I have is not, and you said something that,
    sort of, piqued me. Right now, it is not affordable. I mean, it
    just isn't. The cost per megawatt of installing a new nuclear
    plant is just not comparable even to any other technology and
    sitting next to this lady, we have to figure out what to do
    with the waste. It is not responsible for our generation to say
    we are going to solve our climate problem by building nuclear
    plants, and we are going to let you guys and our children and
    grandchildren deal with the waste. This government made a
    commitment to dealing with waste 70 years ago. They have not
    done it, and that is one of my problems with going whole hog
    into nuclear. But I do think, clearly, the new generation, if
    it comes, smaller, scalable, those kinds of solutions are
    important.
        Number five, for me, is research and innovation. Got it,
    that we have all agreed on that. The shale revolution, in part,
    came out of research at the Department of Energy and if we can
    have similar research that brings us innovations like that in
    batteries, we are in business. I mean, that is a big deal and I
    think we need to appreciate that.
        Finally, the point you all have made, and if you could find
    a question in here, by the way, you are welcome to it.
        [Laughter.]
        Number six is it does have to be an international solution.
    CO2 does not respect boundaries. And if we do
    everything we possibly can, which I think we should, but India
    and China do not, then we are still not going to solve this
    problem. By the way, to put a fine point on the problem, we are
    now at 410 parts per million of CO2. First time in
    three million years we have been there. And the last time we
    were there, the oceans were 60 feet higher. I mean, to me that
    sort of captures where we are. So, I think, we have to be
    talking about all of these things.
        I am a little bit worried about a carbon tax because my
    fear is that a carbon tax would be just high enough to be
    annoying and not high enough to change behavior. All the data I
    have seen is people, and we have lived through it, people are
    not going to stop driving until gas goes up a dollar or two a
    gallon. And nobody is talking about a carbon tax that would
    have that level of increase. Yet we would be taking, it is a
    regressive tax in a sense that we would be taking out of
    consumers.
        You found a question. Answer.
        [Laughter.]
        The Chairman. Senator King, we were waiting for that
    question.
        [Laughter.]
        Senator King. Well, I figured if I threw enough out there--
    --
        The Chairman. We were going to give you a little extra
    time. You found it there.
        Senator King. Yeah, okay, alright. Go for it.
        Ms. Ladislaw. I was just going to offer two really quick
    things.
        Yes, you're right, it's a well put concern about a carbon
    tax. It can't do everything and it can do some things and you
    can design it to not be regressive.
        The most regressive thing about climate change is the
    impacts. That is absolutely the case. Everything else you can,
    sort of, design to be a little bit better.
        And I think your point on global leadership is really
    important. I think if we use empirical evidence about why we're
    doing something and other people aren't to block action, it
    doesn't make answering the problem any easier.
        Senator King. No, and that is why leaving the Paris Climate
    Accord was a disaster because that, at least, was global
    leadership. It was non-binding, but at least put us out there
    with the rest of the world. Now we are saying to them, we are
    not worried about it. You do not have to worry about it.
        Anyway, thank you, Madam Chair.
        The Chairman. Thank you.
        Senator King. I don't usually make speeches here, you have
    to admit, but----
        The Chairman. But this is just one of those hearings where
    there is a level of thought that is provoked and any time you
    have good thought being provoked, this is, again, this is a
    Committee that is taking on these issues because they demand
    some considered thought and, perhaps, provocative discussions.
        Senator King. Thank you for your tolerance.
        The Chairman. Thank you.
        Senator Barrasso, you are up next but if you would like a
    breather, we can turn to Senator Cortez Masto? It is your call.
        Senator Barrasso. Well, thank you very much, Madam
    Chairman.
        The Chairman. He is ready.
        Senator Barrasso. I am ready to go, and I am very thankful
    to you and to Ranking Member Manchin for holding this hearing
    today because technological advancements have always improved
    our quality of life in this country and advancements in energy
    are certainly no exception.
        When I first arrived in the Senate over a decade ago, you
    and I worked along with Jeff Bingaman, who was a Democrat and
    Chairman of this Committee, in a bipartisan way. We introduced
    something called the GEAR Act. Is it? Over a decade ago, a bill
    to----
        The Chairman. What did it stand for?
        Senator Barrasso. I will tell you that in a second.
        [Laughter.]
        Because it was very good.
        But it was designed to remove greenhouse--we have high paid
    staff that come up with these names and then it stands for
    something.
        The Chairman. Yes.
        Senator Barrasso. But the idea was to remove greenhouse gas
    emissions from the atmosphere. We had a hearing in EPW last
    week about the advances in technology over the last decade to
    be able to do that. So it has been a big deal.
        And just yesterday the Senate Committee on Environment and
    Public Works unanimously passed something called the USE IT Act
    which stands for something different. Again, it is bipartisan,
    it is bicameral--it promotes carbon capture, utilization, and
    storage.
        Certainly there is a lot of momentum behind carbon capture
    and I really look forward to working with both of you and all
    the colleagues to quickly pass this kind of legislation to
    promote the development of carbon capture technologies. As we
    continue to pursue carbon capture and other innovations to
    address greenhouse gas emissions, I think it is important that
    all discoveries, all findings and failures are shared
    throughout the research community so people can know what
    worked, what did not work and where we ought to be then
    focusing the next level of research.
        So in the past, federal research has not always been
    available to private researchers. I had a visit with Bill
    Gates, and he was trying to say how do you get more
    information? How do we get shared information? And I think
    sometimes this lack of communication among researchers presents
    a risk of duplicating ongoing efforts. You are shaking your
    heads up and down so I will start, maybe run the panel. How do
    we ensure transparency among researchers to ensure that we do
    not waste time and money, both are critical resources, with how
    we spent this on complementing each other on improving the
    research instead of duplicating it?
        We will run down the panel.
        Dr. Majumdar. Sure. As I said before, having been the first
    Director of ARPA-E and then also the Acting Under Secretary
    with all the applied energy programs, I think there's
    tremendous value in looking at increasing the budget. We had an
    ARPA-E hearing where I said that the ARPA-E budget ought to be
    on the order of $1 billion.
        But also look at the effectiveness, not just of ARPA-E but
    the applied energy program, Basic Energy Sciences. I think
    that's the fundamental base, the foundation of everything. We
    have to look at how our entrepreneurial spirit is ignited with
    this.
        I think creating market demand, we talked about this
    earlier as well, of how, you know, I'm from Silicon Valley and
    people think that Silicon Valley was created by the venture
    capitalists. That's wrong.
        It was created because the Department of Defense wanted to
    buy things of new technologies. And I think we should be
    looking at the biggest energy user in the country which is the
    U.S. Government, to see how to look at energy efficiency in
    buildings, new kinds of fuels, new electrification of batteries
    so that these technologies come down on the cost curve and
    become competitive, not just in the United States, but around
    the world.
        So I think there's a whole--we have to look at it
    holistically, not just innovation out here, policy over there,
    just combining.
        Senator Barrasso. And to that point, in a second, Mr.
    Silverman.
        If you cannot do it worldwide the impact is nothing because
    emissions in the United States are actually going down where
    they are going up in China and in India and around the world.
    But if you shut off the United States completely, it would not
    make the kind of----
        Dr. Majumdar. It's a $10 trillion per year export market
    that we're talking about, because the rest of the world is
    looking for technology.
        Senator Barrasso. Sure.
        Mr. Silverman?
        Mr. Silverman. I love the order we're going in because
    we're the customers who take the technology that ARPA-E and
    others develop and then we, sort of, take it to the next stage
    whether it's through something like the carbon capture system
    down at Parish or the Ivanpah facility which is the largest
    concentrated solar facility in the world, but we also take a
    lot of other technologies.
        And you know, I love going to pitch meetings with people
    who come out of ARPA-E because they always have such
    fascinating ideas. And you know, the thing that we often lack,
    the thing that prevents us from taking those and really running
    with them and making them commercial isn't the technology. It's
    the lack of a comprehensive, long-term price signal because
    it's really hard to take capital and deploy it if you don't
    know what the market is going to look like if you don't have a
    financeable price signal that you're being sent.
        And so, a lot of this, you know, I almost don't care what
    the technology of the future is, because a competitive market
    that sends the right price signal and says, hey, we want more
    of this attribute and we're willing to pay for it. That will
    get at the right technology. And so, when we think about it,
    that's what we're looking for and that's what we really lack in
    today's markets.
        Senator Barrasso. Ms. Ladislaw?
        Ms. Ladislaw. I thought Secretary Moniz and Secretary
    Dabbar both had great ideas about how to increase transparency
    and cooperation within the research structure.
        Just as a simple observation, I think anything that's like
    an XPRIZE or a grand challenge or something that, sort of,
    organizes researchers against a challenge, kind of just
    naturally brings out what are people doing relative to one
    another and draws in the private sector. So I think more things
    like that are really proven to be quite effective.
        Senator Barrasso. That is exactly what the GEAR Act was
    about, a gear, an XPRIZE to make carbon productivity.
        And--yes?
        Mr. Sandalow. Three points, Senator.
        First, engage globally. You're 100 percent right. There's
    no solution to this problem unless we do that. That means not
    just being part of the Paris process, but engaging robustly in
    the Paris process. It means participating in other processes,
    like the Clean Energy Ministerial, that help to disseminate
    these technologies around the world.
        Second, plan. Planning is a real gap in this country. Other
    countries do a much better job than we do. And having served as
    Acting Under Secretary at the Department of Energy, I think the
    applied programs working with Congress can do a much better job
    of long-term planning with assistance from Congress.
        And then third, deploy. There is no long-term, real cost
    reduction for many of these technologies unless they're being
    deployed in the private sector. We need the policy framework
    that gets them out into the marketplace.
        Senator Barrasso. Mr. Bryce?
        Mr. Bryce. Yes, sir, Senator. I'll give you a slightly
    different answer.
        I think these energy technologies are diffusing around the
    world with remarkable speed without much government assistance.
        Just finished shooting a documentary called, ``Juice: How
    electricity explains the world.'' I was in Lebanon about 18
    months ago. I was in the Chouf Mountains, southeast of Beirut,
    and I saw 100 kilowatts of Chinese solar panels that were
    capturing Lebanese sunlight that was being stored in lead acid
    batteries that were designed in Bulgaria and manufactured in
    India. So there's a robust international marketplace for all
    kinds of energy technologies, and in my view, these are
    diffusing very rapidly because there's a market for them.
        Senator Barrasso. Thank you.
        Mr. Sandalow. If I could, Senator?
        That cheap solar panel is cheap because the German
    government over the course of ten years deeply subsidized the
    purchase and the Chinese government deeply subsidized solar
    manufacturing and because this government, over the course of
    many years, was a leader in research and a variety of other
    government factors. So to say that solar panels are deploying
    around the world because governments are staying away is not
    really the full story.
        Senator Barrasso. Madam Chairman----
        Mr. Bryce. I'll just say that's not my point.
        Senator Barrasso. Regrettably, my time is expired.
        But Madam Chairman, just to tickle both of our memories,
    the GEAR Act stood for Greenhouse Gas Emissions Atmospheric
    Removal Act, and I submit that as part of the record.
        [Laughter.]
        [Details of the GEAR Act follow.]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. That is worthy of submission. We will have to
    re-up that one.
        [Laughter.]
        Thank you, Senator, and I appreciate the exchange here.
        Senator Cortez Masto.
        Senator Cortez Masto. Thank you.
        First of all, let me thank the Chairwoman and the Ranking
    Member for this great discussion, so appreciated. And thank you
    all for being here.
        I am from Nevada and let me just say I appreciate the
    conversation--not just about the solar and the wind but we have
    geothermal, we have hydropower. That is an important part of
    our energy portfolio.
        Let me ask you this because I do not disagree with what I
    hear today. I think we are all, kind of, talking about the same
    thing which is you can have a diverse energy portfolio but our
    stated outcome with that is to reduce our carbon footprint.
    Would you all agree with that? Yes? Yes, everyone is nodding
    their head yes.
        Dr. Majumdar. And affordability.
        Senator Cortez Masto. And affordability, correct, right.
    But that is the ultimate goal here.
        Let me ask you this--and because we have pulled out of the
    Paris Climate Exchange, because we are not engaging globally
    now--do you think this country, the United States, should not
    or stop reducing its carbon footprint? Does anybody believe
    that? I don't think anybody agrees with that.
        Mr. Sandalow. It's absolutely imperative that we continue
    to reduce our carbon footprint and that the whole globe do
    that.
        I mean, we've talked a little bit in this area, not a lot,
    about the urgency of climate change. I mean, we are already
    experiencing the dangers of climate change. It's unbelievable
    the amount of flooding, severe storms, fires that we've
    experienced in this country and around the world. Unless we
    jump on this problem now, those risks are going to be even
    worse in the decades to come.
        Senator Cortez Masto. Right, and I agree. I think we can
    lead, and this country should be leading in this direction.
        The other thing is, I think at a federal level, we should
    be investing at a federal level in this new technology. ARPA-E
    is incredible where I think there is that partnership between
    the Federal Government and the private sector.
        I guess my question for you, and I am going to butcher your
    name, Doctor, Dr. Majumdar?
        Dr. Majumdar. That is perfect.
        Senator Cortez Masto. Thank you, sorry.
        In your testimony you mentioned a handful of potential
    innovative solutions to address climate change such as grid-
    scale storage, modular nuclear reactors, we have talked about
    that, decarbonizing, industrial heat processes and others. Can
    you discuss the intersection of what is needed from a policy
    perspective to ramp up such technologies and how can we better
    facilitate the development in them and deployment?
        Dr. Majumdar. Senator, that's a great question, and I think
    we have to look at it holistically.
        It is absolutely critical to invest in the research, this
    foundational science and energy research, that the Department
    of Energy invests in and support them. It's also very important
    to get the right people in the Department of Energy to be the
    best stewards of this and that depends, of course, on the
    Executive Branch.
        I think it is also important to create, as was discussed,
    the markets for these new technologies, otherwise it's very
    difficult for these new technologies to be able to get in there
    because they need a little bit of health initially.
        And whether it's a price, whether it's standards, I think
    we can discuss that, but I think we need some kind of pull on
    the other side of the value chain. In between, we need
    infrastructure. And I think, I can't overemphasize how
    important that is.
        There was a question from Senator Heinrich about
    transmission lines. We are not very good at building
    transmission lines. That requires the Federal Government and
    the state governments and the local jurisdictions to partner
    together to expedite and streamline this process. Otherwise, we
    can put all the wind farms up but if you can't get the
    electricity to the places where the people live--it's all about
    the people at the end of the day----
        Senator Cortez Masto. Right.
        Dr. Majumdar. ----then we are not doing a good job. It's
    not optimal.
        So I would say paying attention to the infrastructure,
    paying attention to the capital requirements to build
    infrastructure, to bring in private capital, to use the federal
    dollars to be able to leverage and maybe create a little bit of
    a competitive spirit amongst the states who can deliver. And
    that's the kind of way to draw that in, to bring in these new
    technologies, test them out, put them, deploy them and then if
    you can lead that in the world, that creates the international
    market where everyone is looking for technologies in the
    future.
        Senator Cortez Masto. Thank you.
        Thank you. Thank you to the panel. I appreciate the
    conversation this morning.
        The Chairman. Thank you.
        This has been good discussions and good debate going on.
    There has been a little bit of discussion on the efficiency
    side. I think you pointed out in your monologue there or
    soliloquy or whatever it was.
        Senator Manchin. It was in there somewhere.
        The Chairman. It was in there somewhere.
        But the focus that what we do not spend is, in fact,
    probably our wisest energy source here.
        This is not a budget hearing, but we have been in the midst
    of budget hearings. I am on the Approps Committee, so we have
    been looking critically at those parts of the budget, whether
    it is in DOE or other parts, where I think we can be making a
    difference when it comes to our missions.
        When I see programs such as the Weatherization Assistance
    Program being zeroed out, it just causes me to, I guess there
    is a level of frustration there because it is seemingly the
    easy things. Maybe it is because we think we do not need to be
    doing the easy things anymore.
        We talk a lot around here about let's go after the low-
    hanging fruit, and I think sometimes we think that if it is too
    small we are not making a difference, we have not addressed the
    urgency of now that you all speak to.
        Can you share with us your observations in this regard that
    doing a little bit every day, maybe this incremental, I think
    you said, Ms. Ladislaw, moderate climate policy need not be
    mediocre which I think is well said.
        But we are kind of dealing with the rhetoric around here.
    We have a Green New Deal that is out there that is going to be
    everything to everybody. We are going to be 100 percent
    renewable in a couple decades. It makes it all sound so easy.
    Then people come to us and say, well why haven't you made it
    happen? So some of this is about managing expectations while at
    the same time we are pushing ourselves on a daily basis.
        But can we have a couple minutes of discussion about why it
    is also important not to overlook the smaller, more incremental
    things that clearly are making a difference there? And I throw
    it out to any of you.
        Mr. Silverman. I'll go ahead and start.
        I love energy efficiency because it is such a cost-
    effective, commonsense, you know, it's what I tell my daughter,
    right? Shut the light off when you leave the room.
        The Chairman. It's what everybody can contribute.
        Mr. Silverman. Absolutely.
        But here's the business model challenge that my company
    faces when we try to drive energy efficiency spend because we
    go in and we're competing with the utility monopoly and they
    don't want to give us access to the meters. They don't want to
    give us access to the customers. We can do on bill financing of
    energy efficiency improvements.
        These problems actually have been solved in one state which
    is Texas where they actually have really restricted the utility
    to being the monopoly utility to being the poles and wires
    company and the rest of us are out there in the market doing
    really crazy, fun, interesting energy efficiency retail demand
    response products.
        We actually compete with other competitive suppliers on who
    has the best rate for retail demand response, you know, where
    we send out a text message and if you reduce your electricity
    over the next hour, you get paid.
        I mean, these are the kind of innovative products, but
    really outside of Texas, our ability to compete to provide
    those products and take them to consumers and market to
    consumers is either restricted or entirely non-existent.
        The Chairman. Go ahead.
        Mr. Sandalow. Senator, my favorite energy efficiency
    investment are white roofs, cool roofs. They are so simple and
    so cheap and so low tech, but in warm climates, simply painting
    your roof white will save a lot in terms of air conditioning.
    Some places do it, some places don't. There are lots of other
    examples of that type of investment that we can make.
        Senator Manchin. How about black roofs in real cold areas?
        Mr. Sandalow. Don't know if that helps, Senator.
        The Chairman. Well, I do know that it has impact on the
    wind turbines, the color that you paint the blade to keep them
    from icing is darker blades.
        Mr. Sandalow. It's just a great example of the type of
    simple changes that we can make. And you know, I think we also
    need to be doing leading R&D on things like carbon fiber
    materials that are very lightweight that can be used in
    vehicles to save energy. I mean, there's lots of high-tech
    research to be needed, but also just some very simple things we
    can do and government policies can help to push those out into
    the marketplace.
        The Chairman. Ms. Ladislaw?
        Ms. Ladislaw. So, just very quickly on the psychology of
    the issue, right?
        We're not going to be done with this climate problem,
    right? So the idea that we do a thing and that it's solved,
    we're behind. And the volume and the magnitude of the Green New
    Deal isn't wrong, we're just that behind.
        But we need to do like an improv class approach, right? A
    lot less of the ``no, but'' and a lot more of the ``yes, and''
    because we just have to build momentum. That's really key to a
    lot of these solutions.
        So on energy efficiency it really does make a lot of sense.
    It is one of those areas where a price on carbon may not,
    doesn't make that much of a difference and you know, when we
    have the government shutdown, right? We really learned how very
    close the American public lives to not having enough money to
    pay their bills. Even if efficiency makes sense, they don't
    have the cash to do it.
        So if we're going to make, sort of, you know, progress on
    some of those issues, we need to have this consistent, let's
    learn from what has worked, let's learn from what hasn't worked
    and let's keep going and sort of keep revisiting these things
    because if we're going to re-engineer the entire economy to be
    net zero if we're going to tackle the carbon management side of
    this problem. And that's not resilience. So yes, and keep doing
    stuff that's working, revisit it on a regular basis. The small
    stuff really does add up.
        The Chairman. Senator Manchin, do you want to step in?
        Senator Manchin. I just want to say that first of all, I
    appreciate it, this has been a wonderful, informative
    discussion that we have had. I think you have been so helpful,
    and I think everyone on this Committee has enjoyed it that has
    been here.
        I am going to take my State of West Virginia. We are still
    producing 91 percent of our power from coal-fired units.
    Nothing has changed except the prices have gone up for some of
    the most challenged incomes of people anywhere. They are on the
    front end. They get beat up unmercifully and all we have done
    is drive the price of coal-fired plants to the point to try to
    make our renewables look more competitive and it is just
    causing a tremendous hardship. We were so attractive to
    industries in manufacturing because we were in the four-cent
    category per kilowatt-hour. We are up to six and eight and ten
    cents now in the commercial arena. We used to be at six and
    eight cents in residential. We are at 12. We are up to the
    national average.
        That is what you cannot sell. And you want to know why we
    lose the rural areas? It makes no sense to them. Why are you
    punishing the people who have done the heavy lifting?
        Mr. Bryce, I think you are an all-in energy person, but you
    are very pragmatic about your approach. If we are going to do
    something, let's do it and don't dillydally around. I think my
    good friend, Angus King, says there's still an awful lot of
    energy property that he can put a lot more renewables on. That
    is fine, but I understand the grid system is not there to
    deliver what you can produce in those empty areas and that cost
    would be pretty extravagant.
        What is the quickest solution, is nuclear? Bill Gates is
    giving me the same kind of spiel you have given me on what he
    is trying. Bill Gates says, listen, Joe. He said everybody
    talks a good game. I put my money where my mouth is. I have
    spent billions. I can tell you what works and doesn't work. I
    can tell you what is aspirational and what is doable. And he is
    big on this nuclear, but like you said, speaking of Catherine
    Cortez Masto, our Senator, she says, why do you keep pushing it
    on me? Why is it Nevada? Why is it Yucca Mountain? Where are we
    going to get rid of this stuff? And it lasts for eternity, so?
        Just give me a real quick response on where you stand on
    what you think is the quickest change we can make within that
    ten-year window. Use the ten-year window.
        Mr. Bryce. Well, I think in the ten-year window I think
    it's going to be U.S. exports of natural gas that are going to
    make the biggest effect on decarbonization.
        There was a report recently out of Singapore that Shell has
    offered a Japanese company to supplant the coal-fired power
    plant, that they want to provide them with a long-term LNG
    contract. So, the maturation of the global LNG market is----
        Senator Manchin. They are going to take a coal plant that
    has a lot of use of life?
        Mr. Bryce. The proposed coal plant would not be built,
    instead it would be supplied by natural gas.
        Senator Manchin. Okay.
        Mr. Bryce. In Japan.
        But my quick response overall, Senator, is I'm incredibly
    optimistic. I'm a humanist. I've been traveling the world the
    last three years looking at what's going on. The prize for
    companies that create key innovations, yes, government policy
    can have an effect, but the global energy market is a $5
    trillion a year business. And so, the U.S. Government can
    affect policy, but those policy results are going to be
    limited.
        And I'll just end with this. Again, this is not just a U.S.
    issue. There are three billion people, roughly today, in the
    world who use less electricity than my kitchen refrigerator.
    So, the defining inequality in the world today is about
    electricity and energy poverty and these countries that in
    India, Lebanon, places I visited, they are not going to sit
    around and say, well yes, we may want clean energy, but we want
    electricity now.
        Senator Manchin. Well, rural India is a good example.
        Mr. Bryce. Exactly.
        Senator Manchin. They don't care what comes out of the
    smokestack.
        Mr. Bryce. Or they're relying on diesel or fuel oil-fired
    generators which are expensive but, in many cases, that's their
    only option.
        Senator Manchin. Yes.
        The Chairman. Welcome to rural Alaska where so many of our
    villages are still powered by diesel-powered generation. That
    is it. They get their fuel brought in by barge twice a year and
    some years they do not judge correctly how cold and how long
    that winter is going to be, so they run out of fuel in
    February. The river is still locked in with ice.
        How do they get their fuel? It is flown in 50-gallon
    barrels at a time.
        So if you do not think it is already costly enough--to be
    locked into a fuel price that was set eight months prior and
    you have full transportation costs coming from the Lower 48 up
    the coast and up into the Yukon. But what is your alternative?
    What is your alternative?
        And so, as difficult as it is in many parts of the world
    that we would consider Third World countries, when we talk
    about energy poverty, Alaska is poster child for the land of
    riches and abject poverty when it comes to meeting energy
    needs. That is why we feel like we're the incubator of some
    really cool and innovative ideas, because when I can go out to
    a village like Kwigillingok, you have 400, 500 people in there.
    They have been powered by diesel for as long as anybody in that
    village can remember. They have a couple wind turbines that are
    clicking along. A little bit of a storage facility. It looks
    like a couple outhouses put together, lifted up off the tundra
    that you go inside, looks like little Chevy Volt batteries that
    are there, probably nothing more sophisticated than that. And
    on the day that I was there, everyone says, can you hear that?
    I am like, I cannot hear anything. And they said, that is the
    point. The generators are off. The generators were off for
    three days of quiet. And for that community, it was life
    changing.
        And so, incrementally, in little bits and pieces, this is
    where I get so excited about microgrids and thank you, Dr.
    Majumdar, for your leadership when we had National Lab Day up
    in Fairbanks last year. You saw some of the innovation that not
    only is going on within our national labs but what is going on
    within our living laboratories up north with these microgrids,
    what we are able to do. Sometimes it is not even engineers, it
    is people that just know how to fix an engine. And they are
    working good ideas, a little bit of duct tape and some rope and
    it is amazing what you can make happen.
        Senator King. Madam Chair, in Maine we call those people
    the guy you call when the horse falls down the well.
        [Laughter.]
        That is native engineering skill.
        The Chairman. I will remember that. We do not have a lot of
    horses that might fall into the well.
        Senator King. Okay, the moose.
        The Chairman. The moose that falls into the well.
        [Laughter.]
        Thank you all. This has been very, very interesting and
    provocative and helpful to us.
        Know that we will count on you as resources as we continue
    our discussion, but I appreciate each of you and what you have
    helped fill the record out.
        With that, the Committee stands adjourned for yet another
    fun return to the Energy and Natural Resources Committee.
        [Whereupon, at 11:58 a.m. the hearing was adjourned.]

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