[Senate Hearing 116-333]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 116-333

                  THE IMPORTANCE OF ENERGY INNOVATION TO 
                    ECONOMIC GROWTH AND COMPETITIVENESS

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 25, 2019

                               __________
                               
                               
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                       Printed for the use of the
               Committee on Energy and Natural Resources

        Available via the World Wide Web: http://www.govinfo.gov
        
                              __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
37-813                    WASHINGTON : 2021                     
          
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                    LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming               JOE MANCHIN III, West Virginia
JAMES E. RISCH, Idaho                RON WYDEN, Oregon
MIKE LEE, Utah                       MARIA CANTWELL, Washington
STEVE DAINES, Montana                BERNARD SANDERS, Vermont
BILL CASSIDY, Louisiana              DEBBIE STABENOW, Michigan
CORY GARDNER, Colorado               MARTIN HEINRICH, New Mexico
CINDY HYDE-SMITH, Mississippi        MAZIE K. HIRONO, Hawaii
MARTHA McSALLY, Arizona              ANGUS S. KING, JR., Maine
LAMAR ALEXANDER, Tennessee           CATHERINE CORTEZ MASTO, Nevada
JOHN HOEVEN, North Dakota

                      Brian Hughes, Staff Director
                     Kellie Donnelly, Chief Counsel
            Chester Carson, Senior Professional Staff Member
               Spencer Nelson, Professional Staff Member
                Sarah Venuto, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
              Lance West, Democratic Deputy Staff Director
                            
                            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

Anderson, Dr. Brian, Director, National Energy Technology 
  Laboratory.....................................................     7
Deskins, Dr. John, Director, Bureau of Business and Economic 
  Research, West Virginia University.............................   115
Hart, Dr. David M., Senior Fellow, Information Technology and 
  Innovation Foundation, and Professor, Schar School of Policy 
  and Government, George Mason University........................   120
Ragsdale, Jr., S. Lee, Senior Vice President, Grid Infrastructure 
  and Compliance, North Carolina's Electric Cooperatives.........   127
Vanderburg, Isaac, CEO, Launch Alaska............................   136

          ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

Anderson, Dr. Brian:
    Opening Statement............................................     7
    ``2018 Science & Technology Accomplishments: Unleashing 
      American Energy,'' from the National Energy Technology 
      Laboratory, U.S. Department of Energy......................     8
    Written Testimony............................................   106
    Responses to Questions for the Record........................   160
Deskins, Dr. John:
    Opening Statement............................................   115
    Written Testimony............................................   117
Hart, Dr. David M.:
    Opening Statement............................................   120
    Written Testimony............................................   122
    Responses to Questions for the Record........................   171
Manchin III, Hon. Joe:
    Opening Statement............................................     3
Murkowski, Hon. Lisa:
    Opening Statement............................................     1
Ragsdale, Jr., S. Lee:
    Opening Statement............................................   127
    Written Testimony............................................   130
    Responses to Questions for the Record........................   179
Vanderburg, Isaac:
    Opening Statement............................................   136
    Written Testimony............................................   139
    Responses to Questions for the Record........................   180

 
      THE IMPORTANCE OF ENERGY INNOVATION TO ECONOMIC GROWTH AND 
                            COMPETITIVENESS

                              ----------                              


                        THURSDAY, JULY 25, 2019

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:03 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 this morning to examine the importance of 
energy innovation to economic growth and our nation's long-term 
competitiveness.
    You will note that I am not joined by my Ranking Member yet 
this morning. He is in an Executive Session in the Senate Armed 
Services Committee and has asked that I go ahead and begin the 
hearing this morning. He will be here. He was actually the one 
who first presented this idea to me that the Committee should 
examine this as we are looking at our priorities here.
    We have held hearings on innovation throughout the year, 
and while we have largely focused on what we see as our best 
policymaking opportunities, today we are going to be looking 
more broadly at why it matters for the economy. Senator Manchin 
has been very, very focused on that effort, and we were pleased 
to be able to put together such a solid panel here this morning 
to help us with that.
    So Senator Manchin will be in and we expect others as well, 
but it is a busy Thursday morning in the United States Senate 
so we are going to kick off the conversation.
    This is an important connection as we think about why 
innovation and, specifically, energy innovation is such a 
significant contributor to economic growth. We may not always 
realize or appreciate it, but energy innovation is critical to 
our success as a nation. Historically, it has enabled higher 
standards of living and the development of modern society, from 
electrification to long-distance transportation.
    I often share the story and the perspective that is 
contained in one of Robert Caro's books which is ``The Path to 
Power,'' and there is one chapter called ``Sad Irons.'' When I 
am speaking to women's groups, I will often reference this 
specific chapter because it speaks about life in Eastern Texas 
before electrification in the '30s and what the life of a woman 
was like. I have not ever spent any time in East Texas, but I 
can only imagine that at this time of year it is not 
particularly pleasant when it is really hot. And when the men 
go off to herd the cattle or do whatever they do on the range, 
the women are left to keep the home. Keeping the home means 
first going down and hauling the water and boiling the water, 
but you had to make a fire, stoke the fire, in order to do 
that. It speaks about just the physical damage to a woman's 
body after years of hauling heavy water, multiple trips back 
and forth. The rigors of just this very heavy, heavy work and 
labor.
    And they talk about the--I am telling a story about ``Sad 
Irons.''
    Senator Manchin. Not me?
    The Chairman. No, no, no.
    But they talk about the various days and how the worst day 
of the week is Thursday because Thursday is the day that they 
do the ironing. So it is not only hauling the wood and making 
the fire, but then standing over the hot fire with the hot iron 
and ironing the stiff jeans that have been hung out to dry, and 
the repetition and the heat.
    And you think about that. These are, some of these women 
are still alive today, whose physical aspects are still 
apparent in that labor that they endured every day because they 
did not have energy. They could not turn the stove on. They 
could not turn the faucet on. When you think about those ways 
that women have truly become empowered, they are the true 
beneficiaries of what we see with energy innovation.
    Today, on a national scale, new energy technologies are 
lowering costs, reducing environmental pollution and supporting 
hundreds of thousands of well-paying jobs in the process.
    Energy innovation will be no less important going forward. 
I happen to believe it is the best way to address the 
challenges that we face on both energy security and climate 
change. Whether we are looking to bolster our energy supply or 
reduce our greenhouse gas emissions, innovation will need to be 
front and center and recognized as our best solution.
    As we consider energy innovation, we want to place special 
emphasis on our rural areas. We have taken care to include 
their perspectives in our discussion today, because we 
recognize that there are tremendous opportunities for energy 
innovation in rural America that are worthy of our attention 
and our discussion.
    I think that is particularly true in our State of Alaska. 
We have already seen how new, innovative technologies can 
reduce our reliance on costly diesel fuel, but we know that we 
have great potential, enormous potential, for much more.
    The sheer size of Alaska makes it very expensive to 
transport fuel. Many of our communities are paying upward of 
$7, $8 a gallon. New technologies, whether they be in 
renewables or even microreactors, I look at these and say these 
innovations will help to make a real difference in the local 
economies and the lives of so many Alaskans.
    It was earlier this summer I was up North in the community 
of Cordova, a small coastal fishing community, and they were 
cutting the ribbon on a new grid-scale battery there. This is 
not interconnected to a terrestrial grid. They have to maintain 
their own microgrid there in Cordova. The town has always 
relied on diesel generation to back up their small hydro, but 
thanks to this new energy storage facility, they now have lower 
costs. They are able to utilize much, much more of their 
abundant hydropower resource. They have far fewer fluctuations 
in the electricity.
    What this has done, this cheaper, more reliable, affordable 
power, it has allowed this fishing community to grow in a way 
that they could otherwise not. They are now the fifth largest 
fishing port by volume in the state. Why? Because the 
processors can locate there. They can make ice in a way that is 
affordable. They can do the processing that they need. You 
can't do that if you don't have power. That fishing community 
would be bypassed if they didn't have that power.
    We up North have always been innovators, and we don't just 
do it because we have to, but because we are pioneers. We like 
breaking new trails. I think that is an important part of it.
    Yesterday we had some good news out of the Department of 
Energy's Office of Indian Energy. They announced competitive 
grants for the communities of Igiugig, Kwethluk and Togiak. 
Igiugig is now on everybody's map. Everyone can pronounce 
Igiugig because it is home to this new RivGen Power System 
where we are going to be tapping into that marine hydrokinetic 
energy there for this small community, getting them once again 
off diesel.
    So, a lot of good stories to be told. I am looking forward 
to hearing more from you, Mr. Vanderburg, with all the 
innovation that is coming out of Launch Alaska. We are pleased 
to have you here to tell us how your startup incubator is 
enabling companies to be successful in Alaska.
    Mr. Vanderburg is joined this morning by Dr. Brian 
Anderson, who is the Director of the National Energy Technology 
Laboratory. We are very pleased to have you.
    Dr. John Deskins is the Director of the Bureau of Business 
and Economic Research at West Virginia University. I am sure 
that Senator Manchin is going to give further introduction 
there.
    Dr. David Hart is a Senior Fellow at the Information 
Technology and Innovation Foundation.
    And Mr. Lee Ragsdale is a Senior VP for Grid Infrastructure 
and Compliance for North Carolina's Electric Cooperatives.
    We have a great panel here this morning, and we are looking 
forward to hearing all the good news that you have to share 
with the Committee.
    I now turn to my friend and colleague, Senator Manchin.

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

    Senator Manchin. Thank you, Chairman Murkowski, and to all 
of you. We want to thank you all for being here and helping us 
through understanding what opportunities we may have if we work 
together.
    Let me just say the Committee, as you see, that we will be 
coming and going. I am going to have to leave because I am in a 
classified hearing downstairs.
    The Chairman. Don't tell them about it.
    Senator Manchin. Oh, I won't tell them.
    But anyway, that is what you see. It is not meant to be 
disrespectful at all. It is just that basically they pile 
everything on at one time.
    I want to especially welcome my fellow West Virginians, Dr. 
Brian Anderson and Dr. John Deskins, who I work very close with 
and have the utmost respect for in their professions, but also, 
their love of West Virginia and basically trying to find the 
best path forward that helps our country and our state. So 
thank you all for being here.
    We also understand innovation is quite possibly the key 
ingredient in global competitiveness and a robust growing 
economy. We have so many today that basically are preaching 
elimination, elimination, elimination. Elimination is not going 
to work. We have very little control over the rest of the 
world's energy supply and the sources of what they are going to 
use.
    We do have an awful lot as far as being involved in 
innovation if we have research and development that gets new 
technology that we are able to spread around the world that 
really addresses the changes in climate.
    I have often said, we are not talking about North American 
climate. We are not talking about West Virginia or Alaska 
climate. We are talking about global climate, and we have to 
make sure we look at this in a global way.
    We only affect, as I am told by scientists, 15 percent of 
what goes on in the climate today. Eighty-five percent is 
basically directed by others. We have to show through 
innovation and also use the power of our economy, if you will, 
to make sure they are able to transition into a cleaner form of 
using energy that they have in their backyard, whether it be 
coal, natural gas, new development of hydrogen and all the new 
resources that will be coming and also the renewables.
    I believe we need a better connection between big concepts 
like innovation of global competitiveness and how those affect 
daily life of millions of Americans. At the most fundamental 
level we are going to be talking about jobs. As the Chairman 
was just saying, I have been to Alaska with her and she has 
been to West Virginia with me. There is a balance between the 
economy and the environment that we should be striving for--not 
the elimination of that, but the balance of it.
    I think that is what the Chairman and I can bring to this, 
two states that are very heavy energy producing states, 
extraction states, thinking that we might not have the same 
desire to have a clean environment which is absolutely untrue 
and absolutely the opposite. We think that we can bring more 
common sense to it and find a balance more than anybody else.
    Earlier this year, former Energy Secretary Ernie Moniz 
testified before us on a short list of breakthrough energy 
technologies that can help us fast-track our response to the 
climate crisis with strategic investments in technology like 
CCUS, solar efficiency, advanced nuclear and others.
    I strongly support strategic federal investment in climate 
solutions, with my EFFECT Act being just one example, and I am 
happy to have the Chairman working with me on this very 
important piece of legislation.
    I would like to see an increased focus on using innovation 
dollars to strengthen the economic resilience of our rural 
communities. As markets and other forces continue to transition 
our economy to reduce utilization of fossil fuels, we can't 
just quit on the rural economies that have produced our energy 
for decades and leave them behind. We must find ways to 
integrate these communities into the new clean energy future by 
expanding energy manufacturing and production in an all-of-the-
above way. And I will make it very clear, I asked one time when 
the previous administration was giving an awful lot of the 
credits to renewables, which was fine because we had to mature 
renewable technologies, but I said, if you are going to give 
these credits, can't you at least make the people use the 
credits in the areas where we lost the jobs? That would help 
soften the blow an awful lot. That was gone unresponded to.
    How do we make sure rural communities have a foothold in 
the growing energy efficiency sector? How do we create an 
environment that invites businesses seeking no and low-carbon 
energy solutions into our home states? How do we reclaim our 
lands in ways that utilize clean energy technologies such as 
solar installation and storage solutions and, yes, recognizing 
that fossil fuels are not going to disappear completely here or 
abroad? How do we find ways to burn fossil fuels in cleaner, 
more efficient ways that lend themselves to the economies of 
traditional energy producing states?
    With those questions in mind, I also welcome, again, Dr. 
Deskins and Dr. Anderson to share their observations on what is 
happening to the economy of West Virginia and its ties to the 
long energy history in my state.
    I hope our discussions today help move us toward 
implementing much needed energy innovation solutions and 
realizing the domestic economic benefits in all American 
communities.
    Our extraordinary system of national labs is unique and, 
along with America's research universities, underpin our 
innovation edge for economic productivity, job creation, 
security and environmental stewardship. Our 17 national 
laboratories comprise the most comprehensive research network 
of its kind in the world, and the Chair and myself had a chance 
to sit down with all 17 lab directors the other night and 
really enjoyed meeting and talking to them. Now my job is to 
make sure I get around and visit all 17. I am really familiar 
with Dr. Anderson. He is next door.
    Dr. Anderson is with the National Energy Technology 
Laboratory (NETL), and he is here with us today to share his 
expertise. NETL is also a prime example of how the labs benefit 
the economy, having an estimated $1.9 billion impact on the 
U.S. economy in 2018, including over 10,000 direct and indirect 
jobs. As we speak, they are continuing important work on carbon 
capture, grid modernization, efficient utilization of coal and 
how to integrate fossil fuel system with renewable energy.
    But this work is not happening in a vacuum. It is happening 
in partnership with our universities and our private 
businesses. The Federal Government must play a robust financial 
role in the innovation space in order to incentivize and 
challenge the private sector to push toward a cleaner energy 
economy. We can't do it without one another. We all must work 
together, and we shouldn't do it without finding ways to bring 
the communities and workforces that have been devastated by the 
loss of energy production and manufacturing along with this 
transition.
    Historically, the U.S. has spent over 2 percent of the 
total budget on non-defense research and development. In fact, 
from the 1960s to the early 1980s, we spent 3.5 percent of our 
federal budget on non-defense research and development. 
However, for the past decade, we have averaged only about 1.7 
percent and have not gone over 2 percent since 2004.
    We cannot be a leader in clean energy technology, or any 
technology, if we do not put the resources behind advancing 
those technologies--and we are falling behind.
    Our Committee has a responsibility to do our part to 
address climate change and work toward climate solutions. We 
are moving in that direction. On July 16th, we reported out a 
number of bills that advance innovative, effective and 
practical technologies. We have held numerous hearings on the 
intersection of innovation and climate change, which is real. 
We have met with countless stakeholders seeking to work with us 
on these issues.
    Today we must discuss the policies that can and should be 
implemented to ensure that our climate solutions lead to 
economic development and the United States has the 
infrastructure in place to get these solutions over the finish 
line. We just need to maintain our funding and focus.
    I have said all along, you ask a coal miner to build you a 
windmill and that miner will build you the best damn windmill 
you have ever seen. West Virginia, Alaska and our nation have 
the best workers in the world, and they have supportive 
communities behind them.
    Now I believe that today's hearing will illustrate how our 
nation's innovative spirit and American workforce can be used 
to advance global climate solutions. And as we build on the 
series of hearings we have had in the past several months, I 
plan to continue advocating for a pragmatic solution that will 
lift up all workers while advancing U.S. leadership on energy 
innovation.
    With that, Chairman Murkowski, I look forward to hearing 
from our witnesses.
    The Chairman. Thank you, Senator.
    Senator Manchin. I am going to have to excuse myself. I am 
going to run back down.
    The Chairman. No, no, no, we understand. I have mentioned--
--
    Senator Manchin. I have a few good questions, so I want to 
get back.
    The Chairman. We will let you pop back in when you get 
here, and we appreciate Senator Cantwell and Senator Gardner 
joining us here this morning.
    Senator Cantwell had led me on a couple different tours in 
Washington State where we have looked at innovation when it 
comes to grid modernization and security.
    And, of course, Senator Gardner has NREL in his state and a 
lot of good innovation coming out of Colorado in the West. So 
we appreciate that as well.
    I have introduced each of our panelists here, so let's get 
into it.
    I would ask you to try to limit your comments to about five 
minutes. Your full statements will be included as part of the 
record. After that, we will have an opportunity to ask 
questions and to explore more some of the interesting 
innovation in the energy space.
    Dr. Anderson.

          STATEMENT OF DR. BRIAN ANDERSON, DIRECTOR, 
             NATIONAL ENERGY TECHNOLOGY LABORATORY

    Dr. Anderson. Well, Chairman Murkowski, and I would also 
like to thank Ranking Member Manchin and the other members of 
this Committee, especially Senators Gardner and Cantwell, for 
the opportunity to discuss energy innovation and economic 
development.
    As you mentioned, I'm Brian Anderson. I'm the Director of 
the National Energy Technology Laboratory of the U.S. 
Department of Energy. We are one of the 17 national labs in the 
DOE's complex.
    The national labs address large-scale, complex research and 
development challenges by placing an emphasis on translating 
basic science into innovation and commercialization. We play a 
key role in the innovation ecosystems of the regions in which 
we operate and the nation as a whole.
    For NETL, our mission is to discover, integrate and mature 
technology solutions to enhance the nation's energy foundation 
and protect its environment for future generations. I also say 
our mission is to discover, integrate and mature technologies 
to change the world. We operate locations in Morgantown, West 
Virginia, Pittsburgh, Pennsylvania, and Albany, Oregon, and 
have field offices in Houston, Texas, and in Anchorage, Alaska.
    NETL supports DOE goals through both our in-house research 
and collaborating with partners in industry, academia and the 
other national laboratories. We implement R&D projects for the 
DOE's Offices of Fossil Energy (FE), Energy Efficiency and 
Renewable Energy (EERE), Cybersecurity, Energy Security, and 
Emergency Response (CESER) and the Office of Electricity (OE). 
Our laboratory research portfolio includes more than 900 
research activities in all 50 states with a total award value 
that exceeds $6 billion currently with $3 billion of that 
coming from industry cost share.
    In today's testimony I will first highlight a few 
technologies that will make an impact in communities across the 
country and discuss the lab's role in accelerating the pace of 
energy innovation through partnerships.
    I would like to include for the record an Accomplishments 
book from 2018 highlighting about 30 of the accomplishments of 
the lab, and I can include--provide a copy for each of the 
Committee members.
    The Chairman. [off mic]
    [The 2018 Science & Technology Accomplishments book 
follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]	

    Dr. Anderson. Thank you very much.
    It is imperative that the American economy continues to 
have access to low-cost, reliable power that minimizes the 
impacts on the environment, including CO2 emissions. 
Our work can help spur economic development while mitigating 
technical and environmental risks. Our carbon capture program 
has cut the cost of carbon capture by nearly 50 percent and 
reduced the energy penalty for capture by nearly 20 percent. 
Our storage program is focused on developing safe, cost-
effective, permanent geologic storage solutions for 
technologies for CO2. Our carbon utilization program 
promotes R&D that utilizes CO2 to generate value-
added products from carbon dioxide. Our in-house researchers 
have had significant breakthroughs in using inexpensive 
catalysts to convert CO2 into useful chemicals such 
as fuels, alcohol, polymers and plastics. Our Advanced Ultra-
supercritical (AUSC) Component Testing program is working 
directly with industry, not only to develop the critical 
components of future AUSC plants but also to design a domestic 
supply chain that would create manufacturing jobs in the United 
States.
    NETL is also exploring the potential for extracting rare 
earth elements from the full spectrum of coal and coal-based 
materials. NETL definitely played a leading role in developing 
a large suite of technologies that helped create the 
unconventional oil and gas boom that we see today that has 
created domestic jobs and provided low-cost energy for our 
homes and businesses. We currently manage eight unconventional 
oil and gas field observatories across the country, including 
locations in West Virginia, Alaska, Texas, Louisiana, North 
Dakota and Kentucky.
    We partner with the University of Alaska Fairbanks, Hilcorp 
and others on a polymer flood pilot on the J-Pad of the Milne 
Point Unit on the North Slope. This technology is expected to 
increase crude oil recovery from 10 to 15 percent currently to 
about 50 percent in the future.
    Our work in Alaska also includes methane hydrates and we 
partnered with the USGS, Japan Oil Gas and Metals Corporation 
and BP to drill a stratigraphic test well that was completed 
this past December. We're on a path to drill the world's first 
long-term hydrate production test well for this clean energy 
resource that dwarfs conventional natural gas accumulations 
around the world.
    American energy innovation is a result of public-private 
partnerships and, along with our other 16 DOE laboratories, 
NETL has significant innovation breakthroughs. We recently 
entered into a ten-year, $100 million agreement with Exxon 
Mobil and the National Renewable Energy Laboratory and--too bad 
Senator Gardner had to leave--it was specifically on developing 
biofuels and carbon capture and storage technologies to bring 
that to commercial scale to the market.
    We're also working with the Department's Advanced 
Manufacturing Office, AIChE's Rapid Manufacturing Institute and 
a number of universities to create new ways to convert natural 
gas into value-added products.
    We recognize that a properly trained workforce promotes a 
successful deployment of new energy technologies, so we have a 
regional workforce initiative that's facilitating our lab's 
engagement with more than 400 individual, regional and national 
stakeholders, along with other federal agencies, specifically 
in energy and advanced manufacturing.
    In conclusion, I would like to emphasize that the work 
being performed at NETL provides opportunities for economic 
development through performing leading edge, fundamental and 
applied research and through our unique role as a government-
owned, government-operated laboratory, we focus on pushing 
technologies toward commercialization. Science, technology, 
research, they're all powerful anchors of regional innovation 
and sustainable economic development.
    So thank you very much for this opportunity to discuss our 
cutting-edge innovations which have applications within and 
well beyond the energy sector.
    Thank you.
    [The prepared statement of Dr. Anderson follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]	
    
    The Chairman. Thank you, Dr. Anderson, lots going on there. 
We appreciate that.
    Dr. Deskins.

STATEMENT OF DR. JOHN DESKINS, DIRECTOR, BUREAU OF BUSINESS AND 
          ECONOMIC RESEARCH, WEST VIRGINIA UNIVERSITY

    Dr. Deskins. Chairman Murkowski and members of the 
Committee, thank you so much for inviting me here today to 
discuss the importance of innovative, energy-related solutions 
to economic growth. I am very happy to be here.
    I will focus my comments on the economic environment in 
West Virginia, but my points apply broadly to other energy-
producing regions across the nation.
    First talk about coal for a second. The recent decline in 
coal production in West Virginia had a devastating effect on 
our state's economy. Coal production dropped to around 80 
million tons in 2016, down nearly 50 percent from its 2008 
level. This led to a loss of 13,000 jobs and a direct loss of 
$4 billion in economic output. Production has bounced back to 
some degree over the last couple years, but this rebound can be 
attributed, mostly, to international coal demand and, as such, 
the state's coal industry is becoming more dependent on 
volatile export markets.
    These losses create a vicious cycle where job loss is 
followed by out-migration and this typically leads to an aging 
population and a population with lower levels of educational 
attainment, drug abuse follows in economically depressed areas, 
altogether making it even more challenging to attract new 
businesses and, thus, perpetuating the cycle.
    The effect of the national drop in coal demand has been 
felt most strongly in central Appalachia which includes 
Southern West Virginia. Consider Boone County, our state's 
largest coal-producing county for many years. Their coal 
production and employment stand at less than one-fourth of 2010 
levels. Other job losses in the county have followed as less 
money flows to other local businesses.
    The industrial mix in Boone County has, also lends to the 
crisis. In 2010, coal accounted for 55 percent of all jobs in 
the county making it difficult, if not impossible, for many 
laid off coal miners to find other jobs locally.
    The concentration in coal job losses, a lack of industrial 
diversity and this vicious cycle that has been sparked give 
rise to the question of whether many of these affected 
communities are sustainable over the long run.
    The natural gas boom that West Virginia has enjoyed in 
recent years has helped. The boom has created around 1,000 
high-paying jobs directly associated with natural gas drilling 
and exploration. The numbers are even larger when one factors 
in other industries that provide transportation and other 
services and pipeline construction activity.
    In terms of natural gas production, West Virginia's 
position in the Appalachian Basin has exposed it to the 
industry's volatility. Between 2010 and 2014, the volume of 
natural gas extracted increased at an average annual rate of 42 
percent but posted only marginal gains in 2015 and 2016 
followed by more growth over the past couple years.
    While the natural gas industry's growth has been beneficial 
in many ways, the upstream stage of production is very capital 
intensive and gains in this aspect of economic activity will 
not be enough to afford broad employment prosperity.
    Given this high level of capital intensity in natural gas, 
truly broad prosperity will require more downstream activity, 
creating more value added in the state. This would begin with 
ethane crackers and ethane storage hub, research labs, et 
cetera.
    Since the 2012 through 2016 recession, West Virginia's 
economy has enjoyed a rebound in economic activity, adding more 
than 11,000 jobs and $4 billion in economic output. However, 
this growth has been highly concentrated from both a geographic 
and an industrial perspective. Seven counties in the state 
account for the lion's share of recent job growth and 
essentially all the job growth is related to energy extraction 
or pipeline construction.
    Many call for industrial diversification as a solution to 
West Virginia's economic crisis, and I myself make this call 
routinely in speeches and discussions across the state. It's 
crucial for West Virginia to cultivate strength in 
manufacturing, tourism and other industries. However, 
industrial diversification is a long-term proposition that 
requires long-term action on the part of businesses, 
entrepreneurs, government and community leaders. In other 
words, broad diversification is a difficult proposition.
    A more viable path for West Virginia's economy and many 
like it, in the short-term, is through strengthening their 
state's energy sector into energy-related areas beyond raw 
extraction. As these figures indicate, this type of 
diversification is desperately needed. This could include jobs 
in energy efficiency and renewables. For instance, we might 
find ways to leverage abandoned surface mine land for use in 
solar energy. We might find ways to introduce pump storage, 
hydroelectric facilities, for example. In other words, strength 
in the near-term may lie in diversifying out from our existing 
comparative advantage in raw energy extraction into innovative, 
energy-related industries.
    I hope that the information provided today can help make 
for better policy to move West Virginia and similar areas 
forward through innovative energy-related diversification and 
cooperation with the Department of Energy with the National 
Energy Technology Laboratory, universities and industry 
players.
    Thank you.
    [The prepared statement of Dr. Deskins follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]	
    
    The Chairman. Thank you, Dr. Deskins. We appreciate that 
perspective.
    Dr. Hart, welcome.

  STATEMENT OF DR. DAVID M. HART, SENIOR FELLOW, INFORMATION 
  TECHNOLOGY AND INNOVATION FOUNDATION, AND PROFESSOR, SCHAR 
    SCHOOL OF POLICY AND GOVERNMENT, GEORGE MASON UNIVERSITY

    Dr. Hart. Thank you, Chairman Murkowski, Senator Cortez 
Masto, members of the Committee.
    My name is David Hart. I'm a professor at the Schar School 
of Policy and Government at George Mason University. I also 
lead the clean energy innovation policy program at the 
Information Technology and Innovation Foundation (ITIF), which 
is a non-partisan think tank.
    Thank you for inviting me to share my views on energy 
innovation with you today. This too often neglected domain is 
vital to our national interests. I will make six points today 
which I developed further in my written testimony.
    First, rapid innovation across a wide range of energy goods 
and services is vital to our national goals in the coming 
decades, including but not limited to, economic prosperity and 
environmental sustainability. I thought Chairman Murkowski's 
story of the Sad Irons made that very vivid. Cleaner, more 
affordable, more reliable energy can underpin improvements in 
Americans' health, enhance the life chances of the less 
advantaged in our society and strengthen our common defense.
    My second point, the future prosperity of the United States 
will depend on innovation in energy supply, management and use. 
For instance, smart manufacturing systems and other process 
innovations can provide U.S. industries with a competitive 
advantage by rapidly improving energy productivity. There will 
also be enormous opportunities in the coming years for dramatic 
product and business model innovations in major industries like 
electric power and transportation. Innovation is the core 
American strength in the global economy, and we must continue 
to build on that strength in energy and in other sectors as 
well.
    Third and equally important, energy innovation is vital to 
arrest global climate change and thereby avoid its worst 
consequences, which would include substantial damage to our 
economy. Climate change is real, accelerating and caused 
primarily by unabated combustion of fossil fuels. The current 
trajectory puts many of our major cities and industries, 
including agriculture, at risk. The world will need to adopt a 
diverse array of energy innovations on a massive scale to bend 
the greenhouse gas emissions curve sharply downward.
    Fourth, while failing to stop climate change will have 
enormous economic consequences, so too will succeeding, 
unlocking significant opportunities for growth. Major sectors 
of the global economy will be transformed. If the United States 
does not lead these transformations, it risks missing out on 
these growth opportunities. The auto industry is a good 
example. It has now begun to shift inexorably toward battery 
propulsion. Massive investments are being made in new battery 
and electric vehicle factories in China, Europe and elsewhere 
while the United States lags.
    Further in the future industries that produce metals, 
chemicals and other bulk materials which produce about a 
quarter of the world's carbon emissions will also be ripe for 
energy innovation.
    Fifth, all states and regions of the United States have 
opportunities to benefit from energy innovation. A big part of 
energy innovation in the 21st century involves developing and 
managing distributed resources such as wind turbines and 
batteries. The grid of the future will not be a one-way system 
through which large power plants sell their output to passive 
customers but a dynamic, multidirectional, interactive platform 
for exchange. Everyone connected to the grid can join in the 
innovation process.
    In addition, and as my colleagues have spoken about, unique 
energy resources in many regions, including many rural areas, 
have the potential to support good, new jobs. It isn't 
surprising that clean energy has emerged as a focus for state 
and regional economic development strategies. The best of these 
strategies take a long-term approach and invest in talent and 
infrastructure to build new capabilities and to attract outside 
investment.
    Sixth, and finally, the Federal Government can and should 
do a better job of accelerating energy innovation. The think 
tank to which I'm affiliated, ITIF, has offered many 
recommendations for federal policy, and I'll just list a few of 
them here. First, providing financial and technical support to 
clean energy-focused state and regional economic development 
strategies. Second, encouraging national laboratories, military 
bases and other federal institutions to contribute to those 
strategies. Third, expanding investment in use-inspired R&D and 
cluster-deepening programs like ARPA-E and manufacturing USA. 
Coinvesting with private, state and other partners in energy 
technology demonstration projects. Reforming how federal 
research, development and demonstration programs and 
institutions are managed so that we get greater value from our 
investments. Providing cleaner, predictable and increasingly 
stringent pollution control regulations and emissions taxes to 
drive industrial innovation. And finally, taking a leadership 
role in the world to drive clean energy innovation.
    In conclusion, innovation is intrinsically uncertain and 
energy innovation is particularly so at this time. No one knows 
precisely what the energy landscape will look like in 2050. We 
need to build a robust portfolio of options not only to address 
the diversity of challenges across the global energy system but 
also so that we are ready to cope with the inevitable surprises 
and failures that come with innovation.
    Thank you for your leadership in this policy area, and I 
look forward to responding to your questions.
    [The prepared statement of Dr. Hart follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]	
    
    The Chairman. Thank you, Dr. Hart.
    Mr. Ragsdale, welcome.

STATEMENT OF S. LEE RAGSDALE, JR., SENIOR VICE PRESIDENT, GRID 
   INFRASTRUCTURE AND COMPLIANCE, NORTH CAROLINA'S ELECTRIC 
                          COOPERATIVES

    Mr. Ragsdale. Chairman Murkowski, Ranking Member Manchin, 
members of the Committee, good morning. My name is Lee 
Ragsdale. I'm Senior Vice President, Grid Infrastructure and 
Compliance for the North Carolina Electric Cooperatives. I'm a 
registered professional engineer in North Carolina with 25 
years of industry experience, the last 12 of which have been in 
leadership roles within my organization's power supply 
division. My team is responsible for pursuing and applying new 
technologies and solutions to the grid that make it more 
flexible, efficient and capable of providing end-of-the-line 
consumers new energy solutions.
    Today I'm honored to share our vision of a brighter energy 
future with you. The network of North Carolina's electric 
cooperatives is comprised of 26 locally-owned and operated co-
ops serving communities from the mountains to the coast--45 
percent of our state's land mass. Each of these co-ops is a 
not-for-profit, member-driven organization, meaning those who 
receive service from a local co-op have a say in how it's run 
through the election of the Board of Directors for the co-op. 
One quarter of our state's total population, two and a half 
million people, primarily in rural areas, are members of 
electric cooperatives.
    As electric cooperatives, our service is to provide 
electricity but as community-based, member-driven 
organizations, our purpose is to support and empower our 
members and communities through economic and community 
development and with new energy services.
    Furthermore, as leaders in the utility industry, it is our 
responsibility to champion an effort that we call a brighter 
energy future. The roots of this forward-focused strategy grow 
from three values that we believe in. One, creating a low 
carbon emissions environment through sustainability and 
continued investment in low and zero emissions resources. 
Integrated technology to make distribution grids more 
resilient, robust and flexible for an energy future that 
includes consumer participation through demand response 
programs and new energy resources distributed across the grid. 
And three, improving efficiency of the overall energy sector 
through the use of beneficial electrification.
    North Carolina's electric cooperatives are pursuing and 
applying new technologies to the electric grid to make it more 
dynamic, flexible and efficient. Collectively, North Carolina's 
electric cooperatives have installed two megawatts of community 
solar across 18 sites throughout the state. We've integrated 
260 megawatts of utility-scale solar. We have planned and 
developed two operating microgrids, each including battery 
storage, and we have worked with consumer members to install 
more than 3,000 Wi-Fi enabled thermostats and water heaters. 
These investments reduce peak loads and improve overall system 
efficiency.
    You can see these edge-of-grid technologies in action at 
our two microgrid sites which control and optimize components 
to enhance resiliency and bring other cooperative and community 
benefits to two North Carolina locations. As you know, 
resiliency is the ability to recover from reliability events. 
Localized sources of power combined with technology and 
infrastructure enables grid flexibility to improve resilience. 
NCEMC placed these demonstration projects to benefit the two 
largest economic drivers in our state, tourism and agriculture. 
They demonstrate economic benefit throughout the year, 
offsetting wholesale power cost, deferring asset investments 
and providing grid optimization opportunities. They also help 
support local resiliency and improve reliability with edge-of-
grid resources distributed throughout the network.
    The Ocracoke Island microgrid is located on North 
Carolina's scenic Outer Banks and became an operational 
microgrid in February 2017. We installed the microgrid in 
partnership with the local cooperative, Tideland Electric. 
Ocracoke Island's remote location leaves it vulnerable during 
weather events and isolated from central power generation 
sources.
    The microgrid includes solar, energy storage, a diesel 
generator, thermostat and water heater controls and will 
support better power reliability for the island. It serves as a 
resource that can be called on during times of peak demand.
    The integration of both supply side and demand side 
resources with community involvement from the residents and 
visitors to this island have made this a successful project. 
The value gained from operating the microgrid funds it 
throughout the year, that is to minimize peak demands, 
offsetting power supply and transmission costs.
    The Butler Farms microgrid in Lillington, North Carolina, 
is a project that integrates components owned by North 
Carolina's electric cooperatives with resources owned by Butler 
Farms. The Farm had existing diesel generation used to support 
its power needs during times when service had been interrupted, 
and it also sells power produced from renewable sources, 
including a swine waste biogas generator and solar to its local 
EMC, South River EMC.
    New components of this microgrid include the micro 
controller and energy storage. The microgrid is configured to 
allow for local resources to not only serve the farm, but also 
to serve homes in the community during outage events. The 
controller balances local control with system optimization for 
power supply savings.
    These projects demonstrate how we can work with industry 
partners to turn our challenges into mutually beneficial 
solutions that strengthen the community. The individual value 
of these devices is amplified when they are coordinated by the 
utility and optimized for the portfolio benefiting member 
consumers across the grid, not just those within the microgrid 
footprint.
    Battery storage is a game-changing technology. We're 
continuing to explore new solutions to the edge of the grid 
that can meet the needs of our member consumers.
    But innovation depends upon infrastructure. Infrastructure 
includes both traditional distribution lines and utility poles 
but also communication through rural broadband. Infrastructure 
also includes investments at the edge of the grid by consumers, 
like on Ocracoke, and by farmers, like Mr. Butler, investing in 
the swine waste facility.
    The success of these projects takes partnership from the 
local community, business partners and the cooperatives. 
Together we can create a bright energy future.
    Finally, I would like to highlight S. 1183, the EASE Act. 
This bill would authorize the Department of Energy to provide 
grants and technical assistance to co-ops for the deployment of 
energy storage and microgrids. S. 1183 would be a welcome 
addition to co-op efforts in these areas.
    Thank you very much.
    [The prepared statement of Mr. Ragsdale follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]	
    
    The Chairman. Thank you, Mr. Ragsdale. We appreciate it, 
and I like the very specific stories there.
    Mr. Vanderburg, I think I introduced you as Vandenberg, 
instead of Vander--so I apologize for that.
    Mr. Vanderburg. I've gotten that before. It's no problem.
    The Chairman. We appreciate you being here and making the 
long haul from Alaska. We welcome your testimony this morning.

       STATEMENT OF ISAAC VANDERBURG, CEO, LAUNCH ALASKA

    Mr. Vanderburg. Thank you.
    Good morning, Chairman Murkowski, Ranking Member Manchin, 
and members of the Committee. It's a privilege to come before 
you today.
    At Launch Alaska we recruit and invest in high growth 
startups and support their growth by connecting them with 
customers and project opportunities in Alaska. Our mission is 
to accelerate the resource revolution by supporting companies 
that decarbonize and digitize food, water, transportation and 
energy systems.
    The topic of this hearing is particularly timely for our 
home State of Alaska at this moment in time, and that's for two 
reasons.
    First, after 50 years of rather miraculous economic growth 
following the discovery of oil in Prudhoe Bay, the state is 
going through a deep economic restructuring as the combination 
of low oil prices and decreased volume through the pipeline is 
severely reducing revenue to the state. Time will tell how the 
state decides to respond to this challenge. What is clear 
already is that Alaska will be forced to make its own energy 
transition over the coming decades.
    Second, climate change is hitting Alaska hard. Electric 
utilities are seeing their infrastructure fail as the 
permafrost below it melts. Ice roads, critical to North Slope 
oil operations are frozen for fewer days each year. Meanwhile, 
entire communities are having to flee coastal erosion and 
fisheries are disappearing thanks to higher than average ocean 
temperatures. Anchorage just experienced its hottest July on 
record passing 90 degrees Fahrenheit for the first time which, 
if you're a glass half full kind of person, is likely the 
coolest July we'll experience in the next 200 years.
    While both of these story lines are particularly intense in 
Alaska, I imagine they are also familiar to other members of 
this Committee and states across the country.
    As a nation, we are all grappling with how to manage the 
energy transition away from fossil fuels in a way that 
strengthens local economies, reduces pollution and keeps 
families and people healthy.
    The good news is that the anecdote for both of these 
ailments is one and the same. It is a massive mobilization to 
create and deploy solutions to climate change and, in so doing, 
participate in the greatest wealth creation opportunity of our 
lifetimes.
    Alaska's role within this energy transition is as a world 
class deployment and proving ground for the technologies that 
lead us to a decarbonized future. Alaska has over 250 
independent islanded microgrids and some of the highest cost in 
the country as well as vast energy resources in the form of 
wind, hydro, geothermal and yes, even solar.
    It's an ideal location for validating technology and 
business models related to microgrids and distributed energy 
resources, new modes of transportation, energy resiliency and 
all the enabling technologies that the global energy transition 
entails.
    At Launch Alaska, our view is that thanks to decades of 
public investment in America's national labs, universities and 
the U.S. military, we already possess the technological tools 
that we need to begin making rapid progress on our most 
pressing economic and climate problems today. Our focus now is 
on validating those technologies and the business models around 
them by helping young companies develop projects in Alaska. 
These are companies like BoxPower, a cleantech, startup 
featured in Forbes 30 Under 30 which manufactures easy to 
assemble solar generators and shipping containers as an 
alternative to diesel generators. Spun out of a Princeton 
University research project, BoxPower worked closely with the 
Northwest Arctic Borough in Alaska to identify community 
partners and deploy their first units in the Fall of 2018 to 
the community of Buckland. And then they deployed two more 
units just a couple weeks ago to Deering, Alaska.
    These projects will save those two communities $800,000 in 
avoided fuel cost over the system life. And the partnership 
provided BoxPower with critical tech validation and performance 
data.
    Another example of a company is 60 Hertz, an Alaska-grown 
startup that used input from power plant operators and rural 
villages to design a piece of operations and maintenance 
software that protects expensive diesel generators and other 
renewable energy assets on islanded microgrids.
    The software ensures that important maintenance happens 
accurately and on time while easing the burden of paperwork for 
all involved. The 60 Hertz team worked closely with Alaskan 
utilities, native serving non-profits and tribes to design 
simple, culturally relevant software that does not require 
existing computer experience.
    And last, but not least, another example is Oklo which is 
working on very small reactors, initially aimed at producing 
cheaper, reliable and cleaner power for Alaskan communities and 
businesses. The Oklo reactor is designed to operate for over 20 
years without refueling. And since it is a fast reactor, it can 
reuse and recycle previously used fuel. The reactor is designed 
for deployment in areas like we have in Alaska and can provide 
both electric power as well as heat. Their technology builds on 
decades of research and development in advanced reactors in the 
U.S. Oklo combines the legacy of technology development with 
advances in materials, high performance computing, innovative 
business models that fit users' needs and venture backing to 
produce a product that is well-suited to scale and to meet 
Alaska's needs and the world's needs.
    For BoxPower, 60 Hertz and Oklo, the challenges they face 
are no longer technology as much as they are policy barriers, 
regulatory barriers and a lack of clear national energy 
priorities to support their deployment. A sustained, 
coordinated and multiyear commitment by federal entities for 
cooperative research agreements and technology demonstration 
deployment projects, can provide a win-win for the state and 
the federal entities.
    Recognizing the unique Arctic test bed that Alaska 
represents, the U.S. Navy's Office of Naval Research is a 
primary sponsor of our efforts and those of several partner 
organizations. Other parts of the U.S. Department of Defense 
are beginning to follow suit.
    On the other hand, the entire U.S. Department of Energy 
physical presence in Alaska consists of two full-time positions 
and currently, one, full-time employee. We are good friends 
with these individuals and they have provided valuable 
mentorship and connections to our companies, and we need more 
of their colleagues and boots on the ground in state. An Arctic 
Energy Office with representation from the DOE is one approach 
to consider.
    In conclusion, as the global transition to a decarbonized 
energy system gathers momentum, Alaska's high cost of energy 
and harsh environment offers an ideal deployment ground for 
startups to partner with communities, validate their tech and 
scale to large global markets. This approach to energy 
innovation can support sustained economic growth and 
competitiveness for communities throughout the U.S. while also 
rising to the challenges posed by climate change.
    Thank you very much for your time today, and I look forward 
to answering your questions.
    [The prepared statement of Mr. Vanderburg follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]	
    
    The Chairman. Thank you, Mr. Vanderburg, I appreciate that. 
You know, it is a reminder that in all of what we are doing, 
these partnerships, whether it is with our national labs, 
whether it is with our universities, whether it is with the 
private sector, how we bring everybody together, this is really 
key.
    We have a lot of great ideas. We have opportunities for 
proving grounds, whether it is in Alaska, whether it is in 
North Carolina with your microgrids or West Virginia, all over 
the country we have these opportunities. But how we bring them 
all together is part of the challenge.
    And you point out, we have some policy barriers, some 
regulatory barriers where, basically, we are our own worst 
enemy there. We need clear direction.
    But I want to pick up where you left off at the end, Mr. 
Vanderburg, because you highlight some of the partnerships that 
have been working in the State of Alaska. We hear repeatedly 
that the Office of Naval Research has been really very good to 
work with and that folks within DoD have been as well, making 
some real commitments there.
    But you would think that the natural partner would be the 
Department of Energy and you bring up, kind of, a sore subject 
for me because we have been pushing on DOE to get us more boots 
on the ground, if you will. We are a state twice the size of 
Texas, we say that all the time, and we are down to one, 
single, full-time employee.
    I want to ask a question about what you have proposed, 
which is working through an Arctic Energy Office as an approach 
that might be more productive than what we have seen with DOE 
as it relates to Alaska.
    In statute we have already outlined this Arctic Energy 
Office. It is theoretically housed within the National Energy 
Technology Laboratory but the previous administration basically 
zeroed it out. They disbanded it. So it is there on paper only.
    I guess I will start with you, Dr. Anderson. Are you 
willing to look into supporting these changes that Mr. 
Vanderburg is talking about to allow us to both expand and make 
better use of this office? Is this something that you think 
is----
    Dr. Anderson. I would absolutely support looking into it.
    Just as a side note, the Arctic Energy Office was 
invaluable to us in the methane hydrate project.
    The Chairman. Right, right.
    Dr. Anderson. And I could see that it would provide great 
benefit.
    Currently we are funding it out of the oil and gas program 
within the----
    The Chairman. The methane hydrate project.
    Dr. Anderson. No, the Arctic Energy Office.
    The Chairman. Okay, okay.
    Dr. Anderson. We're funding out of the oil and gas program 
within the Office of Fossil Energy. But as we work very closely 
with EERE, OE, CESER and the Office of Nuclear Energy, I think 
that there might be an opportunity to support it more broadly 
across the Department.
    The Chairman. I guess I will kick it back to you, Mr. 
Vanderburg then. If we are able to breathe new life into the 
Arctic Energy Office, what would you consider to be some of the 
highest priority research areas that we need to expand into 
that would make a difference in our state?
    Mr. Vanderburg. Again, following up on my comments, my 
mental model of what we need at this point is actually more 
research into regulatory pathways to deploy some of the 
technologies that we currently have. And so, I would actually 
ask that an Arctic Energy Office looks at how do we take some 
of the technologies that have come out of the national lab 
system that are working their way into startups and how do we 
create, do technoeconomic analysis, make regional energy plans 
to understand the impact of scaling these technologies on 
communities and regions and find pathways forward to get this 
stuff deployed into real projects.
    There are also technologies that the national labs, 
universities and military are doing current R&D on which we 
continue to need to invest in those areas, things like grid 
integration, carbon capture and sequestration, seasonal 
storage, you know, there's an entire area around cybersecurity 
for distributed grids and communications in areas where there's 
low broadband. These are all areas, specific technology areas, 
where we just need to continue to develop the most cutting-edge 
competitive technologies out there. But again, a focus on 
getting what we have that's sitting on the shelf into projects 
and working with DOE on that.
    The folks that are in Alaska, they've been successful 
partners, incredibly helpful to us already. We just need more 
of it. And if we get some additional assistance there, I think 
we'll see more deployment and more projects being built in 
Alaska.
    The Chairman. Well, this is something that I would like to 
figure out how we can be working together to really make use of 
some of these proposals that we have funded, to gain good 
benefit from historical technologies. I mean, Dr. Anderson, you 
point out that there was a time when the Arctic Energy Office 
was really doing some big things--I mean, the methane hydrates 
we have been working on with Japan, as you point out, for years 
and made great strides.
    I am not really interested in creating things within 
statute that don't do us any good. If they are not doing any 
good, let's restructure them. Let's reformat them. Let's make 
them purpose built.
    And given that each and every one of you, whether you are 
from West Virginia or North Carolina or Alaska, are pointing to 
the realities that we are seeing with a changing climate, what 
that means to us, knowing how critical the Arctic is to what we 
are seeing, not only around the country but around the world, 
and better understanding that. We are that ideal place for so 
much of the pilot, of the innovation, that is going on. Let's 
test it up there. Let's try to understand it better.
    I would like a commitment to work on how we can really put 
good value to these offices and allow them to be what we had 
hoped that they would be when we initially created them.
    I want to go a little bit more, again, into the 
partnerships because I really do believe that what we have 
seen, for instance, using Alaska as my model, when I was out in 
Cordova to see the folks from the national labs out there, 
working with, literally, the lineman on the ground there at 
Cordova Electric, working with folks from the universities, and 
then of course, the private sector as well, how they all came 
together in really a very unified structure that just worked. 
Maybe it was the personalities, maybe it was the leadership. I 
give Clay Koplin, the Mayor there, a lot of credit for that. 
But whatever it is, it didn't happen with just one entity. It 
didn't just happen with the national lab, kind of, air dropping 
in and saying: this would be a great place for this energy 
storage project.
    So how we do more with the partnerships, I think, is really 
very, very important.
    As you mentioned, Mr. Vanderburg, our state is looking at 
some very, very difficult budget issues, ones that are 
particularly troublesome when it comes to our university 
system. Right now, our university is looking, the system 
itself, is looking at a 41 percent reduction in its overall 
funding. Unprecedented, unprecedented. They are losing the bond 
rating, professors are looking to leave, students are not 
getting their scholarships, are threatened. It is a very, very 
precarious situation for us right now.
    I have a level of confidence that our legislature is going 
to work this through and we are not going to be seeing this, 
but in the meantime, it causes me great concern because we have 
been doing phenomenal research when it comes to the Arctic 
space. We have been doing phenomenal research when it comes to 
energy innovation.
    And so, I throw this out, not only to you, Mr. Vanderburg, 
but to Dr. Anderson, Dr. Deskins and Dr. Hart here. You are all 
either current or former professors. Speak to the role and the 
importance of supporting local economic development in energy 
by our universities partnering with national labs because I see 
this as, again, one of these incubators, one of these proving 
grounds that we can't forget how much value we get from that.
    So just a very general question to you. This should be an 
easy one, and then we will go to Senator Manchin.
    We had great testimony.
    Dr. Anderson. I'll go ahead and jump in.
    We have at NETL, of the 900 external partners, a major 
fraction of those are at universities and because we see really 
two opportunities.
    One, innovative ideas that are coming up from the students 
at the universities and faculty members are imperative to get 
into our commercialization engines. So, as a national lab, we 
fit in that role where lots of creative ideas come out of the 
universities and we can help mature them and hand them off into 
the private sector. But also, to help train the next generation 
of the STEM workforce. It's really important for us. My 
research staff at NETL, within the next five years we will have 
50 percent of our research staff eligible for federal 
retirement. It scares me to death. And I need that pathway 
through partnerships and academia to provide the next 
generation of my researchers and the researchers that we need 
in the country.
    The Chairman. Dr. Deskins.
    Dr. Deskins. I can just add very briefly, at West Virginia 
University, we feel like we have a lot of resources that can 
benefit the state and our current mindset, that I fully 
support, is to be as aggressive as we can possibly be in not 
only fulfilling our traditional mission of educating young men 
and women but also reaching out and partnering with government 
and business groups across the state to do everything that we 
can to help bring our state to the prosperity that we hope for 
in the long run.
    We're very aggressive on outreach, and that's basically my 
entire job at the university.
    The Chairman. Great.
    Dr. Hart. Yeah, I think Dr. Anderson spoke very well to the 
complementarities among the different institutions, the 
national laboratories, the universities, the government 
agencies.
    I would just add that the universities can be an important 
convener at the regional level, especially when we're thinking 
about getting groups of industries and companies together. It's 
a neutral partner, it's not going anywhere and it can really 
serve an effective role in helping build the kinds of 
partnerships that are durable in places.
    The Chairman. Well said.
    Mr. Vanderburg, can you just wrap up this part of the 
discussion by sharing with us the role that the university 
plays, the University of Alaska has played, in the energy 
technology development for the state? Just give some examples 
here?
    Mr. Vanderburg. Yes.
    We have a wonderful partner at the Alaska Center for Energy 
and Power at the University of Alaska Fairbanks. I approach all 
these comments from an entrepreneur perspective and from the 
perspective of our startups. The main thing they look for from 
the university is talent, folks to hire, which goes to that job 
creation/workforce readiness side of things. That's what these 
innovation communities need from the university is talent, 
people to bring into their startups as they grow.
    At the Alaska Center for Energy and Power (ACEP) they also 
play an important role of working with communities. We have 
this history of having folks come into the community and sell 
things that may or may not work, and develop projects and then 
leave, leaving the community worse off. The Alaska Center for 
Energy and Power is doing a great job of building trusting 
relationships with communities, kind of, playing that role so 
that before a company can go in to just sell some technology, 
communities are in the habit of checking with ACEP to make sure 
the technology is legitimate and that they can trust what is 
being deployed. I think that kind of gatekeeper entrusted 
relationship role is a really powerful role that the university 
can play anywhere in the country, but certainly they're playing 
that role in Alaska.
    The Chairman. I think, particularly when you are dealing 
with small villages and tribes and you have, kind of, this view 
that there are those that come up from the outside, again, just 
air drop in, saying we have a fix for your village and then 
they leave and they haven't really made that connection with 
the community, they haven't worked to build an informed or 
skilled maintenance program where the local people can really 
have ownership of that. So I think you raise a key point there.
    Let me go to Senator Manchin. We have had good discussion 
here this morning.
    Senator Manchin. Well, thank you all, and I am sorry we are 
going back and forth. I had to run downstairs, but I am here 
now.
    Anyway, we have seen an exponential growth in natural gas. 
I mean, we never thought we would have the energy. We have an 
ocean of energy in the Appalachian Basin, as you know, and how 
do we take advantage of that for the security of our nation?
    I have had good conversations with Secretary Perry. Rick 
and I were talking and he said, ``Joe, I've seen the model of a 
Class 5 hurricane coming up the Houston Channel, what it can 
do. It decimates us and cripples us and our energy supply for 
our country.'' So with that, we start talking about where would 
be a better place, where do we have an ocean of energy, if you 
would, that basically could be well protected and is not 
subject to the tremendous climate swings and the devastating 
hurricanes? The Appalachian Basin in West Virginia, Ohio, 
Pennsylvania and parts of Kentucky. It all has a tremendous 
opportunity, and it's in a strategically located area, close to 
the most populated area of the country.
    I would like to know from Dr. Deskins and Dr. Anderson, 
both, more on that topic. We have talked about a storage hub 
and what that storage hub could mean, not only for the security 
of our nation, but the economic impact.
    I think, Dr. Deskins, you all have some preliminary numbers 
on what you think that Hub could produce because the 
petrochemical industry along the Ohio River and up the Canal 
River that surrounds West Virginia and comes into West Virginia 
has been strategic for our country since World War II. All the 
things that we might take for granted, a lot of them were 
invented and found right there.
    But it is a shell of what it used to be. We have the 
ability to grow within the same footprint that is not being 
utilized. That is what we are looking to do in a petrochemical 
revitalization.
    But Dr. Deskins, if you want to touch on the economic 
vitality that could happen?
    Dr. Deskins. Sure. I'll just mention that it is remarkable 
how much of a surge we've seen in terms of the production of 
raw natural gas that we're extracting from West Virginia and 
exporting to other states. And that creates benefits in various 
ways. It creates some good-paying jobs. It creates revenue for 
state and local government. But the fact is, just simply 
exporting raw natural gas is a very, very, very capital-
intensive process.
    So if you look at the dollar value of economic output, 
it's, you know, mind blowing. But it just doesn't create as 
many jobs as you would imagine because it's an extremely 
capital-intensive sector.
    Certainly in West Virginia the number of jobs created by 
gas is not close to enough to offset the number of jobs lost in 
coal. So exporting raw natural gas is a good thing, but it's 
not a transformative opportunity for West Virginia. It's not 
going to help us achieve the prosperity we hope for over the 
long run.
    What we have to do to really achieve prosperity is keep the 
natural gas in West Virginia, the ethane storage hub as a part 
of that process, but keep the gas in West Virginia and use it 
in chemicals and plastics and other types of manufacturing 
industries to see the value added in West Virginia and then 
export more valuable products.
    To the extent that we can really achieve our full potential 
in seeing that value-added manufacturing take place in West 
Virginia, it can be a completely transformative experience for 
a state to bring in tens of thousands of high-paying jobs that 
make a real difference. Ethane cracker is part of that process. 
Ethane storage hub is part of that process. Collaboration with 
research laboratories is part of that process. But that has to 
be your focus, not simply exporting raw natural gas.
    Senator Manchin. Let me just mention. I want to go on 
record again. A lot of you have heard about China's involvement 
in our industry in West Virginia. They came and signed an MOU 
for $83 billion, and I repeat, $83 billion over 20 years. When 
you put that in comparison to the state budget of West 
Virginia, our budget is only a little over $4 billion a year. 
So something doesn't make sense here. And we cannot find out 
what their intent is.
    I want to make very clear, we encourage their investment. 
We would love to have their $83 billion, if it is for a capital 
expenditure. If it is basically removing resources, such as the 
ethane, propane, butane and making a commitment to take all of 
our wet gas, if you will, which we use for a building block, 
then we could reinvigorate our manufacturing base but also 
invigorate our petrochemical base. Then I would hope the 
officials in my State of West Virginia would understand that is 
a non-starter. We will do everything we can to prevent that 
from happening.
    I am trying to pass every piece of legislation I can for 
CFIUS to review all of the properties that were taken out of 
our country. We want to help our allies, but the intent is to 
destroy us economically, basically, by taking our stockfeed, 
and that is something that cannot happen. And I have been very, 
very vocal on that, and I want to go on record with that. Bring 
your investments for the capital improvements and capital 
expenditures. Don't bring your investments to rob us of our 
natural resources.
    Dr. Anderson, if I can ask you? You have taken on a role in 
the national labs and we are very proud of that. They are a 
major driver of economic activity all over the country and they 
have been at the forefront of so many innovative, creative 
things that we have all taken for granted. We don't know how we 
got them, but we sure do enjoy them.
    With that being said, I understand NETL has only 460 full-
time positions in Morgantown, West Virginia, but 522 are 
authorized. You just mentioned you have about half of that 
workforce that could retire. Where are we on the recruiting 
end?
    Dr. Anderson. Well, sir, we've been balancing, as part of 
the Congressional justifications of the President's budget, we 
have caps on the federal positions. We've been balancing that 
with hiring through contracted researchers and----
    Senator Manchin. Are you capped right now? I mean, you have 
522 available. Are they capping you at 460 with----
    Dr. Anderson. Well, it's a, we--the caps are in conjunction 
with the budget. And so----
    Senator Manchin. They are basing off the 460, not the 522.
    Dr. Anderson. Right, the authorized number is considerably 
higher than the budget number.
    Senator Manchin. Were you able to raise the concerns you 
have with all the people eligible for retirement?
    Dr. Anderson. Yes. Within approximately the last year we 
have developed a strategic capital plan. We're in the midst of 
workforce development planning for how we can train up the 
existing workforce and ensure that we're recruiting at all 
three sites, including Morgantown.
    Senator Manchin. You have more?
    The Chairman. Yeah, yeah, I have more.
    Senator Manchin. You have more, I have more too.
    The Chairman. Okay, alright.
    Senator Manchin. Go ahead.
    The Chairman. Sharing.
    [Laughter]
    I wanted to ask Mr. Ragsdale, it was interesting listening 
to the description of the two microgrids that you have chosen 
to highlight there at the Butler Farms swine waste. It is not 
anything we know about in Alaska, but you know, it is just a 
reminder to us that we all have different assets wherever we 
are.
    In Alaska, you might have a river that is just right or you 
might have a little geothermal or you might have just enough 
wind or you might have a lot of hogs. And so, how we look 
around us to figure out what it is that we have that we can use 
and you might not think that it is useful. I love the fact that 
when we think about carbon now, instead of thinking about 
different places where we can stuff it under the ground in a 
big enough hole, we are talking about management. We are 
talking about utilization. We are talking about creating value 
out of something that has been viewed as a negative.
    I wanted to ask you about what more we can be doing to help 
with our regional co-ops and our rural co-ops. I think they 
face their own set of challenges. They are smaller. Oftentimes, 
trying to bring that level of innovation to a scale that works 
out there can be a challenge.
    I guess my first question to you is whether or not your 
member co-ops received any initial assistance from DOE, if they 
have been helpful to you in the project development process? 
And what kinds of technical support could be utilized to better 
assist our smaller, rural co-ops in deploying these microgrids 
because as good as it is to be part of the bigger system, when 
you are on a little barrier island out there or when you have 
natural disasters coming your way, the ability to be resilient 
out there is something that we are all looking to with a great 
deal of interest.
    Can you tell us how DOE can be more helpful to our smaller 
co-ops?
    Mr. Ragsdale. Sure, thank you for the question.
    You spoke of partnerships earlier and both of these 
microgrids have been successful because of the partnerships 
that we have. The co-ops in North Carolina, as a whole, all 26 
co-ops, agreed to fund these two microgrids because they 
provide value, but also because they're an opportunity for us 
to look to the future, to do research and development on 
innovative solutions and understand how they can work within 
our system. So they were self-financed. And I appreciate our 
Board of Directors and their forward vision on providing that 
financing and allowing us to work through that.
    But we took partners from Mr. Butler, who made the decision 
a few years ago to invest in swine waste, biogas generation on 
his farm. He saw a need and he had an opportunity, so he made 
an initial investment. We made an investment as well in the 
energy storage to make that a microgrid and to make it 
complete. So those various partnerships across the entities.
    You asked earlier about universities. We've partnered with 
our local universities in North Carolina. We have a great 
system, and they have been very valuable in helping us. We have 
some graduate students and professors that are working with us 
on taking technology and innovative ideas and applying them to 
our real-world examples and helping us improve them.
    As far as DOE funding, unfortunately, we have not received 
DOE funding for these yet.
    The Chairman. Have you applied?
    Mr. Ragsdale. We have applied for a number of grants and 
there's a lot of competition for the grants that's out there. A 
lot of people are interested.
    I believe this S. 1183, the EASE Act, would help facilitate 
more funding going to co-ops who can apply that for their 
members. Because of our not-for-profit cooperative business 
model, we look at solutions that benefit our members at the end 
of the line. We can be nimble on those solutions when they 
pencil out, but DOE funding certainly helps.
    We also have partnered with tax equity investors. Because 
we're not-for-profit, we receive no value from the tax credits 
for solar or storage for our direct investment. So we have to 
partner with other investors to help monetize that and help 
realize some of that value. So those combinations, allowing us 
to be more effective, would be great.
    The Chairman. Let me ask further, and this is to Mr. 
Ragsdale and Mr. Vanderburg and any of you.
    We hear great ideas. We get individuals, like you, Mr. 
Ragsdale, like you, Mr. Vanderburg, that are coming and telling 
us all this amazing stuff that is happening.
    We have West Virginia where you are taking, you are getting 
critical elements, critical minerals out of coal ash, rare 
earths out of coal ash. We hear about all this great stuff that 
is out there. But if you are the little village of Igiugig or 
you are somewhere out in the Outer Banks of North Carolina and 
some of this good stuff that is going on could actually be made 
applicable to where you are, how do you even know who is doing 
what or what you can learn from what is going on in Alaska or 
West Virginia or North Carolina? How do we facilitate the 
sharing of these good ideas? What's out there? I mean, is it 
just people like you, Mr. Vanderburg, that has Launch Alaska 
where you say, hey, we are the repository of cool things. How 
do we do this?
    Mr. Vanderburg. You know, one thing that we haven't talked 
about a lot today is that in addition to the national lab 
system and the university system and the great work that's 
going on in the military, America also has this incredible 
innovation ecosystem where there are accelerators and 
incubators and startup studios and venture capitalists. And 
this in itself is a real jewel of the country. And I think when 
we go about looking for, you know, part of our annual cycle is 
we go and we talk to utilities, we talk to communities, we talk 
to asset owners in the state and try to understand what their 
problems are, problems that they're facing right now that they 
need help with. And then we go out to these partners and ask 
for folks that have solutions that are ready to deploy today. 
We don't look at companies or projects that still have four or 
five years of tech development on them. We want technologies 
that are ready to go that need maybe their first deployment, 
that are tech validation in Alaska. And I think that that is a 
great network.
    I also think some of the work that, as I think Mr. Hart 
mentioned earlier, both universities and national labs can do 
is a great job of convening partners and holding summits. The 
National Lab Day that ACEP did in Fairbanks this last year was 
incredible, and we continue to have great relationships that 
were built there.
    I think a lot of our jobs, those of us who are sitting at 
the table, is about reaching out to our colleagues and spending 
a lot of the time on the phone with folks and asking for, just 
having those conversations and reading, you know, what's going 
on and keeping abreast of recent trends.
    We spend a lot of time on that. You're putting your finger 
on something that is a real challenge and I think, you know, 
that DOE and the Federal Government could keep helping to 
support those convening efforts that are happening in states 
and throughout the country.
    The Chairman. Good. Any other ideas?
    Mr. Ragsdale. Yeah, and I would further, you know, there 
are a number of national organizations that do a real good job 
of spreading information--NRECA for the cooperatives.
    One of our principles is ``Cooperation among 
cooperatives.'' We've done these projects, and we've looked at 
the research. We've documented the use cases. We've put them 
through experiments, we've written up white papers to share and 
we've shared that among the cooperative community. We're 
hearing great things that are happening out in other parts of 
the country, and we're thinking how could we emulate that as 
well? And so, it's that communication, that sharing, that 
really provides the opportunity for us to learn in certain 
locations and apply those learnings throughout.
    We're doing the same in North Carolina. We've got two 
projects now. We have five or six projects in the pipeline in 
the state that we're going to continue to expand. We're going 
to get more complex. We're going to work with the universities 
on control. We're going to work on how do we optimize these 
assets. But it takes the communication of the lessons learned 
and then applying them and making them broader and broader.
    The Chairman. I am going to turn to my colleague.
    Senator Manchin. There are a couple things I want to touch 
on.
    They tell us about 30 percent of the greenhouse gas 
emissions are from hard to reduce industrial sources, and there 
are very few technologies that we have available to sustainably 
reduce those.
    I will give you a couple. Industries such as 
transportation, rail transportation, which moves the 
metallurgical coal which has great demand all over the world. 
That is a hard one to decarbonize also. And the growing 
petrochemical industry is hard to decarbonize.
    All we hear about is the power plants. We think that is 
going to clean up the world. That is a part of it but not 
anywhere close to all of it or the hardest to get to.
    We have a bill that is coming out today, Senator Whitehouse 
and myself, and it will introduce innovative technologies that 
target the greenhouse gas emissions in these industrial 
sectors.
    So aside from the inherent climate benefits, what other 
potential benefits to any state, such as West Virginia, which 
is a heavy lifting, hardworking state, can they anticipate from 
investing in these technologies and do you think that the 
innovation will be spurred on if we put resources to that?
    That would be for anybody on the panel that wants to speak 
to it.
    Dr. Anderson. Well, I'll jump in quickly because one of the 
core tenants of our relationship with Exxon Mobil and the 
National Renewable Energy Laboratory is developing and scaling 
up technologies for carbon capture from industrial sources.
    And so, we're already seeing that there are at least from 
one major industry player in both the petrochemical and 
transportation fuel sector that has a significant interest in 
developing those technologies and bringing them to scale.
    And so, if we can start doing it at the refineries owned by 
Exxon Mobil and others, then we see the opportunities to bring 
down the cost for industrial carbon capture that could then be 
deployed at smaller facilities.
    Senator Manchin. Let me touch on something because we did 
that at the Mountaineer Plant. We tried it. We were the first 
and we took it on as a state through the Department of Energy 
doing a full-scale carbon capture utilization, if you will. It 
was carbon capture sequestration.
    At that time, President Obama said go ahead and build them 
and it will break you. He knew exactly what they were talking 
about because unless you have enhanced oil recovery or some 
other value coming back out when you pressurize liquid 
CO2, the cost was prohibitive. A perfect example, 
just, kind of, a thumbnail on this. If it was a 900-megawatt 
plant and you financed that plant and based on that, however 
many megawatts of production, you are only going to return 
about 600 megawatts of production. You don't have the finances, 
you don't have the cash flow to pay for this. So it is not 
going to happen.
    But during our trip to the Arctic we did just a wonderful 
trip, and it really opened my eyes up. We visited Dr. Mohammad 
and his carbon capture team in Aberdeen, Scotland.
    Now what they were doing, they were taking CO2 
and using a brine to turn it into a powder that can be used in 
other products like plasterboard and bricks to have more 
commercial value.
    We also have a team at West Virginia University that is 
working on turning CO2 from flue gas to baking soda.
    I believe there is a lot of opportunity out there. I have 
always said, carbon capture utilization, and when we crack that 
one, that will be the way to go because we can help the rest of 
the world. And right now, we are not. They are not going to 
follow us down the path of demand in carbon capture 
sequestration when there is nothing to enhance value that comes 
back. It is just not financially feasible.
    So what economic potential do you see in innovative ways of 
using CO2, because it is going to be done. We have a 
lot of people that are clamoring, ``eliminate, just quit 
burning. No more fossil.'' Well, that is fine. You could stop 
burning every drop, every ton of coal and every MCF of gas and 
not change the climate 10, 15 percent. What are you going to do 
with Asia? What are you going to do with China? What are you 
going to do with India? They are not going to follow suit 
because of us, I don't think, unless we have this.
    Do you all see anything coming down the pipeline that you 
are working on?
    Mr. Ragsdale. I can share just briefly. I was at a 
conference in San Francisco last year with a bunch of cleantech 
venture capitalists and everyone--there was a dinner that was 
held and, you know, a lot of the firms are household names you 
would recognize. And the topic of the dinner was carbon capture 
sequestration. And at the outset of the dinner the hosts of the 
conference got together and said, okay, who is seeing deals 
come across your desk in carbon capture sequestration? Who has 
done a deal? And probably 50 people in the room, representing 
the most active VC firms in the country, and no one had seen a 
single deal yet they had invested in.
    Having said that, everyone wants to see one and there's a 
lot of, because of the points that you pointed out, Senator 
Manchin, everyone is recognizing this is critical that we 
figure out carbon capture sequestration.
    I think that as we talk about the role of the Federal 
Government that we may want to be open to the potential that 
there's going to be a lot of need for the Federal Government to 
just invest in solving this problem without a business model 
associated with it.
    Senator Manchin. We have the EFFECT Act now. We are working 
on that.
    Mr. Ragsdale. Yeah.
    Senator Manchin. And we are all working together on this. 
So, basically, it redirects DOE in finding a solution for this 
because I don't think the rest of the world is going to step 
forward.
    By 2040, EIA says China will be depending on 50 percent or 
more of their energy coming from fossil burning. That is not 
going to change much.
    Let me talk just real quick, if I can, about geothermal. We 
went out to Iceland with all the geothermal, and who would have 
thought there would be geothermal in West Virginia? But for all 
the energy we have, something had to create that energy and it 
is still, kind of, percolating a little bit underneath there. 
Do you see any geothermal exploration going on? Any potential?
    Dr. Anderson. So the U.S. Department of Energy, the 
Geothermal Technologies Office, is funding a project at West 
Virginia University on trying to identify ways to use 
geothermal in direct use applications. If we forget about 
heating buildings in the building sector in terms of reducing 
our climate impact, then we're also missing a big piece of that 
pie as well, just like transportation. And so, the project at 
WVU is specifically targeting being able to heat some of the 
campus, a significant part of the campus, using the geothermal 
hot spot in West Virginia.
    Of course, in Alaska, Chena Hot Springs is a great example 
in geothermal energy production.
    And there was recently a Geo Vision Study released by the 
Geothermal Technologies Office that is taking the next step in 
identifying what the geothermal potential is across the 
country.
    Mr. Ragsdale. I think there's also opportunities for 
geothermal heat pumps. I know that we've done some research and 
looked into that for heating residential and cooling 
residential as well. So geothermal is not just the big 
geothermal, but there's also small opportunities as well.
    Senator Manchin. We talk about rooftop solar, and I just 
think the grid is going to change completely within the next 
decade or more. I mean, completely. Everyone sitting in here 
will be a producer of energy, being able to put energy back 
into the grid.
    The grid is going to change and basically use all that 
excess energy that you all can produce and absorb that energy. 
There are going to be so many different, exciting things that 
we are going to have.
    But geothermal, basically, I mean, you drill your wells. We 
know we have a constant 55 degrees, right, at certain depths. 
And we use that. I have geothermal on the boat. Can you believe 
that? Basically, I extract energy with the glycol running 
through the tubes that go into the keel of the boat and 
whatever the water temperature is, I work from there. That is 
my starting point.
    I don't know why we don't use geothermal more? Is it just 
prohibitive cost? Why is it we haven't advanced the technology 
to make it more affordable?
    Mr. Ragsdale. Yeah, I believe that one of the biggest 
constraints is cost. They are more expensive.
    There have been----
    Senator Manchin. Payback is not----
    Mr. Ragsdale. Payback is not quite there. You have to make 
the choice.
    Senator Manchin. Solar has a better payback than 
geothermal?
    Mr. Ragsdale. I haven't looked at those numbers to compare.
    Senator Manchin. Brian?
    Dr. Anderson. It depends on the tax incentives and then, 
easily, state tax incentives.
    Senator Manchin. So that basically it works or it doesn't 
work, right?
    I haven't seen wind being as much individual use as far as 
people putting up little windmills and if they do, it just 
won't do enough. It might work on a sailboat, but not on the 
house, right?
    Mr. Vanderburg. I know in Alaska that there's, you know, a 
world class geothermal resource. The issue there is that it's 
oftentimes stranded and not close enough to significant load, 
significant population centers. And so, by the time you add in 
the cost of transmission to get that energy to populations that 
can use it, it's no longer cost-effective.
    I will say that I'm focused on Launch Alaska at the moment. 
I have these entrepreneurial ideas and one of them that I think 
is floating around in Alaska is that if you look at 
Scandinavia, what they have done is they've taken industries to 
the geothermal resource and built entire industries just in 
situ at the resource.
    And I think there is an opportunity there for some 
entrepreneurs, our group of entrepreneurs, to do that kind of 
thing, take an industry from aluminum smelters, perhaps, that 
have incredibly high energy demand and just place them in those 
areas next to the resource.
    Senator Manchin. Let me just say as far as being on the 
Committee here with my friend, Chairman Murkowski, we are 
willing to look at everything and not look at it from the 
standpoint of the hyper politics that are involved today, but 
actually what can solve our challenges--because we have got to 
do some things.
    If you don't believe that the climate is changing and it is 
changing faster because of humans, then you haven't visited the 
Arctic. You haven't been up to the North Slope of Alaska. You 
haven't seen what is going on.
    I will say this, we went to Ottawa and met with the Arctic 
nations----
    The Chairman. Right--parliamentarians.
    Senator Manchin. Parliamentarians, and all eight countries 
were represented. We are the only nation that is a denier.
    They do not use it and their politics is as hyper, if not 
more hyper, than ours because there are so many political, 
different alignments, if you will, in some of these countries. 
Not one of them, not one of the countries, other than the 
United States, uses climate change as a political divide. They 
all know it is survival. They have to do something. Things are 
changing, the habitats, the ice melt, the fish are changing, 
losing villages. We are seeing things happening. If we don't 
address it, God help us all. You are going to have to, we have 
to innovate our way out of this mess.
    So that is my two cents.
    The Chairman. A good two cents.
    I am going to end with a fun question for you because 
everybody wants to know what is the next great, cool thing? 
Where will the next breakthrough be when it comes to energy 
innovation and how it is going to allow us to have a stronger 
economy, be more competitive to tie into our hearing? So what 
is the next breakthrough? And then, also, are there any growth 
markets where we, here in the United States, are underinvesting 
in our energy technology development?
    You won't be held accountable for your prognosis, but I am 
curious to know if you think that there are some areas where, 
if we put a few more resources, we could be more competitive 
and really help advance this?
    Dr. Anderson, we will start with you from the national lab 
perspective.
    Dr. Anderson. One of the really exciting projects that 
we're working on as a collaboration of national labs are what 
happens at the interface of different energy technologies.
    How can we create hybrid systems that take everything from 
micronuclear reactors to fossil energy generation and 
renewables, put them together in one package and produce energy 
remotely or large-scale on the grid? And so, we see that as a 
tremendous opportunity that couples clean carbon capture fossil 
energy with renewables and nuclear and working truly at the 
interface of all of those.
    The Chairman. Are we underinvesting anywhere?
    Dr. Anderson. You know, I believe that we, as a country, 
need to lead the world in developing carbon capture 
technologies that are going to bring the cost down below $30 to 
scale. The reason we haven't seen the investment from the 
venture capital region yet is because those costs are still, at 
this time, prohibitive and we don't have a cost structure for 
moving those into the market.
    The Chairman. Very good.
    Dr. Deskins.
    Dr. Deskins. Unfortunately, I'm not from an engineering or 
an energy perspective, so I can't answer your question 
directly.
    But I can say that for West Virginia and for many regions 
like it across the country, what we're doing now is not 
working. It's not sustainable. We have to, we have to diversify 
and it's our most fruitful path of diversification is into 
alternative uses or alternative energy industries that build on 
our current comparative advantage. I don't think we're 
investing, in general, all across the board, I don't think 
we're investing enough in finding those industries in West 
Virginia that will work for us over the long run.
    And I think we need to realize sooner rather than later 
that our current path is unsustainable and this 
diversification, this investment, needs to happen immediately.
    The Chairman. Very good.
    Dr. Hart.
    Dr. Hart. So I'm going to have the glib answer which is 
we're underinvesting in almost everything.
    [Laughter.]
    A group of CEOs, known as the American Energy Innovation 
Council, has proposed doubling or tripling the federal 
investments. So on the federal side, I think, we're, you know, 
there's an all-of-the-above strategy and we have to invest in 
all-of-the-above.
    I think in terms of what's going to affect people's lives 
in the near future is the distributed resources and the 
combination of distributed and centralized resources in 
integrating all of that. It's going to change the way people 
think about how they use energy.
    As others have said, I think Senator Manchin said, 
producing energy as well as consuming energy and integrating 
all that is a tremendous challenge I think for the utilities. 
And that's where I think it's going to hit people in their 
daily lives.
    The Chairman. Certainly, Senator Alexander would agree with 
you on the investment side of it. I think that is his first 
point in his Manhattan approach to what we are going to do with 
climate is we are going to double the budgets here when it 
comes to the research, the R&D that goes on.
    Mr. Ragsdale.
    Mr. Ragsdale. So I said in my testimony that energy storage 
is a game-changing technology. I think that's what's next. It's 
still a new technology. The costs are coming down. They're 
coming down rapidly, but there's still a lot of progress that 
needs to be made in that area.
    The energy storage is what enabled the two microgrids that 
we've built, that would enable the neighborhood microgrid that 
we are currently in development with, that enables other 
projects that we're moving down the pipe.
    But I would say that an area that we are underinvesting in 
is rural broadband. We're working hard in North Carolina to 
bring broadband to our communities, but it's sorely not there, 
much like 80, 90 years ago when utilities were not investing in 
rural electric infrastructure, as you mentioned, with the Sad 
Irons story.
    The electric co-ops were formed because farmers got 
together and said, we need electricity. And so, they brought it 
to themselves.
    We really want to work hard to improve rural broadband. 
It's a part of the energy infrastructure. It's enabling 
technology. The thermostats, the demand response that we use, 
depends upon having broadband.
    But if you think about education, if you think about 
economic development, if you think about community development, 
if you think about job creation, all of that hinges upon 
broadband and we take it for granted in the cities.
    But in the rural parts of the country, a lot of people just 
simply do not have it, except for on their phone and that's 
limited to that extent. So I would emphasize that.
    Senator Manchin. So we are working on it and we are very 
much involved because of broadband in our rural West Virginia, 
you know, I said this, in 1930 only ten percent of West 
Virginians had electricity. And if it wasn't for President 
Roosevelt at that time, rural electrification and because the 
markets were not there to get return on investments, it was the 
co-ops that basically moved in and did the job.
    We are in a situation now if we don't do something with 
rural broadband, we are going to leave half of this country 
behind and that is what is happening. We have $4.5 billion into 
rural broadband. FCC's maps are so screwed up, and I have been 
challenging their maps because you can go and test the speeds 
and you can't get the advertised speed. That is because some of 
the carriers are basically saying we are covered here. They are 
averaging across the whole of their market but half of their 
market has no coverage, but they use the whole and use the 
speeds and say we have coverage. We have to contest this. You 
have $4.5 billion we put a hold on. That is going to go to 
rural areas.
    Next of all, we have $1.5 billion, I think, coming out of 
USGA that is going in. So about $6 billion. We are going to 
work on it, but you have to make sure that we can show that we 
are not covered and the speeds are not there and you don't 
have, basically, a population to get return on investment.
    Also, in Alaska, they are doing low orbit satellites and 
that has been very, very, very effective in some areas they 
have been testing. And we think in the mountainous areas, your 
mountainous areas in North Carolina, our mountainous areas of 
West Virginia, that might be a way for us to go.
    So we are on this one. We are on this one and we are going 
to make them challenge the maps. That is all I can tell you. We 
can show you if you don't know how to do it. If no one in North 
Carolina has showed you, call my office and we will get you up 
to speed because you have to go after the FCC on this one. If 
not, the money just goes out.
    The Chairman. Mr. Vanderburg, you get the last word here on 
where we are underinvesting and what our breakthrough is going 
to be.
    Mr. Vanderburg. And one advantage of going last is I can 
just agree with what everyone before me said.
    [Laughter.]
    But I would reiterate that I think we're underinvesting 
everywhere and the challenge that we're confronting at Launch 
Alaska is that startups can go anywhere they want these days, 
anywhere in the world. And there are countries outside of the 
U.S. that are throwing a lot of money at modernizing their 
grids and building out their infrastructure.
    Where I think it's all going which I'm very excited about, 
if you're going to pin me down on a single area, I think that 
it's all converging.
    We focus on food, water, transportation, energy for a 
reason because those four areas are all part of the same 
system. And as you look at the grid of the future, the idea of 
a prosumer--folks that both, you know, consume electricity but 
then also feed back into the grid and then all of the nodes 
within a grid are talking to one another and they are, at any 
given point, deciding where the most economic point to buy and 
sell power from.
    For that future to come to reality, we need to invest in 
the communications platform to let that grid really become 
smart, to use a buzz word. But I'm very excited about that, the 
kind of technologies that allow for grids to be dynamic and to 
be totally connected through communications.
    I would also point out that for this reality to come to 
fruition over the next 50 years in the U.S. that we are going 
to need a lot more transmission and there's just no one that's 
going to do that that's not the Federal Government. Because in 
order for us to move toward that decarbonized economy, we're 
going to need to be able to be sending power over, between 
grids and between regions that where those lines just currently 
don't exist. And there needs to be a massive investment in 
transmission infrastructure for the country.
    But thank you so much.
    The Chairman. Thank you. Thank you, Senator Manchin. And 
thank you, to each of you. We appreciate your contributions.
    I do think that this is an area that is exciting because we 
really just don't know what that next big one is going to be or 
how something that may not necessarily be viewed as a 
breakthrough, but when applied in an area that we haven't 
really thought that it had much application and next we find 
out that, yes, this is actually something that is going to work 
over there.
    So there is a lot in front of us. We have a lot of 
challenges. And we recognize that the grid and transmission, 
how we can have great ideas about how we generate all this 
power, but we also have to talk about how we move all of this 
to where the people are, where the users are. That is equally 
challenging for us.
    But again, I think it is important to recognize that when 
it comes to tackling the big issues, tackling the big issues as 
they relate to climate change, tackling the big issues as to 
how we keep our economy strong, how we keep our competitiveness 
globally, that it is going to require that every day we are 
pushing ourselves to just build things out a little bit bigger, 
better, faster and to take the leadership role that, I think, 
Americans expect and, in fairness, I think the rest of the 
world expects us to lead in these areas.
    And so, let's take it up. Let's innovate. Let's create. 
Let's be the imagineers that we know that we are. You have 
helped shine a little light on that today, and we appreciate 
your contributions.
    With that, the Committee stands adjourned.
    [Whereupon, at 11:42 a.m. the hearing was adjourned.]

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