[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
THE ROLE OF FOSSIL FUEL
SUBSIDIES IN PREVENTING ACTION
ON THE CLIMATE CRISIS
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HEARING
BEFORE THE
SUBCOMMITTEE ON ENVIRONMENT
OF THE
COMMITTEE ON OVERSIGHT AND REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
APRIL 22, 2021
__________
Serial No. 117-16
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Printed for the use of the Committee on Oversight and Reform
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available on: govinfo.gov
oversight.house.gov
docs.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
44-383 PDF WASHINGTON : 2021
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COMMITTEE ON OVERSIGHT AND REFORM
CAROLYN B. MALONEY, New York, Chairwoman
Eleanor Holmes Norton, District of James Comer, Kentucky, Ranking
Columbia Minority Member
Stephen F. Lynch, Massachusetts Jim Jordan, Ohio
Jim Cooper, Tennessee Paul A. Gosar, Arizona
Gerald E. Connolly, Virginia Virginia Foxx, North Carolina
Raja Krishnamoorthi, Illinois Jody B. Hice, Georgia
Jamie Raskin, Maryland Glenn Grothman, Wisconsin
Ro Khanna, California Michael Cloud, Texas
Kweisi Mfume, Maryland Bob Gibbs, Ohio
Alexandria Ocasio-Cortez, New York Clay Higgins, Louisiana
Rashida Tlaib, Michigan Ralph Norman, South Carolina
Katie Porter, California Pete Sessions, Texas
Cori Bush, Missouri Fred Keller, Pennsylvania
Danny K. Davis, Illinois Andy Biggs, Arizona
Debbie Wasserman Schultz, Florida Andrew Clyde, Georgia
Peter Welch, Vermont Nancy Mace, South Carolina
Henry C. ``Hank'' Johnson, Jr., Scott Franklin, Florida
Georgia Jake LaTurner, Kansas
John P. Sarbanes, Maryland Pat Fallon, Texas
Jackie Speier, California Yvette Herrell, New Mexico
Robin L. Kelly, Illinois Byron Donalds, Florida
Brenda L. Lawrence, Michigan
Mark DeSaulnier, California
Jimmy Gomez, California
Ayanna Pressley, Massachusetts
Mike Quigley, Illinois
David Rapallo, Staff Director
Katie Thomas, Staff Director, Subcommittee on Environment
Amy Stratton, Clerk
Mark Marin, Minority Staff Director
Contact Number: 202-225-5051
------
Subcommittee on Environment
Ro Khanna, California, Chairman
Jim Cooper, Tennessee Ralph Norman, South Carolina,
Alexandria Ocasio-Cortez, New York Ranking Minority Member
Rashida Tlaib, Michigan Paul A. Gosar, Arizona
Jimmy Gomez, California Bob Gibbs, Ohio
Raja Krishnamoorthi, Illinois Pat Fallon, Texas
Cori Bush, Missouri Yvette Herrell, New Mexico
C O N T E N T S
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Page
Hearing held on April 22, 2021................................... 1
Witnesses
Joseph Aldy, Professor of the Practice of Public Policy, Harvard
University
Oral Statement................................................... 5
Peter Erickson, Climate Policy Program Director, Stockholm
Environmental Institute
Oral Statement................................................... 6
Tara Houska, Founder, Giniw Collective
Oral Statement................................................... 8
Jill Antares Hunkler, Seventh-Generation Ohio Valley Resident
Oral Statement................................................... 10
Greta Thunberg, Climate Activist
Oral Statement................................................... 11
Frank J. Macchiarola, Senior Vice President, Policy American
Petroleum Institute
Oral Statement................................................... 13
Written opening statements and statements for the witnesses are
available on the U.S. House of Representatives Document
Repository at: docs.house.gov.
Index of Documents
----------
* Letter from Independent Petroleum Association of America;
submitted by Rep. Norman.
Documents entered into the record during this hearing and
Questions for the Record (QFR's) are available at:
docs.house.gov.
THE ROLE OF FOSSIL FUEL
SUBSIDIES IN PREVENTING ACTION
ON THE CLIMATE CRISIS
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Thursday, April 22, 2021
House of Representatives
Subcommittee on Environment,
Committee on Oversight and Reform
Washington, D.C.
The subcommittee met, pursuant to notice, at 10:17 a.m.,
via Webex, Hon. Ro Khanna (chairman of the subcommittee)
presiding.
Present: Representatives Khanna, Ocasio-Cortez, Tlaib,
Gomez, Krishnamoorthi, Bush, Maloney (ex officio), Norman,
Fallon, and Herrell.
Mr. Khanna. All right. The committee will come to order.
Without objection, the chair is authorized to declare a
recess of the committee at any time. I now recognize myself for
an opening statement.
Good morning, everyone. Welcome to the first hearing of the
117th Congress of the Environment Subcommittee. I want to
recognize our ranking member, Ralph Northam, and our vice
chair, Rashida Tlaib, and thank all of the members and
witnesses for participating.
This is a historic hearing. This is the first time that the
U.S. Congress is examining a elimination of fossil fuel
subsidies. These subsidies have been on our books for over a
hundred years. They have been giveaways to the fossil fuel
industry embedded in our Tax Code.
Now, in 2009, the United States committed, with other G7
countries, to eliminate those fossil fuel subsidies. We
actually had self-review, peer review, where we submitted a
report in 2016, acknowledging that these fossil fuel subsidies
exist.
So the argument that the fossil fuel subsidies don't exist
is simply factually false. It's a lie. It's a
misrepresentation. It's a contradiction of what our own U.S.
Government has represented to the world.
We need to be very specific about what these fossil fuel
subsidies are, and today's hearing will make it clear that many
in the environmental movement and in Congress stand absolutely
committed that these subsidies must be eliminated in the next
infrastructure package.
And there are five specific ones that we will detail that
must be eliminated, and we want to hear from our experts about
why that's the case and what else can be done.
Now, let's just get some basic facts on the table. In 2020,
the fossil fuel industry spent over $250 million in political
contributions and Federal lobbying. In return, the fossil fuel
companies received over $30 billion in Federal subsidies in
direct pandemic relief in 2020.
And guess what? They received this relief, and they were
still laying off workers. So the subsidies, the relief, are not
going to actual fossil fuel workers. We stand with the workers.
We stand with those who are job creators.
What we don't want is people making $500-, $600,000, to
lobby. What we don't is people making millions of dollars on
taxpayer subsidies, and that's what is being eliminated. This
is not going to hurt in any way the jobs. What it's going to do
is stop letting taxpayer subsidies go to pay lobbyists and rich
executives.
The industry, of course, opposed the Waxman-Markey climate
bill. They have denied the simple fact that fossil fuels are
the largest contributor to climate change. Despite the ad
campaign, everyone knows that fossil fuels create greenhouse
gas emissions, and these fossil fuel subsidies are outdated and
need to go.
Oil Change International found this expenditure cost $2.3
billion annually for just the tax deduction on intangible
drilling costs. The tax deduction for the percentage depletion,
which started in 1926, cost $1.3 billion annually. We need to
make sure we start to eliminate these.
We will hear testimony from Tara Houska and Jill Hunkler,
both really inspirational people, about how fossil fuel
production pollution has affected their communities, and that's
the impact that it's having on real people. You know, Vice
Chair Tlaib always makes it personal. I mean, this is actually
leading to excessive pollution in communities, and they will
testify about the impact it's having on them and their
neighbors and their families.
We will also hear testimony from Greta Thunberg, the world-
famous climate activist, about how ending fossil fuel subsidies
are absolutely essential to the leadership in the world, that
it matters that we have these fossil fuel subsidies eliminated
in our infrastructure plan, not just for the United States, but
Ms. Thunberg will tell us why it matters for the world.
And we will hear testimony from Dr. Joe Aldy and Peter
Erickson about fossil fuel subsidies not supporting energy
independence or jobs in other ways that actually can support
energy independence and jobs.
The largest subsidies that must be eliminated include
deduction for intangible drilling costs, the percentage
depletion, the MLPs, corporate tax exemption for FuelMaster
limited partnerships, the last-in/last-out accounting, and the
dual capacity taxpayer credit. These are the five things we
insist must be ended in this infrastructure bill.
And, of course, I'm also proud to cosponsor the End
Polluter Welfare Act with Senator Sanders and Representative
Omar, that's even more comprehensive about all the fossil fuel
subsidies. We're focused on the top five, but there are many
more, and that's why I'm proud to be on that legislation.
The bottom line, this hearing will expose what the fossil
fuel subsidies are in our Tax Code, expose that they're out of
date, make it clear that they must end, and make it clear that
the environmental movement in the United States is absolutely
committed to ending these in this infrastructure bill.
With that, I want to now recognize our distinguished
ranking member, Member Northam, for his opening statement.
Mr. Norman. Thank you, Chairman Ro Khanna. It's Norman.
I've been confused with Ralph Northam----
Mr. Khanna. I apologize for that, sir.
Mr. Norman. That's fine. No, Chairman Ro Khanna, I
appreciate you having this meeting, this committee hearing, and
I want to thank the witnesses for taking the time to appear
before the subcommittee.
I'd like to begin by acknowledging the amazing progress
that the United States has made on climate change. We are
leading the world in reducing emissions, having reduced more
than the next 12 emissions-reducing countries combined. Because
these reductions have come via innovation and market forces,
energy costs have decreased nationwide.
While it really wasn't reported by the media, the Trump
administration made substantial progress to protect the
environment. Combined air pollution emissions fell more than
seven percent, while simultaneously growing the economy,
particularly before the COVID-19 pandemic.
My colleagues on the left have regrettably resorted to fear
tactics to scare people into action regarding climate change.
This is not healthy, nor is it productive.
One survey of 30,000 people worldwide found that nearly all
of the people surveyed believe climate change would make
humanity extinct. Children have also been greatly impacted by
the fear of climate change as well.
The American Psychological Association stated that they
were aware of reports that children are increasingly suffering
from eco anxiety. I hope eventually that our committee can move
past doomsday scenarios and headlines and focus on the energy
policy steps we should be taking and what the cost and impacts
are.
Rejoining the Paris climate accords is not one of these
policies, folks. Not only does this agreement fail to hold
countries like China, which uses over 50 percent of the coal,
it does not hold them accountable for the emissions output. It
only exacerbates a double standard despite our contribution to
the global economy and to the nationwide GDP.
Unless China stops its continuing growth of emissions, any
actions we take would be offset several times over by China.
This does not sound like a good deal for American workers or
American energy independence and puts our country at a distinct
disadvantage with our global competitors. Nor has it seemed
like there's any repercussions for them doing what they're
doing to this Nation as well as the world.
This week Democrats in Congress reintroduced the Green New
Deal. It should actually be called the ``radical new doom''
because it is not really about climate change. Only six percent
of it really goes toward any type of climate--6 to 9 percent--
any type of change in the climate.
It's an effort by the far left to remake our economy and do
away with affordable energy while destroying millions of jobs.
Make no mistake, the Green New Deal is not an infrastructure
plan.
The Republican Study Committee has found that the Green New
Deal could potentially result in a 286-percent increase in
energy bills per household, and about 50 percent of the entire
American economy would be under government control.
As a former small business owner, those numbers are
terrifying, they're staggering, and it goes against America's
great tradition of a free-market system.
As Republicans, we will continue to support responsible
policies that work to solve our problems by promoting
innovation, investing in clean and clear energy infrastructure.
However, I do fear that a premature move away from fossil
fuels, particularly for poor areas, means that they will
continue to have little access to the type of cheap, reliable
energy that enables economic growth and allows for the
provisions of clean water and sanitation, widespread
vaccination, and preventative child health services.
I look forward to hearing from the Republican witness today
from the American Petroleum Institute about the impact on jobs
in his industry if the Green New Deal were to become a reality.
I also look forward to learning about the impact proposals
by Democrats that will have on the oil and gas industry if it
is treated differently under the United States Tax Code.
The United States is fortunate to have a copious clean
energy natural resources. We must use those resources to
advance American interests by continuing to lead the world in
emission reductions, not back policies that increase our
dependence on foreign countries who are hostile to American
interests.
Inexpensive, accessible energy has led to technological,
medical, and other advances that have driven the American
economy and increased the U.S. life expectancy.
Thank you, again, Mr. Chairman, and thank you for today's
witnesses. I yield back.
Mr. Khanna. Thank you, Ranking Member Norman, and
appreciate your being a partner in areas where we can
collaborate and appreciate your participation.
I now want to introduce our witnesses. Our first witness
today is Dr. Joseph Aldy, who is a professor of the practice of
public policy at the Harvard Kennedy School.
Next, we will hear from Peter Erickson, who is the climate
policy program director for the Stockholm Environment
Initiative.
Then we will hear from Tara Houska. Tara is the founder of
the Giniw Collective.
We will also hear from Jill Hunkler, who is a seventh-
generation resident of the Ohio River Valley.
And then we will hear from Greta Thunberg, who is a world-
renowned climate activist.
Finally, we will hear from Frank Macchiarola, who serves as
a senior vice president of policy, economics, and regulatory
affairs at the American Petroleum Institute.
The witnesses will be unmuted so we can swear them in.
Please raise your right hands. Do you swear or affirm that
the testimony you're about to give is the truth, the whole
truth, and nothing but the truth, so help you God?
Let the record show that the witnesses all answered in the
affirmative. Thank you.
Without objection, your written statements will be made
part of our official record. With that, Dr. Aldy, you are now
recognized for your testimony.
STATEMENT OF JOSEPH ALDY, PROFESSOR, HARVARD UNIVERSITY
Mr. Aldy. Good morning, Chairman Khanna, Ranking Member
Norman, and members of the Subcommittee on Environment. My name
is Joe Aldy, and I'm a professor of the practice of public
policy at the Harvard Kennedy School.
I've worked on the issue of fossil fuel subsidies and
climate policy more generally, as a former government official,
in my research, and in my teaching. I'm grateful for the
opportunity to share my insights today, especially as we have
new leadership in the White House and new voices in Congress
prepared to combat the climate crisis with the urgency that
this challenge demands.
The U.S. Government continues to subsidize the production
of oil, gas, and coal through tax policy and energy policy. To
enable an evaluation of these subsidies, I presented in my
written testimony five policy principles that can inform our
understanding of what constitutes good and effective energy and
climate policy, and distinguish it from poor and ineffective
policy. Let me briefly review these now.
First, energy and climate policy should correct market
failures. Well-functioning markets do not need government
interventions. The markets that produce too much pollution, too
little innovation, or too little competition merit policy
intervention.
Second, energy and climate policy should promote cost-
effectiveness. Cost-effective design ensures that the American
taxpayer gets the biggest possible social return, such as
improved public health from cleaner air, and fewer threats from
a changing climate, for a given tax expenditure or policy cost.
Third, energy and climate policy should contribute to
fairness and justice. Fair policy should create a level playing
field. A just policy should recognize the disproportionate
historic burden of environmental pollution and infrastructure
siting borne by low-income households and communities of color
and should reduce such disparities.
Fourth, energy and climate policy should enhance our
international leadership. Over the past four years, the U.S.
Government abdicated its leadership globally on many fronts,
including on climate change.
Actions the U.S. Government takes to combat climate change
have the potential to amplify actions in other countries and
thereby multiply the benefits of our own domestic policy.
Finally, we should design an act-learn-act approach to
energy and climate policy. We should design our policy to
enable learning, to identify the priority risks to target, to
assess what works and what does not, and to examine what
experiences have important implications for broadening and
deepening our climate change and energy policy program.
We need to act quickly, but we also need to be smart about
our actions. And integrating learning and flexibility in our
policy increases the effectiveness of our response to climate
change. In my written testimony, I show how fossil fuel
subsidies fall short on each of these five principles.
Fossil fuel subsidies represent a government failure. Let
me repeat that. Fossil fuel subsidies represent a government
failure. They are a form of spending paid for by the American
taxpayer to businesses in an industry that has long been
profitable with a negligible impact on production or
employment.
To the extent U.S. production subsidies increase
hydrocarbon consumption, the adverse public health, climate
change, and labor productivity losses from pollution, resulting
from fossil fuel combustion, could exceed the market value of
these fuels.
These adverse public health and climate damages are
disproportionately borne by low-income households and
communities of color.
I want to emphasize this. We aren't getting much of any
increase in hydrocarbon production because of these subsidies.
By one estimate, we may be spending billions of dollars of
taxpayer moneys per year to increase output by 26,000 barrels
per day. If an oil company spent that much money for such a
small amount of production, it would go out of business. And if
we're not increasing output, we're not creating many jobs.
The continuation of U.S. fossil fuel production subsidies
undermines our government's efforts to engage partners from
across the world to combat climate change. The elimination of
fossil fuel subsidies here and abroad is a key step in our
response to the climate crisis. As President Biden hosts the
Climate Leaders Summit, this is all the more important.
We did energy policy a certain way in the 20th century.
Some of these fossil fuel subsidies have been a part of the Tax
Code for more than 100 years. But the times have changed. We
are bearing the harms of a changing climate today.
We have a rich array of fundamentally new energy
technologies available to us today. We need a new energy policy
for the 21st century that can combat the climate crisis and
improve the well-being of people throughout our country and
around the world.
The first step toward a more effective, modern energy
policy should be to eliminate fossil fuel subsidies.
Thank you, Chairman Khanna.
Mr. Khanna. Thank you very much.
Now--thank you, mister--with that, if we could have Mr.
Erickson, you're now recognized for your testimony.
STATEMENT OF PETER ERICKSON, CLIMATE POLICY PROGRAM DIRECTOR,
STOCKHOLM ENVIRONMENTAL INSTITUTE
Mr. Erickson. Thank you, Chairman Khanna and Ranking Member
Norman, for this opportunity to testify today. My name is Peter
Erickson, and I am a senior scientist at the U.S. Center of the
Stockholm Environment Institute, a research affiliate of Tufts
University.
Today my testimony has three points. One, fossil fuel
subsidies are an inefficient means of supporting economic
activity. Two, they undermine efforts to deal with climate
change. And, three, they work against improvements in public
health.
On the first point, the U.S. Government has subsidized
fossil fuel production for more than a century, including by
forgiving or delaying tax payments that are otherwise required.
The intangible drilling cost provision and the percentage
depletion allowance are examples of this.
The ostensible rationale for these subsidies has been to
promote increased production and jobs. However, the vast
majority of the value of subsidies goes to new oil and gas
wells that are already expected to be profitable and would be
developed anyway.
For example, my research has found that over 96 percent of
subsidy value flows directly to excess profits over and above
the profits required to satisfy minimum investment hurdles.
Most of the value of these subsidies is, therefore, not
contributing to jobs on the ground.
Second, fossil fuel subsidies undermine efforts to deal
with climate change. Subsidies can, at times, make production
of fossil fuels higher than it would otherwise be. This happens
when oil and gas prices are very low, and companies otherwise
have little or no incentive to drill.
These subsidy-driven increases in drilling, even though
relatively small, still raise global greenhouse gas emissions,
undercutting other hard-won gains on the climate crisis.
Subsidies, therefore, work against the need to rapidly wind
down emissions from burning oil, gas, and coal.
Further, subsidies can have symbolic effects since their
continued existence may be read by other nations as a sign that
the U.S. is not taking its commitments to subsidy reform or to
climate action as seriously as it should be.
In 2016, with other G7 governments gathered in Japan, the
U.S. committed to eliminate fossil fuel subsidies by 2025. By
following through on this, the U.S. would encourage other
countries to do the same, multiplying the benefits.
Third, fossil fuel subsidies work against needed
improvements in public health. Subsidies to fossil fuels also
contribute indirectly to air and water pollution, creating
added community health concerns.
For example, researchers found that the cumulative health
damages from the shale gas boom in Appalachia outweigh benefits
from any new employment. Producing and burning fossil fuels
creates air pollution that can lead to worsening asthma,
adverse pregnancy and birth outcomes, and even premature death.
Air pollution from oil and gas drilling can also exacerbate
inequalities. In the Eagle Ford basin in Texas, oil producers
routinely burn off large quantities of natural gas that they
consider to be waste, releasing toxic and carcinogenic
compounds more often in Hispanic neighborhoods than in non-
Hispanic ones.
Opponents of fossil fuel subsidy reform have argued that
special provisions in the Tax Code are not subsidies
specifically because they have been there for so long. But
that's wrong. Policies that provide financial benefits to
companies at a cost to the public, whether provided through the
Tax Code or otherwise, constitute just as much a subsidy as
writing a check, if these financial benefits are not generally
available to other industries.
Not only do tax preferences meet that definition of
subsidy, so do other policies that extend beyond the Tax Code.
For example, governments often charge companies inadequate fees
to cover the cost of retiring oil and gas wells. The result is
a cleanup bill that now totals hundreds of billions of dollars
and may well be paid by the public rather than the companies
that created the pollution.
In summary, subsidies to fossil fuel producers are an
inefficient means of creating jobs, they hold back the low-
carbon energy transition, and they work against efforts to
improve public health.
Thank you to the committee for this important hearing.
Mr. Khanna. Thank you, Mr. Erickson.
Now we'll hear from Ms. Houska. You are now recognized for
your testimony.
STATEMENT OF TARA HOUSKA, FOUNDER, GINIW COLLECTIVE
Ms. Houska. Boozhoo, and hello, Giniw. My name is Tara
Houska. I'm an attorney organizer from Couchiching First Nation
Anishinaabe on the border of Minnesota and Ontario. I'm the
cofounder of Not Your Mascots and the founder of Giniw
Collective. I spent six months out on the front lines, fighting
Dakota Access Pipeline, which is still operating illegally
right now, today, at this moment.
And I'm also engaged in the movement to defund fossil fuels
and a multiyear struggle against Enbridge's Line 3 in my own
territory.
So a really common perception of Native people is that
we're people of the past, that we're the static footnote in
history. But we were here before the arrival of the United
States. We were here before Canada. And we are still here
today.
There is this long dispossession of genocide and removal,
and then there's like nothing after that. People seem to think
that we didn't keep progressing after the 1800's. But the
reality is that we're just five percent of the population
globally, indigenous people. And we hold 80 percent of its
biodiversity.
We're the last holders of the sacred places all over Mother
Earth. Despite this, our voices are almost entirely absent from
the table of solving climate crisis, despite the reality of
what's actually happening.
Our sovereignty is not absolute. It's often subject to the
whims of judiciary or a confusing web of governmental
authority, influenced by special interests.
Solution beyond teaching the basics of life that we all
need healthy air, water, soil, to live, that we can't drink
money, no matter how you try to spin it, is the imperative that
we stand together centering justice, equity, and to reconnect
to the living world by being in community with our Mother.
We know what a just transition should look like, and we
have to find out what that looks like for everyone. Because
water shortages are already happening all over the world. We
have to protect communities that are at risk, like my own. We
are the people who are impacted first and worst by climate
crisis. Yet we are the people who often contribute the least to
climate crisis.
Native people have never lost our connection to the land
and to the water. Many of us live in community with our Mother
as a practice, not in theory.
I always ask people to find out where their water comes
from, where their food comes from, and to internalize what that
actually means. People buy things and don't have a second
thought about the hands and places that their purchases came
from. They turn on their tap or buy a bottle of water and don't
think about that journey from the Earth to their lips.
Everything comes from somewhere. Every bit of life comes
from the Earth, and everything is returned to the Earth,
including human beings.
So in my own territory, Enbridge's Line 3 is one of the
dirtiest fossil fuel pipelines. It would be one of the largest
tar sands oil pipelines in the world, carrying up to 915,000
barrels a day of tar sands through our sacred wild rice beds,
through our territory, to the shore of Lake Superior, through
the Mississippi headwaters.
It uses underhanded methods to achieve its project goals
and plays loose and fast with safety and spill response plans.
So First Nations, eight Tribal communities, environmental
groups, communities across the Great Lakes region, have been
fighting for over seven years to stop this corridor and to stop
Line 3.
We are suing in the courts. Three different Ojibwe Nations
are suing. Minnesota's own Department of Commerce is suing for
failure to justify the line via their oil forecast.
And the people are fighting on the ground, literally
chaining themselves to the machines. Over 250 people have been
arrested at this point since December, arrested during the
middle of a pandemic, climbing into pipelines, climbing into
frozen tar sands lines, literally trying to fight for their
lives, for their futures. It's mostly young people that are
taking these actions.
Line 3 is personal for me because it goes through my
people's territory and endangers that which sits at the center
of our migration story, which is wild rice. There are threats
to the drinking water of millions. There's all these
irrevocable harms of climate emissions and Line 3 being a 10
percent expansion of the tar sands. But when it comes to the
wild rice, it's a threat to our cultural survival. We are
talking about cultural genocide yet again in the history of
this Nation. Wild rice is at the center of our culture and our
connection. It's the only place in the world that wild rice
grows.
Our traditional economies of harvesting somehow are
expendable to the economy of extraction. We endured forced
theft, removal, theft of lands, theft of culture, and now we
endure that the histories want to eradicate what we have left.
So I recognize that my words might appear idealistic, that
I do not understand the way of the world, that it cannot change
so readily or so easily. I wonder, though, if this committee
and we, as people, believe that we have truly conquered the
Earth, if we can actually live without water, if we are
civilized when the cost is globalized destruction of our shared
and only home.
We are in rough shape as a species. I want to look upon the
faces of my grandchildren and tell them I did everything I
possibly could to give them a better world, that I didn't
linger in words and incremental policy without substantive
action as when the world burns and the seas rise. I hope that
you do too, and I pray that we move forward together. Miigwech.
Mr. Khanna. Thank you, Ms. Houska.
Now, Ms. Hunkler, you are recognized for your testimony.
STATEMENT OF JILL ANTARES HUNKLER, SEVENTH GENERATION OHIO
VALLEY RESIDENT
Ms. Hunkler. Thank you. It's an honor to have this
opportunity to share the truth about fossil fuel extraction in
Appalachia. I respect the members of this committee and
appreciate your courageous leadership in service of the people.
My intention is to share this truth. Continuing to
subsidize the fossil fuel industry will not only perpetuate the
climate crisis but the plastics pollution, environmental
justice, and public health crises as well.
I'm a fracking refugee. I was forced from my home at the
headwaters of the historically pristine Captina Creek Watershed
in Belmont County, Ohio, after being surrounded by oil and gas
infrastructure and its associated pollution, including a
compressor station, 78 fracking wells, an interstate, and
gathering pipelines all within a 5-mile radius of my home. I
lived in the hollow below with Slope Creek running through my
yard.
Air pollution from these facilities emanate volatile
organic compounds, some of which are known carcinogens. They're
heavier than air, and they hover in the hollows. I never
imagined that my quiet country and healthy way of life would
disappear. The negative health impacts we experienced were too
much to bear.
Belmont County is the most heavily fracked in the state
with over 595 producing wells. Those of us living in these once
peaceful hills are not only dealing with negative health
impacts. We are also experiencing unsafe roadways due to
industry traffic, air and noise pollution, public, spring, and
well-water contamination, pipeline explosions and well pad
fires, including one operated by a Norwegian oil company that
contaminated a stream resulting in the death of 70,000 fish.
Our water supplies are being depleted by industry withdrawals
from our reservoirs, ponds, and streams.
In 2018, a fracking well blowout in Belmont County caused
the largest methane leak in U.S. history, forcing residents to
evacuate their homes for weeks. And in another horrifying
incident, a brine truck accident contaminated Barnesville's
reservoir with radioactive materials.
At the time of the spill, the Ohio Environmental Protection
Agency water test results showed a spike in radium, a naturally
occurring radioactive element that is brought to the surface in
the fracking process.
I witnessed a former oil field operations manager react in
shock and anger to an illustration showing the transmission of
radioactivity to industry workers in a 2016 report of the
International Association of Oil and Gas Producers.
The industry continues to tout misinformation about
America's clean energy future when, in fact, it produces toxic,
radioactive waste, destroys massive amounts of precious water
for its singular use, and makes the region poorer rather than
richer in the long run.
There are 240 Class 2 wastewater injection wells in Ohio;
1.5 billion gallons of wastewater have been produced here. Now
fracking wastewater has been permitted to be transported via
barging on the Ohio River, threatening the drinking water
supplies of 5 million people.
In the year since the fracking boom began, Belmont and
other eastern Ohio gas-producing counties haven't gained jobs.
In fact, we have lost more than 6,500 jobs according to the
data from the Bureau of Economic Analysis and Bureau of Labor
Statistics.
And the region's population has declined by more than
13,000 people, according to research by the Ohio River Valley
Institute, which has dispelled myths of lasting economic
benefits and job creation in Appalachia fracking counties and
corrected misconceptions that cutting subsidies for the fossil
fuel industry is cutting jobs.
I am living in a sacrifice zone due to the polluting and
poorly regulated oil and gas industry, and now the
petrochemical industry wants to invade and create even more
toxic air pollution. The industry would require even more
fracking in our region to provide feedstock to make plastics.
The regulatory agencies are already failing to protect
communities from air pollution from fracking, and now they have
granted air permits to the PTT Global Chemical ethane cracker
plant. If constructed, the Thai-owned facility would spew
hundreds of tons of hazardous contaminants into the air each
year.
The cracker plant would draw ethane supplies from the
proposed Mountaineer Natural Gas storage facility, which would
develop salt caverns to store up to 3.5 million barrels of
explosive, highly flammable NGLs next to and potentially
underneath the Ohio River.
Companies are securing Federal support for these
petrochemical projects in the form of loan guarantees from the
Department of Energy. This cannot be allowed to happen. We are
asking this subcommittee and the Biden administration to halt
the continued development of oil, gas, and petrochemical
industries.
We must embrace a better vision for Appalachia, creating
renewable energy economies and regenerative agricultural
development. A global commitment must be made to restore peace
and harmony with nature and one another. We shall remain
persistent and resistant to all that threatens our children's
future. Thank you.
Mr. Khanna. Thank you.
Thank you, Ms. Hunkler, for your testimony.
Now, I want to recognize Ms. Thunberg. You're now
recognized for your testimony.
STATEMENT OF GRETA THUNBERG, FOUNDER FRIDAYS FOR FUTURE
Ms. Thunberg. Thank you, and first of all, thank you for
inviting me and for holding this hearing.
I don't represent any financial or political interests. I'm
not a lobbyist, so I can't negotiate, make deals, or
compromise. I have nothing to offer you, nor am I a scientist.
All I can do is to urge you to listen to and act on the science
and to use your common sense.
And I'm not even going to explain why we need to make real
drastic changes and dramatically lower our emissions in line
with overall current, best available science.
It is the year 2021. The fact that we are still having this
discussion and, even more, that we are still subsidizing fossil
fuels, directly or indirectly, using taxpayer money, is a
disgrace. It is a clear proof that we have not understood the
climate emergency at all.
If you compare the current so-called climate policies to
the overall current, best available science, you clearly see
that there's a huge gap. The gap between what we are doing and
what actually needs to be done in order to stay below the 1.5-
degree-Celsius target is widening by the second.
And the simple fact, an uncomfortable fact, is that if we
are to live up to our promises and commitments in the Paris
Agreement, we have to end fossil fuel subsidies, stop new
exploration and extraction, completely divest from fossil
fuels, and keep the carbon in the ground.
Now, especially the U.S., taking into account the fact that
it is the biggest emitter in history, and just to be clear,
that is not my opinion. It is what the science clearly shows.
And yet this is just the very minimum amount of effort that
is needed to start the rapid sustainable transition. And it may
seem like we are asking for a lot, and you will, of course, say
that we are naive. And that's fine, but at least we are not so
naive that we believe things will be solved through countries
and companies making vague, distant, insufficient targets
without any real pressure from the media and the general
public.
So, either you do this, or you're going to have to start to
explain to your children and the most affected people why you
are surrendering on the 1.5-degree target, giving up without
even trying.
What I'm here to say is that, unlike you, my generation
will not give up without a fight. And to be honest, I don't
believe for a second that you will actually do this. The
climate crisis doesn't exist in the public debate today. And
since it doesn't really exist and the general level of
awareness is so absurdly low, you will still get away with
continuing to contribute to the destruction of present and
future living conditions.
And I know I'm not the one who is supposed to ask questions
here, but there is something I really do wonder. How long do
you honestly believe that people in power like you will get
away with it? How long do you think you can continue to ignore
the climate crisis, the global aspect of equity and historic
emissions without being held accountable?
You get away with it now, but sooner or later people are
going to realize what you have been doing all this time. That's
inevitable. You still have time to do the right thing and to
save your legacies, but that window of time is not going to
last for long.
What happens then? We, the young people, are the ones who
are going to write about you in the history books. We are the
ones who get to decide how you will be remembered. So my advice
for you is to choose wisely. Thank you.
Mr. Khanna. Thank you, Ms. Thunberg.
And now we have our fifth witness, Mr. Macchiarola. Mr.
Macchiarola, you are now recognized for your testimony.
STATEMENT OF FRANK J. MACCHIAROLA, SENIOR VICE PRESIDENT OF
POLICY, ECONOMICS AND REGULATORY AFFAIRS, AMERICAN PETROLEUM
INSTITUTE
Mr. Macchiarola. Thank you. Good morning, Chairman Khanna,
Ranking Member Norman, and members of the subcommittee. Thank
you for the opportunity to testify today. I want to speak with
you this morning about the dual challenge of providing
affordable and reliable energy to meet growing demand while
reducing emissions and addressing the risks of climate change.
American oil and gas workers meet this challenge every
single day. Our industry supports more than 10 million jobs and
seven percent of our Nation's economy. The average annual
salary of oil and natural gas workers is approximately
$108,000, nearly double the private sector average.
In 2019, in the districts represented on this subcommittee
alone, our industry supported approximately 325,000 jobs,
directly employing 75,000 people. These are the people helping
to deliver affordable energy to our homes and businesses and
energy security to our Nation.
Over the next two years, as countries around the world
emerge from the pandemic, global GDP is projected to grow at
its highest rate in nearly a half a century. As economies
expand and the world's population grows, the global consumption
of oil and natural gas will also continue to increase.
Even under IEA's sustainable development scenario, which
outlines a major transformation of global energy systems and is
fully aligned with the Paris Agreement, oil and natural gas are
still projected to provide 46 percent of the world's energy in
2040.
The critical question for Congress is whether more of this
energy will come from right here at home or from overseas.
The answer to this question has profound implications for
our Nation's future. We know why energy leadership for America
is important to our economic strength and national security,
but American energy leadership is also important to protecting
the environment and addressing climate change.
Our commitment to environmental protection is clear, as the
United States is now the global leader in both energy
production and CO2 emissions reductions. Over the past several
years, the primary driver of emissions reductions has been the
increased use of natural gas for power generation. With smart
policies, we can build on this progress.
Our industry is also working to reduce methane emissions
from our operations. From 1990 to 2019, methane emissions from
natural gas systems declined 16 percent while production
increased by 90 percent, effectively a 55 percent decline in
the rate of emissions.
To build on this progress, API recently released our
climate action framework, a series of public policies and
industry initiatives that provide tangible solutions for
policymakers, industry, and the public to help meet the
challenge of climate change.
As this committee examines tax and energy policy, I'd like
to emphasize the importance of a Federal tax policy that
promotes investment in the United States and ensures America's
leadership role in the global economic recovery.
As it applies to oil and natural gas industry, provisions
covering natural resources take into account the need to
recover the costs associated with various investments to
support reinvestment back into the business. This includes
deductions for the recovery of payments for expenses like
equipment, labor, and wages.
These cost-recovery mechanisms are not subsidies but rather
common tools that allow businesses to expand, invest, and
create jobs.
Furthermore, unlike tax credits that reduce the tax
obligation outright, these measures do not affect how much our
industry pays in taxes but rather the timing of such payment.
These investments made help businesses grow and ultimately
provide significant revenues to the American taxpayer.
Over the past decade, the U.S. Department of the Interior
dispersed approximately $10 billion per year generated from
energy production on Federal lands and waters, $12 billion in
2019 alone.
In addition, excise taxes placed on our products provide
significant revenues for infrastructure projects. In 2019,
Federal fuel taxes generated $36 billion for highways and
bridges that help keep our Nation moving.
It's essential we implement effective and achievable
policies that allow us to continue to reduce emissions while
supporting America's economy and energy security. The oil and
natural gas industry stands ready to work with you to do just
that.
Thank you for the opportunity to testify, and I look
forward to the committee questions. Thank you.
Mr. Khanna. Thank you. Thank you, Mr. Macchiarola, for your
testimony.
And now we are going to proceed to the questioning.
Everyone on the committee who wishes to ask questions will have
five minutes, and I will begin. The chair now recognizes
himself for five minutes of questioning.
Let me say I was moved, Ms. Thunberg, with your very
eloquent statement about how we will be judged in history and
how you plan to write it. Do you think that the Biden
administration must make repealing these five fossil fuel
subsidies the first and highest priority in the next
infrastructure bill?
Ms. Thunberg. Yes. I mean, if you--I mean, you don't need
me saying that this is, of course, should be one of the top
priorities, but if you do ask for my opinion, then, yes, of
course, if you--because if you look at the overall current,
best available science, that is clearly--it shows that that is
what is needed right now. So, yes, definitely.
Mr. Khanna. And could you speak be a little bit, given your
international perspective, about what message we would be
sending in Congress if we passed an infrastructure bill and did
not have the elimination of fossil fuel subsidies in there
after we ran on that and after it's in the President's plan,
and if let's say we did not have that? What message would that
send to other countries?
Ms. Thunberg. I guess it would send the message that you're
not really taking it serious, that you are talking very much
but not really taking action. I know that sounds very
oversimplified, but that is what it all comes down to. We are
all talking about these distant targets, and we are gonna act,
and we have reduced our emissions and so on.
But we can talk as much we want, as long as we don't take
real bold action right now, reducing the emissions at the
source, then it doesn't really mean anything. At least that's
what I, as a young person, and from talking from an
international perspective, that's the signal that you will be
sending out.
Mr. Khanna. Would it be fair to say it would be a gut-punch
to young people in the environmental movement around the world
if these fossil fuel subsidies aren't eliminated in this
infrastructure bill?
Ms. Thunberg. Yes. Pretty much. That's a good description.
Mr. Khanna. Mr. Macchiarola, I listened very carefully to
your statement because I was perplexed when you said that there
was no special fossil fuel subsidy, as you've said in a number
of your public statements. And I was trying to understand how--
you're under oath--how are you possibly saying that?
And it seems to me I understand the loophole now that
you're trying to invoke. You say they pay the taxes, but they--
this is just a matter of time. Can you explain to us what the
standard tax accounting practices mean for depreciation? If
there was not the intangible drilling deduction, how many years
does the standard tax accounting allow for?
Mr. Macchiarola. Sure. Chairman, I think, in reference to
the IDC specifically, I think the way to think about this is in
terms of the similar treatment that research and development
gets in the Tax Code. What we're trying to do is incentivize
reinvestment back into projects to be able to----
Mr. Khanna. And I want to interrupt. What would the
standard--just so we're on the same page, what would the
standard tax accounting be--the standard tax accounting
depreciation?
Mr. Macchiarola. The current tax accounting appreciation is
over a longer period of time----
Mr. Khanna. Do you know what the standard tax accounting
depreciation would be? Over how many years? I mean, it's a
simple question. I mean, I assume you know the basics.
Mr. Macchiarola. Congressman, Mr. Chairman, I think----
Mr. Khanna. The answer is it's over seven years. And what
the inner--intangible drilling deduction is. You may want to
have people brief you next time before you come to Congress.
It's a seven-year standard deduction. And what the intangible
drilling does is for oil companies, they get to deduct expenses
on the first year for seven years. Do you understand the
concept of the present value of money?
Mr. Macchiarola. I certainly do understand that,
Congressman----
Mr. Khanna. And just to be clear, the research and
development tax credit and other tax credits can't be taken all
at once. Every other industry--every other industry--has
standard tax accounting at seven years. You say you're not for
any special exemption. Would you be fine using standard
accounting practices for every other industry for the oil and
gas industry? Can you commit to that today?
Mr. Macchiarola. I think the importance of this provision
is to be able to reinvest into the next project----
Mr. Khanna. Every other industry could reinvest, and they
don't--they have seven years. Why can't----
Mr. Macchiarola. It is similar treatment in the Tax Code to
research and development----
Mr. Khanna. It's not similar treatment. And if you could
just answer this last question, then I'll give you the last
word. Why is it that your industry doesn't get the standard
seven years that every other industry, including the tech
companies in my district--I'm very familiar with research and
development tax credits. I'm all for it. Can you commit today
that your industry should get the same--same--provision as
every other industry? Why is it that the oil industry should
only get one year to take all the depreciation in defiance of
standard accounting principles?
Mr. Macchiarola. First off, it's important to note where
that savings goes. Eighty percent of the savings that you're
talking about goes back into pay wages, to be able to move on
to the next project, to be able to reinvest----
Mr. Khanna. Can you just admit that you're fine for
standard tax accounting?
Mr. Macchiarola [continuing]. And grow business.
Mr. Khanna. Are you fine to be subject to the same thing
that the tech companies in my district are, or Wall Street is?
Can you just say you're fine with standard tax accounting
principles?
Mr. Macchiarola. I think to take--Mr. Chairman, to take one
provision of the Tax Code and say it should be applied in the
same form and fashion to every business without looking at----
Mr. Khanna. So you're saying----
Mr. Macchiarola [continuing]. Without looking at the entire
Tax Code--the purpose of the Tax Code is to provide revenues to
meet government expenditures----
Mr. Khanna. You said you were saying--you said you were
saying----
Mr. Macchiarola [continuing]. To be able to provide--to be
able to provide----
Mr. Khanna [continuing]. You said that you were being
treated the exact same as every other industry. That's what you
said under oath. That's what you said to the press. And I'm
saying, right now, there's one provision of the Code--we can
discuss the others--where you're not, where every other person
gets seven years. You didn't know the seven years. That's
standard accounting 101. Trust me, that's true.
Now, you can deny the net present value of money. That
would be like denying that the earth is round. Obviously, there
is a benefit if you get to depreciate it all at once. Can you
just, on a consensus, say that you commit to what you said,
that you're fine being treated like every other industry with a
seven-year deduction?
Mr. Macchiarola. We are certainly fine being treated like
every other industry.
Mr. Khanna. OK.
Mr. Macchiarola. There's no--there's no question about
that. If you want to take the entire Tax Code and treat the oil
and gas industry as every other industry, we're happy to do
that.
Mr. Khanna. Ranking Member Norman, my time has elapsed, so
I recognize you for your questions.
Mr. Norman. Thank you, Mr. Chairman.
Ms. Thunberg, thank you for your involvement here today. I
commend you for your willingness to testify and get involved
with public policy.
In the past, when you're talking about climate change, you
have said, quote: ``I want you to panic. I want you to feel the
fear I feel every day.''
What particular study or scientific report did you read
that made you come to this conclusion?
Ms. Thunberg. Thank you for the question. First of all, let
me just clear that, those are metaphors. In speeches, you often
use metaphors. Of course, I don't mean literally that I want
people to panic. So there was no scientific study that made me
come to that conclusion.
Mr. Norman. Oh, OK. So you didn't say that?
Ms. Thunberg. I did. But it's a metaphor that you often use
in speeches.
Mr. Norman. Metaphor for what? I mean, how do you--what I'm
asking, on panic, ``I want you to panic,'' what does that--tell
me what you meant by that.
Ms. Thunberg. By that, I mean that I want people to step
out of their comfort zones, yes, and to not just see the
climate crisis as a far, distant threat, but rather as
something that is impacting people already today and people to
step out of their comfort zones to start taking real action.
Mr. Norman. OK. What in your opinion is, on the PPM, parts
per million, what is acceptable, permissible, on CO2 emissions
in your opinion? What actual amount do you think is
permissible?
Ms. Thunberg. Well, I mean, of course, there is no magic
amount that says that this is an OK amount. The science doesn't
really work that way. But, of course, we can say that it is the
more--the higher the concentration of CO2 in the atmosphere is,
the bigger the risks are going to be.
So, I mean, you can't say that there is one amount that is
acceptable and not. Of course, there is not one magic tipping
point where everything is beyond saving and so on, but rather
we should try to keep it as low as possible.
Mr. Norman. OK. So you wouldn't name a particular number.
What about China, India, the other countries where
there's--in this--if this bill passes, there's no retribution
against these countries that's going to offset anything we do
here in America. What is your take on that?
Ms. Thunberg. Well, if we just thought like that, it would
be very convenient; wouldn't it? But rather we need to see the
holistic perspective, how can we--if we take, for example,
India as an example, how could we expect India to take action
when the developed countries who have actually promised to lead
the way won't do that? When--if we take into account the global
aspect of equity, I mean, there are many, many people around
the world who need to be able to raise their standard of
living. And if we, who live in high-income countries, aren't
able to take a few steps back in order to let other people
raise their living standard, then, I mean, that doesn't--that
just doesn't make any sense.
And of course those countries definitely need to take their
responsibility as well, and that's why we need global
cooperation. And if countries won't take action, then there is
no global cooperation. If the U.S., for example, which is the
biggest emitter in history, won't take action, then how can we
expect other countries to do that?
So taking action ourselves is also a guarantee that other
countries--I mean, it will be a snowball effect most likely. If
one country does something, then other countries will follow.
If no country does something, then no one will follow.
Mr. Norman. OK. And so China as example, which is a
Communist--they practice genocide on their people--they will
watch America and then will just voluntarily reduce their
emissions? Is that your thoughts?
Ms. Thunberg. No. I mean, we should do, of course,
everything we can to make sure that China takes their
responsibility, but I mean, there is not really much--I mean,
all I can do is to try to advocate for global change. All you
can do is to take action and try to create a global pressure on
China so that they will have to take action.
As you say, we can't just go there and ask them to do it.
That would be very nice, but, yes, we need to think
realistically as well.
Mr. Norman. Yes. There's nothing in the bill that puts any
type pressure other than, I guess, showing the example. Thank
you for your testimony.
Mr. Macchiarola, can you address the direct employment in
the United States that the Green New Deal would affect? We're
all seeing the gas prices jump, you know, 70 cents or more.
We're now dependent on foreign countries that particularly
don't have our best interest. Can you discuss how this Green
New Deal would affect energy costs, gas costs, and the many
other minerals that they are prohibiting to be mined in other
states?
Mr. Macchiarola. Sure. Thank you for your question,
Congressman Norman.
I think it is first important to look at the job creation
within the oil and gas industry. We support 10 million jobs in
the U.S. economy, nearly seven percent of the U.S. economy. On
this committee alone, 325,000 jobs supported by the industry,
75,000 directly.
And let's talk about what the tax increases that are being
proposed would do.
In 2017, as a result of reducing the corporate tax rate, we
created, over a period of 19 straight reports, the lowest
poverty rate in 60 years, since the government kept that
statistic. We created jobs for 19 straight months with wage
growth over that period of time prior to the pandemic.
The reason we did that was 70 percent of the savings from
the tax cuts went directly to wages. That's right into the
American people's pockets.
On energy, what has the result been on energy of the
American energy revolution?
Over the past decade, as increases in costs have gone up by
double digits in health care, education, and food costs, energy
costs have gone down by 15 percent.
The tax proposals considered here would drive those costs
up. That would mean real costs for consumers. That would mean
jobs. It's essential that we not go in that direction.
Thank you for your question, Congressman.
Mr. Norman. OK.
You would agree corporations don't pay taxes, people pay
taxes, don't they?
Mr. Macchiarola. People do pay taxes.
Mr. Norman. And the fact that the depreciation schedule is
different from industry to industry. The oil and gas industry
is not like my industry, the real estate business. It's a
different type of business. One size doesn't fit all. Would you
agree?
Mr. Macchiarola. One size does not fit all for all
industries. That's right, Congressman.
Mr. Khanna. Thank you, Member Norman. I want to give you
some more time. Your time has been expired, but I want to be
polite. So maybe just one or two more.
Mr. Norman. That's fine, Chairman. I didn't realize. Thank
you so much. Appreciate it.
Mr. Khanna. Thank you.
You can answer the question, the witness.
Mr. Macchiarola. Sure. Thank you, Mr. Chairman.
Thank you for the question, Ranking Member.
I think what you try to do with a Tax Code is to provide
revenue to meet government services. But you need to ensure a
fair return for the taxpayer, but also U.S. competitiveness.
We are in an increasingly globally interconnected world
where competitiveness is essential. Some of the provisions that
the chairman discussed would directly impact that
competitiveness, particularly the double taxation on income
earned or on taxes paid overseas.
So it's absolutely essential that you look through the lens
of U.S. competitiveness as you establish provisions within the
Tax Code.
Thank you for the question.
Mr. Khanna. Thank you, Ranking Member.
I now want to recognize our distinguished chair, Carolyn
Maloney, who really has prioritized climate change and the
environment as a focus of the larger committee. And she is so
committed to this issue that's she's joining us for part of
this hearing.
So, Chairwoman Maloney.
Mrs. Maloney. Thank you, Mr. Chairman, for allowing me.
They were on the floor voting now and I have to be managing a
bill, but I wanted to be here for your first subcommittee
hearing, and to congratulate you on being a chairman, and also
on focusing your first committee hearing on such an important
topic.
So, Mr. Chairman, one of the most painful realities of the
climate crisis is that the path forward is paved with common
sense, yet we seem incapable of finding our footing.
As a Nation, all we need do is follow the science and
fairly weigh the costs and benefits to see that the only viable
path forward is one that revolutionizes our energy policy,
builds a sustainable economy, and creates millions of clean
energy jobs.
If we fail, the consequences will be catastrophic. But if
we are successful, the benefits will be tremendous. It's that
simple.
Just in my home state of New York, there are hundreds of
thousands of hospitalizations, emergency room visits, and
premature deaths that could be avoided. And the economic value
of these health benefits could exceed $3.5 trillion.
The U.S. could take action today. Congress and the
administration have a duty to lead and a responsibly to act
without delay.
Ms. Thunberg, you often identify the fact that global
leaders fail to act rationally when it comes to the climate
crisis.
We have the science and the data. We see the climate
changing before our eyes. We hear what will happen to us and to
our children if we fail to act. And yet, we still don't act.
Why do you think that is?
Ms. Thunberg?
Mr. Khanna. Ms. Thunberg, are you still with us?
We've had some technical difficulty. Let me just make sure.
Ms. Thunberg, I think you're muted. Did you hear the
chairwoman's question?
Can we check? I don't think she's hearing it, the audio.
Ms. Thunberg, can you hear us?
Mrs. Maloney. Is the problem on our side or on her side?
Mr. Khanna. I think it's on her side.
Ms. Thunberg, if you could raise your hand if you can hear
us.
No, I don't think she's hearing the feed.
Chairwoman, apologies. While we get the technical issue
fixed, I don't know if you had questions for any of the other
witnesses.
Mrs. Maloney. My questions were for this extraordinary
young woman. So I'll just wait.
Mr. Khanna. Well, she's right there. So we will--let's just
work with the--the staff is working to try to fix the link as
we speak.
Mrs. Maloney. Why don't you go back to another Republican.
And if we can get hearing to her, then we'll continue.
Mr. Khanna. OK.
Mrs. Maloney. Unfortunately, these technicalities sometimes
take a long time. So maybe we should go----
Mr. Khanna. I appreciate that.
And so, let us go on the Republican side. Let me just see
who is our--OK. So it will be to our--to the Democratic side
next again, because there's no Republican right now here.
Do we want to have our vice--is Representative Omar here
yet? OK. Do we want to have Representative Tlaib, our vice
chair?
Why don't we do this? Why don't we take a five-minute
recess to give everyone the chance to have the tech working,
because it seems like some of the members haven't worked.
Chairwoman Maloney, will you be able to join us in five
minutes if we can get this?
Mrs. Maloney. Well, we are on the floor voting on D.C.
Statehood and I may not be able to come back. But if I can, I
will. I want to hear the comments and testimony and answers to
the questions on this important hearing.
Mr. Khanna. We appreciate you joining us. Sorry about the
technical difficulty. I'm sure Ms. Thunberg will love to answer
your question. If you can join us, that's great. If not, I'll
give her the opportunity to respond to what you asked, because
it was a very important question.
Mrs. Maloney. Thank you so much.
Mr. Khanna. Thank you.
All right. With that, let's take a five-minute recess.
[Recess.]
Mr. Khanna. I apologize to our witnesses. And we need to
make sure this doesn't happen in future hearings and resolve
any of these technical issues.
With that, I appreciate--you know, the next person is going
to be Vice Chair Tlaib.
I just wanted to give Ms. Thunberg an opportunity to answer
Chairwoman Maloney's question, because you didn't hear it, the
last question Chairwoman Maloney said.
You often identify the fact that global leaders fail to act
rationally. When it comes to the climate crisis, we have
science and the data. We see climate changing before our eyes.
We hear what will happen to us and to our children if we fail
to act. And yet we still don't act. And I think her question
was, why are people not acting?
And so, Ms. Thunberg, if you wanted to answer her question,
that's our Chairwoman Maloney, and then we will turn to our
vice chair, Rashida Tlaib.
Ms. Thunberg, did you have any comments? I think you need
to unmute.
Ms. Thunberg. Yes, of course. I mean, we need to be
realistic. And as long as we are not really treating this
crisis like a crisis, of course people won't understand that we
are facing an emergency. We can hammer people with as many
facts as we want. Unless we really treat it as a crisis, we
won't understand that it is a crisis.
And, of course, we criticize politicians, but we do also
understand that a politician's job is to fulfill the wishes
from voters. And if people in general are not demanding real
climate action, then, of course, nothing, no real changes will
be achieved.
By that I'm not saying that you don't have any
responsibility. Of course we humans are social animals, and we
copy the behavior of people around us. And if our leaders are
not acting as if we were facing a real emergency, of course,
then we will not understand that either.
So it's sort of we are stuck in a hamster wheel, so to
speak, and someone needs to break that. And the people with the
most responsibility, of course, have the biggest opportunity to
do that. And that's why you have such an extremely big
responsibility.
Mr. Khanna. Thank you, Ms. Thunberg.
I now want to recognize our vice chair, who has been
waiting very patiently--sorry for all the technical errors--
Vice Chair Rashida Tlaib.
Ms. Tlaib. Thank you so much, Chairman Khanna.
And thank you so much for our panelists for your patience.
Happy Earth Day, y'all. I hope we are celebrating Earth Day
at some point that we've actually been able to have meaningful
action on climate crisis.
So I represent the 13th congressional District in Michigan.
My entire district is in Wayne County, Michigan, which hasn't
met SO2 standards set by the Clean Air Act in over 15 years. We
know that 75 percent of all greenhouse gas emissions in the
United States are caused by burning fossil fuels.
In Detroit alone, my residents can speak to the real-life
consequences of our country's unending corporate greed, with
large fossil fuel companies pushing to extend the life and
utility of these dirty fuels.
A few years ago, piles of petroleum coke just showed up on
the Detroit riverfront and started blowing around in huge
clouds and coating nearby homes with a thick dust.
And so I want to share with all of you, because I want you
all to see for yourselves, what the human impact is when we
promote this kind of pollution that is killing us.
And with that, I want to ask our committee to please again
show the video of the petroleum coke on the Detroit riverfront.
Mr. Chair, I can continue and we can go back to the video,
if necessary.
Mr. Khanna. Why don't you continue, given the technical
difficulties we've had. And then if we can----
Ms. Tlaib. Well, it turns out a lot of the clouds, many
folks didn't really know what it was. We found out it was
petroleum coke, some call pet coke, a byproduct of the Canadian
tar sands extraction, which is turned around and sold in the
United States by companies for a cheap fuel source abroad.
So when we raised alarms and environmental regulators told
us it was safe, they actually told me, as a Michigan state
Representative, don't worry, this isn't toxic, it's not on the
EPA list.
I said, how is that possible?
Why? Because lobbyists and others were able to push and get
it off of the list.
But how can a substance that emits far more carbon dioxide
than coal, y'all, how can that be safe for my residents to
breathe in?
So we took matters in our own hands, and we collect samples
ourselves and have the Ecology Center in Ann Arbor, Michigan,
to test it independently from our own government. And, nobody's
surprised, we proved that petroleum coke was toxic and could
cause cancer.
This is what happens to countless communities like mine
around the world when we continue to incentivize the use of
dirty, toxic fossil fuels.
And the International Monetary Fund, the IMF, estimates
that that there are at least $5.2 trillion in fossil fuel
subsidies each year globally. These greedy corporations have
even received $15 billion in subsidies from pandemic relief
packages just alone last year.
This is so egregious, the egregious amount, especially for
the industry that has spent decades spreading misinformation
about climate change and has spent millions lobbying to defeat
climate legislation here in Congress, all for profits,
regardless of the human cost on life.
Last term, I brought this subcommittee to my district for a
field hearing regarding this kind of pollution. And it was in
the shadows, the hearing was done in the shadows of Marathon
Petroleum, and the pollution, again, in the 48217 community
neighborhood in Detroit, which is the most polluted ZIP Code in
the state of Michigan.
So I wanted my fellow members, I wanted my colleagues to
smell what my residents smell. I wanted them to see exactly
what it felt like literally to walk out of their house to see
all the oil refinery pollution and how it really made them
feel.
And so I really want to talk to Ms. Hunkler, because you've
described how oil and gas companies have pressured your
neighbors, violated the Clean Air Act, and turned you all into
what you call a frack--turned you into it a fracking refugee.
How has air and water pollution from fossil fuel extraction
affected you and your family's health personally? I think it is
important for people to understand that we are funding the
killing of people and harming folks in such a profound way.
And so, Ms. Hunkler, can you please share again how it has
impacted you personally?
Ms. Hunkler. Thank you so much. And there are so many ways
it has affected me personally and my community.
But the negative health impacts, first, we noticed the
odors, and then headaches and nausea, body aches and pains,
mental confusion, you couldn't sleep, rashes, numbness, aches
and pains.
And the other part about this is that we had no support, no
help. You file complaints to the regulators, the Ohio EPA, and
little action.
And so, it takes these environmental law groups who
actually support people. And I had to get legal
representation--pro bono, thank goodness, or I couldn't have
afforded it--to file an intent to sue against the compressor
station to get any action from the Ohio Environmental
Protection Agency at all.
So it is not only the health impacts that we experience,
but there is no--we have no recourse. There is nobody there to
help us.
And, fortunately, at some point we had environmental
organizations that came and helped us with flare camera imaging
that makes the invisible visible. And that was basically the
final evidence that we had or the evidence that made the
regulators take action, because you could see it.
And, unfortunately, even after years of the compressor
station being in significant and ongoing violations of the
Clean Air Act and the Ohio Pollution Control Act, the flare
images from before any remediation was done and after basically
shows the same amount of pollution billowing toward my home in
the valley.
And the final--I mean, for years I really couldn't live
safely in my home. I kept the property because I do--kept the
property because I couldn't really face getting rid of it.
But the final straw for me putting my property up for sale
was when there was an application to extend the compressor
station, and they were going to begin selling water again for
fracking operations a quarter mile on Slope Creek Reservoir. So
I knew I had to get out.
Ms. Tlaib. Thank you.
Mr. Khanna. Vice Chair, did you have any other--I see your
time has been expired, but we've been pretty generous, as it
was with Ranking Member Norman. But do you have one more----
Ms. Tlaib. No. I know the video--I would like to at least
show the video. I think it's important.
Mr. Khanna. Yes.
Ms. Tlaib. And just my final point.
It is so incredibly outrageous that our government
continues to subsidize this kind of nationwide assault on our
public health. And I just want you all to see the result of us
funding these kinds of toxicity. It is important for you to
see--it took Jill to get people to visualize it with flare.
I'm showing you right now, as an example, right here in the
backyard of the community I was raised in. This is not normal.
We must stop it.
With that, I----
Mr. Khanna. Let's show the video.
Ms. Tlaib. Yes, with the video.
[Video shown.]
Ms. Tlaib. Thank you, Mr. Chair. I yield.
Mr. Khanna. Thank you. Thank you very much for your
leadership.
Now I want to recognize Representative Herrell for five
minutes for your questioning and comments.
Ms. Herrell. Thank you, Mr. Chair. I hope you can hear me
OK.
Mr. Khanna. We can.
Ms. Herrell. Thank you. I really do appreciate this
hearing. It's very important.
And just a little reminder. I'm so thankful for the fossil
fuel industry. Forty-six percent of fossil fuels goes to the
making of gasoline, but 54 percent is used in so many products
that we take for granted every day.
And, in fact, if not for fossil fuels, we wouldn't even be
having the capability to have these remote calls and talks
right now because of the plastics, and medical devices,
eyeglasses, pantyhose, asphalt, roads, shoes, tires, bottles
for water, iPhones, cosmetics. I could go on and on.
So I just want us to be very mindful of the products that
are important to us on a day-to-day--in each of our day-to-day
lives.
But with that, I'd like to ask Mr. Macchiarola a couple of
questions, if he's still on. I'm hoping he still is. I know
there was a little technical difficulty.
But in 2019 the oil and gas industry contributed 39 percent
of New Mexico state budget funding, critical programs such as
education and infrastructure.
Can you quantify the industry's nationwide contribution to
states, the overall number of jobs that your industry supports,
and the nature of those jobs, if you have those numbers
available, or maybe your best estimate, please?
Mr. Macchiarola. Sure. Thanks for your question,
Congresswoman.
I think if you look at the gasoline tax, which supports our
infrastructure, roads and bridges and highways, you're talking
about $36 billion. You're talking about $14 billion in
severance taxes across the states that provided for critical
programs in education and infrastructure and conservation.
In New Mexico, as you stated, in your home state, half of
the production, the revenues from production on Federal lands
go directly to the state budgets. That number was $12 billion
in 2019 across the Department of the Interior in the United
States. This is critical to be able to produce, to provide
state revenues, again, for education programs and other
critical priorities that Governors have.
Your question regarding jobs. Our industry supports more
than 10 million jobs, about seven percent of the U.S. economy.
And it's also important to note the nature of the jobs
within our industry. For example, the private sector salary is
$108,000 in the oil and gas industry. That's almost double the
average private sector salary.
We did a study a couple of years ago to compare jobs in the
oil and gas industry versus other jobs and actually surveyed
workers who found that they preferred the oil and gas industry
jobs because of the high wages, because of the benefits,
because of the ability to advance in your career because these
are highly skilled jobs.
So when folks talk about transferring from our industry to
another industry being something that's very easy, that's just
not the case.
So it's really important as we, again, tackle these
challenges to be able to address the risks of climate change
and while continuing to meet energy demand, that we keep in
mind that these jobs are essential to our economy and to the
American people.
So thank you for the question.
Ms. Herrell. Right. And I just think we have to keep in
mind, it's an important issue for sure. But we're witnessing
right now the impact of bad Federal policy that this
administration is having on the industry.
And what I'm very concerned about is what happens to the
private market, I mean, what happens to the energy industry as
a whole if the administration and congressional Democrats
continue to choose to regulate and tax the industry in every
which way. I mean, we are already seeing a lot of uncertainty
as it relates to future drilling operations and production.
And I know we're almost out of time.
So what does this look like in terms of for the industry as
a whole with these bad policies?
Mr. Macchiarola. It is very concerning, Congresswoman. You
look at the decision on day one on Keystone, that was 2,000
immediate jobs, up to the potential for 10,000 jobs on that
project, many of them good-paying union jobs. You take a look
at a long-term ban on Federal leasing. That has the potential
to cost a million jobs.
So we really need to think very carefully about these
policies and the potential impact on peoples' livelihoods as we
move forward.
Thank you for your question.
Ms. Herrell. Thank you. And not forget the products that we
use every single day that help medical, vitamins, all these
things. So we need to be, I think, thinking of this more
collectively and not segregate it so.
But, Mr. Chairman, thank you so much for hosting this. And
I yield back.
Mr. Khanna. Thank you.
Now, without--is Representative Omar here? Is
Representative Ocasio-Cortez here? We have requests from both
of them. I see them on the screen, but not present. We're
checking, just bear with us.
Thank you for the patience of all our witnesses.
I know that both Representative Ocasio-Cortez and
Representative Omar wanted to ask questions.
Are there any members right now who----
Mr. Fallon. Yes, sir. Pat Fallon, sir.
Mr. Khanna. OK. Why don't we have Representative Fallon,
since you are present and the camera's on. If we could have you
recognized for five minutes.
Mr. Fallon. Thank you, Mr. Chairman, members.
You know, eliminating the tax provisions supporting fossil
fuels, it is going to save about, if we did that, would be $3.2
billion. And the renewable incentives we spend right now, about
almost $10 billion, about three times as much.
I can remember being a child the 1970's and looking, and I
was fascinated with geopolitical events. And there was a dream
that America had, and that was to have energy independence. And
we had long gas lines and oil embargoes. I was a very small kid
and I remember how horrible that was.
We had this dream, and it seemed like a pipe dream, of
energy independence. And here we are on the cusp of that
remarkable achievement, and some members, unfortunately, of the
Democratic Party want to enable and I think, unfortunately and
unwittingly, embolden our enemies by hamstringing our own
energy industry.
The fact of the matter is the United States is now a global
leader since 2000 in reducing CO2 emissions and in energy
production, and they are both remarkable achievements. And we
should do everything we can in our power to facilitate this
kind of success. The energy industry, let us not forget,
accounts for this 10 million high-paying jobs.
And this is also a national security issue. We just had
former Secretary of State Mike Pompeo come and speak, and he
talked about how he was empowered as a diplomat in foreign
relations and it aided him, because so many countries wanted to
talk to and deal with the United States because of our
abundance in fossil fuels.
And there's a moral case, and I think a very compelling
moral case, to be made for the fossil fuel industry. I mean,
look at over the last 100-some-odd years the technical
achievements and advancements we've had.
And the life expectancy. Life expectancy in the United
States in 1900 was only 46 years of age, and now it is 79. That
is a 72 percent increase.
And the quality of that life that Americans lead now, of
all races and creeds, that we didn't lead 120 years ago, before
fossil, really the advent of the fossil fuel industry being as
productive and efficient as it has become.
And the cleaner energy--and that's a goal for everyone,
regardless of party, or really even nationality, in different
nation-states. If we want cleaner energy we should unleash the
expertise of the energy industry that have shown and proven
such innovation.
And as one of our witnesses said about being judged in
history, let's just not forget that, unfortunately, with the
Democratic majority in the House, they are going on a wild
multi-trillion-dollar deficit spending binge and they are
saddling future generations with crushing debt and forcing them
into an untenable financial crisis.
So we have to be consistent here with what we can do. And I
think the best way to do that is to support the fossil fuel
industry and help them--help all of us--with producing more and
cleaner energy.
And, Mr. Chairman, I appreciate it. Thank you. And I yield
back.
Mr. Khanna. Thank you, Representative Fallon.
I know that a number of members have been trying to get on
and having some difficulty. I don't know if Representative
Ocasio-Cortez or Representative Omar have managed to get on the
platform.
Ms. Ocasio-Cortez. Yes. I'm on the platform, Mr. Chairman.
Mr. Khanna. OK. Wonderful. Thank you.
Well, I'd like to recognize Representative Ocasio-Cortez
for her five minutes.
Ms. Ocasio-Cortez. Of course. Thank you so much, Mr.
Chairman. And apologies again. This overlap with the vote has
kind of complicated a lot of our timing here.
I wanted to dive in a little bit into a couple of the myths
that we see advanced in climate work overall.
You know, we've heard a lot of, frankly, fantastical
stories about what we would do if we actually commit to saving
our planet.
We have heard that it is a socialist conspiracy takeover to
bring down climate emissions below the IPCC report of 1.5
degrees Celsius. We have heard that it will cause electricity
bills to skyrocket and prompt families to pay hundreds of
dollars a month in their normal electricity bills.
But that doesn't actually compare. While we see these
statistics and these studies by Republican and conservative and
pro-lobbyist think tanks develop these theoretical ideas of
what nightmares could potentially await us if we actually
stewarded our future, they fail to acknowledge what's happening
right now.
Let's take, for example, electricity bills. While there is
all this fearmongering about if we switch to solar, if we
commit to wind, that our costs will go up lot, that fails to
acknowledge what we just saw in February, when Texas had a
freeze and their fossil fuel infrastructure was so inadequate
and unprepared, thanks to both climate-denying politicians who
refuse to invest in infrastructure to adapt to our future and
acknowledge that we will be experiencing climate events in
regions that have never experienced such events before, and
also from industry, who doesn't want to invest and actually
take the cost of preparing for our future.
So what does that yield? It yielded $16,000 electricity
bills, oil and gas electricity bills, from an oil and gas
infrastructure on everyday people in the state of Texas--
$16,000. That is just the everyday--what we are seeing for
everyday people.
But then let's also talk about the justice component,
because we introduced the Green New Deal earlier this week and
one of the topics I had brought up is how the intersection of
justice and the trampling of Native rights and environmental
racism actually contributes and is a key element of fossil fuel
infrastructure and climate change.
I wanted to ask a question of one of our witnesses, Ms.
Tara Houska.
We see the Dakota Access Pipeline. We've seen what's
happening with Line 3. And it seems as though there's this
pattern of fossil fuel industries and fossil fuel pipelines
intersecting with Native land and treaty land. Is that a
coincidence?
Ms. Houska. I appreciate the question.
The reality is, is that we are the places that are out of
sight, out of mind. We are the last places, like I mentioned in
my testimony, the last places holding the sacred.
When they want to put through a pipeline or through a mine
or through some other extracted economy, they don't put that in
a rich suburb. They don't put that somewhere that is going to
go through other peoples' land. It goes through ours. Just like
what Rashida Tlaib was saying, Congresswoman Rashida Tlaib was
talking about, when it comes to refinement, it goes in Black
and Brown communities.
From beginning to end, we are the people that are
disparately experiencing the impacts of not just the climate
crisis, but of the actual building of infrastructure. We're the
sacrifice zones.
Ms. Ocasio-Cortez. Yes. And, in fact, in the case of the
Dakota Access Pipeline, it was originally supposed to be
constructed through a wealthier and Whiter neighborhood. And
that neighborhood organized and said: Not in our backyard. Put
it over there.
And that is what allowed the political--would you say that
that's what helped contribute to a political environment where
it was easier to look away, where these fossil fuel pipelines
were being constructed in communities, where it is easier to
look away from?
Ms. Houska. They did their best to try to look away. But
then there was a movement that was born by LaDonna Allard and
by the youth runners that ran up to D.C. That woke up the world
and had the President being questioned in Laos about the Dakota
Access Pipeline.
So although they are trying their hardest to look away and
to not look upon our faces, the faces of the original peoples
of this land, we are pushing back. Every single pipeline
infrastructure project that is proposed has Indigenous
resistance to it.
That it is reality of the situation. It's not just us and
Line 3. It is Dakota Access Pipeline, it is Mountain Valley
Pipeline, it is Save Oak Flat. It's all those different places
and spaces of people and faces who are trying their best to
protect our lands.
These are our sacred lands. We cannot just pick up and
leave. These are our homes. We were put here by the Federal
Government. This was the exchange that we made for the country
that we're in to exist today, and they are coming for those
last pieces.
So that's what we're tasked to do. And we have plenty of
young people who are standing with us and leading this fight
for their future.
Ms. Ocasio-Cortez. Thank you so much.
Mr. Khanna. Thank you. Thank you, Representative Ocasio-
Cortez, and for your leadership earlier this week in the
reintroduction of the Green New Deal.
I know we have a number of people who want to ask
questions, and we've had technical difficulty all morning. So
we're waiting on Representative Omar and Representative Gomez
and Representative Porter.
Let me just ask, is any member here right now who wants to
be recognized? If not, we will wait for those two members who I
know have been texting me all morning and have been here.
Well, while we wait for them, I want to give the
opportunity, since we don't have any members right now, if
there are any of our witnesses who want to take this
opportunity to respond generally to anything that they have
heard. We also have Representative Krishnamoorthi, who wants to
ask questions.
So before he joins, is there anyone who feels that they
need to clarify anything or respond to any of the questions?
Just raise your hand.
Yes, Ms. Hunkler. And then, after your comments, we'll go
to Congressman Krishnamoorthi.
Ms. Houska. There's many things I would like to respond to.
But one thing, I can remember being in these meetings that the
oil and gas industry were holding for local people to come in.
I went just so I could be informed about what they were saying,
what was going on. And they promoted and sold this on energy
independence.
And my question is for Representative Fallon.
How can you explain all the exportations? Wasn't the
purpose all along to export the oil and gas to higher price
markets overseas?
Mr. Khanna. Your question is noted for the record and we'll
see if he gets back to you.
I see Representative Krishnamoorthi has joined us, and I
appreciate him joining us.
Representative Krishnamoorthi, you're recognized for your
five minutes.
Mr. Krishnamoorthi. Thank you, Chairman Khanna.
It is so nice to be with all of you. And I apologize for
being late. I was just voting.
If I could please turn to Ms. Thunberg.
Thank you so much, Ms. Thunberg, for joining us.
And thank you, Chairman, for convening her with us.
Ms. Thunberg, one of the questions that people in my
district, especially among young people, might have is, if they
are a young person and they don't know what do in terms of
fighting climate change, what would you, on this Earth Day--
happy Earth Day, by the way--what would you advise them to do
in a very practical way?
Ms. Thunberg. Thank you for the question.
Well, first of all, I would say that it is not up to them
to do the work. They are not the ones who are the ones who have
contributed to this crisis the most and the responsibility
doesn't fall on their shoulders.
But, of course, I understand that many want to take action.
And, of course, everyone has a responsibility.
So then I would say that--I mean, there are countless ways
to get involved. I would say maybe the most important one is to
become aware of the actual crisis that we are facing, to
educate yourself, to read as much as you can, because once you
fully understand the crisis, then you will know what you can do
yourself as well.
And also to be an active democratic citizen. It is our
moral duty as citizens of democracies to stand up and to make
our voices heard.
Democracy is not just on election day, it is every hour of
every day of the year. And we need to make our voices heard.
Because if enough people stand up together and collectively put
pressure on the people in power, like yourselves, then that
change will come. Because we young people are the future and
the people are the ones who have the power, even if it may not
seem like that all the time.
Mr. Krishnamoorthi. Ms. Thunberg, thank you for your
advocacy. I apologize for pronouncing your last name
incorrectly. My last name is very interesting, so I say that my
last name gets me on a first name basis with everyone.
With that being said, you can call me Raja.
But, Ms. Thunberg, let me ask you this. In all of your
advocacy efforts, what has surprised you the most in terms of
either the response that you've received or in any other
regard?
Ms. Thunberg. I don't know. Maybe the fact that people are
actually open for change. I thought that people didn't want
change and that we were just stuck in our old habits. But after
having talking to people, both people in the fossil fuel
industry and people, just everyday people, young people, have
made me realize that people are actually more open for change
than we realize.
So that is something that has surprised me more than I
would have thought.
Mr. Krishnamoorthi. You know, a lot of people in our
country, in the United States, actually have jobs in the fossil
fuel industries, whether it is the oil industry or the natural
gas industry. And a lot of those workers want to know what the
future holds for them, given that we do have to fight manmade
climate change and we do have to transition to a renewable
energy economy.
What would you say to them, because they obviously are
fearful about the future and taking care of their families and
having a job that puts food on the stable and so forth?
Ms. Thunberg. Of course. And who can blame them? I mean,
everyone--that's natural, that we care for ourselves and that
we want to be able to feed our families. So, of course, this is
definitely not their fault.
[Inaudible] they cannot be left behind. That is among the
top priorities, that we actually leave no one behind.
And that's what the climate crisis is all about. That's
what climate justice means. It means justice for the people who
are most affected, but it also means that no one is left
behind.
And, of course, I'm not a politician, I'm not even from the
U.S., so I can't speak exactly on that. But that's basically
all I can say.
And people think that we climate and environmental and
human rights activists are against people in the fossil fuel
industry, but that couldn't be more wrong. I mean, we are
fighting for everyone.
Climate justice is social justice. We can't achieve climate
justice without social justice. So that's what it all comes
down to. That's why we are doing this, because we care about
human lives.
Mr. Krishnamoorthi. Thank you so much. My time has expired.
But thank you for your service.
Thank you, Chairman.
Mr. Khanna. Thank you, Representative Krishnamoorthi. Thank
you for your service and leadership.
I now see Representative Jimmy Gomez, who has been
patiently almost since the beginning of the hearing with us.
And I appreciate your coming back after votes and having
your chance to make a statement and ask any questions.
Mr. Gomez. No, thank you, Mr. Chairman. It was only about a
three-mile walk round trip after I was done walking to vote
three times. But I need the exercise.
The reason why I was so interested in this hearing is
because I'm not only on the Oversight Committee, but I'm also
on the Ways and Means Committee, the taxation committee.
And it's interesting, because the title of this hearing is
about ``The Role of Fossil Fuel Subsidies in Preventing Action
on the Climate Crisis.'' Why is that? It is because a lot of
people assumed from the very beginning that oil and gas and
coal is cheaper because the market determines that it is
cheaper.
But what we've learned is that they have a lot of unfair
advantages because of the Tax Code, because of the Tax Code and
how it was developed over 100 years, and how that is not the
case and how that crowds out new technologies when it comes to
getting different energy from renewable sources, from wind and
solar. And it prevents people from seeing the true cost of oil
and gas and thereby being able to price it accordingly in the
marketplace against other sources of energy.
That is the kicker, is that the public believes that this
is just the naturally cheap energy source compared to
everything else. But we know that that's not the case.
Mr. Aldy, I read some of your testimony. I thought it was
brilliant.
Quick question. Who is benefiting the most from fossil fuel
subsidies and who is made worse off?
Mr. Aldy. Thank you for the question, Congressman Gomez. It
is great to see you and it is fantastic to see an alum of our
Public Policy Program at the Kennedy School representing his
constituents here in Congress.
I think the reason why I first come to the conclusion that
these fossil fuel subsidies, and especially the targeted tax
expenditures in our Tax Code for oil and gas and coal,
represent a failure of government is because we're actually
spending money that's basically just increasing the profits for
these companies. The impact on production is truly negligible.
And if we really want to be thinking about how we use the
Tax Code to support investment, these are not the way to do
that. And it's all the more important because if we want to
favor certain kinds of investment we have to think, what's the
return to the American public for doing this?
The value for doing this for renewables, and why I think it
is an incredible distraction to say renewables get more
subsidies than fossil fuels, renewables deliver this incredible
benefit of not just providing energy, but doing so in a way
that doesn't actually harm our health, creating premature
mortality, creating the risk of cancer for people, especially
those who are disproportionately burdened by this exposure
because they live close to these facilities. They are the ones
who are bearing those great losses.
And, in fact, when we think about the true cost to society,
the fuels look cheap because we're not accounting for the fact
that we are imposing significant public health costs and
significant costs in changing the climate, which means damages
to our infrastructure in the future, the risk of dying
prematurely in the future, the risk of disastrous storms and
forest fires out West.
Those are all the costs associated with this. But the
benefits are really going to the shareholders of these
companies. It's not actually increasing economic activity.
Mr. Gomez. And how is it compared? Compared to energy tax
provisions for renewable energy, how are subsidies for oil and
gas treated differently?
Mr. Aldy. Well, I think a key thing to recognize here is
not just do the comparison between oil and gas and renewables,
but to think about, just in general, how do we think about
supporting investment in the economy? And there have been
favorable rules for oil and gas and coal for more than 100
years.
And what that does is, is it tilts the playing field. It is
an unfair playing field. So if you wanted to invest in building
a new manufacturing plant or building a new retail store, you
actually face a different set of rules than they do in this
industry.
And I think the key thing is, is that when we think about
what makes good public policies, it is not actually delivering
something that makes us better off.
It's OK, I think, in fact quite encouraging, that until we
have a more robust approach to addressing climate change, to
have subsidies for renewables to lower their cost of
investment. It actually enjoys dramatic improvements in the
cost so that they now actually need fewer subsidies to be
rolled out more and more extensively across the country.
That's been great driving down the cost of that technology.
That's because they get something that the market doesn't
recognize right now, which is the value of that clean air and
the value of tackling climate change.
Mr. Gomez. Mr. Chairman, can I have 30 seconds?
Mr. Khanna. Absolutely, absolutely.
Mr. Gomez. This is one of the things that I want people to
understand, that there will be arguments on the other side that
the Tax Code, everybody has access to this. But when you really
look at it, they are the ones that have the biggest advantage
because of the Tax Code. And it is not fair.
It's like the estate tax, right, or increasing the estate
tax limit to $11 million per person. Who benefits from that?
Not the poor person that would never be impacted, but the
extremely wealthy. And people think the Tax Code is neutral.
It's not neutral in any sense of the imagination.
So, in essence, we are hindering the transition to a clean
energy future because we are subsidizing an energy source that
is dirtier, that doesn't take into account the negative
externalities, the costs that are imposed. It's an unfair
playing field. And we've got to level that playing field so
that the transition to clean renewables happens quicker and
happens within the next 10 years.
With that, Mr. Chairman, I yield back.
Mr. Khanna. Thank you, Representative Gomez. And thank you
for your leadership and all the walks to make it to the
hearing.
I know we have Representative Bush who is still trying to
get on. And I know we've had some technical difficulty.
Representative Bush, have you managed to get on or--OK.
Well, let me say this, because if we go back to our
witnesses and while we're waiting for one or two more members,
and I want to recognize any of the witnesses if they have
anything they want to respond to or clarify. Just raise your
hand and I'll call on you. No obligation to.
Mr. Erickson, and then Ms. Houska after that.
So why don't we have Ms. Erickson, Ms. Houska, and then----
Ms. Bush. Chairman Khanna, thank you for convening this
hearing today.
And thank you, Madam Chair.
And we applaud Congressman Khanna and Congresswoman Omar
and Senator Sanders for their work on this issue among so many
others.
I also want to thank our witnesses for joining us today.
And I want to especially thank Ms. Houska, our sister who has
been at the forefront of fighting Line 3 for all of us,
especially those of us downriver on the Mississippi. We are so
grateful for you.
Right now the fossil fuel industry faces little to no
consequences for the lethal pollution they have been creating
for decades.
This is no accident. The fossil fuel industry has played a
central role in diverting climate research and action even as
they contaminate predominantly Black and Brown communities.
There will be consequences. And at first, bare minimum step
toward accountability is ending our government's financial
support of fossil fuels.
My community in St. Louis is home to the headquarters of
two of the most egregious corporate polluters in the world,
Peabody Coal and Arch Resources. Peabody and Arch are the
largest coal companies in the United States, the most polluting
Nation in the history of the world.
Companies like these have burdened my community with
pollution that makes our air and water dirtier, while also
dangerously warming our atmosphere in our cities.
The last thing the government should be doing is uplifting
the grievous impacts of coal and oil on Black lives.
A new report from Greenpeace and the Gulf Coast Center for
Law & Policy and the Movement for Black Lives found further
evidence that extracting and burning fossil fuels
disproportionately harms Black, Brown, and Indigenous and poor
communities.
The report found that Black Americans have 1.5 times the
exposure to particulate matter compared to the overall
population.
What is that? It found that natural gas has increased the
risk of cancer for 1 million--1 million--Black Americans.
Natural gas has also contributed to 138,000 asthma attacks,
which cause over 100,000 lost school days for Black children,
and we know that's unacceptable.
Ms. Houska, could you tell us more about how the fossil
fuel industry's attack on your community in Minnesota could
affect downriver communities like St. Louis?
Ms. Houska. Yes. And I would point out that Minnesota is
also the ground zero of racial justice right now, right? Like,
we just had this moment where Derek Chauvin is actually going
to go to prison for murdering George Floyd. That's happening in
southern Minnesota, using the same police forces that are over-
policing and surveilling and harassing Indigenous people in the
north.
Our struggles are intertwined. We are interconnected.
Racial justice is climate justice. So when it comes to the
disparate impacts felt by this industry, I discussed it
earlier, every single stopping point, whether it is the point
of extraction, the transportation of the fuel, or whatever it
happens to be, and the endpoint, when it is refined and when it
is shipped out somewhere else, it is always Black and Brown
folks and poor folks who are dealing with these impacts
disparately over everyone else. We are the ones that are
getting cancer. We are the ones that are forgotten. We're the
sacrifice zones.
It's shocking to me to hear this committee continue to say
this is about jobs, this is about jobs. What about the jobs in
our communities? What about the economies that we have as
people? What about the economies of wild rice that have existed
since before the United States? What about the economies of all
of the workers who they keep talking about, our workers, our
workers.
I talk with these people. These are my family. These are my
friends. I'm from those places. You don't think that we want to
stop extracting from and destroying the natural world that we
live in? Because they get to benefit from that, but we are the
ones that have to actually deal with the impacts after they
leave.
Enbridge is not going to be here when tar sands are in our
rivers. We are the ones that have to deal with it. Just like in
Kalamazoo, Michigan, when that spill happened, they are the
ones that have to deal with that.
I know that workers want better jobs and we want jobs that
don't require us to destroy the world around us. And I know
that we can do better when it comes to racial justice.
Ms. Bush. Yes. Thank you, Ms. Houska. Thank you.
We must address these historic injustices by ending our
reliance on fossil fuels. We must end fossil fuel extraction
and infrastructure. We also need to direct massive investments
into renewable energy and climate infrastructure.
Just this week, I put forward a bill that would invest $1
trillion in the Green New Deal for cities, towns, counties, and
Tribes. Ending fossil fuel subsidies is just the beginning.
Ms. Thunberg, we need way more action to protect frontline
Black, Brown, and Indigenous communities from the causes that
impact climate change.
What action would you take, if you were leading the richest
country in the world right now and the one most historically
responsible for the climate crisis?
Ms. Thunberg. Well, that's the big question. And, of
course, I couldn't really do anything because that would be
undemocratic, and we have to, of course, protect democracy at
all costs.
So what I would do is to raise awareness so that people
would understand why these changes would be necessary, why we
need to take drastic climate action. That would maybe be the
thing I would do first, because you cannot, of course, not take
action unless you have support from the general public.
Ms. Bush. Absolutely. And I know that very well.
Thank you. And I yield back.
Mr. Khanna. Thank you, Representative Bush, for your
leadership.
Without objection, Katie Porter, the Member from
California, shall be permitted to join the subcommittee and be
recognized for questioning the witnesses.
Thank you for joining us, Representative Porter. The floor
is yours.
Ms. Porter. Thank you very much.
Mr. Macchiarola, this isn't your first rodeo. You've come
to testify before in Congress and you've worked on these issues
for a long time.
Before you were working for the American Petroleum
Institute, you were staff director for the Senate Committee on
Energy and Natural Resources. Is that correct?
Mr. Macchiarola. Yes.
Ms. Porter. And that committee has jurisdiction over the
issues that you now lobby on.
And you get paid a much better salary in the private sector
than in the government, which is very typical. And your
companies, they are part of capitalism. They invest, they take
risk, they earn money, they share that money with shareholders.
But my question is, why should the taxpayers have to pay
for any of that? Why should taxpayers have to shell out for
your salary and for the costs of pollution? Why shouldn't the
companies bear that themselves?
Let's assume just for a minute that big oil companies are
bad actors in a capitalist system. Even if I'm OK with that,
why do I have to pay? Why do taxpayers have to subsidize you
and your polluting clients?
Mr. Macchiarola. Thanks for your question, Congresswoman.
So taxpayers paid my salary when I worked for the
government from 2004 through 2013. Since then, after leaving
public service, I've worked in the private sector in a range of
different roles, and taxpayers have not funded my salary----
Ms. Porter. Reclaiming my time, Mr. Macchiarola.
Mr. Macchiarola [continuing]. Since that time. Thank you.
Ms. Porter. But you are aware that the fossil fuel industry
receives--it received $30 billion in Federal subsidies in 2020,
last year. You don't think they use any of that Federal money
to pay your salary to come lobby us to keep the rules in their
favor so that you can come back to lobby us? Why do I have to
pay for you to shill for oil companies? Why do we, as
taxpayers, have to pay subsidies to the oil and gas industry?
Mr. Macchiarola. Thank you for your question,
Congresswoman. So the Federal leasing for oil and gas
development produces a significant amount of funding for the
Treasury. In fact----
Ms. Porter. Reclaiming my time, Mr. Macchiarola.
Mr. Macchiarola. I'd like to----
Ms. Porter. Mr. Macchiarola, excuse me, but the evidence is
clear, we subsidize--we taxpayers subsidize the oil and gas
industry. We did it this year alone in the middle of the
world's greatest pandemic, $15.2 billion in direct pandemic
relief alone to fossil fuel companies. And the fossil fuel
industry turned around in 2020 and spent $139 million on
political donations and $111 million lobbying.
Look, I get it. You drill in the Arctic Refuge. You take
out oil and gas, and you poison the planet. Bad enough, but why
should taxpayers have to subsidize that activity? It's a bridge
too far, Mr. Macchiarola. Not with my tax dollars. You want to
pollute, you want to hurt the wildlife, you want to destroy our
planet, do it on your company's own dime. The subsidies here
have to stop.
Ms. Thunberg----
Mr. Macchiarola. Thanks for your question. Thank you for
your question, Congresswoman.
Ms. Porter. That's not a question, Mr. Macchiarola. That's
a fact.
Ms. Thunberg, I want to turn to you. You were----
Mr. Macchiarola. I'd like to respond----
Ms. Porter. Reclaiming my time.
Mr. Macchiarola [continuing]. To the question about
stabilization because it's a very important point that you
made, Congresswoman. During the period of time where the
economy was shedding 20 million jobs, and both Congress and the
administration, through fiscal policy and monetary policy, came
in and stabilized the economy through bipartisan efforts----
Ms. Porter. Reclaiming my time, Mr. Macchiarola. There's
nothing magical about bipartisan. The vast majority of your
political contributions are to Republicans, and during that
period from March to August, when you were receiving--the oil
companies were receiving $15.2 billion in direct relief, you
laid off 107,000 workers from that March to August.
Now I want to talk to Ms. Thunberg for a minute.
Mr. Macchiarola. You referenced my congressional
experience. I actually have found that there is something
magical about bipartisan. It's something that this Congress
could actually----
Ms. Porter. Reclaiming my time, Mr. Macchiarola.
Mr. Macchiarola [continuing]. Could actually--could
actually----
Ms. Porter. Could I have my time back?
Mr. Macchiarola [continuing]. Take a lesson from
bipartisanship and to be able to move forward on some of these
important issues, Congresswoman. Thank you for your question.
Ms. Porter. Ms. Thunberg, I just wanted to ask you one
question. I have a nine-year-old daughter--I have three kids--
and I told my nine-year-old daughter that I was going to be
speaking with you, and I said, what do you think about climate
change? And she said, ``The Earth is on fire, and we're all
going to die soon.'' And I asked her how that made her feel,
and she said it made her feel angry.
What should I tell my daughter? And how should I help her
and the youngest generation bear the emotional toll of the
actions that fossil fuel companies are taking to destroy our
planet?
Ms. Thunberg. Well, it's--thank you for the question.
That's a big, big question, and I know that there are many
young people who feel angry and sad because of all the things
that some people are doing to this planet and to our futures
and to the most affected people, and that's very
understandable. It would be strange if we didn't feel that way
because then we wouldn't have any empathy.
So I would--but, of course, there is still much hope, and
if we choose to take action, we can do this and there--I mean,
there's unlimited things that we can do, and if we choose to
act together, there are no limits to what we can accomplish.
And always the best medication against anger and anxiety is to
take action yourself. So that's what I would tell her, to take
action herself, because that will make her feel so much better.
That's what it did to me, at least, and so many others.
Ms. Porter. Thank you so much.
Mr. Chair, I yield back.
Mr. Khanna. Thank you. Thank you, Representative Porter for
joining us on this committee and your always incisive
questions.
I think that brings our committee to an end. I did want
to--because before you joined, Representative Porter, I think
Mr. Erickson had one comment. I want to give him that
opportunity, and then we will end this hearing.
Mr. Erickson?
Mr. Erickson. Thank you, Chairman Khanna.
I wanted to address this question of to what degree
subsidies to oil and gas actually lead to new investment. It's
been a question raised by both Mr. Aldy and Mr. Macchiarola.
I just wanted to have an opportunity to just say that is
the exact area of my research, and what we found is that over
96 percent of the value of the subsidies in the Tax Code goes
to--goes directly to profits over and above the minimum
investment hurdle rates that would be required to actually make
those new investments happening.
So that very much supports the statement that Mr. Aldy was
making about how subsidies don't actually lead to very much new
investment or jobs at all, and that instead, the subsidies go
to profits much more along the lines of what Congresswoman
Porter was describing. Thank you.
Mr. Khanna. Thank you, Mr. Erickson.
Well, I want to thank all our panelists, first of all, for
your remarks, for staying with us, for the duration and through
the votes and the technical difficulty.
And I want to really thank my colleagues, so many of them
joining this subcommittee hearing, which, as you can tell,
signals their interest and commitment and passion in ending
fossil fuel subsidies and making sure that we do that this
infrastructure bill.
With that, without objection, all members will have five
legislative days within which to submit additional written
questions for the witnesses to the chair which will be
forwarded to the witnesses for their responses.
I ask our witnesses to please respond as promptly as you
are able. Thank you again for your expertise, testimony, and
time. This meeting is now adjourned.
[Whereupon, at 12:42 p.m., the subcommittee was adjourned.]
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