[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
OFFSHORE WIND, ONSHORE BENEFITS: GROWING
THE DOMESTIC WIND ENERGY INDUSTRY
=======================================================================
HYBRID HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
OCTOBER 21, 2021
__________
Serial No. 117-54
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Published for the use of the Committee on Energy and Commerce
govinfo.gov/committee/house-energy
energycommerce.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
56-194 PDF WASHINGTON : 2024
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COMMITTEE ON ENERGY AND COMMERCE
FRANK PALLONE, Jr., New Jersey
Chairman
BOBBY L. RUSH, Illinois CATHY McMORRIS RODGERS, Washington
ANNA G. ESHOO, California Ranking Member
DIANA DeGETTE, Colorado FRED UPTON, Michigan
MIKE DOYLE, Pennsylvania MICHAEL C. BURGESS, Texas
JAN SCHAKOWSKY, Illinois STEVE SCALISE, Louisiana
G. K. BUTTERFIELD, North Carolina ROBERT E. LATTA, Ohio
DORIS O. MATSUI, California BRETT GUTHRIE, Kentucky
KATHY CASTOR, Florida DAVID B. McKINLEY, West Virginia
JOHN P. SARBANES, Maryland ADAM KINZINGER, Illinois
JERRY McNERNEY, California H. MORGAN GRIFFITH, Virginia
PETER WELCH, Vermont GUS M. BILIRAKIS, Florida
PAUL TONKO, New York BILL JOHNSON, Ohio
YVETTE D. CLARKE, New York BILLY LONG, Missouri
KURT SCHRADER, Oregon LARRY BUCSHON, Indiana
TONY CARDENAS, California MARKWAYNE MULLIN, Oklahoma
RAUL RUIZ, California RICHARD HUDSON, North Carolina
SCOTT H. PETERS, California TIM WALBERG, Michigan
DEBBIE DINGELL, Michigan EARL L. ``BUDDY'' CARTER, Georgia
MARC A. VEASEY, Texas JEFF DUNCAN, South Carolina
ANN M. KUSTER, New Hampshire GARY J. PALMER, Alabama
ROBIN L. KELLY, Illinois, Vice NEAL P. DUNN, Florida
Chair JOHN R. CURTIS, Utah
NANETTE DIAZ BARRAGAN, California DEBBBIE LESKO, Arizona
A. DONALD McEACHIN, Virginia GREG PENCE, Indiana
LISA BLUNT ROCHESTER, Delaware DAN CRENSHAW, Texas
DARREN SOTO, Florida JOHN JOYCE, Pennsylvania
TOM O'HALLERAN, Arizona KELLY ARMSTRONG, North Dakota
KATHLEEN M. RICE, New York
ANGIE CRAIG, Minnesota
KIM SCHRIER, Washington
LORI TRAHAN, Massachusetts
LIZZIE FLETCHER, Texas
------
Professional Staff
TIFFANY GUARASCIO, Staff Director
WAVERLY GORDON, Deputy Staff Director
NATE HODSON, Minority Staff Director
Subcommittee on Energy
BOBBY L. RUSH, Illinois
Chairman
SCOTT H. PETERS, California FRED UPTON, Michigan
MIKE DOYLE, Pennsylvania Ranking Member
JERRY McNERNEY, California, Vice MICHAEL C. BURGESS, Texas
Chair ROBERT E. LATTA, Ohio
PAUL TONKO, New York DAVID B. McKINLEY, West Virginia
MARC A. VEASEY, Texas ADAM KINZINGER, Illinois
KIM SCHRIER, Washington H. MORGAN GRIFFITH, Virginia
DIANA DeGETTE, Colorado BILL JOHNSON, Ohio
G. K. BUTTERFIELD, North Carolina LARRY BUCSHON, Indiana
DORIS O. MATSUI, California TIM WALBERG, Michigan
KATHY CASTOR, Florida JEFF DUNCAN, South Carolina
PETER WELCH, Vermont GARY J. PALMER, Alabama
KURT SCHRADER, Oregon DEBBIE LESKO, Arizona
ANN M. KUSTER, New Hampshire GREG PENCE, Indiana
NANETTE DIAZ BARRAGAN, California KELLY ARMSTRONG, North Dakota
A. DONALD McEACHIN, Virginia CATHY McMORRIS RODGERS, Washington
LISA BLUNT ROCHESTER, Delaware (ex officio)
TOM O'HALLERAN, Arizona
FRANK PALLONE, Jr., New Jersey (ex
officio)
C O N T E N T S
----------
Page
Hon. Bobby L. Rush, a Representative in Congress from the State
of Illinois, opening statement................................. 2
Prepared statement........................................... 3
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 4
Prepared statement........................................... 5
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 6
Prepared statement........................................... 8
Hon. Cathy McMorris Rodgers, a Representative in Congress from
the State of Washington, opening statement..................... 9
Prepared statement........................................... 10
Witnesses
Heather Zichal, Chief Executive Officer, American Clean Power
Association.................................................... 12
Prepared statement........................................... 15
Answers to submitted questions............................... 152
David Hardy, Chief Executive Officer, Ørsted Offshore
North America.................................................. 17
Prepared statement........................................... 19
Answers to submitted questions............................... 159
James Strong, Assistant to the Director, District 8, United
Steel, Paper and Forestry, Rubber, Manufacturing, Energy,
Allied Industrial and Service Workers International Union...... 24
Prepared statement........................................... 26
Answers to submitted questions............................... 168
Mark W. Menezes, Former Deputy Secretary, Department of Energy... 32
Prepared statement........................................... 34
Submitted Material
Letter of October 19, 2021, from Erik Milito, President, National
Ocean Industries Association, to Mr. Rush and Mr. Upton,
submitted by Mr. Rush.......................................... 95
Letter of October 19, 2021, from Liz Burdock, Chief Executive
Officer and President, Business Network for Offshore Wind, to
Mr. Rush, submitted by Mr. Rush................................ 97
Report, ``Help Wanted: Diversity in Clean Energy,'' by E2, et
al., 2021, submitted by Mr. Rush\1\
Article of September 9, 2021, ``As clean energy jobs grow, women
and Black workers are at risk of being left behind,'' by
Charisse Jones, USA Today, submitted by Mr. Rush............... 102
Report of Affordable Energy for New Jersey, ``Natural Gas:
Crucial for New Jersey's Energy and Economic Future,'' prepared
by Continental Economics, Inc., September 2020, submitted by
Mr. Rush\1\
Article of February 5, 2020, ``Wind Turbine Blades Can't Be
Recycled, So They're Piling Up in Landfills,'' by Chris Martin,
Bloomberg, submitted by Mr. Palmer............................. 105
s----------
\1\ The information has been retained in committee files and is
available at https://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=114148.
Article of May 6, 2019, ``The Reason Renewables Can't Power
Modern Civilization Is Because They Were Never Meant To,'' May
6, 2019, by Michael Shellenberger, Forbes, submitted by Mr.
Palmer......................................................... 109
Article of October 17, 2021, ``Behind the Energy Crisis: Fossil
Fuel Investment Drops, and Renewables Aren't Ready,'' by
Christopher M. Matthews, et al., Wall Street Journal, submitted
by Mr. McKinley................................................ 117
Article of September 13, 2021, ``Fishing industry sues BOEM over
Vineyard Wind approval,'' by Kelsey Tamborrino, Politico Pro,
submitted by Mr. Upton......................................... 127
Letter of October 20, 2021, from Affordable Energy for New Jersey
to Mr. Rush and Mr. Upton, submitted by Mr. Upton.............. 130
Policy paper, ``Trenton's Dirty Little Secret: Nobody Can Afford
the Energy Master Plan,'' Affordable Energy for New Jersey,
submitted by Mr. Upton\2\
Letter of October 20, 2021, from Annie Hawkins, Executive
Director, Responsible Offshore Development Alliance, to Mr.
Rush and Mr. Upton, submitted by Mr. Walberg................... 133
Article of October 20, 2021, ```Bloody expensive.' Major U.S.
offshore wind plan hits obstacles,'' by Heather Richards, E&E
News, submitted by Mr. Griffith................................ 142
----------
\2\ The information has been retained in committee files and is
available at https://docs.house.gov/meetings/IF/IF03/20211021/114148/
HHRG-117-IF03-20211021-SD019.pdf.
OFFSHORE WIND, ONSHORE BENEFITS: GROWING THE DOMESTIC WIND ENERGY
INDUSTRY
----------
THURSDAY, OCTOBER 21, 2021
House of Representatives,
Subcommittee on Energy,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:32 a.m., in
the John D. Dingell Room 2123, Rayburn House Office Building,
and remotely via Cisco Webex online video conferencing, Hon.
Bobby L. Rush (chairman of the subcommittee) presiding.
Staff present: Representatives Rush, Peters, Doyle,
McNerney, Tonko, Veasey, Schrier, DeGette, Castor, Schrader,
Kuster, Barragan, Blunt Rochester, O'Halleran, Pallone (ex
officio), Upton (subcommittee ranking member), Burgess, Latta,
McKinley, Griffith, Johnson, Bucshon, Walberg, Duncan, Palmer,
Lesko, Pence, Armstrong, and Rodgers (ex officio).
Also present: Representatives Rice, Schakowsky, Trahan,
Carter, and Joyce.
Staff present: Waverly Gordon, Deputy Staff Director and
General Counsel; Tiffany Guarascio, Staff Director; Perry
Hamilton, Clerk; Anne Marie Hirschberger, FERC Detailee; Zach
Kahan, Deputy Director, Outreach and Member Service; Rick
Kessler, Senior Advisor and Staff Director, Energy and
Environment; Mackenzie Kuhl, Digital Assistant; Tyler O'Connor,
Energy Counsel; Lino Pena-Martinez, Policy Analyst; Kris
Pittard, Policy Coordinator; Kylea Rogers, Staff Assistant;
Tuley Wright, Senior Energy and Environment Policy Advisor;
Sarah Burke, Minority Deputy Staff Director; Michael Cameron,
Minority Policy Analyst, Consumer Protection and Commerce,
Energy, Environment; Nate Hodson, Minority Staff Director;
Peter Kielty, Minority General Counsel; Emily King, Minority
Member Services Director; Mary Martin, Minority Chief Counsel,
Energy and Environment; Brandon Mooney, Minority Deputy Chief
Counsel for Energy; and Michael Taggart, Minority Policy
Director.
Mr. Rush. The subcommittee on energy will now come to
order. Today the subcommittee is holding a hearing entitled
``Offshore Wind, Onshore Benefits: Growing the Domestic Wind
Energy Industry.''
Due to COVID-19 public health emergencies, Members can
participate, as I am, in today's hearing either in person or
remotely via online video conferencing. Members, staff, and
members of the press----
Mr. Upton. Mr. Chairman.
Mr. Rush. Yes?
Mr. Upton. We weren't in order when you started. So if you
could start again, that would be good.
Mr. Rush. We weren't in order?
Mr. Upton. So I would ask unanimous consent--No we weren't.
The gavel didn't come down, and now the gavel has come down
and--I ask that you start things again.
Mr. Rush. I am going to disagree with you. I brought the
gavel down at 9:30 central time, 10:30----
Mr. Upton. I know. We didn't hear it. So we were all
talking. So there is bad behavior here. So we would ask that
you start again so we can be fully attentive.
Mr. Rush. Well----
Mr. Upton. I apologize for the actions of our Members on
both sides of the aisle.
Mr. Rush. All right. Well----
Mr. Upton. And our chairman, Mr. Pallone, has just walked
in the door.
Mr. Rush. In consideration of my friend's request and
unanimous consent request, I will take time to begin the
meeting again and for all of those who didn't hear the gavel
come down previously, this is the gavel, watch me.
The subcommittee will now come to order. Today the
subcommittee is holding a hearing entitled ``Offshore Wind,
Onshore Benefits: Growing the Domestic Wind Energy Industry.''
Due to the COVID-19 public health emergencies, Members can
participate in today's hearing either in person or remotely via
online video conferencing. Members, staff, and members of the
press present in the hearing room must wear a mask in
accordance with the updated guidance issued by the attending
physician.
For Members participating remotely, your microphones will
be set on mute for the purpose of eliminating and averting
background noise. Members participating remotely will need to
unmute your microphone each time you wish to speak.
Please note that once you unmute your microphone, anything
that is said will be heard over the loudspeaker in the
committee room and is subject to being heard by live stream and
C-SPAN. Since Members are participating from different
locations at today's hearing, our recognition of Members, such
as for questioning, will be in order of the subcommittee's
seniority. Documents for the record can be sent to Lino Pena-
Martinez at the email address that we have provided to staff.
All documents will be entered into the record at the conclusion
of today's hearing.
The Chair now recognizes himself for 5 minutes for the
purposes of an opening statement.
OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Again, good morning, I would like to thank all of you for
joining us today for this important hearing on the state of the
offshore wind industry. The U.S. offshore wind industry is
lagging behind the rest of the world, with Europe having just
over 25 gigawatts and China with just over 7. The U.S. by
comparison has effectively zero. That is why I was so delighted
when earlier this year President Biden announced a goal of
deploying 30 gigawatts of offshore wind capacity by 2030,
helping kickstart what I hope would mean a start of an offshore
wind revolution.
According to an analysis by the National Renewable
Inventory Laboratory, 30 gigawatts of offshore wind has the
capacity to create 70,000 jobs by 2030. And it would tee up
creation of over 135,000 jobs by the year 2050.
We will see turbines in the Atlantic, in the Pacific, in
the Gulf of Mexico, and perhaps even in the beloved Great Lakes
that is close to my home State of Illinois. Additionally, at a
time when U.S. consumers are vulnerable to violent variations
in fossil fuel prices, the allure of a consistent, affordable
source of base load electricity produced right here at home by
American workers should be clear.
And the part of our broader effort to Build Back Better, we
need to ensure that we are making small investments so that the
offshore wind lives up to its high, very high, potential. These
include investments in American shipbuilding, steel, and
American ports.
The Biden administration has announced that it will provide
$3 billion worth of loan guarantees to help direct investment
to where they so desperately need to loan. An investment in
offshore wind would truly exemplify what we know as the Build
Back Better promise. That same NREL study found that the
construction and operating jobs created by the offshore wind
industry would have a median pay higher than the current
nationwide median wage. In other words, these are high-paying
jobs.
There are also good union jobs. As some of our witnesses
today will attest, the sector has seen a good deal of success
integrating organized labor into its plans.
I was pleased last year that Ørsted signed an
agreement with the national North American Building Trades
Unions to transition construction workers into the offshore
wind industry. Additionally, Vineyard Wind, which is slated to
be the first commercial-scale offshore wind project in the
Nation, recently signed a project labor agreement with the
Southeastern Massachusetts Building Trades Council. This is
great, a great, great beginning. And I am constantly on the
alert that minorities and women are included into this process.
[The prepared statement of Mr. Rush follows:]
Prepared Statement of Hon. Bobby L. Rush
Good morning. I would like to thank you all for joining us
today for this important hearing on the state of the offshore
wind industry.
The U.S. offshore wind industry is lagging behind the rest
of the world--with Europe having just over 25 gigawatts and
China with just over 7. The U.S.--by comparison--has
effectively zero.
That's why I was so delighted when, earlier this year,
President Biden announced a goal of deploying 30 gigawatts of
offshore wind capacity by 2030, helping kickstart what I hope
will be the start of an offshore wind revolution. According to
an analysis by the National Renewable Energy Laboratory, 30
gigawatts of offshore wind have the potential to create 77,000
jobs by 2030 and would tee up the creation of over 135,000 jobs
by 2050. We will see turbines in the Atlantic, Pacific, Gulf of
Mexico, and perhaps even the Great Lakes close to my own home
state of Illinois.
Additionally, at a time when U.S. consumers are vulnerable
to violent variations in fossil fuel prices, the allure of a
consistent, affordable source of baseload electricity--produced
right here at home by American workers--should be clear.
As a part of our broader efforts to Build Back Better, we
need to ensure that we are making smart investments so that
offshore wind lives up to its potential. These include
investments in American shipbuilding, steel, and ports. The
Biden Administration has announced that it will provide three
billion dollars' worth of loan guarantees to help direct
investments to where they need to go.
And investments in offshore wind truly exemplify the Build
Back Better promise. That same NREL study found that the
construction and operating jobs created by the offshore wind
industry would have a median pay higher than the current
nationwide median wage. In other words, these are high-paying
jobs.
They are also good, union jobs. As some of our witnesses
today will attest, the sector has seen a good deal of success
integrating organized labor into its plans. I was pleased that,
last year, Ørsted signed an agreement with the North
America Building Trades Unions to transition construction
workers into the offshore wind industry. Additionally, Vineyard
Wind, which is slated to be the first commercial-scale offshore
wind project in the country, recently signed a project labor
agreement with the Southeastern Massachusetts Building Trades
Council. I sincerely hope that these early steps create a
standard for the industry as it grows and evolves.
While this is all very promising, it is critical that we
remain on high alert to ensure that the offshore wind industry
does not follow in the footsteps of so many other clean energy
industries, which have disproportionately left Black and Brown
workers--as well as women of all races--behind. The offshore
wind industry cannot repeat those same mistakes, and I hope
that we take this opportunity to do better.
With that said, I am looking forward to today's hearing and
to a good discussion around the potential and promise of the
offshore wind industry.
And with that, I would like to welcome my friend and
colleague, the Ranking Member from the great state of Michigan,
Mr. Upton, to make an opening statement.
Mr. Rush. With that, I now yield to my good friend from the
great State of Michigan, the ranking member of the
subcommittee, Mr. Upton, for 5 minutes.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Well, thank you, my friend, Mr. Chairman. And
thank you to our witnesses for appearing today.
A special welcome to the honorable Mr. Menezes, the former
Deputy Secretary of Energy and former Energy and Commerce chief
counsel for energy and development and environment. It is
always good to have you back.
Mr. Chairman, I am a little bit troubled by the topic of
today's hearing. As you know, we are in an energy crisis right
now, which is what I believe this committee ought to be focused
on. The price of gas and many energy commodities are at a 7-
year high. The average price in my district earlier this week
around my district was about $3.35 a gallon, almost double what
it cost a year ago. And I was in Chicago last weekend, and it
was over $4.20 in your district as I traveled up and down the
Dan Ryan Expressway.
So, compared with last winter's heating costs, the
Department of Energy forecasts that U.S. households are going
to spend 54 percent more for propane, 43 percent more for
heating oil, 30 percent more for natural gas, and 6 percent
more for electricity to heat their homes this season.
Last week, the Republican members of the committee sent a
letter to DOE Secretary Granholm to understand what specific
actions DOE is taking to address energy prices and supply
shortages. We needed to know what steps DOE is taking to
encourage more U.S. energy production to be able to reduce our
growing reliance on foreign oil. And as we all know, the U.S.
was a net energy exporter in 2019, but since President Biden
took office, we are now relying on Russia and Middle East for
energy imports, not the right trend.
We also need to know what Federal policies might be causing
or contributing to energy price increases. I suspect that the
cancellation of the Keystone XL pipeline and moratorium on
drilling on Federal lands and offshore waters may have played a
role.
Congress should also understand how proposed environmental
regulations and policies like the push for economywide net-zero
greenhouse gas emissions will impact energy bills. We also need
to look before we leap. And we need to gather those facts.
We should also be studying the energy crisis in Europe and
the impact that it is having on global energy markets and
prices. Europe is that big on offshore wind, and the track
record is not particularly good. The world read the headlines.
In September, the winds in the North Sea stopped blowing,
forcing regional energy markets to scramble for natural gas to
heat homes and power businesses.
Russia, energy's largest supplier of gas, seems to be the
biggest winner. And ironically, Europe is burning more coal due
to the high gas prices. Here in the U.S., we only have seven
offshore wind turbines. We have talked a lot about that over
the years, we have seven. One commercial project off Rhode
Island that has been plagued with maintenance and operational
difficulties and one small pilot project off the Coast of
Virginia.
Biden administration plans more than 3,000 new offshore
turbines by 2030, not too far away. But it is very difficult to
imagine that any projects are going to be get built without
substantial taxpayer and ratepayer subsidies, and of course we
have the questions of permitting. Where is the streamlining on
permitting to get 3,000 new offshore turbines in just a short
period of time?
Offshore wind faces serious obstacles, including those
related to poor economics, operating reliability in harsh
conditions, onshore and offshore permitting challenge, negative
environment and fishery impacts, workforce and labor issues,
marine traffic and shipping, concerns expressed by the
Department of Defense. The list goes on and on.
While I am optimistic that technological innovation and
American ingenuity will bring advances in the offshore wind
era, I believe this committee should be focused on ways to
lower energy prices for consumers across the board in the near-
term.
With that, I look forward to today's testimony and yield
back the balance of my time.
[The prepared statement of Mr. Upton follows:]
Prepared Statement of Hon. Fred Upton
Thank you, Mr. Chairman. And thank you, to our witnesses,
for appearing before us today. A special welcome to the
Honorable Mr. Menezes, the former Deputy Secretary of Energy
and a former Energy and Commerce Chief Counsel for energy and
environment. It's good to have you back.
Mr. Chairman, I'm troubled by the topic of today's hearing.
As you know, we are in an energy crisis right now, which is
what I believe this Committee should be focused on. The price
of gasoline and many energy commodities are at 7-year highs.
The average price of gasoline in my home state of Michigan is
$3.30--almost double what it cost last year.
Compared with last winter's heating costs, the Department
of Energy forecasts U.S. households will spend 54% more for
propane, 43% more for heating oil, 30% more for natural gas,
and 6% more for electricity to heat their homes.
Last week, Republican Members of the Committee sent a
letter to DOE Secretary Granholm to understand what specific
actions DOE is taking to address energy prices and supply
shortages.
We need to know what steps DOE is taking to encourage more
U.S. energy production and reduce our growing reliance on
foreign oil. As we all know, the U.S. was a net energy exporter
in 2019, but since President Biden took office, we are back to
relying on Russia and the Middle East for energy imports.
We also need to know which Federal policies may be causing
or contributing to energy price increases. I suspect the
cancellation of the Keystone XL pipeline and the moratorium on
drilling on Federal lands and offshore waters has played a
role.
Congress should also understand how proposed environmental
regulations and policies--like the push for economy-wide net-
zero greenhouse gas emissions--will impact consumer's energy
bills. We must look before we leap and gather those facts.
We should be studying the energy crisis in Europe and the
impact it is having on global energy markets and prices.
Europe bet big on offshore wind, and the track record is
not good. The world read the headlines: in September, the winds
in the North Sea stopped blowing, forcing regional energy
markets to scramble for natural gas to heat homes and power
businesses. Russia--Europe's largest supplier of gas--seems to
be the biggest winner, and ironically, Europe is burning more
coal due to the high gas prices.
Here in the U.S., we only have seven offshore wind
turbines. One commercial project off Rhode Island that has been
plagued with maintenance and operational difficulties, and one
small pilot project off the coast of Virginia.
The Biden Administration plans more than 3,000 new offshore
turbines by 2030, but it is very difficult to imagine that any
projects will get built without substantial tax-payer and rate-
payer subsidies.
Offshore wind faces serious obstacles--including those
related to poor economics, operating reliably in harsh
conditions, onshore and offshore permitting challenges,
negative environmental and fishery impacts, workforce and labor
issues, marine traffic and shipping, and concerns expressed by
the Department of Defense. The list goes on and on.
While I am optimistic that technological innovation and
American ingenuity will bring advances in offshore wind, I
believe this Committee should focused on ways to lower energy
prices for consumers in the near-term.
With that, I look forward to today's testimony and hearing
from Mr. Menezes on ways Congress can address the current
energy crisis.
I yield back.
Mr. Rush. The gentleman yields back the balance of his
time.
The chairman now recognizes the chairman of the full
committee, Mr. Pallone, for 5 minutes for his opening
statement.
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Chairman Rush. Today we are going
to discuss the growing potential of the offshore wind industry
to power American homes with clean energy. The industry's
growth also provides us a real opportunity to revitalize
manufacturing in poor communities throughout the Nation.
This hearing is not only important but timely. Early this
year, President Biden restored American leadership in the fight
against the climate crisis by announcing an ambitious goal of
deploying 30 gigawatts of offshore wind capacity by 2030.
Achieving this goal will provide clean power to 10 million
American households and avoid 78 million metric tons of carbon
emissions.
This is not only critical to our efforts to combat the
climate crisis, but it would also mean major investments,
domestic manufacturing and supply chains, including U.S. flag
shipping and shipbuilding. These investments would help create
tens of thousands of good-paying jobs for blue-collar workers.
In fact, communities across the Nation are already seeing
the incredible benefits of investing in offshore wind, and
nowhere is that truer than in my home State of New Jersey. Just
this year, New Jersey has spurred development of more than
2,600 megawatts of offshore wind capacity. Our State is also
constructing the first purpose-built wind port in the Nation,
bringing thousands of jobs and billions of dollars of
investment to the Garden State.
But to be clear, the economic benefits of offshore wind
won't just accrue on the Coast, they will impact communities
across the country. A study released last week estimated that
achieving the Biden administration's offshore wind goals would
generate 109 billion in economic activity. Additionally, the
Business Network for Offshore Wind has identified more than 600
domestic supply contracts for offshore wind components to be
built by companies throughout the United States.
Offshore wind also holds significant promise for American
workers. Achieving the Biden administration's goals will
support 80,000 jobs by 2030, including good-paying union jobs
in construction, steel fabrication, welding, and many other
fields. But we we need to make sure that the rising tide of
offshore wind lifts all boats.
So I look forward to hearing how workforce development
efforts can ensure that local and disadvantaged communities
reap the benefits of development. And I know this has been a
major concern of Chairman Rush.
The offshore wind industry has great potential for growth,
and that is particularly important in a rapidly changing world
where fossil fuels are increasingly unreliable and subject to
huge price swings. We witnessed this from a global volatility
of oil and gas prices, from the unreliability of gas during the
Texas winter storm, from the hack of the Colonial oil pipeline
and others.
Doubling down on existing fossil fuel infrastructure makes
little sense, in my opinion. We must invest in mechanisms that
reliably bring energy to consumers. And that is why I am proud
that the Build Back Better Act passed by this committee last
month included significant funding for transmission, including
for offshore wind.
I look forward to hearing from our witnesses about the
measures the Federal Government can take to ensure we build a
backbone transmission system capable of delivering reliable
offshore wind energy to American households and businesses.
Rapidly expanding offshore wind will be critical to
decarbonizing the power sector. I am excited about the progress
in New Jersey and other States in the Northeast. And I hope
that some momentum will spread to other offshore areas
throughout the country. We can't rely on existing trends or
wishful thinking to get us to net-zero electricity sector
emissions. And that is why the investments in the Build Back
Better Act are so critical in our efforts to tackle the
climate.
I want to welcome all four of our witnesses here today,
including--although I can't really see you, Heather. Lisa is in
the way. We love Lisa, so that is OK. But Heather Zichal was my
environmental legislative assistant and then legislative
director--it says in my notes about 20 years ago--before she
moved over to the Senate.
I didn't really want to read that part, Heather, because
that shows that you and I have been around here for a while,
but whatever. She then served as a senior adviser to President
Obama and is now the CEO of the American Clean Power
Association. So welcome, in particular, Heather.
I look forward to our overall discussion today, Mr.
Chairman, and yield back.
[The prepared statement of Mr. Pallone follows:]
Prepared Statement of Hon. Frank Pallone, Jr.
Today we are going to discuss the growing potential of the
offshore wind industry to power American homes with clean
energy. The industry's growth also provides us a real
opportunity to revitalize manufacturing and port communities
throughout the nation.
This hearing is not only important, but timely. Earlier
this year, President Biden restored American leadership in the
fight against the climate crisis by announcing an ambitious
goal of deploying 30 gigawatts of offshore wind capacity by
2030. Achieving this goal will provide clean power to ten
million American households and avoid 78 million metric tons of
carbon emissions.
This is not only critical to our efforts to combat the
climate crisis, but it would also mean major investments in
domestic manufacturing and supply chains, including U.S.-
flagged shipping and ship building. These investments would
help create tens of thousands of good-paying jobs for blue
collar workers.
In fact, communities across the nation are already seeing
the incredible benefits of investing in offshore wind, and
nowhere is that truer than in my home state of New Jersey. Just
this year, New Jersey has spurred development of more than
2,600 megawatts of offshore wind capacity. Our state is also
constructing the first purpose-built Wind Port in the nation,
bringing thousands of jobs and billions of dollars in
investment to the Garden State.
But to be clear, the economic benefits of offshore wind
won't just accrue on the coasts, they will impact communities
across the country. A study released last week estimated that
achieving the Biden Administration's offshore wind goals would
generate $109 billion in economic activity. Additionally, the
Business Network for Offshore Wind has identified more than 600
domestic supply contracts for offshore wind components to be
built by companies throughout the United States.
Offshore wind also holds significant promise for American
workers. Achieving the Biden Administration's goals will
support 80,000 jobs by 2030, including good paying union jobs
in construction, steel fabrication, welding, and many other
fields. But we need to make sure that the rising tide of
offshore wind lifts all boats, so I look forward to hearing how
workforce development efforts can ensure that local and
disadvantaged communities reap the benefits of development.
The offshore wind industry has great potential for growth,
and that's particularly important in a rapidly changing world
where fossil fuels are increasingly unreliable and subject to
huge price swings. We've witnessed this from the global
volatility of oil and gas prices, from the unreliability of gas
during the Texas Winter storm, and from the hack of the
Colonial oil pipeline. Doubling down on existing fossil fuel
infrastructure makes little sense. We must invest in mechanisms
that reliably bring energy to consumers.
That is why I am proud that the Build Back Better Act
passed by this Committee last month included significant
funding for transmission, including for offshore wind. I look
forward to hearing from our witnesses about the measures the
federal government can take to ensure we build a backbone
transmission system capable of delivering reliable offshore
wind energy to American households and businesses.
Rapidly expanding offshore wind will be critical to
decarbonizing the power sector. I am excited about the progress
in New Jersey and other states in the Northeast, and I hope
that same momentum can spread to other offshore areas
throughout the country. We cannot rely on existing trends or
wishful thinking to get us to net-zero electricity sector
emissions, and that's why the investments in the Build Back
Better Act are so critical in our efforts to tackle the climate
crisis.
I welcome all four of our witnesses here today, including a
former member of my staff. Heather Zichal was my environmental
legislative assistant and then legislative director about 20
years ago before she moved over to the Senate. She then served
as a senior advisor to President Obama and is now the CEO of
the American Clean Power Association. Welcome back, Heather.
I look forward to our overall discussion today.
Mr. Rush. The Chair yields back.
The Chair now recognizes the gentlelady from Washington
State, the ranking member of the full committee, Mrs. McMorris
Rodgers, for 5 minutes for the purposes of an opening
statement.
OPENING STATEMENT OF HON. CATHY McMORRIS RODGERS, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON
Mrs. Rodgers. Good morning, Mr. Chairman.
Mr. Rush. Good morning.
Mrs. Rodgers. We are going to be talking about the state of
offshore wind energy. We should take a hard look first at what
is happening right now with energy crises. Just yesterday I
filled up with gas in Spokane: $3.59 a gallon. Ouch.
The worry and the discussion about rising costs is
happening around every kitchen table in America today. It is
our job on this committee to make sure that people have access
to reliable and affordable energy to heat their homes, drive
their cars, run their businesses. Unfortunately today, this
committee is ignoring the real energy crisis in front of us.
Around the world over the past month, post-COVID economic
forces and a radical agenda for the Green New Deal are driving
up energy costs.
In the United Kingdom, where they are betting heavily on
offshore wind, a sudden loss of wind for electricity generation
helped spike natural gas prices to record levels in September.
Increasing energy and power costs rippling through
economies of the U.K. and Europe. And it has raised the cost
for goods and services, especially household energy, just in
time for winter months. What is happening in Europe should
provide a powerful reminder of the dangers of both tight fuel
supplies, dependency on Russia, and weather-dependent energy.
These reckless policies hurt people's health and welfare. U.S.
households are not escaping this energy crisis.
Committee Republicans reminded the Secretary of Energy just
last week that, over the past year and a half, retail gasoline
prices have almost doubled. Natural gas prices have almost
tripled, electric rates continue to increase, and propane
prices, so critical for many households, have skyrocketed by
552 percent. Meanwhile, the President and his Cabinet prepares
to jet off to the Glasgow Climate Conference with celebrities.
The Energy Information Administration forecasts that
households will pay significantly more this winter as energy
and power prices continue to rise. Families are already being
stretched thin by the inflation crisis. What will they do when
there are 746 heating and natural gas bills pile up this
winter?
These are Biden's bills for keeping natural gas in the
ground and lurching to unreliable energy sources like wind that
aren't affordable for families. Unaffordable energy costs from
global supply chain disruptions and COVID-related demand shocks
have only been accelerated by the anti-fossil-fuel agenda of
this administration despite technology for carbon capture and
sequestration, including the President's decision to cancel the
Keystone and issue a moratorium on exploration and development
on Federal Lands while calling OPEC to ask them to increase
production. How does this make any sense?
And it is not just the high prices that harm working
families and our prosperity. Electricity reliability is also
jeopardized, as people in California and Texas are painfully
aware. The North American Electric Reliability Corporation is
reporting that increasing risk of brownouts, not just in
California or Texas but the Midwest and New England. In short,
an electricity reliability crisis is unfolding across this
country.
And much of this can be traced to the environmental and
Federal regulatory policies, from renewable energy standards to
electricity market regulatory structures, that drive out
traditional base load.
All of this should focus our attention on what really
matters, what is necessary to ensure affordable, reliable power
for hard-working families and communities now and in the
future. What can we do about the current energy crisis? And how
will this radical agenda to take over our electricity grid and
rush renewable energy hurt prices, security, and reliability?
That should be central to our questions today.
We must reset our energy discussions to focus on the very
real affordability and reliability crises that are confronting
people, especially middle-class Americans.
To be sure, we should try to understand the
administration's agenda to accelerate the build out of offshore
wind generation. The pace and scale of these plans promise
industrial development, but they raise many practical questions
about affordability and reliability. Let's learn from Europe,
not copy its failures.
So I welcome the witnesses. I would like to welcome
especially Mark Menezes, the former Deputy Secretary of Energy,
an alumni of this staff. I am sure that he can help us explore
the really pressing issues that people care about and put into
context what is necessary to ensure affordable, reliable energy
today and an innovative and prosperous future.
Thank you, Mr. Chairman. I yield back.
[The prepared statement of Mrs. Rodgers follows:]
Prepared Statement of Hon. Cathy McMorris Rodgers
If we are going to talk about future of offshore wind
energy, we should first take a hard look at what is happening
now with energy prices.
The worry and discussion about rising costs is happening
around every kitchen table in American today.
It's our job on this Committee to make sure that people
have access to reliable and affordable energy to heat their
homes, drive their cars, and run their businesses.
Let's not use this hearing to distract us from the very
real energy crisis in front of us.
Across the world over the past month, post-COVID economic
forces and a radical agenda for the Green New Deal are driving
up energy costs.
In the United Kingdom--where they are betting heavily on
offshore wind--a sudden loss of wind for electricity generation
helped spike natural gas prices to record levels in September.
Increasing energy and power prices rippling through
economies of the UK and Europe.... And it's raised the costs
for goods and services, especially household energy-just in
time for winter months
What's happening in Europe should provide a powerful
reminder of the dangers of both tight fuel supplies, dependency
on Russia, and weather-dependent energy. These reckless
policies hurt peoples' health and welfare.
U.S. households are not escaping this energy crisis.
Committee Republican's reminded the Secretary of Energy
last week that over the past year-and-a-half:
retail gasoline prices have almost doubled,
natural gas prices have almost tripled,
electric rates continue to increase,
and propane prices--so critical for many
households--have skyrocketed by 552 percent.
Meanwhile, as the President and his Cabinet prepares to jet
off to the Glasgow climate conference with celebrities, the
Energy Information Administration forecasts that households
will pay significantly more this winter as energy and power
prices continue to rise.
Families are already being stretched thin by Biden's
inflation crisis.
What will they do when their $746 heating and natural gas
bills pile up this winter?
These are Biden's bills for keeping natural gas in the
ground and lurching to unreliable energy sources like wind that
aren't affordable for families.
Unaffordable energy costs from global supply chain
disruptions and Covid-related demand shocks have only been
accelerated by the perpetual anti-fossil-fuel agenda of this
Administration, including the President's decision to cancel
Keystone and issue a moratorium on federal drilling.
And it is not just high prices that harm working families
and our prosperity.
Electricity reliability problems are a growing concern, as
people in California and Texas are painfully aware.
The North American Electric Reliability Corporation is
reporting the increasing risks of brownouts, not only in
California or Texas, but the Midwest and New England if there
is a harsh spike in demand.
In short, an electricity reliability crisis is unfolding
across large regions of the country.
And much of this can be traced to state environmental and
federal regulatory policies...
...from renewable energy standards to electricity market
regulatory structures that drive out traditional baseload
generation assets.
All of this should focus our attention on what really
matters, which is: what is necessary to ensure affordable,
reliable power for hard working families and communities now,
and in the future?
What can we do about the current energy crises?
...and how will the Democrat's radical agenda to take over
our electricity grid and rush renewable energy hurt prices,
security, and reliability?
These should be central to our questions today.
We must reset our energy discussions to focus on the very
real affordability and reliability crises that are confronting
people, especially the middle class, today.
To be sure, we should try to understand the Biden
Administration's agenda to accelerate the build out of offshore
wind generation.
The unprecedented pace and scale of these plans promise
industrial development, but also raise many practical questions
about affordable, reliable power.
We should be learning from Europe, not copy its failures.
So, I welcome the witnesses. And I'd like to welcome
especially Mark Menezes, former Deputy Secretary of Energy, and
alumni of this Committee's staff.
Given his experience, I'm sure he can help us explore the
really pressing issues people care about and put into context
what is necessary to ensure affordable, reliable energy today
and an innovative and prosperous future.
Mr. Rush. The ranking member yields back.
The Chair would like to remind all the Members on the
subcommittee that, pursuant to the committee rules, all
Members' written opening statements shall be made part of the
record.
And now it is my honor and my privilege and my pleasure to
welcome our witnesses for this morning's hearing.
As was stated earlier, Ms. Heather Zichal, a former staff
member of the committee, and who is currently the chief
executive officer of the American Clean Power Association.
Along with her is Mr. David Hardy, who is the chief
executive officer of Ørsted Offshore North America.
Along with both of them is Mr. James Strong, who is the
assistant to the director of District 8, United Steel, Paper
and Forestry, Rubber, Manufacturing, Energy, Allied Industrial
and Service Workers International Union.
And last but not least, the honorable Mark Menezes, who is
the former staff member, and also the forme Deputy Secretary of
Energy at the U.S. Department of Energy.
I want to welcome each of our witnesses and thank you for
joining us here today, and we look forward to your testimony.
At this time, the Chair will recognize each witness for 5
minutes to provide an opening statement. But before we begin, I
would like to explain the lighting system for witnesses
testifying in person.
In front of our witnesses there is a series of lights. The
lights will be initially green. The light will turn yellow when
you have 1 minute remaining. Please begin to wrap up your
testimony at that point. The light will turn red when your time
expires.
With that said, Mr. Zichal, you are now recognized for 5
minutes for your opening statement.
STATEMENTS OF HEATHER ZICHAL, CHIEF EXECUTIVE OFFICER, AMERICAN
CLEAN POWER ASSOCIATION; DAVID HARDY, CHIEF EXECUTIVE OFFICER,
ORSTED OFFSHORE NORTH AMERICA; JAMES STRONG, ASSISTANT TO THE
DIRECTOR, DISTRICT 8, UNITED STEEL, PAPER AND FORESTRY, RUBBER,
MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS
INTERNATIONAL UNION; AND MARK W. MENEZES, FORMER DEPUTY
SECRETARY, DEPARTMENT OF ENERGY
STATEMENT OF HEATHER ZICHAL
Ms. Zichal. Thank you, Chairman Rush, Ranking Member Upton,
members of the House Energy and Commerce Subcommittee on
Energy, thank you for the invitation to testify at today's
hearing. My name is Heather Zichal, and I am the CEO of the
American Clean Power Association, a national trade association
that unites the power of offshore wind, onshore wind, solar,
storage, and transmission companies.
While the U.S. industry is in its infancy, with 42
megawatts of offshore wind currently deployed, the global
offshore wind industry is booming, with 34,000 megawatts in
Europe, U.K., and Asia.
As U.S. market grows, ACP and our member companies are
committed to growing a domestic supply chain. The
administration's goal to deploy 30 gigawatts by 2030 as well as
additional State goals are jump starting this industry and will
create up to 83,000 jobs and $25 billion in annual economic
output.
The Vineyard Wind project will be the first commercial-
scale project in the United States and has already completed
two major milestones this year, receiving the final Federal
permits and reaching financial close. There are 13 other
offshore wind construction and operation plans, or COPs, in the
permitting pipeline. And BOEM has promised to review at least
16 of those by 2025.
Last week, Interior Secretary Haaland announced plans for
up to seven new lease sales by 2025 in the Gulf of Maine, New
York Bight, Central Atlantic, Gulf of Mexico, Carolinas,
California, and Oregon. These commitments to reviewing COPs and
new leases and long-term followthrough will provide the
certainty needed to build a successful new offshore wind
industry here in the United States.
Currently, the offshore wind industry is investing millions
of dollars in a domestic supply chain. Equinor is investing in
the first offshore wind tower and transition piece
manufacturing facility in New York's port of Albany.
Ørsted and Eversources selected Kiewit Offshore Services
in Texas to design and build the South Fork project substation.
Dominion Energy is investing $500 million to build the
first U.S. flag offshore wind turbine installation vessel in
Brownsville, Texas, with 10,000 tons of steel sourced from West
Virginia and Alabama. Atlantic Shores signed a labor agreement
with six different unions for workforce training in New Jersey.
Nexans is opening a new offshore wind subsea cable
manufacturing plant in South Carolina.
These investments will only continue to grow as projects
are permitted and construction begins.
Additional policy levers can help drive an even greater
degree of domestic offshore wind manufacturing on a more
ambitious timeline. Congress can help spur these investments
with policies like ACP-backed legislation from Senator Markey
that would create offshore wind manufacturing tax credits for
turbine components and vessels. And we hope to see companion
legislation introduced in the House soon.
Integrating offshore wind into our electric system will
require coordination between Federal agencies, States,
utilities, developers, and grid operators. These groups
collectively have the skills, knowledge, and experience to
successfully integrate offshore wind, but we need to be sure we
are looking ahead, because transmission takes time to develop.
The wind industry looks forward to working collaboratively
with this committee and all of the relevant actors to make sure
that we are planning for the infrastructure we need to bring
low-cost offshore wind to customers.
The FERC, Department of Energy, BOEM, the States, and
regional grid operators must coordinate to ensure that
transmission planning accounts for at least 30 gigawatts of
offshore wind. In many cases, offshore wind projects will
interconnect to the electric grid where other sources have
retired, providing a clean and reliable replacement energy
source. In other cases, new or upgraded transmission will be
needed.
Initial offshore wind projects will connect to the grid
using individual radio transmission lines. But sustaining the
long-term growth of offshore wind will require a coordinated
approach to transmission that spans multiple lease areas,
States, and regions.
Forward-thinking transmission planning will help to expand
the market for offshore wind more quickly and benefit the
supply chain. Some early-stage transmission plaining is taking
place, but multistate and multiagency planning is necessary to
ensure that we have the onshore and offshore infrastructure to
meet the 30 gigawatt goal.
As such, FERC has commenced a review of its transmission
planning, cost allocation, and interconnection rules that would
help to spur proactive transmission development, including
transmission for offshore wind. New Jersey and PJM are working
together on transmission proposals specifically to integrate
7.5 gigawatts of offshore wind. ACP also supports the
committee's budget reconciliation language that includes
funding for a number of crucial programs along these lines.
Thank you for the opportunity to testify during this
historic time for the offshore wind energy. And I look forward
to answering your questions.
[The prepared statement of Ms. Zichal follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. Thank you. And please accept my sincere apologies
for saying you are Mr. rather than Ms. Please accept my
heartfelt apologies.
I want to now recognize Mr. Hardy for 5 minutes for the
purposes of an opening statement.
Mr. Hardy, you are recognized.
STATEMENT OF DAVID HARDY
Mr. Hardy. Good morning, Chairman Pallone, Chairman Rush,
Ranking Member McMorris Rodgers, and Ranking Member Upton, and
members of this committee. Thank you for the invitation to
speak with you today. My name is David Hardy, and I am the CE0
of Ørsted Offshore North America.
Ørsted is a global leader in offshore wind energy,
with approximately 8,000 megawatts of installed capacity
globally. While today's hearing is focused on offshore wind, it
is important to note that Ørsted is also a global leader
in onshore wind, solar, energy storage, and green hydrogen.
While once a fossil-fuel-intensive oil and gas company,
today we have transitioned to a 100 percent clean energy
company. Although we have this global experience, at our core
we are a local company rooted in the communities we serve.
In the U.S., Ørsted is the leading offshore wind
energy company currently developing offshore wind farms
totaling more than 4,000 megawatts and powering millions of
homes in Rhode Island, Connecticut, New York, New Jersey, and
Maryland. We have been involved in one way or another with all
seven of the current operating offshore wind turbines in the
U.S., installing the first two turbines in Federal waters off
the cost of Virginia last year and owning and operating the
five-turbine Block Island Wind Farm in Rhode Island.
While our offshore wind projects obviously being built
along the Coast lines, I would like to highlight how offshore
energy creates economic opportunity in communities across the
country.
One of the challenges facing the U.S. wind industry is the
capacity of and expertise within the supply chain.
Ørsted has a two-pronged approach to help solve this
challenge. This includes, first, building U.S. capability with
existing American companies, and second, attracting European
firms to build facilities here in the U.S., thus creating
foreign direct investment in new American jobs.
Here are some examples of how we are helping to build
capacity and capability within U.S. companies. First, in the
area of offshore substation, we have partnered with Kiewit, a
company based out of Nebraska, to build the first American-made
offshore wind substation. Kiewit will leverage its oil and gas
experience to produce this important piece of infrastructure in
Texas.
Next, in the area of vessels, earlier this summer I was in
Minority Whip Scalise's district to meet with Edison Chouest
Offshore, a Louisiana company that will build America's first
service operation vessel, or SOV. This is an $80 million vessel
that is 260 feet long.
In June, I joined Congressman McKinley, Senator Manchin,
and Secretary Granholm in West Virginia to celebrate the lease
that we signed to charter for the first U.S.-built offshore
wind turbine installation vessel. This $500 million vessel will
be built in Texas.
U.S. steel manufacturers in Pennsylvania, North Carolina,
Alabama, and West Virginia will supply the steel for these two
vessels, and Caterpillar in Illinois will produce the engines
to power our SOV.
Last in the area of foundation components, I attended an
event just 2 weeks ago with Congressman Tonko to announce an
$86 million investment for Riggs Distler and Ljungstrom Steel
Fabricators to make steel components in western New York for
turbine foundations. And in Maryland we are investing $70
million into Crystal Steel, a minority-owned company, to do
similar work.
Now I would like to share some examples of how we are
working with global partners to build U.S. facilities and
create American jobs. First, in the area of undersea submarine
cables, we partnered with Nexans, a French global leader in
submarine export cables, to expand their capability in their
South Carolina facility.
And as part of our current bid in Maryland, we have
partnered with Hellenic Cables, a Greek company, to open a
factory in the Baltimore area and produce the first American-
made offshore wind submarine array cables there.
Additionally, we have also attracted EEW, a German offshore
wind foundation manufacturer, to open the world's most advanced
monopile manufacturing facility in Paulsboro, New Jersey. This
investment includes six large buildings to make the 400-foot-
long and 40-foot-in-diameter monopile foundation.
As you can see, there is already significant economic
activity happening across the country. Even as a new U.S.
industry, our supply chain today already includes companies and
employees from every State represented on this subcommittee.
In closing, I would like to emphasize one more important
point. That is, Europe has a had several decades to build the
infrastructure needed to support a mature offshore wind
industry. And although we are making considerable progress in
building the U.S. supply chain, it remains a challenge that
needs regulatory certainty and incentive if we want to achieve
30 gigawatts by 2030 and realize our full potential.
It is an exciting but critical time for U.S. offshore wind
energy, an industry that will both reduce the impacts of
climate change as well as create jobs across America.
Thank you for your interest. And I look forward to your
questions.
[The prepared statement of Mr. Hardy follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. The gentleman yields back.
The Chair now recognizes Mr. Strong for 5 minutes for the
purpose an opening statement.
Mr. Strong, you are recognized.
STATEMENT OF JAMES STRONG
Mr. Strong. Good morning, Chairman Rush, Ranking Member
Upton, and members of the subcommittee. Thank you for the
invitation to testify today. My name is Jim Strong. I am here
on behalf of the United Steelworkers Union because wind shore
wind lends tremendous opportunities to workers in
manufacturing.
In my testimony, I want to make three points. Number one,
most of the potential for job growth from offshore wind is in
the manufacturing supply chain.
Number two, manufacturing offshore wind can significantly
benefit deindustrialized and economically disadvantaged
communities across the country.
And number three, partnerships are critical for workforce
training.
Our union appreciates the Biden administration goal of
achieving 30 gigawatts of offshore wind by 2030. To meet this,
the U.S. will require massive production and purchase of
materials for these products, including nacelles, blades,
towers, foundation, and subsea cables. The manufacturing of
this products will create the demand for raw, and intermediate
products, as well as finished goods. The difference between the
modest domestic content and high domestic content means a new
doubling of the job creation [inaudible] For wind energy. These
jobs will not be isolated on the Coast. For example, steel
plate is made in the United States in Indiana, Pennsylvania,
and Kentucky.
The Jones Act compliant vessels commissioned by Dominion is
being built in Texas with steel from Alabama and West Virginia.
And existing American technology from the offshore oil and gas
industry, common in the Gulf Coast States, has potential for
offshore wind as well.
In order for this new industry to thrive and create jobs,
it must make long-term commitments to domestic sourcing and
domestic supply chains. Manufacturers can make investments,
including by taking advantage of Federal programs like loans
and tax credits. But those will not make a difference if
manufacturers cannot be confident that they will have
customers. Congress, the administration, and the States will
need to align policies to make sure our supply chain grows.
Manufacturing for offshore wind can benefit communities
across the country by bringing back high quality jobs. One
potential success story is nearby in Baltimore where I live.
Baltimore and its inner suburbs were once home to vast
industrial facilities, with nearly one-third of the labor force
working in manufacturing in 1970.
Now, less than 10 percent have manufacturing jobs. This has
left Baltimore residents, particularly in communities of color,
with access to only low-paying service sector jobs. Our union
was proud to announce an agreement with offshore wind developer
US Wind this summer in Maryland.
Bethlehem Steel in Sparrows Point was an important part of
our Nation's history that once employed tens of thousands of
workers. US Winds intends to open a new facility called
Sparrows Point Steel on the site of the former steel mill that
will manufacture monopile foundations, first for its own
projects and then later for other customers.
The company anticipates that there will be 500 permanent
manufacturing jobs at the facility, once again bringing people
into that sacred site to work with steel. Our union will work
with the company to recruit and train local workers, ensuring
that the surrounding communities share in the benefits of this
investment.
The new jobs created invariably elsewhere will require both
new and common skills. When I was younger, I went to vocational
school in the Baltimore area as did many of my peers. There
were good, union manufacturing jobs in our community at the
time. However, now fewer students attend vocation school and
employers invest much less in training.
The ideal modern workforce training partnerships of today
are those under collective bargaining agreements where training
is site specific and tailored to the needs of the employer, the
workforce, and the company or community.
Importantly, policymakers and partnerships should help
ensure that public investment and workforce training feed
trainees into actual employment. Offshore wind has the
potential for economic and environmental benefits across the
country. However, they will only occur if the industry develops
responsibly.
Our union looks forward to working with Congress to ensure
that the supply chain is developed and that economic benefit
from the industry reached communities across the country, and
that the workforce is trained.
Again, I want to thank you again for this opportunity to
testify on this issue.
[The prepared statement of Mr. Strong follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. Thank you. Mr. Strong.
The Chair now recognizes Mr. Menezes for 5 minutes for the
purpose of an opening statement.
STATEMENT OF MARK W. MENEZES
Mr. Menezes. Thank you, Chairmen Pallone, Rush, Ranking
Member McMorris Rodgers, Mr. Upton, and members of the
subcommittee. Thank you for the invitation to testify this
morning. I am Mark Menezes. I will be speaking as a private
citizen, not in any official capacity, and my testimony is my
own. I ask that my written statement be entered and printed
into the record.
Before I get to offshore wind, I too think it important to
note that energy and commodity prices are at their highest in
years. The cost of crude, gasoline, natural gas, even propane
have increased dramatically over the past several months.
Consumers are paying higher costs than they have grown
accustomed to since the U.S. shale revolution and when the U.S.
became the leader in oil and gas production.
Offshore wind will provide electricity to consumers. But
until our transportation and industrial sectors electrify,
consumers will expect to be able to get energy when they need
it at affordable prices.
So what is not to like about offshore wind? Winds offshore
are abundant, stronger, more consistent, more sustainable than
onshore winds, they are off coast lines where populations are
located. Since offshore and undersea, it appears that planning
and citing is less complicated than onshore wind projects.
Things aren't always as they appear. Offshore wind is very
difficult to cite, build, connect, and estimate actual cost.
One only has to utter Cape Wind to cause pause in this
enthusiasm. When this committee faced the controversial
project, we met with Danish officials who told us the answer
was munis and co-ops. That is right, they had to require local
ownership to gain acceptance. I am not sure that is a solution
here.
A lot has been done to foster offshore wind. At the
Department we created and funded the Offshore Wind Consortium,
comprised of all stakeholders, selected a State authority to
lead it. We had regular briefings from developers and planners.
We released the Offshore Wind Market Report. We engaged our
National Labs to model and solve technical issues. We analyzed
the environmental-inciting challenges. We even had a blog.
We also looked at costs. Our offices and labs modeled the
costs of certain offshore wind projects using state-of-the-art
technologies. The results appeared promising. But others now
challenge both the estimated cost to plan projects and the
actual cost of existing projects, and that consumer costs are
actually higher. Costs of the proposed projects off New York's
coast goes up and down our eastern seaboard have been
questioned. And still others now question the true cost in
Europe, particularly in U.K., where offshore wind has been
operating for years. So consumer costs are an issue you should
be aware of.
And as you know, there are Jones Act and FERC issues. We
had interagency meetings on the Jones Act, and FERC initiated a
technical conference to examine its offshore transmission
policies.
Well, what can Congress do? Well, in 2005, Congress gave
lead authority to the Department of the Interior over all
offshore energy projects, including wind, except in the Great
Lakes, as you will recall, Chairman Rush and Ranking Member
Upton. And Congress has sought to address the complicated
Federal, State, and local regulatory processes before. Perhaps
a CZMA should be looked at. But that is likely outside of this
committee's jurisdiction. But even then, States can ban
offshore wind off their coast in State waters.
In July we saw what happened in Maine. A supportive
Governor signed a bill banning offshore wind in State waters.
One can say they still support offshore wind, but in my view
States banning offshore wind doesn't make it easier, or
efficient, or less expensive to consumers if you have site and
operate projects in Federal waters. And even if we are able to
overcome all the issues involved, we saw what happened in the
North Sea just about a month ago when the wind stopped blowing.
Grid operators turned to natural gas and coal to keep the grid
operating.
The cost of natural gas is at an all-time high. A retired
coal plant shuttered due to anti-fossil policies had to be
restarted. At least two electricity suppliers went bankrupt.
The only good news was that U.S. LNG exporters helped keep the
lights on in the U.K.
We have learned this lesson in the U.S. When our electric
systems are stressed during cold winters and hot summers, grid
operators turn to baseload power, natural gas, coal, nuclear,
and oil because wind and solar cannot ramp up to meet increased
demand.
We saw this in the 2014 polar vortex when operations relied
on coal. During the 2018 bomb cyclone in the East, operators
relied on nuclear, increased coal and oil sources as plants
switched to oil to meet increased demand. And for the past two
summers, DOE issued emergency orders to California with its
abundant wind and solar to run natural gas to meet high demand.
Our system should be designed to provide power when
consumers need it the most. For all the positives of offshore
wind, until we have long-duration storage battery technology
greater than 10 hours deployable at affordable costs, offshore
wind will be a luxury to most Americans.
Some predict that batteries will take the place of
traditional power generation, while our current state of
effective battery technology is 4 hours. It takes years to
site, permit, and build. In California, a 4-hour, 350-megawatt
battery storage project on a solar project scheduled to come
online in 2022 has been under development for 7 years. Long
duration energy storage, possibly the Holy Grail of grid
storages, is still years away from demonstration and
deployment.
Mr. Chairman, in conclusion, offshore wind has great
potential. It is not without its challenges. I respectfully
suggest this committee might take time to consider other
important measures, keep the U.S. leader of energy production
at affordable cost to consumers to ensure a strong economy in
our domestic security.
In my written statement, I mention several bills pending in
this subcommittee and why their passage will help achieve these
goals.
With that, Mr. Chairman, I conclude my statement and look
forward to your questions.
[The prepared statement of Mr. Menezes follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. That indeed concludes the opening statements of
our witnesses, and we will now move to Member questions. Each
Member will have 5 minutes to ask questions of our witnesses.
And I will start by recognizing myself for 5 minutes for
questioning of the witnesses.
As I have been known and privileged as stated on many other
occasions, I am indeed committed to ensuring that the offshore
wind industry does not recreate the lack of diversity that is
far too common other renewable energy industries.
As an article in USA Today last month stated, and I quote,
``women and Black workers are vastly underrepresented in the
clean energy workforce.'' I would like to ask unanimous consent
to enter into the record the article as well as the underlying
study on diversity in the clean energy sector.
And without objection, so ordered.\1\
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\1\ The letter appears at the conclusion of the hearing. The study
is retained in committee files and is available at https://
docs.house.gov/meetings/IF/IF03/20211021/114148/HHRG-117-IF03-20211021-
SD013.pdf.
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Earlier this year, I introduce a bill to help address this
very problem entitled the Blue Collar to Green Collar Jobs Act,
which will create a program at DOE to improve education and
training for jobs in the clean energy-related sector.
And I look forward to working with my colleagues and to
advance this bill, and to advance similar legislation in this
Congress to ensure that workers have the skills that they need
to thrive in these high-paying jobs.
With that said, Mr. Hardy and Mr. Strong, what is
Ørsted and the U.S. Steelworkers doing to recruit more
minorities and women into the offshore wind industry? And what
can Congress do to help increase the number of minorities and
women seeking jobs in this sector?
Mr. Hardy. Thank you, Mr. Chairman.
It is a really important topic and something that I also
feel quite passionate about. As a CEO of an American company
here, I am constantly looking to try to make sure we have the
best and the brightest from all parts of our society.
At Ørsted, in North America we have about 400
employees, and 40 percent of those employees are women. And we
have a lot of actions to try to bring more minorities and
disadvantaged folks into our industry--not just direct in our
industry, but across the whole supply chain, as I previously
announced. And our--which I haven't discussed, but we are in
discussions with----
Mr. Rush. Mr. Ørsted, Mr. Ørsted, do you have
any specific programs that you can tell us about to bring
minorities into Ørsted?
Mr. Hardy. Yes. I have two examples, sir. One is in our
agreements that we are working on right now, the national
offshore wind agreement with NAV 2. We are requiring the trade
unions recruit through their apprentice programs or
preapprentice programs people of all backgrounds.
And secondly, we have got specific programs in some of our
States to do training for environmental justice communities,
and at least in the State of New Jersey we have $1.5 million
scholarship for New Jersey Institute of Technology to try to
recruit American people from disadvantaged communities.
Mr. Rush. Mr. Hardy, my time is moving forward.
Mr. Strong, can you answer this more specifically,
specifics?
Mr. Strong. Thank you, Mr. Chairman.
When we signed this relationship with US Wind going back a
couple of years ago, that was a priority for us in our
discussions on what their plans were as far as encouraging and
bringing in minorities to help run this program. And I can tell
you that, as a union, we support, you know, opportunities for
everybody, minorities, women. It is an important foundation of
our union.
But regarding US Wind, when we had this discussion, US Wind
I do know it has expanded its staff to they hired three
individuals that have a background in working with the minority
business enterprise. They specialize in outreach and ensuring
that maximum participation of minority groups. I know
businesses are a part of this development. I know that they
have had outreach meeting with membership of the Maryland/
Washington Minority Companies Association. And they have also
had communications and are working with the Governor's Office
of Small, Minority and Women's Business Affairs.
And sometime in the very near future, they are going to
provide a briefing of these reports in moving forward and what
their plans are working with minorities, businesses, women, and
so forth, Mr. Chairman.
Mr. Rush. That concludes my time. My time has expired.
The Chair now recognizes Mr. Pallone for 5 minutes. Mr.
Pallone, you are recognized for 5 minutes.
Mr. Upton. Thank you, Mr. Chairman. Five minutes goes by
very fast.
Mr. Rush. Mr. Upton, you are recognized for 5 minutes.
Mr. Upton. Thank you. Thank you.
Ms. Zichal, you mentioned that Europe has 34,000 megawatts,
or the rest of the world, 34,000. We are at 42 megawatts. The
goal is to get to 30,000 in this country within a number of
years.
Mr. Hardy, your bottom line was we need regulatory
certainty. Do we have that today?
Mr. Hardy. I think that we are seeing positive momentum in
building confidence in this industry, which is bringing the
supply chain investments that we have spoken about, the Biden
administration's target of 30 gigawatts by 2030, BOEM's
advancement of Federal permitting on the 15 or so projects that
are bringing confidence. But these are large, expensive
infrastructure projects that we need certainty, long-term
certainty in order for us to invest and in order for the supply
chain to make those investments.
Mr. Upton. So I want to say virtually everybody here
supports an all-of-the-above approach, which includes
renewables, but what do we need to do legislatively to work
with industry to make sure that we have regulatory certainty to
try and achieve this goal that is out there? Ms. Zichal?
Ms. Zichal. Thank you, Chairman Upton. I think you are
asking a really important question. And certainly as
representatives up here, we agree that, you know, we have got
to advance all energy sources. We are committed to making sure
we are looking at this energy transition energy through the
lens of how do we do it in a way that is reliable and
affordable.
And I think as--we have regulatory certainty and
predictability inasmuch as this administration and Department
of the Interior are currently making timely decisions about
permitting and leasing. We don't know that that is always going
to be the case going forward.
I think that there are some ways that we could find to work
together that would allow for expedited processes. It is not to
say the process today is broken. I think when you are standing
up a new industry and a new permitting process for the first
time in any country, you are going to find ways to improve that
process.
Mr. Upton. So how--I am sorry to interrupt. So how does the
rest of the world get 34,000 megawatts and we are at 42? Do
they have a shot clock? I mean, what do they do on the
regulatory side that we are not?
Ms. Zichal. Well, so I think we have a lot to learn from
other countries, right? It is very clear, as you pointed out,
globally we are looking at 34,000 megawatts versus 42 in this
country. It has been a slow start. But the good news is I think
we can catch up.
I think we have seen from this administration a commitment
to this 30,000 gigawatt goal, which is terrific. But I think at
the same time, it is not as easy as installing one wind
turbine, right?
We have to think holistically about what we want to do with
this industry. What does this mean in terms of the kind of jobs
we are creating domestically? What percentage of the supply
chain is coming from the United States versus other countries?
How do we make sure that the transmission planning, which is a
really long and complicated process, allows us to bring those
30 gigawatts on?
So I guess we could look at it and say the rest of the
world is ahead of us, but I look at it and say we can learn a
lot from what has worked and what hasn't.
Mr. Upton. So let me ask you another question.
I am going to ask unanimous consent to put into the record
a letter addressed to Mr. Rush and myself from the Affordable
Energy for New Jersey. It is a 3-page letter. We will put it
into the record.
We talk about we want to make it affordable. We do.
Mr. Rush. So ordered.
Mr. Upton. Yes, without--I would ask unanimous consent to
stick--put this in the record, Mr. Chairman.
Mr. Rush. So ordered.
[The information appears at the conclusion of the hearing.]
Mr. Upton. And you already have a copy, as I do.
But when you talk about you want to make this affordable,
we all want that, particularly when we see these alarming
energy costs that are going up. In this letter from the
Affordable Energy for New Jersey, they talk about, currently,
in 2035, the last year of the contract in New Jersey, it is
going to be $470 per megawatt hour. By contrast, the average
price for wholesale electricity in New England last year was
about $31. So a difference of 15-fold.
How does that make it affordable?
Ms. Zichal. Well, I think, again, we just permitted the
first project in the United States for offshore wind. And if
you look at the lessons in the renewable energy sector, I am
pretty optimistic. The cost of wind has come down 71 percent
since 2009. Solar is down 90 percent. And offshore wind, yes,
initially there is going to be, you know, a cost for doing
something and being a first mover in the United States.
But I also think what is interesting about many of the
opening statements, we were focused on the fact that we have
got rising energy--rising commodity costs for things like
propane, heating oil, natural gas. The beauty of offshore wind
is that the wind is free. We don't have to rely on these
commodities that are subject to the whims of the global market.
And I think over time what we have learned by looking at the
European example is that costs have come down 43 percent. There
is cost parity, and I am very optimistic that we as an industry
can get there.
Mr. Upton. I know my time has expired, but appreciate you--
--
Mr. Rush. The gentleman's time has expired.
The Chair now recognizes the chairman of the full
committee, Mr. Pallone, for 5 minutes.
Mr. Pallone. Thank you, Chairman Rush.
You know, I just listened, obviously, to what Mr. Upton
said, and, you know, I just want to say, like all new
technologies, offshore wind didn't start cheap, but it is
getting cheaper. And, in fact, offshore wind prices are already
dropping each year, and NREL estimates further price decreases
of up to 50 percent over the next few years. But keep in mind
that, unlike offshore wind and renewables, the price of natural
gas is skyrocketing. In fact, in more than 60 percent of the
country, building new solar now is actually cheaper than
running an existing coal plant. So, you know, it is all
relative, in my opinion.
But I wanted to get in at least two, maybe three questions.
So, you know, I want to say I am very proud of New Jersey's
leadership in developing a robust offshore wind industry in the
United States, and Ørsted is playing a large role in
achieving that vision, but it is important that in developing
these projects Ørsted invests in New Jersey's workforce
and local communities.
So, Mr. Hardy, could you elaborate on Ørsted's plans
to partner with local labor organizations and communities to
ensure that New Jersey residents benefit from offshore wind
development and, in particular, describe what actions
Ørsted is taking to help shoreside communities?
I know, for example, you are doing things in the Port of
Newark and Elizabeth, but maybe a minute or so because I want
to get to Ms. Zichal too.
Mr. Hardy. Thank you, Mr. Chairman. We are also proud of
our work that we are doing in New Jersey. I could spend a lot
of time on New Jersey, but I will try to keep it short.
I mean, building of this EEW monopile manufacturing
facility, this is a huge factory. It will employ over a
thousand workers for 3 years just building the factory, and
then we will employ--all signed with local PLAs. And then
workers in that factory will be 500 to 600 long-term workers
building these monopile facilities, and that is just one
example.
We are investing in the wind port. We are opening an office
in Newark for our industrial IoT, Internet of Things,
headquarters. We are partnering with--we are building an O&M
base on the New Jersey shore in the Atlantic City area. So just
a lot of activities to create jobs in New Jersey and to invest
in this industry there.
Mr. Pallone. I appreciate that. Thank you so much.
Let me get to Ms. Zichal, or Heather. You identify in your
testimony how constructing new transmission and upgrading
existing onshore facilities to reliably deliver offshore wind
energy to the onshore grid. You mentioned that. And we just
passed in the committee provisions in the Build Back Better Act
that direct the Department of Energy to plan for offshore wind
transmission development and fund the significant expansion of
the offshore wind transmission system.
So I mention these steps, but what else can Congress or DOE
or the Federal Energy Regulatory Commission do to make sure we
are proactively planning our transmission system to incorporate
offshore wind?
Ms. Zichal. Thank you, Mr. Chairman, and thank you for your
kind words in the introduction. It is a little strange for you
to call me Ms. Zichal. But I appreciate your question.
You know, embedded in your question is exactly what--how we
need to be thinking about standing up offshore wind, because it
is not--as I said earlier, it is not just about constructing
the wind turbines, it is how do we actually bring that power
onto the grid to power American homes and businesses.
And, you know, we are very grateful for the collective
actions that have been taken around the bipartisan
infrastructure bill, because those transmission components are
really critical for our industry overall.
I would say additionally, you know, some examples of what
additional planning efforts could include, I think the
Department of Energy funding studies through the National Labs
and providing technical support to States and grid operators is
going to be a step in the right direction.
And I also believe that between FERC and BOEM, they have a
2009 memorandum of understanding to enhance their collaboration
on offshore wind and transmission. I think, you know, updating
that memorandum could be helpful. But at the end of the day, it
really truly is about regulatory certainty and predictability
in the permitting process so that, you know, we have got one
permit done. We see the pipeline. We want to make sure that we
are continuing to make timely decisions so that the industry
can respond and we can then make the investments domestically
that we want to do to grow the economy, create jobs, and reduce
greenhouse gas emissions.
Mr. Pallone. Thank you so much.
Thank you, Mr. Chairman.
Mr. Rush. The chairman yields back.
The Chair now recognizes the ranking member, Mrs. McMorris
Rodgers, for 5 minutes.
Mrs. Rodgers. Thank you, Mr. Chairman.
Mr. Menezes, as you know from your time at the Department
of Energy and on this committee, that our job is to oversee
energy policy and ultimately make sure that people have
affordable, reliable energy. In my opinion, we should be
harnessing all of the benefits of our Nation's abundant energy
resources, and our goal should be to do what is going to be
best for prosperity, for the prosperity of hard-working
families and our energy security.
The prospect of higher prices for American families this
winter is alarming. What also is alarming is the energy crisis
that is unfolding in Europe. It should be a warning to American
policymakers. In the United States, gas and electricity bills
could double this winter, with harmful impacts for those in
need. It is energy-induced poverty.
Half of Europe's natural gas is supplied by Russia, which
news reports indicate is refusing to boost their supplies. All
of this has been driven by the U.K. and the European rush for
renewables, at the exclusion of developing the U.K. shale,
shutting down coal and nuclear, especially in Germany.
So I just wanted to ask if you would talk briefly about the
factors behind the European energy crisis, its energy security,
and what we should be doing here to avoid the same fate.
Mr. Menezes. Thank you for the question. Indeed, there are
many factors that go into, of course, the high prices, you
know, around the world right now today. Of course, we are
coming back, we are coming out of COVID, so there's increased
demand and there's tight supplies. But, to be sure, it is a lot
of the policies that you see in place that have very
aggressively favored renewables over fossils.
So, for example, when the winds stopped blowing in the
U.K., there weren't really that many natural gas units or coal
units available, because to be able to be in ready standby, you
had to purchase very expensive certificates to run, you know,
in the EU. So it was always already out of a price point.
Policymakers here in the United States too, I mean, because
U.S. LNG has been now a global export for these several years,
the EU has been expecting to be able to get U.S. LNG. They
favor that. We tried to develop that so they weren't dependent
on Russia over that. And indeed, it turns out that Cheniere,
one of our LNG exporters, was able to, you know, sort of come
to the rescue, if you will, of Europe.
So policies do make a difference in the real marketplace.
Capital is waiting to be invested here in the U.S. What you see
signaling from this administration, you know, pretty much puts
the chilling effect on moving capital, making investments as
you see the policies coming out of this administration.
Mrs. Rodgers. Well, just as a followup, the standing is
that the administration has reached out to OPEC and Russia and
Kyrgyzstan to boost oil production, but yet at the same time
shutting down exploration development of energy here in the
United States and production right here in the United States.
On the first day in office, President Biden cancelled the
Keystone pipeline, imposed a moratorium on exploration and
development of Federal lands while asking Russia and OPEC to
produce more.
Would you speak to how these actions contribute to higher
prices?
Mr. Menezes. Well, thank you very much. You know, indeed,
the actions that we have seen from this administration actually
go down further than what you have read about in stopping the
Keystone pipeline and, you know, he has allowed Nord Stream to
go, which, of course, the Russians enjoy because now they will
be able to send natural gas to Europe and Europe will become
more dependent on Russia gas.
But, you know, he has placed a moratorium on new coal and
gas leases in Federal lands and waters. The Interior Department
drilling permits are down 75 percent from April. You know, he
suspended the leases, the existing leases in Anwar and Alaska.
He has announced stricter methane emission regulations on
natural gas industries. He has increased fuel mileage standards
for automobiles.
The FERC, his FERC that we are looking forward to to try to
help solve the offshore wind issues, announced it is
considering greenhouse gas emissions for all natural gas and
LNG and announced that it is even reviewing its certification
process on pipelines. And for the President to be calling on
OPEC to provide, you know, increased oil, he should be calling
on the U.S. producers in the United States. We have shown that
we can produce. That is why we are the world's number-one
leading producer in oil and natural gas. He should be calling
on the U.S. producers, Americans to produce the energy that we
need, not OPEC countries or Russia.
Mrs. Rodgers. Well, thank you. There's a lot of questions
around all of these policies being promoted right now by the
administration.
I have run out of time, though. I yield back.
Mr. Rush. The ranking member yields back.
The Chair now recognizes the gentleman from California, Mr.
Peters, for 5 minutes.
Mr. Peters. Thank you, Mr. Chairman. Thanks for having the
hearing.
Offshore wind can play a key role in accomplishing our
clean energy and climate ambitions. I suggest to ensure the
technology reaches its full potential we should do three
things: We should level the playing field among energy
technologies; we should reduce the regulatory burden for siting
and permitting both offshore wind projects and the transmission
infrastructure needed to bring that energy to market; and we
should deploy innovative financing tools to make sure that the
United States leads the world in advanced technology
development.
First on incentives, I am a strong supporter of the Clean
Energy Payment Program. However, if that program is no longer
politically viable, as we are hearing, we should add a price on
carbon pollution to the Build Back Better bill. It is the only
single budgetary tool that substantially reduces greenhouse gas
emissions and raises significant revenue, and that fits
squarely within the reconciliation process, which is restricted
to Federal outlays in revenues and provides technology-neutral
and economywide incentives that would not assure an outcome
with respect to renewables but would allow wind to compete.
Second, we have to reform our siting and permitting
processes for major clean energy and transmission projects. As
an example, my POWER ON Act, which is included in the
Bipartisan Infrastructure Bill, would clarify FERC's backstop
citing authority and lead to more rapid deployment of
interstate transmission projects.
But I want to say here that I completely agree with the
implication of Mr. Upton's questions that, if we are serious
about renewables and climate change, we cannot hold up the
development of wind, solar, hydro, carbon capture, and nuclear
projects. We have to get out of our own way if we claim this is
a crisis, and we do believe it is a crisis.
And, third, we have to use the Department of Energy Loan
Programs Office to accelerate the deployment of advanced
offshore wind through loan guarantees, and I would advocate for
more funding for this office in the House Build Back Better
Act.
With that, I wanted to ask a couple of questions, and start
with Ms. Zichal, about California in particular. I know that
there is an easier deployment in the East Coast because of the
way the ocean floor is. What is the potential for offshore wind
off the coast of California? What are the policy barriers that
[inaudible] deployment?
Ms. Zichal. Well, thank you for your question. You know, I
couldn't be more excited about the opportunity for offshore
wind in California. And earlier, we were talking about the fact
that the United States is behind when it comes to the
deployment of offshore wind. But where I think the United
States has the ability to lead the world is in the floating
technology, and that is the kind of technology we need off the
coast of California.
It is a different--as you point out, it is a different
ocean environment, but obviously one that we believe can
contribute in a very meaningful way to clean, affordable power
for families, not only in California, but throughout the
region.
We are really--we were excited to see the decision by BOEM
to move forward with some leasing programs in call areas, Morro
Bay and Humboldt. I know that those--getting those decisions
made and seeing that process move forward has been a priority
for you. It has certainly been a priority for the industry as
well.
I also think, because we are looking at new technology,
thinking through DOE funding and pilots would help to provide
valuable experience that can be applied at scale on the West
Coast, and that is certainly something we would love to work
with you on.
Mr. Peters. OK. Thank you.
And, Mr. Hardy, I want to give you a chance to respond to a
question that was posed to Ms. Zichal before about the U.S.
being so far behind Europe in the development of offshore wind.
And, particularly, what policies--what can we learn from
Europe? What policies has Europe implemented that has
contributed to a more rapid build out than here?
Mr. Hardy. Yes, I would like to just discuss this price
discussion, I think it will be helpful. Part of the reason that
prices are higher here in the U.S. is because we are just
standing up this industry, and we have a lot of fixed costs in
the beginning. We are doing port infrastructure, we are
building half-a-billion-dollar ships, we are building
factories, et cetera. Europe has been doing this for 30 years,
so their supply chain is already built, and they are on the
variable cost curve. We are coming down on the variable cost
curve related to the turbine technology, but eventually we will
have a prompt jump down and then continue on the cost curve
once we get these fixed costs behind us.
So what can the U.S. Congress do to help? Help us get down
that curve faster by helping us invest in these fixed costs,
get these factories built, get these ports built, get the
transmission built, and then we will be on a low-cost variable
cost like Europe is today in offshore wind.
Mr. Peters. So your advice is let's get started. I think
the loan program at DOE is probably a helpful tool for that.
Mr. Chairman, my time has expired, and I yield back.
Mr. Rush. The gentleman's time has expired.
The Chair now recognizes Dr. Burgess for 5 minutes.
Mr. Burgess. I thank the Chair.
Mr. Menezes, it is good to see you again. Thank you for
your help in my district this summer. We did our annual energy
efficiency event. Sometimes we forget that energy efficiency is
another arm of one of the arrows in our quiver when we talk
about the Nation's energy armamentarium, and I certainly thank
you for your help that day.
I also agree with you and virtually every other Member on
this side of the dais who has voiced concern. We are, of
course, talking about big-scale wind projects that down the
road are a significant deliverable, and not that that is not
important, but it is a little hard to consider that when you
are facing a cold winter with rising prices. And what is that
going to mean for our constituents? And what is it going to
mean for American families and families around the world?
You referenced the wind stopping blowing in Europe. What if
they have a colder winter than we do and the demands for our
exportable natural gas are going to increase, and that is going
to affect price here?
Unfortunately, in the Build Back Better Act, there is a
methane fee that was included. We don't call it a tax because
that would be a tax on families earning under $400,000 a year.
So we are a little sensitive of the language, but nevertheless
it is going to increase price.
So I just wonder if you had any additional thoughts on
that. You know, we as the authorizing committee for energy
policy in the people's House looking ahead with the dire wolf
at the door in the wintertime, any other advice that you can
give us from your recent activity at the Department of Energy?
Mr. Menezes. Well, thank you very much for that. I will
tell you, Congress actually has a good bill that they can pass
right now. It is the Bipartisan Infrastructure Bill. That will
address a lot of the issues that we are talking about here
today. So instead of waiting around and try to figure out
passing the reconciliation package, you can actually look very
closely at that one and you will achieve some of the goals here
that we have been talking about.
We have the solution to tight supplies right here in this
country, right here. You know, the shale revolution. Once
again, you have heard me say this, both oil and natural gas, we
are able to help not only domestically but globally. We can
bring the supply. So as--and this is a good story. As demand
increases coming out of COVID, we should be able to produce
enough so that everybody can get what they need at reasonable
prices.
We will have to go through a little bit here, but the fact
is that if we are not sending out the negative messages to move
capital and to get resources out of the ground, we would be
actually spending money and getting the economy moving so that
we can actually celebrate what we have here. All studies show
that our natural gas displaces coal and has led to decreased
global emissions. All studies show that.
Mr. Burgess. Yes, sir.
Mr. Menezes. OK.
Mr. Burgess. Right. The deliverable--yes, 5 minutes goes by
terribly quickly.
It is a little bit off topic, but that never stops me. The
stranded natural gas in the Permian Basin is an area where we
could perhaps focus for an immediate deliverable on natural gas
for heating homes, delivering it to electrical generation
plants, getting it from West Texas. Unlike wind energy, the
wind is right on the shoreline and you can bring the power
right on board. we will have to get the natural gas from the
Permian to the places where it is going to be used--Houston,
Dallas, San Antonio, and the ports down in Corpus Christi and
Freeport--but it is doable.
And there are existing pipelines--this is a fascinating
topic that one of our railroad commissioners brought up to me.
There are existing abandoned natural gas pipelines in the State
of Texas that could begin this process literally by turning it
back on. To be sure, there are things that will have to be
checked and make certain everything is up to specs, but this is
an immediate source for an immediate problem that we have,
again, just right around the corner.
I do have to ask you, since there has been so much talk
about the price on the wind energy, are people factoring in,
will there be like a Federal subsidy like there is for land-
based wind energy in this offshore wind energy?
Mr. Menezes. Well, thank you for the question. Everything
that I have read says that we still continue to need, you know,
the subsidies and support from the Government to be able to get
where we want to go, to even get to the variable cost curve. So
while there's a lot of fixed costs that are being spent, there
needs to still be considerable subsidies.
We see this with the extension of the renewable tax credits
that we go through decade after decade after decade. You know,
each year we say we are going to phase them out because, why,
you know, it is cheap, we have gotten down the variable cost
curve, you know, the wind is free, right? Well, why do we
continue to have all these subsidies? Why is it a good thing
that FERC can allow negative pricing in energy markets and we
can't actually price the real cost that consumers know as to
what they are paying for?
Mr. Burgess. There is a real effect. We felt it last
February. Absolutely.
Thank you, Mr. Chairman. I yield back.
Mr. Rush. The gentleman yields back.
The Chair now recognizes the gentleman from Pennsylvania,
Mr. Doyle, for 5 minutes.
Mr. Doyle. Thank you, Chairman Rush and Ranking Member
Upton, for holding this hearing.
I think the U.S. offshore wind industry, it is a game
changer for renewable energy and for our efforts to combat
climate change. Additionally, opportunities to bring home
manufacturing and provide good-paying, long-term jobs in the
industry is tremendous.
You know, I think the key to getting buy-in from the public
as we build out more clean energy systems will be the benefits
they bring to communities in terms of jobs and economic
activity. Unfortunately, we have heard too often that the
renewable energy sector is lagging in unionization and
abundance of good-paying, career-sustaining jobs.
Mr. Strong, let me ask you, what has been your union's
experience working with offshore wind industry thus far? And
what can Congress do to ensure that labor is getting a fair
shake as industry grows?
Mr. Strong. Thank you, Congressman. This has been my first
experience actually dealing with offshore wind, and that is a
relationship that we have with US Wind. It started about 3
years ago. It has really progressed very well. We have entered
into an MOU with US Wind that those jobs at this facility will
be union jobs. They have agreed they will not interfere in our
ability to organize. And in that MOU, it says that we will get
an agreement within a short period of time, and whatever issues
that we don't agree to, we will submit to arbitration.
Now, we are pleased with our relationship with US Wind, and
it has been a very good experience. And we think that
eventually these are going to be well-paying jobs. You know, in
the high 30s, $40-an-hour job with benefits, and it is much
needed in our State. We are bringing steel back, fabrication
back to what would be considered sacred ground at the Bethlehem
Steel Sparrows Point.
Mr. Doyle. Thank you.
Mr. Hardy, it is my understanding your company has strong
relationships with labor in Denmark. What is Ørsted
doing to build strong relationships with construction and
manufacturing unions here in the United States?
Mr. Hardy. Thank you, Congressman Doyle. Look, I am a Navy
veteran, submarine veteran enlisted. Other than the military, I
think the unions have the best training programs. We are
building a new industry here that requires a certain skill
level, and so we are on our front foot at Ørsted. We
leaned into working with unions. We signed an MOU with NABTU,
and we are in the process which we will expect to complete
national offshore wind agreement, which will propose that we
use the building trades for every aspect of our projects,
onshore, offshore.
Some of those capabilities already exist in the unions.
Building an onshore substation, they know how to do that. But
erecting an offshore wind turbine, the U.S. unions have never
done that before. But we are developing a relationship with the
unions, doing training programs, introducing our supply chain,
our service providers, and trying to bring those jobs to the
unions.
And in the cases where there may be some parts of the
country that aren't union, we are agreeing to prevailing wage
requirements, trying to create these middle-class jobs in our
industry.
Mr. Doyle. Very good. Thank you.
Ms. Zichal, given the administration's estimate of the
offshore wind industry will generate a demand of more than 7
million tons of steel, equivalent to 4 years of output for a
typical U.S. steel mill, what can Congress do to ensure that
the benefits of offshore wind extend beyond the coast and into
these manufacturing communities like mine in western
Pennsylvania and other places?
Ms. Zichal. One of the things that excites me most about
working on offshore wind is the new opportunity for economic
development. Offshore wind developers today are already
committed to $729 million in port infrastructure and $280
million in U.S. manufacturing facilities. So think about the
opportunity there.
In terms of actions from Congress, I think there is an
important conversation happening today around domestic content
requirement as it relates to the Build Back Better legislation.
I also think there are important conversations happening about
what are some of the manufacturing credits that we might be
able to provide. So it is kind of think holistically about
let's create the demand and create the opportunity to build
these projects, but then let's also look at, you know, what are
the other tools in the toolkit to make sure that we are
creating opportunities across the board.
Mr. Doyle. Thank you.
Mr. Chairman, thank you very much. I yield back.
Mr. Rush. The Chair muted himself.
The Chair now recognizes the gentleman from Ohio for 5
minutes.
Mr. Latta, you are recognized for 5 minutes.
Mr. Latta. Well, thank you, Mr. Chairman. And thanks for
our witnesses being with us today.
As already stated by Members on our side of the aisle, our
country is facing an immediate crisis over how everyday
Americans will be able to afford to heat their homes this
winter, fill up their vehicles to go to work, turn the lights
on at the small businesses, and importantly right now,
especially across my district, how farmers are going to dry
their grain.
This year, we have seen energy prices reach their highest
levels in years, gas prices up to a 7-year high with no signs
of relief. Natural gas price is at levels we haven't seen since
the end of the Bush administration.
This coming winter, residential propane prices are
projected to be at their highest level since the polar vortex
in 2013 and 2014. At that time, I worked tirelessly to address
propane shortage and make sure Ohioans were able to heat their
homes and maintain their livelihoods. I had legislation that
was signed into law to help prevent future shortages, and I
cofounded the Congressional Propane Caucus to make sure that
Congress stayed educated on the benefits and resources that
come from propane.
Mr. Under Secretary Menezes, quick question. You know, as I
have been sitting here and hearing the testimony today, you
know, we have had a lot of testimony over the last year in this
committee and also in the subcommittee. We are talking about
protecting our infrastructure and how critical that is. I am
just curious, what is the vulnerability of offshore wind to
cyber and physical attacks? And how far--just in general, how
far off are most of the wind turbines?
Mr. Menezes. Well, I will defer to the experts on, you
know, distances, but you know that they have to be beyond the
viewshed, because we are not really going to build many too
close. But it is in harsh environments. You know, it is deep. I
think on the East Coast we can probably have fixed platforms.
On the West Coast it will be floating.
But to be sure, they are using state-of-the-art technology,
which is a good thing. But what we know and we have learned at
the Department and everybody knows it now is that as, you know,
you improve the technology and you become more sophisticated
and you put these industrial control systems, you know, on
these operations, you want to make sure that they are very,
very secure from cybersecurity.
And so, certainly, we haven't even brought that up, but I
think security of these, I think is something that we should
look into. They are far away from the shoreline, so one would
wonder, if you can't see them, are they operating? You know,
you get your electricity, but who is out there guarding them,
protecting them? And what about the cybersecurity risks?
Mr. Latta. Because, you know, when I have gone through
power plants, especially nuclear power plants--and this is the
question I want to bring up--is that, you know, the security
levels at them are pretty high, because they want to make sure
that that power stays on.
But, you know, just talking, if I could move on in talking
about our domestic nuclear industry, and you mentioned two
pieces of my legislation, in that nuclear power being one of
the most reliable sources of energy and it is emissions free.
Is it possible for the United States to meet the Biden
administration's climate mandates if we don't have a strong
nuclear industry here at home?
Mr. Menezes. Well, not only here in the U.S.--I mean, our
nuclear fleet, you know, provides at least 20 percent typically
both in capacity and almost in generation each year on
emission-free energy. It is by far, you know, the largest
producer of emission-free energy that we have here. And
certainly even internationally, EIA, Dr. Fatih Birol, he called
on all nations should be considering, if you are interested in
reducing your emissions and bringing electricity to the people,
particularly in developing countries, you should be developing
nuclear.
Now, who is the leader in nuclear technology? Well, it has
been the United States, right? Now, we need to continue that
global leadership, because it really makes a big difference.
Because other countries are going to be turning and they are
turning to nuclear to meet these emission-free goals, and they
will want to deal with the United States. Well, the United
States requires 123 agreements, right, nonproliferation,
nonenrichment agreements, for nuclear weapons. That is all
great.
Well, we are now in competition with the Chinese and
Russians of providing nuclear technology to other countries.
This is 40 years, 100-year relationships where you bring in the
regulatory process, you know, the institutional knowledge, you
have to train everybody, you have to have the whole educational
system in place to do that. You want to have that relationship.
If we in the United States--whether you are for or against
nuclear--if we give up on nuclear, we lose that leadership, and
we are ceding it to Russia and China, and those are two
countries that do not have statutory obligations for 123
agreements.
So nuclear plays a big role in not only emissions but also
in global security, and you want the U.S. to maintain that. And
we should be building next generation of nuclear here both for
climate reasons and global world security.
Mr. Latta. Well, thank you very much.
Mr. Chairman, my time has expired, and I am going to submit
my additional questions for the record. Thank you. I yield
back.
Mr. Rush. The gentleman's time has expired.
The Chair now recognizes Mr. McNerney for 5 minutes.
Mr. McNerney. Well, I thank the chairman. This is an
interesting hearing, close to my heart.
Offshore wind on the West Coast is behind offshore wind
development for the rest and some of the other countries
because of our ocean geography, and this will present a unique
set of challenges and opportunities.
Ms. Zichal, I really appreciate your comment that we may be
behind other countries in offshore development, but that gives
us an opportunity to learn from their mistakes. I spent 20-plus
years in the wind industry, and I can verify that mistakes are
made and that diligent parties can learn from the mistakes of
others without having to pay enormous learning costs.
Do you see floating turbine technology as ready for
utility-scale development in the Pacific at costs that are
comparable to those on the East Coast deployments? Now, I
realize this is similar to Mr. Peters' question, but I would
really like to focus on the technology rather than on the
policy.
Ms. Zichal. Well, thank you for your question. I mean, the
short answer is yes. But, again, I think what is interesting
about California and the work that the Department of Interior
is doing with their leasing is thinking down the road about
what are we--what is the opportunity here, how do we think
differently about the technology, and what potential do we have
in America to grow and really lead, pave the way for the rest
of the world to develop and embrace the floating turbine
technology.
I also think what is really important as we think about the
opportunity in California and the opportunity for offshore
wind, that we also get in front of the conversation that needs
to happen around transmission. You know, obviously, planning
for transmission and, you know, the work that goes into
connecting offshore wind resources to the grid is going to be
really crucial. So as--I think as we are thinking holistically
about California's opportunity, we need to think not only about
how do we get the technology right, how do we make sure that
America is leading the way there, but also, you know, how do we
jump start that conversation about transmission planning.
Because I think that is going to be really important,
especially in a State like California.
Mr. McNerney. Well, you sort of anticipated my next
question. You mentioned in your testimony the possibility for
an interconnection at the site of a retired nuclear generation,
which would be a good way to use existing infrastructure. What
kind of planning [inaudible] systems are needed to ensure that
these transfers happen?
Ms. Zichal. So as I think about interconnection processes,
which is something I am sure everyone loves to think about, the
transmission and interconnection have three P's: planning,
permitting, and paying.
And on the planning side, FERC has jurisdiction over how we
plan for transmission. Each individual offshore wind project
today is determining where to best interconnect to the grid and
is paying their own costs. I think as these projects move
forward, we are going to need to be planning for the long term
with a backbone transmission approach.
On permitting, this is a shared responsibility between BOEM
and the States. I think BOEM and FERC can better coordinate on
transmission to make sure there aren't unnecessary hurdles.
And on paying, FERC also has jurisdiction over who pays for
transmission. We want to be sure that the benefits of upgraded
transmission, including lower-cost power, reliability, and
reduced emissions, are equitably shared and not just placed
solely on generators.
Mr. McNerney. Thank you for that answer.
Mr. Hardy, Ørsted already has made large investments
on fixed bottom offshore wind projects in the eastern United
States. Is there specific equipment that will be needed for
installation of floating wind turbines? And has Ørsted
started investing in the supply chain for that?
Mr. Hardy. Yes. As previously discussed, I mean, we are the
world's leader in offshore wind, so, of course, we are
monitoring and planning for the transition to floating
technology. We have got some partnerships and some active
projects in Europe and in Asia around floating. Floating is
still a little less mature than fixed-bottom, for sure, but
these are long-cycle projects, so when we think about floating
in California, we are thinking about projects that are
installed in late 2020, early 2030s, and the technology will
continue to evolve between now and then.
So you have got float--you have got the floating, the
floaters themselves, the foundation. You have got dynamic
cables. And we are researching, you know, all of those types of
technologies and partnering with technology providers to make
sure that these become, you know, commercially viable as soon
as possible.
Mr. McNerney. Are we going to be able to benefit from the
oil technology of floating platforms?
Mr. Hardy. Sir, can you repeat the question?
Mr. Rush. The gentleman's time has expired.
Mr. McNerney. I am out of time, but oil platforms have used
floating technology for years. Are we going to benefit from
that?
Mr. Rush. The gentleman's time has expired.
The Chair now recognizes the gentleman from West Virginia,
Mr. McKinley, for 5 minutes.
Mr. McKinley. Thank you, Mr. Chairman.
I would like to enter into the record an article that was
published this week in The Wall Street Journal that is entitled
``Behind the Energy Crisis: Fossil Fuel Investment Drops, and
Renewables Aren't Ready.''
With all due respect, Chairman Rush--and we have been
friends for years--this hearing seems to be taking on an air of
distraction from what Americans are really dealing with across
this country. I can't for the life of me understand why we are
having a hearing on offshore wind when there are so many
uncertainties that we are going to be facing in the next couple
of months as we enter into winter and the fact that countries
all around the globe are dealing with this global energy
crisis.
In the United States, energy costs are at a 7-year high. In
Europe, according to Daily Mail, the natural gas prices are up
600 percent. And in China, we have rolling blackouts and
rationing energy. But the Democrat leadership here in Congress
is seemingly and apparently more interested in discussing
offshore wind turbines.
Look, I am supportive of offshore wind turbines. I like the
project that we are going to be involved in in West Virginia
with it, but this is a topic better suited for the end of
winter, not dealing with how we are prepared to deal with the
winter weather as we approach this.
So let's talk about some of those things we are facing
today. Remember earlier this year, winter storm Uri exposed a
number of issues with our grid in ERCOT, MISO, and other parts
of the country. Fourteen States experienced shock because of
the winter weather. And the polar vortexes of 2014 and 2016
exposed America's vulnerability, and outages occurred. PJM came
within 5 minutes of having a major power outage on the East
Coast.
These are the important issues, and this committee's
responsibility is to give the American people confidence that
as we get into this winter, they won't face the same problems
and crisis being experienced currently in Europe and China,
higher utility bills, and energy rationing.
Look, this is America, but we have fewer supplies due to
Biden's cutbacks, like threats to the gas production,
reductions in mining coal, decommissioning nuclear power
plants. What is Congress doing about supply? And this is a case
of Economics 101. I am just an engineer, I am not an economist,
but it is so fundamental. We have supply and demand. Demand is
going up, and the supply is dropping. We are bound to hit
higher costs with that. So no wonder IEA is estimating the
energy costs are going to go up 30 percent this year.
So how can we give the American people confidence today
that the United States won't have shortages or heating costs?
So, Menezes, could you explain this? Is the United States
prepared for a potential winter storm this time?
Without your mask, please.
Mr. Menezes. Right. Well, our own EIA is predicting, of
course, that costs are going to be much higher, certainly in
propane, really across the board. You can expect that. I know
utilities are already sending out letters to their ratepayers
informing them that because of the high price of natural gas--
which is unusual in the United States. Why would the United
States have high price of natural gas? Well, again, it has all
happened since the change of administration.
Again, as we come back, you know, demand is increasing, but
the fact of the matter is we have the solution right here.
Congress really doesn't have to do anything. They should do no
harm. They should allow, really, the producers to produce, and
supply will get to demand. And guess what will happen to
prices? It puts downward pressure on prices.
So while an engineer, I think you have got the economics
right, although I, myself, am neither, but I think that is what
we can do here in the United States.
But don't forget about propane, right? Where does propane
come from? Propane is a byproduct of natural gas. So if we are
producing less natural gas, guess what we have less of? We have
less of propane. So it all works together and is something----
Mr. McKinley. You more or less answered my third question.
Wouldn't it make more sense to balance the scale and ramp up
production? And that is what you are saying. We need to be
doing that rather than cutting back.
And then the last, do you think currently--remember, we are
just 2 months away. There is already snow in Colorado. We know
the winter is coming. We have seen the predictions that this is
going to be a pretty severe winter. I don't know how well we
are prepared for it.
So I am saying, do you think we currently have enough
energy supply to avoid increased utility bills this year?
Mr. Menezes. Well, everything that I read, I think, if you
are a Member of Congress, you should be very concerned about
what we are reading today about tight supplies for an expected
cooler winter.
Mr. McKinley. OK. My time has expired. I yield back the
balance of any time I have. Thank you.
Mr. Rush. The gentleman yields back.
The Chair now recognizes the gentleman from New York, Mr.
Tonko, for 5 minutes.
Mr. Tonko. Thank you, Chairman Rush, for this hearing. And
thank you to our witnesses for participating.
It is indeed rare that we have the opportunity to witness
and support the development of a brand-new industry in the
United States. With offshore wind, we can get it right from the
start to build our own resilient supply chains that create
high-quality, unionized American jobs. It has been estimated
that offshore wind will result in some $109 billion in domestic
supply chain investments in the next decade. And even though my
district is hundreds of miles from any wind energy area, both
ports in New York 20 have recently announced hundreds of new
jobs to manufacture components.
Mr. Hardy, it is great to see you again, and thank you for
the good news. While we were together recently at the Port of
Coeymans, which will be involved in advanced foundation
components construction, I understand that you have been
visiting with suppliers located across the country. While
coastal communities and their ports will experience new
investments, can you speak to how Ørsted projects are
creating opportunities for those that are beyond the coastal
communities?
Mr. Hardy. Absolutely. Good to see you again, Congressman,
as well.
As I mentioned in my original testimony, right now we
already see jobs being created by this early--in the early
stages of this new industry in 44 States. So this is not a
manufacturing opportunity along the coastlines. Of course, some
of the operation and maintenance jobs will be there, and, of
course, the port infrastructure will be closer to shore, but
the supply chain, when you think about tier 1, tier 2, tier 3,
will stretch across the whole United States. And so we are
looking every day to try and bring as many jobs to Americans as
we stand up this industry, like you said, doing it right from
the start.
Mr. Tonko. Thank you, sir.
And I have a bill, the Restoring Offshore Wind
Opportunities Act, that would lift the ban on offshore wind
leasing off the Carolinas. Some might question why a Member
from upstate New York is interested in seeing offshore wind
projects built so far away, but I do believe this speaks to the
profound opportunities that offshore wind is creating for
United States manufacturers and why we all have a stake in this
industry.
So, Mr. Hardy, again, do you expect that as more projects
are developed around the country that there will continue to be
opportunities for steel plants in West Virginia and Maryland,
shipbuilders in Texas, and component manufacturers in upstate
New York?
Mr. Hardy. Well, the simple answer is yes, I do. But a
little bit more feedback. I mean, we are excited about
Secretary Haaland's announcement just last week to bring some
certainty to the industry and lay out timelines for additional
offshore wind leases. And as we continue to bring certainty--
you hear this theme from me over and over--then companies like
mine and companies in the supply chain will continue to invest,
and that investment will happen across America as people see
the market opportunities to supply components to the industry,
and, of course, that will create new jobs.
Mr. Tonko. Thank you.
And, Mr. Strong, where do you see the opportunities for
union jobs being created across our country? And what types of
jobs would be part of the supply chain?
Mr. Strong. Well, obviously, steel. A tremendous amount of
steel goes into one of those turbines. Cement. We have two
facilities in Maryland that we will see increase in production,
could be very well we will see additional hirees, depending on
how much production they will provide for these projects.
But the supply chain is enormous, from steel to the cables
to the cement to the various components, the blades. We have a
great opportunity here to really put manufacturing to levels
that we haven't seen before, going back many, many years ago. I
am optimistic. Our union is really supporting offshore wind
renewables because of the tremendous potential in growth in
manufacturing.
Mr. Tonko. Thank you, sir.
And the Build Back Better Act reported by this committee
last month included $100 million for DOE to convene
stakeholders to plan, model, and analyze the transmission needs
for offshore wind.
Ms. Zichal, you were earlier asked by Representative
McNerney about the challenges to offshore--or about
transmission as an issue for the West Coast. There are probably
unique challenges to offshore transmission in that regard. And
because I am out of time, I would just ask that you get to the
committee a response to how this DOE funding would be helpful
to overcome any of the challenges that you imagined would be
there for transmission as it relates to the floating offshore
wind industry.
Thank you very much. With that, Mr. Chair, I yield back.
Mr. Rush. The gentleman yields back.
The Chair now recognizes the gentleman from Virginia, Mr.
Griffith, for 5 minutes.
Mr. Griffith. Thank you very much, Mr. Chairman.
I have an article that I would like to submit for the
record from E&E News called ```Bloody expensive.' Major U.S.
offshore wind plan hits obstacles.'' Without objection----
Mr. Rush. Hearing no objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Griffith. Thank you.
Mr. Menezes, as referenced in the article I have submitted
for the record, there is a significant concern in my beloved
Commonwealth of Virginia about who will pay for this massive
offshore wind project. The cost of the project just to build
two of the 180 turbines costs $300 million. While the full cost
remains unclear, we know this will be a--it will result in a
hefty price tag.
Isn't it true that under current Virginia law, all Dominion
customers will pay for the building of the turbines?
Mr. Menezes. That is correct. I think your legislature made
sure that that was going to happen.
Mr. Griffith. Yes. And looking at this at the national
level, if the Biden administration aims to add 30 gigawatts of
offshore wind by 2030, I understand that means somewhere
between--somewhere around 3,000 new turbines. Won't nationally
it also be mostly customers, with some taxpayer dollars, paying
for those?
Mr. Menezes. Well, right. You just heard Ms. Zichal. Ms.
Zichal said that she didn't want these costs to be put on the
power developers. Well, where are those costs going to be put
on? The costs are going to be put on ratepayers. You know,
these--and the resident--if you are not aware of it, it is the
residential customers that pay the largest amount of all rates,
over industrial users and over commercial. So when you hear
things like this, don't--make sure you know where the costs are
going.
Mr. Griffith. I appreciate that.
Mr. Hardy, I am concerned about the impacts some of the
wind farms will have on our environment, particularly birds.
Many of the US Wind farms are located in the paths that are
used by migratory birds, because the birds use the wind to get
north and south, and the turbines are put there in order to
catch the good winds.
So as Ms. Zichal said, a lot can be learned from other
countries. What has your company learned in dealing with white-
tailed eagles and other Palearctic bird species?
Mr. Hardy. Sir, I can talk broadly about birds. I will have
to follow up with you on the specific bird type that you are
asking about. But, in general, the lease areas that we are
building in our Federal lease areas, which have been studied by
the Federal agencies, including----
Mr. Griffith. OK. I am asking about your experience in
Europe. What experience has your company had in Europe?
Mr. Hardy. In Europe, we are the most sustainable energy
company in the world, and we build all of our projects in----
Mr. Griffith. So you really don't know about the birds, the
experience that your company has had in building fairly large
wind farms off the coast of northern Europe?
Mr. Hardy. I know a little bit about that. I am the North
American CEO, and we are looking at all the environmental
aspects, including white whales, fish, birds, et cetera.
Mr. Griffith. All right. So let me--I asked specifically
about the white-tailed eagle because it is the cousin of the
American bald eagle and has similar habits, and that is why I
wanted to know about that. If you could follow up with me later
on that, I would appreciate that.
Mr. Hardy. Yes, sir.
Mr. Griffith. But one of the studies from northern Europe
shows that the mortality rate caused by the wind turbines is
reduced 70 percent if you paint the turbine blades black. Now,
in this article I submitted, there is a picture that purports
to be the Dominion facility, one of the two you have already
put up, and they are white. Why wouldn't you all look into that
if there is a study that says there is a 70 percent reduction
in mortality?
Mr. Hardy. Sir, I will just have to follow up with you on
these questions.
Mr. Griffith. Well, I mean, I do think the environment is
important, and everybody assumes that wind is environmentally
friendly, but as an avid birdwatcher, I can assure you there
are lots of deaths caused by wind turbines.
And your turbines, the blades are actually going to be
about 40 percent--or the height is going to be about 40 percent
greater than everything you have in Europe. Isn't that true?
Mr. Hardy. We will be building projects that are larger
than the projects that were built in Europe 30 years ago. The
projects that are being built in Europe today are using the
same technology that we are using.
Mr. Griffith. So the new ones in Europe are going to be
just as big as this one you are putting off the coast of
Virginia?
Mr. Hardy. Yes.
Mr. Griffith. A hundred eighty-some facilities, with 800-
foot--almost as big as the Eiffel Tower?
Mr. Hardy. That is correct.
Mr. Griffith. All right. Mr. Menezes, back to you. Would it
be cheaper and more efficient and potentially better for the
environment--talking about my birds there--to invest in and
deploy carbon capture technologies on existing coal and natural
gas plants?
Mr. Menezes. Yes. We should put carbon capture on existing
facilities. That will help reduce emissions.
Mr. Griffith. And that will help reduce emissions, and
won't it also help us not leave costs stranded? Because the
ratepayers have already paid for those plants. Isn't that true?
Mr. Menezes. That is correct.
Mr. Griffith. Yes, I appreciate it.
Mr. Menezes. By the way, you said captured carbon, and you
can help make some of the blades here and you can probably use
carbon black and maybe they will actually be black.
Mr. Griffith. Yes, we can actually use--yes, and we can use
some graphene out of southwest Virginia. I appreciate it.
Appreciate the plug.
Thank you all very much. I yield back.
Mr. Rush. The gentleman yields back.
The Chair now recognizes Mr. Veasey of Texas for 5 minutes.
Mr. Veasey. Mr. Chairman, thank you very much. And I want
to thank all the panelists for being here today to discuss the
importance of investing in domestic wind energy.
I look forward to hearing from the panel throughout the
rest of the committee to just talk about how we can provide
more safer, more sustainable, and more reliable energy to Texas
and the Nation.
As I think everybody already knows here, Texas is one of
the dominant players in wind energy. I don't think that there
is any secret about that. As a matter of fact, Texas dominates
the wind energy to such an extent that if we were a country to
our own, we literally would rank number five in total wind
generation in the world.
Mr. Hardy, I understand there is a potential in the longer
term for offshore wind to be developed in the Gulf. But in the
more immediate term, can you expound on what Texans have to
gain from supporting offshore wind development in the U.S.?
Mr. Hardy. Yes. Thank you, Congressman. I appreciate your
question.
First off, I would highlight that Ørsted builds
onshore wind farms in Texas, so we are one of the participants
in the Texas onshore wind and solar industry. With respect to
offshore wind in Texas, you are also correct that there are now
studies being done about offshore wind being built in the Gulf
and potentially supplying power to not only Texas but
Louisiana, Mississippi, and other Gulf States.
Likewise, today there are significant supply chain
activities happening in Texas, not least some of the things we
talked about earlier. The Kiewit offshore substation is being
built near Corpus Christi, there are the Dominion vessels, the
Jones Act-compliant turbine installation vessels being built
down in Brownsville. These are large, job-creating projects
that are supporting our offshore wind industry today, and the
oil and gas sector is a natural place for engineering and
construction to be transitioned into the offshore wind
industry. And, of course, Texas has a long history in Houston
and elsewhere in supporting that industry.
Mr. Veasey. So how many jobs are we talking about? Can you
expand on that a little bit? What sort of job creation numbers
would we be looking at?
Mr. Hardy. Just the vessel alone is over 1,000 jobs for a
multiyear period. The Kiewit offshore substation is similar
types of numbers, hundreds of jobs for a multiyear period. The
construction yard is actually down in Brownsville--outside of
Corpus Christi, but there will be other jobs related to that,
engineering procurement jobs in other States as well.
Mr. Veasey. Mr. Strong, in your testimony you emphasize the
importance of providing workforce training to develop new
talent in the wind industry. How can we ensure that quality,
good-paying jobs created by wind are disperseed across States?
And furthermore, how might this revitalize postindustrial
communities?
Mr. Strong. Well, thank you, Congressman. I sit on the
Maryland Manufacturing Advisory Board. I represent organized
labor. I was appointed by the Governor in that capacity. But in
Maryland what we have noticed in the manufacturing sector,
every company that participates has a demand for a skilled
workforce. There is a shortage of skilled workforce in many
trades: welders, machinists, millwrights, so forth. So it is a
problem in Maryland that we are constantly talking about.
And you know eventually we have to get all the stakeholders
together, the Federal Government, the State government, come up
with ideas and plans. I went to a vocational school when I was
young, but you don't see them anymore, but it is a problem.
And in my conversations with US Wind, we know that this is
a challenge for us to find the type of skills that we are going
to need to work at this facility. We are working on it. We are
talking to the State about worker development and so forth. But
this is a problem in all of manufacturing sectors.
Mr. Veasey. Yes, absolutely it is.
Mr. Chairman, thank you very much. I yield back the balance
of my time.
Mr. Rush. The gentleman thanks and the gentleman yields
back.
The Chair now recognizes the gentleman from Ohio, Mr.
Johnson, for 5 minutes.
Mr. Johnson. Thank you, Mr. Chairman.
You know, I have to say that I am deeply concerned about
the subject of today's hearing. I mean, just look at the news.
We have rampant inflation, gasoline and grocery prices rising,
shortage of essential products. And we are staring down a cold
winter with price hikes on electricity, natural gas, and oil.
You could say that America is experiencing an energy problem
and a commerce problem. That is what this committee is all
about: energy and commerce.
So one would think that the Energy and Commerce Committee
would be working on solutions and holding hearings to address
these issues that the American people are so concerned about.
But no, the American people will be tuning in today to watch us
participate in a windmill hearing. Can you believe that? A
windmill hearing. You can't make this stuff up.
In my district in Appalachia Ohio, my constituents are
starting to get worried. Families on fixed incomes, seniors are
sensitive to energy costs. When these costs rise, it crowds out
the rest of their budget.
The latest data shows that these fears are warranted.
According to the Energy Information Administration, if winter
this year is 10 percent colder than usual, which many are
predicting, heating oil would be 59 percent higher than last
year; natural gas bills, 50 percent higher; propane, 94 percent
higher; and electricity, 15 percent higher.
Folks, I think the windmill hearing could have waited.
Perhaps, we should be examining what is happening in Europe to
figure out how to prevent their energy crisis from coming here.
So Mr. Menezes, you mentioned in your testimony U.S. LNG
recently helped the U.K. keep the lights on when the wind
stopped blowing. I appreciate you mentioning my LNG export
legislation, H.R. 1575. So here is my question to you: Is it
true that any large-scale build out of renewables such as
offshore wind still needs to be backed up by ample supplies of
reliable, abundant, and affordable natural gas or coal-fired
base load electricity?
Mr. Menezes. That is correct. We need backup power. We are
not there with batteries, so that has been my testimony.
Mr. Johnson. OK. Does it concern you that, given what we
are seeing in Europe, that the movement to quote ``keep it in
the ground'' coupled with a rush to renewables could raise
energy prices and risk grid reliability here at home in
America?
Mr. Menezes. Yes, I agree. I mean, fossil fuels still
provide 80 percent of our energy today. It is the propane, it
is the heating oil, its everything that we use every day, every
aspect of our lives. And this administration has essentially a
keep-it-in-the-ground policy.
Mr. Johnson. OK. Mr. Menezes, continuing with you, we are
currently seeing our natural gas and other commodities
stockpiles blow their seasonal averages. I am worried about
this administration discouraging domestic production of our
abundant coal, oil, and gas resources. In your opinion, is this
administration focused enough and truly doing all it can to get
ready for this winter with reports of major energy price
increases and perhaps even energy shortages on the way?
Mr. Menezes. I do not see it. I would expect them to call
on U.S. producers to really help increase supplies so that
prices can be addressed.
Mr. Johnson. Well, Thank you.
Mr. Chairman, I hope it is noted I am yielding back an
entire 104, 1 minute and 4 seconds.
Mr. Rush. And the Chair appreciates the gentleman for
yielding. The Chair does note it.
And the Chair now recognizes the gentlelady from Washington
State, Ms. Schrier, for 5 minutes.
Ms. Schrier. Thank you, Mr. Chairman. And thank you to our
witnesses.
You know, I have been listening with interest. Many of my
colleagues have argued that we should be increasing our
reliance on fossil fuels in order to keep energy costs down and
reduce uncertainty. But there is certainty that continued
resilience on fossil fuels will further warm the planet. And
that is already disastrous.
Also, the major impetus for transitioning to clean energy
is to stop adding to atmospheric CO2 and responsibly
manage climate change. So we need a full portfolio of
alternative sources of energy: hydro, nuclear, solar and wind,
including offshore wind. And of course, I just want to point
out that no natural gas is coming offline until we have enough
renewable energy to replace it. So tying these together, which
some of my colleagues are doing, is misleading, it is
fearmongering. And it is just making a bunch of excuses for
doing nothing.
Mr. Hardy, I have a question for you, which is, as we
establish more and more manufacturing jobs here, the training,
the manufacturing, and the steel, what can Congress do to
promote a possible export market for American-made offshore
wind complements?
Mr. Hardy. Yes. Thank you for that question.
You might be surprised to realize that we are actually
exporting offshore wind components from the U.S. today. I
talked about the Nexans cable factory in South Carolina. They
are actually--the first product they are producing there, they
are exporting to a project in the U.K. So this can happen
quickly. We are behind in megawatts, but we are coming in where
the technology is much more advanced.
We have American ingenuity. We have the best labor force,
good engineering schools. And so, it will be a while before we
maybe have the megawatts that they have, but we can produce
components and supply chain items today and export them. And
some of the investments that I talked about earlier have the
potential for further export in the global market.
Ms. Schrier. I appreciate your saying that.
Having visited Wild Horse Wind Farm in my district, I have
seen the size of those turbines. And so, just imagining them
being exported is pretty remarkable. And I would just point out
that, even if the wind energy isn't here, converting the clean
energy anywhere on the planet helps all of us. So I want to
thank you for that.
Ms. Zichal, I have a question for you. Given your
experience in the Obama administration, I was wondering about
the National Renewable Energy Laboratory's regional energy
deployment system model. And it has estimated that the State of
Washington has offshore wind technical generation potential of
more than 160 megawatt hours, or enough energy to power 13
million homes in the State, which we don't even have.
How do you believe industry can leverage the work of the
Department of Energy and the National Labs to address technical
and market barriers to really unlock the full potential of
offshore wind? And can you talk a little bit about public-
private partnerships to lower some of the supply chain
barriers?
Ms. Zichal. Yes. Thank you for your question.
I think big picture what we have learned about standing up
an industry for the first time ever, which is what we are doing
with offshore winds, it does take a village. And we are very
lucky in the fact that we have agencies, we have the National
Labs, we have a number of different agencies that are able to
lean in and help, not only through the technology, but, you
know, the regulatory process as well.
And a lot of the proposals that have come from Congress as
well as some of the appropriations supported by this committee
are going to provide important funding to help continue down
that path. So I would like on behalf of the American Clean
Power Association and member companies to thank the committee
for your important work there.
As you talk about a public-private partnership, I think
there are absolutely tremendous opportunities. And previously
we were talking about cybersecurity and clean energy. And this
is an area where our trade association is working directly with
the National Labs to create a clean energy cybersecurity
incubator. So this is an industry that very much recognizes the
important role that the U.S. Government and elected officials
are playing in helping us achieve decarbonization in the power
sector. And we would love an opportunity to continue working
together in that vein.
Ms. Schrier. Thank you.
With my remaining time, Mr. Hardy, my colleague Marc Veasey
talked about wind power in the Gulf. Can you--is that viable,
given the climate?
Mr. Hardy. Yes, it is viable. The wind speeds are lower
there, but the turbine technology continues to evolve. And just
like in onshore wind, the original turbines were developed for
the north seas, where the wind speeds are higher. But as we
move to lower wind speeds, the turbine technology, the rotor
diameter-to-generator ratio can be built to support those low-
speed winds.
Ms. Schrier. All right. I am way out of time. Thank you
very much.
I yield back.
Mr. Rush. The gentlelady yields back.
The Chair now recognizes Mr. Bucshon for 5 minutes.
Mr. Bucshon you are recognized for 5 minutes.
Mr. Bucshon. Thank you, Mr. Chairman.
I just want to point out that people like me are not
proposing doing nothing about carbon emission.We just want
solutions and timelines that don't destroy our economy and put
us in a very weak geopolitical position against the rest of the
world, which is what a lot of these proposals are doing coming
from my colleagues on the other side of the aisle, and will do.
I feel like I had to respond to that since we were accused of
doing nothing by my colleague that just spoke.
I support an all-of-the-above energy approach. It keeps the
lights on, rates down, and emissions low. I believe there is a
role for wind energy. I support wind energy as part of the
portfolio. And I support research and development efforts made
by public and private entities to develop the technology needed
to make wind energy more reliable and more affordable.
However, we have a duty to our constituents to ensure that
our energy grid remains reliable and affordable. The majority's
focused on wind energy at a time when many of my constituents
are seeing their energy prices soar is out of touch with the
challenges facing ordinary Americans.
As such, I am concerned that the Biden adminstration's
pledge to deploy 3,000 offshore wind turbines and make
everybody in some of these companies rich in the United States
by 2030 would make our energy grid overly reliant upon weather-
dependent energy sources. Plus, it is just not feasible.
Permitting, workforce, grid infrastructure, et cetera--this
type of a build out could take decades.
As we saw last month in Europe, an overreliance on wind
energy fails to meet energy needs when the wind doesn't blow,
which is why we must continue to employ other energy sources
like nuclear, natural gas, coal, utilizing carbon capture
technologies. We all want to get our emissions down. They
aren't dependent on the weather. The Biden administration's
unrealistic target ignores the constraints of current
technology to deliver reliable, affordable wind energy.
Mr. Menezes, in your testimony you discuss access to
critical minerals necessary to make wind turbines. From where
are we currently getting the parts like turbine blades and
generating equipment to build and operate offshore wind?
Mr. Menezes. I thank you for the question.
In my testimony I identified rare earths that are used in
the magnets on these turbines. And we did the study of critical
minerals and materials in the Trump administration. We
identified 35. And the rare earths are one of these. Fourteen
of those rare earths we have no domestic production of, the
other 31 we import over 50 percent. And of that amount that we
import, 75 percent comes from China. So you should be aware of
that. Therefore, we have supply chain vulnerabilities.
Mr. Bucshon. So the short answer is we don't produce much
of these things at all ourselves. We are going to buy it from
China, and other foreign countries----
Mr. Menezes. Critical materials.
Mr. Bucshon. Critical materials to make these. Understood.
I also want to again point out that Mr. Upton pointed out
this letter from Affordable Energy for New Jersey, and a couple
of key questions. Will the work be done by an American
workforce? The answer is no. Look at Rhode Island's 30
megawatt, 6-turbine offshore wind project off Block Island as a
benchmark. The majority of the work was performed on a
specialty wind turbine installation vessel, was completed by
foreign nationals from the developer's country of origin,
something that could be considered a violation of the Jones
Act. Why is that? Well, because there is a limited supply of
installation vessels. That provides a--this provides a
challenge in this area.
Currently, there's zero Jones Act-qualified offshore wind
turbine installation vessels in the United States. The first is
under construction and not expected to sail until 2023.
The second question: Will it be affordable? Well, I am not
so sure. When Block Island's six turbines came online in 2016,
the local utility paid $245 per megawatt hour for the project's
electricity with a guaranteed increase 3.5 percent per year. By
contrast, the average price of wholesale electricity in New
England last year was $31 megawatt hour. As Mr. Upton pointed
out, a massive cost increase.
So I guess my last question, Mr. Menezes, is what steps can
the Federal Government take to ensure that we can develop and
manufacture and maintain offshore wind technology here in the
U.S. and get control of our own supply chain to do so?
Mr. Menezes. It is an excellent question.
Look, at the Department what we decided to do, we cannot
continue to rely on rare earths or critical materials or
minerals manufactured in China or other countries. And so, we
turned our labs loose to find, frankly, substitutes. Let's
create new materials. Surprisingly, a lot of advancements that
we make in technologies today, we create new materials. And so,
that is one of things we did. Also recycle, reuse, we do all of
this. R&D is certainly good.
And if I can just respond to Ms. Zichal's point about the
cybersecurity.
Mr. Bucshon. My time has expired. I apologize.
I yield back, Mr. Chairman.
Mr. Rush. The gentleman yields back.
The Chair now recognizes the gentlelady from Colorado, Ms.
DeGette, for 5 minutes.
Ms. DeGette. Thank you so much, Mr. Chairman. And thanks to
all of our witnesses today.
I am the chair of the Oversight and Investigation
Subcommittee of this hearing. And we had a hearing a while ago
about the failure of the Texas grid that oil--or coal, gas, and
nuclear power lost twice as much power to the extreme cold as
renewable energy sources. And major power companies are warning
that gas supplies in Texas and the Gulf are still ill-prepared
to handle cold weather conditions.
I am sorry that our colleague Mr. McKinley isn't still here
in the room, because he made a little comment about my State of
Colorado. He said that we already have snow there. That is
true, we already have three ski areas open, just FYI to
everybody. But I also want to tell my colleague Mr. McKinley we
have zero offshore wind sources in Colorado that are powering
the, as far as I know, that are powering the ski areas.
But despite that, though, Mr. Hardy, your company does
operate offshore wind turbines in extremely cold winter
environments, don't you?
Mr. Hardy. Yes. The majority of our projects are built in
the North Atlantic off the coast of the U.K., Denmark.
Ms. DeGette. And it is cold up there.
Mr. Hardy. Harsh, harsh conditions.
Ms. DeGette. Harsh.
And what happens to offshore wind turbines when there is a
major cold front?
Mr. Hardy. The turbines are designed to operate in those
environments, and we haven't had any significant issues with
any reliability.
Ms. DeGette. So let's say you had a situation where
electric resource supplies were strained. Could offshore wind
actually help in severe weather conditions?
Mr. Hardy. It absolutely can.
Ms. DeGette. Why is that?
Mr. Hardy. Because the turbines actually perform in those
environments, the wind is free. As we have talked about before,
usually when the storms come, the wind is blowing. It if
reaches too high, then they need to protect themselves. But in
general, in those cold winters is when the wind blows the most,
and that is when we produce the most power. And so, it is
specifically up in the northeast when these production-scale,
utility-scale projects are on board we will actually offset the
need for natural gas for heating in the northeast.
Ms. DeGette. And is it expensive to winterize offshore wind
turbines?
Mr. Hardy. It is a standard part of the package.
Ms. DeGette. OK. So it is not extra money, really? OK.
Let me ask you about your turbine capacity factor, which is
the ratio of actual output to the maximum possible output. How
would you compare the capacity factor of offshore wind to other
resources like onshore wind and fossil fuel generation?
Mr. Hardy. Offshore wind has the highest capacity factor of
all renewable energy. It can today, with the latest technology,
exceed 60 percent capacity factor, whereas onshore solar is
probably less than half of that and onshore wind is somewhere
in between.
Ms. DeGette. OK. How has the capacity factor for offshore
wind improved with advances in technology in the past decade?
Mr. Hardy. It is a combination of the site conditions.
Where we are putting these turbines, 15 miles offshore--someone
asked the question earlier, 15 to 20 miles offshore--the winds
blow stronger and more consistently there, so that is part of
it. And then the turbines are designed to capture that
consistently.
Ms. DeGette. OK. Sort of a different issue, Mr. Hardy. I
understand that Ørsted is pilot testing the production
of hydrogen utilizing the electricity generated by some of its
offshore wind turbines. Can you just briefly explain that
process and what we could use the hydrogen for? I saw that the
other day. I was very intrigued.
Mr. Hardy. Yes. Green hydrogen produced by green electrons
is an important aspect in the energy transition. With this
green hydrogen you can make green fuels to power the hard-to-
abate energy markets like ship fuels, airplane fuels, et
cetera. You can also use the green hydrogen mixed with nitrogen
to make green ammonia for fertilizers, green hydrogen as an
additive to natural gas to green existing capacity. The way it
works is the electrons, you split water and you create hydrogen
from clean water through electrolysis.
Ms. DeGette. OK. So why would you make hydrogen with the
wind turbines rather than generating electricity?
Mr. Hardy. Sometimes you can use hydrogen because of the
location and the cost for transmission. And it is just an
augmented way to go through the energy transition.
Ms. DeGette. It just helps you transition to a cleaner
energy source. Is that right?
Mr. Hardy. Yes.
Ms. DeGette. Great.
Thank you so much, Mr. Chairman. I yield back.
Mr. Rush. The gentlelady yields back.
The Chair now recognizes the gentleman from Michigan, Mr.
Walberg, for 5 minutes.
Mr. Walberg. Thank you, Mr. Chairman. And thanks to the
panel for being with us today.
Mr. Chairman, with all due respect, let me first add to my
colleagues' concerns as well that I am disappointed that at a
time when we are facing rapidly rising energy prices, steep
home heating costs, global supply shortages, and skyrocketing
gas prices, this committee is choosing to prioritize President
Biden's antifossil-fuel agenda over ensuring that we can meet
basic needs of American families during the coming winter
months. And we do have them in Michigan.
Frankly, it is a little mind boggling to me how even after
witnessing what is happening in Europe, where millions of
families won't be able to afford to heat their homes this
winter and are entirely reliant on Russian gas, we are
continuing down this self-destructive path. The Wall Street
Journal put it best earlier this week when it said Putin must
be amazed at his strategic luck.
Now, turning to offshore wind, there seems to be many
benefits to exploring this technology, but I am deeply
concerned with this rush-to-green agenda, which would require
the build out of 30,000 megawatts by 2030. My colleagues have
mentioned some of the issues with rushing this build out. The
one that hits home for me is the impact to recreational and
commercial fishing and its supported livelihoods and
industries. The Great Lakes provides commercial fishermen with
an annual average harvest of nearly 50 million pounds. And in
my district, Lake Erie supports the largest commercial fishery
with its abundance of walleye and yellow perch. I know from
experience.
Mr. Chairman, I would like to enter into the record this
letter from the Responsible Offshore Development Alliance,
RODA, a coalition of fishing industry associations with an
interest in improving the compatibility offshore wind
development with their businesses.
[The information appears at the conclusion of the hearing.]
Mr. Walberg. RODA announced its intent to sue the Biden
administration earlier this week over its failure to comply
with the Outer Continental Shelf Lands Act in its approval of
the Vineyard Wind 1 project, and this letter highlights some of
their concerns.
Mr. Menezes, you have extensive experience examining
offshore wind projects. It seems to me like when the hype
starts building for these types of projects and everyone is
trying to get a piece of the pie, some of the entities that
have legitimate interest are left by the wayside until the last
minute, when it is too late. How do we ensure voices like RODA
are heard and at the appropriate time are given due
consideration?
Mr. Menezes. Excellent question. I know when we established
the consortium we set it up with the intent that all
stakeholders would be heard. You have to hear from everyone.
You have to give everybody a voice. And you have to build in
enough time in the process. Other than that, you end up in
court. And we know that is not necessarily a good outcome.
Mr. Walberg. And that is where it is going right now, as it
appears.
So let me ask you, Mr. Menezes, in their filing the
commercial fishing groups lay out evidence that this Vineyard
Wind project will have severe long-term impacts on commercial
fishing operations. The Army Corps of Engineers even says that,
and I quote, ``due to the placement of turbines, it is likely
the entire 76,000-acre area will be abandoned by fisheries due
to difficulties with navigation.''
I am curious, what kind of processes did you have in place
as Under Secretary of Energy to consider not only the economic
impacts but the safety risks of vessels navigating around these
turbines, particularly during storms and cold weather events
when ice builds up on turbine blades?
And if you have time to respond to Ms. Zichal's statements
that you wish to, take the time.
Mr. Menezes. Well, I was going to say, so our process was
very comprehensive. I was very much interested in offshore
wind. I am an offshore platform guy from Louisiana. So I know
if you are going to have platforms offshore for oil and gas,
you ought to be able to site platforms offshore for wind, just
generally.
So we had a top-to-bottom, thorough evaluation of this. We
had regular meetings with all the stakeholders on this. We
heard--and we knew these were not going to be pleasant
hearings--or meetings, rather--but we heard from the fisheries,
we heard from all the interested parties.
You didn't always like what you heard, but had you to make
sure that you had a fair process for everybody to hear. That is
why we were, frankly, excited about the consortium, because we
thought that, if you will, we can have a federally created and
funded consortium led by a State agency, right? Because the
States have big issues. But to make sure that you had a
process, you had to put them all in the room together. Now, you
can't always reach resolution, to be sure.
And the thing that we really learned and what is stark is
these projects are out of sight and, if you will, out of mind.
So nobody really asked the questions about endangered species.
I mean, do we even have any out there? Do we know? Do we care,
right? I mean it is just this out-of-sight thing.
And so, unfortunately, if you will, for offshore wind,
people get so excited by it initially, by the time you get into
the process and everything, you realize that there are equities
that have to be balanced. And so, that is what the witnesses
have been talking about here today--that we experience there--
--
Mr. Rush. I am requesting the witness bring his answers to
a conclusion.
The Chair----
Mr. Walberg. I yield back.
Mr. Rush. The gentleman yields back.
The Chair now recognizes the gentlelady from California,
Ms. Matsui, for 5 minutes.
Ms. Matsui. Thank you very much, Mr. Chairman. I want to
thank all of the witnesses for being here today. This is an
extremely important subject as we try to figure out what we do
with this existential threat of climate crisis.
Now in my home State of California, we are talking a lot
about extreme weather events, as I believe the rest of the
country, and that has been intensified by climate change, the
threat of longer and more widespread wildfires, in our case,
which deeply affects electricity reliability in the region,
causing rolling blackouts that affect millions of households.
For this reason I co-lead the POWER ON Act, which provides
funding to make our electricity grid more resilient to extreme
weather events. Similarly, supporting the development of
offshore wind in our Nation can help combat the issue of energy
reliability caused by climate change.
I want to ask a question that was talked about a little bit
before, but in more detail. Ms. Zichal, I was interested
regarding the transmission of clean energy, in essence we
always seem to find that to be quite a challenge, but
especially with offshore platforms and things like that. We are
talking, I believe, about a backbone offshore. How would that
work? For instance, as existence right now I would say we have
them in California or on the East Coast.
Ms. Zichal. Thank you for your question.
California, as I said earlier, really has an opportunity to
be a global leader in floating offshore wind. But the fact that
California's waters are so deep that they will require floating
offshore wind turbines rather than the fixed-bottom turbines
that are prevalent in the East Coast, the technologies are
essentially identical except for their foundations.
And, you know, as we look around the world, we see 80
megawatts of floating offshore wind turbines that have been
installed globally. There are three multiturbine floating
projects: one in Scotland, one in Portugal, and one in the U.K.
The New England Aqua Ventus project that is currently being
permitted in the Gulf of Maine will be the first U.S. floating
offshore wind project.
So I do, I think--as we are starting this investment in
offshore wind and beginning to take advantage of this
technology, I think you are going to see not only, you know,
projects that are going to focus on the fixed-bottom turbines,
they are also going to utilize the floating offshore
technology. A lot of that is due to the leadership role that
California and the members there have played in really
prioritizing and getting the Department of the Interior to move
forward with leasing in Humboldt and Morro Bay, so thank you
for your leadership there.
Ms. Matsui. Absolutely.
I wanted to ask Mr. Hardy a question. It is my
understanding that General Electric last year initiated a novel
wind turbine recycling program and that Ørsted has made
a commitment to sustainably recycle its turbines.
Mr. Hardy, how long do wind turbines last? And what is the
protocol for ensuring they are recycled and repurposed?
Additionally, is it possible to repower offshore wind turbines
much as wind turbines are repowered for onshore wind projects?
Mr. Hardy. Yes. Thank you for your question.
Wind turbines are designed to--most wind projects are
designed for a 30-year life, but the technology actually will
allow the turbines to probably run for longer than that. And at
Ørsted, we take this industry very seriously, and we are
the most sustainable energy company in the world. And we have
made a commitment to recycle all the blades in all of our wind
turbine projects from 2030 and beyond. And we have made a
commitment to have a carbon-neutral supply chain by 2040 or
sooner.
And in our caught process, in the process of getting an
approval to build an offshore wind farm, we have very detailed
decommissioning plans that we have to submit to the regulators.
So all of that is accounted for, and of course the steel and
other components in these wind farms will be recycled.
So I--the permitting process in Federal waters is very
robust. It is taking longer than it should, but 2 to 3 years at
least from the time we submit our application and a year or
more ahead of that to do all the studies. And so, a lot of
things go into making sure that these projects are sustainable
out at sea for the long term, including fisheries and mammals
and all kinds of other things.
Ms. Matsui. Well, thank you very much, Mr. Hardy.
And I think I am out of time right now. Thank you very
much.
Mr. Rush. The gentlelady yields back.
The Chair now recognizes the gentleman from South Carolina,
Mr. Duncan, for 5 minutes.
Mr. Duncan. Thank you, Mr. Chairman. And I thank the
panelists for being here today. It is a great hearing. I
actually love the idea of wind and solar. In fact, I have liked
it for a long time.
South Carolina's home to the Clemson and Duke energy
drivetrain facility where they actually test a lot of the
turbines and the torque is put on them and the feasibility of
it. Your company, Ørsted, has agreed to invest a good
bit of money in South Carolina with the Nexans project for
undersea cables for the transmission. It all works. But also
know it is very costly. And I don't know that wind and solar
projects actually are that feasible without a lot of Government
subsidies that we see. So we have got to get beyond where the
Government's supporting this industry.
I remember John Kerry talking about--he is our climate
czar, I think--talking about wind off the coast of Cape Cod a
long time ago. That had to be in the early 2000s. How many wind
turbines are off the coast of Cape Cod? None, zero. How many
are off the coast of Malibu or Debby-Do in South Carolina,
Hilton Head? None. I think we have seven off the coast of Rhode
Island. We may see them. But I would ask anyone that is really
interested in seeing wind turbines off the coast of their home
State to go to Iowa or the panhandle of Texas.
And don't just go during the daytime, when you see all
those turbines out there and it looks real groovy because they
are spinning and they are creating energy. Go at night. Go at
night because what you are going to see is this massive red
blob of safety lights that are on top of those turbines to keep
the airplanes from flying into them. And I am not just talking
about one. There are hundreds and hundreds of turbines, all
blinking in unison, big red lights, and you tell me you want
that off the coast of New Jersey, Mr. Chairman of the full
committee. Tell me you want that off the coast of Miami or
Malibu. You don't.
So there is an issue there that is aesthetics that is often
left out of this debate. I will go back to what I was saying: W
don't have them off the coast of Cape Cod because John Kerry
and his crowd didn't want them ultimately within sight of land.
We have this debate about offshore drilling platforms, Mr.
Menezes, which I support. We talk about South Carolina and we
were trying to work on getting some energy development out
there. People didn't want to see those platforms off the coast.
But what we were talking about was well over the visible
horizon. You wouldn't see them unless you got in a boat. And if
you got in a boat taking a fishing run, go out there and see
them and fish.
The same thing is going happen with wind turbines. I think
there are great fisheries, and there are some benefits for it.
But the left keeps holding up Europe as a model and an example
of, you know, clean energy and wind turbines offshore energy
development. They are still as reliant on coal today as they
were when they put those turbines off the coast, because coal
and natural gas have to supplement it.
And while I am talking about natural gas, let me tell you,
we have the ability in this country to export natural gas to
Europe to our friends to lesson their dependence on foreign
sources of energy. We don't. We don't because now the President
has green-lighted Nord Stream 2 pipeline, which is coming from
where? It is coming from Russia. They are bringing Russian gas
to Europe.
Europe is now reliant on Russia and Vladimir Putin to bring
gas to Europe to meet their energy needs. Energy policy in
Europe is a disaster. They are relying on Russian gas, which is
dirtier. It burns dirtier and puts more emissions in the
atmosphere that we don't like. When we talk about climate
change and other things, Russian gas is dirty.
We can't just talk about Europe burning Russian gas,
because New England is burning Russian gas too. We won't run a
pipeline from Bill Johnson's district in western Pennsylvania,
the Marcellus Shale, right up to New England. We won't run it
because they don't like pipelines. They kill pipelines. This
administration kills pipelines in this country. They don't like
pipelines in New England to bring cleaner-burning, U.S.-
produced natural gas, which we have an abundance of. But they
will bring in an LNG ship from Russia to Boston's harbor and
export--or import Russian LNG and burn dirty Russian gas.
Who sells that gas? Vladimir Putin sells that gas. And he
and his oligarchs end up benefiting from it. The hypocrisy is
glaring on this when we have the gas here and we are trying to
put wind turbines offshore and can't do it without government
subsidies. It is unbelievable.
You know, I was on the Natural Resources Committee, and I
filed some bills that deal with Migratory Bird Treaty Act and
endangered species, because condors and golden eagles and
migratory birds of all sort, not just waterfowl, are killed
every year by wind turbines. But we ignore that dirty fact. And
we will expedite wind turbine permits to allow wind farms to be
built in this country. And we will slow walk oil and gas
development, stuff that works. And I got vilified because I
just wanted to treat the wind industry fairly with the
Migratory Bird Treaty Act, but I got vilified by the outdoor
environmental community.
So Mr. Chairman, I like wind. I hope we get this. I don't
mind seeing it offshore, but I don't have any property on the
coast. There's a lot of aesthetic things we have to work out
here. We have to do away with the subsidies and make sure that
it is economically feasible. And we also have to factor into
this that New England is burning Russian gas and won't put wind
turbines off their----
Mr. Rush. The gentleman's time has expired.
Mr. Duncan. It is crazy. I yield back.
Mr. Rush. The gentleman's time has expired.
The Chair now recognizes Ms. Castor of Florida for 5
minutes.
Ms. Castor. Well, thank you, Mr. Chairman, for calling the
hearing.
You know, anyone who is concerned about the rising cost and
risks on American families and businesses should be pressing
for ambitious investments in clean energy and public-private
partnerships with clean energy companies.
Solar power and wind power is a lot less expensive, has a
much-reduced impact on the air we breathe. And when it comes to
biodiversity, we have the biodiversity crisis. And unless we
tackle climate change, that biodiversity crisis is going to get
a whole lot worse.
Talk about rising costs, because climate just this year we
have had about 20 climate-fueled disasters. We have paid out
over $109 billion already. So don't forget that part of the
equation either.
The good news is that here in America we are blessed with
abundant offshore wind resources on the Atlantic Coast, off the
Atlantic Coast and the Pacific Coast. These resources can help
bring lower-cost, clean energy to millions of Americans. But we
do have to build up the supply chains, as the witnesses have
testified today.
One element of it, I was excited to hear from Ørsted
that a lot of the offshore vessels you are going to need are
going to be built in shipyards around the country, including
Port Tampa Bay. Is that still correct, Mr. Hardy?
Mr. Hardy. Yes, it is.
Ms. Castor. Great.
Well, a couple of years ago, Congresswoman Elaine Luria and
Bobby Scott and Don McEachin, they invited me to Norfolk, to
the Port of Virginia. And it was so interesting to see the port
executives there, their excitement for the potential to grow
their port businesses and jobs there because they really saw
themselves as the place where the wind turbines could be
assembled and the vessels could help build, especially in the
mid-Atlantic, the new offshore wind areas.
How is that going in that area? And then what do you see--
what do we need do to improve our port infrastructure around
the country as we increase the supply chains and build out?
Mr. Hardy. Yes. There are a lot of big projects happening
along the East Coast with respect to ports. We are involved in
a project in Rhode Island, in Providence. We are cofunding in a
kind of a public-private partnership with the State of
Connecticut. The New London pier. We are making investments in
New Jersey, at Paulsboro in the New Jersey wind port, in the
Baltimore harbor, Tradepoint Atlantic making investments there
for staging offshore wind. And some of our competitors or
partners in the offshore wind space are making similar
investments in other States. So there is quite a bit of
infrastructure, one-time costs going into building up the
capability of this industry.
And I think it is important to recognize that, you know,
this is a long-term play, a long-term solution. And we are
making investments now that will make us competitive and less
reliant on carbon fuels in the long term. We are not going to
solve the 2021 winter crisis with offshore wind, but we might
prevent a crisis in 2026 or 2029 if we invest now.
Ms. Castor. Thank you.
So you all have recommended a number of things already,
extending tax credits for offshore wind. Ms. Zichal, you
favored that, correct?
Ms. Zichal. Yes.
Ms. Castor. Along with reauthorizing the--expanding the DOE
research and development demonstration of offshore wind
technologies. Is that right?
Ms. Zichal. That is correct.
Ms. Castor. Developing a national offshore wind
transmission plan?
Ms. Zichal. Yes.
Ms. Castor. Ensuring the U.S. Territories that don't get a
lot of attention, the Territories can take advantage of the
offshore wind. Is that another recommendation?
Ms. Zichal. Yes.
Ms. Castor. We talked about upgrading ports, coordinating
the clean energy training programs to strengthen the diversity
and inclusivity of the workforce. Is the clean energy and
offshore wind industries--are they committed to doing that?
Ms. Zichal. Yes.
Ms. Castor. And then encouraging the Department of the
Interior to take a regional approach to offshore wind leasing
that minimizes the environmental impact. You discussed that a
little bit already.
Ms. Zichal. Yes, absolutely.
Ms. Castor. That is terrific, because that lines up with
the major report issued last year from the Select Committee on
the Climate Crisis, where we surveyed businesses and
manufacturers, labor leaders all across America on what is our
plan of action. And so I am glad that they are aligned there.
In addition, I want to point out, I totally agree with you
on the grid interconnections. And if anyone wants to move that
forward, there is a bill 4027 of the Efficient Grid
Interconnection Act that should help folks. But it has been
good to see the great interest in this hearing today and good
clean offshore wind resources.
So thank you, Mr. Chairman. I yield back.
Mr. Rush. The gentlelady yields back.
The Chair now recognizes the gentleman from Alabama, Mr.
Palmer, for 5 minutes.
Mr. Palmer. I thank chairman.
Mr. Menezes, based on--first of all, I want to address a
comment by Mr. Hardy that the lifecycle for a turbine is 30
years, when I think the functional lifecycle for a wind turbine
is about 20. Well, I have got the reports here that would
indicate otherwise. And I am not surprised that you would
disagree. You are going to defend your industry.
Mr. Menezes, based on what we are seeing from Europe, these
massive offshore turbines, along that same line, there is a
report from the Manhattan Institute that says after about 10
years the average output of these newer offshore wind turbines
was just over half of the initial output. We are already
struggling with the disposing of current wind turbine blades to
the point that we have resorted to burying them in landfills.
And I have got an article here with a picture of a landfill in
Wyoming, Mr. Chairman, I would like to enter into the record,
without objection.
Mr. Rush. So moved.
Mr. Palmer. Thanks, sir.
Mr. Rush. Without objection, rather.
[The information appears at the conclusion of the hearing.]
Mr. Palmer. If we need to replace these machines every 10
to 15 years, is offshore wind really as environmentally
friendly as advertised?
Mr. Menezes. Is that directed to me?
Mr. Palmer. Yes, sir.
Mr. Menezes. We saw this issue for some few years ago. And
so, I know we turned our labs loose to try to figure this stuff
out because it was filling up in our landfills. And we made
special trips out there to NREL in particular to see if they
could help, you know, with the problem. But it was a growing
problem.
Mr. Palmer. Yes. Well, when you talk about losing the
output at the rate that has been reported, that also increases
the cost of generating power through wind turbines. Isn't that
also true, Mr.----
Mr. Menezes. Absolutely.
Mr. Palmer. Yes. The reason I bring this up is that we are
already experiencing major energy poverty in the United States
and particularly in Europe, as Europe has moved, more and more
to renewables, they have seen a major increase in excess winter
deaths because of energy policy.
The household energy utility costs in Europe are way higher
than the United States. And Germany has, I think, maybe the
highest in the European Union. Great Britain is right behind
them. And literally people are having to make decisions about
how much money they can spend to keep their homes warm in the
wintertime versus what they can spend on food and medicine.
Isn't this--I ask, should the people who support renewable
energy just wholesale, should those deaths we considered
collateral damage?
Mr. Menezes. Well, it is certainly one way to look at it. I
will tell you one of the reasons for the high cost in Europe
were they moved very early on high feed-in tariffs to build
renewables. And they are still stuck with those higher-than-
market costs.
So the citizens of Europe are burdened higher costs because
of something the policymakers--decisions they made years ago,
they are still bearing the high costs of feed-in tariffs to
build renewables.
Mr. Palmer. And it is interesting that they are having to
back up these renewable energies, particularly the wind
turbines for natural gas and now coal, because of what happened
in the North Sea recently. We saw when those shut down or quit
providing adequate output, they had to resort to natural gas.
Natural gas prices spiked, which makes an energy poverty issue
even greater. And they then reverted back to coal.
And I am not against renewables, don't get me wrong. I
worked for international industry companies, worked in
environmental systems. I get it in terms of what we need to do.
But I grew up dirt poor. I mean, we heated our house with a
coal heater that sat in the kitchen with a pipe that went
outside through the wall. So I understand what is like to live
in an inadequately heated home. There are millions of Americans
that are suffering that as well. And this headlong rush into
renewables is not only going to cost us a lot of money, it is
going to cost us a lot of dead people. And I think that needs
to be a major consideration. Would you agree, Mr. Menezes?
Mr. Menezes. I think it is a major concern we should
consider.
Mr. Palmer. I agree with you. And I would also like to
point out that the lifecycle for natural gas production is
about 60 years, and for nuclear is 80 years. And with the onset
of Next Gen nuclear, which is being pushed by a number of
people, including Bill Gates, I think the lifecycle on that end
would be much longer and in terms of emissions and greenhouse
gases is zero.
Mr. Chairman, I yield back.
Mr. Rush. The gentleman yields back.
The Chair now recognizes the gentleman from----
Mr. Palmer. Mr. Chairman, I failed to ask permission to
enter one other document into the record, if I may, without
objection.
Mr. Rush. So ordered.
Mr. Palmer. Thank you.
[The information appears at the conclusion of the hearing.]
Mr. Rush. Mr. Schrader, you are recognized for 5 minutes.
Mr. Schrader. Thank you very much, Mr. Chairman. I
appreciate this panel and this hearing today.
A lot of conflicts, so I couldn't sit in the whole time.
Welcome, Mr. Hardy. Thank you for being here, an Oregonian by
connection, at the very least, for quite some time. And I look
forward to you coming back at some point. That would be very
good.
Mr. Hardy. One of my 11 States, yes.
Mr. Schrader. To Ms. Zichal and Mr. Hardy, actually a lot
of discussion in my home State of Oregon about offshore wind.
And some excitement and some concern at the same time.
My local fishermen have engaged me and BOEM and a lot of
local partners along the coast with the process and some of the
things that have gone on. We have had some folks in the wave
energy space also try and acknowledge opportunities there. And
the concern has become not all through the fault of BOEM,
because they are a reactive agency. They basically, if someone
applies for a lease, they then go through their processes and
try it and do the right thing as per their regulatory framework
that is established.
But there is no opportunity for either Vestas or whoever to
get some certainty up front about, is this a suitable area for
our leasing? What does the local community think about it? And
from my standpoint, more importantly, what do my fishermen and
fisherwomen think about it? That is a big deal. So it is really
important that, I think, we develop some sort of process.
Maybe you have had experience with your leases in other
parts of the country and your projects in other parts of the
country to how we go about engaging the fishermen, engaging the
local communities that aren't necessarily governmental
agencies. BOEM's framework, you have to be a governmental
agency to get on any of the task force. So how should we build
opportunity in for the local input on the Pacific Coast?
Ms. Zichal and maybe Mr. Hardy and Mr. Menezes.
Ms. Zichal. First, thank you for your question.
For starters, I think as an industry we absolutely believe
that fisheries and offshore winds can coexist. And BOEM's
current offshore winds leasing process does consider other uses
when they are leasing and permitting offshore wind projects,
and those do include commercial and recreational fisheries. It
is not to say that it is the perfect process, and it is
certainly one I think we as an industry would like to engage
with you and discuss further.
But from what we have seen to date, the BOEM process itself
does allow for the input from fishing communities. And it also
allows us to think differently about and to hear from the
industry directly. You know, are there areas that we should
think differently about turbine spacing and layouts and make
modifications to that? And in fact, it is not all that
different from what we do when we are doing onshore wind and
thinking about what we were talking about earlier, migratory
birds or, you know, when you are trying to site a new oil and
gas facility and dealing with a lesser prairie chicken or
another endangered species.
There are existing programs within the agencies to make
sure that there is the right feedback mechanism. Do we have it
perfect? Probably not. But it is something we would love an
opportunity to work with you on.
Mr. Schrader. Mr. Hardy?
Mr. Hardy. Yes. I agree with most or all of what Ms. Zichal
said. I think that the current programs do--the commercial
fishermen and recreational fishermen do have a voice. I think
it is a misstatement to say they don't. I think companies like
Ørsted, we have a marine affairs organization that is
10-plus people that are dedicated to this, plus third-party
consultants that we hire. We talk to recreational and
commercial fishers on all of our projects.
As Ms. Zichal alluded to, we have made compromises already
on layouts to create a larger one by 1 nautical square mile. If
we were purely doing this in our own interest, we would have
those turbines kind of more densely packed, but we opened up
the design so that the commercial fishermen could fish within
the wind farms and could transit them in a safe manner. We have
also come up with other compensatory programs for the fishermen
for lost gear, for lost catch, et cetera. And we are working
with NOAA's fishery data to try to coexist with the commercial
fishermen. So it is a part of our program.
Mr. Schrader. So is there some of the things that we would
want to engage with and make conditions of approval perhaps as
we get into that, where there is an opportunity to have those
discussions?
Mr. Hardy. Just quickly, I think if we could have
prealigned programs where the fisheries knew what they would
get and we knew what it would cost us, that would be helpful.
Right now it is quite bilateral.
Mr. Schrader. Mr. Menezes, do you have any----
Mr. Menezes. Well thank you for the question. Again while
at the Department we----
Mr. Rush. The gentleman's time has expired. The gentleman's
time has expired.
Mr. Schrader. Oh, my bad. Sorry.
Mr. Menezes. I apologize.
Mr. Schrader. Thank you very much.
Mr. Rush. The Chair now recognizes the gentlelady from
Arizona, Mrs. Lesko, for 5 minutes.
Mrs. Lesko. Thank you, Mr. Chairman. And thank you for all
of those who are testifying today.
My goal as a Congresswoman is to provide the most reliable
and affordable energy to my constituents, and also to increase
jobs in the United States. And I believe in an all-of-the-above
energy policy: Whatever works, whatever's reliable, whatever's
affordable, I don't really care what the source is, as long as
that is what happens in the end for our constituents.
I have three questions, all for Mr. Menezes. The first one
is, as you know, the Biden administration is planning to have
30,000 megawatts of offshore wind energy, which I calculate
would need 3,000 offshore wind turbines by 2030. That is just 9
years from now. Do you think that is realistic?
Mr. Menezes. Based on my own personal experience, and what
I think I have even heard today, I do not believe it is
realistic.
Mrs. Lesko. Thank you.
My second question to you, sir, is in March of this year we
had testimony from former Secretary of Energy Ernest Moniz. And
in that I asked him a question and he answered that each
offshore wind turbine takes 1 ton of rare earth mineral. And I
assume that he was talking about the neodymium that is used in
the maintenance for the wind turbines. My understanding is that
most of those wind turbine magnets are made in China. Is that
your belief?
And I also have a followup question. I just saw recently,
September 24, the Biden administration actually is doing an
investigation into the effects of imports of neodymium magnets
on U.S. national security, because so many of them are produced
offshore.
So my next question is, how fast, assuming the United
States decided to start making them on our own and processing
the material, how fast could we do that? Could we do it in the
9-year time period?
Mr. Menezes. Thank you for that. That is very challenging
question. I will tell you that I am not entirely sure if the
magnets themselves are made in China, but certainly the rare
earths are produced in China. And what we have seen is we have
pushed offshore lot of the critical materials being made in
other countries. It was something that the past administration
was comfortable with, and so other countries really built that
up.
We would have to build up, you know, the ability to be able
to process to first mine to the extent that they need to be
mined, to the extent that we can get them out of coal ash,
there are rare earth elements there. We need processes in
place, and that is going to take a long time just to get the
permitting in place.
In my testimony, I talked about it takes 7 years just to
get a battery storage facility on a solar plant permitted in
California. So it will be a very difficult stretch. It is a
goal we should all seek, however.
I think that it is important for national security that we
realize that we have to produce our own critical minerals and
materials. And I earlier gave you the facts about how we are
overdependent on imports for this for our own national security
reasons in addition for breaking technology like these magnets
that power those high-powered offshore turbines.
Mrs. Lesko. Well, I agree with you, Mr. Menezes. And I also
think that James Strong would probably appreciate the jobs
coming to the United States instead of our foreign countries
and often our adversaries.
My last question is, do you think this rush to push
offshore wind turbines--which I am not opposed to, I am just
talking about the timing of it and all the incentives, which
will push away other energy sources--will that lead to
unreliability, possibly unreliability and higher costs for our
constituents in America?
Mr. Menezes. So what the witnesses have been talking about
today is the fact that we are going to have these offshore wind
turbines offshore. We are going to have to have basically
gathering lines to come in and funnel in, and certain, you
know, some will be high-voltage--not all--undersea cables. They
have to tie into our existing bulk power system in locations.
You simply not--you can't connect every single turbine out
there to come into the bulk power system, and we don't have any
offshore bulk power system lines out there right now.
So we are talking about basic wires. We have got to feed
in. We have got to figure out where we can do it, and it is
where the interconnection comes in, is where you want to make
sure that the grid is sufficiently flexible to take what is
going to be a large amount of megawatts, if all of this gets
built, into our grid. So that is going to be shoving off a lot
of existing power right now. And so we have to make sure that
we get all the engineers together and we make sure that we have
all the grid operators there, in addition to having the
policies in place to get these things in at the right place so
that we can actually handle what is going to be a large amount
of offshore wind.
Mr. Rush. The gentlelady's time has expired.
The Chair now recognizes the gentlelady from New Hampshire,
Ms. Kuster, for 5 minutes.
Ms. Kuster. Thank you so much, Mr. Chairman, for hosting
this important hearing.
Offshore wind is good for workers, it is good for the
economy, and it is especially good for our planet. Meeting
President Biden's goal of creating 30 gigawatts of offshore
wind power by 2030 could create more than 80,000 good-paying
jobs for workers, generate $25 billion annually in economic
output, and all while reducing our carbon emissions and saving
our planet. So that is just the first step.
According to research by Environment America, offshore wind
could more than meet the New England region's future needs.
Presently, offshore wind makes up a tiny fraction of power
generation in New England. Today, Granite Staters are bracing
themselves for another cold winter, which likely will bring
unusually expensive electricity and heating bills due to
increased natural gas prices.
During the coldest days of the year in New England, natural
gas supplies constrain because families need extra gas to heat
their homes and power generators need extra gas to generate
electricity. So this means natural gas power plants pay a
premium for gas that they need to generate power. Ultimately,
these costs get passed along to ratepayers in higher
electricity bills. And to make matters worse, the North
American Electricity Reliability Commission has warned of
potential winter outages in New England due to constraints on
natural gas supply.
So, Mr. Hardy, I want to emphasize the point raised by my
colleague, Ms. DeGette. Can you operate offshore wind turbines
in cold weather conditions when natural gas supplies in New
England are constrained?
Mr. Hardy. Absolutely. And, in fact, in the winter months,
as I explained earlier, is when the wind blows the hardest and
we will be able to produce the most electricity.
Ms. Kuster. Thank you. And as a followup, since the source
of fuel for wind turbines is free, should New England
ratepayers expect to pay less for electricity as offshore wind
is built out in our region?
Mr. Hardy. Yes. Maybe I just take 1 second and explain the
economics of an offshore wind farm. We commit to a price and we
sell that power up front, and then that price is locked in. So
we take the risk. If the turbines aren't as reliable or the
wind doesn't blow as much, that doesn't affect the ratepayers.
We are taking the risk. And we have an incentive, of course, to
sell as much power as possible, so we are motivated to keep the
turbines as reliable and high-performing as possible.
So I think that the answer to your question is that, you
know, this should reduce consumers' costs for power and heating
in the winters in New England.
Ms. Kuster. Great.
Now, one of the big challenges we have heard about today
are interconnection queues or developing the infrastructure
necessary to plug offshore wind farms into the electricity
transmission system. I think there are two solutions. First,
plug in at existing interconnection points, and that could
lower costs for ratepayers and save time required to build new
transmission infrastructure. My office has heard from fossil
power generators that want to give up their interconnection
point but don't currently have a business case for doing so.
Ms. Zichal, should FERC consider market structures that
would help retiring fossil fuel power generators turn over
their interconnection point to offshore wind?
Ms. Zichal. Thank you for your question. I think I would
start by saying that we at American Clean Power Association are
happy that the FERC has taken the first step towards reforming
its transmission planning and interconnection rules, and we
feel that this is going to go a long way toward ensuring that
generators can most effectively integrate onto the grid.
Part of the long-term solution is to plan for the upgrades
needed to integrate future generation as part of a transmission
system rather than just relying on individual generators to
fund major upgrades that everyone benefits from.
So, bottom line, I think there is more work to do, but the
decisions by the FERC initially are moving us in the right
direction.
Ms. Kuster. So I think you anticipated my second choice,
the Federal Government to take a preplanned approach to
interconnection, building out the necessary underwater
transmission infrastructure ahead of new offshore wind
development. Analysis by the Brattle Group on the New York
offshore wind market found this preplanned approach could lower
costs and risks associated with developing new offshore.
My time is out, but I will follow up. And if you have any
more information for the record on that, I would be very
grateful. Thank you.
And, with that, Mr. Chairman, I yield back.
Mr. Rush. The gentlelady yields back.
The Chair now recognizes the gentleman from North Dakota,
Mr. Armstrong, for 5 minutes.
Mr. Armstrong. Thank you, Mr. Chairman.
And being from the geographic center of North America,
offshore energy is something that doesn't necessarily directly
relate to my constituents. However, cheap, reliable, and
affordable energy in the winter is obviously something we care
very much about.
And I appreciate the eagerness of my colleagues to be
engaged in development of domestic energy, but I have to point
out once again that we are not having an honest conversation
about the timelines for the massive deployment of intermittent
distributed generation and the numerous legal, bureaucratic,
and supply chain issues that are going to complicate this
process.
We know that President Biden announced a goal of deploying
30 gigawatts of offshore wind by 2030, and on paper and a
Tweet, that may seem attainable. However, once you break it
down, 30 gigawatts is a massive undertaking that the current
system is not designed to handle.
The only operational offshore wind farm in the U.S. is the
Block Island Wind Farm. It is a 30-megawatt, 5-turbine project
that took years to design and plan and construct, and that is
just one project. And even assuming the second one will take
less time than the first one, if we put that in perspective, to
scale up the Block Island project to the levels pushed by
President Biden, you would need a thousand projects of the same
size, or roughly 5,000 new turbines. All of this would need to
be completed within the next 8 years, meaning that we would
have to build more than 1.5 new offshore turbines every day
starting on January 1.
As if that is not enough of a challenge, simply based on
the availability of materials, labor, installation vessels, and
port infrastructure, there is no consideration about how the
transmission will be developed and numerous obstacles,
including local opposition, siting concerns, activist
environmental litigation, and never-ending permitting process
for all energy projects. Even if you account for technological
improvement and increased efficiency, the fact is that this
committee continues to ignore the nuts and bolts of deploying
any form of generation or transmission, let alone distributed
energy sources.
So, Mr. Menezes, in your testimony, you touched on the
failed Cape Wind project and recent actions in Maine to ban
offshore wind in State waters. But these aren't the only
examples of local communities rejecting utilitarian
infrastructure, are they?
Mr. Menezes. No. One was old and one was new, so that I
kind of framed it that way.
Mr. Armstrong. And whether it is a wind project in Thousand
Islands in New York or a transmission line supplying
electricity generated from a hydropower project in Canada,
people generally don't like massive energy infrastructure in
their back yards, particularly wealthy communities who have
houses on the beach or the coast.
So do you think in order to meet President Biden's goal of
deploying 30 gigawatts offshore in 9 years is feasible, without
substantially curtailing the ability of State, local
governments, and individuals to object to generation and
transmission projects?
Mr. Menezes. I do not believe it is feasible. It is just
numbers that they put up.
Mr. Armstrong. What about litigation reform? I mean, Ms.
Zichal, you mentioned lesser prairie chicken. Well, if you care
about the bifurcation of the habitat, you don't care what is
bifurcating the habitat. You just care that it is being
bifurcated. And I have said this continuously, if you think it
is hard to put an oil and gas pipeline in eastern Montana, try
putting a transmission line in a highly--in a densely pop--we
have taught--the oil and gas industry have taught people how to
slow down these projects, and, I think, more importantly, you
don't have to stop them at the place they occur. Eventually
along that line somewhere, there is a bottleneck, and you don't
have to beat it in any particular spot; You just have to beat
it in one spot.
So I guess that would be the same question. Do you think we
can deploy these types of infrastructure projects without
having significant litigation reform, one, and, two,
significantly curtailing local municipalities' ability to
stop--or to weigh in on these projects?
Ms. Zichal. Well, I would say where you see roadblocks and
impossibilities because of regulatory hurdles, I see
opportunity. I think that we have tremendous opportunity in
this country to harness the Saudi Arabia of winds, create jobs,
and drive down greenhouse gas emissions.
Mr. Armstrong. I don't disagree with any of that, but--and
I am going to go to Mr. Menezes. I was a very big fan of
President Trump's 57 nationwide permits legislation, which
continually gets opposed. I just don't think we can do it
without significant regulatory and litigation reform. And I
think we need to be honest with the American people about what
the problems are with getting these--listen, it doesn't matter
if it is a gas pipeline, it doesn't matter if it is a
transmission line, it doesn't matter what the--it can be a
cloverleaf for a highway. If we don't solve this problem, we
continue to have these hearings and we continue to put these
pie-in-the-sky deadlines in place that just simply are
unattainable, and we have to deal with the litigation and
permitting reform.
And, with that, I would just let you close with my exactly
zero seconds left.
Mr. Menezes. Thank you very much for the question.
Mr. Rush. The gentleman's time has expired.
The Chair now recognizes the gentlelady from California,
Ms. Barragan, for 5 minutes.
Ms. Barragan. Thank you, Chairman Rush, for holding this
important hearing on offshore wind, which has great potential
to help our country reach 100 percent clean energy while
creating good-paying union jobs along our coast.
Ms. Zichal, one barrier to offshore wind is the lengthy
amount of time it is expected to take to build an offshore wind
farm, which could be 5 to 10 years. The climate crisis means we
must move as fast as possible. What are the most meaningful
steps the Federal Government can take to shorten this length of
time so we can connect the clean energy to our grid faster?
Ms. Zichal. Great. Thank you for your question. The
encouraging thing is I think between the steps that have been
taken by the Biden administration plus the good legislation
that has been proposed in the bipartisan infrastructure
framework as well as the Build Back Better legislation, we have
got the core components there. And, you know, first and
foremost is we just as an industry need certainty and
predictability in the permitting process.
Second, you know, we--the tax credits and the direct-pay
options are crucially important as we think about the future
and where we need to go.
And the last piece of this, I think, is around the
manufacturing--the domestic manufacturing incentives. We have
spent a lot of time today talking about the jobs and the
opportunities that we have to grow this industry and create
jobs, and those manufacturing credits, I think, would be very
crucial to us, not only being able to build these projects but
having a higher and higher degree of domestic content in the
projects themselves.
Ms. Barragan. Thank you very much.
Mr. Hardy, while offshore wind won't cause an oil spill
like we are living with in southern California, it will expand
maritime activity at our ports, oceans, and coastal
communities. How are you working with communities to advance
environmental justice and address frontline community impacts?
Mr. Hardy. Yes. Thank you. As I have said a number of
times, we are the world's leader, and we are trying to build
this industry sustainable and for the long term. And so when we
think about, you know, what we need to do to stand up this
industry in the U.S., we think about supply chain, we think
about training and we think about the port infrastructure and
we think about the workers that we will need. And so we have
got specific initiatives to bring the opportunities to all
Americans to participate in this industry.
And one specific example of something that we did in New
Jersey, we invested $11 million in Zeem Solutions, which is an
electric truck initiative, to convert drayage trucks at the
Port of Newark into electric trucks and to build a charging
station for those trucks with offshore wind.
The communities around the Port of Newark are particularly
susceptible to the pollution, just like many other communities
in port locations. So we think that that could be used as a
model for other initiatives that we could do both on the East
Coast and West Coast.
Ms. Barragan. Well, thank you. And thanks for bringing that
up in particular. I represent the Port of Los Angeles, so
anything we can do around the ports is something important to
me. I am a firm believer that offshore wind will bring clean
power to our coastal communities, reducing local air pollution
from burning fossil fuels in California and other coastal
States.
Ms. Zichal, as we look to develop offshore wind off the
West Coast, what kind of port infrastructure upgrades are
needed at our West Coast ports? I know you touched a little bit
about the East Coast, so I wanted to get your input about the
West Coast ports. And will this be an additional source of job
creation?
Ms. Zichal. So, for starters, I think there is great
opportunity for port revitalization, and it very well fits
within the broader goals of, you know, a just and fair energy
transition. You know, the kinds of investments in port
communities, whether you are on the East or West Coast--and
even though we are talking about a different kind of technology
for the West Coast, I still think you are going to see a lot of
those same opportunities for port revitalization and the same
kind of investments Mr. Hardy was speaking to.
And not only, you know, is that great from an economic
perspective, but these port communities for a long time have
been the underserved communities that have been struggling with
some of the worst air pollution challenges. And with these
opportunities, not only are we addressing the economic piece of
the puzzle, we are also addressing the environmental and public
health components as well.
Ms. Barragan. Thank you.
And right on time, Mr. Chairman, I yield back.
Mr. Rush. The gentlelady yields back.
The Chair now recognizes the gentleman from the great State
of Georgia, Mr. Carter, for 5 minutes.
Mr. Carter, you are recognized for 5 minutes.
The gentleman doesn't respond. The Chair now recognizes the
gentleman from Pennsylvania, Mr. Joyce, for 5 minutes.
Mr. Upton. So, Mr. Chairman, as you know, we are in a
series of votes. Dr. Joyce is actually en route back from the
floor back to here, so he should be here in about 2 minutes. He
walks fast.
Mr. Rush. Well, I am going to proceed. The gentlelady from
Delaware, Ms. Blunt Rochester, is recognized for 5 minutes.
Ms. Blunt Rochester. Thank you, Mr. Chairman. And thank you
so much to the witnesses and our Ranking Member Upton.
The National Renewable Energy Laboratory calculated that
the offshore wind industry could provide over 2,000 gigawatts
of energy a year. That is almost double the amount of energy
our country uses annually. Additionally, a recent University of
Delaware report estimates that the offshore wind industry has
the capacity to generate up to $109 billion of economic
development over the next 10 years.
Not only does the offshore wind industry have the potential
to address the ongoing crisis, but it also has the potential to
create good-paying union jobs, health--quality of health, and a
more equitable economy.
This February, I introduced H.R. 862, the Climate Action
Planning for Ports Act of 2021, which would reduce the impacts
of pollution around our Nation's ports.
As Ms. Barragan mentioned, ports are often adjacent to low-
income communities and communities of color, groups that
disproportionately bear the brunt of pollution and climate
impacts.
And so I do want to follow up a little bit more with Mr.
Hardy and Ms. Zichal. I wanted to come at it from the benefits
for the communities, and if we could speak a little bit about
that. And also I wanted to touch on the chairman's comment
about diversifying the industry as well. I know the question
was asked, and the answers were kind of vague, and I would love
to hear from a union perspective as well as you, Mr. Hardy and
Ms. Zichal.
So I will turn it to you, Mr. Hardy, if you could just talk
about ports but also about diversifying the industry.
Mr. Hardy. Yes. Thank you for your leadership on this
important topic.
As a company ranked three times the world's most
sustainable energy company, we share your values. As I said
many times, we are trying to build this industry in a
sustainable way, and the intersection between port communities
and offshore wind presents an opportunity for positive change.
As I mentioned just in the answer to the last conversation, we
have made a big investment, $11 million investment with Zeem in
the Port of Newark, but not just to train--not just to
transition those drayage trucks into electric but also to
create training and certification programs and job
opportunities for the local residents of the Newark area and
the port communities.
Likewise, in Maryland we just announced a zero-emission
operation and maintenance hub, where we will host our CTVs, our
crew transport vessels, to service our Skipjack 1 project. And
again, we will be working there to train folks to enter this
sector and we will be targeting folks from disadvantaged
communities. And we have set aside specific funds for
attracting and recruiting people into this industry, and we are
very committed to trying to make it an equitable transition.
Ms. Blunt Rochester. I would love to follow up with you as
well as Mr. Strong. I think the issue of affordability,
reliability, and equity are all intertwined in this
conversation.
And, Ms. Zichal, earlier this month I introduced two
bipartisan pieces of legislation with Representatives
Malinowski and Kinzinger, H.R. 5495, the Building Resilient
Supply Chains Act, and H.R. 5492, the Manufacturing Economy and
National Security Act. I could speak on and on about what we
hope to accomplish with that, but I want to ask you, if we
don't swiftly act to promote the domestic production of wind
turbines, how will that impact our global competitiveness?
Ms. Zichal. Well, for starters, I think that a lot of the
policies that are currently being discussed are going to help
solve for these things, whether that is the manufacturing tax
credits or the requirements around domestic content. I think a
lot of--there are a lot of good ideas that are currently out
there in the mix, and hopefully before the end of the year we
will get across the finish line.
At the same time, what I think is so important about this
opportunity is this is the first--I have been working on
climate policy for two decades, and this is the first time we
have actually been talking about not just an energy transition
but an energy and justice, you know, energy and environmental
justice transition. This is something our industry takes very,
very seriously. We spend a lot of time one-on-one with our
board members looking at what our potential best practices
across the industry rather than just by a company-by-company
basis. So I think there is great room for improvement, and it
is something we would love to work together on.
Ms. Blunt Rochester. I would love to work together with you
on that as well, and I thank you.
And I yield back 1 second.
Mr. Rush. The gentlelady does yield back.
The Chair now recognizes the gentleman from Georgia, Mr.
Carter, for 5 minutes.
There is no response from Mr. Carter.
Mr. Joyce from Pennsylvania is recognized for 5 minutes.
Mr. Joyce. First, I want to thank Chairman Rush for
allowing me to waive on to this subcommittee hearing today, and
thank all of you witnesses for appearing.
As we begin this next decade, American energy needs will
only continue to grow. Consistent and stable energy prices are
critical to our economy, with manufacturing using over 30
percent of the Nation's power and every American depending on
the grid to heat and to cool their homes.
As we have heard today, American energy prices are the
highest that they have been for years. Any American who goes to
the pump or looks at their utility bill has already discovered
this very sad reality. That is why it is vital for our Nation
and our constituents to have access to all available energy
sources--all. Offshore wind is not a source that can supply our
businesses and power our homes.
By building a grid that is dependent on wind power, we
leave ourselves at the mercy of Mother Nature. We have seen
this. We have seen it in the United Kingdom, where their
overreliance on wind for 25 percent of their power has led to
volatile prices when wind output dropped by over two-thirds.
Fortunately, they had the wherewithal to restart a coal power
plant to fill that needed gap. There is no reason why we should
allow this sort of situation to ever occur in the United
States.
My first question is for you, Mr. Menezes. As the Biden
administration looks to achieve its goal of deploying 30,000
megawatts of offshore wind power by 2030, just how many
windmills are we talking about?
Mr. Menezes. I think we said we were talking about 3,000?
Two thousand. Two thousand turbines, which is a lot.
Mr. Joyce. From a geographic point of view, what is this
going to look like on our coasts? Can we expect to see wind
turbines off of every shore up and down the East Coast, the
West Coast, and the Gulf of Mexico?
Mr. Menezes. Well, to be sure, there are, you know, plans
or studies looking at trying to put as much offshore wind as we
can on our eastern seaboard. We testified earlier Gulf of
Mexico's wind zone is great. But to be sure, if it works, if we
can figure out ways to get it going in some areas, I think you
can expect it to be utilized in other areas.
Mr. Joyce. So the answer is all coasts, East, West, and
perhaps even the Gulf of Mexico.
If we are concerned about being environmentally friendly, I
don't understand how building thousands of windmills in
hundreds of different ocean habitats allows that to occur.
Instead of endangering ecosystems on the sea floor and in the
sky, there are other established and other affordable options.
For example, 1,154 megawatts of nuclear power plant
typically uses 50 acres of land. Not only does it inhabit far
less space, but it provides the necessary baseload power
through all types of weather at all times of the year.
Moving on to discuss the physical footprint of what this
administration's offshore wind energy goal would mean, the real
question is, would this even be possible? The red tape in the
energy industry has gotten out of hand. In terms of offshore
power specifically, the Bureau of Ocean Energy Management gives
a timeline that would occur over 10 years for a single project
to be planned, permitted, and built--one project.
Mr. Menezes, in this regulation of environment, would the
construction of that many offshore windmills even be possible?
Mr. Menezes. Not within the timeframe announced.
Mr. Joyce. So the goals to have this amount of wind power
by 2030, from your perspective, is not attainable?
Mr. Menezes. Correct.
Mr. Joyce. Overregulation is both expensive and,
unfortunately, it is a job killer. I hope to work with my
colleagues on reforms that will allow our Nation to have safe
and stable energy prices moving forward and to utilize the
necessary energy that is under the feet and has already been
developed here in the United States.
I again would like to thank Chairman Rush for allowing me
to waive on to this important hearing, and I waive my remaining
30 seconds back.
Mr. Rush. The gentleman yields back.
Miss Rice, I sincerely apologize to you. The order should
have been reversed. So if you would, Miss Rice, you are
recognized for questioning the witnesses.
Miss Rice. Thank you so much, Mr. Chairman. And thank you
for allowing me to waive on to this very important hearing.
As we have heard from our witnesses, it is critical that we
ensure a skilled labor pool is ready to work in this emerging
industry. I am very proud of the workforce development efforts
already underway at Stony Brook University and Farmingdale
State College in my home State of New York. These institutions
are partnering with the State to establish a new and innovative
offshore wind training institute which will train 2,500 workers
as part of the largest public investment in offshore wind
workforce development by any State in the country. The
institute has already begun teaching its first class of
students, and I have heard nothing but positive feedback so
far.
Ms. Zichal and Mr. Hardy, to what extent are developers
working with academic institutions to coordinate training
programs and curricula so the offshore wind labor pool is well
matched with the demand for skilled workers in manufacturing,
construction, maintenance, repair, and all the other jobs that
are going to flow from this emerging industry?
Ms. Zichal. Well, the issue that you are pointing out is
something that we in the industry think about every day, which
is, we see true opportunity and we see the offshore wind
industry as something that is very much at the beginning of
taking off. And in order to do that, we recognize we are going
to need to have a skilled, trained workforce. You know, when
you even contemplate what it would take to, you know, build an
offshore wind turbine, it is very different than an onshore
wind facility.
So we are spending a lot of time working directly with
labor unions. We are working with Congress in trying to find
new programs. We are thinking outside the box about where might
we create some new public-private-sector partnerships to
advance training for the offshore wind workforce that we are
going to need.
And again, it is not just about the turbines itself. It is
about, you know, the entire supply chain, so building the core
components that go into the wind turbines as well as, you know,
building the ships and all of the technology that it is going
to need to support them.
Miss Rice. Mr. Hardy?
Mr. Hardy. Yes. We, you know, want this next generation--we
want this industry to be the next generation of good-paying
green jobs, and we want those to be accessible to all. So that
is why we are partnering with community colleges and technical
programs. I think you alluded to the $10 million seed funding
that we esta--that we helped fund the National Offshore Wind
Training Center on Long Island, New York. We also have a 10-
year $1.5 million scholarship with the New Jersey Institute of
Technology to fund precollege STEM programs and scholarships
for STEM students. In Maryland we are sponsoring a $10 million
STEM scholarship and workforce development program.
And we are really supportive of Congressman Keating's
legislation to provide Federal grants and enhance the suite of
offshore wind training programs available. His legislation is
called the Offshore Wind Jobs and Opportunities Act, H.R. 998.
So, in general, we are aligned, I think, on trying to
partner with technical and community colleges to train the
workforce. We also do quite a bit with universities on
research: Rutgers, URI, and others, Stony Brook, and others, to
name a few.
Miss Rice. Well, thank you so much for leading the way in
that department.
And I want to thank all the witnesses. I have to go run and
vote.
And, again, Mr. Chairman, thank you so much.
Mr. Rush. The gentlelady yields back.
The Chair now understands that Mr. Carter has returned.
Mr. Carter, you are recognized for 5 minutes.
Mr. Carter, you are recognized for 5 minutes.
The Chair understands that the----
Mr. Joyce. Mr. Chair, he is unavailable, if you would
proceed with the order.
Mr. Rush. All right. Mrs. Trahan, you are recognized for 5
minutes.
Mrs. Trahan, you are recognized for 5 minutes.
Mr. Carter, I see you entered into the room.
Mrs. Trahan, you are recognized for 5 minutes.
Mrs. Trahan. Well, thank you, Mr. Chairman.
As a Bay Stater and a Massachusetts representative, I am
excited to speak with you all about the Vineyard Wind project,
the Nation's first utility-scale offshore wind energy project
15 miles off the coast of Massachusetts. The project will
generate renewable, affordable energy for over 400,000 homes
and businesses while reducing carbon emissions by over 1.6
million tons per year.
I want to ask a few questions related to what I am seeing
on the ground in the State. As many of my colleagues have
mentioned today, we must ensure that the offshore wind industry
is creating stable union jobs for all people, regardless of
race and gender.
Vineyard Wind and stakeholders throughout the State have
been working on a project labor agreement. One challenge I hear
about is that the majority of building trade union members in
Massachusetts are white, while most of the minority-owned
contractors in the Boston area are nonunion. My understanding
is that this speaks to a larger challenge regarding equity in
the offshore wind workforce.
Mr. Strong, can you speak to USW's efforts to diversify the
union jobs across the offshore wind supply chain?
Mr. Strong. Well, again, my--thank you for the question,
Congresslady.
My experience has been with US Wind. When we started that
conversation a couple of years ago, obviously we talked about
the roles of minority workers. That is a foundation of our
union, being diversified. They are committed. They have hired
personnel to work with the minority business enterprise. They
are working with the other groups to promote the hiring and the
use of minority workers and businesses.
One of the oldest communities that we have that is located
where Bethlehem Steel was, is Turner Point Station, is
predominantly African-American. They support the project
because they know that there are opportunities for those
workers in that community to get the good-paying union jobs.
That is why they come there at that facility.
But this has been part of our conversation with US Wind,
and they are committed to making sure that minorities have
access to these jobs and that they are also committed to making
sure that minority businesses are included in their contracts.
Mrs. Trahan. Great. I appreciate that. I mean, that is
exactly what we need when we say Build Back Better.
Typically, we think of offshore wind investment as the
physical construction of majestic turbines in the ocean, but
what we are seeing in Massachusetts is that investments span
beyond that basic construction.
For example, Vineyard Winds is investing $3 million to
research and deploy innovative technologies to further
safeguard marine mammals. They are providing a $50,000 grant to
the New Bedford Port Authority for developing publicly owned
port facilities, and they have committed to investing $10
million in projects to accelerate the development of the
offshore wind supply chain and infrastructure in Massachusetts.
Mr. Hardy, can you speak to the ways these broader offshore
wind power supply chain investments help Americans?
Mr. Hardy. Absolutely. Thank you for your question. As we
have talked about numerous times throughout the day, this is a
brand-new industry, and although maybe people don't realize how
different it is from onshore wind, the supply chain is
completely different. The turbines look the same, but they are
actually quite a bit larger. They are built to different
specifications, et cetera. And so the build out of the supply
chain across all of the U.S. will create tremendous number of
jobs.
And as you alluded to with Vineyard Winds project, which
isn't our project, there's a number of other job creations that
happen as part of this industry. We have talked about port
revitalization and port infrastructure, vessels. We talked
about onshore construction of the manufacturing facilities, of
the onshore substations, and then the offshore construction
jobs and the offshore long-term, 30-plus-year operation and
maintenance jobs, which an offshore maintenance technician is a
six-figure job, typically.
So these are not, you know, minimum-wage, low-cost jobs.
These are highly advanced, good-paying, middle-class jobs as we
build out this industry.
Mrs. Trahan. Well, I appreciate that.
And my time is ticking down, but I just want to thank the
committee. I want to thank the chairman for allowing me to
waive on. I am always happy to share what we are learning from
the offshore wind industry in Massachusetts and certainly learn
from the expert panel of witnesses.
Thank you. I yield back.
Mr. Rush. The gentlelady yields back.
The Chair now recognizes the gentleman from Georgia, Mr.
Carter, for 5 minutes.
Mr. Carter. Thank you, Mr. Chairman, and thank all of you
for being here. I know it has been a long day, so I will try to
wrap this up very quickly.
Mr. Menezes, you have been very busy. I know you testified
before the Climate Change Committee yesterday, and I appreciate
your efforts in doing that. And yesterday, we had the
opportunity to discuss the proposed CEP plan that is in the
reconciliation bill, and I know that you had some strong
feelings on it, as do I. And I think you would agree that it
would be detrimental to investments in other energy solutions
if it were to pass, and it would essentially just negate a lot
of all the progress that we have made.
I am from the State of Georgia, of course, and we take our
renewable energy and clean energy very seriously. In fact,
solar energy has been growing in our State, and we are in the
top 10 now, expect to be in the top 7 in the use of solar
energy. We have nuclear reactors under construction at Plant
Vogtle, as you are well aware, the only nuclear reactors under
construction in the country right now. It is baseline reliable
energy, and over time it will be affordable energy, and that is
certainly something that is important.
Just wanted to ask you, I know that you mentioned in your
testimony about Denmark and their successful acceptance and the
adoption of wind energy because they had local buy-in and local
ownership. Considering this, what role do you think that States
and local communities should have in deciding offshore wind
projects in their areas?
And I mention this because I have the honor and privilege
of representing the entire coast of Georgia, and they are, of
course, oppo--I say there are some who are opposed to offshore
drilling but also to offshore wind projects. And my question is
simple: What do you think the local communities--should they
have a voice in this or should they not?
Mr. Menezes. Thank you for the question. I think we all
agree here that the States should have a role and so, you know,
the local municipalities, et cetera. Nobody is trying to deny
anybody from a process. What I think what we are seeing,
though, like in Maine--just take Maine. Maine is very
supportive, the Governor is very supportive, but they are
banning instate water, so that is 3 miles out, I think, is what
Maine is, so that pushes everything out in Federal waters. I
don't think there is anything necessarily wrong with that. That
takes the States and munis out, except--municipalities--except
when you need to come onshore.
So we have to figure out a way where somewhere along the
eastern seaboard we are going to have to just physically bring
the power in. So there will probably be another round there
that might more involve reliability councils, you know, the
utilities, you know, the public utility commissioners to make
sure that the bulk power system can handle this fairly enormous
amount of power that is going to come in. And so there you are
going to have another probably round of stakeholders to go
through to see where you can interconnect, who bears those
costs, who does upgrades, you know, those kinds of issues that
we were talking about.
Mr. Carter. Can you elaborate on that? I am not sure I am
following you. You mean that you would put it all together
outside the 3-mile----
Mr. Menezes. No. So the way that you place the turbines,
you know, they can't really all be bunched up. Of course, it is
a huge coast, so in some respects, they will be close together.
But even as our NREL lab shows, you position them in certain
positions to make sure that you take advantage of, you know,
the wind in certain distances.
My point on that is, as I had said earlier, you are not
going to have a line going into the coast from every single
turbine.
Mr. Carter. Right.
Mr. Menezes. You are going to have like these gathering
systems, sort of like we do right now, you know, with natural
gas. And so all this electricity will be brought in, and they
are going to be either into HD--you know, high-voltage lines,
rather, or maybe not quite that much. But the fact is they have
got to make landfall and they have got to tie into the bulk
power system. So, right now, we have interconnections that
where other power right now is feeding into the grid.
So I think what we have talked about this morning was you
identify those places along the bulk power system where you can
interconnect, and when that decision is made, then you have the
gathering systems, you know, the gathering lines, you know,
that bring the power in, you know, and then you need to bring
it onshore, you need to get it into the bulk power system. And
that is where FERC and that is where BOEM and the others that
we have come in.
So you have pushed it further out into Federal waters, so
it takes it out of the State's hands.
Mr. Carter. And it becomes more expensive as well?
Mr. Menezes. One would probably--that would be my view
likely, because you are not as close.
Mr. Carter. Right.
Mr. Menezes. You are just further out.
Mr. Carter. Right. OK. OK, well, you know, it is a concern.
I mean, everybody wants renewable and clean energy, but they
just don't want wind turbines in sight.
Mr. Menezes. You know what, you made a great point about
the CEP, because we have been asked about the 10-year program.
Mr. Carter. Right.
Mr. Menezes. If the CEP passes, the Clean Electricity
Performance project, it pushes the utilities from really
investing in offshore wind. They are not going to have the time
to comply with the CEP to really do the investments and to make
the modifications on the grid necessary to bring in offshore
wind. It is going to be outside the CEP window.
So this is an example of technology, that if that CEP is
adopted in the reconciliation package, you are not going to get
a lot of support when the utilities are going to be building
solar. That is really all they are willing--there is going to
be some wind, but it won't be offshore wind.
Mr. Carter. Right. OK. Well, thank you.
I am out of time, and I will yield back. Thank you very
much.
Mr. Rush. The gentleman yields back.
Seeing no more Members with questions, the Chair is
announcing that this concludes the witness questioning.
And I would like to thank our witnesses for your
considerable participation in today's hearing. You have really
invested a lot of sacrificial time in this hearing, and I
really appreciate it, and the members of the subcommittee
really appreciate it.
That said, I want to remind Members that, pursuant to
committee rules, they have 10 business days to submit
additional questions for the record to be answered by the
witnesses who have appeared before us today. And I also ask
each witness to respond promptly to any such questions that you
may receive.
Before we adjourn, I would request unanimous consent to
enter the agreed-upon list of documents into the subcommittee's
records.
Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Rush. At this time, the subcommittee does hereby stand
adjourned. The subcommittee is adjourned.
Thank you.
[Whereupon, at 2:16 p.m., the subcommittee was adjourned.]
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