[Joint House and Senate Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 117-87
EXAMINING THE ECONOMIC BENEFITS OF
ELECTRIFYING AMERICA'S HOMES AND BUILDINGS
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HEARING
BEFORE THE
JOINT ECONOMIC COMMITTEE
OF THE
CONGRESS OF THE UNITED STATES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 22, 2021
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Printed for the use of the Joint Economic Committee
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
45-853 WASHINGTON : 2022
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JOINT ECONOMIC COMMITTEE
[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]
HOUSE OF REPRESENTATIVES SENATE
Donald S. Beyer Jr., Virginia, Martin Heinrich, New Mexico, Vice
Chairman Chairman
David Trone, Maryland Amy Klobuchar, Minnesota
Joyce Beatty, Ohio Margaret Wood Hassan, New
Mark Pocan, Wisconsin Hampshire
Scott Peters, California Mark Kelly, Arizona
Sharice L. Davids, Kansas Raphael G. Warnock, Georgia
David Schweikert, Arizona Mike Lee, Utah, Ranking Member
Jaime Herrera Beutler, Washington Tom Cotton, Arkansas
Jodey C. Arrington, Texas Rob Portman, Ohio
Ron Estes, Kansas Bill Cassidy, M.D., Louisiana
Ted Cruz, Texas
Tamara L. Fucile, Executive Director
Vanessa Brown Calder, Republican Staff Director
Colleen J. Healy, Financial Director
C O N T E N T S
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Opening Statements of Members
Hon. Martin Heinrich, Vice Chairman, a U.S. Senator from New
Mexico......................................................... 1
Hon. Mike Lee, Ranking Member, a U.S. Senator from Utah.......... 3
Witnesses
Mr. Ari Matusiak, Chief Executive Officer, Rewiring America, San
Diego, CA...................................................... 6
Dr. Leah Stokes, Associate Professor of Political Science,
University of California, Santa Barbara, CA.................... 7
Mr. Donnel Baird, Founder and CEO, BlocPower LLC, Brooklyn, NY... 9
Dr. Eli Dourado, Senior Research Fellow at the Center for Growth
and Opportunity at Utah State University, Logan, UT............ 11
Submissions for the Record
Prepared statement of Hon. Donald Beyer Jr., Chairman, a U.S.
Representative from the Commonwealth of Virginia............... 36
Prepared statement of Hon. Martin Heinrich, Vice Chairman, a U.S.
Senator from New Mexico........................................ 37
Prepared statement of Hon. Mike Lee, Ranking Member, a U.S.
Senator from Utah.............................................. 38
Prepared statement of Mr. Ari Matusiak, Chief Executive Officer,
Rewiring America, San Diego, CA................................ 40
Prepared statement of Dr. Leah Stokes, Associate Professor of
Political Science, University of California, Santa Barbara, CA. 44
Prepared statement of Mr. Donnel Baird, Founder and CEO,
BlocPower LLC, Brooklyn, NY.................................... 50
Prepared statement of Dr. Eli Dourado, Senior Research Fellow at
the Center for Growth and Opportunity at Utah State University,
Logan, UT...................................................... 52
Response from Mr. Ari Matusiak to Question for the Record
Submitted by Representative Peters............................. 56
Response from Mr. Ari Matusiak to Question for the Record
Submitted by Representative Herrera Beutler.................... 57
Response from Dr. Leah Stokes to Question for the Record
Submitted by Representative Peters............................. 57
Response from Dr. Leah Stokes to Question for the Record
Submitted by Representative Herrera Beutler.................... 58
Response from Mr. Donnel Baird to Question for the Record
Submitted by Representative Herrera Beutler.................... 58
Response from Dr. Eli Dourado to Questions for the Record
Submitted by Representative Herrera Beutler.................... 58
Article links for the Record Submitted by Representative
Schweikert..................................................... 60
Letter dated September 27, 2021 from Rewiring America Submitted
by Senator Heinrich............................................ 61
EXAMINING THE ECONOMIC BENEFITS
OF ELECTRIFYING AMERICA'S
HOMES AND BUILDINGS
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WEDNESDAY, SEPTEMBER 22, 2021
United States Congress,
Joint Economic Committee,
Washington, DC.
The hearing was convened, pursuant to notice, at 2:32 p.m.,
in Room 216, Hart Senate Office Building, Vice Chairman, Martin
Heinrich, presiding.
Representatives present: Beyer, Herrera Beutler, Arrington,
Schweikert, Estes, Trone, Peters, and Beatty.
Senators present: Heinrich, Lee, Kelly, Hassan, Klobuchar,
Cruz, and Cassidy.
Staff present: Tiffany Angulo, Vanessa Brown Calder, Ron
Donado, Ryan Ethington, Tamara Fucile, Devin Gould, Colleen
Healy, Ismael Cid-Martinez, Adam Michel, Alexander Schunk, Nita
Somasundaram, Jackie Varas, Emily Volk, Brian Wemple, and
Michael Madowitz.
OPENING STATEMENT OF MARTIN HEINRICH, VICE CHAIRMAN, A U.S.
SENATOR FROM NEW MEXICO
Vice Chairman Heinrich. This meeting will come to order. I
want to thank Chairman Beyer in particular for allowing me to
hold this hearing today to highlight what I see as one of the
shortest actions that we need to take right now to confront the
climate crisis and to advance stronger, stable and broadly
shared economic growth.
And thank you to our witnesses here today who are leading
experts in the growing movement for widespread electrification.
The fact is that if we ever want to address our contributions
to our climate problem we need to find sustainable and cost-
effective substitutes for all of the devices and machines that
we use today that combust fossil fuels.
And it's not just our gas-powered cars and trucks. We're
also burning fossil fuels and emitting carbon pollution from
our hot water heaters, our furnaces, our ovens and stoves. In
addition to the climate impacts researchers are finding that
burning fossil fuels in our homes, including methane or natural
gas as it's commonly called, is really bad for our health.
This is particularly the case if someone in your family has
asthma or other respiratory conditions. Even if you are
properly ventilating your fossil combustion devices, the
particulate matter in the exhaust from your gas range stove
likely includes unhealthy of harmful chemicals like nitrogen
dioxide, carbon monoxide and even formaldehyde.
But the good news is that there are already better electric
alternatives for each of these fossil burning machines in our
homes. Each of these electric substitutes can help reduce our
climate pollution and create savings on our energy bills.
Just last month I invited Secretary of Energy Jennifer
Granholm to visit New Mexico. During her visit we met with
homeowners in Albuquerque's International District neighborhood
who are participating in an exciting demonstration project that
is helping families install energy efficient and electric water
heaters and air source heat pumps in their homes.
Tammy Fiebelkorn from the Southwest Energy Efficiency
Project told us that installing these new appliances is
reducing the burden of energy costs for these low-income
families. As she put it the project is ``fighting climate
change while also making sure that the benefits of that fight
make it to our front line and our disadvantaged communities.''
That's exactly right. These new electric appliances will be
much more efficient than the fossil fuel machines that they are
replacing, and that could mean significant savings for these
families on their monthly utility bills. Those savings can make
an enormous difference for a family that's living paycheck to
paycheck.
And importantly for our climate, all of these electrified
machines can be powered by all the new clean and carbon
pollution free electricity that we will generate in our new
clean energy economy. This is how we can power our long-term
economy recovery, and save families money by solving our
pressing climate challenge. This is how we build back better.
We need to get to a place where each time a family sits
around the kitchen table to figure out how to replace a broken
furnace or stove or water heater, they choose to and can afford
to install an electric machine. That's exactly why I introduced
the Zero Emissions Homes Act to establish a point of sale
rebates program for these new electric appliances.
Through this type of Federal investment we can make all of
the long-term economic and health benefits of electrification
affordable and accessible to all Americans. We have a once in a
generation opportunity to make transformative investments in
our energy economy.
Investments that will protect our planet, help keep our
communities healthy, and promote shared prosperity. We simply
don't have any more time to waste in meeting our responsibility
on climate. Widespread electrification is one of the surest
strategies we can pursue to finally take actions that meet the
scale of this challenge.
I'd like to now turn things over to Ranking Member Lee for
his opening comments.
[The prepared statement of Vice Chairman Heinrich appears
in the Submissions for the Record on page 37.]
OPENING STATEMENT OF MIKE LEE, RANKING MEMBER, A U.S. SENATOR
FROM UTAH
Senator Lee. Thanks so much Mr. Chairman. Our country needs
to modernize the way we generate, transmit and distribute
electricity. Over the last year devastating blackouts have
harmed communities across the country from New York to
California to Texas. The U.S. electric grid has at times proven
inadequate for the needs of American families. However, the
answer is not to spend billions of Federal taxpayer dollars to
electrify every American home and business, and just as
importantly, the answer is not to fundamentally alter the
Federal policy to regulate energy in its generation and in its
consumption.
Instead we need to unshackle American industry so that new
and diverse energy sources can help create a more resilient
energy future for America. It was not that long ago that
American innovation unleashed the shale revolution, driving
down natural gas prices and providing a cleaner energy option
for homes and businesses.
We need a similar revolution if we want to modernize our
electric grid. To clear a path for continued energy innovation
we must reform existing regulatory policies that stand in the
way of investors and discourage entrepreneurs. If we want to
move our energy infrastructure into the future, we need to
address environmental review.
When President Nixon signed the National Environmental
Policy Act, or NEPA into law, it was meant to require agencies
to consider the environmental consequences of their actions.
NEPA is generally implicated when projects use Federal funds,
or when they touch Federal lands which many energy projects do.
Now 50 years later this seemingly commonsense requirement
has transformed into a process that requires an average of four
and a half years, and sometimes two decades or even more of
paperwork and litigation. The NEPA process frequently
discourages and prevents critical energy infrastructure
projects from being built.
The delays might be worth it if NEPA protected the
environment, but environmental review is strictly procedural
meaning that it doesn't actually privilege environmental
protection. This means that paperwork and lawyers' fees are the
most consistent result of the NEPA process.
Federal agencies can find that the action under
consideration imposes environmental harm, and then
theoretically decide to approve the agency anyway
notwithstanding those problems.
The process even delays projects with clear environmental
benefits. Without reform NEPA leaves countless energy
infrastructure projects in a state of bureaucratic limbo,
sidelining workers, stunting innovative new technologies, and
leaving communities across the country to wait for Washington
to approve their future.
That's unacceptable, it's why I've introduced the UNSHACKLE
Act. This suite of bills reforms the NEPA process so that
Federal agencies are better empowered to carry out the law's
original intent, while also making our Nation's infrastructure
projects affordable again.
The UNSHACKLE Act would require agencies to finish their
environmental assessments faster, allow them to reuse paperwork
that they've already generated and limit duplicative work at
State and Federal levels. It would apply a two year deadline
for the completion of the entire NEPA process, provide fair
legal parameters around project reviews, and allow states to
handle NEPA review within their own borders.
Now these reforms shouldn't be partisan in nature. They're
designed to achieve something that we can all agree on, that is
more efficient, effective, Federal permitting for environmental
projects. Ultimately the best energy future is one that allows
the American people to innovate. Americans have made great
strides pursuing breakthroughs in energy extraction production,
and technological innovations in wind, solar, hydroelectric and
other renewable forms of energy in the face of heavy-handed
government control.
Removing existing regulatory burdens will allow Americans
to build a more sustainable future. The ability to build and
build more quickly will help make the U.S. electric grid more
robust, resilient and reduce the frequency of outages, it will
become cleaner, more affordable and more reliable power to
American families and communities will be provided.
As we rebuild after the pandemic we must liberate our
energy sector. We must reduce regulatory barriers to developing
nuclear, hydro, geothermal and other forms of energy. These
technologies can be an important part of a competitive energy
sector and a diverse energy future. So let's get government out
of the way and allow Americans to do what they do best.
Reforming policies that get in the way of modernizing our
energy infrastructure will boost economic prospects for
American families, improve the environment, and enable us to
build a better America.
I'm hopeful that today's hearing will convince us of the
urgent need to achieve that very goal, thank you.
[The prepared statement of Senator Lee appears in the
Submissions for the Record on page 38.]
Vice Chairman Heinrich. We have four witnesses here to
share their expertise today. Our first witness will be Mr. Ari
Matusiak, the CEO of Rewiring America, a non-profit that aims
to electrify everything starting with the 121 million U.S.
households that make the decisions accounting for 42 percent of
U.S. energy related carbon emissions.
Rewiring America's mission is to revitalize the U.S.
economy and tackle the climate crisis through a detailed policy
agenda, including low-cost financing, and targeted regulatory
and code interventions to cut the cost of energy efficient
measures like solar panels and electrify each American home.
Mr. Matusiak is also a Co-Founder and Managing Partner of
Purpose Venture Group, a social impact advisory firm, an
incubator that builds community-centered ventures focused on
combating climate and economic inequality. He served in the
Obama White House as a Special Assistant to the President and
Director of Private Sector Engagement where his focus was on
economic policy related to jobs and competitiveness.
He has a bachelors degree in political science from Brown
University and a J.D. from Georgetown University Law Center.
Our second witness will be Dr. Leah Stokes. She is an
Associate Professor in the Department of Political Science and
is affiliated with the Bren School of Environmental Science and
Management in the Environmental Studies Department at the
University of California, Santa Barbara.
Her research areas include energy, climate, and
environmental politics, with a particular focus on renewable
energy. Her academic work has been published in some of the top
publications in her field, including Nature Energy, Energy
Policy and the American Political Science Review.
In 2020 Dr. Stokes published a book titled, Short
Circuiting Policy, which examines clean energy policies to
understand why states are not on track to address the climate
crisis and how fossil fuel companies and electricity providers
have put profit above progress by promoting climate denial and
delay.
Dr. Stokes has a PhD in public policy from MIT and master's
degrees from MIT's Political Science Department, and the School
of International and Public Affairs, and the Earth Institute at
Columbia University.
She has a bachelors degree in psychology and eStation
studies from the University of Toronto.
Our third witness will be Mr. Donnel Baird, a green
entrepreneur who is the CEO of BlocPower which he launched as a
startup in 2012. BlocPower markets, finances, and installs
solar and energy efficient technology in homes and buildings
across 15 U.S. cities where it trains and hires local
vulnerable populations for jobs including installing smart low-
cost sensors and thermostats, and retrofitting large heating
and cooling systems.
Mr. Baird aims to replace heating and cooling systems that
run on fossil fuels with greener and more efficient
alternatives such as electric heat pumps and solar panels.
BlocPower's completed energy projects in over 1,000 buildings
in the New York area helping clients from small businesses to
non-profits save 20 to 40 percent on their energy bills each
year.
BlocPower secured investments and partnerships with Fortune
500 companies like Goldman Sachs and Apple, and Mr. Baird was
selected as a 2020 Dial Fellow by the Emerson Collective.
Mr. Baird obtained his BA from Duke University and his MBA
from Columbia Business School in 2013.
Our fourth witness will be Dr. Eli Dourado. Dr. Dourado is
a Senior Research Fellow at the Center for Growth and
Opportunity at Utah State University. His area of focus are on
the new technology and innovation needed to drive large
increases in economic growth including the expedition of
infrastructure deployment and the elimination of barriers for
entrepreneurs.
Dr. Dourado has worked on a wide range of technology policy
issues including aviation, internet governance, and crypto
currency. Dr. Dourado previously worked as a senior researcher
at the Mercatus Center at George Mason University, as Director
of its Technology Policy Program.
Dr. Dourado has served as an advisor to the State
Department on International Telecommunications Matters, and as
an Economist at the Bureau of Economic Analysis. He has a BA in
Economics and Political Science from Furman University and a
PhD in Economics from George Mason University.
The Committee will recognize each witness for five minutes
to provide remarks. Mr. Matusiak let's begin with your
testimony and then we'll continue in the order of
introductions. Mr. Matusiak the floor is all yours.
STATEMENT OF MR. ARI MATUSIAK, CHIEF EXECUTIVE OFFICER,
REWIRING AMERICA, SAN DIEGO, CA
Mr. Matusiak. Thank you. Vice Chairman Heinrich thank you,
Ranking Member Lee, other distinguished members of the
Committee. Thank you for having me in for shining a spotlight
on household and building electrification, the most central
path for Americans to take to cut climate change emission sin
half by 2030, and to zero them out before 2050.
I am CEO of the non-profit Rewiring America, founded just
over 1 year ago. Our co-founder Saul Griffith was hired by the
U.S. Government to map the energy sector down to .1 percent
fidelity on both the supply and the demand side. The upshot,
the roughly 100 quads of energy we generate and consume as a
country each year will produce about 90 percent of our
emissions.
When it comes to reducing emissions much attention has been
paid to the supply side as we work to decarbonize our energy
supply. The conversation on the demand side has been largely
focused on replacing combustion engine vehicles with electric
ones.
But the residential housing sector is another and very
large part of the demand side. If we are cleaning our grid, we
must also clean all of the machines that use it. We cannot get
to zero emissions by any date unless we do, and that means that
building decarbonization is the great unmet need in our climate
policy.
Indeed at Rewiring America we calculate that over 40
percent of energy related emissions in the U.S. exist as a
result of decisions made around the kitchen table, what we
drive, how we eat and cool our homes, how we heat our water,
how we cook our food, how we dry our clothes.
There are 121 million households in American. In order to
get to zero emissions by 2050 we calculate America must replace
or install one billion machines across all of those households
in that timeframe. The timeframe is important because these
machines last for a long time, 10 to 25 years on average.
Put it this way, every time an opportunity is missed to
install an efficient, electric machine, we put further pressure
on hitting our 2050 target, every machine counts. For us, that
is an affirming and optimistic prognosis because if those one
billion machines represent about 40 percent of our emissions as
a country, 65 percent if you include small businesses, then we
can develop a plan for addressing them, one efficient electric
machine at a time.
We don't need to wait on any moonshot technology--it all
already exists. We don't need to ask Americans to sacrifice or
change their lifestyles to survive. We can define our climate
strategy in a way that benefits every American directly and
immediately.
Those one billion machines also represent an enormous
economic opportunity for America, because if we need all these
efficient electric machines, so to does the rest of the world.
According to our modeling, replacing carbon-dependent
appliances increases household discretionary income, creates
local jobs that cannot be automated or off-shored, and reduces
the health costs of burning fossil fuels in our homes.
That's a triple win, on top of the fourth win of helping
the emissions. Here are the numbers. At least 85 percent of
households in the U.S., 103 million could save 37.3 billion
dollars a year on energy bills if they were using modern
electrified furnaces or water heaters instead of their current
machines.
Of the households in the U.S. that would save by
electrifying, 44 percent of them are low to moderate income.
Each year they could save an average of $377.00, and we
estimate that by 2030 that number could go up to $2,500.00.
Outside of these direct pocketbook benefits to Americans, and
especially low and moderate income Americans, electrification
would create 462,000 installation jobs in the U.S. that can't
be automated or off-shored.
In addition, it would further generate another 80,000
manufacturing jobs and 800,000 indirect and induced jobs. And
on the healthcare front which has boomeranging effects into our
economy, electrifying household appliances with address the 42
percent increased risks of children experiencing asthma systems
associated with gas stoves, and the 15,500 premature deaths in
the U.S. that come from outdoor air pollution from buildings.
Those are a lot of numbers. The point is this. If the
upfront costs were the same, we think Americans would choose to
electrify their households every single time an appliance fails
and needs to be replaced. In not installing these machines,
these households would be locking in emissions for one to two
decades or more because of the brand new carbon dependent
machines that would be installed instead.
This is a machine-by-machine plan that puts us on a path to
zero emissions. It's an optimistic plan that carries with it a
moral and economic imperative for action. Because not only is
it the right answer for our planet, it also does right by
Americans and their families today.
By the numbers there is simply no greater opportunity for
the Congress to unlock another American century of economic
expansion and prosperity than by investing in the
electrification of our economy, starting with the American
household. It is time to understand our households as the
keystone of our climate infrastructure.
Encouraging these invested power to make real the
opportunity before us, and to continue to use your bully pulpit
to educate Americans about the role we can all play in
realizing our shared future and potential. Thank you Mr. Vice
Chairman and to all the members of the committee.
[The prepared statement of Mr. Matusiak appears in the
Submissions for the Record on page 40.]
Vice Chairman Heinrich. Dr. Stokes.
STATEMENT OF DR. LEAH STOKES, ASSOCIATE PROFESSOR OF POLITICAL
SCIENCE, UNIVERSITY OF CALIFORNIA SANTA BARBARA, CA
Dr. Stokes. Vice Chairman Heinrich, Ranking Member Lee, and
Distinguished Members of the Joint Economic Committee good
afternoon. For more than three decades scientists like me have
come before Congress to warn lawmakers like you that climate
change poses a dire risk to our economy.
Those warnings have now come to pass. Last year the United
States experienced 22 separate billion dollar climate and
weather disasters, which cost us nearly half a trillion
dollars. That is the economic cost of inaction on climate
change, and it is growing every year.
You already know the broad contours of what I am going to
say. Congress must act now to cut carbon pollution by reducing
our dependence on fossil fuels. Americans have asked you to do
this for years through phone calls, letters and testimony. I'm
urging you to listen, not just to me and to other scientists,
but to the American people and act now on the climate crisis.
We must cut carbon pollution by 45 percent 2030 to have a
chance of limiting warming to 1.5 degrees. President Biden has
a plan to do that, but we need Congress to act on that plan and
pass his Build Back Better agenda. This includes investing in
building electrification.
Our homes are our safe places. Yet scientists are
uncovering that burning fossil gas in buildings is dangerous to
our health. Children living in a home with a gas stove have a
42 percent chance--increased chance of having asthma. Even when
a gas stove or other gas appliance is turned off, it is still
leaking, and that gas contains carcinogens like Benzene which
cause cancer.
Thankfully we've got the solutions to remove pollution from
our homes. We can use electric technologies like induction
stoves and heat pumps. Clean electricity combined with
electrification could cut three-quarters of our carbon
pollution.
To accelerate building electrification, Congress must make
key investments now. The goal should be to have clean
appliances be the default choice for all Americans. Zero
emission appliance rebates are crucial for making clean
technologies accessible to all Americans. These investments
will catalyze the market, creating lower costs through
innovation.
They will also help to avoid locking in current pollution
as appliances installed today may still be operating in the
2040s. This is also smart economic policy because it will avoid
creating stranded costs. Additional dollars should also flow to
the weatherization assistance program, to tax credits, and to
grants for domestic manufacturing of clean appliances.
Congress should also invest in clean electricity through
both tax credits for power producers, and grants for utilities
that increase their share of clean power. Cleaner electricity
will help building electrification deliver even greater
benefits. All of these investments will be multiplied many
times over by growing the economy, and they'll pay themselves
back. Through aggressive Federal Government investments in
building electrification we could create one million jobs this
decade.
And many of these jobs cannot be taken overseas. If you
want to have a heat pump in your home, you actually have to
have an American worker install that in your home. These
Federal investments are also crucial to reducing inequality and
healthcare costs.
Clean buildings are important for all us, but they're
particularly important for people of color who are exposed to
higher levels of indoor air pollution. Federal investments can
also cut energy bills with Congress's help more than 100
million American households could save money by installing
these modern electric appliances.
So cleaning up the American economy is a win/win. It
creates jobs, it saves Americans money, it advances equality,
and it keeps the United States competitive globally. So the
climate solutions are ready. The question is speed. To deploy
these clean technologies fast enough we need Congress's help.
You can act now to catalyze the market creating millions of
jobs and saving everyday Americans money. I'd like to close by
sharing something personal. I have two newborn babies that are
two months old at home right now, and I have left them to come
here and speak with all of you because I know the urgency of
this moment. I'm here not just to speak on behalf of my newborn
children, but on behalf of all the children in the United
States.
I'm also here to speak on behalf of young people who are
deeply fearful about what their future holds. And quite
frankly, I'm here to speak on behalf of all of us because we
are already seeing what climate change is doing to the places
and the people we cherish most.
This is a pivotal moment in history. The world is watching.
Either Congress will pass a bold climate investment package
this fall, or we will lose the last best opportunity we have
and wait another decade. We don't have anymore decades left to
waste to act on the climate crisis, thank you.
[The prepared statement of Dr. Stokes appears in the
Submissions for the Record on page 44.]
Vice Chairman Heinrich. Mr. Baird.
STATEMENT OF MR. DONNEL BAIRD, FOUNDER AND CEO, BLOCPOWER LLC,
BROOKLYN, NY
Mr. Baird. Good afternoon. Is this on? Great. Greetings to
all the members of this Distinguished Committee. My name is
Donnel Baird. I grew up in a Brooklyn apartment building that
did not have a working heating system. Like many of our
neighbors in Brooklyn, mostly immigrant families, we heated our
apartment with a gas oven, and so every night we would turn on
the gas burner, open up the oven door and that was kind of how
we heat everything.
My dad was a mechanical engineer, so we knew that the oven
produced carbon monoxide and other toxins, and was not safe, so
we opened up all the windows every night to clear the air. You
don't need to be an engineer, or the CEO of a clean tech
startup to know that releasing toxic gasses into your family's
bedrooms is bad for public health, and that leaving windows
open to mitigate the impact is a waste of resources.
I founded my climate tech startup BlocPower to help address
the energy issues my family struggled with growing up.
Households account for 42 percent of U.S. carbon emissions, and
BlocPower is focused on greening buildings, replacing old,
antiquated, fossil fuel energy systems with all electric
technology.
Our business case is simple. We install clean, zero
emission technology in older buildings that waste fossil fuels
all over the country. We make money because the technology
saves so much money to the building owner that we are able to
make investments and amortize other health measures into
transactions with that save so much money that we can finance
all of this.
We are able to turn a profit and leave households spending
less on energy than they were before by utilizing these
technologies. In the process we dramatically lower building's
carbon emissions. We make them healthier and more comfortable.
In essence, we're creating both jobs and healthier
buildings, and healthier communities while delivering financial
and economic impact. We've completed upgrades in over 1,200
buildings, apartment buildings, schools, houses of worship,
townhomes, single family buildings in New York City's poorest
neighborhoods, impacting tens of thousands of families.
And we've built software to analyze the impact of these
technologies on over 120 million buildings across America. I'll
never forget one of our first projects in the Bronx when we
were called in to convert an aging school building following a
tragedy. The building had been burning fossil fuels in its
basement to power the facility however, the building's
ventilation system was set up improperly.
As a result air pollution from the fossil fuel system in
the basement was being pumped into the cafeteria every single
day contributing to chronic asthma amongst all the school
children. The school nurse had 70 different zip lock bags with
pieces of tape with all of the four-year-old's names on it to
figure out which inhaler went to which child.
It was so poor that one day a four-year-old had an asthma
attack and needed to go to the emergency room and later died.
We know this is not an isolated incident. Our schools and our
homes across this country need and deserve electrification.
Electric buildings are better buildings.
The problems of dirty fuels and buildings are fixable. We
know electric building technology works. In Brooklyn, new
buildings under construction often include heat pumps. We have
installed systems in hundreds of buildings throughout New York
City and now coast to coast.
We have the ability to bring the same incredible electric
heating technology, both the software and the hardware, to the
challenges of heating and cooling in buildings. These are real
benefits to families, and aggregated across America these
benefits to our economy are massive.
But I want to point out that the markets have spoken. The
private sector has spoken and endorsed better building
electrification technology. All electric, carbon, low carbon,
healthy buildings are being embraced by Apple, Microsoft,
Google, Goldman Sachs, the American Family Life Insurance
Company, Salesforce, the New York State Government and energy
giant Exelon. And I know this because we partner with all of
them and they've invested in our company to electrify
American's building stock.
The government has a key role to play to ensure that the
benefits of all electric buildings are accessible to all
Americans. Rebates will help to reduce the upfront costs. Today
we raise five private dollars for ever single government dollar
that is invested.
In addition, expanding lending authority through the
Department of Energy's Loan Program Office could provide
significant new capital to grid electrification across the U.S.
We can make our houses smart, and all electric, and responsive
to a modern cyber secure smart grid so that we can protect
ourselves from climate disasters.
America can and should lead the world in innovation,
manufacturing and the workforce to convert our real estate
stock. Thank you.
[The prepared statement of Mr. Baird appears in the
Submissions for the Record on page 50.]
Vice Chairman Heinrich. Dr. Dourado.
STATEMENT OF DR. ELI DOURADO, SENIOR RESEARCH FELLOW AT THE
CENTER FOR GROWTH AND OPPORTUNITY AT UTAH STATE UNIVERSITY,
LOGAN, UT
Dr. Dourado. Thank you Vice Chairman Heinrich, Ranking
Member Lee, and Members of the Committee for the opportunity to
testify today. My name is Eli Dourado, and I am a Senior
Research Fellow at the Center for Growth and Opportunity at
Utah State University.
I study the technologies that could bring about
transformative economic growth and the obstacles they face.
Climate change is a technology problem. New technologies are
our only realistic hope to significantly reduce carbon
emissions. The way to address climate change is not to
deindustrialize society and go back to a less prosperous past.
It is to charge boldly into the future.
On that, I believe we all strongly agree. There's a slogan
that represents one vision of this future. Electrify
everything. Like all slogans it oversimplifies. I'd like to use
this opportunity to raise some nuance and offer some additional
solutions that will make us more likely to achieve our
decarbonization goals.
First we must be realistic about the necessary electrical
system upgrades. Electrifying heating makes financial sense for
many, but not all individual homeowners, but even if heat pumps
make individual economic sense, they may not make collective
economic sense until upgrades are available for our electric
grid and generation capacity.
Mass adoption of electric heat pumps, particularly in the
coldest parts of the country where they are least efficient
will flip the time of peak electricity demand from summer to
winter. Since our current system is only built to the capacity
of the summer peak without new capacity the coldest winter days
would be met with rolling blackouts at exactly the time we most
need reliable energy.
Heating is a safety critical service. People die if the
heating goes out. If we want to rely exclusively on electricity
for heating we must invest not only in additional capacity to
meet peak demand, but also in grid hardening, like placing
wires underground where they can't be downed by falling trees.
Which brings me to my next point. We must make it easier to
build. If we're going to do so much building, new peak load
power plants, undergrounding of wires, new long distance
transmission lines, and new wind and solar farms, it is worth
first addressing the excessive costs of building new
infrastructure in this country.
Among the chief culprits are laws that give project
deponents a way to slow or stop the permitting and siting
process. Laws intended to support environmental justice, like
the National Environmental Policy Act, have instead been
weaponized by nimbies or competitors to slow progress.
Research from the Brookings Institution found that
interstate highway construction costs tripled between the 1960s
and the 1980s. The researchers dated the inflection point to
the early 1970s which they noted was precisely when NEPA took
effect.
By lengthening and adding risk to the permitting process,
NEPA makes financing large capital intensive projects less
attractive. Sometimes propose new subsidies for long distance
transmission projects to overcome this obstacle, while
subsidies for these projects may be desirable in isolation, it
is unwise to spend taxpayer money to overcome a permitting
obstacle that Congress created and has the tools to fix.
Congress should first remove the permitting obstacles, and
then consider whether new subsidies are still necessary. Even
if they are still necessary, they would return a much higher
value for the taxpayer with the permitting obstacles removed.
The country would also greatly benefit from new zero carbon
baseload power plants, either nuclear or geothermal. To
accommodate all of this building, we need a thorough going
permitting reform of the kind that has been proposed in the
UNSHACKLE Act.
Third, we should avoid picking winners and losers. A
downside of a strong policy focus on electric heat pumps or
anything else is that it puts politicians in the role of
picking the winning technology. If left to compete on a level
playing field, a range of other possible solutions, including
non-electric options, could help to decarbonize heating.
Some possibilities include district heating and high
quality offsets from genuine carbon removal projects, instead
of selecting one technology decarbonize heating on its own,
Congress should achieve its goals with technology neutral
policies.
Finally, the committee should recognize that the economic
benefits of addressing climate change will not come from jobs,
but from cheap and abundant clean energy. Consider electric
vehicles. Electric vehicles have many advantages over
combustion vehicles, but one of them is that they have fewer
moving parts and therefore require less maintenance expense.
This reduction in maintenance requirements will translate
to thousands of mechanic jobs being destroyed. Should we oppose
electric vehicles, underscore? Of course not. The economic
opportunity from addressing climate change comes from
rethinking energy, not from creating jobs.
If we could repeat the stunning cost reductions we have
observed in wind and solar energy in firm dense technologies
like advanced nuclear and advanced geothermal, we could double
or triple per capita primary energy use that would truly make
the economy boom.
I once again thank the committee for the opportunity to
testify, and I look forward to your questions.
[The prepared statement of Dr. Dourado appears in the
Submissions for the Record on page 52.]
Chairman Beyer [presiding]. Thank you very much. Let me now
recognize the Ranking Member from the State of Utah Senator Lee
for his questions. Thank you.
Senator Lee. Thank you very much. Dr. Dourado I'd like to
start with you if that's okay, and I appreciated your testimony
and your insights that were very helpful. Now you've written a
little bit about the promise of geothermal energy based on the
fact that it's clean, it's cheap, and it's an abundant energy
source, but suggested that in many ways poor policy on the
books now could be standing in the way of our capitalizing on
that, and benefiting from geothermal energy.
The most favorable conditions for geothermal power happen
to be found in the western United States where coincidentally
the Federal Government happens to control a very significant
portion of all the land. Now can you tell us specifically how
Federal policy could help make geothermal electricity
generation more competitive, and thus more of a reality?
Dr. Dourado. Yes, Senator, thank you for the question. As
you noted the most near term resources for geothermal are all
in the west and overlap significantly with Federal lands. And
geothermal has a very strong learning by doing component.
Bringing technology--reporting it from the oil and gas sector,
people leaving the oil and gas sector and just started the new
geothermal advanced geothermal sector.
They need experience and practice, and that process of
delivering power is what's going to drive the cost down and
make it available eventually everywhere in the country, not
just where the resources are located.
On Federal lands to get a permit to drill, whether it's an
oil and gas well, or a geothermal well, you need permission
from the Bureau of Land Management, and because the oil and gas
industry has so much influence in Washington they were able to
get a categorical exclusion from NEPA review, they only have to
do you know a two week approval process to get their wells
approved.
Whereas a geothermal well, it takes about two years to get
an approval from the Bureau of Land Management. So I think a
very promising policy would be to extend the exclusion that
currently exists, under the exact same conditions that exist
for oil and gas and you know just make them available for
geothermal as well, and that would I think radially increase
access to progress in geothermal energy in the coming you know
years, within this decade.
Senator Lee. So let me get this straight. We've given more
favorable NEPA regulatory treatment to oil and gas drilling on
Federal lands, than we have to geothermal drilling on Federal
land?
Dr. Dourado. That's exactly correct Senator.
Senator Lee. Geothermal sources are effectively renewable,
they're not emitting things. They're not emitting carbon into
the atmosphere. They're not polluting the atmosphere. The same
cannot be said of oil and gas drilling. Is that correct? So why
would that make any sense? What plausible defensible public
policy justification could there be for treating oil and gas
drilling more favorably than we treat geothermal drilling?
Dr. Dourado. I don't think there's any good reason for it
Senator. Geothermal is a renewable technology, but it's also a
vast existing reservoir, so actually the amount of geothermal
energy that exists is 40 times greater than all fossil fuel
energy, and all fissionable material combined.
So it's just a massive resource. It would power our economy
for the next billion years, and it makes no sense that it is
disfavored relative to oil and gas.
Senator Lee. Thank you. That's very informative. Dr.
Stokes, I want to talk to you for a moment. I take it you've
been involved in the development of the clean energy, clean
electricity performance program. And as you know the CEPP
requires significant renewable solar development.
One study produced by Princeton University suggests that
land equivalent to the size of the State of West Virginia could
be necessary for solar deployment in a full zero emissions
transmission. Do you know about how many acres of Federal land
you'd anticipate would be needed to realize the development of
CEPP?
Dr. Stokes. Well I would say that actually clean energy
sources would be eligible under that program, not just solar,
and of course solar can also be put on rooftops and other
buildings, so it doesn't necessarily require a lot of land.
Senator Lee. Sure, sure, there are other sources that could
be included within it.
Dr. Stokes. That are included yes.
Senator Lee. And one of those is wind. Now the same
Princeton University study suggests that an area equivalent to
the acreage of Kansas, Nebraska, Oklahoma, Iowa, Missouri, and
Arkansas may be needed for wind turbines to reach zero
emissions. All of those states combined.
So how many acres of Federal land do you think would be
needed?
Dr. Stokes. Well you don't have to develop renewables on
Federal land. It's of course an option. And I think there may
be some you know good reasons for doing it in some places. You
can also do it offshore. In the case of offshore wind you can
do geothermal, as Dr. Dourado's been talking about.
You can do carbon capture and sequestration, nuclear
energy. The clean electricity performance program is a
technology neutral approach, so it does not require the
building of renewables on Federal lands.
Senator Lee. By the way one of the dirtiest, one of the
biggest emitters as I understand it, one of the dirtier sources
of pollution happens to be heating oil, would you agree with
that?
Dr. Stokes. Heating oil, yes.
Senator Lee. Are there efforts underway to ban that? Is
that part of your initiative?
Dr. Stokes. I'm not trying to ban anything, and I don't
really have an initiative so to speak. I know there are efforts
in New York City for example, to try to clean up heating oil in
that city as that's been used for many decades in New York
City. So heating oil does have significant health impacts at
the building level as well as carbon pollution impacts as well.
Senator Lee. I see my time's expired. Thank you.
Chairman Beyer. Mr. Senator we thank you very much. Let me
begin with just the formal Chairman's statement which is I'm so
pleased that you're here this afternoon, and I really want to
thank my friend and colleague, Vice Chairman Heinrich, for
bringing us together for this important discussion.
Climate change is a threat not only to our planet, but also
to the health of our economy, so we need to look at the
multitudes of solutions, including electrification technology.
So in the interest of time I just want to submit my opening
statement for the record and move right to some questions.
Mr. Matusiak, I was fascinated by all of your statistics,
the 37.3 billion dollars a year savings, the 463,000
installation jobs created, 15,000 premature deaths--not
happening. You didn't do the other side of it which are the
jobs that go away in the gas industry, or the coal miners,
something like that.
Do you have any sense when you netted out what the impact
on economic growth would be from electrifying our economy? What
GDP, what the increments of GDP growth might be?
Mr. Matusiak. Well thank you Chairman, it's wonderful being
with you today and for the opportunity. By our analysis there
are over the course of the next 20 years, 25 years, an
opportunity to create 25 million jobs in the electrification of
the economy.
Five million durable, sustainable jobs over that timeframe,
and we will look at the transition of jobs across different
sectors. There is a significant opportunity to retrain and to
put people to work doing things that they are accustomed to
doing. So for example, if we're talking about installing water
heaters and furnaces, if they are electric they are heat pumps,
and that is part of a transition of opportunity--of economic
opportunity.
But the upshot here is that the electrification of the
economy unlocks a massive opportunity. It is a massive
opportunity in job creation. It's a massive opportunity in
localized job creation, and it's a massive opportunity in
economic catalyst in terms of--as an economic catalyst in terms
of the money that flows through the economy when you start to
stack the incremental jobs that are created, the incremental
savings that households realize, the lower costs to communities
when it comes to healthcare costs and all the rest.
And we have an opportunity to put a lot more money to work
in the economy which creates a lot more jobs as you well know.
And so for us the electrification strategy is not just a
climate imperative, a moral imperative, frankly the path at
which we get to zero emissions. It was the win/win/win strategy
whereby we create the jobs that power us into the next century
of economic prosperity as a country, and allow us to maintain
our economic position as not just a leader in terms of our
standard for the world, but in terms of the machines that we
are producing and making and exporting to the other countries
that will certainly need them as well.
Chairman Beyer. Thank you very much. Dr. Stokes you sort of
made the public health case for the electrification of
buildings in that kids in homes using gas stoves are at a 42
percent greater risk of having asthmas. Can you expand on that?
Is this something that OSHA should be doing, or national
building permit standards?
Dr. Stokes. Well there are actually discussions that gas
appliances should come with warnings for citizens and for
Americans that they pose health and safety risks, serve
consumer reports, could for example put a sticker on these
appliances warning people that you know they could increase the
risk of asthma, that they can be involved in emitting
carcinogens into your home.
That there are significant health risks to these
appliances, and it's interesting because we've lived with them
in our homes for a long time. We sort of celebrated them as
this wonderful innovation, but what scientists are uncovering
right now with research that's ongoing is that there's a really
big health side effect to burning gas in our homes. And so I
think that the American people as they learn more and more
about the science are going to realize that they haven't fully
understood the health implications of having this in their
homes, and it's possible that the American government could be
doing more to help inform Americans about the risks of having
gas in their homes.
Chairman Beyer. Great thank you very much. Dr. Dourado you
talked about the misuse of NEPA, and people weaponizing it and
the like, and that the rise of the citizen voice. Is there
something wrong with having a citizen voice in this process,
especially when you look back at all the times when citizens
had no voice?
Dr. Dourado. You know Senator, Mr. Chairman I believe
democracy is very important and I think it's most important at
election time. And I think in many other decisions I think it's
better if we let the wheels of government turn without
involving every member of the community that might have an
objection to a project.
We need to let projects go forward if we want to build in
this country.
Chairman Beyer. Thank you very much for that perspective.
My time is up. I will now recognize my friend from Arizona, Mr.
Schweikert.
Representative Schweikert. Thank you Mr. Chairman. I have a
couple things here. It was interesting Senator Lee actually
asked one of the things that's actually--and look I'm a
westerner, I've actually never seen fuel oil heating, but I've
seen the data on it and it's absolutely unhealthy, it's filthy.
I'm almost surprised that the reaction from all witnesses
wasn't absolutely you know if natural gas appliance needs
labeling of this and that, the others need to be pulled out
immediately.
So I'm just a little surprised by that. Mr. is it Dourado,
what's the best way to pronounce it, the doctor from Utah.
Dr. Dourado. Dourado.
Representative Schweikert. I'm sorry. I have to learn to
actually wear glasses. I actually want to walk through one of
my personal fixations, and I care a lot about this because
being from the desert southwest we have the largest nuclear
power plant in the country, but we also have tremendous
photovoltaic and actually some decent hydroelectric.
Are you familiar with the SunZia power line? In the middle
of New Mexico is one of the greatest wind assets in the United
States. And California functionally contracted for this
wonderful wind generated asset. We're approaching 20 years to
move the power line to get it permitted because it crosses a
number of jurisdictions.
Oddly enough the real problem had been the government
jurisdictions. So in some ways it becomes actually a fraudulent
narrative here when we say we want to exploit our wind assets,
and then without the same breath my friends, and I don't care
what side of the aisle you're on, don't also articulate saying
we need major NEPA reform to actually move the power generated
from those wind assets. And help me understand.
Because this is one it crosses through Arizona, hits the
Palo Verdi hub as you probably know if you specialize in
electricity and then would move to the L.A. basin. But
seriously, you talk to the investors on this and today they say
we wouldn't do this again. You know something that was going to
take six, seven years, now is approaching 20 years.
How common do you run into this? What would you do in NEPA
reform?
Dr. Dourado. You know I talk to a lot of companies
including hard tech startups that run into NEPA issues all the
time. It is ubiquitous throughout the economy that you know at
various times you need Federal Government approval for
something, and that brings in NEPA--some sort of NEPA review.
A lot of times it isn't an environmental impact statement.
I think the Federal Government only finalizes about 200
environment impact statements a year, but they do about 12,000
environmental assessments per year. And each of these is
hundreds of pages long, you know, sometimes thousands of pages
of appendices, it takes multiple years, and it just adds a
tremendous entirely procedural burden on a lot of projects.
So I think it's a very significant obstacle to building in
this country.
Representative Schweikert. And I wasn't going to burden
everyone. We have a whole binder of little charts of
photovoltaic projects, actually even some power coming out of
Earth Energy, and you can't move the lines. One other one just,
have you seen the charts that talk about over the next few
years carbon emissions, predicted greenhouse emissions in the
United States are going to go up.
And a lot of it is because we are about to remove much of
our baseload nuclear off the grid, and by removing that
baseload nuclear you know our generation base is truly
impaired. What is your understanding on that dataset?
Dr. Dourado. I think that's generally correct, and you know
as an example New York City just closed down one of its nuclear
facilities saying it would be replaced with renewable energy,
and it was replaced with fossil fuels, so it was fossil fuels
that made up the load that was missing from the shutdown
nuclear plant.
So I think it's important to not only keep open our
existing nuclear plants, but to figure out what we can do on
nuclear licensing to make it more cost effective to the nuclear
clients including advanced small modular reactors that are the
next generation of nuclear facilities.
Representative Schweikert. Thank you. Mr. Chairman if
you'll give me time I'm going to submit for the record some
articles about technology of extraction of uranium from sea
water as well as an article from a Noble Prize Laureate
physicist talking about the use of hyper pulse lasers to break
down spent nuclear materials as making it inert, and the fact
that we may be at the time where if we truly embrace technology
we may have the virtual cycle upon that and with that I yield
back.
[Article links submitted by Representative Schweikert
appear in the Submissions for the Record on page 60.]
Vice Chairman Heinrich [presiding]. Without objection those
will be added to the record. I appreciate my friend from the
House bringing up the issue of SunZia, I would just point out
as someone who has been deeply involved in that project for
most of that period that it's actually the state based Public
Regulatory Commission and the former Governor who objected to
SunZia.
They actually had a final environmental impact statement
and the record of the decision, so I don't think NEPA is to
blame there. I think what we probably need is Federal backstop
authority for transmission planning, something which is
included in the bipartisan infrastructure package and will
facilitate much more transmission in this country.
Mr. Baird, I want to ask you, your firm is doing this every
day. Can you talk a little bit from that perspective. Have your
clients seen health impacts, positive health impacts from these
changes?
Mr. Baird. Thank you, Senator. We are working with MIT as
well as Columbia Mailman School of Public Health to measure air
quality and asthma impact across the population in New York
City, to measure the impacts on air quality and reductions in
air pollution from electrifying buildings.
And they are significant. They are so significant that the
New York State government has opened an R&D exploration of the
reduced impact on Medicaid and Medicare costs because of
reduced emergency room visitation due to chronic asthma. The
hospital systems in New York they know which apartment
buildings overproduce chronic asthmatics.
They can give you a list of six or 700 apartment buildings
in the Bronx which has the highest asthma rates in America, and
they can say these are the apartment buildings in the Bronx
that are overproducing asthma even relative to other folks in
the Bronx.
And if we can green and electrify those buildings we do
dramatically reduce indoor air pollution caused by burning
fossil fuels. There's 5,000 buildings in the Bronx that burn
oil in their basements for heat and for hot water which means
it burns every single day, as whether it's summer or winter
there does need to be oil burned for hot water, cooking, and
showering.
And so we do believe that there are multiple academic
multi-year studies that will indicate that a reduction in air
pollution will have a dramatically positive impact on asthma.
This is going to end up being like lead sir, gas and oil in
buildings. It's going to be like lead.
We're going to look back on it five years from now and say
what were thinking? How could we subject our children, the next
generation to these toxins.
Vice Chairman Heinrich. Would you characterize I think one
of the words I've heard is deindustrialization, characterize
your buildings and what the residents of these buildings start
with and end with, and would you characterize them as more or
less advanced technological, et cetera.
Mr. Baird. We characterize our buildings and our processes.
We want to turn old, antiquated, fossil fuel wasting, unhealthy
you know systems in basements where no one wants to go, and no
one wants to breathe.
We want to turn that building into a Tesla. Just like a
Tesla is modern. It's all electric. It has the best software in
the world. We can now do that to buildings. That's what a heat
pump actually allows us to do is to modernize buildings and
bring them from the 1950s or 1960s into 2021, or even 2030.
We are bringing low income residents and school children
who attend schools in the Bronx into the future by giving them
the most modern technology that is available, and it is the
opposite of deindustrialization. It is using all of the
innovation and machine learning and hardware and software from
Silicon Valley which funds my company, and we are bringing that
to bear in our neglected real estate sector across America to
move them into the modern era and make people healthier and
safer.
Vice Chairman Heinrich. So let's get to the hard questions.
Which ones of you actually own an induction stove? Because I
think that's the elephant in the room. So for Dr. Stokes or Mr.
Baird, I have to admit my own bias in thinking that oh how can
I cook without gas until I cooked with an induction stove.
So tell me about that contrast because everything else I
think are things that people are going to naturally gravitate
toward the obviously more efficient, more advanced heat pump
solutions, but with natural gas we did such a good job
convincing ourselves that it was the right way to cook, tell me
about that.
Dr. Stokes. Yes, there's been a marketing campaign for a
long time to sell gas to the American people, and you know we
believe cooking with gas that it is the better way to cook. But
what we're realizing is that we're not asking people to go back
to the electric coils which we can all agree are terrible, we
are asking people to go to as Donnel would put it, the Tesla of
their stoves right?
Induction stoves are safer. They don't heat up. They
basically use magnets to transfer to other surfaces the heat,
and so they're safer, and of course they're not emitting these
toxins into homes like the carcinogens that we've talked about,
particular matter, things that cause asthma.
I honestly think the American people don't know in some
ways all the risks of gas stoves in their homes and how much
the technology has come ahead. And what we've got to do is make
that technology the same cost as putting in a new gas stove,
make it affordable, and that's where Congress can really help
out with those zero emissions appliance rebates.
Vice Chairman Heinrich. Thank you. My time is expired, but
I'm going to hopefully stick around for a second panel if I
can. Congressman Estes and then we'll have Congressman Peters
after him.
Representative Estes. Well thank you Mr. Chairman and thank
you to all our witnesses for being here today. You know before
the COVID-19 pandemic our economy had taken off thanks in part
to policies that valued America's energy independence. And
today as we try to recapture that economic boom that we saw
before the pandemic, I worry that many companies who fought
hard to stay afloat during COVID will ultimately fail with the
rising tide of government mandates that make everything more
expensive for them including energy.
And the higher cost to power small businesses and homes
will negatively affect both consumers as well as the family
budget. The fact that nearly 80 percent of all U.S. energy
comes from gas, oil and coal with wind and solar accounting for
roughly 10 percent, so before we look at maybe what could be
called unrealistic plans to remove fossil fuels completely from
the U.S. economy, we should look at how do we focus on getting
more efficient across the spectrum.
And we certainly don't need special tax credits to
subsidize electric vehicles for millionaires to ride in
California, particularly when my middle class folks in Kansas
have to pay for that write off on the Tesla.
So I'm a big advocate of an all of the above energy
strategy that prioritizes American energy independent, embraces
the spectrum of fossil fuels and renewable energy and doesn't
necessary focus on Washington picking winners and losers
through these big subsidies.
On the other side it looks a lot like an anything but
strategy that demonizes fossil fuels and clean energy like
nuclear. An everything but policy is bad for our economy and
environment. We've seen the fracking and natural gas have
reduced natural greenhouse gas emissions more than any other
technology in the past two decades, and innovation in that
sector were driven entirely by the private sector, not by some
top down government mandates.
Dr. Dourado research has shown that lower income households
spend more of their budget on energy bills. For example a 2015
report found that households with less than $30,000.00 annually
in income spend 23 percent of their after tax income on energy,
while households making over 50 percent annually spent just 7
percent of their after tax income on energy.
How do higher energy costs impact lower income families?
Dr. Dourado. Thank you Representative Estes. That is
correct that poorer families spend a higher percentage of their
budget on energy, and I think because energy is a necessity,
and this is true across the board of almost all necessities
that they affect the poorest the most.
I think it's extremely important that we focus on
increasing productivity growth in our energy sector, and use
the opportunity afforded through conversations like this to
drive progress in our energy system across the board including
next generation technologies like advanced nuclear and advanced
geothermal.
I think that productivity will you know disproportionately
help the poorest Americans.
Representative Estes. Thank you. Also, Dr. Dourado you
noted in your writing that the current structure of Federal
subsidies for clean energy generation significantly favors some
forms of power over others. Senator Lee talked earlier about on
Federal lands gas being favored over geothermal. But isn't it
also true that solar power is favored over geothermal?
And how does that uneven nature of government subsidies
affect clean energy production in the United States, and
wouldn't a more neutral approach spur greater creation of what
could ultimately be cheaper forms of energy for the future?
Dr. Dourado. I think it would be an excellent idea to take
a very close look at the permitting that we do on all forms of
energy on Federal land, and see you know what is the maximum
scope for processes like categorical exclusions that would
simplify permitting for you know for solar and for geothermal,
and for anything else that we might want to do.
So I think maximizing use of you know both legislative or
administrative categorical solutions with that regard to the
energy selected I think would be very good for productivity.
Representative Estes. Thank you. You know one of the
things, and I'm about to run out of time, but one of the things
that I noted as we looked ahead at energy production is that
some of the renewables, the most likely ones we've talked about
today in terms of wind and solar are the least productive in
terms of being efficient.
And so we need to make sure that as we look to the future
that we can have a total generating capacity that provide our
electric needs into the future, so thank you Mr. Chairman and
I'll yield back.
Vice Chairman Heinrich. Representative Peters.
Representative Peters. Thank you Senator Vice Chairman
Heinrich for holding this important hearing. Also for
mentioning the backstop authority for interstate high voltage
transmission which we worked on together, and I hope we can
pass that out of the House next week.
It's great to be joined by climate advocates,
electrification experts, and even a fellow San Diegan in Mr.
Matusiak, good to see you on this side of the country. And
before I start I just want to say too to Mr. Schweikert. Count
me in on the people who want to deal with NEPA in the context
of climate action.
We have a very short time to get to where we need to, and I
think we really have to look hard at the paperwork we put the
people through particularly for things that are explicitly
environmentally beneficial and I would love to work with you on
cutting down the time of that.
Mr. Matusiak I'm interested in the scale of this project.
This is a tremendously ambitious idea. Can you tell me kind of
what you mean by electrifying everything? What does that mean
in terms of time and cost and resources? And then I'm going to
ask you kind of if you were us, how would you set up a program
in terms of funding and incentives that would get us there?
Mr. Matusiak. Well thank you Congressman Peters. It's nice
to see you here in Washington, and hopefully get to see you on
the other side of the country too.
Representative Peters. The better side.
Mr. Matusiak. Where it's less humid and you know nicer
weather. I would just say a couple of things. I think for us
the conversation about electrifying everything is just a math
question. How do we get to zero emissions and how do we do that
as quickly as possible?
It's really electrifying almost everything. It's really
focusing on our energy emissions, and our energy use in the
country accounts for 90 percent of emissions. So by
transitioning and electrifying the economy a few things happen.
The first thing that happens is that we actually cut in half
the amount of energy that we use as a country because the
reality is that electric machines are much more efficient than
non-electric ones.
It turns out that the heat pumps that we're talking about
today for people's homes are three times more efficient than
the machines that they would replace. They are more efficient
and they cost less to operate than any other kind of machine on
the market.
So once we start electrifying the economy on our supply
side, we have an opportunity actually lower the amount of
energy, reduce the amount of energy we use as a country because
it turns out that electrification is the efficiency. But where
we focus, and where we had spent a lot of time thinking about
is the demand side of the question.
Because when you electrify the supply side, when you
decarbonize our supply, you still have machines on the other
end that have to use the power that we are producing. And the
opportunity that we have is to start thinking about the
American households as the keystone of our infrastructure
because every single one of those households as we go forward
in the future, will have cars in the garage with batteries
between the wheels.
They can have heat pumps in their homes that actually also
serve as batteries, and each of those homes become a way for us
to better balance the grid, to have better resilience, and to
actually save Americans a lot of money so that they can plow it
back into the economy.
Representative Peters. Just to make sure that we get to
where I need to go is I understand that from the perspective of
new construction, it's relatively easy to understand. What
would you do to accomplish the retrofit of existing buildings?
Mr. Matusiak. By our analysis most of American homes in the
United States will save money on their bills if the front end
costs of these machines, these efficient electric heat pump
machines are the same as the ones that the would be replacing.
And so really, Senator Heinrich has introduced a bill for
rebates to lower the front end costs of these machines to make
them the same as the ones that they would replace.
We are convinced that Americans will choose those options
if they are given the opportunity. And in addition to the
rebates that we've talked about in terms of lowering the front
end costs I would add two other things.
The first is low cost financing because these machines last
a very long time, 10 years, 15 years, 20, 25 years. We can
amortize the costs over a long period of time to further reduce
the monthly cost to the American homeowner. The second thing
that I would add on top of the rebates is actually goes to
regulation.
We can lower the cost to the American consumer by making it
easier for these machines to be installed, and ensuring that we
have American workers who are trained to do that.
Representative Peters. I'm going to run out of time. I
guess the other thing for us to look at as we go forward is one
of the issues with the deployment of solar for instance is that
people who have the upfront money to put those in are somewhat
advantages, and it ends up with people that can't afford the
upfront costs subsidizing the others. And I would like to make
sure that we come up with a way to ensure that that doesn't
happen in this instance. And Mr. Chairman the San Diegans have
used up my five minutes.
Vice Chairman Heinrich. Senator Cruz.
Senator Cruz. Thank you Mr. Chairman. Welcome to each of
the witnesses. The advocates of the Green New Deal like to
pitch their proposals in high sounding rhetoric, but the
reality of their proposals are that they would do four things.
They would hurt the poor. They would hurt the working
class. They would give special benefits and subsidies to the
rich, and they would hurt the environment. The advocates of the
Green New Deal like to pretend that they follow the science,
that the laws of supply and demand somehow don't apply to them.
And they pretend that by spending trillions of dollars
we're saving money. In a country that is blessed with vast
natural resources we should be paying a fraction of the price
for electricity and gasoline, but because of bad policies at
the local, State and Federal level, Californians pay on average
twice as much per kilowatt for electricity and a dollar more
per gallon of gas, as people in Texas and most of the country.
And if you want to understand the Green New Deal it is to
bring the failed energy policies of California to force them on
the rest of the country. And for anyone who might pause to say
well what's so wrong with that you could look no further than a
census report released this month, September 2021 that
concluded out of 50 states which state has the highest level of
poverty.
The answer is of course the State of California as it was
the year before, as it was the year before, as it was the year
before. California according to the Census Bureau's latest
calculation 15.4 percent of California residents lived in
poverty from 2018 to 2020. There's only one place in the United
States that exceeds the poverty level for California, and that
is the place we find ourselves right now the District of
Columbia.
The District of Columbia has the highest poverty level
California has the second. Now what do those two jurisdictions
share in common? They are governed exclusively by Democrats.
They are governed by policies that drive up the costs of
working class people, of low income people, and at the same
time give generous subsidies to millionaires, so the proposals
we had before sort of force Americans to shift from the gas
furnace to a heat pump.
They are to force Americans to shift from their car or
truck in their driveway to a much higher priced electric
vehicle, to give them no choice in the matter. But not only
that in doing so to hurt the environment. Right now a
significant percentage of electricity is produced by coal-fired
plants.
As a very practical step if you are shifting from a gas to
an electric vehicle in a jurisdiction where your electricity is
coming from coal, you are moving to a dirtier and more
environmentally damaging way of travel. It's also worth noting
that of every country on earth there's one country that has
reduced CO2 more than any other country, and that is
the country we are in right now the United States of America.
The United States of America has reduced CO2
emissions steadily. They peaked in 2007 and they have been
steadily declining ever since. Right now today we emit the same
amount of CO2 as we did in the early 1990s, and even
less methane, despite having a population of 60 million more.
Now why is that?
The principle driver of our steady reduction in
CO2 is the substitution of natural gas for coal
production in electricity. If the advocates of the Green New
Deal actually believed their rhetoric that reducing
CO2 was a good thing, they wouldn't fight tooth and
nail to kill natural gas production, to kill natural gas
pipelines to shut it down.
Mr. Matusiak, your biography says that you are a Managing
Partner of an advisory firm focused on addressing climate
change and economic inequality. Suppose that the
electrification policy you've testified about today were to be
implemented fully and entirely, what would be the temperature
affect by the year 2100 using the EPA's own climate model?
Mr. Matusiak. Thank you Senator Cruz. I haven't done that
calculation on the back of this testimony, but what I would say
is that if we were going to fully implement the climate policy
we're talking about today we would be ensuring on a voluntary
basis that homeowners all across the country, households all
across the country would be able to elect to purchase a heat
pump water heater, a space heater, inductive stove.
Senator Cruz. Sir if you haven't done the research on what
the climate benefit would be from the policies you're
advocating using the EPA's own model I'll tell you what they
would be according to the EPA's own model in 2100, so 80 years
from now global temperature would be lowered by 0.173 degrees
Celsius.
And in exchange for that you would impose trillions of
dollars of costs on African-Americans, on Hispanics, on low
income Americans, and you would drive up poverty across the
country. It's difficult to ascertain why that's good for this
country.
Mr. Matusiak. So I would just respond by saying a couple
things. The first is that 40 percent of our emissions come from
decisions made around the kitchen table in the households all
across America.
The effect of the policy that we are talking about here
today is to drive 40 percent of those emissions down to zero.
The component piece of that with respect to America's
contribution to global emissions would be the 40 percent of
America's contribution to global emissions.
Senator Cruz. Do you dispute the EPA number?
Vice Chairman Heinrich. The gentleman's time has expired.
Mr. Matusiak. The effects on American households would be
to put money back into the pockets of American families because
the reality is that people are paying way too much on their
energy bills, and those energy bills as was stated earlier by
one of your colleagues are in elastic. People have to----
Senator Cruz. Do you dispute----
Vice Chairman Heinrich. Thank you for your patience Mr.
Matusiak. Congressman Trone has been----
Senator Cruz. Don't want him to answer that one?
Vice Chairman Heinrich. I would be happy to let him answer
that.
Senator Cruz. Good. I would welcome. Do you dispute the EPA
number?
Mr. Matusiak. I didn't hear the question I'm sorry.
Senator Cruz. Do you dispute the EPA number that the effect
of all these proposals by the year 2100 would be to decrease
global temperature by 0.173 degrees Celsius?
Mr. Matusiak. What I know is what we are stacking in terms
of emissions as a country. And what I know is what our North
Star needs to be, and our North Star needs to be to get to
zero. And the only way to get to zero is to electrify as many
of the things as we can in this economy thank you.
Vice Chairman Heinrich. Congressman Trone thanks for your
patience.
Representative Trone. Mr. Chairman would it be okay if I
asked a few questions rather than give a partisan speech?
Vice Chairman Heinrich. It would.
Representative Trone. That'd be great. Let's do it then.
Mr. Baird your testimony discussed some of the incredible work
that BlocPower LLC's been doing in solar energy efficient
technology, and you also highlighted how your company employs
people in vulnerable populations. One of my top priorities in
Congress is criminal justice reform. I'm very passionate about
connecting justice impacted individuals with the resources to
build back a better life.
How do you think the transition to the greener energy
technology will impact the job market for disadvantaged folks
like our justice impacted individuals?
Mr. Baird. Thank you sir for the question. I sit on the
board of the New York Federal Reserve Bank back in New York.
And one of the things we look at is construction data. And
across the country our ability to build new buildings, retrofit
existing buildings, and do construction across America is
impacted by the fact that folks from our generation--me and Dr.
Stokes, we don't necessarily want to go work for our baby
boomer parents plumbing company it turns out.
We want to be on YouTube as an influencer. And so there is
a shortage of highly skilled construction workers across
America that is impacting our economic productivity. We think
there's a massive opportunity here in front of all of us to
train and to employ into economically and environmentally
productive work--jobs, returning citizens to install heat
pumps, to assess buildings in need of furnace upgrades or
replacements to keep our kids healthy at home and in school.
And in New York City we are actually partnering with the
city government. Right now we're hiring 1,500 young adults who
are at risk of gun violence as defined by the District Attorney
in all five boroughs. These folks have witnessed gun violence,
they've been impacted by gun violence in high crime, low income
neighborhoods in New York City.
And so we're hiring hundreds and hundreds of these young
people. We're training them in cutting edge software out of
Silicon Valley. How do you build a 3-D model of a building with
a three dimensional camera on top of your construction hat, so
that not only can they participate in the current construction
economy, but they can participate in innovating and leading and
ensuring that American construction workers are at the
forefront of innovation.
Representative Trone. I think that's fantastic Mr. Baird,
and my company has hired over 500 returning citizens and it's
good we can do good business, and do right by other folks too.
Mr. Baird. They work harder in fact sir as I'm sure you
know because when you find the right folks they are indeed very
focused and ready to work in a way that other folks may not be.
Representative Trone. And we have a better retention rate.
Mr. Baird. Correct.
Representative Trone. Mr. Matusiak if we could jump over.
This administration has put back the Build Back Better Plan to
invest in the American people and our economy. It's vital this
plan works to ensure individuals have access to technology
that's safe for them and the planet.
The President's plan is an opportunity to lay out the
groundwork for long term change. How can we ensure these
investments through Build Back Better can be targeted to help
address disparities we have in electrification.
Mr. Matusiak. Thank you Congressman. Wonderful question.
The reality is we have to be aware of the price disparities
that face American households when it comes to not just the
energy burden of their current bills, but also what it's going
to mean for them to electrify.
One of the things Senator Heinrich has done through his
legislation is introduce a bill that would recognize those
disparities by putting increased dollars in the form of
consumer point of sale rebates to low and moderate income
households as compared to those who are not.
Those are the kinds of approaches we need to take. We need
to be eyes open to the costs associated with the transition,
enabling low and moderate income families who frankly have the
most to gain from the transition by electrifying their homes,
and enabling them to participate in that transition, and making
sure as a matter of public policy that we are putting the thumb
on the scale and investing and enabling them to do so.
Representative Trone. Mr. Chairman thank you I yield back.
Vice Chairman Heinrich. Representative Arrington.
Representative Arrington. Mr. Chairman thank you and thank
you panelists. I'm from Texas. I share some of my colleagues
sentiments if not all of them, and I understand that there are
good intention folk on both sides of this issue with respect to
the electrification of our country and our power systems.
And I don't judge or impugn the motives of those who want
to do it. I think it's all in the way we approach it, and I
think the way my colleagues are approaching it on the Democrat
side is just too extreme, it's too radical, it's too abrupt,
it's going to be too costly.
It's not balanced with respect to what we need to continue
to grow our economy, not just for the opportunities and the
prosperity for America, but vis-a-vis our adversaries and our
competitors. We need to look at questions fundamentally that I
think are inconclusive like the human activity, industrial
activities, contribution to overall relative to the ebb and
flow of our carbon and greenhouse gas emissions.
I think we need to make decisions also with respect to the
United States contribution, again relative to the rest of the
world including China and other much larger polluters, and much
bigger problems.
So I'm just very concerned about what I think is
ideologically driven. I really do. Like I said I think a lot of
this is inconclusive. We have been blessed with fossil fuels.
And there's not hardly a thing in this room, including the
microphone, our smart phones, the glasses that Dr. Dourado's
wearing, our clothes, medical devices that don't have
hydrocarbon component parts.
Actually 90 percent of the products that we use have some
petrol chemical element to them. And the natural gas shale
revolution has been a gift to the United States, and again not
just our quality of lives, but for consumers to have affordable
ways to heat and cool their home and get to and from work, to
give us a competitive advantage to China who does not share our
values.
And to give us energy independence. It's been remarkable.
And I'm concerned Mr. Chairman, about the hostility. And I hear
it from my Ways and Means colleagues, with all due respect to
Mr. Beyer, he made mention at a hearing that we were going to
burn up the planet. I don't think that's right.
I think we need to manage emissions. We need to steward our
environment, but we've got to be smart about this. I don't have
a prepared speech here, and I'm not going to try to rail on
anybody in particular. I just think it's a fool's errand to try
to radically transform the greatest economy in the world and
have this in a way that picks winners and losers.
I mean if you're going to accelerate technology by battery
story and the production, sustainability, reliability of
renewables, at least let the market drive it, and let's have
technology neutral government intervention, so that we can make
sure the right technologies are being brought to bear to get us
where we're going.
I think we're way too focused on the clean and the
reduction, and it's very de minimis in terms of our global
contribution. You can take away all of transportation and it's
going to be really a 1 percent, 2 percent reduction globally.
Why not be rational and smart in the heat of emotional debates
on both side? Have an all the above approach.
I generate--I say I, my district generates more wind energy
than any district in the country, three times California. But
I'm also on top of the largest oil base in the world. And we
coexist peacefully, and we are transitioning I think
responsibly. So you know I should have a question here I know,
but I'm very concerned about the path we're on.
I think it's extremely irresponsible. I think there's a lot
of radical climate alarmist and ideologues driving this, and I
think it's going to ruin the greatest economy in the world. And
China is going to pounce on us, and they're just waiting for us
to trip up. But I have to say I've seen the enemy and the enemy
is us.
Let's work together on an all the above in a smart and
logical and responsible transition. That would be my plea to my
colleagues, and I'm sorry I went over time. I had some
questions, but I will yield back because I've expired--at least
my time has.
Vice Chairman Heinrich. Representative Beatty.
Representative Beatty. Thank you Mr. Chairman, to my
colleagues and to all of our witnesses. Clearly, we have
different opinions that you've heard today. I guess that could
be the beauty of having testimony, winners and losers, radical.
Sorry my colleague from Texas left because Mr. Chairman I
wanted to remind him about talking about those failures of
energy policies in other states. I think it was earlier this
year that his home State of Texas had a colossal failure of its
electric grid, and it led to blackouts and price gouging for
electricity costs, and this happened because they refused to
make the investments necessary to harden their grid, while my
colleagues Democrats are trying to Build Back Better in the
budget reconciliation.
But he might not have remembered that because I think maybe
he was on vacation somewhere. But with that to the witnesses,
Mr. Baird, as Chair of the House Financial Services Diversity
and Inclusion Subcommittee, I have routinely sought ways for
more venture capital investments to find its way to minority-
and women-owned companies.
According to the business database Crunchbase, women-led
startups receive roughly 2.3 percent of venture capital
investments in 2020, and another study found that black-owned
startups only received around 2.9 percent of venture capitals
in 2019.
Can you tell me as an African-American male who founded a
very successful startup and secured venture capital investments
from one of the largest venture capital firms in the country,
can you discuss your experience in securing venture capital
investment, or any thoughts that you may have on how to
increase the minority-owned startups receiving venture capital?
Mr. Baird. Thank you for the question Congresswoman, and
for your leadership on financial services. When starting our
company we met with 200 venture capitalists back to back to
back. Everyone told us no for a variety of reasons. The real
reason was they weren't quite comfortable with the risk that
our company, and perhaps my profile as a founder signified.
Early stage venture capital investing is like dating it
turns out. There actually are non-verbal communications, and
were you part of this fraternity or sorority and these things
really matter at the stage of investment before a company has
proven itself in the marketplace, before it has customers,
before it has revenue, before it has traction.
And early stage investor is taking a bet on the founder and
you often--too often find according to the statistics that you
outlined that since most venture capitalists are men they too
often are not comfortable investing in women and will say
things like, ``Oh well, that's interesting. Let me ask my wife
if this is a good company for me to invest in.''
So that is a problem. For me we were very fortunate to win
a clean energy contract for two and a half million dollars from
the U.S. Department of Energy. It was competitively bid. We bid
and competed against some of the largest engineering firms in
America, but the Department of Energy at that time was
responsive to innovation, and to technology and software, and
worked with us collaboratively--in fact bent over backwards.
Once we won the contract to help us access the capital, the
legal services, the accounting services that we needed to
further qualify to actually begin the contract. I think there's
a major opportunity when we look at HUD. You don't see that
kind of small business innovation budget at HUD in the same way
as you do at the Department of Defense, Department of
Agriculture, the U.S. Department of Energy.
And so I think it is important to look into what are the
ways that we can fund innovation out of HUD. We hosted the EPA
Administrator Michael Regan in the Bronx to visit one of our
schools that we've electrified on Monday.
And he suggested an interagency working group with himself,
the Secretary of Energy, and Secretary Fudge at HUD to begin to
look at how BIPOC climate tech startups could work together to
partner with the Federal Government to deliver the climate type
solutions that our communities need, particular with respect to
the infrastructure spending that's coming down.
How do we prepare communities that have been historically
disenfranchised to access the capital that they are entitled
to?
Representative Beatty. Thank you, thank you Mr. Chairman.
Vice Chairman Heinrich. Senator Klobuchar.
Senator Klobuchar. Well very good thank you Mr. Chair,
thank you Vice Chair as well as Senator Lee for this hearing.
I'm going to start with the exciting world of appliances, or as
I call it building a fridge to the next century.
Okay. So one example of this is that we have a co-op. We
have a lot of electrical co-ops in our state, the highest
number per capita of any state, interesting electric co-ops.
And it's a different scale of development of course of energy
innovation. But one called the Steele-Waseca Co-op, developed a
program where customers who purchased a solar panel would
receive a free water heater with a demand control switch.
And they showed me all these people purchased solar panels
not for their farms, actually they were outside of the--right
outside of the co-op, but then they got this water heater. So
Mr. Matusiak, Dr. Stokes, can you comment on ways to speed up
the deployment of cleaner appliances, not just water heaters,
anything. Senator Hogan and I actually end up doing a bill on
this, but that's another story, so go ahead.
Mr. Matusiak. Well, Senator Klobuchar thank you so much for
the question. It's an honor to have that conversation with you.
Just if you ever look at your water heater in your house you
might see that yellow sticker that tells you how much the
yearly energy costs are and just to give you a window into
maybe that sticker, and what it could say.
A conventional gas water heater has a yearly energy cost of
$293.00. High efficiency gas $271.00. A modern heat pump
electric water heater $104.00. There's a reason why the co-op
in your state is giving free heat pump water heaters out with
the solar panels.
It is because once you start electrifying one thing in the
house it becomes easier to electrify other things in the house
and the savings stack on top of one another. And so for us what
is really critical is that we get started. Every single day in
Minnesota and across the country water heaters are failing,
furnaces are failing, people are changing out stovetops.
Appliances have useful lives, then they come up and they
need to be swapped out. And homeowners are not actually experts
when it comes to water heaters and furnaces. I have yet to meet
a single American or anybody that I have talked to who has said
I can't wait for that new model water heater to come out next
year because I'm absolutely upgrading, that's not how it works.
And so therefore, what needs to happen is that the front
end cost of these machines need to be at the same level as the
ones that they would otherwise have a choice to buy. If they
are, the savings will be apparent, the benefits will be
apparent, and our firm belief is that American families will
vote with their wallets and bring the climate benefits along
with them.
Senator Klobuchar. Okay. Do you want to just quick add
anything to that Dr. Stokes?
Dr. Stokes. Sure. I would just like to elevate the work of
Vice Chairman Heinrich with his Zero Emissions Home Act which
may be slightly renamed, that is working on rebates for
Americans so that it is more affordable to get these
appliances.
Senator Klobuchar. Exactly.
Dr. Stokes. Yes that's what we really need in Build Back
Better Plan.
Senator Klobuchar. Okay very good. Mr. Baird one of the
things we also have found challenging is non-profits and making
sure that a lot of them are in older buildings, and then
they've got limited resources that they want to do for whatever
their work is, or the churches, the synagogues, mosques, and
another bill we did actually did something with that to make it
easier for non-profits, and actually it's included, it's in the
bipartisan infrastructure bill.
Talk about how we can make that easier and why that's a
good idea, and then I have one last quick question for you Dr.
Dourado, so if you could keep it to 30 seconds Mr. Baird.
Mr. Baird. Thank you Senator Klobuchar. I'll give you an
example of a church in Westchester, New York. We reduced their
greenhouse gas emissions by 70 percent, 7-0, which was great
for all the millennials and Gen Zers to encourage them to
attend services because their church was addressing the climate
crisis which is important for their generation.
But we also saved them $25,000.00 a year which they were
able to reinvest in you know raises for Sunday school teachers
and other items. Using the rebates that Dr. Stokes spoke about
are very important to helping all Americans access the benefits
of clean energy technology.
Senator Klobuchar. Okay. You did it in 30 seconds. It was
impressive. Dr. Dourado you talked about in your testimony
diversified carbon free energy resources, streamlined
permitting. We've got about 75 million in the bipartisan
infrastructure bill for states to establish their own
permitting programs and giving Federal agencies the direction
to evaluate, and look at permitting timelines. I'm especially
obsessed with this with the pandemic and how things got
disrupted and then trying to get things done and approved.
I think if anything it's gotten worse. Can you--over the
last two years. Can you speak to the importance of streamlining
and investing in efficient permitting?
Dr. Dourado. Yes Senator. I think it's critical and I think
in particular it creates a lot of value even if we are going to
do subsidies. I think combining it, subsidies with streamlined
permitting returns higher value to the taxpayer because you're
not just subsidizing people to go through this painful
permitting process that often has not very much point, so I
think adds a lot of value.
Senator Klobuchar. Thank you. Thank you. Thanks Mr. Chair
and Mr. Vice Chair.
Vice Chairman Heinrich. Thank you Senator. There's interest
in folks in doing a second round. If it's okay with everyone
I'd like to suggest that the second round be limited to three
minutes, and I'll stick around as long as I possibly can.
Chairman Beyer.
Chairman Beyer. Thank you Senator very much. With respect
to my friend from Texas who is really my friend. I just want to
quote from August 9, IPCCC at the U.N. quoted 14,000 different
studies. They said that changes in climate today have little
parallel in human history. The last decade is quite likely the
hottest the planet has been in the 125,000 years. The world's
glaciers are melting and receding at a rate unprecedented in at
least the last 2,000 years.
Atmospheric levels of carbon dioxide have not been this
high in at least 2 million years. Ocean levels have risen 8
inches on average over the past century, and the rate of
increase has doubled since 2006. Heatwaves have become
significantly hotter since 1950 and last longer in much of the
world.
Bursts of extreme heat in the ocean which can kill fish,
sea birds and coral reefs have doubled in frequency since the
1980s, and I believe we have just come through the hottest
summer on record. I'm going to stick with burning up the
planet.
By the way I wish that were not true. I mean nothing would
thrill me more than science to come through and say we
misunderstood climate change, but for the moment I think I'm
going to stick with the 14,000 studies.
Mr. Baird, tell us about the business model. Can you really
make a profit and have homes save energy and save costs? What's
their payback, how many years?
Mr. Baird. Thank you for the question sir. We have a credit
line with Goldman Sachs for 50 million dollars. We did 36
months of extensive financial due diligence with the team at
Goldman Sachs in order to answer your question. The Goldman
folks, they are interested in environmental sustainability, but
they are more interested in profit.
And they invested this capital with our company because
were able to demonstrate that on a unit economics basis per
building, we were able to generate significant savings. A 70
percent reduction in energy usage dramatically lowers energy
costs so significantly that you can use those savings as part
of your financial underwriting.
So if you're spending $50,000.00 per year on energy right
now and that baseline cost comes down to $25,000.00. You now
have $25,000.00 worth of savings which you can use as part of
your financial payback. For large heat pump projects in New
York City we see paybacks within 7 to 15 years, and we think
that a financial product--we and Goldman believe that you can
kind of almost create like a green mortgage where a rebate from
the utility company, or from the Federal Government would be
used, almost like a credit enhancement, or an FDIC guarantee at
the end of that 15 year term.
Chairman Beyer. Thank you Mr. Baird very much.
Vice Chairman Heinrich. Representative Arrington.
Representative Arrington. Thank you. I'm looking at Steve
Koonin's book. He was an Obama Administration Senior Official
at Department of Energy. It says hurricanes and tornadoes are
becoming more fierce. Climate change will be an economic
disaster, surging sea levels.
He said you've heard all of these presented as fact, but
according to science all these statements are profoundly
misleading. And he goes on to say that these are not
definitive, they're unsettled--that's the name of his book. So
I get it. It's sincere. I'm not going to question again your
motive.
I think the reality is when you look at for example just
the combustion engine, and just the transportation. Our
transportation systems driven by hydrocarbon fuels contributes
4 percent globally to the greenhouse gas emissions.
If you put everybody in an electric vehicle you're probably
not going to be able to accomplish this goal on planes and
trains all the way, but you just do the electric vehicles. And
you have your charging stations. You've got to get electricity
somewhere. By the time you get to netting out the emissions
from charging the cars it's 1 percent. It's less than 1
percent.
And we're going to try to subsidize the entire electric
vehicle industry and put everybody in an electric car, the math
doesn't work to your point. It's a math problem at that point.
I mean we could do it, but we're 28 trillion in debt. We're not
paying any of this.
And look I'm going to say the Republicans are just as
guilty in not paying for stuff. That's the biggest threat to
our country, not climate change. I'd say obesity is a bigger
threat to our country, and the disease states that follow. I'd
say opioid epidemic is a bigger threat. It's more immediate.
I'd say inflation is a bigger concern to most Americans.
But I'll get to a question because I think you get the
point about where I sit and stand on this issue. And I'd like
to be objective about it, but on this whole electrification and
the data that I went through on how much we would actually
reduce our carbon footprint relative to the global pollution,
Dr. Dourado what's the smartest way to get us to the goal of a
reduction in carbon emission if that's your thing, and maybe
it's wise to manage that down as we already are and lead the
world.
How do we accelerate that so that we're not subsidizing
things that don't get us there most efficiently and effectively
for the goal, for the taxpayer, for the economy, and for all
the other things quite frankly that don't get much
consideration? Clean gets all the love, but reliability and
affordability ought to be in the mix don't you think, and can
you answer that question it's very broad.
And thank you again Mr. Chairman for the additional
questions and Mr. Beyer is my friend and I respect his
position.
Vice Chairman Heinrich. And next time I'll bring a bag of
question marks for all of our folks to. Go ahead.
Dr. Dourado. Yes Congressman as I testified I believe like
the way to do it is through technology, which I am gratified
that we are talking about technology today. I think but I think
it's a wide range of technologies include next generation,
nuclear and geothermal.
I think to really advance the whole suite of technologies
that we'll need to reduce our carbon emissions we need to take
a very close look at permitting, and make it easier to build in
this country, build all kinds of new infrastructure across the
board. And use sort of technology neutral policies to get us
there.
Vice Chairman Heinrich. Thank you. I think I want to talk a
little bit about math because comparing us to the rest of the
world in our missions does miss the point that we are I believe
the second biggest emitter in the world today after China, but
we're also the largest historical emitter, so we put a lot of
this stuff in the atmosphere in the first place and got us to
where we are today in terms of parts per million in that
atmosphere.
Now my friend from Texas, not Congressman Arrington, but
the other friend from Texas who was here for a little while
said that if you plug an electric vehicle into a coal-fired
power plant it's dirtier than a gas vehicle. That math doesn't
work, and it doesn't work because an internal combustion engine
is only about 30 to 35 percent efficient.
Whereas an electric motor is well over 90 percent efficient
in most applications. So even if you plug into a power plant
that's not true. But if you plug in in Texas where so much of
their power comes from wind it gets even cleaner. So I do think
the math here matters.
And one of the most fascinating things that I learned from
the work that Rewiring has done, and the work that Saul
Griffith has done on primary energy is the realization that if
we electrify we can actually cut our primary energy in half.
Mr. Matusiak can you elaborate on that, and explain why that
is.
Mr. Matusiak. Yes thank you Senator Heinrich. The shorthand
is electrification is the efficiency because as you just said
electric motors are three times more efficient than fossil
fuels ones. Just for clarification, cars represent 15 percent
of the U.S. emissions, 12 percent of our energy emissions, but
the important point is that every single one of the machines
that we're talking about is an appreciating climate asset
because you're talking about the demand side where people are
buying things, holding on to them for 10, 15, 20, 25 years,
while the grid is getting cleaner and cheaper.
And so when it comes to Senator your question about why
electrification enables us to save so much energy in the end,
it is because of the technology embedded in these machines, and
what they enable us to do. One other additional point that I
would just make which is important, is that every single one--
most of these machines, we're talking about the heat pumps and
the cars, are also part of the grid.
They go to the resilience of our whole grid because we are
starting to put aspects of the grid's storage in garages and in
basements across 121 million households in the U.S. That helps
us manage load over the day. It helps us respond if there is
ever a failure like there was in Texas, or like there was after
Hurricane Ida.
And it enables us to ensure that we have households who can
maintain power and work and persist with their day to day
activities when there is a grid failure. You can't do that if
you have a battery in your garage, and a gas-fired furnace in
your basement. The two things need to talk to each other.
Vice Chairman Heinrich. But if you have an F150 and the
lights go out, you can run you can even plug in your house, and
that's what today was all about. I want to thank Chairman Beyer
for scheduling this hearing and for participating.
I want to thank all of our members who came and
participated today, and I want to thank our witnesses. The
record is going to stay open for three business days and with
that this hearing is adjourned.
[Whereupon the hearing adjourned at 4:21 p.m.]
SUBMISSIONS FOR THE RECORD
Prepared statement of Hon. Donald Beyer Jr., Chairman,
Joint Economic Committee
Mr. Vice Chairman,
Climate change is a threat not only to our planet and our health
but also to our economy. It is a crisis that becomes more deadly and
costly every year. Just this past month, we witnessed catastrophic
weather events from fires in the West to hurricanes in the South to
flooding in the Northeast--events that devastated communities. But it
isn't just homes in the path of this extreme weather that are
susceptible to the negative consequences of climate change. We know
that every American household feels its effects, and that low-income
families and marginalized communities are disproportionately impacted.
To limit global warming and the expensive and life-threatening
extreme weather events that come with it, we, as a Nation, must act now
to aggressively move toward a zero-carbon economy. To achieve our
climate goals, we must look at a multitude of solutions.
Electrifying homes and buildings is an important component of
addressing the existential threat of climate change. The benefits of
electrification go beyond the environmental and health benefits of
lower global temperatures. Electric devices are safer and cheaper to
operate than alternatives. These technologies help reduce residential
energy costs, which boosts household disposable income--a boon to local
businesses across the country--and improves public health outcomes.
Unfortunately, the upfront cost of investing in residential
electrification technologies and appliances can be a significant
obstacle for many families. Economic barriers and a lack of financing
options may stand between homeowners and long-term investments in
lower-cost electric appliances. We know that many households lack the
financial capacity to spend upfront on improvements that will generate
future savings. Research tells us that more than 1/3 of American
families would struggle to afford a $400 emergency, and most of these
upgrades are precisely that type of emergency.
Another challenge consumers face in investing in residential
electrification is that many older homes and buildings in the United
States were not built to accommodate complete household
electrification. Older housing stock often requires building upgrades
to handle modern electric devices. Additionally, the ideal time to
upgrade to the latest technology is often when an in-service device
fails; however, coordinating more involved upgrades takes time that
owners may not have when a furnace dies on a freezing winter evening.
Furthermore, many of the skilled trade workers who install household
appliances lack the time and resources to become trained on new
technologies, creating additional supply chain barriers.
A number of market failures also stand in the way of broad adoption
of electrification technologies. For example, landlords and
homebuilders, who purchase many of the appliances families use, do not
pay the operating costs of these units or breathe the air they operate
in, creating incentives to underinvest in technology, safety and
efficiency.
Market failures disproportionately impact low-income households,
which spend the largest share of rent on utilities. This is
particularly true in rural areas where many houses are connected to the
electric grid, but are forced to pay high heating bills because HVAC
systems have locked them into using high-cost fuels like propane or
oil-fired heat. This mismatch can be even more acute with manufactured
and mobile homes, a key source of affordable housing. Mobile homes use
more energy per square foot than traditional construction and often
rely on high-cost fuels, especially in rural settings.
Well-designed policies can help overcome a number of economic
barriers and market failures that stand in the way of the adoption of
electrification technologies.
This is why I, along with my colleague Rep. Earl Blumenauer of
Oregon, recently introduced the Energy Efficient Commercial Buildings
Act, which helps building owners with the costs of installing energy-
efficient technology. Electrifying buildings puts businesses in a
position to leverage investments in clean electricity into reduced
emissions and lower energy bills. We must make these opportunities
available to families and residential building owners as well.
We must also implement policies that make it easier for all
families to upgrade to the latest zero-emissions technology to ensure
that the gains from building electrification are broadly shared.
Policies, such as point of sale rebates, would help families capitalize
on opportunities to replace outdated and inefficient appliances, save
money on energy bills and live in safer homes with less indoor
pollution.
The scale of the challenges our planet is facing as a result of
climate change is great. We must take this opportunity to deploy every
tool at our disposal to meet the moment. Investments in electrification
technologies can--and should--be part of that solution.
__________
Prepared statement of Hon. Martin Heinrich, Vice Chairman,
Joint Economic Committee
This hearing will come to order.
Thank you, Chairman Beyer, for joining me to hold this hearing
today to highlight what I see as one of the surest actions that we need
to take right now to confront the climate crisis and to advance
stronger, stable, and broadly shared economic growth.
And thank you to the witnesses here today who are leading experts
in the growing movement for widespread electrification.
The fact is that if we ever want to address our contributions to
our climate problem, we need to find sustainable and cost-effective
substitutes for all the machines we use today that burn fossil fuels.
And it's not just our gas-powered cars and trucks.
We are also burning fossil fuels and emitting carbon pollution from
our hot water heaters, furnaces, clothes dryers, ovens, and stoves.
In addition to the climate impacts, researchers are finding that
burning fossil fuels in our homes, including methane--otherwise known
as ``natural'' gas--or home heating oil, is really bad for our health.
This is particularly the case if someone in your family has asthma
or other respiratory conditions.
Even if you are properly ventilating your fossil combustion
devices, the particulate matter in the exhaust from your gas-range
stove likely includes unhealthy levels of harmful chemicals like
nitrogen dioxide, carbon monoxide, and even formaldehyde.
But the good news is that there are already better electric
alternatives for each of these fossil-burning machines in our homes.
Each of these electric substitutes can help reduce our climate
pollution and create savings on our energy bills.
Just last month, I invited Secretary of Energy Jennifer Granholm to
visit New Mexico.
During her visit, we met with homeowners in Albuquerque's
International District neighborhood who are participating in an
exciting demonstration project that is helping families install energy
efficient and electric water heaters and air-source heat pumps in their
homes.
Tammy Fiebelkorn, from the Southwest Energy Efficiency Project,
told us that installing these new appliances is reducing the burden of
energy costs for low-income families.
As she put it, the project is ``fighting climate change while also
making sure that the benefits of that fight make it to our frontline
and disadvantaged communities.''
That's exactly right.
These new electric appliances will be much more efficient than the
fossil fuel-powered machines they are replacing.
And that means significant savings for these families on their
monthly utility bills.
Those savings can make an enormous difference for a family living
paycheck to paycheck.
And, importantly for our climate, all of these electrified machines
can be powered by all the new clean and carbon pollution-free
electricity that we will generate in our new clean energy economy.
This is how we can power our long-term economic recovery and save
families money by solving our pressing climate challenge.
This is how we can build back better.
We need to get to a place where every time a family sits around a
kitchen table to figure out how to replace a broken furnace, stove, or
water heater, they choose to and can afford to install an electric
machine.
That's why I introduced the Zero-Emissions Homes Act to establish a
point-of-sale rebates program for these new electric appliances.
Through this type of Federal investment, we can make all of the
long-term economic and health benefits of electrification affordable
and accessible to all Americans.
We have a once-in-a-generation opportunity to make transformative
investments in our energy economy--investments that will protect our
planet, help keep our communities healthy, and promote shared
prosperity.
We simply don't have any more time to waste in meeting our
responsibility on climate.
Widespread electrification is one of the surest strategies we can
pursue to finally take actions that meet the scale of this challenge.
__________
Prepared statement of Hon. Mike Lee, Ranking Member,
Joint Economic Committee
Our country needs to modernize the way we generate, transmit, and
distribute electricity. Over the last year, devastating blackouts have
harmed communities across the country, from New York to California to
Texas. The U.S. electric grid has at times proven inadequate for the
needs of American families.
However, the answer is not to spend billions of Federal taxpayer
dollars to electrify every American home and business, and just as
importantly the answer is not to fundamentally alter Federal policy to
regulate energy generation and consumption. Instead, we need to
unshackle American industry so that new and diverse energy sources can
help create a more resilient energy future.
It was not that long ago that American innovation unleashed the
shale revolution, driving down natural gas prices and providing a
cleaner energy option for homes and businesses. We need a similar
revolution if we want to modernize our electric grid.
To clear a path for continued energy innovation, we must reform
existing regulatory policies that stand in the way of investors and
discourage entrepreneurs. If we want to move our energy infrastructure
into the future, we need to address environmental review.
When President Nixon signed the National Environmental Policy Act--
or NEPA--into law, it was meant to require agencies to consider the
environmental consequences of their actions. NEPA is generally
implicated when projects use Federal funds or touch Federal lands,
which many energy projects do.
Fifty years later, this seemingly commonsense requirement has
transformed into a process that requires an average of four and a half
years--and sometimes almost two decades--of paperwork and litigation.
The NEPA process frequently discourages and prevents critical energy
infrastructure projects from being built.
The delays might be worth it if NEPA protected the environment. But
environmental review is strictly procedural, meaning that it doesn't
actually privilege environmental protection.
This means that paperwork and lawyers' fees are the most consistent
result of the NEPA process. Federal agencies can find that the action
under consideration imposes environmental harm and then theoretically
decide to approve the project anyway. The process even delays projects
with clear environmental benefits.
Without reform, NEPA leaves countless energy infrastructure
projects in a state of bureaucratic limbo, sidelining workers, stunting
innovative new technologies, and leaving communities across the country
to wait for Washington to approve their future.
That's unacceptable, and it's why I've introduced the UNSHACKLE
Act. This suite of bills reforms the NEPA process so that Federal
agencies are better empowered to carry out the law's original intent,
while also making our Nation's infrastructure projects affordable
again.
The UNSHACKLE Act would require agencies to finish environmental
assessments faster, allow them to reuse paperwork, and limit
duplicative work at State and Federal levels. It would apply a two-year
deadline for completion of the entire NEPA process, provide fair legal
parameters around project reviews, and allow states to handle NEPA
review within their own borders.
These reforms shouldn't be a partisan issue. They are designed to
achieve something that we all can agree on--more efficient, effective
Federal permitting for infrastructure projects.
Ultimately, the best energy future is one that allows the American
people to innovate. Americans have made great strides pursuing
breakthroughs in energy extraction, production, and technological
innovations in wind, solar, hydro-electric, and other renewable forms
of energy in the face of heavy-handed government control. Removing
existing regulatory burdens will allow Americans to build a more
sustainable future.
The ability to build, and build more quickly, will help make the
U.S. electric grid more robust, resilient, and reduce the frequency of
outages. It will provide cleaner, more affordable, more reliable power
to American families and communities.
As we rebuild after the pandemic, we must liberate our energy
sector. We must reduce regulatory barriers to developing nuclear,
hydro, geothermal, and other forms of energy. These technologies can be
an important part of a competitive energy sector and a diverse energy
future.
Let's get government out of the way and allow Americans to do what
they do best. Reforming policies that get in the way of modernizing our
energy infrastructure will boost economic prospects for American
families, improve the environment, and enable us to build a better
America. I am hopeful that today's hearing will convince us of the
urgent need to achieve that goal.
Thank you.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Response from Mr. Ari Matusiak to Question for the Record submitted by
Representative Peters
Mr. Matusiak, there are concerns about the clean energy industry
not sufficiently providing union jobs. How is the electrification
industry advancing union jobs and how can our programs better support
U.S. workers? I am specifically interested in apprenticeship
opportunities and local hiring opportunities in this sector.
First, thank you for your timely question on the economic
opportunity that electrification offers to U.S. workers. The
electrification industry, or market, is nascent, providing an important
window to shape its development with the American people--and American
workers--at its center. To that end, designing programs that both
catalyze the market and support local good-paying jobs is critical.
Rewiring America estimates that one billion machines need to be
replaced and installed to fully electrify our residential sector. \1\
This will require U.S. workers in every segment of the market, from
manufacturing to installation to sales. Indeed, according to our
analysis, a wholesale commitment to electrification will create 25
million net jobs over the next 15 years with five million new jobs
sustained by 2050. \2\ By 1) investing in high-quality training and
placement programs, 2) enabling contractor companies to train and hire
U.S. workers, and 3) incentivizing domestic manufacture and assembly of
the machines necessary to electrify, the U.S. Congress can ensure that
the U.S. provides the opportunity for local jobs in every zip code
while prioritizing U.S. leadership and competitiveness on the global
market.
---------------------------------------------------------------------------
\1\ See Rewiring America's ``One Billion Machines'' report by Saul
Griffith, PhD and Sam Calisch, PhD, June 2021.
\2\ See Rewiring America's ``Mobilizing for a Zero Carbon America:
Jobs, Jobs, Jobs, and More Jobs; A Jobs and Employment Study Report''
by Saul Griffith, PhD, Sam Calisch, PhD, and Alex Laskey, July 2020.
---------------------------------------------------------------------------
Household electrification depends on the mobilization of local U.S.
workers who will provide the contracting, installing, rewiring, and
maintenance of and for the machines that heat and cool our homes, heat
our water, cook our food, and dry our clothes. These jobs are
impossible to be offshored or automated, thus necessitating a skilled
workforce available in every state, county, and zip code. \3\ The
inherent need for the broad distribution of these jobs creates an
opportunity to train and place local workers in the predominantly small
businesses that will offer these services to communities across the
country. Apprenticeships play a natural role here as workers transition
from their training into their newfound roles. Congress can fund such
job creation programs through grant programs, as it is currently
considering both in the Infrastructure Investment and Jobs Act and
reconciliation legislation, which together comprise the President's
Build Back Better Agenda.
---------------------------------------------------------------------------
\3\ See Rewiring America and the Coalition for Green Capital's
Rewiring Communities: A Plan to Accelerate Climate Action and
Environmental Justice by Investing in Household Electrification at the
Local Level report by Adam Zurofsky, Jeffrey Schub, John Rhodes, Tony
Curnes, and Sam Calisch, PhD, May 2021.
---------------------------------------------------------------------------
Contractor companies exist throughout the country and will have to
scale up their capacity to meet the needs for an accelerated household
electrification drive. This also applies to union-hiring businesses
that mainly service multifamily buildings. Incentives via tax breaks or
direct grants can be used by these companies to hire workers, including
apprentices, and provide for their training. By providing such support,
Congress can enable these small businesses and larger entities to bring
on new workers with good-paying wages.
Lastly, the job opportunities electrification will create are not
limited to highly localized jobs for the installation of the electric
machines--these machines must also be made, assembled, and distributed
across the country. By supporting manufacturers to assemble, produce,
and stock the machines domestically, America can bolster its
manufacturing capacity. In doing so, new good-paying union jobs will be
created, while also ensuring U.S. competitiveness on the global market,
critically, as demand for these modern electric machines dramatically
increases. And as these machines are used in mission-critical and
public-health situations (e.g. cold rooms, protecting against extreme
heat or cold), having these machines within our shores also bolsters
U.S. resiliency. Manufacturers and distributors can be encouraged to
build domestic facilities via incentives in the forms of tax credits
and direct grants.
In sum, the electrification market is poised for a once-in-a-
generation expansion both domestically and internationally. U.S.
workers should lead the way in the making, transporting, selling, and
installing of the machines required. The opportunity for the creation
of local good-paying jobs, including apprenticeships and union labor,
is ours to bolster. Congress has within its power the ability to fund
important incentives that will support each segment in the market to
train, place, and hire this new workforce, 25 million strong.
__________
Response from Mr. Ari Matusiak to Question for the Record submitted by
Representative Herrera Beutler
We continue to hear of moving the U.S. toward zero emission
electricity. As a member of the Conservative Climate Caucus, I think
preserving our economy and environment do not have to be mutually
exclusive goals. In Washington State hydropower accounts for roughly 70
percent of clean energy across the state. There is even a 1300 Megawatt
(MW), 20 hour Goldendale pumped storage project in my district that
would provide more than 3,000 jobs.
What role do the witnesses see pumped storage and
hydropower playing in the path to more renewable energy not only in
Washington State, but across the Nation?
Thank you for your question. At Rewiring America, we agree that
preserving our economy and environment are not mutually exclusive
goals. Indeed, with thoughtful policy, these two goals can each work to
support the other, fueling a zero-emissions today and tomorrow.
During the hearing, the fact that the United States is blessed with
abundant natural resources was accurately raised. One state where this
is particularly true is Washington State that has significant
hydropower resources. By utilizing pumped storage, hydropower and other
renewable energy generation sources can be used to fully supply the
state's energy needs and, potentially, to supply other states as well.
Indeed, renewable energy resources, when paired with storage, can solve
any reliability issues, providing clean energy and resilience to
communities across America.
If electrification is the path that will carry our Nation to a
zero-emission future, electric appliances and machines can be seen as
the bridge between clean electricity supply and energy demand. As our
energy supply increasingly goes toward the generation of electricity,
we also need to ensure that the machines they would power are installed
and ready to go. The more households that are connected to fossil fuel
infrastructure through their everyday appliances, the harder it will be
to transition away from fossil fuels. Further, because these machines
have long useful lives with an upper range of a few decades, not
replacing these machines with clean electric options jeopardizes our
ability to reach our climate goals. Specifically, our analysis makes
clear that the electrification of the one billion small machines in
Americans' homes is necessary for the U.S. to reach zero emissions by
2050. This trajectory is in line with what the science unequivocally
tells us is necessary if we are to avert the worst consequences from
climate change. Thus, while these machines may serve everyday functions
(keeping our homes warm or cool, heating our water, cooking our food,
drying our clothes, and driving us to work), their impact is
significant. Through electrification, these machines can be a part of
the solution, supporting the vast renewable resources powering the
grid.
__________
Response from Dr. Leah Stokes to Question for the Record submitted by
Representative Peters
Dr. Stokes, there are concerns about the clean energy industry not
sufficiently providing union jobs. How is the electrification industry
advancing union jobs and how can our programs better support U.S.
workers? I am specifically interested in apprenticeship opportunities
and local hiring opportunities in this sector.
It's critical that we see higher unionization rates in the clean
energy economy. In the power sector, one important policy change is
allowing the tax credits (ITC and PTC) to include a ``direct pay''
mechanism. Since many utilities do not have significant amounts of
Federal tax liability (or in some cases any), this makes it difficult
for them to develop clean energy projects. If utilities are able to
develop more clean energy projects, it is likely that there will be
higher unionization rates in the sector as utilities tend to work with
unionized labor more than independent power producers.
In building electrification, the Federal Government could create a
manufacturing grant program that supports companies that create
American made products, including with unionized labor.
__________
Response from Dr. Leah Stokes to Question for the Record submitted by
Representative Herrera Beutler
We continue to hear of moving the U.S. toward zero emission
electricity. As a member of the Conservative Climate Caucus, I think
preserving our economy and environment do not have to be mutually
exclusive goals. In Washington State hydropower accounts for roughly 70
percent of clean energy across the state. There is even a 1300 Megawatt
(MW), 20 hour Goldendale pumped storage project in my district that
would provide more than 3,000 jobs.
What role do the witnesses see pumped storage and
hydropower playing in the path to more renewable energy not only in
Washington State, but across the Nation?
Hydropower is a crucial resource in our clean energy electricity
mix because it can match the output of other renewable energy sources,
like wind and solar. The same is true of pumped storage. That being
said, we have already developed the vast amount of hydropower resources
available in the United States. If all the unused, potential hydropower
resources were built out in the United States, they would only supply
an additional 5 percentage points of clean power. For this reason, a
broader array of clean energy technologies must be pursed alongside
hydropower if we aim to clean up our electricity sector this decade.
Pumped storage may prove an important solution as the electricity
system balances higher levels of intermittent resources.
__________
Response from Mr. Donnel Baird to Question for the Record submitted by
Representative Herrera Beutler
We continue to hear of moving the U.S. toward zero emission
electricity. As a member of the Conservative Climate Caucus, I think
preserving our economy and environment do not have to be mutually
exclusive goals. In Washington State hydropower accounts for roughly 70
percent of clean energy across the state. There is even a 1300 Megawatt
(MW), 20 hour Goldendale pumped storage project in my district that
would provide more than 3,000 jobs.
What role do the witnesses see pumped storage and
hydropower playing in the path to more renewable energy not only in
Washington State, but across the Nation?
Thank you so very much for your extraordinary leadership. We salute
the courage with which you represent your district, not only with
regard to your membership in the Conservative Climate Caucus, who's
work we would be happy to support in any way that's helpful, but all
the courage you displayed on behalf of parents of young children
everywhere and Americans who cherish democracy everywhere.
We agree with you, and with Washington State: Hydroelectric power
and storage MUST play a larger and larger role in our energy ecosystem.
In particular, we have been excited to learn of advances in micro-
hydro electric power technology, where micro-hydro turbines are able to
generate electricity with minimal disruption to natural ecosystems and
waterways. Natel Energy is a wonderful example of micro-hydro electric
power technology, and I'd be happy to arrange a briefing for your team
about micro-hydro power and storage if helpful.
__________
Response from Dr. Eli Dourado to Questions for the Record submitted by
Representative Herrera Beutler
1. Last Congress my bill, the Better Energy Technology Act (Best
Act) which was later signed into law, set clear goals for technology
development in energy storage. In my home state of WA, Pacific
Northwest National Laboratory (PNNL) has been a leader for the
Department of Energy and DOE is moving forward on the design and
construction of the Grid Storage Launchpad right in Washington State
which will further cement our region's leadership in the energy storage
development.
Dr. Dourado, could you talk about the importance of
modernizing the grid and how grid storage could lead to a more secure
energy future?
The electricity grid must be designed to meet several requirements
at the same time. First, it must have adequate capacity to serve all
customers at the moment of peak annual demand. Second, it must be
designed to be reliable in the event of natural disasters such as
storms and earthquakes. Third, it must be capable of keeping the supply
and demand of electricity in perfect balance at every moment of every
day.
It's this third requirement that implicates grid storage. If we
switch a significant fraction of our generation capacity to
intermittent sources like wind and solar, it is vital that we pair it
with adequate storage capacity to enable shifting the supply of
electricity to when it is demanded. That storage could come from
batteries, pumped hydro, compressed air storage, hydrogen production,
and possibly other sources. Additionally, more dynamic electricity
pricing would be a good way of economizing on the storage needed, since
momentarily high prices could induce some customers to shift their
electricity consumption to times when prices were lower.
2. We continue to hear of moving the U.S. toward zero emission
electricity. As a member of the Conservative Climate Caucus, I think
preserving our economy and environment do not have to be mutually
exclusive goals. In Washington State hydropower accounts for roughly 70
percent of clean energy across the state. There is even a 1300 Megawatt
(MW), 20 hour Goldendale pumped storage project in my district that
would provide more than 3,000 jobs.
What role do the witnesses see pumped storage and
hydropower playing in the path to more renewable energy not only in
Washington State, but across the Nation?
Hydropower accounts for about 6-7 percent of the electricity
generated in the United States. With full development of the country's
hydropower resources, it's possible that it could reach 10-11 percent
of generation capacity, before accounting for increases in total
generation needed for the transition to electric vehicles and other
forms of electrification. Additional firm, dispatchable electricity
generation, of the kind that hydropower provides, helps the grid
accommodate additional intermittent sources, like solar and wind
energy. Hydropower, then, is not only renewable in its own right, it
helps facilitate the addition of other renewable sources to the energy
mix.
Pumped storage has several advantages over batteries. It is able to
cycle deeply every day without degradation. Pumped storage can also
last much longer than today's batteries. The challenge is in properly
siting pumped storage facilities, especially considering potential
damage to river ecosystems. But since the battery supply chain is
likely to be pushed to its maximum merely to meet demand for electric
vehicles, it's hard to imagine a future where wind and solar are a
large part of our energy supply and pumped storage does not play a
significant role.
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