    [Senate Hearing 117-106]
    [From the U.S. Government Publishing Office]

                                                        S. Hrg. 117-106

                           GLOBAL CLIMATE TRENDS FROM
                       ENERGY-RELATED SECTORS TO CONSIDER
                        WHERE AND HOW PROGRESS HAS BEEN
                       MADE IN ADDRESSING CLIMATE CHANGE

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

                                    HEARING

                                   BEFORE THE

                                  COMMITTEE ON
                          ENERGY AND NATURAL RESOURCES
                              UNITED STATES SENATE

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 FIRST SESSION

                                   ----------

                                FEBRUARY 3, 2021

                                   ----------

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

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

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

                        U.S. GOVERNMENT PUBLISHING OFFICE
    43-820 PDF                 WASHINGTON : 2023

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

                   COMMITTEE ON ENERGY AND NATURAL RESOURCES
                                (116th Congress)

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

                          Brian Hughes, Staff Director
                          Lucy Murfitt, Chief Counsel
                     Renae Black, Democratic Staff Director
                    Sam E. Fowler, Democratic Chief Counsel

                        (117th Congress) \1\

                    JOE MANCHIN III, West Virginia, Chairman
    RON WYDEN, Oregon                    JOHN BARRASSO, Wyoming
    MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
    BERNARD SANDERS, Vermont             MIKE LEE, Utah
    MARTIN HEINRICH, New Mexico          STEVE DAINES, Montana
    MAZIE K. HIRONO, Hawaii              LISA MURKOWSKI, Alaska
    ANGUS S. KING, JR., Maine            JOHN HOEVEN, North Dakota
    CATHERINE CORTEZ MASTO, Nevada       JAMES LANKFORD, Oklahoma
    MARK KELLY, Arizona                  BILL CASSIDY, Louisiana
    JOHN W. HICKENLOOPER, Colorado       CINDY HYDE-SMITH, Mississippi
                                         ROGER MARSHALL, Kansas

                          Renae Black, Staff Director
                          Sam E. Fowler, Chief Counsel
                 Luke Bassett, Senior Professional Staff Member
                 Richard M. Russell, Republican Staff Director
                  Matthew H. Leggett, Republican Chief Counsel
          Justin Memmott, Republican Deputy Staff Director for Energy

    ----------
    \1\  Senate Resolutions 28 and 32, concerning official designations of
    committee membership for the 117th Congress, were passed on February 3,
    2021, after this hearing took place.

                               C O N T E N T S

                                  ----------

                               OPENING STATEMENTS

                                                                       Page
    Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska....     1
    Manchin III, Hon. Joe, Incoming Chairman and a U.S. Senator from
      West Virginia..................................................     1
    Barrasso, Hon. John, Incoming Ranking Member and a U.S. Senator
      from Wyoming...................................................     6

                                   WITNESSES

    Birol, Dr. Fatih, Executive Director, International Energy Agency     7
    Newell, Dr. Richard G., President and CEO, Resources for the
      Future.........................................................    16
    Hsu, Dr. Angel, Assistant Professor, University of North Carolina
      at Chapel Hill, Data-Driven Environmental Policy Lab...........    24
    Tinker, Dr. Scott W., Director, Bureau of Economic Geology, The
      University of Texas at Austin..................................    36
    Mills, Mark P., Senior Fellow, Manhattan Institute...............    55

              ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

    American Exploration & Production Council:
        Statement for the Record.....................................   162
    Barrasso, Hon. John:
        Opening Statement............................................     6
    Birol, Dr. Fatih:
        Opening Statement............................................     7
        Written Testimony............................................     9
        Responses to Questions for the Record........................    95
    Hsu, Dr. Angel:
        Opening Statement............................................    24
        Written Testimony............................................    26
        Responses to Questions for the Record........................   122
    King, Jr., Hon. Angus S.:
        Chart 1--Atmospheric Carbon Dioxide Levels...................    77
        Chart 2--Sea Level Change....................................    79
        Chart 3--Arctic Sea Ice Minimum Volume 1979 vs. 2020.........    81
    Manchin III, Hon. Joe:
        Opening Statement............................................     1
        Chart 1--U.S. Electricity Generation Mix 2005 vs. 2019 (IEA).     3
        Chart 2--China and India Electricity Generation Mix 2005 vs.
          2019 (IEA).................................................     4
    Mills, Mark P.:
        Opening Statement............................................    55
        Written Testimony............................................    57
        Responses to Questions for the Record........................   153
    Murkowski, Hon. Lisa:
        Opening Statement............................................     1
    Newell, Dr. Richard G.:
        Opening Statement............................................    16
        Written Testimony............................................    18
        Responses to Questions for the Record........................   109
    Tinker, Dr. Scott W.:
        Opening Statement............................................    36
        Written Testimony............................................    38
        Responses to Questions for the Record........................   143
    Whitehouse, Hon. Sheldon:
        Memorandum outlining the sources for ``Economic Risks of
          Climate Change'' dated March 3, 2020.......................   166
        Economic Risks of Climate Change: A collection of articles,
          letters, reports, and speeches.............................   170

    GLOBAL CLIMATE TRENDS FROM ENERGY-RELATED SECTORS TO CONSIDER WHERE AND
            HOW PROGRESS HAS BEEN MADE IN ADDRESSING CLIMATE CHANGE

                                  ----------

                          WEDNESDAY, FEBRUARY 3, 2021

                                           U.S. Senate,
                     Committee on Energy and Natural Resources,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:11 a.m., in
    Room SD-G50, Dirksen Senate Office Building, Hon. Lisa
    Murkowski, Chairman of the Committee presiding, to consider the
    nomination of Governor Jennifer Granholm, to be the Secretary
    of Energy. Upon disposition of the nomination, the Chairman
    adjourned the business meeting and reconvened the Committee to
    take testimony on global climate trends.
        The Committee met, pursuant to notice, at 10:21 a.m. in
    Room SD-G50, Dirksen Senate Office Building, Hon. Lisa
    Murkowski, Chairman of the Committee, presiding.

               OPENING STATEMENT OF HON. LISA MURKOWSKI,
                        U.S. SENATOR FROM ALASKA

        The Chairman. We can move now to the hearing that is
    scheduled this morning, and I will turn to Senator Manchin.

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

        Senator Manchin. Thank you, Madam Chair.
        So this Committee has proven itself ever ready to rise to
    the occasion of working together to identify and enact
    solutions to both present and future issues facing our country.
    As Chairman, I am committed to continuing these traditions and
    working with all of my colleagues on the issues that are
    important to their states and to our nation. Climate change is
    one of those issues--critical not only to our states and our
    nation, but to every country around the world.
        To address climate change, we must face it head-on, on a
    global scale, and in every sector of our economy. No doubt, we
    will all have differing views on the best way to do that, but
    first, I believe, we must begin with a common understanding of
    where we stand today and what got us here. I have long said
    that you are entitled to your own opinions, but not your own
    facts. And it is in that spirit that I wanted our first hearing
    of this new Congress to focus on setting a baseline of global
    climate facts from which the Committee can build on as we
    advance climate solutions.
        In 2019, a few of my colleagues and I visited the Arctic,
    where we met with several leaders, and in each country we
    visited, we saw the impact of climate change firsthand and
    heard from those leaders that it was a matter of survival, not
    of partisan politics. I will ad-lib here: when we had been in
    Ottawa, the United States was the only country of all the
    Arctic nations that basically used climate as a political
    divide. They all came to a conclusion. John, we were all there.
    It was a great day that we had with our Chairman, our former
    Chairman, almost.
        [Laughter.]
        Maybe.
        This Committee has shown the ability to rise above that, as
    evidenced by the recent enactment of the Energy Act--our all-
    of-the-above energy innovation package with provisions
    sponsored by almost 70 senators last year. It is abundantly
    clear that the dwelling on partisan rhetoric shuts down debate,
    collaboration, and progress. And as we look for ways to heal
    the division in our own country, I believe that one way for us
    to overcome our differences of opinion is by first grounding
    ourselves in the facts, which will serve as a guide going
    forward.
        Before hearing from our panel today, there is one fact that
    I would like to serve as our starting point, and that is that
    climate change is real and largely linked to human activity.
    Scientists around the world, including in our national
    laboratories, are researching many aspects of climate change,
    and the scientific record is convincing and growing. This
    year----
        [Coughing.]
        Excuse me. Oh boy, I just got tested.
        This year, the Intergovernmental Panel on Climate Change--
    --
        Senator Barrasso. Was it positive or negative?
        [Laughter.]
        Senator Manchin. That was a good one, John.
        [Laughter.]
        This year, the Intergovernmental Panel on Climate Change
    will release its sixth comprehensive report on global climate
    change, and I look forward to learning the new findings.
        We also have an immense amount of energy data on our
    fingertips, thanks to the incredible work of the U.S. Energy
    Information Administration and international organizations like
    the International Energy Agency (IEA). A snapshot of that data
    shows that in the past 10 to 15 years, the United States has
    seen major transition in energy markets. We will be leaving
    these two panels up here for you all to view.
        [The two panels mentioned follow:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Manchin. The cost of natural gas has been cut in
    half from 2010 to 2020 and the cost of wind has fallen by 70
    percent and the cost of solar has fallen by 90 percent. When
    paired with increasing energy efficiency, this has led to a
    rapidly changing electric power grid system. While it is much
    less carbon intensive, retirements of coal-powered plants have
    devastated communities across my home State of West Virginia
    along with many other traditional energy-producing states
    represented on this Committee.
        That raises two points that we must recognize about fossil
    fuels. In the domestic context, the energy transition has
    increased hardships in the areas of the United States that have
    powered our nation for decades by mining its coal, producing
    its fuel, and generating its electricity. As our energy mix has
    changed, concern about the impacts on these traditional energy
    communities has and will remain front-of-mind for many of our
    members. I will continue to work hard to ensure that those
    communities are given new opportunities to thrive, including as
    a member of the new IEA Global Commission, focused on examining
    the impacts of a clean energy transition on individuals and
    communities. I am honored to join this effort and confident our
    discussion today will provide a strong foundation for
    discussions ahead as we work to address climate change and
    leave no one behind.
        We must also recognize that although fossil fuel
    consumption is dropping in the U.S. power grid, the global
    transition in fossil fuel use should make us all recognize that
    fossil fuels are not going away anytime soon, particularly in
    countries that are seeking to expand access to electricity and
    energy in order to address poverty. In both the domestic and
    international arenas, however, the fact is that we have tackled
    these challenges before and we can overcome them again by
    focusing on the technological innovations needed to do so.
    Following the Clean Air Act amendments of 1990, electric
    utilities across the United States developed and adopted
    equipment that aided their compliance with the new laws to
    reduce or eliminate SOX and NOX and
    particulate matter. By outlining the facts about our pollution
    and developing the technologies needed to manage it, utilities
    were able to adapt and improve public health and maintain jobs,
    all at a lower cost than what was initially projected. This
    provides one principle for our Committee's work going forward:
    the power of innovation combined with keeping all of our
    options on the table will help us create high-quality jobs,
    reach our environmental goals, and do so cost-effectively.
        I also think it applies in the global arena, as we look to
    lead the world on tackling the climate challenge. We must
    remember that the rest of the world is not necessarily ready to
    follow the same path as we do. By pursuing an all-of-the-above
    energy policy and a broad array of emissions-reducing
    technologies, we can simultaneously build our technology export
    opportunities and diplomatic relationships with those countries
    who choose to utilize their own fossil resources.
        Today's panel includes experts that bring domestic as well
    as global perspectives and includes Dr. Birol, the Executive
    Director of the International Energy Agency; Dr. Richard
    Newell, the President and CEO of Resources for the Future; Dr.
    Angel Hsu, an Assistant Professor at the University of North
    Carolina; Dr. Scott Tinker, Director of the Bureau of Economic
    Geology at the University of Texas; and Mr. Mark Mills, a
    Senior Fellow at the Manhattan Institute. I would like to
    welcome all of you to the Committee for this important
    retrospective discussion that will set the scene for forward-
    looking solutions. I look forward to hearing this discussion
    and about the trends and current state of play in global and
    domestic energy markets, technologies, policies, and emission
    reductions. Of course, the raw data and percentages are just
    the tip of the iceberg. Below the surface, the changes we have
    seen were being driven by innovation, policy, markets, and
    incentives. This discussion will serve an important role in
    setting a baseline of common facts and a historical perspective
    for this Committee from which we identify the common challenges
    and opportunities and move quickly to address them.
        With that, I am going to turn it over to Senator Barrasso
    for his opening statement.
        Senator Barrasso.

               OPENING STATEMENT OF HON. JOHN BARRASSO,
                       U.S. SENATOR FROM WYOMING

        Senator Barrasso. Thanks, Senator Manchin, and you know, in
    December of last year, Congress passed historic, bipartisan
    climate innovation legislation that I worked on closely in the
    Environment and Public Works Committee with Senator Carper.
    This was the most significant greenhouse gas reduction bill to
    be signed into law in well over a decade. Importantly, it won't
    raise costs for American families. So I look forward to working
    with you, Senator Manchin, on energy and environmental
    innovation in this same bipartisan spirit.
        Today's hearing is intended to set the baseline of
    knowledge about contributions to global emissions. It is a very
    worthwhile goal. We are holding this hearing at a very critical
    moment. Over the past two weeks, the Biden Administration has
    rolled out a series of indefensible and ineffective climate
    policies that will sacrifice--that is the term used by the
    nominee to be Secretary of Energy--to sacrifice tens of
    thousands of American jobs. This hearing can provide an
    important reality check. I think we have to stop fooling
    ourselves into thinking that eliminating U.S. fossil fuel
    production is going to solve the problem, because it won't. It
    will just make America less competitive and less energy secure.
        The energy industry has been a critical engine of economic
    recovery in the past. After the Great Recession, while the rest
    of the economy was still struggling, the oil and gas industry
    was investing and adding jobs at a brisk pace. Because of these
    investments, the U.S. has some of the lowest energy prices,
    cost to consumers, in the world. Now President Biden wants to
    kill energy jobs and drive up energy prices. Undermining
    America's energy security will not solve climate change. It is
    unrealistic to expect that China, India, and Russia and many
    other large emitters will stop using fossil fuels. It is just
    unrealistic. They know the importance of affordable energy to
    their own economies. Eliminating U.S. fossil fuels is not going
    to change any of that.
        This data from the International Energy Agency has shown
    that the U.S. has become a significantly smaller source of
    carbon dioxide emissions worldwide. U.S. emissions now account
    for just 14 percent of the global total. That is down from 25
    percent just 20 years ago. Over that same period of time, the
    share of total emissions from China jumped from 13 percent of
    the world's carbon emissions all the way up to nearly 30
    percent--from 13 to 30 percent of the world's carbon emissions
    due to China. And it is not just China. Emerging economies like
    India, Brazil, South Africa, and others are all increasing
    energy use as they develop and grow in population. The
    International Energy Agency expects that by the year 2030,
    energy use in these and other developing countries will jump by
    almost 20 percent. With almost a billion people still lacking
    access to electricity around the world, addressing climate
    change is not a priority for developing countries, especially
    if it hampers their economic development. They do not consider
    it a priority in their efforts for economic development.
        Affordable, reliable, and scalable energy are the keys to
    reducing energy poverty, to improving human welfare, and to
    powering economic growth. These trends mean we have to focus on
    practical solutions. At its most fundamental level, reducing
    greenhouse gas emissions is a technology challenge. Instead of
    raising the cost of traditional energy sources, we should work
    to lower the cost of alternate technologies, like carbon
    capture and advanced nuclear reactors. Until that happens,
    traditional fuels are going to continue to capture the lion's
    share of global energy demand.
        An approach based on innovation plays to our strength in
    America. American innovation is the key to reducing global
    emissions and our goal should be to encourage and support that
    process and that progress.
        Thank you, Mr. Chairman.
        Senator Manchin. Thank you, Senator.
        Now we are going to turn to our witnesses. And our first
    witness will be Dr. Birol. Doctor, thank you so much.

    STATEMENT OF DR. FATIH BIROL, EXECUTIVE DIRECTOR, INTERNATIONAL
                             ENERGY AGENCY

        Dr. Birol. Thank you very much, Senator Manchin. Senator
    Manchin, Senator Barrasso, still the Chairman, Senator
    Murkowski, members of the Committee, dear fellow witnesses,
    greetings to all of you from Paris, from International Energy
    Agency Headquarters.
        So before starting my words, may I congratulate Governor
    Granholm for getting the approval of the Committee and, if
    confirmed, I am looking forward to working with Ms. Granholm as
    the next Secretary of Energy of the United States.
        And also, many thanks to Senator Manchin for agreeing to be
    a member of our Global Commission on People-Centered Clean
    Energy Transitions. Thank you very much, sir, for joining
    global leaders focusing on this issue.
        It's an honor for me to be here as the Head of the IEA, to
    be in front of you. I had the pleasure to testify several times
    and I can tell you, every time I learn a lot from you and I
    understand it's a special group that work on a bipartisan basis
    and reach several good results, the last one being the Energy
    Act of 2020, for which I thank you and I congratulate you.
        Now, you have my full testimony in front of you, so I just
    want to focus on three points from the global picture. First,
    current state of play, international climate change. Our
    climate change is essentially an energy challenge. Why? Very
    simple--about 80 percent--in fact, more than 80 percent of the
    emissions causing climate change come from the production and
    use of energy. And methane comes out of that. If you look at
    the major emitters, I'll give you four of them, four major
    ones. China is, by far, the largest emitter since 15 years,
    China is the largest emitter, responsible about 30 percent of
    global emissions. But China is also, by far, the leader of
    solar energy. The solar energy in China is equal to all the
    other countries put together. India emissions are about seven
    percent. But on a per-capita basis, it is about the lowest in
    the world. The European Union--also about seven percent, and I
    should mention to you that the latest EU stimulus package will
    spend billions on new clean energy technologies. The United
    States--USA's international world emission reductions over the
    recent years and today, U.S. emissions are half of that of
    China, but on a per-capita basis, still very, very high. So
    this is the picture of where we are.
        The second point I want to mention is the technologies we
    maybe enact to reach our climate course. We have wonderful
    technologies which are already ready for the markets--solar,
    wind, onshore wind, offshore wind, hydropower, geothermal,
    nuclear power--they are ready for the markets, but they alone
    are not enough, by far not enough to reach our climate course.
    Innovation, as Senator Barrasso mentioned, is the key word here
    and the innovation in the carbon capture and storage industry.
    Hydrogen and advanced nuclear will be critical to reach our
    climate course. We have some which are ready. They are not
    enough. We need innovation, other clean air technologies being
    made part of our markets.
        Third point: clean air energy transitions will have broad
    repercussions and there are some challenges. I want to
    highlight only two for you, maybe we can discuss at length in
    the next minutes to come. The first one is the challenges
    coming from the critical minerals. Under ambitious climate
    policies, the energy sector will become a major force in drive
    and demand for copper, lithium, nickel, and cobalt and we see
    it still develop vulnerability of our global system in the next
    years to come. It is the reason IEA is preparing a major study
    to look at the global tensions that can arise from this
    challenge.
        The last point I want to mention, another broader
    implication, is how the governments will be able to proceed
    clean energy transition without having major impact on the
    communities, on the workers. So smart, well-designed policies
    will be critical in order to help everybody on board. So these
    are two major implications while we proceed with clean energy
    transitions around the world.
        Once again, Mr. Chairman, thank you very much for inviting
    the International Energy Agency. I am looking forward to your
    questions and the comments of my colleagues. Thank you.
        [The prepared statement of Dr. Birol follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Manchin. Thank you, Dr. Birol.
        And next we have Dr. Newell for his opening statement.
        Dr. Newell.

        STATEMENT OF DR. RICHARD G. NEWELL, PRESIDENT AND CEO,
                        RESOURCES FOR THE FUTURE

        Dr. Newell. Senator Murkowski, Senator Manchin, Senator
    Barrasso, distinguished members of the Committee, thank you for
    the opportunity to provide my testimony today. My name is
    Richard Newell. I'm the President and CEO of Resources for the
    Future, an independent, non-profit research institution that
    has informed energy and climate policy for decades. RFF's
    mission is to improve environmental energy and natural resource
    decisions through impartial economic research and policy
    engagement. The views I express today are my own and may differ
    from those of other RFF experts.
        I've had the opportunity to testify before this Committee
    previously as the Administrator of the U.S. Energy Information
    Administration. I therefore appreciate the importance of
    decisions informed by the best data, science, and analysis
    available. It's my pleasure to be with you here again to speak
    today about global climate, energy, and emissions trends,
    particularly from a U.S. perspective.
        The climate is unquestionably changing and human activity
    is the primary driver. Since the industrial revolution, humans
    have released increasing amounts of greenhouse gases to the
    atmosphere, leading to higher average global temperatures,
    melting ice caps, sea level rise, and other impacts. The
    consequences are stark. The average global temperature has
    already risen by one degree Celsius. And regions like Alaska
    have confronted increases twice that amount. The U.S. is the
    second largest emitter of greenhouse gases after China, and we
    remain the largest contributor to cumulative historic
    greenhouse gas emissions. Eighty-three to 85 percent of U.S.
    emissions come from the production and use of energy,
    particularly from fossil fuel production. Our mission's
    trajectory hinges on economic growth, improvements in energy
    efficiency, and shifts to low or zero carbon energy sources.
    These shifts are driven, in turn, by three major forces: energy
    market conditions, technological innovation, and public policy.
        U.S. greenhouse gas emissions have decreased/declined since
    2005, primarily due to declining coal-based electricity
    generation and increasing power from natural gas and renewable
    power sources. Wind and solar have experienced cost declines of
    over 70 percent since 2009 and have benefited from tax credits
    and other policies. Natural gas power has benefited from low
    prices due to shale gas innovation. There have also been
    substantial advances in technologies that can complement
    intermittent renewables to provide reliable power, such as
    energy storage, advanced nuclear, advanced geothermal systems,
    and natural gas with carbon capture.
        The transportation sector is now the largest source of U.S.
    greenhouse gas emissions, although transport emissions have
    fallen by about five percent since 2005, principally due to
    increased fuel economy of vehicles. The cost and range of
    electric passenger vehicles have improved considerably, but
    aviation, shipping, and long-haul trucking are more difficult
    to electrify. U.S. emissions from industrial sources such as
    steel, cement, and petrochemical production, have shifted only
    modestly since 2005. Industrial processes that require very
    high temperatures or have process-related emissions require a
    distinct set of solutions, possibly carbon capture and storage,
    hydrogen or advanced nuclear technologies. Outside of energy--
    agriculture, forestry, and other land use emission sources
    present distinct issues and they also present opportunities for
    carbon removal through biomass, carbon sequestration in
    forests, grasslands, and soils. Direct air capture of carbon is
    also now possible through technological means.
        Because the energy system is so widespread and complex,
    reducing emissions will require a broad and inclusive approach
    to incorporating new technologies. We can't know in advance
    which technologies will become most competitive. So expanding
    our solution set makes ambitious strategies more feasible.
        I'll conclude with three key observations. First, the
    concentration of greenhouse gases in the atmosphere is
    increasing rapidly, causing our climate to change. Fossil fuel
    use is the leading cause, and the U.S. is a major contributor.
    Second, a wide array of technological options is both necessary
    and available to reduce emissions across a diverse energy
    landscape. And finally, given cost reductions in advances in
    clean energy and other emission reduction technologies,
    ambitious reductions are now more achievable at substantially
    lower cost. The success of emissions reduction strategies will
    depend on how well they meet the needs of diverse sectors,
    incentivize consumers and producers to choose low emission
    options, and spur technological innovation. Research shows that
    incentive-based policies, coupled with targeted innovation
    support, are the most effective means to allowing private
    sector incentives with society's emission reduction goals.
    Innovation flourishes when accelerating demand for new
    technology is coupled with robust support for research and
    development.
        Senators, I want to thank you again for this opportunity to
    appear before you. I'll now conclude my remarks and look
    forward to your questions.
        [The prepared statement of Dr. Newell follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Manchin. Thank you, Dr. Newell.
        And next we have Dr. Hsu.

    STATEMENT OF DR. ANGEL HSU, ASSISTANT PROFESSOR, UNIVERSITY OF
    NORTH CAROLINA AT CHAPEL HILL, DATA-DRIVEN ENVIRONMENTAL POLICY
                                  LAB

        Dr. Hsu. Thank you, Senators Manchin and Barrasso and
    members of the Committee on Energy and Natural Resources, for
    inviting me here to testify today. It is an absolute honor to
    be here and share my knowledge on these issues. I am a
    contributing and lead author to several global climate
    assessments and Director of the Data-Driven Environmental
    Policy Lab at the University of North Carolina--Chapel Hill.
    Much of my research has focused on China and its contributions
    to global climate and energy policy. Maintaining primarily a
    global perspective, I would like to address four points. One,
    where we stand today on global climate change. Two, where our
    existing policies stand in limiting global temperature rise.
    Three, China's role in combating climate change. And lastly,
    the potential for some national actors and the business
    community to fill climate policy shortfalls.
        First, I'm starting with the current status of the global
    climate. The latest climate science literature describes a
    narrowing window for meaningful climate action to restrict
    global temperature rise to 1.5 degrees Celsius. As Dr. Newell
    just said, temperatures have already risen by about 1.1 degree
    Celsius. Emissions increased on average around one percent each
    year over the last decade, with 2019 seeing a record-high
    emissions level predominantly driven by global fossil fuel
    consumption. Despite the devastating impacts of COVID-19,
    however, it has been the single largest, short-term influencer
    of greenhouse gas emissions. In 2020, carbon dioxide emissions
    reductions due to COVID-19 related shutdowns are estimated to
    be between seven and nine percent. This precipitous drop in
    emissions has provided now an opportunity for countries like
    the U.S. to consider post-COVID-19 recovery plans with climate
    change and energy policy considerations. There is a strong
    economic case for the transition away from fossil fuels to
    renewable energy. Costs have continuously declined for
    renewable energy and demand has remained robust compared to
    fossil fuels. For example, in 2020, over 70 percent of utility-
    scaled power that was added to the U.S. generation capacity was
    in the form of renewable energy.
        Second, in terms of the current policy status, the science
    is clear that we need to get to zero emissions by 2050 to
    contain global temperature rise to 1.5 degrees Celsius.
    Ideally, global emissions should have already peaked in 2020.
    One analogy that has been used to describe the challenge is
    that we need emissions now to fall off a cliff. If the road had
    begun steadily decreasing emissions around ten years ago, we
    would only need to have been reducing emissions by two percent
    per year. Now global emissions need to decrease by seven
    percent per year until dropping to zero. The reality is that
    the ambition of national government climate policy efforts are
    woefully inadequate to stay within our remaining carbon budget.
    At our current emissions rate, we will deplete the entire
    remaining carbon budget within the next ten years. While the
    data show that countries' track record for addressing climate
    change has not been adequate, around 127 countries recently
    have pledged to decarbonize, including China, the world's
    largest emitter of greenhouse gas emissions. China's President,
    Xi Jinping, announced last September at the U.N. General
    Assembly that it would commit to become carbon neutral by 2060.
    This carbon neutrality pledge is significant. If successful, it
    could cool the planet by about 0.2 to 0.3 degrees Celsius by
    2100 on its own.
        But to meet this carbon neutrality goal, China will need to
    eliminate coal as part of its energy mix, which in 2018
    generated 65 percent of its electricity. They have a plan to
    phase it out by 2050 and generate 90 percent of all electricity
    from non-fossil sources, including renewables and nuclear
    energy. To do this will require a 16-fold increase in solar
    energy, a ninefold growth in wind power, a sixfold increase in
    nuclear and a doubling of hydroelectricity. China will also
    need to grow renewable energy investments to around 15 trillion
    U.S. dollars in the next 30 years. It currently already tops
    global clean energy investments at around 100 billion U.S.
    dollars each year, more than the U.S. and EU combined, and it
    is a leading manufacturer of wind, solar, and electric vehicle
    technology. The U.S. and the world can have confidence that
    China will meet this carbon neutrality target. The country's
    past record demonstrates that it has met or has come extremely
    close to meeting every single energy and environmental target
    the country has set. It is already on track to overachieve its
    2020 and 2030 carbon intensity goals and independent satellite
    data confirm that China has achieved significant reductions in
    air pollution already.
        Despite the importance of Chinese climate commitments and
    other existing agreements however, this still won't get us all
    the way to net zero. Our research demonstrates that nearly
    6,000 cities, states, and regions and over 1,500 companies'
    existing climate efforts will lower greenhouse gas emissions by
    1.2 to 2 gigatons of carbon dioxide equivalent in 2030. This is
    additional reduction and it amounts to roughly four percent of
    the world's total annual greenhouse gas emissions, as much as
    Japan and Canada emit in a single year. In the U.S., these
    commitments could provide at least half of the reductions
    needed to meet its Paris pledge. As of October 2020, more than
    1,500 businesses, 826 cities, and 103 regional governments,
    including 24 U.S. states, have already made net zero
    commitments.
        To end, how national governments design post-COVID-19
    economic recovery strategies will largely determine how much
    global emissions rebound to pre-COVID-19 levels. Global
    competition and cooperation on clean energy, building on
    continued progress from some national business actors, is one
    vehicle toward our decarbonization goals. Thank you very much
    and I look forward to further discussion and your questions.
        [The prepared statement of Dr. Hsu follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Manchin. Thank you, Dr. Hsu.
        Now let's hear from Dr. Tinker.

    STATEMENT OF DR. SCOTT W. TINKER, DIRECTOR, BUREAU OF ECONOMIC
               GEOLOGY, THE UNIVERSITY OF TEXAS AT AUSTIN

        Dr. Tinker. Senators, distinguished members, fellow
    panelists, it's an honor to be here today with you. Senator
    Murkowski, thanks for your leadership. Senators Manchin and
    Barrasso, I look forward to working with you.
        We all share a common desire to provide affordable,
    reliable energy in order to grow healthy economies and lift the
    world from poverty, while also minimizing environmental
    impacts, including climate, land, water, air. There may be a
    perception of division, but I think it's a false divide. Let's
    not let that division triumph. I had planned to mention a bit
    about my background and highlight key facts about global
    poverty, population, energy, and the economy, but that's all in
    my written testimony and that can be made available to anyone
    listening in.
        Instead, I'd like to tell you a story. The films we have
    made the past decade on global energy, the environment, and
    poverty are nonpartisan and introduce critical thinking on
    these important issues. They are used by educators all over the
    world for students of all ages. As such, I am asked by teachers
    and faculty, globally, if I could please visit in person or
    Zoom in with their students for a short discussion. It would
    mean so much to the kids, they say. I try to do as many of
    these each month as I can.
        Just before COVID, I was visiting an environmental class of
    about 50 lower division university students--an ``ask me
    anything'' format. And near the end, one student said, and I
    quote, ``Why does any of this matter? We're all gone in 15
    years anyway?'' ``What do you mean,'' I asked? ``Humans. We're
    gone because of climate change.'' Trust me, I am rarely
    speechless. I asked the class how many felt that way. Fifty
    percent raised their hands. I was stunned. I asked why they
    felt this and if they could describe what would actually wipe
    out all of humanity in 15 years.
        They couldn't describe how anyone would actually die. They
    just said they were being taught that climate change is an
    existential threat and learning that from their leaders. To
    them, that meant humans will no longer exist. I was deeply
    disturbed by this on many levels, for many weeks. Where was the
    critical thinking?
        The non-partisan, non-profit Switch Energy Alliance that I
    formed many years ago makes critical thinking films on energy
    and the environment. We have worked with AP environmental
    science high school teachers across the country the past few
    years to develop a truly objective curriculum on energy for
    classes across the U.S. It didn't take long to discover how
    bias is introduced. Here's an example of two essay questions
    from an AP test: What are the environmental benefits of
    offshore wind? What are the environmental impacts of tar sands?
    The questions can only result in the student seeing benefits of
    one option and impacts of the other. When in fact, we all know,
    and we've heard--there are pros and cons to both. This happens
    at the highest levels.
        Just this morning, E&E reported that a new National
    Academies report offers a comprehensive roadmap for achieving a
    carbon-free economy by mid-century and concludes that it is,
    quote, ``on the edge of feasibility.'' Of course, if the
    question posed to the National Academies committee was, ``How
    do we reach a carbon-free economy?'' By definition, the report
    will attempt to spell that out. Critical thinking would ask,
    ``How do we reach a carbon-free economy without damaging the
    land, water, and local air in the process?'' In other words,
    how do we avoid robbing from nature Peter to pay climate Paul?
        I trust we all believe that humans will be here in 15 years
    and hopefully well beyond that. As such, each of us carries a
    remarkable burden. We do not want students around the world to
    feel duped someday when they realize that ``clean'' didn't
    really mean ``clean.'' To be sure, coal, oil, and natural gas
    to a lesser degree, impact the environment. Let's continue to
    clean them up, especially the emissions, but all forms of
    energy impact the environment.
        As a geoscientist, I'm not against mining. I know that low-
    density sources of energy, such as solar, wind, biofuels, and
    batteries will require an unprecedented scale of mined,
    sometimes toxic, resources from the earth that must be disposed
    of when they wear out and they get disposed in the land and the
    ocean. Although levelized cost of electricity and energy have
    fallen, the cost of full-scale redundant backup makes it more
    expensive to the consumer. Ask California and Germany. It's not
    clean or renewable or cheaper, it's just different. So let's
    converge on a plan that provides equitable energy access
    globally and addresses not only emissions, but all
    environmental impacts. The plan should focus on some key
    CO2 solutions: Reduce actual CO2
    emissions into our single global atmosphere; protect the rest
    of the environment; be affordable, dispatchable and scalable;
    be deployed or deployable in the next two decades; protect U.S.
    security and the U.S. economy; and lift the world from energy
    and economic poverty.
        Fortunately, solutions exist. Options you have heard from
    other witnesses here are remarkably consistent. Switching from
    coal to natural gas, especially in Asia--if Asia doesn't act,
    it won't matter. Preserve the nuclear fleet in the U.S. and
    support nuclear globally, especially small modular reactors,
    and streamline deep borehole disposal. Accelerate efficiency
    across all U.S. and global sectors. Natural gas, nuclear, and
    efficiency, in partnership with solar and wind, CCUS, hydro,
    geothermal, hydrogen, and others provide dispatchable,
    reliable, affordable energy today and it preserves industry and
    grows higher-wage jobs. The U.S. can lead through investment in
    technology, federal and state incentives, and efforts to find
    scalable, affordable, timely solutions. Although tempting, we
    have to resist the well-intended efforts to restrict market
    opportunities and optionality, which often result in unintended
    consequences.
        Thank you for the opportunity to speak with you today.
        [The prepared statement of Dr. Tinker follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Manchin. Thank you, Dr. Tinker.
        And finally, we have Mr. Mills. Thank you for being here,
    Mr. Mills.

                      STATEMENT OF MARK P. MILLS,
                   SENIOR FELLOW, MANHATTAN INSTITUTE

        Mr. Mills. Thank you, incoming Chairman Manchin, very much
    for----
        Senator Manchin. We'll get this worked out pretty soon.
        [Laughter.]
        Mr. Mills. And thank you, outgoing Chairman Murkowski. I
    was tempted to make an allusion to Bill Murray in the movie we
    all know and love. But thank you for inviting me, it's an honor
    and a pleasure, and Senator Barrasso and members of the
    Committee.
        Since the purpose of this hearing is to establish a
    baseline on the state of affairs regarding carbon dioxide
    emissions associated with energy, permit me to note three basic
    realities and each of them have implications for the subject at
    hand. These are realities, in fact, that help explain why, as
    the Committee's Joint Staff Memorandum notes, that global
    carbon dioxide emissions continued to increase prior to the
    pandemic lockdowns, despite massive investments in non-hydro
    carbon energy production both in Europe and the United States
    and China.
        First, it's indisputable--and it's a good thing that the
    world will use far more wind turbines and solar machines and
    electric cars in the future. The reason for that, aside from
    obvious policies encouraging all three, is anchored in the fact
    that those technologies are all profoundly better than they
    were a decade or two ago, and given the magnitude of future
    global energy needs to bring people out of poverty, more
    options are always better.
        Second, it's equally indisputable that all energy machines
    are, necessarily, built and operated using materials that must
    first be extracted from the earth. Replacing hydrocarbons with
    the wind, solar and battery-powered machines--the principal
    vectors in most countries on these discussions--doing that
    constitutes a major shift in both the nature and the quantities
    of these energy materials. It's a switch from using mainly
    liquids and gases to using solids, and it's a switch that, on
    average, results in a tenfold increase in the quantity of
    materials mined and processed per unit of energy delivered to
    society.
        And third, the United States is today, and will be for the
    foreseeable future, a net importer of either wind, solar, or
    battery machines, or key components for those machines or, in
    fact, for most of the critical energy minerals and materials
    needed to build them.
        Now, these realities have implications in the accounting of
    carbon dioxide emissions. They also have economic, and of
    course, geopolitical, environmental, and even human rights
    implications. I know, briefly, that the U.S. is essentially, as
    the Committee knows, self-sufficient today in net hydrocarbon
    use. It's an importer, though, of alternative energy materials
    and machines. This means that replacing the former, which
    supply 80 percent of America's energy, with the latter, would
    replace a very large share of the domestic GDP with imports.
        So given the way the world is, not as we wish it would be,
    increasing domestic use of wind, solar, and batteries results
    in a de facto export of carbon dioxide emissions. That's
    because mining and processing of energy minerals and the
    fabrication of energy machines is inherently energy-intensive,
    and most of that energy used takes place offshore. By
    calculating the magnitude of that, one could call it offshoring
    of emissions, it's actually complex. There are some analyses
    that have, for example, looked at the impact of processing
    battery materials or fabricating battery components in China,
    which, in fact, this Committee may know is a major, if not the
    dominant, share of such industries.
        With China's grid that's two-thirds coal-fired, that
    processing and fabrication leads to supply-chain carbon dioxide
    emissions that constitute a significant share and can even be
    the entire share of any emissions that are eliminated by
    replacing a combustion engine with an electric vehicle in many
    parts of the United States. In fact, in more broadly looking at
    global mining, its oil use for heavy machinery, of course,
    rivals the total oil use of global aviation--of course, before
    the Great Lockdowns. Meanwhile, the path contemplated in the
    Paris Accord will lead to the greatest acceleration in demand
    for mining that the world has ever seen.
        This all points to the need for a realistic supply-chain
    emissions analyses, accounting of the carbon dioxide of where
    it really comes from and de facto export of carbon dioxide
    emissions, something that's lacking in the current carbon
    accounting, but also points, frankly, to an opportunity for the
    United States to revitalize our domestic mining and mineral
    processing industries, something I note that China has been
    focused on for years.
        I'd like to conclude by noting that there's some irony in
    the fact that the world that's coming full-circle to revisit
    the importance of mining. It's humanity's oldest industrial
    activity, in fact. Way back in 1934, speaking of baselines, the
    great American philosopher and technology historian, Lewis
    Mumford, who was born in Queens, by the way, observed in a
    seminal book about technology and civilization that the
    industrialization of mining was a major and, in fact, in his
    view it was the primary vector, the primary driver in the
    creation of modern capital markets, in the organization of
    labor, and in our understanding of our relationship with the
    environment. Given green energy plans, I expect we'll be
    revisiting those lessons in the coming decades.
        I thank you for the opportunity to testify.
        [The prepared statement of Mr. Mills follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Manchin. Thank you, Mr. Mills.
        And now we will turn to our Chairwoman for her questions.
    She was just regrouping there and she is ready.
        The Chairman. I am absolutely ready. I was getting ready to
    go over to HELP and then come back but you have given me an
    opportunity.
        Senator Manchin. You are going to start right out, ma'am.
        The Chairman. I am going to start right out.
        Senator Manchin. You are still officially our Chairperson.
        The Chairman. I do have to comment, Mr. Mills, your last
    statement there included the recognition or the reality that we
    are switching our vulnerability, if you will, from liquid state
    to soon, solid state. That is something that I think we need to
    be thinking about, and it is something that this Committee has
    focused on. Senator Manchin and I had our Critical Minerals
    bill that we included in the Energy Act, but we know we need to
    be doing more in that regard, and what you have highlighted
    here, I think, is very important. And you, Dr. Birol, in your
    comments mentioned much the same.
        And again, I want to extend my thanks and my appreciation
    to Dr. Birol. You and your leadership, the opportunity that I
    have had to serve as a member of the Global Commission on
    Energy Efficiency, some of the best practices that we have been
    able to work through and talk about, I just so appreciate your
    leadership there.
        I guess I would direct this question to both Dr. Birol and
    you, Mr. Mills. We have seen recent executive actions, Senator
    Barrasso mentioned them earlier when we were taking up the
    confirmation of Jennifer Granholm for Secretary of Energy, but
    these actions potentially jeopardize the very future
    development and production of U.S. fossil fuel resources. As we
    know, U.S. LNG markets, our exports are particularly important
    for markets in Asia. So the question to you both is, if future
    U.S. oil and gas exports are no longer available within the
    broader global market, this reduction in supply is going to be
    met elsewhere. And so, to you perhaps, Dr. Birol, what
    countries benefit the most from U.S. oil and gas exports and
    where will future supplies then come from if the U.S. cuts its
    exports?
        And then, following that, Mr. Mills, if you can speak to
    what a reduction in U.S. oil and gas production really means
    for the development of the global markets. I appreciate your
    views on this.
        Dr. Birol.
        Dr. Birol. Thank you very much. Thank you very much,
    Senator Murkowski, once again and thank you very much for your
    leadership in addressing one of the critical issues of clean
    energy, mainly energy efficiency best practices for households,
    for industry, for the transportation sector, with other leaders
    around the world.
        Now, if the United States' production is set to decline,
    and if there's still strong demand for oil around the world,
    the gap will be met mainly by the cheap cost Middle East
    countries. Having said that, when we look at the current oil
    demand numbers, as it is out of COVID, they went down
    substantially, and we do not expect that the demand will go
    there where it was before COVID in the next three or four years
    to come, just on that issue and there is a huge amount of spare
    capacity in the markets now which the markets can make use of.
        In terms of LNG, the flexible nature of U.S. LNG
    contributed a lot around the world and brought the price of gas
    down since the last few years and interestingly enough, the
    main purchaser of U.S. LNG today, by far, is China. From an
    emissions point of view, U.S. LNG, if it replaces coal in Asia,
    it can lead to significant emission declines, both in terms of
    CO2 emissions, but also for air pollution.
        Having said that, the methane emissions are very important
    here and it is very important to note that several customers
    around the world will soon look at the methane footprint of
    their gas exporters and therefore, it is perhaps an important
    task for the current Administration to take note of.
        Thank you.
        The Chairman. I appreciate that.
        Mr. Mills.
        Mr. Mills. Thank you, Senator Murkowski.
        I would say first that the IEA has been remarkably honest--
    and I don't mean this as any surprise or shock--at outlining
    the realities of where the world's energy markets are going in
    the near term, both with respect to the demand for critical
    energy minerals, but also with respect to where oil and gas
    demand are trending given the nature of the world. So it's my
    go-to for--we'll call it honest analyses at the global level.
        Your question about what will happen to the U.S. and world
    development is, I think, a particularly appropriate one, as we
    know the demand for oil is not--and all the forecasts show--
    it's not going to decline, it's going to roughly where it was.
    Who produces that oil and who's going to produce the natural
    gas, we know--I would add to the OPEC nations--Russia is the
    other principal beneficiary and some other African nations, but
    principally it's Russia and OPEC. The world divides
    simplistically into oil and gas, transportation and electric
    power, roughly speaking. And the United States' role in the
    transportation markets and the cost for people to get around in
    cars, we can distill our impact in a very simple way. We, in
    America, were essentially responsible for the collapse of world
    oil prices to the benefit of world consumers who drive and fly.
    There will be about a billion cars added to the world's roads
    over the coming couple decades. Even if all the existing cars
    become electric, which is going to be extraordinarily
    difficult, there will still be an enormous demand for oil--
    markets, consumers, will want that oil to be cheap. We drove
    the price down.
        We can continue to drive the price down. It's essential to
    swing producers. That's what's happened. The United States
    became, in the last decade, to the total shock of the world,
    the swing producer. It's to the detriment of U.S. oil
    companies, by the way, because it means you're a price taker,
    you're not a market maker. Every time prices go up, as we all
    know, it's like Mardi Gras again in the oil fields and they
    start drilling and prices collapse.
        Natural gas is the go-to source of electricity for the
    world, not--the coal is still growing, as you all know, but
    natural gas is the go-to and there, as well, the U.S. shale
    fields directly caused the collapse in global gas prices. Just
    the anticipation of the U.S. entering global markets caused
    prices to collapse. Gazprom began negotiating and renegotiating
    new prices with Europe. The world benefited. The world's
    electric consumers benefited from American shale fields.
        Lastly, I'll note, in terms of development, the United
    States--and this sounds a little bit bombastic because, but I'm
    a Canadian as well as an American--the American oil and gas
    industry is the technologically most sophisticated in the
    world. It has path-breaking capabilities, not just to produce
    marginal oil and gas more inexpensively, but more efficiently--
    which in the fuel cycle for carbon dioxide emissions matters-
    and more environmentally sensibly. So we are the pioneers on
    that. If we push that oil production and gas production to
    parts the world which are not as cautious and not as good at it
    as us, the oil and gas will be produced there. It will be less
    efficient and less clean and probably more expensive, which I
    think is a net bad for the world.
        The Chairman. Mr. Chairman, thank you and Ranking Member
    Barrasso. I think both gentlemen have well pushed me beyond my
    time, but I think their responses and the reality of the role
    that the United States has played in a very dramatic way, very
    quickly, in terms of being that player in production, in what
    we have been able to do with our allies, is nothing short of
    extraordinary and I would certainly hate to see us go backward
    with that very significant and dominant role.
        Thank you.
        Senator Manchin. Thank you, Madam Chairman.
        And with that, Senator Heinrich has another conflicting
    committee meeting and I want him to take my time right now.
        Senator Heinrich. Thank you to the former and current
    Chairmen.
        Dr. Newell, the Ranking Member brought up the concern that
    embracing renewable power sources could lead to an unaffordable
    energy supply. Could you sort of walk us through the major
    sources of electric power generation today and how they stack
    up based on levelized cost of energy (LCOE)? In other words,
    what sources are most expensive today and what are the cheapest
    and what does that say about where we are going?
        Dr. Newell. Thank you, Senator.
        So there's been dramatic change over the last ten years or
    so in what's called the levelized cost of electricity
    production, which takes the upfront capital cost of building a
    new plant and also takes account of the fuel cost that you
    would use to operate a gas or a coal-fired plant and it puts
    those two things together and expresses it in, you know,
    dollars or cents per kilowatt-hour. So what we've seen is, as I
    mentioned in my testimony, a very, very substantial drop in the
    cost of both wind and solar power since 2009. Solar power has
    come down in its levelized cost by about 90 percent and wind,
    which had been thought of as actually a relatively mature
    renewable technology, has actually come down by about 70
    percent.
        What that has done is that it has really flipped on its
    head the relative stacking of where new capacity additions are
    coming from and whereas it was true in the past that natural
    gas was actually a favored, low-cost provider of electricity,
    that has changed substantially. What we've seen over the last
    decade is that renewables, both wind and solar are competing
    with natural gas for new capacity additions. The U.S. Energy
    Information Administration, which is where I look for constant
    tracking of this levelized cost of electricity, is coming out
    with its Annual Energy Outlook today. It hasn't been released
    yet, but in a preview of that the EIA kind of reconfirmed what
    it has shown over, you know, many years now, which is that
    renewable energy, in terms of new capacity additions for
    electric power, is taking increasing market share. And that
    looking forward, renewable power will actually be the majority
    of new capacity additions. That's without any future changes in
    policy.
        If you look at the other sources of electric power, natural
    gas tends to be there next--natural gas combined cycle. And
    then, coal and nuclear power, in terms of new capacity
    additions, are relatively more expensive now compared to both
    natural gas and renewables.
        Senator Heinrich. Obviously, we have seen a lot of stranded
    coal assets over the last few years. If the current trend
    continues with respect to the decline that we have seen
    historically in solar prices, as well as in wind generation
    prices, is there a risk that assets, gas assets in particular,
    that were financed with the idea to be 30-year assets, if they
    should be financed more on a 15-year or shorter timeframe--what
    is the risk of natural gas generation assets becoming stranded
    assets in the coming years?
        Dr. Newell. Yes, so the issue of what I would refer to as
    climate financial risk is an increasingly important
    conversation both in the investment community, of course, to
    you know, power producers and energy producers as well. So this
    is why it's important, I think, to lay out in advance what our
    future policies will be. Investment unfolds over time. These
    aren't sudden shocks to the system. As you alluded to, you
    know, new investments are made. They do last, you know, a
    significant period of time. They can last, you know, one, two,
    three, decades.
        But policy also evolves. And energy transitions also evolve
    over the course of years and decades. So I don't expect these
    to be sudden shifts. Whether or not there are stranded assets,
    that will depend upon if there, again, if there are sudden
    shifts and that investors can't anticipate what kind of cost
    recovery they'll get on their investments.
        Senator Heinrich. Dr. Birol, in its World Energy Outlook
    (WEO) analyses, IEA historically, fairly consistently,
    underprojected both growth trends and the cost reductions for
    renewable energy. While analyses, I realize, are based on
    different policy cases, IEA analyses historically predicted a
    linear path, but the shifts that we have seen, consistently
    actually since the 1970s on, have clearly been exponential
    paths, not linear paths. And I think this potentially points to
    the need for a reassessment of the scenarios or assumptions
    that are used.
        I know that IEA has made some changes to the WEO over the
    past couple of years, particularly in 2020, but I was hoping
    you could speak to those adjustments. What adjustments has IEA
    made in modeling or assumptions to improve projections of
    renewable energy in the future?
        Dr. Birol. Thank you very much, Senator Heinrich.
        I am very happy that you asked me this question again. So
    last time you had the same question. I want to repeat my
    answer, if I may. What we do is, Mr. Senator, we look at the
    projections if the governments do not change their policies,
    what kind of world we are facing, which we call our reference
    scenario or stated policy scenario. And here, with the policies
    governments are putting in place, we have seen a strong
    penetration of solar, but the level of the solar penetration
    was not high enough, not as much as we would like to see it to
    reach our climate progress. But in addition to that scenario,
    you might have missed that scenario----
        Senator Heinrich. Sure.
        Dr. Birol [continuing]. Which we call the sustainable
    development scenario. We have seen a huge increase of solar
    power. Indeed, only a few months ago I had the liberty to call
    solar the new king of global electricity markets. The reason I
    said so is that one, in the year 2020 of all the power plants
    installed in the world, 50 percent were solar. The other 50
    percent--all the other technologies put together, namely coal,
    plus oil, plus gas, plus nuclear, plus wind, hydro, 50
    percent--solar 50 percent. The main reason here is the
    governments are changing their policies, providing incentives
    to solar power and, as of today, as we have suggested in our
    sustainable development scenario, solar power is the cheapest
    source of electricity generation in many parts of the world.
        Just for you to note, Mr. Senator, on the 18th of May this
    year, the International Energy Agency will come out with the
    world's first roadmap to ``Net Zero by 2050''--what the energy
    sector would actually look like if the governments around the
    world take policies in order to reach net zero emissions by
    2050, which I expect that solar power will get the lion's share
    of the electricity generation, even much higher than what we
    said before, which is, I believe, good news for everybody.
        Senator Heinrich. Thank you.
        Senator Manchin. Thank you, Dr. Birol. Thank you, Senator.
        Senator Barrasso.
        Senator Barrasso. Senator Manchin, in terms of time
    constraints, if you would like to go next, that would be just
    fine with me and I am happy to stay. I know you have a conflict
    a little later.
        Senator Manchin. I appreciate it so much, Senator. And I
    will, and then I will turn the Chair over to you.
        This is to Dr. Hsu. I want all of you to think about this
    right now: the Paris Accord and the U.S. entering back into the
    Paris Accord. My understanding of the Paris Accord is there are
    different timetables for different participants. And now, with
    things changing since that started to where we are today, think
    about where we are and if we should all be on a level playing
    field. But my question is going to be, can the United States,
    can China, can all those in the Paris Accord meet the net zero
    carbon reduction by 2050?
        And I will start with Dr. Hsu because of her deep interest
    and deep involvement in the China energy market.
        Dr. Hsu.
        Dr. Hsu. Thanks so much, Senator Manchin, for that
    excellent question.
        So as you know, the Paris Agreement is formulated on this
    bottom-up process. And so, instead of the old Kyoto model,
    which is what we had in 1992, where there were these targets,
    these timetables that were agreed upon by all parties, the
    Paris Agreement decided to allow the countries themselves to
    determine what timetables and targets to meet for their
    nationally determined contributions, or their NDCs. And so, the
    science dictates or provides this broad picture of where we
    need to go as a world in order to hit these targets of
    containing global temperature rise, within 1.5 degrees Celsius,
    but the countries themselves can then determine what types of
    target years and commitments on climate change mitigation,
    adaptation, financing, what those look like. So----
        Senator Manchin. Don't you think--if I may interrupt, I am
    so sorry--with your knowledge that you have, especially with
    China being one of the greatest emitters, but all of us, if we
    are on a trajectory to hit that and China says they can, can
    the United States make it? Can China make it? And what should
    we be able to do to make enforcement for the other ones? If
    they are going to say we belong to the Paris Accord, but they
    are not going to attain any achievements whatsoever in meeting
    the net zero carbon by 2050, how can we enforce that?
        Dr. Hsu. So that's a really good point, and I think one of
    the major criticisms of the Paris Agreement is the fact that
    it's not legally binding. And so, because of that, then it's
    largely up to country governments themselves to implement laws
    and legislations to actually implement those particular
    policies to meet their goals.
        I think for China, one area and one reason why I have a lot
    of optimism--and we can see based on their track record that
    they will meet their Paris Agreement targets--is the fact that
    they have adopted their Paris Agreement goals within their
    five-year plans. And so, it's actually codified into binding
    laws at the very top level and then implemented at the local
    provinces. And so, I think we can have really a reasonable
    assurance that China will actually meet their goals because
    it's part of their law. And then the 14th five-year plan, which
    will be released in the coming weeks, is also expected to
    incorporate many of these energy and climate targets for the
    Paris Agreement to help them achieve their goals. And then
    also, we should be expecting an enhanced-ambition Paris pledge,
    an NDC that will also reflect the fact that they now have this
    longer-term 2060 carbon neutrality target.
        But then, even still, you're absolutely right that when you
    look at the climate models and the scenarios, all of these
    Paris pledges that countries have made, do not add up to get us
    to net zero by 2050.
        Senator Manchin. Right.
        Dr. Hsu. In fact, it's leading to about a 3.6 median degree
    Celsius warming world by 2100. And currently, we have about a
    97 percent probability that we're going to already overshoot to
    two degrees Celsius. So, absolutely, the targets and the
    pledges that are put forth in the Paris Agreement are
    completely inadequate.
        So that said, I think that's why it's important, and why
    China's net zero commitment, and exactly as Dr. Birol
    mentioned, many governments are making these net zero pledges
    and----
        Senator Manchin. The bottom line with China is they are
    keeping their own records. Do we know, do we have insight, are
    we seeing factual information and making sure that we are
    getting the correct information? And if I may, you might answer
    real quick on that because I want to ask if anybody else has a
    comment on this.
        Dr. Hsu. Yeah, I mean, I think that's also a major question
    that was an obvious sticking point in the 2009 Copenhagen
    negotiations--
        Senator Manchin. Yes.
        Dr. Hsu [continuing]. Where the U.S. really pressed China
    to open up its climate change and energy data and to have
    transparency on regiment reporting and verification in order to
    move forward on international climate agreements. I think one
    of the points that I want to emphasize is that we don't need to
    rely, necessarily, on official Chinese statistics and data to
    have assurance that they are meeting their climate goals.
        Senator Manchin. Okay.
        Dr. Hsu. For me, as a scientist, I use a lot of satellite
    remote sensing data, from U.S. satellites and also from the EU,
    for example.
        Senator Manchin. Wonderful.
        Dr. Hsu. And we can see, we can observe from space and use
    that data to see that China actually has been really effective
    in reducing, primarily, air pollution and other fossil fuel
    related----
        Senator Manchin. Thank you, Dr. Hsu. I am so sorry, but I
    have to see if any other of our witnesses have anything to
    comment on the Paris Accord, how we hold people accountable.
        Dr. Tinker. Senator, this is Scott Tinker from the----
        Senator Manchin. Hey, Dr. Tinker, go ahead, please.
        Dr. Tinker. Thank you.
        Yes, I think it's really important here, and I'll try to be
    very brief, to look at pledges and then look at results. And
    so, if you look at the Paris Accord, the U.S. response to that
    with the Clean Power Plan, we did not implement it, that was
    proposed. We were proposing to reduce by 32 percent our
    emissions in the power sector by 2030. We set a self-imposed
    base year, 2005, which was prior to 2007 in the United States
    for our highest emissions.
        We met that goal, that 32 percent reduction by 2030--non-
    COVID-related--in 2020, ten years earlier. So the U.S. reduced
    700 million tons of emissions and continues to--How? Replacing
    coal with natural gas, renewables, solar, and wind. With state
    portfolio standards and other things and efficiency, but also
    exporting manufacturing, which doesn't count into the single
    global atmosphere. That's kind of a shell game.
        And so, how do you really do this? How do you actually
    reduce CO2 emissions? The United States has actually
    affected change faster than any other country who has pledged.
    Now, how do we continue to do that globally, I think you're
    asking. It's a very viable question and part of that comes
    from--something can be completely factual, but not factually
    complete. And I think that's what's happening with LCOE. Yes,
    solar and wind are the fastest growing sources in capacity and
    rate, but they're just getting started and everything grows
    exponentially early.
        In fact, solar and wind, since 2005, globally--and this
    comes from the IEA's own data, which are fantastic, by the
    way--have provided less than 25 percent of the growth in global
    electricity demand--so the other 75 percent of that growth is
    satisfied somewhere else.
        Natural gas is the fastest growing source of global
    electricity since 1985 by a lot, and there are reasons for
    that. But I think as we really converge on the scalability of
    these global solutions, we have to look at what actually
    reduces at scale emissions with everything that is being done
    now and there are many great opportunities to do that, but we
    want to be factually complete, not just completely factual.
        Senator Manchin. Thank you so much. My time is expired and
    if you all want to think about that, if I get a second round, I
    will have you all comment at that time. I am so sorry, but
    thank you.
        And with that, Senator Barrasso.
        Senator Barrasso. Thank you so much, Senator Manchin.
        Mr. Mills, many environmentalists insist that
    industrialized countries reduce their greenhouse gas emissions
    principally, if not exclusively, through the use of solar,
    wind, and electric battery technologies. They often fight, you
    know, coal, natural gas, nuclear power, hydropower projects.
    Can you discuss the costs to the environment if these
    industrialized countries attempt to reduce their emissions
    principally through just solar, wind, and electric battery
    technologies?
        Mr. Mills. Senator, I think that's one of the key issues
    that is the proverbial elephant in the room and the IEA and Dr.
    Birol have mentioned this, others have mentioned it. The work
    that I've done is looking at research that comes, in fact, from
    the U.N. Environment Program from the IEA, from the World Bank,
    from academic and research institutes, primarily in Europe,
    which asks that question--what is the impact on the environment
    broadly, not just carbon dioxide emissions?
        I spoke about carbon dioxide emissions because of a simple
    fact that since most of the world's battery materials are
    processed in China, and as we've heard earlier, from where two-
    thirds of the grid there is coal-fired, that means that the
    energy to make battery materials emits carbon dioxide. And
    just, as a calibration point, making a battery and the
    materials for it that can store the amount of energy equal to a
    barrel of oil requires consuming about 100 barrels of oil
    equivalent of energy. So that consumption of energy just to
    build the battery, which doesn't produce energy, but stores it,
    has carbon dioxide emissions.
        But more importantly, to your point, it's not just that. It
    has water use implications, land use implications, and toxic
    mineral management implications because of the processes
    involved. In fact, the World Bank issued a report just two
    years ago, very concerned about what they called a gold rush
    for energy minerals in fragile parts of the world where it's
    easier to open up mines than in the European and North American
    continents, specifically because of the need for a whole host
    of materials, not just the rare earths that are famously or
    infamously talked about. Rare earths, as you know, are not
    rare, they have rare properties which are useful, but we don't
    mine them anymore, significantly, but it's also nickel and
    cobalt, very basic materials--the call on copper, which is one
    of the biggest minerals mined in the world--biggest in terms of
    quantities. Copper use doubles per car compared, for electric
    car, compared to a non-electric car for obvious reasons. It has
    more electrical equipment in it. Nickel use goes up because of
    battery's use of nickel.
        So the demand for nickel alone, which is not a rare
    material, goes up literally exponentially in the true
    exponential sense. It's going to have to come from somewhere.
    It'll have environmental impacts. I think we will probably not
    mine it here. I don't see any evidence that the United States
    is embracing the opening of new mines in a timeframe that will
    be meaningful. So it will come from Russia's Norilsk mine in
    the Arctic, which I'll just note and end on this point for the
    record, is where you could say that the world's first oil spill
    in service of electric cars happened already last year. There
    was a massive oil spill at the Siberian--Russian-Siberian
    nickel mine. The amount of oil spilled into the Arctic was
    almost equal to the amount of oil spilled from the Exxon
    Valdez, which was much more infamous and well known. It was the
    oil stored at the mine site to operate mine equipment and it
    caused a lot of angst, and properly so, in the environmental
    community of Russia.
        Senator Barrasso. So let me ask you this then, Mr. Mills.
        Last week, President Biden signed an Executive Order
    prohibiting new oil, gas, and coal leasing and permitting on
    federal lands and waters. Is there any reason to believe that
    that Executive Order by President Biden is going to reduce the
    amount of oil and gas that the world will consume?
        Mr. Mills. I could make that answer an easy and short one--
    no.
        Senator Barrasso. No.
        Mr. Mills. There's no reason to believe that will happen.
    The world's consumption of oil, recovering particularly from
    the Great Lockdowns, is going to increase not decrease.
        Senator Barrasso. So is it fair to characterize President
    Biden's Executive Order as completely ineffective as a means to
    address climate change?
        Mr. Mills. It, as a practical means, is utterly
    ineffective. It will not reduce the consumption of oil or the
    emissions of carbon dioxide from the combustion of petroleum.
        Senator Barrasso. So then, is it fair to expect that
    President Biden's Executive Order is going to outsource
    American oil and gas production, the tens of thousands of
    American jobs that come with it, to foreign countries including
    OPEC members and Russia?
        Mr. Mills. The short answer is yes, but it also, by
    increasing the use of batteries here to offset the oil, if it
    were to be so mandated, we will also export jobs and economic
    development for that to those nations that make those minerals
    and materials, as I have outlined.
        Senator Barrasso. Thank you.
        One question for Dr. Tinker. U.S. carbon dioxide emissions
    have been steadily declining since 2007 and the International
    Energy Agency's most recent forecast expects U.S. emissions to
    decline by another 17 percent by 2030. Other industrialized
    countries are also expected to reduce their emissions by 2030.
    However, emissions in countries which have been defined as
    developing countries--and we can get into the issue of whether
    that is a good definition or not--they are expected to increase
    over the next ten years. In some regions of the world they have
    increased: 30 percent in Southeast Asia, 27 percent in India,
    14 percent in Africa.
        Is it accurate, Dr. Tinker, to say that all of the future
    growth in global emissions is going to come from these so-
    called developing countries?
        Dr. Tinker. It is, but there's a reason for that. I think
    the United States and Western Europe--we built our fundamental
    economies on coal and oil for transportation and power
    generation. We've come to a level of wealth now that we're
    transitioning--decarbonizing coal and natural gas, oil and
    beyond. And so, the emerging and developing world, as they grow
    are also using coal as a reliable fuel. I don't fault that at
    all. It is lifting their economies from global poverty and
    creating the products that we all consume so we keep our
    emissions there to keep the stuff we want cheap.
        And so, how do we accelerate? How do China and Southeast
    Asia and nations that will follow, particularly India? India is
    just getting started. They passed the United States in coal
    consumption now, but are way behind China. And a number of
    people say, how did that happen? How can you accelerate into
    some other baseload dispatchable electricity stores in these
    countries? And that's really the great challenge before us, I
    think an opportunity for the United States to help lead, in
    many ways, this effort.
        So, yes, that's where the emissions are coming from. The
    goal is then to accelerate through that as you balance the
    energy and the economy and the environmental impacts as well,
    and it's doable, but not if we're not able to support
    technologically and economically and in leadership in the
    United States, for that to happen.
        Senator Barrasso. So if we want to help these developing
    countries reduce their emissions, would you agree that the
    United States should really develop technologies to lower
    emissions that we can then export these technologies so they
    would be used in these other locations around the world?
        Dr. Tinker. Technologies and energies. I have visited China
    many, many, many times throughout the last couple of decades
    and done work there, looking at their shale opportunities and
    natural gas, and other--they have natural gas resources but
    it's not at the level we--those exist in Russia, has already
    been mentioned--et cetera. LNG could bring some of that natural
    gas in as options in addition to the nuclear developing, the
    hydro and the solar and the wind. So it's resources as well as
    technologies. The United States needs an environmentally adept
    way to develop oil and gas. Oil and gas isn't clean--nobody
    ever said it was, nothing is, no form of energy is, but we are
    leading in that.
        And so, how do you accelerate and bring those technologies
    to the world such that they can skip the steps we went through
    to get to the high-density drilling, the high-volume
    extractions and the very small surface pads, minimizing use of
    the water and other kinds of things that need to happen for the
    extraction of fluids--and by the way, those are much more
    extreme than mining.
        Senator Barrasso. Thank you.
        Dr. Tinker. Absolutely.
        Senator Barrasso [presiding]. Thank you, Dr. Tinker, we are
    having a little bit of a technical problem with the feedback.
    With that, let me turn to Senator Hirono.
        Senator Hirono. This is for Dr. Birol. In your testimony,
    you highlight the need for ambitious actions and note that
    almost half of the emission reductions needed to reach net zero
    by 2050 will need to come from technologies that have not
    reached the market today. And you note the importance of
    American leadership. As you know, American leadership on clean
    energy is a priority for President Biden. What kind of
    ambitious incentives or mandates do you think the U.S. needs to
    put in place within the next year or two to remain a leader in
    emission reductions and clean energy technologies?
        Dr. Birol. Thank you. Thank you very much, Senator Hirono.
        This is an extremely important fact. In fact, Senator
    Manchin asked the Paris question, and this very much leads to
    the Paris question, how to reach the emission reductions, to
    reach emission reductions in 2050 to net zero emissions. So we
    need three things here. One, to make the most out of the
    existing clean energy technologies. What are those? Renewables,
    efficiency, nuclear power, these are the key ones, but these
    are as you said, Senator Hirono, these are not enough to make
    the emissions come to net zero by 2050.
        Senator Hirono. Right.
        Dr. Birol. As our analyses show, half of these emission
    reductions need to come from technologies which are not in the
    market yet.
        Senator Hirono. Yes.
        Dr. Birol. Therefore, the key word is innovation. What are
    those? For me, a critical one--perhaps the most critical one--
    is carbon capture, utilization and storage. This is an
    extremely important one, looking at the current energy
    infrastructure we have around the world. Second, advanced
    nuclear power. Third, hydrogen. Fourth, the batteries, advanced
    batteries. And when I look over the history of the United
    States, innovation is in the DNA of the U.S. energy industry.
    In fact, U.S. industry in general, and I will look at the
    Internet, I look at the chips, the United States was at the
    forefront, so my expectation is the United States, not only at
    home, but internationally shows the leadership to push these
    clean energy technologies, which are not in place yet, but very
    important for the future. You have at the DOE wonderful
    laboratories across the country and they can play a particular
    role here in my view.
        Senator Hirono. Yes.
        Dr. Birol, the question was, you know, what kind of
    mandates or incentives should we put in place, because I know
    we are doing things to aid battery development, for example,
    but are there ways that we can incentivize the commitment to
    moving into those innovative areas that you are talking about?
    But let me just ask one more thing though. You talk about using
    existing technologies and one action that we can take today
    using technologies that are already on the market is to lower
    methane emissions from oil and gas wells. And in January 2012,
    an IEA report noted that reducing methane emissions from oil
    and gas operations is among the most cost-effective and
    impactful actions that governments can take to achieve global
    climate goals. However, the report notes that while reducing
    methane emissions may be cost-effective, many companies are not
    voluntarily doing so.
        There was, at one time, a federal methane regulation on the
    books to require companies to detect and reduce methane leaks.
    The Trump Administration repealed it last year. So how
    important do you think it is for the U.S. to resume regulating
    methane emissions, that being a very cost-effective way that we
    could use existing technology for the oil and gas industry?
    Should we reassert that regulatory requirement?
        Dr. Birol. Thank you very much, Senator.
        First of all, coming back to your first question,
    incentives for the clean energy technologies, which aren't in
    the market yet, it can be many ways. For example, this
    Committee, your Committee has for the CCUS, the 45Q tax credits
    was an excellent move in the right direction. And also, the
    economy recovery packages which will be coming soon, I hope
    they will provide incentives for the clean energy technologies
    plus the research and development budget for these technologies
    can be increased and some mandates can be deployed in order to
    give a strong push to clean energy technologies which aren't in
    the market yet.
        Now methane--thank you very much for referring to our
    report. Methane is a powerful greenhouse gas and especially is
    so, and when we look at the world, we said for the
    CO2 emissions, China is the number one country, but
    for methane, the United States is the number one country in
    terms of methane emissions, followed closely by Russia. And
    methane emissions reduction is not rocket science. You need to
    have the right regulations in place in order to minimize the
    venting and flaring, and methane is--all of it has a price--is
    a price of natural gas. What you need for this is to put in the
    right policies and mandatory framework. And I know that many
    companies are already making some efforts, but it's a major
    issue for the United States and many other countries, including
    Russia and other Middle East countries to address this issue.
        Our analyses show that a big chunk of the methane emission
    reductions are, as you mentioned, cost-effective and in effect,
    some of them are in the negative cost.
        Senator Hirono. Thank you very much.
        Thank you, Mr. Chairman.
        Senator Barrasso. Thank you, Senator Hirono.
        Now we have Senator Cassidy.
        Senator Cassidy. Thank you, Mr. Chairman and Mr. Ranking
    Member.
        Dr. Mills, there was a great exchange you had with Dr.
    Barrasso, but I just wanted to make it clear when we
    potentially don't deliver our oil and gas, we will shift
    production of the oil and gas to other countries with lower
    environmental standards, which is to say, per unit of oil or
    gas produced there would be more greenhouse gases emitted into
    the atmosphere. Is that a fair statement?
        Mr. Mills. The efficiency from a carbon dioxide perspective
    is typically lower in the other--all the other provinces. But
    the issue I was referring to was other environmental features--
    water use, well water contamination, spillage, labor practices.
    The whole panoply of environmental issues about which we are,
    in America in particular, very cautious. Many nations aren't as
    cautious as we are. But your question about the carbon dioxide
    efficiency of primary energy extraction, as I said in my
    testimony, is actually rather complex. The issue is not that
    there isn't some energy used to produce energy, minerals,
    including oil, but who produces it because the world will use
    more oil in the future than it is in the present--for the near
    foreseeable future, a decade or two at least. If we don't
    produce it, your point is absolutely correct, others will, and
    it's not complicated to figure out who they are.
        Senator Cassidy. Yes, I see that.
        And you point out Russia, and we have seen with methane
    emissions increase from Russia and so, presumably, if they took
    over gas production you would continue to see that increased
    methane from Russia. Granted, I think Senator Hirono points out
    wisely that we need to decrease ours, but I have more faith in
    us making that commitment than I do in Russia.
        Mr. Newell, in your response to Senator Heinrich, you spoke
    about the levelized cost of electricity, but it is fair to say
    that that levelized cost of electricity for wind does not
    include the backup plans needed to address the intermittency of
    the wind and the baseload that would be required to run
    concomitantly. Is that true?
        Dr. Newell. Senator, yes. You know, one of the----
        Senator Cassidy. I have another question. I have limited
    time--
        Dr. Newell. Yeah, one of the inadequacies of the concept of
    levelized cost is that it doesn't directly address
    intermittency of different resources. And so, that you may----
        Senator Cassidy. Let me ask another question because I have
    limited time. What I don't know, does the price that is quoted
    for wind, is that a net of the federal subsidy that goes for
    the production tax credit or whatever is used? So, you know,
    it's not the true production cost, it is a production cost
    minus the subsidy. Is that correct?
        Dr. Newell. That's not correct, Senator.
        So the costs that I cited do not include the subsidies. If
    you include federal tax incentives or state-level renewable
    portfolio support, that would further reduce the cost. They've
    come down in real costs aside from tax credits and other
    support policies.
        Senator Cassidy. Thank you very much.
        Dr. Birol, I always enjoy your testimony. I enjoy all of
    your testimonies. You mentioned the reliable supplies of
    critical minerals and metals vital to energy transitions. I
    don't know this answer, but I have read that there is actually
    not enough cobalt in the world to completely go to an all-
    electric vehicle standard. Is that true or am I
    misunderstanding that?
        Dr. Birol. Thank you very much, Senator.
        As I said a few minutes ago, we are looking at the impact
    of the ambitious climate policies on the availability of
    critical minerals in the next 10, 20 years or so. We are going
    to release this report in April. If you wish, I will be very
    happy to report to your Committee what the results are, what
    our intentions are, but currently it is not a major issue. But
    with the increasing demand, there may be clashes of supply and
    demand, number one. Second, there may be implications on the
    prices. And third, this can also lead, in some cases, to some
    energy security implications.
        But these are not issues that cannot be addressed, they can
    be addressed through different trading partners, I mean,
    reliable trading partners, putting in--stand ups and finding
    substitutes to those critical minerals. But as I said, we will
    come out with our report in April to show where the stress
    points are--what are the implications for the governments who
    are pushing clean energy transitions for their economies and
    for their energy security.
        Senator Cassidy. I look forward to that report. Thank you
    and I yield back.
        Senator Barrasso. Thank you.
        Senator Manchin [presiding]. Thank you, Senator.
        And now we have Senator King.
        Senator King. Mr. Chairman, we have been talking a lot
    today about the cost of transition to a new, lower carbon
    economy. I have a couple of slides, several slides, I would
    like to share that put this into perspective of the costs of
    not making this transition. If the tech people can put up the
    first slide for me.
        [Chart number 1 is displayed.]
        [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Senator King. This is several hundred thousand years of
    CO2 in the atmosphere. Many people talk about
    natural variations, and as you can see from this chart, there
    are natural variations, but if you look at the far-right side
    of the chart, we are way outside of those natural variations,
    we are well above now 400 parts per million of CO2.
    This is a vivid demonstration of the fact that we are in
    uncharted territory. In fact, it is not really uncharted. Three
    million years ago was the last time we had 400 parts per
    million. And by the way, the oceans were about 60 feet higher.
        Speaking of the oceans, if you can put up chart number two.
        [Chart number 2 is displayed.]
        [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Senator King. This is a really fascinating piece of data.
    This is 24,000 years of history. And the low point on the left
    is the height of the Ice Age. It was when a huge amount of
    water was locked up in the glaciers. And what you see is the
    increasing depth of the ocean. It is about 390 feet of
    difference between 24,000 years ago and today. There are two
    important things I want to point out on this chart. You will
    see in the middle there is a very steep incline of increasing
    water depth, called Meltwater Pulse 1A. The reason that is
    significant is that during that period, the ocean level rose a
    foot a decade and many scientists believe that we are in a
    similar moment right now. The point I am trying to make is this
    is not science fiction. This has happened in the past.
        And the other interesting thing about this chart is if you
    go over to the right where you see it sort of levels off at the
    top, that is the current sea level. It is about the last 8,000
    years. Eight thousand years happens to be recorded human
    history. In other words, the oceans have been where they are
    and we all think of them as being constant. The point of this
    chart is that in fairly recent times, 25,000 years, they have
    not been constant at all. The Chesapeake Bay, 15,000 years ago,
    was a nice river valley of the Susquehanna River. It was mostly
    dry land. So the whole East Coast would move about 180 miles
    east, 15,000, 20,000 years ago during the Ice Age.
        Here is the third chart, which talks about the practical
    effects of what we are looking at.
        [Chart number 3 is displayed.]
        [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Senator King. This is ice concentration in the Arctic. It
    has reduced by 75 percent in the last 40 years. The point I am
    making is we are talking a lot today about the cost of
    transition. We also have to talk about the cost of not
    transitioning and the dramatic impacts that we are facing. You
    want to rebuild Miami or New Orleans or New York, Washington,
    DC, any coastal communities? If we are talking about six to
    eight feet of sea level rise in the next century, that is a
    catastrophe, both a human catastrophe and an economic
    catastrophe.
        We are talking about baseline in this hearing and I wanted
    to talk about the fact that we are in a very, very dangerous
    time and facing, what I think, could be catastrophic changes,
    if not within our lifetime, certainly within the lifetime of
    our children and grandchildren.
        A couple of questions:
        Dr. Hsu, Senator Barrasso mentioned this, given the
    magnitude of this problem and the fact that it is an
    international problem and that there are developing countries
    that don't have the technological and industry base that we
    have, wouldn't a good adjunct to the Paris Climate Agreement be
    technology sharing? This should be an international moonshot,
    if you will, to develop the technologies both for efficiency
    and for carbon-free production.
        Dr. Hsu, is that something we should be working on, bearing
    in mind, I have already used a lot of my time, but give me a
    couple of sentences on that, please?
        Dr. Hsu. Yes, I absolutely agree with you. Thank you for
    the question. But I also think it's not just about technology
    sharing and cooperation, but it's also about competition. We
    can also compete, as the U.S., in promoting clean technologies
    abroad and accessing markets that are now growing in their
    demand for clean technology because of their decarbonization
    goals and their targets on the Paris Agreement.
        So I think that permits even more opportunity for green
    competition as well, and not just technology sharing.
        Senator King. Great.
        Mr. Mills, I want to understand your testimony. You are
    talking about the costs of building batteries, for example. And
    I understand there are environmental costs. There is no free
    lunch in energy. I learned that a long time ago. However, are
    you saying that the emissions that go into the manufacturing of
    a single car battery would be equal to the emissions saved by
    that car battery in an electric car over, say, 150,000 miles of
    a ten-year life? Is that--I don't think you are saying that,
    but I just want to be sure.
        Mr. Mills. Senator, thanks for the question. I am saying
    that. In fact, there are very robust studies on this. I was not
    speaking to the economic costs, because the baseline I believe
    we were talking about was emissions. I was pointing out that
    the emissions associated with the energy consumed to fabricate
    batteries to make and process the key minerals and materials
    are significant that the data show and numerous academic--these
    are not, you know, studies promoted by advocates of either
    forms of energy. The analyses of what is involved in the fuel
    cycle to make the battery and battery materials, the range of
    energy cost--energy cost, not dollar cost--to fabricate
    barrels-of-oil equivalent of energy storage consumes 100 to 300
    barrels of oil of energy to fabricate that quantity of
    batteries. So that----
        Senator King. But my question is how many barrels of oil
    would be offset by that battery over a ten-year life?
        Mr. Mills. That's a very fair question. It does, it offsets
    over its life, oil. It depends on where the cars exist. In the
    world that exists today, batteries that are fabricated with
    those, the way we now do it, result in emissions that are only
    partly offset depending on where they're driven. One of the
    European studies finds that if you drive the Tesla in Norway,
    for example, half of the emissions savings that you have by not
    burning oil are wiped out by making the electric car. If you
    drive the vehicle in most of Germany, two-thirds of all the
    emission savings are wiped out and if you drive it in Poland,
    obviously, they have an electric grid that's coal-fired, then
    you have a net increase in emissions.
        So, yes, I was saying exactly that. That's what needs to be
    a part of the accounting.
        Senator King. Well, I would appreciate if you could supply
    those studies for the record for the Committee. I would be very
    interested in following up.
        Mr. Mills. Yes, sir.
        Senator King. One final comment, not a question. I know my
    time is up. I want to associate myself with Senator Hirono. The
    low-hanging fruit of climate change prevention is methane, and
    most of the methane comes from unregulated oil and gas
    drilling, whether it is in Russia or here. I think that is an
    area where we need to lead, but we also could be talking to
    Russia about some kind of methane treaty, if you will, because
    it is cost-effective. We ought to be doing it and it is, by
    far, the easiest, shortest, and most cost-effective way to deal
    with climate change.
        So, thank you. Thank you, Mr. Chairman.
        Senator Manchin. Thank you, Senator.
        Next, we have Senator Daines.
        Senator Daines. Thanks, Mr. Chairman.
        Since President Biden took office just two weeks ago, we
    have seen attack after attack on made-in-America energy and
    union jobs, and we know how devastating this will be to
    Montana's economy, Montana families, and the reliability of the
    electric grid. Just look at what California went through last
    summer as it relates to what happens when you take radical
    shifts to the left, and the lack of reliability that comes from
    those shifts. These actions could actually move us away from
    our climate ambitions. Today, the United States leads the world
    in reducing energy-related carbon emissions. We are number one.
    We have achieved this through innovation, not regulation.
    However, a recent report found that President Biden's ban on
    federal energy leasing will lead to a 5.5 percent increase in
    carbon emissions in the power sector by 2030.
        The cancellation of the Keystone XL pipeline, which has
    undergone extensive environmental reviews and would have
    achieved net zero emissions by 2023, will force major
    quantities of crude oil onto the rails, which now will emit up
    to three million tons of carbon dioxide annually into the
    atmosphere. Let me say that again. The cancellation of the
    Keystone XL pipeline could lead to an increase of three million
    tons of carbon dioxide emissions per year. By the way, any ban
    on fracking is also expected to drastically increase emissions.
    I am a chemical engineer by degree. I like to look at the
    numbers. The science tells us that these radical moves to the
    left are actually going to increase CO2, not
    decrease CO2.
        Mr. Mills, have technological breakthroughs like horizontal
    drilling and hydraulic fracturing lowered our emissions and do
    you believe that heavy-handed regulatory approaches, like the
    executive actions seen over the past two weeks, actually move
    us away from emission reduction goals?
        Mr. Mills. Well, thank you, Senator, for the question.
        Chemical engineering is one of the disciplines I respect
    enormously as a physicist. I chose physics because chemistry
    was hard.
        [Laughter.]
        So the answer is yes, of course. The hydraulic fracturing
    in the United States is so productive and so economically
    responsive--it's fast, which is non-trivial in capital
    markets--that it drove world prices of gas down, drove down
    domestic prices, and as most analysts know, the principal
    reason for the reduction in coal use in America is because gas
    got so cheap. So it is a profound impact globally. There is
    certainly a path to tremendous improvements yet in those
    markets, in terms of economic and resource efficiency.
        Senator Daines. Thank you very much.
        Just last week during a press briefing, one of President
    Biden's top aides, Gina McCarthy, stated, and I quote,
    ``Climate change is the most significant public health
    challenge of our time.''
        Let me just state the obvious. We are in the midst of a
    global pandemic. So I would have to say this is certainly not
    the case. It was also not the case before the pandemic hit. The
    greatest indicator of health status is poverty and access to
    reliable, affordable electricity, which usually provides clean
    water. That is intrinsically linked to human welfare. The
    policies initiated over the past two weeks, which are being
    pushed by the left, only compromise energy access and jobs,
    which will now exacerbate the health and economic crisis that
    we are in now. They will lead to higher energy costs, higher
    gas prices for Americans at a time when families are struggling
    to make ends meet and keep food on the table.
        As shown by the U.S. reduction in emissions, it is possible
    to grow our economy and specifically, our energy sector, while
    meeting our environmental goals. In fact, in 2019, energy-
    related emissions fell by 2.6 percent in the U.S. Meanwhile,
    China increased their emissions by nearly twice as much.
        Dr. Birol, can you speak to how U.S. carbon emission
    reductions compare to countries like China and India?
        Dr. Birol. Thank you, Mr. Senator.
        You are right, in fact, in the last decade or so, U.S.
    emissions declined significantly, mainly as a result of natural
    gas replacing coal, but also from a big push for renewables--
    solar and wind. These were two main reasons. And today, U.S.
    emissions are half of that of China, globally. China is about
    30 percent of the global emissions, United States, 14. Having
    said that, if you look at it--because people look at emissions
    from different angles, the U.S. per capita emissions is one of
    the highest in the world, much higher than China.
        And I would like to say that I liked very much Mr. King's
    grasp of what would happen if we don't act. In addition to
    those, the implications on climate change, I can tell you that
    if the U.S. does not act, push to create an age of transitions,
    U.S. industry, U.S. technology may be well beyond the curve.
    Others are moving. It's not only a policy, but also market-
    driven transitions. Therefore, the U.S. has been always the
    leader of innovation, new technologies, and I believe why the
    U.S. preserve this important, strong force in the global energy
    markets, pushing innovation would be also an economic idea in
    addition to playing an important role responsibly as a leader
    of the international economy.
        Senator Daines. Thank you, Dr. Birol.
        I am out of time, but let me just say this. In Montana, we
    have the nation's largest reserve of recoverable coal and
    large-scale coal plants. We are uniquely positioned in Montana,
    speaking of innovation, to be a leader in carbon capture
    research and development. Thirty-five percent of carbon
    emissions reductions have already been achieved in these high-
    efficiency, low-emissions coal plants. So I am all about
    innovation. We have some great ways we could do that in
    Montana.
        Mr. Chairman, thank you.
        Senator Manchin. Thank you, Senator.
        And now we have Senator Cortez Masto.
        Senator Cortez Masto. Thank you, Mr. Chairman. Thank you
    for this conversation. This has been a fantastic conversation.
    And as always, I always learn something from my good friend,
    the Senator from Maine, Senator King. I have always enjoyed
    listening to his questions. But he nailed it for me, and this
    is why I think it is so important to have this discussion.
        I have been hearing the discussion here about the cost of
    transition versus the cost of not transitioning, but we have
    not talked about the benefits of transitioning. Here has been
    my concern all along as I have sat in for the last four years
    of the Senate is, I have watched China take advantage
    economically over the United States and other countries and
    they are still pursuing that, they are investing billions of
    dollars. This is an area we now, as the United States, when it
    comes to clean technology, have the ability to lead if we
    actually invest in the research, the development, and the
    deployment, because whoever can lead in this clean technology,
    whatever country has the best technology, is going to have a
    better economic advantage moving forward and we are
    transitioning, no matter what anybody says.
        I am going to stop preaching, but let me just say this. I
    am going to ask both Dr. Hsu and Dr. Birol--you know, part of
    the conversation that I think is important for the Paris
    Agreement is not whether there is enforcement, not whether we
    can ensure their carbon reduction, it is the fact that we are
    trying to achieve a goal here and incentivizing all of our
    states, all of our private sector, all of our government to
    work together to go down the path toward this clean energy and
    develop this new technology because this will create jobs, this
    will give us an economic advantage, and other countries will
    want to understand it as well or possibly be able to engage in
    that.
        Is that correct? What are the benefits for us entering into
    the Paris Agreement? And Dr. Hsu, let me ask you.
        Dr. Hsu. It's a great question and thank you so much,
    Senator, for asking it.
        You're absolutely right. If we look at China two decades
    ago, it basically didn't even have a clean energy sector to
    really speak of and then because of that massive amount of
    investment, they were able to, basically, eat all other
    country's lunch when it comes to producing solar, wind
    turbines, for example. I think I stated in my testimony that
    two-thirds of all wind turbines are coming from China, half of
    all solar panels are produced in China. So there's a huge
    market out there for these technologies.
        Some estimates that I've seen predict that by 2030, there's
    going to be a $23 trillion market for climate-smart
    investments, and so this will just continue to grow as
    countries, exactly as you said, work to meet the goals of the
    Paris Agreement. So, yes, I think absolutely by sticking to
    these old fossil fuel based industries that our economy has
    relied on to achieve the emissions reductions in the past
    decade, I think, it's short-sighted. I think the world is
    moving in the direction of decarbonization and if the U.S.
    doesn't act quickly and decisively enough, they're going to
    miss an opportunity.
        Thank you.
        Senator Cortez Masto. Yes, and with that said, I do
    understand. Listen, China is trying to decarbonize by 2060, but
    we also know China is continuing to invest in fossil fuels from
    emerging countries, right? So we know that the emerging
    countries right now are challenged and they are going to be
    transitioning, but right now, they are looking for the lowest
    cost. So it does make sense for us to work to figure out how we
    develop this technology for carbon capture, utilization, and
    storage and how we address the methane gas because it is not
    going to go away anytime soon, nor should we look to put people
    out of work, right? We want to transition to the jobs. We want
    to transition to the technology, the jobs of the future and
    transition those skills along the way. Everybody should be
    employed.
        With that said, let me ask Dr. Birol. For purposes of the
    Paris Agreement, you talked a little bit about the benefits of
    it--renewables, efficiency, nuclear power, advanced nuclear
    power--and you talked a little bit about incentives that the
    United States can engage in, including tax credits, as well as
    research, development, and deployment. What else should we be
    doing to ensure that we are incentivizing across the states in
    this space to develop the technology that is necessary for this
    clean energy?
        Dr. Birol. I think, if I may, Madam Senator, combining this
    question with your wonderful comments about the competition is
    very important here between the countries to develop the clean
    energy technologies. One lesson for the United States from
    history, we all agree today that the solar is one of the
    cheapest sources of electricity generation, and it was the
    United States which put--between 1975 and 2000--U.S. Federal
    Government subsidies, about $3 billion in order to bring the
    cost of solar down, from 1975 to 2000. And afterwards, if I may
    say so, dropped the ball and today, when we look at the
    picture, only one percent of the solar PV module shipments come
    from the United States and seven out of ten solar PV is coming
    from Asia.
        So I think we need to learn from this example. What kind of
    incentives? It can be tax incentives, it can be subsidies,
    mandates and some, in my view, some standards are needed. You
    talk about the methane. Methane--to capture methane is really
    an easy business. It is for the many companies--they just don't
    need to be greedy. They just need to put additional technical
    improvements reducing venting and flaring, which will happen
    only if there are regulations there. In my view, strict
    regulation on methane is a part of the incentives, if I may say
    so.
        Finally, Madam Senator, even if there was no climate change
    concern, I still believe that the United States would still
    push the advanced technologies to be a leader in the global
    economy because--and today if American manufacturers are
    changing their strategies--and pushing the electric vehicles,
    it is not only to save the planet, but it is also putting their
    businesses, their strategies on the right track to make money
    for themselves and for their shareholders.
        Senator Cortez Masto. Thank you.
        And Mr. Chairman, thank you. I know my time is up, but let
    me just say this. This is our moonshot. This is it. In this
    century, this is what we have to tackle. And I come from a
    mining state. I am very proud of the mining that we have. We
    have the ability to create new jobs around the critical
    minerals that are going to be necessary for this clean energy,
    from the extraction to the production, all the way to the end
    product. And we should be doing that. We should be engaging on
    how we continue to develop these new technologies from out of
    the ground to the finished product, because that is good for
    our economy, it is good for jobs, and it gives us that
    competitive advantage that I would like to see the United
    States lead with.
        So thank you.
        Senator Manchin. Thank you, Senator.
        Senator Hoeven.
        Has Senator Hoeven been able to get back? If not, we will
    go for a quick second round--anybody that might have--I have
    one to finish up on.
        Dr. Tinker. Mr. Chairman, this is Scott Tinker. Is my
    microphone working yet?
        Senator Manchin. It is now, yes.
        Dr. Tinker. Okay, I apologize. I'm not sure what happened
    there. I've got a lot to share on each of these topics.
        Senator Manchin. Okay, Scott. Well, we will get back to
    you.
        Anybody that did not have a chance to respond to my first
    question, if you recall, on the Paris Accord? Where we are
    going, different times, different elements, different people,
    many different countries meeting different timetables and
    hitting the net zero by 2050.
        Yes sir, Doctor.
        Dr. Newell. Yes, Senator. One of the things to recognize is
    that the concept of net zero and why has that gotten so much
    salience and the reason is that when carbon dioxide emissions
    are put into the climate system, they stay there for a thousand
    years, right? They don't go away. And so, the concept of net
    zero is that if we want to stabilize the climate and stop
    temperature from rising, we need to get to net zero emissions
    to stabilize the stock of greenhouse gases in the atmosphere.
    So, that's the--it's a very simple concept and it's, you know,
    it's gotten increased policy salience.
        Now the United States, and this has come up before, the
    United States--we contribute about 15 percent of global
    greenhouse gas emissions. It means 85 percent is coming from
    other countries. And so, how do we prevent the impacts on the
    United States, in our own self-interest, from climate change?
    How do we prevent additional sea level rise and temperature
    change? We need to do that both for our own actions and, very
    importantly, by encouraging actions by other countries, because
    85 percent of the impacts we're feeling are actually coming
    from other countries.
        So how do we do that? We have to engage in international
    agreements, like the Paris Agreement. And I think in order for
    us to expect other countries to react in kind, we need to lead
    by example. So that's what I would say, Senator. And finally,
    in terms of, you know, particular net zero goals, in order to
    stabilize the climate, I would think we need to get to net zero
    as quickly as possible. Exactly when that is, is going to
    depend on how technologies unfold, how policies unfold, how
    market conditions change. I guess I'd finally----
        Senator Manchin. There is nothing enforcement about the
    Paris Accord. That is the problem. There is nothing enforcing
    it whatsoever.
        Dr. Newell. Yes, the Paris Accord is based, as was
    described earlier, on bottom-up commitments by countries.
        Senator Manchin. Okay.
        Dr. Tinker, I don't think you have commented on this. Am I
    right?
        Dr. Tinker. I haven't----
        Senator Manchin. I know Dr. Hsu has. Dr. Tinker, please.
        Dr. Tinker [continuing]. Or maybe I did but you didn't hear
    me.
        Senator Manchin. Yes, we have you. We have you, Doctor.
        Dr. Tinker. Thank you. I probably was talking to myself,
    but thank you.
        You know, I think it's really important on the Accord
    optionality--so replacing CO2 dense emissions with
    less dense--and you have to think about those that are
    intermittent and those that are baseload as well. So replacing
    coal and natural gas has had a huge effect in the United
    States. Capturing the CO2 from that natural gas
    would have even more of an effect and then, supplementing that
    with other things.
        I think the levelized cost conversation, which didn't come
    through, we'd have to be complete on that. Again, when you have
    to back up materials, back up intermittent energy with
    something and it's 100 percent backup, plus or minus, in
    batteries or redundant plants. That raises the cost. It
    really--Dr. Birol knows this very well--that the levelized cost
    does not represent the cost to the consumer. It doesn't. That's
    why California and the Northeast U.S. and Germany pay so much
    more for electricity today, the consumer does. It's regressive.
        And it's not--it's just physics and economics. You have to
    back intermittent energy up if you want steady electricity. So
    we have to look at the complete cost of electricity. Density
    matters--a lot of stuff. I definitely respect and am very close
    with the state geologist in Nevada. And mining--it is
    important. We have to think candidly about how much mining we
    will enable here if we're going to manufacture stuff here--
    where does it come from? I've put solar in, in Columbia in our
    film, ``Switch On'', a film on energy poverty. And it takes
    stuff from all over the world to do that, to bring it to it, to
    manufacture it and deploy it, the production chains for this
    are phenomenal.
        So how are we going to accomplish that globally to truly
    reduce emissions in a real world where others are making most
    of our stuff now in this country? It's such a practical
    question.
        Senator Manchin. Doctor, I hate to cut you short. I have
    two others.
        Dr. Tinker. Okay. Sure.
        Senator Manchin. If you don't mind.
        Dr. Tinker. You bet.
        Senator Manchin. We will get back.
        So I am going to go to Mr. Mills and then we are going to
    finish up with Dr. Birol real quick. I am sorry to indulge, but
    we want to get these out.
        Mr. Mills.
        Mr. Mills. Thank you, Senator. I'll take you at your word
    and answer the question about what do I think about the
    probability of reaching that goal by 2050. If I were betting,
    and I'll take the public bet, we won't reach the goal.
        Senator Manchin. The United States or all?
        Mr. Mills. Neither the United States or the world. And I
    say that not because it's aspirational, or should or
    shouldn't--aside from that entirely. The inertia in these
    systems, the world, is so great and the magnitude of the
    resources that we have to put to work is so large, that it
    would require efforts that are equivalent to a World War II
    type of mobilization, not just for a few years, but for
    decades.
        The physical resource requirements, and I look forward to
    the IEA study on this, I suspect it will look like other World
    Bank and IMF studies, are astonishing. I just don't think the
    world is prepared to mine that much material, move that much
    material, and spend that much capital. So I would bet against
    it happening. So that would argue that we have to start
    thinking seriously, as some organizations do, about resilience
    and adaptation to whatever happens to the climate in the coming
    decades.
        Senator Manchin. Thank you.
        And Dr. Birol.
        Dr. Birol. Thank you very much, Mr. Manchin.
        So I would like to bet either way. We are going to, as I
    said, making a study on the 18th of May, we are publishing, to
    see what needs to be done to reach net zero by 2050, and I can
    tell you that it requires Herculean efforts to reach that major
    transformation of the energy sector around the world, and one
    key word here--there are many, many challenges--but one
    important challenge, in my view, is there is a need for
    intelligent collaboration among the countries around the world.
    This is the biggest challenge. And if we don't come together,
    it will be very difficult to reach this target.
        And here, yet finally, one opportunity. Many countries
    around the world, including the United States, are putting in
    place economic recovery packages. Once-in-a-generation in
    scale, trillions of dollars, and many governments are putting
    incentives in for clean energy technologies. This can well
    create an unprecedented momentum for the clean energy
    technologies and try to give a strong support to reach those
    targets. But once again, it requires Herculean efforts to reach
    those targets, which, I believe, from the pictures of Mr. King,
    is compulsative for all of us to reach.
        Thank you.
        Senator Manchin. Thank you, Dr. Birol.
        We have Senator Hoeven and then Senator Barrasso will
    finish up the second round.
        Senator Hoeven.
        Senator Hoeven. Thank you, Mr. Chairman, I appreciate it
    very much.
        Dr. Birol, when you appeared before us earlier you talked
    about the importance of, in terms of fossil fuels, coal-fired
    electric plants providing a substantial amount of energy
    throughout the world and that is going to continue to be the
    case, and then emphasized that carbon capture and storage, you
    called, not just one of the most important technologies, but
    the most important technology that exists because of its
    ability to marry the benefits of good, normal stewardship and
    continued, dependable energy production. So I guess my first
    question is, do you stand by that statement? Is CCUS
    indispensable in terms of making sure we have dependable, low-
    cost energy and meeting our objectives in terms of the
    production of CO2 emissions?
        Dr. Birol. Even more than before, Mr. Senator. It is
    getting more and more important, more and more critical, CCUS
    in power generation, industry and elsewhere. The problem is not
    energy. The problem is emissions. Energy is good. Emissions are
    bad.
        Senator Hoeven. Right, but isn't the demand for fossil
    fuels, coal-fired electric production, going to continue,
    particularly in a lot of countries outside the United States?
    And so, isn't cracking the code in terms of making CCUS
    commercially viable, which we can do here with our technology,
    isn't that vitally important, not just for us, but really for
    the world?
        Dr. Birol. Very much so. I think it will be not only
    important for the new power plants to be clean, but also for
    the existing power plants today. One-third of all the emissions
    in the world come from coal-fired power plants around the
    world. And if the United States was a leader of carbon capture,
    utilization and storage technologies, and it can well be a very
    important product for exported technology around the world. And
    this, this is what I would expect from the United States.
        Senator Hoeven. So we are trying to make that happen. Thank
    you for your comments and I agree with you and we are working
    hard to make that happen. We worked hard to get 45Q in place.
    So my question is, what kind of enhancements--and we are
    working on funding from the Department of Energy, loan
    guarantees--what else can we do, should we do, to make this
    happen? How do we help make this happen in the United States,
    lead the way forward, deploy it commercially, advance the
    technology and really lead the world here? What kind of things
    can we do to help make that happen?
        Dr. Birol. When I look at the numbers, 45Q seems to be
    working. We have seen several new projects coming online. Maybe
    an extension of 45Q and maybe providing additional incentives
    for the, especially for the industry sector--cement, iron,
    steel and others--who have to push the CCUS technologies and,
    as such, bringing the cost down. Today, the issue is not
    whether or not technology works, the issue is the cost of the
    technology. We just need to bring the costs down.
        As we have seen in the solar, learning by doing, we brought
    the cost down and with CCUS may well have the same pattern if
    there was leadership there.
        Senator Hoeven. So those would be the keys--enhancement of
    45Q, help through Department of Energy and other sources too,
    for the front-end cost to put this technology on the plants,
    and then loan guarantees to help those companies actually
    finance their costs to not only advance the technology, but to
    put it into place and operate on a commercially viable basis.
    Those, you think, would be the keys--make this happen instead
    of just talk about it, then we have to work with our Department
    of Energy and our companies to do those things, you would say?
        Dr. Birol. Yes, definitely, especially now the focus needs
    to be in the industry sector as well--iron, steel, cement and
    other special chemical industry--and we are going to, we are, I
    believe, working with the Department of Energy in order to
    provide them some assistance.
        Senator Hoeven. And you think that could have a huge impact
    for our country and that we could really lead the world
    forward--correct?
        Dr. Birol. Definitely. And the United States can be the
    leader of this technology around the world, and as such, not
    only benefits the U.S. economy, but in terms of reducing the
    emissions, keeping the energy in the United States, but also
    exporting this technology around the world.
        Senator Hoeven. And a lot of great jobs, right?
        Dr. Birol. Yes, exactly. CCUS is a job-creating machine.
        Dr. Tinker. Senator Hoeven.
        Senator Hoeven. Thank you very much, Doctor and thank you,
    Mr. Chairman----
        Dr. Tinker. Senator Hoeven, just briefly.
        Senator Hoeven. Yes, sir.
        Dr. Tinker. Technology matters with CCUS as well. So the
    ability to put fluids in at rate and in the volumes, and there
    again, the United States has a remarkable advantage--the Gulf
    of Mexico, where infrastructure exists and sites to capture,
    and then being owned by the Federal Government and the states
    in the offshore--is a remarkable site for large-scale CCUS. It
    could be world-leading in setting up a hub for capture,
    transmission, disposal, and monitoring and verifying its
    storage--50 gigatons of potential storage there. So we have a
    remarkable opportunity to lead that, but the geology does
    matter.
        Senator Hoeven. Thank you, Dr. Tinker, I appreciate that
    very much. And again, thank you, Mr. Chairman.
        Senator Manchin. Senator Barrasso.
        Senator Barrasso. Thank you, Mr. Chairman.
        Dr. Tinker, China is the world's largest emitter of carbon
    dioxide, and it accounts for about 30 percent of global
    emissions. So while Chinese emissions have been rising for
    decades, U.S. emissions, as we've talked previously, have been
    steadily declining since back in 2007 and are expected to
    decline another 17 percent by 2030. So in 2015, China said they
    are going to cap their emissions by 2030, so 2015 all the way
    up to 2030. Is it fair to say that China's pledge is really
    just business as usual for them?
        Dr. Tinker. Well, it's interesting. Yes, in some senses,
    but business as usual is really transition as usual. Nothing is
    static. So the transition in fuels is very real. China is
    transitioning. It's growing its economy on coal but will
    transition away from that. So it is business as usual in that
    transition. Accelerating through that transition is really the
    great opportunity the United States can lead, Senator, as we go
    forward here--is really helping to move through the emissions
    that Dr. Birol said so well, it's the emissions. And it's also
    the water, air, and land impacts. It's the environment that
    we're talking about, the whole environment.
        So business as usual is an interesting term, but nothing is
    business as usual.
        Senator Barrasso. Then, since you mentioned Dr. Birol--Dr.
    Birol, let me ask you this. The IEA's 2019 Energy Policy Review
    for the United States recommends that, it says, ``As the United
    States is poised for further production growth over the coming
    decade, facilitating the buildout of supporting infrastructure
    will be a key factor to maximize the benefits of shale, both at
    home and abroad.'' So, on balance, would you agree that the
    construction of natural gas pipelines, LNG export terminals
    here in the United States is a good thing for the United
    States, for the world, and for the environment?
        Dr. Birol. Yes, U.S. LNG, especially where it is exported
    to Asia, as I said a few minutes ago, as of these last two
    months, the biggest buyer of U.S. LNG is China, by the way, and
    other Asian countries. When it replaces coal it reduces the
    emissions. But once again, it is important that the methane
    emissions in the United States need to be addressed and
    minimized, otherwise soon there may be some challenges to find
    the customers as they may look at the methane footprint of U.S.
    LNG. But in general, it can help to reduce the emissions from
    coal and also help to reduce the air pollution in the cities in
    Asia.
        Senator Barrasso. Let me ask you, since the IEA was, I
    understand, created to ensure the security of energy supplies,
    particularly oil, the United States is now the world's largest
    producer of crude oil and natural gas. On balance, has the
    emergence of the United States as the top oil and gas producer
    increased the stability and security of global energy markets?
        Dr. Birol. Definitely, yes.
        Senator Barrasso. Thank you.
        Thank you, Mr. Chairman.
        Senator Manchin. And with that, I want to thank all the
    witnesses. You all have been wonderful. I appreciate the time
    you have spent to come here in person, but also those on the
    web. I appreciate very much you sharing with us your expertise
    and we are going to be calling on you much, much more during
    this Congress.
        With that, members have until the close of business
    tomorrow to submit additional questions for the record.
        The Committee stands adjourned.
        [Whereupon, at 12:30 p.m., the hearing was adjourned.]

                          APPENDIX MATERIAL SUBMITTED

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                                 ECONOMIC RISKS

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                                 CLIMATE CHANGE

      The pages that follow can also be accessed online at the following
    web address:

        https://senwhitehouse.medium.com/economic-risks-of-climate-change-
    sources-f9626ddff539
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