[Senate Hearing 117-741]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 117-741


          BORROWED TIME: THE ECONOMIC COSTS OF CLIMATE CHANGE

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                                   ON

 EXAMINING CLIMATE CHANGE AND ITS EFFECTS ON OUR NATION AND OUR ECONOMY

                               __________

                             AUGUST 4, 2022
                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs
                                
                                
                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                                


                Available at: https: //www.govinfo.gov /
                
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
53-567 PDF                WASHINGTON : 2023 

           
           COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                     SHERROD BROWN, Ohio, Chairman

JACK REED, Rhode Island              PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey          RICHARD C. SHELBY, Alabama
JON TESTER, Montana                  MIKE CRAPO, Idaho
MARK R. WARNER, Virginia             TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts      MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland           THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada       JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota                BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona              CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia                  JERRY MORAN, Kansas
RAPHAEL WARNOCK, Georgia             KEVIN CRAMER, North Dakota
                                     STEVE DAINES, Montana

                     Laura Swanson, Staff Director

                 Brad Grantz, Republican Staff Director

                       Elisha Tuku, Chief Counsel

                 Dan Sullivan, Republican Chief Counsel

                      Cameron Ricker, Chief Clerk

                      Shelvin Simmons, IT Director

                        Pat Lally, Hearing Clerk

                                  (ii)


                            C O N T E N T S

                              ----------                              

                        THURSDAY, AUGUST 4, 2022

                                                                   Page

Opening statement of Chairman Brown..............................     1
        Prepared statement.......................................    31

Opening statements, comments, or prepared statements of:
    Senator Toomey...............................................     3
        Prepared statement.......................................    32

                               WITNESSES

Joe Flarida, Executive Director, Power a Clean Future Ohio.......     6
    Prepared statement...........................................    34
    Responses to written questions of:
        Chairman Brown...........................................    84
        Senator Van Hollen.......................................    86
        Senator Sinema...........................................    87
Dan K. Eberhart, CEO, Canary, LLC................................     7
    Prepared statement...........................................    47
    Responses to written questions of:
        Senator Van Hollen.......................................    88
        Senator Sinema...........................................    88
David Butterworth, Northeast Regional Business Agent, Pipeliners 
  Local Union 798................................................     9
    Prepared statement...........................................    50
    Responses to written questions of:
        Senator Van Hollen.......................................    89
        Senator Sinema...........................................    89
Shalini Vajjhala, Founder and CEO, re:focus partners.............    11
    Prepared statement...........................................    51
    Responses to written questions of:
        Chairman Brown...........................................    90
        Senator Van Hollen.......................................    92
        Senator Sinema...........................................    94

                                 (iii)

 
          BORROWED TIME: THE ECONOMIC COSTS OF CLIMATE CHANGE

                              ----------                              


                        THURSDAY, AUGUST 4, 2022

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met via Webex and in room 538, Dirksen Senate 
Office Building, Hon. Sherrod Brown, Chairman of the Committee, 
presiding.

          OPENING STATEMENT OF CHAIRMAN SHERROD BROWN

    Chairman Brown. The Committee on Banking, Housing, and 
Urban Affairs will come to order. Welcome to the three 
witnesses in person and our fourth witness online, and thank 
you for that.
    Climate change is here, and the country knows it. It is 
here for Ohio teachers and students forced to work in schools 
without air conditioning in 90-plus degree heat, for more and 
more days at both ends of the school year.
    It is here for Ohio cities and towns, like the one Mr. 
Flarida comes from, that draw their drinking water from Lake 
Erie, and face higher and higher costs from harmful algal 
blooms.
    It is here for Ohio farmers, many of whom lost an entire 
growing season in 2019 because of extreme rain, and who will 
soon be forced to learn to grow crops that used to be better 
suited to Arkansas than to Ohio.
    And it is here for our neighbors in Kentucky, who watched 
their homes and communities wash away in devastating floods 
this week, the kind that scientists warn are becoming more 
common. We have all seen the pictures, pretty much probably all 
of us in this room. The flooding could be in many of our 
States.
    Ask mayors, ask school superintendents, ask county 
commissioners about the increasing costs they deal with already 
because of climate change, costs we know will only get worse.
    And we know who will be forced to pay for those costs. It 
is not the oil companies that make record profits: $8.5 billion 
last quarter for BP, and that is only 3 months. $12 billion for 
Chevron--that is $4 billion in profits a month. $12 billion for 
Shell--that is $1 billion in profits per week. $18 billion for 
Exxon Mobil--that is $200 million in profits a day.
    It is not these corporations that will pay the bill. It is 
local taxpayers. The likely impacts of climate change could 
cost people in my State $6 billion a year.
    These corporations and their executives have been getting 
rich by price gouging consumers and polluting our communities 
for decades. And taxpayers in Ohio, taxpayers around the 
country, will be left to pick up the pieces. Taxpayers are 
always left to pick up the pieces.
    It is why we have to act now to grow the renewable energy 
economy and to make our communities more resilient to climate 
disasters. If we delay it will only get more expensive to fix.
    In previous hearings, we have examined the threat of 
climate change to our financial system, the economic 
opportunities for good-paying jobs in the low-carbon economy, 
the role of insurance in protecting the economy from the coming 
impacts, and how we can reduce carbon emissions as we improve 
our housing.
    In each hearing, too many have treated the looming 
catastrophe of climate change as just kind of a non-issue, or 
as something so far out in the future that there is no need to 
spend time on it in this Committee.
    That just makes no sense.
    As the Committee tasked with overseeing the stability of 
our financial system--that is what we are doing--we have a 
responsibility to do all we can to prevent obvious risks from 
wrecking our local communities and our financial stability.
    No one on this Committee questions the need to prevent 
cybercrimes by asking how many banks have failed because of it. 
We do not dismiss financial scams because they do not pose a 
systemic risk to the financial system at the moment. Our towns 
and our taxpayers cannot afford for us to treat climate risk 
any differently, not when the effects on the economy are so 
clear.
    With almost the entire country under excessive heat 
warnings, with floods and wildfires and droughts and extreme 
storms threatening Americans' lives and livelihoods, we know 
that communities in every State are about to be hit with 
massive bills, bills many of them just will not see coming.
    And we know there is tremendous economic opportunity if we 
address these threats in the right way.
    Ohio, Pennsylvania, and South Carolina can create good-
paying jobs in the industries of the future. And if we do not 
lead, we know China will be all too happy to lead.
    This morning, we will hear from four witnesses, including 
the executive director of one of the Ohio groups that published 
a report called ``The Bill is Coming Due''. It features some 
eye-opening figures detailing costs that will be borne by Ohio 
towns and cities, and as a result, Ohio taxpayers, because of 
climate change. What I hope to hear from our witnesses is a 
recognition of the risk to our communities--and to the lives 
and livelihoods of our fellow citizens--from these real and 
present and looming and growing threats.
    I hope we will hear honest assessments of the state of the 
world we are in, and constructive suggestions about how we can 
make it better. And I hope we will come away from this hearing 
thinking about how we can help towns and cities in Ohio and 
Rhode Island and North Dakota and Pennsylvania, that are 
living, frankly, on borrowed time, and how they can prepare for 
what is coming.
    Let us create the jobs for the 21st century. Let us make 
sure the workers--and I hope union jobs, Dave--the workers who 
will drive the 21st century economy can still live in the towns 
and cities we were sent here to represent.
    Senator Toomey.

         OPENING STATEMENT OF SENATOR PATRICK J. TOOMEY

    Senator Toomey. Thank you Mr. Chairman and thank you to all 
of our witnesses here today, especially those who traveled a 
long way to be with us. I appreciate you taking the time and 
going through the effort to join us.
    Every month seems to bring more bad news about energy. Gas 
prices still remain at near-record highs, despite modest 
declines in the last month.
    The CPI's energy index was up over 41 percent over the past 
year as of June. This includes gasoline, fuel oil, electricity, 
and utilities.
    Meanwhile, prices are rising across the economy and 
paychecks certainly are not keeping up. After adjusting for 
inflation, wages have declined 5 percent since President Biden 
took office. In fact, unless you got a 12 percent raise in the 
last 18 months, you have effectively gotten a pay cut. Working 
Americans are becoming poorer every day.
    And our Democratic colleagues' wasteful spending, coupled 
with over a decade of ultra-easy monetary policy, caused the 
40-year high inflation and now the contraction in our economy.
    You know what is the last thing Americans need? Policies 
that are explicitly designed to reduce American energy 
production, and therefore make the cost of energy even more 
expensive, under the guise of addressing climate change. But 
that is exactly what the Administration and many of my 
congressional allies have been doing. They have been eager to 
find any culprit--other than themselves--to explain the rising 
cost of energy. They have tried blaming supply chains, Vladimir 
Putin, and my personal favorite, ``corporate greed.'' How dare 
businesses be motivated by profit.
    My colleagues on the other side of the aisle should really 
be doing a little self-reflection. But instead they are trying 
to jam through a 700-page tax-and-spend bill that will throw 
fuel, presumably of the carbon-neutral kind, on this fire: $385 
billion in corporate welfare for politically favored ``green'' 
energy, including $9 billion in generous subsidies for wealthy 
people to buy Teslas, $1 billion to fund electric garbage 
trucks and school buses, even though the infrastructure bill 
provided $5 billion for this purpose, $1.5 billion for State 
and local government tree planting, even though we sent State 
and local governments $500 billion in funding over the last 2 
years while they were having record-high tax revenue 
collections. Then there is $1 billion to install solar panels 
in Government-assisted housing, while we are in the middle of a 
housing affordability crisis.
    And how do our Democratic colleagues propose to pay for all 
these? By raising taxes by $326 billion on employers, with half 
of that burden falling on U.S. manufacturing companies, all of 
which will be passed on to workers, shareholders, and consumers 
in the form of still higher prices. This ``pay for'' will 
exacerbate a recession we are very likely already likely in.
    The massive tax-and-spending spree is really just the tip 
of the iceberg for the Biden administration's costly energy 
policy. In less than 2 years, they have halted the Keystone XL 
Pipeline, erected onerous regulatory barriers to natural gas 
pipeline construction, mandated the highest ethanol blending 
requirement in the history of the Renewable Fuel Standard, 
issued a moratorium on oil and gas drilling on Federal lands 
and offshore, and nominated for critical Federal positions 
individuals who are openly hostile to the oil and gas industry.
    In our Committee's jurisdiction, the SEC has reached far 
outside its statutory authority to get in on the action. In 
March, the SEC proposed a rule that would require all public 
companies to report every greenhouse gas emission in their 
entire supply chain and among their customers, even though this 
data has nothing to do with the company's financial performance 
and is likely irrelevant to investors.
    In addition to hijacking the democratic process with its 
breathtaking scope, the SEC proposal would impose enormous 
costs on public companies. The SEC itself estimated that the 
compliance costs, the paperwork burden to these public 
companies to be an extra $6.4 billion annually, for this rule 
alone. And that amount dwarfs the current annual compliance 
paperwork burden from all other SEC regulations combined, which 
is about $3.8 billion.
    Obviously, the costs of the policies I have described so 
far are quite high. Businesses which will shrink, jobs that 
will be lost, less energy produced. But there are second-order 
effects as well: higher prices for consumers, failures on the 
electrical grid, less economic growth, and a lower standard of 
living. The great irony of all this is that even for their 
extraordinarily high costs, none of these policies is going to 
make a dent in slowing climate change.
    I am not denying global warming. It is undoubtedly real. 
What I am denying is that these policies will have any 
meaningful effect. Think of this. If tomorrow the United States 
of America, the second-largest carbon emitter in the world, 
went completely carbon-neutral--in other words, from a carbon 
point of view it would be equivalent to America ceasing to 
exist--then global temperatures 80 years from now will have 
been reduced by \3/10\ of one degree Fahrenheit, relative to 
what they otherwise would be. This is not my analysis. This is 
according to the U.N. climate model. So feel free to estimate 
the impact of a few more rich people buying Teslas.
    I know my Democratic colleagues sincerely want to reduce 
greenhouse gas emissions anyway. Well, there is a way we can do 
that. There is one thing that has made a dramatic reduction in 
U.S. greenhouse gas emissions already. It is American energy 
production. Between 2005 and 2019, the U.S. led the world in 
emissions reductions, largely due to transitioning from coal to 
natural gas.
    David Butterworth is with us today. He is a business 
manager for the Pipeliners Local Union 798, representing 6,400 
union pipeline workers. He has been a member of the union for 
25 years. Mr. Butterworth will testify to the importance of 
traditional energy for grid reliability, as well as the direct 
challenges his members face from hostility toward their chosen 
industry and profession.
    Dan Eberhart is with us today. He is the CEO of Canary, an 
oilfield services company employing roughly 400 people from New 
Mexico to Pennsylvania. Mr. Eberhart will testify to the 
consequences of consistent under-investment in traditional 
energy, including policies that chill investment like the SEC 
climate proposed rule.
    I hope my colleagues on both sides of the aisle listen to 
what they have to share today. I thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Toomey. Of course we 
will.
    I will introduce today's witnesses. I appreciate Senator 
Toomey mentioning two of them.
    Joe Flarida is the Executive Director of Power A Clean 
Future Ohio, a native of Lima, Ohio. He leads the group, a 
nonpartisan coalition working with local leaders across Ohio to 
develop and implement economical and equitable climate 
solutions.
    He worked on energy policy here in Washington with the 
Bosch Foundation in Germany and in Ohio. He earned a bachelor's 
in political science from Ohio State.
    Welcome, Mr. Flarida.
    Mr. Dan Eberhart, CEO of Canary, an oilfield services 
company. Under his leadership, Canary has become one of the 
largest corporations in that sector. He is a frequent 
commentator on energy policy in various media outlets.
    He is a Georgia native, as is my mother, a cum laude 
graduate of Vanderbilt, and has a law degree from Tulane.
    Mr. Eberhart, welcome.
    Mr. David Butterworth is the Northeast Regional Business 
Agent for Pipeliners Local Union 798, associated with UA, with 
the Plumbers and Pipefitters. He is a veteran of the U.S. Army. 
He worked his first pipeline job as a welder helper a year 
after he was discharged. He has been business agent for 6 
years.
    While working as a welder he earned a B.S. in journalism--
like my wife--from West Virginia University.
    I look forward to your testimony. I hope you will also 
discuss, Mr. Butterworth, how the Infrastructure Bill and the 
CHIPS Act and the Inflation Reduction Act that we are about to 
pass will create thousands of good-paying jobs for union 
workers, an emphasis on this side of the aisle, on union 
workers.
    Dr. Shalini Vajjhala, the Founder and CEO of re:focus 
partners. She joins us remotely from the West Coast. She is the 
CEO of re:focus partners, which develops sustainability 
solutions for municipal and private sector clients around the 
world. She was educated at Carnegie Mellon, in the Ranking 
Member's home State, in western Pennsylvania. Before assuming 
her current role she has been a visiting professor of 
environmental policy at Johns Hopkins and an official in the 
Obama administration, the EPA, and the CEQ.
    Welcome, Dr. Vajjhala.
    Mr. Flarida, you may proceed. Thank you for joining us.

  STATEMENT OF JOE FLARIDA, EXECUTIVE DIRECTOR, POWER A CLEAN 
                          FUTURE OHIO

    Mr. Flarida. Chairman Brown, Ranking Member Toomey, and 
Members of the Committee, thank you for the opportunity to 
testify on this most pressing issue, the economic costs of 
climate change. My name is Joe Flarida and I serve as the 
Executive Director of Power A Clean Future Ohio. In a moment, I 
will share more about our work and our incredible partners in 
Ohio, but I want to start today with two brief observations on 
the topic.
    First, I want to recognize that climate change is not a 
math problem, and the impacts that we will face as human beings 
are far more complex than we can put into simple economic or 
financial terms. The most vulnerable in communities in my home 
State of Ohio and around the world will experience the most 
harm on the shortest timeline as a result of severe climate 
impacts. Health consequences already impacting vulnerable 
populations will get worse.
    Access to clean air, clean water, and healthy green space 
will become more scarce. And despite the false narrative we 
hear often, stable, good-paying jobs for workers will be 
sacrificed if we ignore the environmental challenges in front 
of us.
    Second, year in and year out, local governments are 
burdened with the most challenging public problems we face. 
They are the eyes that see these problems first, the voices 
that raise the alarm when we reach a tipping point, and the 
hands that are asked to implement the solutions we identify. 
Today I am here to lift up Ohio's local elected leaders and the 
tireless staff that are indeed raising the alarm on the 
financial costs of climate change. They both see these costs 
coming and in some cases are experiencing them now.
    In the face of a complex challenge, one way to wrap our 
heads around it is to look at the numbers and determine how 
much it will cost us to act and how much it will cost us to do 
nothing. My main point today is that we cannot afford not to 
act. We must act now.
    Power A Clean Future Ohio was launched in February 2020, by 
an incredible group of policy experts, advocates, and local 
government leaders. We built this organization to do one thing, 
provide direct support to Ohio's local governments to help them 
identify and adopt clean energy solutions. We support them in 
pursuing carbon reduction goals in big and small ways. We have 
learned that the right solution is the one that works best for 
that community, be it economically, environmentally, 
culturally, or even, yes, politically.
    Power A Clean Future Ohio, the Ohio Environmental Council, 
and our technical partner, Scioto Analysis, recently issued a 
report titled ``The Bill is Coming Due: Calculating the 
Financial Cost of Climate Change to Ohio's Local Governments''. 
This report assessed key climate impacts for local governments 
in Ohio. For just 10 of these impacts we estimate that local 
governments in the State of Ohio will need to increase 
municipal spending between $1.8 billion and $5.9 billion per 
year by midcentury. For context, a $5.9 billion increase would 
equate to an 82 percent increase over 2019 local government 
spending levels for environment and housing programs in Ohio. 
Not one of the local governments Power A Clean Future Ohio 
works with knows how they will pay for these increased costs, 
whether they are on the low end or the high end.
    There are the traditional approaches of increased taxes, 
bonds, and Government grants, all financed by taxpayers. 
Alternatively, cities, States, and the Federal Government could 
hold accountable the corporations that caused this problem to 
start with.
    So what are the specifics of these costs? By 2050, Ohio 
cities could see spending increases of over $2.2 billion to 
contend with harmful algal blooms and drinking water treatment; 
$1.7 billion to elevate roads that will be flooded due to 
changes in precipitation and severe storms; $1 billion for road 
repair due to damage as a result of increased freeze-thaw 
cycles; and $590 million to establish and operate new cooling 
centers during the summer months.
    Our analysis provides a conservative estimate of additional 
costs that municipalities can expect. We know, in most cases, 
these costs are already starting to accumulate and will 
steadily increase until they reach their midcentury targets. 
The monetized amounts in our report represent only 10 of the 50 
different impacts identified. Had we accounted for all 50 
impacts or additional impacts beyond that, the total increase 
in annual spending by municipal governments due to climate 
change is certainly higher.
    While this report seems to be full of bad news, all hope is 
not lost. While we are very likely to incur considerable costs 
due to climate change, the worst of this crisis can be averted. 
Local governments are leading the way in transitioning to clean 
energy. They are adopting carbon reduction goals and putting 
into place bold climate action plans, but they need your 
support.
    My recommendation to Congress is to, one, elevate this 
issue in every aspect of what you do, and two, further invest 
in local governments.
    There is no doubt that the costs and impacts we face are 
daunting, but I firmly believe that if we can do it locally, we 
can solve it globally.
    Thank you for the opportunity and I look forward to your 
questions
    Chairman Brown. Thank you, Mr. Flarida.
    Mr. Eberhart, you are recognized for 5 minutes.
    Thank you for joining us.

         STATEMENT OF DAN K. EBERHART, CEO, CANARY, LLC

    Mr. Eberhart. Chairman Brown, Ranking Member Toomey, and 
Members of the Committee, thank you for inviting me to testify 
today on the economic costs of climate change. Climate change 
is one of the most significant issues of our time, and I am 
proud of the continuing role of the energy sector in reducing 
the carbon intensity of the energy Americans rely on every day 
to power their communities and their lives.
    As CEO of Canary, one of the largest privately held 
oilfield services companies in the United States, I am very 
familiar with the positive impact business can have on 
communities, providing good-paying jobs and benefits to the 
hundreds of workers who are proud to call us their employer. We 
have about 400 employees currently. These are folks who proudly 
come to work every day committed to building our reputation of 
trust, quality service, and commitment to excellence, as well 
as safety.
    Today, however, we are increasingly challenged by the 
mountains of red tape imposed by regulators, both local and 
Federal, which has disproportionately impacted our industry, 
which is already one of the most heavily regulated in the 
country.
    As CEO, I also understand the important role of business in 
addressing the environmental impacts of energy production and 
helping to mitigate climate change. Canary is already required 
to operate in a manner that protects the environment and human 
health, both of which are responsibilities we take very 
seriously. We are one of the Nation's most innovative 
industries, with billions of dollars invested industrywide in 
research and development, in improving our efficiency, and in 
trying to mitigate our impact on the climate, to develop 
technologies that allow us to produce the abundant and 
affordable energy that Americans have come to depend on every 
day.
    I firmly believe the oil and gas industry can be our 
Nation's most formidable ally in the fight against climate 
change. This view may be controversial, but we are what could 
provide the transition to a cleaner and brighter future. But to 
do so, we need the Government as a partner, not as an adversary 
in this process.
    That is why I am concerned that the U.S. Securities and 
Exchange Commission's proposal mandating public companies 
report their emissions and exposure to climate risks is a major 
move in the wrong direction.
    Proponents argue the SEC's proposed rule on ``The 
Enhancement and Standardization of Climate-Related Disclosures 
for Investors'' will provide investors with useful information 
on a company's exposure to climate risks, but the practical 
effect, as Senator Toomey mentioned in his opening statement, 
is to drive capital away from badly needed conventional energy 
and from infrastructure projects. This makes energy more 
expensive and denies America of a natural competitive advantage 
against other countries, and will drive up costs for consumers, 
thereby making their everyday lives more difficult.
    In a parallel trend in the capital markets, the growing 
popularity of environmental, social, and governance investment 
funds, ESGs, are steadily strangling domestic oil production, 
which now sits at around 11.6 million barrels per day compared 
to its peak in 2019, of 13 million per day when the economy was 
not as strong as it today and the price of oil was lower than 
it is today.
    A report last year from the International Energy Regulatory 
Forum estimates that 2021 oil and gas production remained 23 
percent below the prepandemic level of $525 billion, while 
investment slumped by more than 30 percent in the industry in 
2020. The report identified ESG as one of the three principal 
drivers of underinvestment. That is a predictable result of the 
nearly $2.7 trillion in ESG funds that restrict investment in 
conventional energy-producing companies.
    As Committee Members are undoubtedly aware, our economy 
faces an historic energy supply challenge right now. We are in 
an energy crisis and energy costs are too high. After a decade 
of underinvestment in the oil and gas sector, particularly 
since COVID, current domestic output sits well below 
prepandemic levels while demand continues to return and even 
climb. Unfortunately, much of this shortage is driven by 
domestic energy policy, not economics, that has frozen new 
Federal leasing and prohibited pipeline construction, 
discouraging the investment necessary to explore, develop, and 
produce the energy America needs to prosper.
    In fact, our energy that we purchase from overseas has gone 
from 0 percent in 2019, on a net basis, to about 25 percent in 
2022. I would argue that we would rather spend that money on 
domestic energy production, not on buying it from sending 
dollars overseas to the Middle East and elsewhere.
    Our industry requires capital--it is very capital 
intensive--and investor confidence to thrive. Investor 
confidence follows from reasonable and predictable regulation. 
Without these prerequisites, companies will not risk the 
capital needed to ensure we have a secure supply of energy. We 
are already starting to see the results of that, and this is 
partially why the energy costs have spiked this year. 
Decapitalizing the oil and gas industry in the fight against 
climate change is the wrong approach. This will increase energy 
prices even more than it already has, restrict innovation, and 
shrink our economy as well as send dollars overseas.
    Structural underinvestment has hampered capital-intensive 
industries across the upstream, midstream, and downstream 
sectors of our industry. Less than a decade ago, there were 
1,600 active drilling rigs in the country. Today, there are 
barely 500.
    While the SEC rule and adjacent policies undermine U.S. 
energy security and destabilize the economy, the Administration 
has done little to nothing to address consumer demand for the 
underlying products. As an industry, we are responsible to the 
market, the shareholders, and to our stakeholders and projected 
increases in demand. By comparison, the mixed signals coming 
out of the Biden administration are clearly discouraging new 
investment and acting as a chilling effect on growing 
production, which is what we need to do to lower prices to help 
consumers.
    Regulatory burdens carry real costs that effect everyday 
Americans. As prices rise across energy categories that 
consumers rely on, I strongly urge the Committee to reconsider 
its current reliance on regulations, and especially duplicative 
ones, and instead pursue a viable and durable path forward on 
climate policy that allows a reasonable transition time as well 
as protecting the environment, consumers, the economy, and our 
national security.
    Thank you.
    Chairman Brown. Thank you, Mr. Eberhart.
    Mr. Butterworth, you are recognized for 5 minutes. Thank 
you.

  STATEMENT OF DAVID BUTTERWORTH, NORTHEAST REGIONAL BUSINESS 
               AGENT, PIPELINERS LOCAL UNION 798

    Mr. Butterworth. Chairman Brown, Ranking Member Toomey, and 
Members of the Committee, thank you for the opportunity to 
testify today about climate change. My name is David 
Butterworth, and I am from Clendenin, West Virginia. I am 
employed as a Business Agent for Pipeliners Local Union 798. I 
represent approximately 6,400 welders, helpers, and journeymen 
who build pipelines in the United States. My jurisdiction 
extends from Virginia to Maine, and 904 of our members live 
throughout the Northeast. I welded and worked on pipelines from 
1998 until 2015, and was hired to my current position in 
January 2016.
    I am here today to speak about how climate change and 
energy policies affect grid reliability, the country, our 
towns, and my membership. Local 798 has attended and spoken at 
just about every Federal and State pipeline hearing that has 
taken place in the Northeast from 2016 until today.
    Some of these pipelines are the Atlantic Sunrise, Atlantic 
Coast, Mariner East, Mountaineer Express, Mountain Valley, 
Northeast Supply Enhancement, Northern Access, and Penn East, 
just to name a few. We attended and spoke at each of these 
hearings because we know the massive work opportunities these 
projects provide our membership. Our job prospects have 
dwindled significantly since the summer of 2018, when we peaked 
at 8,300 members due to Mountain Valley pipeline and Atlantic 
Coast being in full swing. When completed, the Mountain Valley 
Pipeline will provide a natural gas backup generator system to 
Carilion Hospital in Roanoke, Virginia, and will also lead to 
increased manufacturing and jobs in the South.
    I come from a town in West Virginia where good-paying jobs 
are intertwined with the fossil fuel industry. My father and 
many others from my town helped build the Alaska Pipeline. 
Local 798 is made up of members from towns like this spread 
across our great Nation. Towns like Mifflintown, Pennsylvania; 
Olive Hill, Kentucky; Bald Knob, Arkansas; Oak Grove, 
Louisiana; and Durant, Oklahoma, are towns you have probably 
never heard of, but if you traveled to them, you stand a good 
chance of meeting a pipeliner.
    We were once fortunate enough to be out of the national 
spotlight and had to explain to people exactly what we did, and 
quite frankly, nobody really cared. Unfortunately for us, those 
days are over, and we find ourselves thrust into national 
politics.
    This is not where we want to be. We are in the middle. 
Middle-class union workers are feeling the squeeze between 
opposing sides. I find myself asking questions like, ``Do the 
policymakers and those against fossil fuels truly believe we 
can shut down all fossil fuels tomorrow and not fall into utter 
chaos?''
    I ask this because during the ``Texas Freeze,'' where all 
forms of energy failed, and sadly people perished, we were 
shown a snapshot of the disorder that accompanies a broken 
grid. I also witnessed the gas hoarding that began to happen at 
my local gas station when the Colonial Pipeline was hacked. 
American citizens were filling large containers of gasoline in 
preparation for a nationwide gas shortage without thinking 
about how this would affect the next person who simply wanted 
to fill up their tank.
    This brings me to my next point. A report published by the 
Columbia University Center on Global Energy Policy shows a 
``future continued use of natural gas for at least the next 30 
years'' and that ``there is no quick replacement for gas in the 
U.S. energy mix.''
    Switching from coal to natural gas power generation has 
dropped emission levels. According to the Energy Information 
Administration, from 2005 to 2017, U.S. natural gas production 
increased by 51 percent, and CO2 emissions decreased by 14 
percent.
    The Nation's pipeline system guarantees a safe, efficient, 
clean energy transition. I support efforts to curb climate 
change, but I do not support curbing climate change when the 
cost is grid reliability.
    We can achieve climate goals by using common sense and 
American ingenuity while imploring all the above energy 
approaches that include carbon capture and hydrogen blending. 
Both methods use the existing pipeline system and will bring 
climate change levels down. These new techniques will be 
protested, and this Committee, along with the rest of Congress, 
has the power to support agendas that keep my members working, 
provide grid reliability, and align with the new strategies 
that address the current climate situation. I ask that you tune 
out the 10 percent of American citizens that protest literally 
everything, and instead listen to a person who has played a 
part in building the power grid.
    We have the energy here, and we need to use it so that we 
do not end up like Germany, whose citizens will be introduced 
to warming houses and natural gas rationing this winter. Please 
consider the plight of the grid builders stuck in the middle. 
We might have a better idea of how we can conquer our dilemma. 
This problem can be solved through hard work and the 
implementation of moderate policies that benefit the whole 
rather than the far-right and far-left fringes that continue to 
divide us.
    I would be happy to answer any questions you may have.
    Chairman Brown. Thank you, Mr. Butterworth.
    Dr. Vajjhala, you are recognized from California.

   STATEMENT OF SHALINI VAJJHALA, FOUNDER AND CEO, RE:FOCUS 
                            PARTNERS

    Ms. Vajjhala. Thank you. Thank you, Chairman Brown, Ranking 
Member Toomey, and Members of the Committee. I am so pleased 
with the opportunity to testify today.
    My name is Shalini Vajjhala. I am an architect and 
engineer, specializing in the design and finance of resilient 
infrastructure solutions. For the past 10 years, my firm, 
re:focus partners, has been working with cities and regions 
across the United States to develop projects to address both 
the physical and financial risks of climate change.
    These issues have only grown more urgent over the last 
decade. The costs of climate change are already being felt 
across the country. This is not some distant future. The 
effects of more severe storms, heat, and droughts are visible 
in public budgets today.
    Climate change will impact all parts of our economy. But 
counterintuitively, the costs of most climate-related events 
are site-specific not economywide. A hurricane or wildfire does 
not hit the whole country at once. At the end of the day, the 
physical and financial impacts of disasters will be felt first 
and worst at the community level.
    Recent OMB estimates put the potential Federal fiscal 
impacts of climate inaction at up to $2 trillion dollars per 
year. This is staggering. Having a better understanding of the 
total economic costs is essential, but we also need better ways 
of disaggregating these costs by peril, sector, and region to 
motivate local action to protect against the worst overall 
outcomes.
    Three areas where this Committee can help break down the 
problem into more actionable pieces is by looking more closely 
at three types of costs: local revenue losses, reductions in 
asset lifetimes, and deferred infrastructure maintenance.
    Revenue losses due to climate change cut across all 
sectors. Public utilities, including power, transportation, and 
water systems, are already experiencing disruptions and losses 
due to climate-related events.
    The EIA estimates that severe drought conditions here in 
California could reduce hydropower generation by up to 48 
percent this year. Recent heat waves have resulted in operating 
restrictions and losses for passenger and freight rail systems 
nationwide and costly structural damages, including derailments 
due to buckling tracks and melted power cables in places with 
typically mild climates, like Portland, Oregon.
    In the water sector, sea-level rise has increased the risk 
of salt-water intrusion. This has costly implications for 
coastal agriculture and drinking water systems from Rhode 
Island to Alabama, with financial risks that extend into the 
healthcare sector. These same acute and chronic stresses have 
resulted in property and income tax base losses with the 
potential for municipal bond downgrades and defaults.
    I want to be clear. This is not all bad news. Focusing on 
where we are losing money today offers an entry point for 
identifying where losses and liabilities are likely to 
increase. This also opens the door to new ways of financing 
cost-saving infrastructure investments, such as coastal 
protection projects and power and transportation system 
weatherization measures, that can be funded through direct 
savings, reduced insurance costs, and risk pooling.
    Climate impacts are already reducing infrastructure asset 
lifetimes. In many cases, the same events that result in 
revenue losses also have longer-term financial consequences. 
The impacts of flash floods and wildfires can result in damage 
to infrastructure systems that reduce their replacement 
lifetime. This poses major budgeting challenges for public 
works departments across the country who might see a road 
planned to last for 25 years become unusable in half that time. 
In the worst cases, this can result in the collapse of private 
insurance markets in specific sectors and regions. Work by the 
Arizona Department of Transportation on lifecycle planning for 
extreme weather and climate events offers a national model for 
better risk management.
    Deferred maintenance backlogs can also highlight where to 
intervene to prevent cascading failures. The devastating toll 
of both winter and summer power grid failures in Texas 
highlights where seasonal maintenance and timely infrastructure 
upgrades can prevent catastrophic failures down the line. 
Investing hundreds of millions of dollars now can prevent 
billions in losses in future, but these investments must be 
well coordinated.
    The naval bases in Norfolk and San Diego offer excellent 
examples of how military installations can better protect 
against sea level rise and storm surge. At the same time, these 
facilities show where resilience measures can be undermined if 
adjacent roads and bridges are not also upgraded so essential 
personnel can reach high-priority sites during severe storms 
and floods. Better information about critical infrastructure 
weak links can help identify where short-term local tradeoffs, 
like prioritizing emergency repairs over more robust upgrades, 
can have long-term national costs and consequences.
    No single individual, family, or region is concerned with 
the total economic costs of climate change. Everyone is 
concerned with their own physical and financial security. We 
need better frameworks to translate the big picture costs of 
climate inaction into levers for avoiding losses and reducing 
suffering.
    The Infrastructure Investment and Jobs Act holds tremendous 
promise for addressing these challenges, as does the Inflation 
Reduction Act. Physical protections and financial protections 
from the worst economic impacts of climate change must go hand-
in-hand. Breaking down the total economic costs can help 
identify opportunities to shape the next generation of 
infrastructure and make sure we move quickly to build what we 
need, not just what we had.
    Thank you and I look forward to your questions.
    Chairman Brown. Thank you, Dr. Vajjhala.
    I will start, Mr. Flarida, with you. Every American watched 
in horror this summer as severe weather and flash flooding 
devastated communities across our country in Kentucky, 
Missouri, and Montana. As we witness this devastation we are 
moved to help the victims. We worry also that our communities 
could be next.
    What are the costs, if you could delineate them, that Ohio 
communities should anticipate due to climate change?
    Mr. Flarida. Chairman Brown, the costs that we estimate in 
our report are very conservative. I want to start with that, 
and just note here that what we are seeing is anywhere between 
a $1.8 billion and a $5.9 billion estimate by 2050, and that is 
on an annual basis.
    The biggest share of that, in those 10 impacts that we 
identified, is drinking water treatment and treatment for 
harmful algal blooms. We also see significant investment to 
elevate roads due to increased precipitation and flooding.
    But there are also costs outside of that, that are not 
recognized in just the numbers. These are lives lost. These are 
days missed of school for children because we are having severe 
heat events.
    Chairman Brown. Dr. Vajjhala, listening to what Mr. Flarida 
said about one State, a large State but one State only, would 
you expect similar costs for communities across the country? I 
know you work both in the U.S. and internationally. Would you 
expect similar kinds of problems and costs in communities that 
you work with and serve?
    Ms. Vajjhala. Absolutely. We are seeing many of the same 
challenges--roads being washed away, water systems being 
degraded, and the costs are worse in places where 
infrastructure has been least well maintained. So the places 
that are furthest behind in being able to keep up their 
infrastructure are also the ones that are likely to suffer 
most.
    Chairman Brown. And give me a couple of examples.
    Ms. Vajjhala. I think deferred maintenance of water 
systems. In Michigan, for example, we have seen the case of 
Flint and places where water systems are overbuilt. It is 
incredibly costly for local governments to maintain these 
systems, to keep pressure, and to absorb the costs of climate 
impacts in places where they are essentially overburdened with 
their current infrastructure and do not have the budget and the 
resources to replace with something that is more appropriate 
for their current needs. This is true also in the South.
    Chairman Brown. So those communities that already struggle 
with their budgets, that are already not able to keep up with 
costs, communities that generally have a weaker or lesser tax 
base are the ones that are hit the hardest and, in a sense, 
will maybe perhaps never catch up.
    Mr. Flarida, back to you. When local budgets are strained 
communities have few options. They can cut essential services 
like police and fire or they can raise taxes, or obviously, in 
some cases do both. Share some examples of how local 
governments in Ohio are already seeing climate change affect 
their budgets, if you would.
    Mr. Flarida. I think one notable example that we have seen 
in Cincinnati, Ohio, is the Columbia Parkway hillside project. 
I was in Cincinnati last week and spoke with Mayor Aftab 
Pureval, which was really enlightening and illuminating to see, 
as Cincinnati has experienced a 137 percent increase in 
rainfall in recent years. Cincinnati is a hilly city, and as a 
result this is destabilizing roads and destabilizing hills.
    And so they have had to invest $18 million in this project, 
which was taken out of their operating budget. And Mayor 
Pureval said, ``Out of the blue, an $18 million investment, and 
for cities our size, $18 million is a massive hit to our 
operating budget.'' And they had to take money out of a police 
station of District 5, they were planning to spend on that 
station, and put it toward the hillside stabilization project.
    So I think it is a perfect example of essential city 
services that they had to redirect to account for the damage 
due to climate change.
    Chairman Brown. And that his Ohio's third-largest city, and 
the hilliest of the three, but certainly the others face those 
kinds of problems.
    Back to you, Dr. Vajjhala. Your testimony highlighted 
issues, and to answer your first question, with legacy 
infrastructure. How does taking action to reduce the costs of 
climate change also help how these communities address historic 
inequities in infrastructure investment?
    Ms. Vajjhala. I think many of the communities that have 
faced the greatest environmental harms have either been divided 
by infrastructure, have been underserved by infrastructure, and 
being able to make investments in bringing this infrastructure 
up to a state of good repair and making sure it meets current 
needs can help us reach those folks who have often been last in 
line for infrastructure dollars and investments, and helps us 
deal with climate challenges.
    And the city of Hoboken is an excellent example of this, 
where the city was able to move to create a six-acre urban park 
that is also a flood protection measure, that repurposed a 
major contaminated site.
    Chairman Brown. Thank you. Senator Toomey.
    Senator Toomey. Thank you, Mr. Chairman.
    Many of us probably remember an incident from 2018, not 
that long ago, when demand for natural gas in New England 
during a cold snap ended with a Russian LNG tanker docked in 
Boston Harbor, supplying gas. And the irony is incredible to me 
because this happened despite the fact that my State of 
Pennsylvania is sitting on enormous--enormous--reserves of 
natural gas. We have a huge glut of natural gas. We have a 
tremendous amount of natural gas that we just do not take out 
of the ground because we have got nowhere to put it.
    The U.S. is now the world's leading LNG supplier, as of 
this year, but we have not been able to complete a single 
pipeline to take this huge glut of gas we have in Pennsylvania 
and bring it to New England. And we cannot because New York and 
New Jersey will not let us build the pipelines.
    My understanding is the last new interstate pipeline 
completed from Pennsylvania into New York was in 2011. The 
Marcellus Shale boom had barely begun.
    So let me start with Mr. Butterworth. Does it make any 
sense at all to you that we leave gas in the ground in 
Pennsylvania instead of piping it New England, as a result, New 
England occasionally has to buy large quantities from countries 
like Russia? Does that make any sense to you?
    Mr. Butterworth. The Constitution Pipeline was supposed to 
take gas from Pennsylvania to the New England States. When I 
got this job in 2016, we were meeting with contractors to pre-
job the Constitution. It got scrapped.
    Also, I go to public hearings where--I have been to public 
hearings in New York and Buffalo where a lady got up there and 
said, ``We do not want your Pennsylvania fracked gas.'' That is 
the type of stuff we are dealing with.
    Also, the NESE, which was going to take 1.8 people off of 
heating oil in Brooklyn, we know heating oil is a worse emitter 
than natural gas, but it never got through because they said 
AOC sent a rep there that said that if you approve this project 
the city will be underwater in 10 years.
    Senator Toomey. Just to address the obvious, if it were 
possible to build these pipelines, among other things, would it 
likely result in more work for your members?
    Mr. Butterworth. Heck, yes. Heck, yes.
    Senator Toomey. Mr. Eberhart, I am not sure if you have any 
expertise to share with us on this particular, but in case you 
do it is my understanding that American energy extraction, oil 
and gas extraction, is generally held to a much higher standard 
of environmental quality than many other places in the world, 
including Russia. So substituting Russian gas for American gas, 
or probably gas from other places, not only accomplishes 
nothing in terms of reducing gas consumption but it is actually 
worse for the economy because it is a lower standard.
    Is that your understanding?
    Mr. Eberhart. Yeah, I can speak to this, Senator. I will 
tell you that the only country remotely close to us in terms of 
specifications for drilling onshore would be Canada. No one 
else is even close in terms of OPEC, the Middle East, Russia, 
Africa, Asia, to the environmental standards we have.
    So in terms of the condition we leave the ground in after 
completion of the jobsite, in terms of how much carbon is 
emitted during the drilling process, in terms of--you know, the 
natural gas from Russia or the Middle East or wherever is going 
to have to be transported, so there is carbon emitted in it 
being transported, you know, when it is obviously much more 
efficient if it is transported via pipeline.
    So the conclusion is that harvest the gas in America and 
transporting in inside America is vastly better for the 
environment because our standards are higher and the carbon 
emitted during the transportation is much, much lower. So to me 
it is a no-brainer if you are concerned about the carbon 
emitted during the drilling process or the transportation 
process.
    Senator Toomey. Thank you. Let me go back to Mr. 
Butterworth. There is a population notion among some that the 
job losses from traditional energy projects, like Keystone 
Pipeline or other pipelines, they will be made up for with 
good, clean energy jobs. Case in point, at a White House press 
conference this past January, John Kerry famously said that 
laid-off pipeline workers, quote, ``can be the people who go to 
work to make the solar panels,'' end quote.
    What do you think about that? Can your guys who cannot find 
work making pipelines, because we cannot approve pipelines, can 
they just pack up and make solar panels?
    Mr. Butterworth. Every welder who comes to a pipeline 
project has to take a destructive test. These are highly 
skilled jobs that take years to develop those skills. And like 
I say, I am an all-of-the-above guy, but I do not know where 
the skill would be in building solar. I do not think you can 
compare them on the skill level.
    Senator Toomey. It is not that easily transferrable.
    Mr. Butterworth. No, I do not think so. And I have never 
been contacted by anybody wanting to put my folks on these 
types of jobs.
    Senator Toomey. You have never gotten a job offer from a 
solar panel company?
    Mr. Butterworth. No, I have not.
    Senator Toomey. I see. Thank you.
    Mr. Butterworth. Thank you.
    Chairman Brown. Senator Reed, of Rhode Island, is 
recognized.
    Senator Reed. Thank you very much, and interesting 
testimony. I have got some personal observations about green 
energy and jobs. Rhode Island is the first State in the country 
to have offshore wind farms. The labor unions were involved in 
that process from the very beginning. In fact, just five 
turbines--a very small project off Block Island--created 300 
jobs. And the Administration estimates that there will be 
nearly 80,000 similar jobs, and they do involve welding and 
sheet metal work and all traditional trades.
    Indeed, Orsted, one of the biggest wind developers in the 
Northeast, has already signed a PLA--a Project Labor Agreement, 
you know--with the building trades union for all its future 
wind farms. So alternate energy is not the end of good-paying 
union jobs. It is the beginning. And it also satisfies the 
demands of climate change.
    There has been a lot of discussion here about the shift by 
the market from coal to natural gas, is wonderful. That 
feeling, I do not think, is shared by the United Mine Workers.
    So let us be realistic. We have to deal with this climate 
change issue and we have to deal with good, solid jobs, and we 
can do both, if we are determined to do that, rather than just 
being rhetorical about all of this.
    Dr. Vajjhala, how would the economic benefits of the SEC's 
Climate Disclosure Rule outweigh any costs? Could you answer 
that, please?
    Ms. Vajjhala. Yes. I think what you are hearing from me and 
a number of the witnesses is the importance of investing in the 
infrastructure and the jobs that provide the connective tissue 
to keep our economy strong and resilient in the face of risk.
    I think the SEC's requirements, particularly on risk 
management and strategy, offer us a window into being able to 
see where these risks have implications for cascading failures 
outside of a single business, and where public investments can 
help strengthen the economy.
    Senator Reed. Is the premise of those who object to this 
rule that most companies or all companies, public companies, do 
not have any material risk of climate change? How accurate 
would that assumption be?
    Ms. Vajjhala. I do not personally believe that that is an 
accurate assumption. I believe that information, in this case, 
well used, could be tremendously valuable.
    Senator Reed. And should be made available to investors, 
both shareholders and bondholders?
    Ms. Vajjhala. Correct. Climate impacts will impact 
shareholders.
    Senator Reed. You mentioned coastal property values, and I 
represent the Ocean State, so we are acutely sensitive to this 
issue. First Street Foundation reported that between 2005 and 
2017, Rhode Island lost $44.7 million in relative property 
values due to the impacts of sea level rise, and it is only 
going to continue. In fact, it will probably accelerate.
    So Dr. Vajjhala, can you talk about what climate change 
means to the huge coastal real estate market?
    Ms. Vajjhala. I think this is an enormous problem, Senator, 
and it is one where there are not obvious or good solutions, 
and we need better information about where we can help 
communities protect themselves, where we can take measures to 
ensure that there are smooth transitions for areas that are at 
the greatest risk, and to make sure that we do not leave people 
behind. Many, many people, especially older homeowners, the 
majority of their wealth is locked up in their homes. And in 
the absence of solutions that address both the physical and the 
financial risks, we are going to leave individual communities 
to suffer.
    So I think this is an area for incredible innovation around 
infrastructure, but also work with the insurance industry to 
make sure that we are dealing with both the physical and the 
financial risks.
    Senator Reed. And once again, for major insurance companies 
that have extensive coverage of oceanfront properties, this 
financial risk is obvious right now and should be acknowledge 
and disclosed by the companies? Would that be appropriate?
    Ms. Vajjhala. It should.
    Senator Reed. Thank you. Thank you very much, Mr. Chairman.
    Chairman Brown. Thank you, Senator Reed.
    Senator Cramer, from North Dakota, is recognized.
    Senator Cramer. Thank you, Chairman Brown. Thank you, 
Ranking Member Toomey. Thanks to all of our witnesses.
    I have been writing a lot of notes, and the first thing I 
want to say, in response to the question earlier about the 
emissions of ships bringing natural gas from Russia to the 
Northeast rather than piping it from Pennsylvania, let me just 
tell you this gets to the heart of one of your issues, Mr. 
Eberhart, and that is, let us produce more American natural gas 
and American energy. Because according to the National Energy 
Technology Labs at the Department of Energy, according to their 
data, Vladimir Putin's natural gas emits about 50 percent more 
greenhouse gas emissions than American natural gas. If we did 
nothing but displaced Russia's natural gas with America's we 
would be doing a lot for workers, a lot for our country, and a 
lot for reducing greenhouse gas emissions.
    Second, I want to get to this issue, the real issue of the 
moment, and that is the cost of climate change overreaction, 
which I think stems from the first point. Chairman Brown talked 
about the awful CEOs of American companies that are making 
record profits. If the price signals coming from the 
Administration and from liberals in charge of this place were 
different, if they were different, would not those profits 
instead be investments in creating jobs and cleaner energy here 
in the United States, Mr. Eberhart?
    Mr. Eberhart. Absolutely, Senator. You know, to your first 
point about the Russian natural gas, I would just like to add 
that the carbon intensity of oil from Venezuela is twice what 
it is from American oil, and there are various other countries 
like that. The carbon intensity from the U.S. oil is lower than 
nearly anywhere else in the world. So again, in addition to the 
environmental costs and the transportation costs, the carbon 
intensity is lower.
    So if the ultimate goal is to reduce carbon intensity and 
we are going to have the energy demand anyway and we are not 
going to affect supply--or we are not going to affect energy, 
we are going to affect supply, we want to use American energy 
first anyway.
    Second, to your point, I think that we want more investment 
in America. We want more jobs in America. And we do it better, 
cleaner, safer, and it is closer. So to me the logic would just 
dictate to focus on doing the best we can with the natural 
resources we have in America and trying to do it in the 
cleanest way possible, Senator.
    Senator Cramer. Well, and let me follow up then with this 
question. Because Chairman Brown also, in his opening 
statement, referenced if America does not lead, China will, to 
which I say, ``Exactly. That is my concern.''
    And so if we do not lead--if we lead with SEC regulations, 
for example, that further burden American energy, are we to 
assume that China is going to also increase their regulatory 
scheme, or is Russia going to increase its regulatory scheme so 
that they can follow the lead of the United States of America? 
I mean, is that how global markets work?
    Mr. Eberhart. Absolutely not, Senator, and I think to think 
that would be naive.
    Look, all this ESG investment scoring and whatever, we are 
handicapping the international competitiveness of American 
companies, and I think it is ill-advised.
    Look, these companies in charge, they do not have an ESG 
score that is going to negatively impact their banking 
relationship, their relationship with the Government or 
anything. You know, China, Iran, Saudi Arabia, Venezuela, these 
countries care about profits and they care about bringing in 
hard currency. They do not care one iota about the 
environmental impact of what they are doing, nor do they care 
about what it does to their local consumers.
    We have higher standards in America and we have a better 
outlook on balancing the environmental damage and the 
environmental costs with the jobs and the economy of what we 
are doing.
    Again, the only country even close to the same standards as 
us is Canada. Places that you mentioned, Senator, have 
absolutely no incentive to focus on the environment while 
extracting their natural resources.
    Senator Cramer. Since we are talking about discrepancy of 
standards, Mr. Butterworth, do you think that the workers in 
China and the workers in Russia are treated as well as workers 
in the United States?
    Mr. Butterworth. I would have to look at their agreement. 
That is a joke.
    No, really, I cannot answer that. But I know we follow 
agreements and our folks are treated well, in this country.
    Senator Cramer. Well then, let me help you. The labor 
standards in Russia and the labor standards in China are not as 
good as the labor standards in the United States of America. So 
I am for an all-of-the-above, like many have said, and I am for 
an America First, not an America Only but an American First 
agenda that takes care of workers and the environment, and I 
think we do it better than anybody.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Cramer. Thank you for 
taking notes from my opening statement. It is a whole new 
concept.
    Senator Menendez, from New Jersey, is recognized.
    Senator Menendez. Thank you, Mr. Chairman. You know, I just 
want to say the suggestion that the Chairman's statements, or 
that those of us who are concerned about climate change is an 
overreaction, well, look at the wildfires in the West. How many 
acres have to go up in smoke? Look at the flooding in Kentucky. 
How many lives have to be lost? Look at the droughts in the 
Midwest, where farmers are producing a fraction of the crop 
that they would normally produce. Our colleague, Senator 
Tester, was talking about how, on his farm, he cannot produce 
as much as he used to because of climate change.
    Look at the cattle ranchers who are selling their cattle 
prematurely because they do not even know if they can keep them 
alive. And look at the Nor'easters that we get on the East 
Coast. And I could go on and on.
    These are tectonic shifts that are affecting our very lives 
and livelihoods, and that is an overreaction? I think Mother 
Nature is not overreacting. She is sending us a message.
    Flooding is one of the most expensive and most frequent 
natural disasters in the United States, and climate change is 
only going to intensify these events, and it is critical that 
our communities are prepared for the challenges that lie ahead.
    In New Jersey, we are leveraging Federal resources from 
Community Development Block Grants to build state-of-the-art, 
resilient infrastructure like Hoboken's Rebuild By Design. This 
$230 million mitigation initiative, which I helped secure 
funding for, will help alleviate repetitive flooding and 
protect against damage from storm surges. And for every $1 we 
invest in mitigation the Federal Government saves $6 in 
disaster relief spending.
    So Dr. Vajjhala, should not the Federal Government be 
investing more in innovative, large-scale, flood resilience 
projects like the Rebuild By Design and, in general, on 
mitigation to reduce damages for the costly disaster aid that 
subsequently comes forth?
    Ms. Vajjhala. Absolutely, Senator. I think the costs of 
inaction far outweigh the costs of any overreaction. And the 
Hoboken example is an excellent one. The work in Hoboken to 
reinforce the coast, the water system, and to build public 
infrastructure like beautiful new parks is also going to 
protect the local hospital that was under many feet of water 
after Hurricane Sandy.
    And so I think we are failing to make the connections to 
where the positive benefits spread through the rest of society 
in reducing costs, in the health care system, for example.
    Senator Menendez. Well I appreciate that. You know, 6-to-1. 
I would be willing to make investments that give me a 6-to-1 
rate of return, and that is what mitigation does. That is why I 
introduced the bipartisan NFIP Re Act, which supercharges 
billions of dollars for pre-disaster mitigation and resilience 
in the Nation's most flood-prone areas. And I hope we can get 
to that because that is going to not only save us money and 
save lives, but it is also going to create a lot of jobs along 
the way.
    I have long been a vocal advocate for mass transit in my 
home State of New Jersey and across the country, and I am proud 
of the work the Committee has done, and the leadership of 
Chairman Brown to advance Federal investments in our transit 
systems, including the historic Bipartisan Infrastructure Bill 
signed into law last year. And as a former mayor, I have seen 
first-hand the transformational effect that access to transit 
can have on a community.
    But transit impacts go beyond just economics. The fact is 
every transit dollar we spend is also, in my view, a climate 
dollar.
    Mr. Flarida, what role do you see transit playing in our 
communities as we decarbonize our economy?
    Mr. Flarida. Senator Menendez, as a former mayor you know 
that transit systems can be the lifeblood of a city. They help 
us become more connected, give workers access to jobs, and 
bring together economies in areas that did not have bridges 
connecting each other before.
    As we work with Ohio communities, one of the key 
recommendations we have is to invest in mass transit. As you 
know, mass transit, as you said, every investment we make there 
is a climate dollar. Every dollar we invest there is a climate 
dollar. Mass transit is a far less carbon-intensive way of 
transportation than single-occupancy vehicles, and as we also 
know, transportation is now the largest emitter of greenhouse 
gasses, the largest economic sector emitting greenhouse gas 
emissions in the United States.
    Senator Menendez. Yeah. So taking off from that, how will 
creating more livable, walkable communities help not only to 
lower greenhouse gas emissions and promote sustainability but 
also reduce costs for consumers and promote affordability? This 
is the essence of something I call the Livable Communities Act, 
where we try to look at both the housing needs that exist--we 
had a hearing the other day--in our country, and at the same 
time create the linkages to existing infrastructure on transit, 
and then create access to jobs. What is your view on that?
    Mr. Flarida. One of the key areas we work with Ohio 
communities on is to make their communities more livable and 
walkable, and this means central planning, as you discussed. It 
helps ensure that we are preserving public health and have 
access to green space. It is a critical piece of our 
sustainability future.
    But I think I want to point to your example of reducing 
costs, because I think this is a really important one and one 
that you all are considering with the Inflation Reduction Act.
    The technology and the economics have now aligned where we 
have opportunity to invest in technologies that will reduce our 
emissions and save us money, save consumers money. But this is 
not as easy as it sounds. We are fighting up against incumbent 
industries that have been at it for generations, and in order 
to do that we have to make sure that they have that barrier to 
entry lowered and that they can get into the market. So I think 
this is a really important point that you all are investing in, 
and I encourage that.
    Senator Menendez. Thank you. Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Menendez.
    Senator Warren, from Massachusetts, is recognized.
    Senator Warren. Thank you, Mr. Chairman.
    So with the Inflation Reduction Act, Democrats have 
announced an historic downpayment in the fight against the 
climate crisis. This bill will cut our carbon emissions by 40 
percent in just 8 years. It is also going to cut both the 
immediate and long-term costs of energy, create American jobs, 
raise American wages, and most importantly, save American 
lives.
    Today I want to talk about how the Inflation Reduction Act 
would tackle two of the major costs that fossil fuels inflict 
on American families and on the Federal budget. First, the cost 
to public health, and second, the cost of natural disasters. So 
let me start with public health costs.
    Burning fossil fuels pollutes our air, with low-income 
communities and communities of color being hit the hardest. And 
one of the biggest causes of emissions is from diesel vehicles, 
like buses and trains.
    Mr. Flarida, you are an expert on climate and environmental 
issues so let me ask you, if these vehicles, buses and trains, 
ran on electricity rather than fossil fuels what impact would 
that have on public health?
    Mr. Flarida. Senator Warren, one of the major benefits of 
transitioning to electric vehicles is the simple fact that they 
have zero tailpipe emissions. So every day we have cars, 
trucks, buses driving up and down our streets, driving through 
our neighborhoods, taking our kids back and forth to school, 
and they are emitting pollutants every time they drive on our 
roads.
    And I think one important point, which a recent assessment 
showed and I am happy to submit this for the Committee, is that 
as a result of transitioning that entire fleet--if we were to 
take our entire bus fleet, our entire railroad fleet, and 
transition it to electric-drive motors, we would see 4,200 
fewer deaths annually, many of which are from children and 
elderly who are especially susceptible to ambient air 
pollution.
    Senator Warner. Wow. So 4,200 deaths, and presumably a lot 
of people who just would not get as sick, right----
    Mr. Flarida. Correct.
    Senator Warner. ----but do not die from this. Thank you.
    You know, this is the reason that Congressman Levin and I 
introduce the Build Green Act and Buy Green Act to purchase 
American-made electric vehicles and clean energy products for 
Federal, State, and local use, and for export.
    Fortunately, parts of our bill were included in the 
Infrastructure bill and now in the Inflation Reduction Act, 
which puts $4 billion toward electrifying our Federal fleet as 
well as school and transit buses. This is going to help with 
public health and help reduce public health costs and advance 
environmental justice by ensuring that our most vulnerable 
Americans are breathing cleaner air. In fact, estimates suggest 
that the IRA will result in as many as 3,900 fewer premature 
deaths due to pollution in 2030.
    Now in addition to making us sicker, fossil fuels are 
exacerbating extreme weather events, as Senator Menendez just 
noted. They harm local communities, harm communities all around 
the world. A storm surge of 40 inches in South Boston could 
displace more than 35,000 people, and recovery would be 
massively expensive.
    Dr. Vajjhala, your organization works on issues such as 
addressing sea level rise and fire risks. Would the climate 
investments in the Inflation Reduction Act lower the cost of 
disaster relief for the Federal Government?
    Ms. Vajjhala. Thank you, Senator Warren. The answer is 100 
percent absolutely yes. Investing in prevention is far more 
cost effective than relief and recovery. And the recent OMB 
study that highlighted that climate change could lead to an 
annual Federal revenue loss equivalent to $2 trillion per year 
noted that it could also cost to the Government $25 to $128 
billion more a year just for dealing with coastal disaster 
relief, flood insurance, crop insurance, health care, and 
wildfire suppression, and flooding of Federal facilities.
    So there is no doubt that the Inflation Reduction Act would 
help address these costs.
    Senator Warren. Thank you very much. You know, tackling 
climate change is a bargain compared to the alternative. 
According to the National Institute of Building Sciences every 
dollar spent on mitigating natural hazards saves society about 
$13 in expenses we do not incur.
    The Inflation Reduction Act will help us avoid the cost in 
both dollars and in lives, lives lost from pollution and from 
climate change, and it is essential that Congress pass this 
legislation immediately.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Warren.
    Senator Smith, from Minnesota, is recognized from her 
office.
    Senator Smith. Thank you, Mr. Chair, and thanks to our 
panelists for being here today.
    I want to start by taking a look at this from the 
perspective of local governments, as several of you have done. 
You know, I used to be the Chief of Staff for the Mayor of 
Minneapolis, and I know first-hand the challenges that the 
cities have trying to balance their budgets. Start from the 
perspective of where we are with the Inflation Reduction Act, 
this bill is going to go a long way toward, one, cleaning up 
our electric power grid, two, helping us to make everything 
that we do as energy efficient as possible, and third, 
electrifying as much as we can. All of that, as Senator Warren 
just said, is going to result in significant emissions 
reductions, it is going to result in significant job growth, 
and it is going to improve the health of Americans everywhere, 
especially in community that have been most impacted by fossil 
fuel pollution, poor communities and communities of color.
    But if you think about what this means in terms of local 
governments that are trying to run cities in the midst of the 
incredible expense of the climate crisis, that is sort of what 
I want to dive into a little bit.
    Mr. Flarida, we know that local communities are already 
taking action around climate. You talked about what that looks 
like in Ohio, and I know that in Minnesota many of our 
communities are doing the same thing. There was just a great 
story in the New York Times about Morris, Minnesota, and what 
that community is doing to address the climate crisis.
    So could you talk to us a little bit about how these things 
that we are accomplishing in the Inflation Reduction Act, 
cleaning up the grid, improving energy efficiency, and helping 
people to electrify home appliances and other things like that, 
could you talk to us a little bit transportation? Could you 
talk to us a little bit about how that is going to help local 
governments as they are trying to figure out how to balance 
their budgets every year?
    Mr. Flarida. Thank you for the question. When we did this 
report to assess the costs of climate change to local 
governments we estimated it at $6.9 billion annually by 2050. 
And I think one important point here is that all of these costs 
do not reflect the private sector and the costs that will fall 
on everyday citizens, homeowners, renters, that need to contend 
with these changing costs due to climate change.
    I think the Inflation Reduction Act is a great example of 
how we can invest and ease that burden on everyday Americans 
that are going to feel these impacts. They are going to feel 
the heat in their cities and have to contend with that. They 
are going to have to install new air conditioning systems. They 
are going to have to find ways to adapt to a changing climate 
that they were not used to. And so I think this is an 
opportunity for local governments to work alongside their 
residents to plan comprehensively to address this issue.
    Senator Smith. Thank you. I could not agree more with that.
    Dr. Vajjhala, let me just follow up on this question. As we 
think about who ends up experiencing the worst impacts of the 
climate crisis it is often, as I said, poor communities, 
communities of color, communities that do not have the 
resources to often make the investments they need and then are 
bearing the health costs of fossil fuel pollution.
    Could you just address a little bit for us, as you think 
about what is in the Inflation Reduction Act, on the climate 
policy, how that is going to help communities, for example, 
communities that have older housing stock, less efficient 
homes, and people who do not necessarily have thousands of 
dollars sitting in their checking accounts to make the 
improvements in energy efficiency and electrification that are 
going to make a big difference to their bottom line and save 
them money.
    Ms. Vajjhala. Thank you, Senator. I think the Inflation 
Reduction Act coupled with Infrastructure Investment and Jobs 
Act has the potential to absolutely transformational for the 
communities that are already suffering, and going to suffer 
even more with the impacts of climate change.
    When I think about transit systems and heat, for example, 
who suffers most when our transit systems fail? It is the 
elderly. It is transit-dependent workers who are left out 
waiting for that train that is not coming because a track has 
melted or buckled. And they are faced with being outside more 
often and for longer on the hottest days of the year. These 
same communities are also majority renters and they do not have 
the luxury of making upgrades to whole buildings.
    The types of energy efficiency investment opportunities 
that are in both IIJA and the Inflation Reduction Act have the 
potential to be absolutely transformational for household 
budgets, where energy costs are a wildly increasing portion of 
total budgets.
    And so I think this is a way of splitting the problem, to 
not just look at who loses money when we do not address climate 
change but to really put in front who suffers, and make sure 
that we do not let that individual suffering translate to 
economywide health and unemployment impacts.
    Senator Smith. Exactly. And when we pass this legislation, 
this means that it is going to be saving money for people who 
live in communities all across the country. Rewiring America 
estimates that this will save Americans who take advantage of 
these rebates and tax incentives, it is going to save them 
$1,800, not $1,800 in total but $1,800 a year in terms of their 
energy costs. And that is going to make a very, very big 
difference. It looks like a good deal to me.
    Thank you, Mr. Chair.
    Chairman Brown. Thank you, Senator Smith.
    Senator Cortez Masto, from Nevada, is recognized from her 
office.
    Senator Cortez Masto. Thank you, Mr. Chair. I appreciate 
the hearing, and to the panelists. I too, like Senator 
Menendez, have to respond to this idea that somehow there is an 
overreaction to the climate crisis. I would invite some of my 
colleagues who believe that to come to Nevada, and maybe come 
visit the western States, because I can guarantee you everybody 
that I talk to in my State and in the western States are 
dealing with some form of extreme weather because of the 
climate crisis.
    I know 50 percent of the country, and 100 percent of 
Nevada, are in some sort of drought mode. We have a historic 
declaration that was made by the Bureau of Reclamation along 
the Colorado River, restricting water usage to Nevada and 
Arizona. And please know 90 percent of the water comes from the 
Colorado River, drinking water for folks in southern Nevada, 
where the majority of the population is.
    So you just have to come visit the western States and 
understand that people are taking this very seriously, and we 
should too. There is a way to really focus on addressing the 
climate and having smart policies in place.
    And let me just talk a little bit about smart policies, 
because I am very proud, in Nevada, in southern Nevada, we have 
done a really good job, recognizing we get a small proportion 
of water off the Colorado River, how to conserve, how to reuse 
that water, how to ensure that we are not only conserving our 
water but recognizing that the population continues to grow as 
well.
    And so Dr. Vajjhala, let me ask you this. How can the best 
practices of cities like Las Vegas help inform how other cities 
can improve their water usage? Know this: Nevada, in the early 
2000s, actually paid people to take up their laws, because we 
know a lot of watering on grass is where we lose that water to 
evaporation, and does not go back into the drains where we can 
reuse it and recycle it. We actually paid people to take up the 
majority of the grass, so much so that the sod that we have 
taken up since early 2000, if you actually put it in a line, it 
would be a ring around the Earth. That is how much grass we 
have taken up. And there are still more restrictions we are 
putting in place.
    So I am curious, Doctor, best practices. Can we learn from 
one another? Are there other things that we should be thinking 
about when it comes to if we want to focus on extreme weather 
and the climate crisis, that it is challenging to our water 
usage now and the drought that we are seeing?
    Ms. Vajjhala. I greatly appreciate this question, Senator. 
I am from San Diego, where we also rely on water from the 
Colorado River. And we depend on the best practices of all the 
communities that are upstream from us, being at the end of the 
pipe here. And I think what Las Vegas and other towns have done 
to really reward and create incentive programs for avoiding 
lock-in to behaviors that could lead to worse outcomes, where a 
small thing at the individual level but when you add it up you 
end up with a systemwide program when it comes to water 
efficiency and water use.
    So I think best practices are going to be tremendously 
important, and making sure that we follow what flows from the 
Infrastructure Investment and Jobs Act at the ground level in 
cities, I am particularly interested in where maintenance and 
emergency repair best practices can help translate to cost 
savings for local governments and help with budget 
stabilization.
    In a lot of cases, when we do this work well, success is 
something that does not happen. The flash flood hit by the 
community road did not get washed out. And so we have to be 
following and monitoring these best practices to be able to 
know what we prevented and what the value of that is, and Las 
Vegas is an excellent model for that.
    Senator Cortez Masto. Thank you. I appreciate that. And, 
you know, talking about the Bipartisan Infrastructure package 
that we passed, there was $800 billion for water infrastructure 
needs in the West. I know that personally because I fought for 
some of that money so that we could build large-scale water 
recycle projects, a relationship and I know a cooperation 
between southern Nevada and California to do just that, to 
augment the water along the Colorado River, which will 
absolutely have a positive impact on so many of our homeowners. 
We have to be thinking outside the box.
    But we also need the Federal Government working with our 
local governments, working with our private partners. Everybody 
should be focused on this and not just rely on one Government 
agency or another, or relying on corporations, thinking that 
they are going to help us get out of this.
    You talked about local governments. Let me just touch on 
one thing. I know across the country municipalities are working 
to harden their infrastructure from extreme heat or flooding, 
like you have talked about. However, some have highlighted the 
difficulty of raising enough capital due to climate change, 
since credit rating agencies are unsure of the community's 
long-term fiscal stability.
    Can you speak on the issues facing the municipal bond 
market for climate-vulnerable communities and what needs to be 
done?
    Ms. Vajjhala. This is a tremendous challenge, Senator, and 
it is one that requires a lot more thoughtfulness and work. The 
implications for the municipal bond market are varied. 
Communities that have been completely leveled by wildfires are 
still holding debt that they have to pay back, and that is 
obstructing their ability to rebuild better. So for those 
communities you have to think about solutions that actually 
enable thoughtful transitions.
    For protecting the bond market itself, all of the 
investments that we are discussing make bonds more secure. It 
makes communities more reliably able to pay back the debt that 
they are already holding and ensure that the investments last 
as long as they are intended, that we do not pay for a road for 
20 years that only lasts for 10.
    Senator Cortez Masto. Thank you. I know my time is up, Mr. 
Chairman. Thank you.
    Chairman Brown. Thank you, Senator Cortez Masto.
    We are going to change things a little. Senator Toomey will 
have one question, I will have one question, we think Senator 
Van Hollen will come back and do his 5 minutes, and then we 
will wrap, whether or not he is back. Senator Toomey.
    Senator Toomey. Thank you, Mr. Chairman.
    So let me just tee this up, and this is going to be for Mr. 
Eberhart. We know that we have, mistakenly in my view, we have 
given so much discretion and power to financial regulators that 
we do not actually have to pass a law, and often they do not 
even have to pass a rulemaking to be able to effect the outcome 
they want with respect to the institutions they regulate, such 
as their power over these institutions.
    So, Mr. Eberhart, I wonder if you would comment on whether 
or not, and if so to what extent, you have seen a decline in 
the availability of credit, and specifically capital in 
general, for the oil services, for exploration and development 
of oil and gas, and if there is a decline in the availability 
and access to capital for these purposes, for whatever reason, 
from whatever sources, has that contributed to the decline in 
energy production that you referenced during your comments? Has 
that contributed to higher prices for consumers? If you could 
share your thoughts on that I would appreciate it.
    Mr. Eberhart. Sure. So I have kind of a couple of different 
points. First of all, in speaking about Canary specifically, I 
would say that since the Biden administration has come into 
office there has been a chilling effect on access to capital 
for us as an oilfield service company. So folks that we have 
had long-term relationships with have said--and these are big 
banks, banks that people would know, that have said, ``Look, we 
are under order to shrink our energy portfolio, to not make new 
energy loans to the oil and gas base, to reallocate from oil 
and gas to renewable energy.'' I would say that is a theme, not 
something I have heard, but something I have heard probably 
four times. So that is on Canary specifically.
    With respect to the larger industry I would say that it is 
very peculiar for me. I have been doing this 20 years, and 
normally when you have a price spike like this, when oil hits 
$80, $90, $100, I am seeing a lot of startups from, you know, 
private equity financed startups in this space, and I am seeing 
zero of that right now with the elevated price level. And I 
attribute that to kind of this Green New Deal cloak on energy 
investment, oil and gas investing as a 5- or 10-year time 
horizon is going to be replaced by renewables. And so this is 
having a chilling effect on investment. I think that is the 
pointy end of the spear.
    The more general conclusion is the medium and larger E&P 
companies are reducing their investments in this space. That is 
why you see reduced drilling rig count. The drilling rigs are 
less than a third of what they were 5 years ago. And you are 
seeing less bond offerings and less IPOs, all as a result of 
this kind of sense that oil and gas investing is going to reach 
a terminal point.
    Senator Toomey. And in your view does that translate to 
higher costs for energy for consumers?
    Mr. Eberhart. Yeah. The second part of your question. 
Absolutely, because less investment means less competition, 
which means higher costs for the oil companies to complete the 
stuff if there are less oilfield service companies. Also if 
there is less access to capital, the capital costs are higher, 
they are going to do less drilling. All of this leads to less 
production, which leads to higher energy costs for consumers.
    Senator Toomey. Thank you. Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Mr. Eberhart. Thank you, Senator 
Toomey.
    My last question for Mr. Flarida. The fossil fuel industry 
knew decades ago that we would need to transition to cleaner 
energy sources to avoid what they called ``globally 
catastrophic effects,'' but instead of leading that transition 
they misled the public. They especially misled their own 
workers about the future of fossil fuels. The energy workers 
deserve support as the industry changes, not more lies, not 
more empty promises from executives.
    That is why I introduced the American Energy Worker 
Opportunity Act last year to provide wage supplements and 
education and training and other benefits to workers who are 
impacted by the energy transition.
    So talk about the next step there. If we can do that, how 
will supporting energy workers in our State, in Ohio, help 
communities address the cost of climate change?
    Mr. Flarida. Mr. Chairman, there are over 100,000 workers 
in the clean energy sector, in Ohio alone, and today now 3\1/2\ 
times more Americans work in the clean energy sector than with 
fossil fuels. And so to hear today some of the hand-wringing 
around access to capital while there are record profits for the 
oil and gas industry I think is frustrating. It is frustrating 
to hear, especially when these oil and gas companies have known 
for decades about the problem they were creating and chose not 
to disclose that to the public.
    For our own health, for our own well-being, for our own 
economic futures, we have an opportunity to invest in clean 
energy, see good-paying jobs, and we are seeing that in Ohio. I 
think we have got a lot of really good news to think about with 
Ford investing in EV manufacturing. We are seeing electric 
vehicle manufacturing and battery manufacturing in Ohio. Intel 
is going to be investing in a semiconductor facility that is 
going to help enable the digitalization and clean energy 
technologies that we need. We have the largest solar 
manufacturer, soon to be the largest solar manufacturer in the 
entire country.
    There are incredible opportunities for clean energy jobs in 
Ohio, and in the energy efficiency space, which is the largest 
employer in the clean energy sector.
    My dad has been a member of the Plumbers and Pipefitters 
Local 776 in Lima, Ohio, for years and has worked as a 
journeyman HVAC professional, and I am proud to see him being 
able to support and grow and build an incredible life for his 
family and for my siblings. And part of that is because we are 
seeing incredible investments in that space, and as I talk to 
him, he sees more and more work coming as a result of the 
challenges we are facing.
    So it is not necessarily something we should think about as 
a major challenge but also an opportunity.
    Chairman Brown. Thank you. Your dad the same UA union as 
Mr. Butterworth's parent union, if you will.
    Senator Van Hollen, from Maryland, is recognized from his 
office.
    Senator Van Hollen. Thank you, Mr. Chairman, and that is a 
great place to kick off for my question, because I have a 
question about the costs and harm of doing nothing in response 
to accelerating climate change, but also one related to the 
opportunities of doing something to accelerate our transition 
to a clean energy economy.
    On the costs and harm side, since 1982, which is about a 
40-year period, we have had 69 what we call billion-dollar 
climate disasters impacting the State of Maryland. Nearly half 
of those 69 have occurred in the last decade, with 19 occurring 
in the last 5 years. NOAA Center for Environmental Information 
estimates that those events have cost up to $20 billion in 
damages to Maryland.
    Mr. Flarida, are these estimates consistent with the kind 
of impacts you are seeing in other parts of the country, 
including the acceleration of these impacts, and what would you 
say with respect to the likelihood of these costs increasing in 
an accelerating way in the years to come?
    Mr. Flarida. Thank you for the question, Senator. Without a 
doubt we are going to see these costs increase as temperatures 
increase. We often think about climate change on the coasts, 
and we are trying to raise this issue in the State of Ohio to 
say this is going to impact us in the State of Ohio. Oftentimes 
we think about this with hurricanes and wildfires, but every 
day Ohioans are also experiencing this on a day-to-day basis, 
and certainly the floods in Kentucky are a notable example of 
late, in America's heartland.
    So we will see these costs increase. They will go up. I 
think one important number to think about is the savings 
opportunity and the economic growth if we are able to keep 
global warming below 1.5 degrees C, which will result in a $20 
trillion increase in global GDP by 2100.
    Senator Van Hollen. Well, thank you for putting a number on 
it. That is obviously a big number, and that is the cost of 
doing nothing. But there is also the benefits in terms of GDP 
and jobs and good-paying jobs of doing something to accelerate 
the clean energy economy. And that is what the legislation that 
we will be voting on, I hope soon, the Inflation Reduction Act, 
will do with respect to accelerating the reductions of 
emissions of greenhouse gasses as well as helping deploy more 
clean energy that will make it cheaper to heat your homes and 
cool your homes.
    I do just want to say in the State of Maryland we are 
fortunate to have a budding wind energy, offshore wind energy, 
deployments. Two companies, Orsted and U.S. Wind, have 
projected together that they will create 10,000 jobs in the 
State of Maryland. And we just had an announcement yesterday 
from the Deputy Secretary of Commerce in Maryland about an 
apprenticeship program that will go hand-in-hand with that, to 
make sure that we have the workforce to do the job.
    So obviously big benefits. You spoke to some in Ohio, Mr. 
Flarida.
    Dr. Vajjhala, can you just expand on some of the estimates 
of the job opportunities if we accelerate the deployment to a 
clean energy economy?
    Ms. Vajjhala. Absolutely, Senator Van Hollen. Thank you for 
the question. I would like to highlight the job opportunities 
in the energy sector not just for offshore wind but for grid 
modernization, so that we invest in the jobs that help build 
out the connective tissue.
    The Infrastructure Investment and Jobs Act is going to 
enable thousands of jobs related to grid modernization, and 
these are high-quality jobs where we know how to do this well. 
We know how to weatherize the grid in places like Minnesota and 
North Dakota. We are not doing it in places like Texas. And 
those are transferrable skills. That is not taking something 
from one sector and trying to port it over into another.
    These types of jobs I think are not limited to the energy 
sector, and there is a model in Maryland that I would like to 
highlight that I think could help create some cross-sector 
innovation, and that is the Clean Water Partnership for 
managing stormwater and the costs of disasters.
    The Clean Water Partnership was a public-private 
partnership designed to help deal with stormwater and pollution 
in the Chesapeake Bay, and the way the partnership was 
structured it was specifically designed to train local workers. 
And the county resident workforce utilization of this project 
is 78 percent. That is massive compared to many of these 
projects that often bring in outside employers and employees.
    And so I think this is an opportunity for place-based 
investment in high-quality jobs and retaining those jobs.
    Senator Van Hollen. I appreciate your raising that Maryland 
example, and those are important stories in Maryland and around 
the country. I should underscore the fact that the 10,000 jobs 
I mentioned associated with offshore wind here in Maryland are 
going to be good-paying union jobs. Both companies have signed 
agreements with respect to the nature of the jobs.
    So I do see a lot of opportunity here, and I just want to 
make sure that as we talk about the costs of doing nothing we 
also talk about the benefits of action. Thank you, Mr. 
Chairman.
    Chairman Brown. Thank you, Senator Van Hollen.
    Mr. Butterworth, this is just a statement, and then we will 
close. Mr. Butterworth talked about pipelines we have not seen 
built. He mentioned a couple of specifically. I want to let 
everyone know that the Inflation Reduction Act will require the 
Mountain Valley Pipeline to be built by a specific date. It 
also requires permitting legislation to pass before the end of 
the current fiscal year next month. I absolutely am committed 
to working on that and working with Senator Toomey on that, if 
he so chooses.
    Of course, we would rather have energy produced here rather 
than under the weak environmental standards of the rest of the 
world. I think all of the panel made that clear. We are not 
trying to get off oil and gas cold turkey. I share Mr. 
Butterworth's fears of unreliability, disorder, and unstable 
work in the energy sector, and appreciate the workers, the 
hourly good paid union hourly wage earners in that sector.
    If we do not address, however, these climate-related costs 
nobody will be investing in new energy infrastructure, period. 
Accounting for the costs of climate change now can help us 
avoid the worst outcomes later, and I think there is general 
agreement and understanding of that.
    Thanks to the witnesses today. For Senators who wish to 
submit questions they are due 1 week from today, Thursday, 
August 11th. To witnesses, per our Committee rules, we ask that 
you respond to any questions we send to you within 45 days of 
receipt. Thank you again. With that the hearing is adjourned. 
Thank you so much.
    [Whereupon, at 11:40 a.m., the hearing was adjourned.]
    [Prepared statements and responses to written questions 
supplied for the record follow:]
              PREPARED STATEMENT OF CHAIRMAN SHERROD BROWN
    Climate change is here--and the country knows it.
    It's here for Ohio teachers and students forced to work in schools 
without air conditioning in 90-plus degree heat, for more and more days 
at both ends of the school year.
    It's here for Ohio cities and towns that draw their drinking water 
from Lake Erie, and face higher and higher costs from harmful algal 
blooms.
    It's here for Ohio farmers, many of whom lost an entire growing 
season in 2019 because of extreme rain, and who will soon be forced to 
learn to grow crops that used to be better suited to Arkansas than to 
Ohio.
    And, it's here for our neighbors in Kentucky, who watched their 
homes and communities wash away in devastating flash floods this week--
the kind that scientists warn are becoming more common.
    We've all seen the pictures. The flooding could be any of our 
States.
    Ask mayors, ask school superintendents, ask county commissioners 
about the increasing costs they deal with already because of climate 
change--costs we know will only get worse.
    And we know who will be forced to pay for those costs.
    It's not the oil companies that are raking in record profits: $8.5 
billion last quarter for BP--that's only 3 months. $12 billion for 
Chevron--that's four billion a month. $12 billion for Shell--that's a 
billion dollars a week. $18 billion for Exxon Mobil--that's $200 
million a day.
    It's not these corporations that will pay the bill--it's local 
taxpayers.
    The likely impacts of climate change could cost Ohioans nearly $6 
billion a year.
    These corporations and their executives have been getting rich by 
price gouging consumers and polluting our communities for decades. And 
taxpayers in Ohio and around the country will be left to pick up the 
pieces--taxpayers are always left to pick up the pieces.
    It's why we have to act now to grow the renewable energy economy, 
and to make our communities more resilient to climate disasters.
    If we delay, it will only get more expensive to fix.
    In previous hearings, we have examined the threat of climate change 
to our financial system, the economic opportunities in the low-carbon 
economy, the role of insurance in protecting the economy from the 
coming impacts, and how we can reduce carbon emissions as we improve 
our housing.
    In each hearing, too many have treated the looming catastrophe of 
climate change as a non-issue--or as something so far out in the future 
that there's no need to spend time on it in this Committee.
    That makes no sense.
    As the Committee tasked with overseeing the stability of our 
financial system, we have a responsibility to do all we can to prevent 
obvious risks from wrecking our local economies and our financial 
stability.
    No one on this Committee questions the need to prevent cybercrimes 
by asking how many banks have failed because of it.
    We don't dismiss financial scams because they don't pose a systemic 
risk to the financial system at the moment.
    Our towns and our taxpayers can't afford for us to treat climate 
risk any differently--not when the effects on the economy are so clear.
    With almost the entire country under excessive heat warnings, with 
floods and wildfires and droughts and extreme storms threatening 
Americans' lives and livelihoods, we know that communities in every 
State are about to be hit with massive bills--bills many of them won't 
see coming.
    And we know there is tremendous economic opportunity if we address 
these threats.
    Ohio and Pennsylvania and South Carolina can create good-paying 
jobs in the industries of the future. And if we don't lead, we know 
China will be all too happy to.
    This morning, we will hear from four witnesses, including the 
executive director of one of the Ohio groups that published a report 
called ``The Bill is Coming Due''.
    It features some eye-opening figures detailing costs that will be 
borne by Ohio towns and cities--and as a result, Ohio taxpayers--
because of climate change.
    What I hope to hear from all our witnesses is a recognition of the 
risk to our communities--and to the lives and livelihoods of our fellow 
citizens--from these real and present threats.
    I hope we'll hear honest assessments of the state of the world 
we're in, and constructive suggestions about how we can make it better.
    And I hope we'll come away from this hearing thinking about how we 
can help towns and cities in Ohio and around the country, that are 
living on borrowed time, prepare for what's coming.
    Let's create the jobs for the 21st Century, and make sure the 
workers who will drive the 21st Century economy can still live in the 
towns and cities we were sent here to represent.
                                 ______
                                 
            PREPARED STATEMENT OF SENATOR PATRICK J. TOOMEY
    Thank you Mr. Chairman and all of our witnesses here today.
    Every month seems to bring more bad news about energy. Gas prices 
still remain at near-record highs, despite declines in the last month.
    The CPI's energy index was up over 41 percent over the past year as 
of June. This includes gasoline, fuel oil, electricity, and utilities.
    Meanwhile, prices are rising across the economy but paychecks 
aren't keeping up. After adjusting for inflation, wages have declined 5 
percent since President Biden took office.
    In fact, unless you got a 12 percent raise in the last 18 months, 
you've effectively gotten a pay cut. Working Americans are becoming 
poorer every day.
    Democrats' wasteful spending coupled with over a decade of ultra-
easy monetary policy caused 40-year high inflation and contracted our 
economy. You know what is the last thing Americans need? Policies that 
are explicitly designed to reduce American energy production--and 
therefore make the cost of energy more expensive--under the guise of 
addressing climate change.
    That's exactly what the Administration and congressional allies 
have done. They've been eager to find any culprit--other than 
themselves--to explain the rising cost of energy. They've tried blaming 
supply chains, Vladimir Putin, and my personal favorite, ``corporate 
greed.'' How dare businesses be motivated by profit!
    My colleagues on the other side of the aisle should really be doing 
a little self-reflection. But instead, they're trying to jam through a 
700-page tax-and-spend bill that will throw fuel, presumably the 
carbon-neutral kind, on this fire: $385 billion in corporate welfare 
for politically favored ``green'' energy, including $9 billion in 
generous subsidies for the wealthy to buy Teslas, $1 billion to fund 
electric garbage trucks and school buses, even though the 
infrastructure bill provided $5 billion, $1.5 billion for State and 
local government tree planting, even though we sent State and local 
governments $500 billion in emergency funding over the last 2 years, 
and $1 billion to install solar panels in Government-assisted housing--
while we're in the middle of a housing affordability crisis.
    And how do Democrats propose to pay for these goodies? By raising 
taxes by $326 billion on employers, with half the burden falling on 
U.S. manufacturing companies. This ``pay for'' will exacerbate a 
recession we're already likely in.
    The massive tax-and-spending spree is really just the tip of the 
iceberg for the Biden administration's costly energy policy. In less 
than 2 years, they've halted the Keystone XL Pipeline, erected onerous 
regulatory barriers to natural gas pipeline construction, mandated the 
highest ethanol blending requirement in the history of the Renewable 
Fuel Standard program, issued a moratorium on oil and gas drilling on 
Federal lands and offshore, and nominated for critical Federal 
positions individuals who are openly hostile to the oil and gas 
industry.
    In our Committee's jurisdiction, the SEC has reached far outside 
its statutory mandate to get in on the action. In March, the SEC 
proposed a rule that would require all public companies to report every 
greenhouse gas emission in their supply chain--even though this data 
has nothing to do with the company's financial performance and is 
likely irrelevant to investors.
    In addition to hijacking the democratic process with its 
breathtaking scope, the SEC proposal would impose immense costs on 
companies. The SEC itself estimated the paperwork burden to public 
companies to be an extra $6.4 billion annually. This amount dwarves the 
current annual paperwork burden from all other SEC regulations 
combined, which is $3.8 billion annually for this rule alone.
    Obviously, the costs of the policies I've described so far are 
quite high. Businesses shut down. Jobs are lost. Less energy is 
produced.
    Then there are second order effects: higher prices for consumers, 
failure of the electrical grid, less economic growth, and a lower 
standard of living. The great irony of all this is that, even for their 
extraordinarily high costs, none of these policies will make so much as 
a dent in slowing climate change.
    I'm not denying global warming, which is undoubtedly real. What I'm 
denying is that these policies will have any meaningful effect.
    If tomorrow the United States, the second-largest carbon emitter in 
the world, went carbon-neutral--which, from a carbon point of view, is 
equivalent to America not existing--global temperatures 80 years from 
now will have been reduced by \3/10\th of a degree Fahrenheit.
    This is according to the United Nations' climate model. Feel free 
to estimate the impact of a few more rich people buying Teslas.
    I know my Democratic colleagues sincerely want to reduce greenhouse 
gas emissions anyway. Well, there's a way we can do that.
    There is one thing that has made a dramatic dent in reducing U.S. 
greenhouse gas emissions: American energy production. Between 2005 and 
2019, the U.S. led the world in emissions reductions--largely due to 
transitioning from coal to natural gas.
    David Butterworth is a business manager for the Pipeliners Local 
Union 798, representing 6,400 union pipeline workers. He has been a 
member of the union for 25 years. Mr. Butterworth will testify to the 
importance of traditional energy for grid reliability, as well as the 
direct challenges his members face from hostility toward their chosen 
industry and profession.
    Dan Eberhart is the CEO of Canary, an oilfield services company 
employing roughly 400 people from New Mexico to Pennsylvania. Mr. 
Eberhart will testify to the consequences of consistent under-
investment in traditional energy, including policies that chill 
investment like the SEC climate proposed rule.
    I hope my colleagues on both sides of the aisle listen to what they 
have to share today. Thank you.
                   PREPARED STATEMENT OF JOE FLARIDA
             Executive Director, Power a Clean Future Ohio
                             August 4, 2022

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                 PREPARED STATEMENT OF DAN K. EBERHART
                            CEO, Canary, LLC
                             August 4, 2022
Introduction
    Chairman Brown, Ranking Member Toomey, and Members of the 
Committee, thank you for inviting me to testify today on the economic 
costs of climate change. Climate change is one of the most significant 
issues of our time, and I am proud of the continuing role of the energy 
sector in reducing the carbon intensity of the energy Americans rely on 
every day.
    As CEO of Canary, one of the largest privately held oilfield 
services companies in the United States, I am familiar with the 
positive impact business can have on communities, providing good paying 
jobs and benefits to the hundreds of workers who are proud to call us 
their employer. These are folks who proudly come to work every day 
committed to building our reputation of trust, quality service, and 
commitment to excellence. Today, however, we are increasingly 
challenged by the mountains of red tape imposed by regulators, which 
has disproportionately impacted our industry, one of the most heavily 
regulated in the country.
    As CEO, I also understand the important role of business in 
addressing the environmental impacts of energy production and helping 
mitigate climate change. Canary is already required to operate in a 
manner that protects the environment and human health, responsibilities 
we take seriously. We are also one of the Nation's most innovative 
industries, with billions of dollars invested industrywide to develop 
technologies that allow us to produce the abundant and affordable 
energy that Americans have come to depend on every day.
    I firmly believe the oil and natural gas industry can be our 
Nation's most formidable ally in the fight against climate change. But 
to do so, we need the Government as a partner, not an adversary.
    That is why I am concerned that the U.S. Securities and Exchange 
Commission's proposal mandating public companies report their emissions 
and exposure to climate risks is a major move in the wrong direction.
    Proponents argue the SEC's proposed rule on ``The Enhancement and 
Standardization of Climate-Related Disclosures for Investors'' will 
provide investors with useful information on a company's exposure to 
climate risks, but the practical effect will be to drive capital away 
from badly needed conventional energy and infrastructure projects, 
making energy more expensive and denying America of a natural 
competitive advantage against other countries.
    In a parallel trend in the capital markets, the growing popularity 
of environmental, social, and governance (ESG) investment funds, are 
steadily strangling domestic oil production, which now sits at around 
11.6 million barrels per day compared to its peak in 2019 of 13 million 
per day.
    A report last year from the International Energy Forum estimates 
that 2021 oil and gas production remained 23 percent below the 
prepandemic level of $525 billion, while investment slumped by 30 
percent in 2020. The report identified ESG as one of three principal 
drivers of underinvestment. That is a predictable result of the nearly 
$2.7 trillion in ESG funds that restrict investment in conventional 
energy producing companies.
    As Committee members are undoubtedly aware, our economy faces an 
historic energy supply challenge. After a decade of underinvestment in 
the oil and gas sector, current domestic output sits well below 
prepandemic levels while demand continues to return. Unfortunately, 
much of this shortage is driven by domestic energy policy that has 
frozen new Federal leasing and prohibited pipeline construction, 
discouraging the investment necessary to explore, develop, and produce 
the energy America needs to prosper.
    Our industry requires capital and investor confidence to thrive. 
Investor confidence follows from reasonable and predictable regulation. 
Without those prerequisites, companies will not risk the capital needed 
to ensure we have a secure supply of energy. Decapitalizing the oil and 
gas industry in the fight against climate change will increase energy 
prices, restrict innovation, and shrink our economy.
    Structural underinvestment has hampered capital-intensive 
activities across the upstream, midstream, and downstream sectors of 
our industry. Less than a decade ago, there were 1,600 active drilling 
rigs in the country. Today, there are roughly 500.
    And while the SEC rule and adjacent policies undermine U.S. energy 
security and destabilize the economy, the Administration has done 
little to nothing to address consumer demand for the underlying 
products. As an industry, we are responding to the market and projected 
increases in demand. By comparison, the mixed signals coming out of the 
Administration are clearly discouraging new investment.
    Regulatory burdens carry real costs that effect everyday Americans. 
As prices rise across energy categories that consumers rely on, I 
strongly urge the Committee to reconsider its current reliance on 
regulations, and instead pursue a viable and durable path forward on 
climate policy that protects the environment, consumers, the economy, 
and our national security.
Authority
    Perhaps the most significant concern raised by the proposed rule is 
that the SEC is exceeding its statutory authority.
    The SEC's rules, as clarified in its 2010 interpretative guidance, 
already require publicly traded companies to disclose a wide range of 
climate information to the extent that it is financially material.
    These rules are principles-based and grounded in the materiality 
standard, which has long underpinned U.S. capital markets and ensured 
that Federal securities regulation fulfills the Commission's tripartite 
mission. That standard, which is generally defined by Congress and the 
courts as requiring disclosure of information necessary to protect 
investors from inflated prices and fraud, has long instilled 
confidence, promoted market efficiency, and competition and is thus 
tied to advancing the goals of Federal securities laws, as reflected in 
the SEC's mission.
    Furthermore, much of the emissions data the Commission seeks is 
already publicly available under the Environmental Protection Agency's 
(EPA) Greenhouse Gas (GHG) Reporting Program, which captures roughly 90 
percent of U.S. GHG emissions from the largest emitters. \1\ Combined 
with the U.S. Inventory of GHG emissions, investors have more than 
enough data about a companies' emissions profile to make informed 
investment decisions.
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     \1\ https://www.epa.gov/ghgreporting
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    Like other service companies, Canary adheres to the EPA's 
regulations on this topic and encourages regulation from just one 
agency to limit duplicative rules, or worse, inconsistencies that 
increase costs and the risk of unintended consequences.
    Unfortunately, the SEC's proposal goes well beyond requiring 
information that provides an objective picture of a company's financial 
situation. Instead, it seeks to impose an unnecessarily burdensome and 
costly reporting structure that requires disclosure of a wide range of 
information, much of which is non-investor-oriented, and that is 
largely immaterial to a company's financial health.
    Compelling public companies to report different kinds of costly 
environmental data, including Scope 1, 2, and 3 emissions data, climate 
scenario analyses, transition plans, climate-related financial impacts 
on corporate financial statements, and emissions reductions plans will 
have a practical effect on markets beyond just ``disclosure.''
    If there is concern regarding companies' disclosures, they might be 
more readily, and cost effectively addressed through updated guidance 
regarding its materiality standards and by cross referencing EPA's GHG 
Reporting Program.
    The Scope 3 reporting requirement proposed in the rule will place 
the responsibility and pressure to mitigate economywide emissions 
solely on the oil and gas industry.
    For many companies, those costs are significant and could 
contribute to a decision to forego participating in public markets. On 
an annual basis, companies are projected to spend more than $10 billion 
cumulatively and burn more than 43 million work hours to meet the 
demands of this proposal. These direct compliance costs are likely 
underestimated, however, and say nothing of the broader costs to the 
economy, due to the proposal's impact on capital allocation, markets, 
and energy prices.
    Notwithstanding the SEC's stated goal of establishing a reporting 
framework that provides more ``consistent, comparable, and reliable 
information,'' the Commission should not attempt to expand its 
authority simply because a subset of investors is interested in 
compelling corporate adherence to aspirational policy objectives, 
regardless of their merit. In fact, given the well documented political 
opposition the proposal has already garnered, it is likely that the 
rule will result in market instability and confusion, as the rules 
become a continued source of controversy and subject to repeal once a 
new Administration takes office or the complexion of the Commission 
itself changes.
Excessive Costs
    Most important to companies like Canary is the impact this proposal 
will have on the bottom line. In this regard, the proposal fails to 
reasonably arrive at an accurate assessment of the cost for companies 
to comply. The SEC provides its first-year cost of compliance estimate 
at $640,000 for non-SEC registrants and $490,000 for SEC registrants. 
But on page 372, the SEC admits that these estimates may be ``limited 
in scope and may not directly reflect registrants' compliance costs.'' 
From my vantage point as a CEO, I find this estimate suspect given the 
immense financial, account, and legal hours that the proposal will 
require. This compels me to question if the SEC has arrived at a 
reasonable estimate for companies to comply with the full scope of the 
rule. One economist from the University of Wisconsin, found that ``by 
the late 2020s, the enduring economic impact will be approximately $25 
billion in U.S. GDP foregone each year and 200,000 fewer jobs.'' \2\
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     \2\ https://www.sec.gov/comments/s7-10-22/s71022-20132304-
302836.pdf
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    Mandatory disclosure will drive the shift in investment flows by 
providing ESG funds regulatory cover to prioritize ``environmental 
sustainability'' over economic returns for investors when ranking 
funds.
    The proposed rule will further cripple the oil and gas sector and 
our ability to meet the energy needs of consumers. The requirement that 
a company accounts for greenhouse gases emitted anywhere along its 
supply chain, called Scope 3 emissions, and the use of its products is 
a burdensome standard that will disproportionally affect domestic 
energy producers, including the financial institutions that underwrite 
the sector.
    As CEO of a private company, this Scope 3 requirement amounts to 
one of my biggest concerns with the proposal. As an oilfield services 
company, Canary's Scope 1 emissions would be the Scope 3 emissions for 
a company who procures our services. This unprecedented mandate for 
Scope 3 has rightly concerned many private companies, as many lack the 
capability to collect this data. This is particularly the case for 
smaller companies, like Canary, who will be required to expend a 
disproportionate amount of resources to comply. While it may be true 
that certain large incumbent firms might have sufficient resources to 
begin a Scope 3 data collection process--that will only involve those 
large firms asking smaller companies, like Canary, for their emissions 
estimates, which are much too costly for us to collect.
    In addition, the industrial sector has expressed concern about 
increased liability for companies that must suddenly predict risks 10 
to 20 years into the future as global temperatures rise. Chevron, 
ConocoPhillips and the American Petroleum Institute were among those 
asking the SEC to stipulate so-called ``safe harbor'' protections to 
shield them from legal or regulatory penalties related to the new 
climate-risk disclosures.
Conclusion
    Throughout my testimony, I've described in detail the various 
reasons why companies like Canary are concerned about this proposal. If 
implemented as proposed, the rule will severely impact the ability of 
the oil and gas sector to meet present energy demand. The energy crisis 
facing the country today will be further exacerbated as costs pile onto 
energy producers and present difficulties to find labor, materials, and 
capital needed for exploration and production efforts.
    A weakened U.S. oil and gas sector will not, however, stop 
forthcoming rising global energy demand, which the EIA projects will 
rise nearly 50 percent by 2050. Instead, current policy initiatives 
look more likely to bring about scenarios in which the U.S. settles 
into a role as a net importer of petroleum and natural gas products 
despite our abundant resources here at home.
    Financial regulators' shift toward prioritizing climate change over 
returns will end badly for the U.S. economy and consumers. It's bound 
to restrict investment into finding and producing conventional energy 
supplies and usher in a more extreme version of the demand shock we're 
experiencing today. Regulators make poor capital allocators. Free 
markets that can react to sudden supply and demand changes are much 
better at channeling investment.
    The proposed rule's prescriptive regime for emissions disclosures 
for public companies is unnecessary, will weaken our country's energy 
security, and undermine our climate goals. As prices rise across energy 
categories that consumers rely on, the SEC, in its role as a financial 
regulator, cannot and should not move forward with a major 
environmental initiative without the direction of elected policymakers 
and agencies with environmental and energy expertise.
    With two quarters of negative economic growth, and alarming 
inflationary trends in our future, I implore Congress to save American 
energy independence and oppose this rule.
                                 ______
                                 
                PREPARED STATEMENT OF DAVID BUTTERWORTH
     Northeast Regional Business Agent, Pipeliners Local Union 798
                             August 4, 2022
    Chairman Brown, Ranking Member Toomey, and Members of the 
Committee, thank you for the opportunity to testify today about climate 
change. My name is David Butterworth, and I am from Clendenin, West 
Virginia. I am employed as a Business Agent for Pipeliners Local Union 
798. I represent approximately 6,400 Welders, Helpers, and Journeymen 
who build pipelines in the United States. My jurisdiction extends from 
Virginia to Maine, and 904 of our members live throughout the 
Northeast. I welded and worked on pipelines from 1998 until 2015 and 
was hired to my current position in January 2016.
    I am here today to speak about how climate change and energy 
policies affect grid reliability, the country, our towns, and my 
membership. Local 798 has attended and spoken at just about every 
Federal and State pipeline hearing that has taken place in the 
Northeast from 2016 until today. Some of these pipelines are the 
Atlantic Sunrise, Atlantic Coast, Mariner East, Mountaineer Express, 
Mountain Valley, Northeast Supply Enhancement, Northern Access, and 
Penn East, just to name a few. We attended and spoke at each of these 
hearings because we know the massive work opportunities these projects 
provide our membership. Our job prospects have dwindled significantly 
since the summer of 2018 when we peaked at 8,300 members due to 
Mountain Valley and Atlantic Coast being in full swing. When completed, 
the Mountain Valley Pipeline will provide a natural gas backup 
generator system to Carilion Hospital in Roanoke, VA, and will also 
lead to increased manufacturing and jobs in the South.
    I come from a town in West Virginia where good-paying jobs are 
intertwined with the fossil fuel industry. My father and many others 
from my town helped build the Alaska Pipeline. Local 798 is made up of 
members from towns like this spread across our great Nation. 
Mifflintown, PA, Olive Hill, KY, Bald Knob, AR, Oak Grove, LA, and 
Durant, OK, are towns you have probably never heard of, but if you 
traveled to them, you stand a good chance of meeting a pipeliner. We 
were once fortunate enough to be out of the national spotlight and had 
to explain to people exactly what we did, and quite frankly, nobody 
really cared. Unfortunately for us, those days are over, and we find 
ourselves thrust into national politics.
    This is not where we want to be. We're in the middle; middle-class 
union workers are feeling the squeeze between opposing sides. I find 
myself asking questions like, ``do the policymakers and those against 
fossil fuels truly believe we can shut down all fossil fuels tomorrow 
and not fall into utter chaos?'' I ask this because during the ``Texas 
Freeze,'' where all forms of energy failed, and sadly people perished, 
we were shown a snapshot of the disorder that accompanies a broken 
grid. I also witnessed the gas hoarding that began to happen at my 
local gas station when the Colonial Pipeline was hacked. American 
citizens were filling large containers of gasoline in preparation for a 
nationwide gas shortage without thinking about how this would affect 
the next person who simply wanted to fill up their vehicle tank.
    This brings me to my next point. A report published by the Columbia 
University Center on Global Energy Policy shows a ``future continued 
use of natural gas for at least the next 30 years'' and that ``there is 
no quick replacement for gas in the U.S. energy mix.'' Switching from 
coal to natural gas power generation has dropped emission levels. 
According to the Energy Information Administration, from 2005 to 2017, 
U.S. natural gas production increased by 51 percent, and CO2 emissions 
decreased by 14 percent. The Nation's pipeline system guarantees a 
safe, efficient, clean energy transition. I support efforts to curb 
climate change, but I do not support curbing climate change when the 
cost is grid reliability.
    We can achieve climate goals by using common sense and American 
ingenuity while imploring all the above energy approaches that include 
carbon capture and hydrogen blending. Both methods use the existing 
pipeline system and will bring down climate change levels. These new 
techniques will be protested, and this committee, along with the rest 
of Congress, has the power to support agendas that keep my members 
working, provide grid reliability and align with the new strategies 
that address the current climate situation. I ask that you tune out the 
10 percent of American citizens who protest literally everything, and 
instead listen to a person who has played a part in building the power 
grid.
    We have the energy here, and we need to use it so that we don't end 
up like Germany, whose citizens will be introduced to warming houses 
and natural gas rationing this winter. Please consider the plight of 
the grid builders stuck in the middle. We might have a better idea of 
how we can conquer our dilemma. This problem can be solved through hard 
work and the implementation of moderate policies that benefit the whole 
rather than the far-right and far-left fringes that continue to divide 
us. I would be happy to answer any questions you may have.
                                 ______
                                 
                 PREPARED STATEMENT OF SHALINI VAJJHALA
                   Founder and CEO, re:Focus Partners
                             August 4, 2022
    Chairman Brown, Ranking Member Toomey, and Members of the 
Committee: Thank you for the opportunity to testify today.
    My name is Shalini Vajjhala. I am an architect and engineer, 
specializing in the design and finance of resilient infrastructure 
solutions. For the past 10 years, my firm re:focus partners has been 
working with cities and regions across the United States to develop 
projects to address both the physical and financial risks of climate 
change.
    These issues have only grown more urgent over the last decade. The 
costs of climate change are already being felt across the country. This 
is not some distant future. The effects of more severe storms, heat, 
and droughts are visible in public budgets today.
    Climate change will impact all parts of our economy. But 
counterintuitively, the costs of most climate-related events are site-
specific not economywide. \1\ A hurricane or wildfire doesn't hit the 
whole country at once. At the end of the day, the physical and 
financial impacts of disasters will be felt first and worst at the 
community level.
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     \1\ https://www.ncei.noaa.gov/monitoring-content/billions/docs/
2021-us-billion-dollar-weather-and-climate-disasters-hazard-and-
socioeconomic-risk-mapping-ams-washington-forum.pdf
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    Recent OMB estimates put the potential Federal fiscal impacts of 
climate inaction at up to $2 Trillion dollars per year. \2\ This is 
staggering. Having a better understanding of the total economic costs 
of climate change is essential, but we also need better ways of 
disaggregating these costs by peril, sector, and region to motivate 
local action to protect against the worst overall outcomes.
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     \2\ https://www.whitehouse.gov/wp-content/uploads/2022/04/OMB-
Climate-Risk-Exposure-2022.pdf
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    Three areas where this Committee can help break down the problem 
into more actionable pieces by looking more closely at three types of 
costs are: local revenue losses, reductions in asset lifetimes, and 
deferred infrastructure maintenance.
    Revenue losses due to climate impacts cut across all sectors. 
Public utilities, including power, transportation, and water systems, 
are already experiencing disruptions and operational losses due to 
climate-related events.
    The EIA estimates that severe drought conditions in California 
could reduce hydropower generation by up to 48 percent this year. \3\ 
Recent heat waves have resulted in operating restrictions and losses 
for passenger and freight rail systems nationwide and costly structural 
damages, including derailments due to buckling tracks and melted power 
cables in places with typically mild climates, like Portland, OR. \4\
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     \3\ https://www.eia.gov/todayinenergy/
detail.php?id=52578&src=email
     \4\ https://www.bloomberg.com/news/articles/2022-07-21/-the-us-is-
not-prepared-hot-temperatures-stress-transit-systems#xj4y7vzkg
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    In the water sector, sea-level rise has increased the risk of salt-
water intrusion. This has costly implications for coastal agriculture 
\5\ and drinking water systems from Rhode Island to Alabama \6\ with 
financial risks that extend into the health care sector. These same 
acute and chronic stresses have resulted in property and income tax 
base losses with the potential for municipal bond downgrades and 
defaults. \7\ \8\
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     \5\ https://www.climatehubs.usda.gov/index.php/hubs/northeast/
topic/saltwater-intrusion-growing-threat-coastal-agriculture
     \6\ https://www.nature.com/articles/s41467-020-17038-2
     \7\ https://www.wsj.com/articles/paradise-the-wildfire-ravaged-
california-town-warns-of-municipal-bond-default-11658493581
     \8\ https://reader.elsevier.com/reader/sd/pii/
S0264275118314100?token=&originRegion=us-east-
1&originCreation=20220802175120
---------------------------------------------------------------------------
    This is not all bad news. Focusing on where we are losing money 
today offers an entry point for identifying where losses and 
liabilities are likely to increase. This approach also opens the door 
to new ways of financing cost-saving infrastructure investments, such 
as coastal protection projects and power and transportation system 
weatherization measures, that can be funded through direct savings, 
reduced insurance costs, and risk pooling. \9\
---------------------------------------------------------------------------
     \9\ https://hbr.org/2017/08/how-the-insurance-industry-can-push-
us-to-prepare-for-climate-change
---------------------------------------------------------------------------
    Climate impacts are already reducing infrastructure asset 
lifetimes. \10\ In many cases, the same events that result in revenue 
losses also have longer-term financial consequences. The impacts of 
flash floods and wildfires can result in damage to infrastructure 
systems that reduce their replacement lifetime. This poses major 
budgeting challenges for public works departments across the country 
who might see a road planned to last for 25-years become unusable in 
half that time. In the worst cases, this can result in the collapse of 
private insurance markets in specific sectors and regions. \11\ Work by 
the Arizona Department of Transportation on life-cycle planning for 
extreme weather offers a national model for risk management. \12\
---------------------------------------------------------------------------
     \10\ https://www.mckinsey.com/business-functions/sustainability/
our-insights/will-infrastructure-bend-or-break-under-climate-stress
     \11\ https://www.americanprogress.org/article/regulators-should-
identify-and-mitigate-climate-risks-in-the-insurance-industry/
     \12\ https://azdot.gov/sites/default/files/2019/07/Asset-Mgmt-
Extreme-Weather-and-Proxy-Indicators-Pilot-Project.pdf
---------------------------------------------------------------------------
    Deferred maintenance backlogs can also highlight where to intervene 
to prevent cascading failures. The devastating toll of both winter and 
summer power grid failures in Texas highlight where seasonal 
maintenance and timely infrastructure upgrades can prevent catastrophic 
failures down the line. \13\ Investing hundreds of millions of dollars 
now can prevent billions in losses in future, but these investments 
must be well coordinated. The Norfolk, VA, and San Diego, CA, naval 
bases offer excellent examples of how military installations can better 
protect against sea-level rise and storm surge. At the same time these 
facilities show where resilience measures can be undermined if adjacent 
roads and bridges are not also upgraded so essential personnel can 
reach high-priority sites during severe storms and floods. \14\ Better 
information about critical infrastructure weak links can help identify 
where short-term local trade-offs, like prioritizing emergency repairs 
over more robust upgrades, can have long-term national costs and 
consequences. \15\
---------------------------------------------------------------------------
     \13\ https://thehill.com/opinion/energy-environment/542067-texas-
has-lessons-for-all-of-us-on-infrastructure-resilience/
     \14\ https://www.defense.gov/News/News-Stories/Article/Article/
2703096/dod-navy-confront-climate-change-challenges-in-southern-
virginia/
     \15\ https://www.brookings.edu/blog/the-avenue/2017/06/05/legacy-
infrastructure-and-the-challenge-of-procuring-urban-resilience/
---------------------------------------------------------------------------
    No single individual, family, or region is concerned with the total 
economic costs of climate change. Everyone is concerned with their own 
physical and financial security. We need better frameworks to translate 
the big picture costs of climate inaction into levers for avoiding 
losses and reducing suffering.
    The Infrastructure Investment and Jobs Act (IIJA) holds tremendous 
promise for addressing these challenges, as does the Inflation 
Reduction Act. Physical protections and financial protections from the 
worst economic impacts of climate change must go hand-in-hand. Breaking 
down the total economic costs can help identify opportunities to shape 
the next generation of infrastructure and make sure we move quickly to 
build what we need, not just what we had.
    Thank you and I look forward to your questions.
Supporting Documents
    1. Kane, J.W., and S.P. Vajjhala (2020). ``Prioritize People, Not 
Projects: Addressing the Harms of Legacy Infrastructure in the COVID-19 
Recovery''. The Brookings Institution. https://www.brookings.edu/
research/prioritize-people-not-projects-addressing-the-harms-of-legacy-
infrastructure-in-the-covid-19-recovery/
    2. Vajjhala, S.P., and J.W. Kane (2020). ``Four Steps To Undo the 
Harms of Legacy Infrastructure in the COVID-19 Recovery''. The 
Brookings Institution. https://www.brookings.edu/research/four-steps-
to-undo-the-harms-of-legacy-infrastructure-in-the-covid-19-recovery/
    3. Vajjhala, S., and J. Rhodes (2019). ``Insurance Innovation and 
Community-Based Adaptation Finance''. Community Development Innovation 
Review: Strategies To Address Climate Change Risk in Low- and Moderate-
Income Communities. Federal Reserve Bank of San Francisco, Volume 
14(1): 47-53. https://www.frbsf.org/community-development/wp-content/
uploads/sites/3/05-Vajjhala-Rhodes.pdf
    4. Vajjhala, S., and J. Rhodes (2018). ``Resilience Bonds: A 
Business-Model for Resilient Infrastructure''. The Veolia Institute 
Review FACTS Report 2018, pp. 58-63. https://journals.openedition.org/
factsreports/4562?file=1
    5. Vajjhala, S.P., and E. Monks (2018). ``Investing in Better 
Procurement Processes Can Enable Better Infrastructure Outcomes''. The 
Brookings Institution. https://www.brookings.edu/blog/the-avenue/2018/
11/26/investing-in-better-procurement-processes-can-enable-better-
infrastructure-outcomes/

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        RESPONSES TO WRITTEN QUESTIONS OF CHAIRMAN BROWN
                        FROM JOE FLARIDA

Q.1. Power a Clean Future Ohio's recent study, ``The Bill is 
Coming Due'', listed 10 climate impacts that were analyzed for 
additional costs to Ohio communities.
    What other environmental or financial impacts is climate 
change having, or will be likely to have, on these communities? 
What would be the consequences of communities just choosing not 
to deal with them?

A.1. Our report lays out 50 climate impacts that are forecasted 
to have negative financial impact on local government budgets 
in Ohio. We developed cost estimates for 10 of those 50 impacts 
that we identified. The remaining 40 climate impacts, however, 
are not necessarily less severe or less costly. On the 
contrary, some of these impacts may result in much higher costs 
than some of the 10 that we estimated. Appendix A in our report 
lays out the full list of potential costs, although this list 
is not exhaustive.
    One notable set of climate impact that was not modeled is 
public health costs associated with climate change. These 
future costs will be considerable and also an area that will 
further strain local governments' capacities and resources.They 
will also disproportionately harm vulnerable individuals and 
populations. As detailed by a 2019 report from the Ohio 
Environmental Council and Policy Matters titled ``Climate 
Change is Hazardous to Ohio Children's Health'', we know that 
children are at greater risk of climate-related health effects. 
The report states:

        Climate change is hazardous to children's health. 
        Heatwaves degrade air quality, exacerbating symptoms of 
        asthma, one of the most common chronic childhood 
        illnesses. Heavy rains and flooding can contaminate 
        public water supplies with bacteria to which children 
        are especially susceptible. Warmer average temperatures 
        allow insect populations to multiply, and with them the 
        incidence of insect-borne diseases like West Nile 
        Virus. Here in Ohio, children are already being hurt by 
        climate change, and the harm is projected to get worse 
        . . .

    Erosion is another environmental impact that will be 
exacerbated by climate change due to extreme precipitation and 
more frequent severe weather events. Damage due to erosion in 
parts of Ohio and certainly in large portions of the United 
States will be a key cost facing local governments in the 
coming decades, made worse by climate change. One subset of 
costs due to erosion is going to be from local planning and 
regulation. Local governments will need to identify, map, and 
track erosion hazard areas; develop and enforce an erosion 
management plan; and develop site and building design 
standards.
    Communities and every level of Government supporting them 
need to both mitigate their emissions to curb the impacts of 
climate change on a global scale, but also do comprehensive 
resilience planning locally and make smart investments now to 
avoid higher costs in the future.
    Those communities that do not have the resources, capacity, 
or technical expertise to do these critical planning exercises 
will be more vulnerable and less prepared to deal with the 
costs and impacts on the lives and well-being of residents.

Q.2. How are the costs in the report conservative estimates, 
and how did the consultant build defensibility in the modeling? 
Was the increased cost of insurance included in the analysis?

A.2. The analysis behind our report, ``The Bill is Coming Due'' 
provides a conservative estimate of the additional costs that 
Ohio municipalities can expect to incur due to climate change. 
Many of the costs of climate change are expressed in 2021 
dollars, which means that simple inflation may drive these 
costs up on their own. The monetized amounts represent only 10 
of the 50 different impacts addressed in the report. 
Monetization of the other 40 impacts would significantly 
increase the overall climate costs reflected here, but are hard 
to calculate on a statewide basis. In other words, the total 
increase in annual spending by municipal governments due to 
climate change is certainly higher, and likely much higher than 
this report reflects.
    The models we used to provide estimates for each of the 10 
climate impacts are also conservative in the scope of the 
analysis. As an example, the cost estimate for air conditioning 
in schools only estimates the cost for urban high-poverty 
districts. Statewide costs for air conditioning installation 
are likely much higher, because installation in small town, 
rural, suburban, high poverty, and low poverty districts are 
excluded from this analysis. While installation will require a 
single upfront investment from school districts, municipal 
governments and school boards should also consider additional 
future costs incurred by energy use, operation, and maintenance 
of these units.
    Each cost estimate that is detailed in the report also 
includes detailed methodology. The cost of insurance was not 
included in our analysis.

Q.3. You looked at how climate change would impact large urban 
Ohio cities as well as much smaller rural jurisdictions.
    What size of Government does your analysis suggest will 
suffer the most from climate change?
    Will smaller Governments need technical assistance to 
address these impacts? What about underserved populations?
    Acknowledging that a one-size-fits-all approach is rarely 
the most effective way to tackle problems across a diverse set 
of actors, are there still general guidelines communities 
should consider in addressing climate impacts?

A.3. Climate impacts will touch every community regardless of 
size. Extreme heat, increased precipitation, flooding, and 
severe storms will impact the largest urban communities, rural 
regions and towns, and everywhere in between. Some of these 
financial impacts will vary based on the type of community and 
the infrastructure that is at risk as a result. For example, 
urban heat islands will be felt acutely in city settings where 
the infrastructure and built environment paired with extreme 
heat create the conditions for the dangerous urban heat island 
effects to arise. Harmful algae blooms will impact communities 
that abut bodies of water that are at risk. While this issue 
often stems from rural regions where extreme precipitation 
events lead to fertilizer runoff from nearby agricultural land 
into drinking water sources and recreational bodies of water, 
the impacts can be felt downstream by urban and suburban 
communities. According to the U.S. Environmental Protection 
Agency, warming water temperatures, increased freshwater 
salinity, and increased carbon dioxide levels in the air and 
water, all of which can be tied to climate change will 
exacerbate the growth and impact of harmful algal blooms.
    Financially, smaller communities have less ability to 
absorb large unexpected costs. Smaller budgets naturally have 
smaller margins to absorb unexpected costs and local 
governments have limited options to debt finance large-scale 
recovery costs.
    Based on how financial costs are currently accounted for, 
the resources available to communities to prepare for and 
finance these impacts is largely dependent on that community's 
tax base and the revenue and bond financing available to that 
local government. These factors further environmental 
injustices that have affected the health and well-being of 
Americans across our country. A lack of access to resources for 
resilience and mitigation investments will make vulnerable 
communities even more vulnerable.
    Based on the communities we engage with, the largest cities 
are most equipped with the staff technical capacity and 
necessary resources to do the immediate resilience planning 
required and to implement plans to reduce emissions. However, 
these communities also have the most infrastructure at risk due 
to climate impacts. Smaller communities need further support 
from State governments and the Federal Government in order to 
prepare for the climate impacts they will face in the coming 
years.
                                ------                                


               RESPONSES TO WRITTEN QUESTIONS OF
              SENATOR VAN HOLLEN FROM JOE FLARIDA

Q.1. Do you think it's fair that taxpayers in Maryland--and all 
coastal States--are going to foot the bill to avoid the 
existential threat climate change, and rising sea levels, 
present?
    Vulnerable Populations in Coastal Communities--According to 
the National Oceanic and Atmospheric Administration's Coastal 
County Snapshot, 50 percent of Maryland's Somerset County is 
located within the designated 100-year flood plain. 
Additionally, nearly 60 percent of the county's elderly 
population and 46 percent of low-income residents live within 
that same flood plain.

A.1. Our analysis focused on costs to Ohio local governments. 
Flood related costs which could include stormwater management, 
elevating roads, and road repair, could cost local government 
budgets in Ohio alone over $1.1 billion per year by 2050. 
Additional impacts related to flooding and severe storms will 
vary State to State and the overall costs will also vary.
    Based on how financial costs are currently accounted for, 
the resources available to communities to prepare for and 
finance these impacts is largely dependent on that community's 
tax base and the revenue and bond financing available to that 
local government. These factors further environmental 
injustices that have affected the health and well-being of 
Americans across our country. A lack of access to resources for 
resilience and mitigation investments will make vulnerable 
communities even more vulnerable.
    According to a report by the Carbon Disclosure Project 
released in 2017, 100 companies account for 71 percent of all 
industrial greenhouse gas emissions since 1988. Moreover, some 
of the largest contributors of emissions knew the harm that the 
increased use of fossil fuels would have on the environment. 
Thanks to the work of journalists, independent researchers, and 
academics, we have seen internal company documents showing 
large oil and gas companies knew as early as the 1960s that 
their products would lead to climate change, and that it could 
have disastrous impacts worldwide.
    The question of fairness and accountability is a critical 
one in determining how we address the mitigation and adaptation 
costs we face. Individual taxpayers should not be forced to 
foot the bill for a problem they did not cause.

Q.2. Can you provide any insight on the financial resources 
that these residents would need to adequately prepare for and 
recover from flood-events? How would you recommend we protect 
vulnerable populations from the dangerous and expensive impacts 
of more frequent flooding due to climate change?

A.2. Insurance costs for homeowners and renters that live in 
flood-risk communities are going up. We cannot rely on the 
insurance industry to adequately account for the severity of 
the problems these communities face, which are getting worse as 
a result of climate change. Residents need transparency and 
clarity on the risks they face when purchasing or renting a 
property. This requires adequate local, State, and Federal 
resources to support local planning and regulation, including 
the technical support to update maps and information on hazard 
areas. The actions to support vulnerable populations will vary 
by region and which resilience actions are prioritized as a 
result of the types of climate impacts the communities will 
face. In the long-term, zoning and building affordable housing 
in low-risk locations and using design practices and materials 
that will help mitigate the impact of severe weather events is 
one important step that local, State, and Federal agencies and 
relevant housing authorities can take to protect vulnerable 
populations.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR SINEMA
                        FROM JOE FLARIDA

Q.1. Water supply challenges are one major consequence of a 
changing climate in Arizona and throughout the West. The 
ongoing drought is a constraint on economic growth in the 
medium and long term. From your perspective, could long-term 
water supply challenges pose a material risk to the financial 
health of a business? If so, do you believe existing 
disclosures are sufficient to inform investors, or do you 
believe additional information is needed for investors to make 
informed decisions?

A.1. Long-term water supply challenges will most certainly pose 
a material risk to the financial health of any business, 
especially those that rely heavily on access to water for their 
supply chain or manufacturing process. This particular climate 
impact alongside the array of other expected financial costs of 
climate change will absolutely hurt businesses and providing 
transparency for investors on climate risk will be necessary as 
we face greater climate impacts in every sector in the coming 
decades. While we would support further transparency, we are 
not in a position to comment directly on disclosures or 
perspectives of investors.
                                ------                                


               RESPONSES TO WRITTEN QUESTIONS OF
            SENATOR VAN HOLLEN FROM DAN K. EBERHART

Q.1. Do you think it's fair that taxpayers in Maryland--and all 
coastal States--are going to foot the bill to avoid the 
existential threat climate change, and rising sea levels, 
present?

A.1. While all States bear the localized costs of climate 
change, East Coast States, Maryland included, have enjoyed the 
economic benefits of industrialization and the use of fossil 
fuels far longer than much of the country. Coal was the energy 
source of choice for East Coast industrialization in the 19th 
century, and what aided the migration of people from rural 
farming communities to the densely populated urban cities that 
continue to dominate the region today. Shipping has long been 
another economic anchor for Maryland and its coastal 
neighbors--an industry powered universally by petroleum. So, 
while every U.S. taxpayer pays for the Federal Government's 
response to climate change, not all taxpayers live in States 
that have had the same opportunity to benefit from fossil fuels 
as Maryland. Furthermore, while the oil and gas industry have 
continued to innovate and improve how it extracts and processes 
petroleum, the same embrace of innovation has not been seen in 
the shipping industry or in the embrace of offshore wind farms 
and other alternative energy sources. One of the greatest 
impediments to innovation and competition in renewable energy 
and in the free movement of energy in general is the 
protectionist Jones Act, which says only U.S.-built-and-
operated ships can move goods between U.S. ports. The century 
old law adds unnecessary time and costs to the installation of 
offshore wind turbines and has also impeded the delivery of 
American energy to East Coast communities that continue to rely 
on gasoline for transportation and natural gas for electricity 
generation.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR SINEMA
                      FROM DAN K. EBERHART

Q.1. Water supply challenges are one major consequence of a 
changing climate in Arizona and throughout the West. The 
ongoing drought is a constraint on economic growth in the 
medium and long term. From your perspective, could long-term 
water supply challenges pose a material risk to the financial 
health of a business? If so, do you believe existing 
disclosures are sufficient to inform investors, or do you 
believe additional information is needed for investors to make 
informed decisions?

A.1. Water supply has been a challenge in the West since before 
Arizona was admitted into the Union. It is not a new problem 
brought about by climate change nor do I agree with the idea of 
using it as a cudgel to punish certain businesses. In fact, the 
biggest challenge facing western States when it comes to water 
supply is population growth--the same challenge that existed a 
century ago. Arizona Governor Doug Ducey has taken an 
innovative and bipartisan approach to managing a resource that 
is in high demand but has limited availability. Gov. Ducey has 
invested in acquiring water rights and empowered local 
communities to be flexible in how they manage water rights. 
That flexibility is crucial to maintain both conservation of a 
limited natural resource and promote continued economic growth 
and human flourishing in the arid West.
                                ------                                


               RESPONSES TO WRITTEN QUESTIONS OF
           SENATOR VAN HOLLEN FROM DAVID BUTTERWORTH

Q.1. Do you think it's fair that taxpayers in Maryland--and all 
coastal States--are going to foot the bill to avoid the 
existential threat climate change, and rising sea levels, 
present?

A.1. This question is somewhat out of my wheelhouse because I 
do not know the current amount of taxes that Maryland and all 
coastal States are paying to avoid the existential threats of 
climate change and rising sea levels. I do know that Western 
Maryland has a large amount of natural gas pipelines and 
storage assets that I have personally worked on during my 
career. Pipeliners Local 798 is currently working on a project 
in Baltimore that will remove an aging mainline feed to 
Baltimore City and replace it with a new state-of-the-art 
pipeline built to maintain the public's safety while 
maintaining Baltimore's power grid and quality of life. For a 
State to divide itself and say its coastal region's taxes are 
unfair because it has little to no fossil fuel development as 
opposed to its inland regions is counterproductive to the 
essential goal of maintaining grid reliability as we develop 
strategies to use of all forms of energy in the power grid. 
It's time for compromise and a time to endorse policies focused 
on representing the good of the whole. Pipeliners Local 798 
will be there waiting to work on projects that accomplish these 
goals and stand ready to embrace all of the above energy 
approaches that keep the membership working and achieve climate 
objectives at the same time.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR SINEMA
                     FROM DAVID BUTTERWORTH

Q.1. Water supply challenges are one major consequence of a 
changing climate in Arizona and throughout the West. The 
ongoing drought is a constraint on economic growth in the 
medium and long term. From your perspective, could long-term 
water supply challenges pose a material risk to the financial 
health of a business? If so, do you believe existing 
disclosures are sufficient to inform investors, or do you 
believe additional information is needed for investors to make 
informed decisions?

A.1. In answer to the first part of the question I do believe 
that water supply challenges could pose a material risk to the 
financial health of a business, and I believe that pipelines 
could aid in thwarting these challenges. I'm not a scientist or 
an engineer and haven't studied how this could be done, but I 
don't see a reason why we can't transport water from regions 
with an abundance of water to drought starved regions via 
pipelines. For this to become a reality the current permitting 
will have to change because most projects of this magnitude 
will be protested by the ``Not In My Back Yard'' groups that 
currently have pipeline projects in my area of expertise held 
up with legal challenges. I believe the upcoming Permitting 
Reform bill endorsed by Senator Manchin will help to get 
infrastructure projects freed up from their current gridlocked 
situation as the bill promises to, ``Direct the President to 
designate and periodically update a list of at least 25 high-
priority energy infrastructure projects and prioritize 
permitting for these projects.''
    I also realize that water transport does not necessarily 
fall under the ``energy permitting'' scope, but I think the 
significance and similarities of the two go hand in hand with 
maintaining the current quality of life in the United States. I 
also recommend reading a September 5, 2022, New York Times 
article by Harry Fountain titled ``Climate Change Is Ravaging 
the Colorado River. There's a Model To Avert the Worst''. This 
article describes the triumphs water managers have had in the 
Yakima River basin located in Central Washington and describes 
how their successes can be applied to the current situation 
faced by the seven Colorado Basin States. The second part of 
your question asking whether existing disclosures are 
sufficient to inform investors is beyond my field of expertise 
and I cannot honestly answer that part of the question.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF CHAIRMAN BROWN
                     FROM SHALINI VAJJHALA

Q.1. In your work with communities, are you finding that they 
have the capacity and in-house expertise to evaluate physical 
and financial climate risk?

A.1. Communities vary widely in their capacity to assess the 
physical and financial risks associated with climate change. 
The greatest divides are between large and small cities, urban 
and rural areas, and well-resourced and impoverished 
communities. The regions that have been most successful in 
evaluating their physical and financial risks to date have been 
able to proactively grow their adaptive capacity and bring 
together public sector entities with local universities and 
companies to develop comprehensive risk assessments and start 
working collectively toward regional solutions. By contrast, 
the regions that need the most support have experienced 
recurring disasters, deep staffing shortages and/or major data 
gaps, and they often lack steady access to outside expertise 
and technical assistance.

Q.2. How can Congress help them with this task?

A.2. The Infrastructure Investment and Jobs Act (IIJA) and the 
Inflation Reduction Act (IRA) are major steps forward in 
supporting communities to better characterize and respond to 
the physical and financial risks of climate change. Congress 
can build on these efforts by continuing to prioritize Federal 
agency resources and staff capacity for baseline data 
collection and sharing, deep technical assistance for the 
communities in greatest need, and multibenefit infrastructure 
predevelopment. Where possible, Congress should consider how to 
streamline Federal funding applications and support 
partnerships among Government agencies and colleges and 
universities to build more durable local capacity for 
addressing long-term challenges. Some examples of relevant risk 
modeling initiatives, data partnerships, and local knowledge 
exchanges, include the Wharton Risk Center, the Georgetown 
Climate Center, and The Atlas, which is an online platform for 
local officials to engage with peer communities as they are 
learning-by-doing.

Q.3. How can investing in adaptation or resilience create new 
economic development opportunities for communities?

A.3. Two national examples of where investing in resilience has 
been an engine for economic growth and innovation are the 
Netherlands and Israel. Both countries have faced major 
resource constraints and challenges that have required drastic 
adaptation measures. The Netherlands has developed world-
leading expertise in coastal protection engineering and water 
management. Israel has cultivated world-class water efficiency 
and agriculture technology start-ups to build a drought-
tolerant agriculture sector. There are examples within the U.S. 
as well-Hampton Roads, Virginia, and Milwaukee, Wisconsin, have 
created test beds for technology innovation with promising 
potential to scale. These are just a few of many examples of 
where creatively responding to resource challenges can seed new 
climate smart industries and foster greater economic growth.

Q.4. In your written testimony you touch on property values 
being reduced as a result of climate change. When do you expect 
this to happen and what effect will this have on local 
revenues? What will this mean to communities?

A.4. There is a growing body of research on the property value 
losses and associated tax implications of climate change. The 
main takeaway is that the effects of climate change will not 
occur simultaneously or evenly in the market. Some communities 
have already been devastated, while others are facing certain 
future disruption. Individuals, communities, and local 
governments all face the same challenge of trying to understand 
when and how to take action to limit the worst consequences, 
what proactive physical and financial protection measures are 
available, and how to make effectively timed decisions.

Q.5. In your testimony, you spoke about climate impacts 
reducing infrastructure asset lifetimes, and in a December 2020 
Brookings report, you emphasized the ways in which legacy 
infrastructure--including roads, pipes, telephone lines, power 
plants, and transmission lines--often entrenches historic 
inequities, saying that we, ``must invest with purpose and undo 
the harms of our legacy infrastructure systems. Too often, 
households have struggled to afford water and energy bills, to 
physically reach jobs, or to plug into the internet.''
    Are there actions related to addressing climate change that 
are so vital they should be taken by communities to respond, 
adapt, or to make themselves more resilient, to climate impacts 
even if such action might have the ancillary effect of 
continuing a legacy of inequity in the building and maintenance 
of infrastructure?

A.5. Just as a clean environment and a strong economy are not 
mutually exclusive, for infrastructure to be resilient and to 
build community resilience it inherently needs to be equitable. 
Balancing these priorities is a design challenge. It is also an 
important question that every local government and community 
needs to confront directly. Responding effectively to climate 
change will involve trade-offs. Doing so successfully will 
require communities to be engaged in making those trade-offs, 
so that we don't default to an exclusionary and inequitable 
status quo. There are many promising approaches for engaging 
communities early in planning processes and creating shared 
economic value and greater community wealth, whether that is 
for powerlines, seawalls, or new lithium resources. Given the 
long-standing opposition to many large-scale infrastructure 
projects, even renewable energy, I believe it is not only 
possible, but essential to reconsider how infrastructure is 
designed and maintained so that new projects don't recreate 
past failures.

Q.6. Our payments system is also critical Government 
infrastructure that supports local economies. With digital 
payments on the rise, and the Federal Reserve exploring the 
prospect of a Central Bank Digital Currency, how can we promote 
resilience in the digital infrastructure that our communities 
increasingly depend on to participate in today's economy? Like 
with other forms of infrastructure, is it important that access 
is equitable?

A.6. Equitable access should be a cornerstone of all public 
infrastructure. Digital infrastructure is particularly complex, 
because system resilience depends directly on the resilience of 
other infrastructure, such as the power grid and cybersecurity 
systems. One key consideration is the much shorter asset 
lifetimes of technology systems versus the multidecade asset 
lifetimes in the transportation and energy sectors. Planning 
and budgeting for upgrades to maintain system resilience will 
require even more frequent attention than many other types of 
infrastructure.

Q.7. Relatedly, people are increasingly recognizing the 
importance of offline digital payments for resilience in the 
face of disruptive climate events. Is it important to build 
resilience by supporting logical financial technology 
innovations that work offline and serve the public in a cheap, 
reliable manner?

A.7. Redundancy, robustness, and flexibility are important 
elements of resilience and should absolutely be considerations 
in the design of digital payment systems.
                                ------                                


               RESPONSES TO WRITTEN QUESTIONS OF
            SENATOR VAN HOLLEN FROM SHALINI VAJJHALA

Q.1. Natural Buffers: In order to reduce the negative impacts 
of climate change, we're working to sustain climate-resilient 
infrastructure--including our natural infrastructure. The 
Chesapeake Bay's wetlands act as natural drainage systems that 
absorb the damage from storms while also reducing storm surges 
and runoff. Can you quantify the associate costs of fortifying 
natural buffers as opposed to building new resilient 
infrastructure? What efforts have you all made to measure the 
importance of wetlands and other natural buffers to lessen 
flood damages?

A.1. There has been significant progress in recent years on 
characterizing both the costs and the benefits of nature-based 
solutions, such as wetlands and mangroves for flood risk 
reduction. However, the ability to compare different types of 
``gray'' and ``green'' infrastructure measures depends on the 
quality of the baseline data and models available for site-
specific interventions. Ongoing research and programs, such as 
the U.S. Army Corps of Engineers (USACE) Engineering with 
Nature Program, show tremendous promise for developing more 
standardized methodologies for design and evaluation.

Q.2. Sea Walls: Despite having the Chesapeake Bay as our first 
line of defense against rising sea levels, analysts with the 
Center for Climate Integrity and Resilient Analytics estimate 
that it would cost $27.4 billion to build nearly 3,000 miles of 
sea walls to protect Maryland from chronic flooding by 2040.
    Would restoring the Chesapeake Bay's wetlands lower this 
cost-estimate?

A.2. Ecosystem restoration can play a central role in improving 
coastal protection and adapting to rising sea levels. Research 
on how and how much different types of natural infrastructure 
can cut costs and improve performance continues become more 
robust. While these types of studies can help identify which 
types of projects are best suited to different contexts, 
evaluating whether any specific intervention will be more cost-
effective than any other alternative requires site-specific 
analysis.

Q.3. To your knowledge, would Big Oil and Gas companies provide 
any financial support to States like Maryland that will be on 
the hook for billions of dollars of climate resilience and 
mitigation costs?

A.3. Coastal States play a vital role in global supply chains. 
While international corporations in any sector are unlikely to 
provide financial support for addressing broad climate impacts, 
Maryland and other coastal States have the opportunity to 
develop strategic public-private partnerships around public 
infrastructure and investments in resilience that can help 
protect supply chains and private sector operations in critical 
local and regional economic sectors.

Q.4. Do you think it's fair that taxpayers in Maryland--and all 
coastal States--are going to foot the bill to avoid the 
existential threat climate change, and rising sea levels, 
present?

A.4. The impacts of climate change are unequally distributed 
across the U.S. and around the world. Successful adaptation to 
the worst climate impacts, including sea-level rise, will 
require coordination and a focus on the broader economic, 
social, and health benefits of taking action quickly over delay 
or inaction. In my experience, the best coastal protection and 
climate resilience projects do not use taxpayer dollars to 
preserve the status quo, instead they leverage both public and 
private sector resources to actively improve lives and create 
wider economic and environmental benefits.
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        RESPONSES TO WRITTEN QUESTIONS OF SENATOR SINEMA
                     FROM SHALINI VAJJHALA

Q.1. Water supply challenges are one major consequence of a 
changing climate in Arizona and throughout the West. The 
ongoing drought is a constraint on economic growth in the 
medium and long term. From your perspective, could long-term 
water supply challenges pose a material risk to the financial 
health of a business? If so, do you believe existing 
disclosures are sufficient to inform investors, or do you 
believe additional information is needed for investors to make 
informed decisions?

A.1. Water supply challenges can and do pose material risks to 
the financial health of businesses. A 2020 CDP Global Water 
Report notes that water dependent companies--including energy 
and power, agriculture, and food and beverage operations--are 
already experiencing the consequences of extreme drought 
conditions. Voluntary disclosures about water supply risks are 
also increasing. These types of disclosures highlight where 
upstream economic impacts of severe drought, for example to 
hydropower generation, can create cascading economic losses 
across other sectors from manufacturing to electronics supply 
chains.
    I believe the Securities and Exchange Commission's March 
2022 proposed rule on ``The Enhancement and Standardization of 
Climate-Related Disclosures for Investors'' is an important 
step forward in ensuring that investors can make more informed 
decisions about both chronic and acute risks associated with 
climate change. This type of information can also help academic 
researchers and public sector entities recognize where issues 
in one sector can have compounding economic and health effects 
across other sectors and identify potential adaptation and 
resilience measures.