[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                        FUELING UNAFFORDABILITY:
                     HOW THE BIDEN ADMINISTRATION'S
                    POLICIES CATALYZED GLOBAL ENERGY
                   SCARCITY AND COMPOUNDED INFLATION

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

                                HEARING

                               BEFORE THE

 SUBCOMMITTEE ON ECONOMIC GROWTH, ENERGY POLICY, AND REGULATORY AFFAIRS

                                 OF THE

               COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 29, 2023

                               __________

                           Serial No. 118-18

                               __________

  Printed for the use of the Committee on Oversight and Accountability
  
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]  


                       Available on: govinfo.gov,
                         oversight.house.gov or
                             docs.house.gov
                             
                               __________

                                
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
51-834 PDF                  WASHINGTON : 2023                    
          
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               COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY

                    JAMES COMER, Kentucky, Chairman

Jim Jordan, Ohio                     Jamie Raskin, Maryland, Ranking 
Mike Turner, Ohio                        Minority Member
Paul Gosar, Arizona                  Eleanor Holmes Norton, District of 
Virginia Foxx, North Carolina            Columbia
Glenn Grothman, Wisconsin            Stephen F. Lynch, Massachusetts
Gary Palmer, Alabama                 Gerald E. Connolly, Virginia
Clay Higgins, Louisiana              Raja Krishnamoorthi, Illinois
Pete Sessions, Texas                 Ro Khanna, California
Andy Biggs, Arizona                  Kweisi Mfume, Maryland
Nancy Mace, South Carolina           Alexandria Ocasio-Cortez, New York
Jake LaTurner, Kansas                Katie Porter, California
Pat Fallon, Texas                    Cori Bush, Missouri
Byron Donalds, Florida               Shontel Brown, Ohio
Kelly Armstrong, North Dakota        Jimmy Gomez, California
Scott Perry, Pennsylvania            Melanie Stansbury, New Mexico
William Timmons, South Carolina      Robert Garcia, California
Tim Burchett, Tennessee              Maxwell Frost, Florida
Marjorie Taylor Greene, Georgia      Becca Balint, Vermont
Lisa McClain, Michigan               Summer Lee, Pennsylvania
Lauren Boebert, Colorado             Greg Casar, Texas
Russell Fry, South Carolina          Jasmine Crockett, Texas
Anna Paulina Luna, Florida           Dan Goldman, New York
Chuck Edwards, North Carolina        Jared Moskowitz, Florida
Nick Langworthy, New York
Eric Burlison, Missouri

                       Mark Marin, Staff Director
       Jessica Donlon, Deputy Staff Director and General Counsel
                          David Ehmen, Counsel
                Jeanne Kuehl, Senior Professional Staff
      Mallory Cogar, Deputy Director of Operations and Chief Clerk

                      Contact Number: 202-225-5074

                  Julie Tagen, Minority Staff Director
                      Contact Number: 202-225-5051

 Subcommittee On Economic Growth, Energy Policy, And Regulatory Affairs

                      Pat Fallon, Texas, Chairman
Byron Donalds, Florida               Cori Bush, Missouri, Ranking 
Scott Perry, Pennsylvania                Minority Member
Lisa McClain, Michigan               Shontel Brown, Ohio
Lauren Boebert, Colorado             Melanie Stansbury, New Mexico
Russell Fry, South Carolina          Eleanor Holmes Norton, District of 
Anna Paulina Luna, Florida               Columbia
Chuck Edwards, North Carolina        Raja Krishnamoorthi, Illinois
Nick Langworthy, New York            Ro Khanna, California
                        
                        
                        C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page
Hearing held on March 29, 2023...................................     1

                               Witnesses

                              ----------                              

Mr. Oliver McPherson-Smith, Director for Energy, Trade, and 
  Environmental Policy, American Consumer Institute Center for 
  Citizen Research
Oral Statement...................................................     4
Ms. Mandy Gunasekara, Director, Center for Energy & Conservation, 
  Independent Women's Forum
Oral Statement...................................................     6
Dr. Mark Paul (Minority Witness), Assistant Professor of 
  Economics, Rutgers University
Oral Statement...................................................     7

 Opening statements and the prepared statements for the witnesses 
  are available in the U.S. House of Representatives Repository 
  at: docs.house.gov.

                           Index of Documents

                              ----------                              

No additional documents were entered into the record for this 
  hearing. 

 
                        FUELING UNAFFORDABILITY:
                     HOW THE BIDEN ADMINISTRATION'S
                    POLICIES CATALYZED GLOBAL ENERGY
                   SCARCITY AND COMPOUNDED INFLATION

                              ----------                              


                   Wednesday, March 29, 2023

                        House of Representatives

               Committee on Oversight and Accountability

                Subcommittee on Economic Growth, Energy 
                     Policy, and Regulatory Affairs

                                                   Washington, D.C.

    The Subcommittee met, pursuant to notice, at 2:48 p.m., in 
room 2154, Rayburn House Office Building, Hon. Pat Fallon 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Fallon, Donalds, Boebert, Edwards, 
Langworthy, Bush, Brown, and Stansbury.
    Mr. Fallon. This hearing on the Subcommittee on Economic 
Growth, Energy Policy and Regulatory Affairs will come to 
order. I want to welcome everyone for coming.
    Without objection, the Chair may declare a recess at any 
time.
    I recognize myself for the purpose of making an opening 
statement.
    In the 118th Congress, the Subcommittee on Economic Growth, 
Energy Policy and Regulatory Affairs has taken its mission 
seriously to conduct oversight over the Federal Government. 
This Subcommittee has already held two hearings examining the 
Biden Administration's misuse of government power. We have 
explored how this Administration continues to erode our 
country's energy security by depleting the Strategic Petroleum 
Reserve. And we have also looked into the Administration's 
abuse of the administrative state, burdening the Second 
Amendment rights of law-abiding gun owners. Today, we are going 
to turn to the Biden Administration's policies on inflation and 
energy prices.
    Every American is suffering from inflation. I think we can 
all agree on that, and the rising energy prices, but Americans 
with low and fixed incomes are being the hardest hit. This 
focus stands in stark contrast to the last Congress where the 
Democrats' work in this hearing room focused on, believe it or 
not, investigating flea and tick collars and an NFL football 
team. In fact, we had two hearings on that because somebody had 
a bee in their bonnet about Daniel Snyder. So, I am proud to 
lead the third Committee hearing and look forward to focusing 
more on important matters to the American people.
    And, as I stated today, we are examining the inflation's 
effect on energy prices, and inflation--you know, the primary 
driver for inflation is going to be government spending. And if 
you inject trillions of dollars into the money supply with a 
finite amount of goods and services, those things are going to 
end up costing more. And what inflation is, at the end of the 
day, is an invisible, or not an invisible, very visible tax on 
us all, on everything that we need and everything that we buy.
    Unfortunately, under the Biden Administration, the price of 
utilities and goods and services have jumped from month to 
month. You know, it is burdening household budgets and 
increasing economic uncertainty. The average American 
household's purchasing power has decreased by almost $5,000. 
And when President Trump left office, inflation sat at 1.4 
percent, and under Joe Biden, inflation shot up to 9.1 percent 
last summer, which was a 40-year high. So, when inflation was 
at its highest levels, the Energy Index alone rose about 42 
percent. So, it is no surprise that energy price volatility is 
directly tied to the rapid retirement of fossil fuel power 
plants, lags in domestic natural gas pipeline construction, and 
the over reliance on expensive green energy alternatives 
without any plan for a smooth transition from traditional 
energy sources.
    Now, I think a lot of my Democratic colleagues are going to 
say the Putin price hike, it is all Vladimir Putin's fault that 
gas costs more. Well, let us look at some empirical data. On 
January 20, when Joe Biden took office, the average price of 
gasoline in this country was $2.39 and at its high was at 
$5.01. But, before Vladimir Putin got into those tanks and 
headed toward Kyiv, the price of gasoline was $3.61, and today 
it is $3.53, so it is actually ironically slightly lower after 
the invasion. And, cut it the way you will, it is 48 percent 
higher when you buy a gallon of gas today than it was when Joe 
Biden took office.
    So, this began when President Biden did take office and he 
canceled the Keystone XL pipeline right away, and they are 
dragging their feet and they slow walked drilling permits on 
Federal lands and waters. So, unfortunately, at the end of the 
day, Americans with low and fixed incomes are, you know, most 
harshly are feeling the immediate impact of the skyrocketing 
energy prices. And as a result of higher prices, larger 
portions of take-home income must go to daily necessities, 
forcing Americans to choose between feeding their families and 
fueling their cars, receiving healthcare, or even heating their 
homes.
    So, what this hearing is going to do, is we are going to 
examine the relationship between the Biden Administration's 
policies, energy production, and supply as price drivers, and, 
ultimately, the share of overall inflation attributable to 
rising energy prices. So, I want to thank all the witnesses for 
coming today, thank you very much for your participation, and 
we look forward to hearing your testimony.
    And with that, I now recognize Ranking Member Bush for the 
purpose of making her opening statement.
    Ms. Bush. Thank you, Chairman Fallon. St. Louis and I are 
here today to highlight the urgent need for new investments in 
renewable, reliable energy. Instead, Republicans are wasting 
our time on the preposterous and offensive oil industry wish 
list that House Republicans are bringing to the Floor for a 
vote this week as the Polluters Over People Act.
    At our last energy hearing, we considered the global nature 
of inflation and the price hike caused by the pandemic, 
Russia's violent invasion of Ukraine, and supply chains 
shortages. We also discussed how the United States has been 
harmed by a precarious reliance on unsafe and unstable energy 
sources such as coal, oil and gas. For me, and many of my 
colleagues, it is clearer than ever that our best path to 
energy security is to rapidly diminish our reliance on fossil 
fuels. Until we do, Black, Brown, and indigenous communities 
will continue to bear the heaviest burden of this energy crisis 
and our reliance on fossil fuels.
    At the same time, to achieve energy security and 
independence, we need far more public investments in energy 
efficiency and renewable energy. Energy security means regular, 
everyday people can keep their lights on at night, and kids, 
especially Black and Brown kids, can play outside without 
getting asthma. It does not mean securing the profit margins of 
coal barons. In the Polluters Over People Act, House 
Republicans have put forward an alarmingly harmful energy 
policy that will serve as a giveaway to oil tycoons and 
eviscerate the voices of affected communities like mine. This 
bill is so extremist and unscientific that it could only have 
been written by the industry that will profit the most, Big 
Oil.
    The bill will repeal some of the most effective provisions 
of President Biden's Inflation Reduction Act, including 
provisions to eliminate fees on methane emissions, and zero out 
programs to reduce home utility bills. The bill will make oil 
and gas leasing unbelievably cheap and allow companies to 
trample over communities in the blind pursuit of profit. 
Imagine throwing money at companies whose actions are driving 
the climate crisis, and then asking them to monitor themselves 
and calling it policy. The inhumanity is heartbreaking.
    Almost as alarming as the provisions of this bill and the 
false premise of this hearing, many of the bill's provisions 
are the same as they were six years ago. Industry couldn't 
think of anything more favorable, and Republicans have made few 
updates to their energy policy in six years. I suppose if their 
work builds off of industry marketing documents, we would be 
better off if they weren't doing anything at all. But still, I 
would love the opportunity to work with my Republican 
colleagues to invest in energy security and lower prices for 
families. Sadly, they are more interested in economic security 
for corporations that security for people. congressional 
Democrats have a different idea. We intend to do what the 
government was set up to do: spend public dollars supporting 
people and not corporations. We will invest in community-based 
organizations and green jobs. We will build renewable energy 
infrastructure to scale. We will fight and we will win a green 
new deal for everyone. Thank you, and I yield back.
    Mr. Fallon. Thank you. I am pleased to introduce our three 
witnesses today. Oliver McPherson-Smith is Director for energy, 
trade and environmental policy at the American Consumer 
Institute for Citizen Research. His work and research focuses 
on energy and resource-wealthy economies. Mandy, and Mandy help 
me with your last name.
    Ms. Gunasekara. Gunasekara.
    Mr. Fallon. That is not that scary.
    Ms. Gunasekara. It isn't.
    Mr. Fallon. All right. Could you say it one more time?
    Ms. Gunasekara. Gunasekara.
    Mr. Fallon. Gunasekara.
    Ms. Gunasekara. Yes, or just Mandy. Mandy is easy.
    Mr. Fallon. Awesome. That is a cool last name. Mandy 
Gunasekara, my good friend, serves as the Director of Center 
for Energy and Conservation of the Independent Women's Forum. 
Ms. Gunasekara--Ms. G. previously served as the Chief of Staff 
of the United States Environmental Protection Agency and the 
Principal Deputy Assistant Administrator for the EPA's Office 
of Air and Radiation.
    And we have Mark Paul, who is an assistant professor of 
economics at the Edward J. Bloustein School of Planning and 
Public Policy at Rutgers University and a member of Rutgers 
Climate Institute. And I believe you used to teach at UMass, is 
that correct, or were you----
    Mr. Paul. I received my Ph.D. from UMass.
    Mr. Fallon. UMass. OK. Excellent. Well, I attended the 
University of Massachusetts Amherst for one year and then 
transferred to Notre Dame, but I still love my Minutemen and 
our Lacrosse program. I look forward to hearing from each of 
you on this important topic.
    Pursuant to Committee Rule 9(g), the witnesses will please 
stand and raise their right hands.
    Do you solemnly swear or affirm that the testimony that you 
are about to give is the truth, the whole truth and nothing but 
the truth, so help you God?
    [A chorus of ayes.]
    Mr. Fallon. Thank you. Please take your seats. Let the 
record show that the witnesses all answered in the affirmative, 
and we appreciate all of you being here today and look forward 
to your testimony. Again, I want to thank you.
    Let me remind the witnesses that we have read your written 
statements, and they will appear in full in the hearing record. 
Please limit your oral statements to five minutes. As a 
reminder, please press the button on your microphone in front 
of you when you speak so the Members can hear you. And when you 
begin speaking, there is a light in front of you that will turn 
green. After four minutes it will turn yellow, and then when 
the red light comes on, that means wrap it up.
    I recognize Dr. McPherson-Smith to please begin his opening 
statement.

   STATEMENT OF OLIVER MCPHERSON-SMITH, DIRECTOR FOR ENERGY, 
 TRADE, AND ENVIRONMENTAL POLICY, AMERICAN CONSUMER INSTITUTE 
                      FOR CITIZEN RESEARCH

    Mr. McPherson-Smith. Thank you, Chairman Fallon, Ranking 
Member Bush, and other Members of the Subcommittee for inviting 
me here today.
    The Nation's continued economic recovery from the 
coronavirus pandemic has provided a welcome return to family 
and commercial life for millions of Americans. However, this 
recovery has neither been seamless nor balanced. The crude oil 
market provides an indicative case study. U.S. crude oil 
production peaked shortly before the pandemic in November 2019, 
at a monthly average of around 13 million barrels per day. Now, 
while production has gradually recovered from its pandemic low 
of around 9.7 million barrels per day in May 2020, it 
nonetheless has remained below the pre-pandemic peak. However, 
the Nation's lagging oil production only tells half the story.
    Consumers and businesses typically purchase refined 
petroleum products, not crude oil. America's capacity to refine 
its own petroleum products has undergone an even starker 
decline. This lower supply of crude oil and diminished capacity 
to refine it unfortunately coincided with an increase in demand 
attributable to the repeal of pandemic restrictions and the 
resumption of commercial, leisure, and industrial 
transportation. This mismatch between supply and demand is 
evident in the persistently higher gasoline prices of the past 
two years.
    Oil production is determined by a variety of technical, 
economic, and political factors at the local, national, and 
international levels. Nonetheless, Federal policy has a 
tangible effect on shaping production. Since January 2021, the 
Federal executive branch of government has sought to inhibit 
and disincentivize the domestic production and refining of 
fossil fuels. These efforts include and are not limited to the 
cancellation of the Keystone XL pipeline, an ultimately 
unsuccessful moratorium on oil and gas leases on public land; 
the outlawing of oil and gas development within 2.8 million 
acres of the National Petroleum Reserve in Alaska; and the 
continued absence of an offshore oil and gas leasing schedule 
following the expiry of the 2017 to 2022 schedule.
    Additionally, a range of proposed or impending policies at 
the Federal level serve to disincentivize investment in future 
productive capacity within much of the American energy 
industry. From the Securities and Exchange Commission's 
proposed environmental, social, and governance, or ESG, 
disclosure, to the Inflation Reduction Act's impending methane 
tax on oil and gas producers, these policies reduce investment 
in the short term and risk raising consumer prices in the long 
term.
    Had the Biden Administration simply mirrored the Trump 
Administration's oil production growth rate, daily oil 
production would have reached almost 15 million barrels by 
December 2022. This represents a hypothetical shortfall of 
almost 3 million barrels each day by December 2022, a 
significantly larger amount than the average OPEC members' 
production of 2.23 million barrels per day in that same month.
    In aggregate, this hypothetical scenario would have 
facilitated the additional production of more than 850 million 
barrels of oil since January 2021. This sits in stark contrast 
to the Biden Administration's recent sale of 180 million 
barrels from the SPR. The absence of this oil left the American 
economy and American families vulnerable to international oil 
market fluctuations, such as that associated with Russia's 
renewed and unjustified invasion of Ukraine.
    The academic literature on the pass-through of energy 
prices into overall inflation is varied and vast. Energy is 
used by virtually every business in the United States. 
Consequently, elevated energy costs appear not only as 
individual components within the measurements of inflation but 
also within consumer prices of goods and services via higher 
business costs of lighting, heating, and transportation.
    Finally, I would like to draw your attention to a potential 
remedy to the enduring consumer challenge of energy inflation, 
which is a Federal all-of-the-above energy policy. Facilitating 
greater energy production from all sources, whether they be 
fossil fuel, renewable, nuclear, or otherwise, enables consumer 
and community choice competition among companies, competition 
among technologies, innovation, and lower prices. I thank you 
again for the opportunity to testify today and look forward to 
your questions.
    Mr. Fallon. Thank you. Ms. Gunasekara, you are recognized 
for your statement.

 STATEMENT OF MANDY GUNASEKARA, DIRECTOR OF CENTER FOR ENERGY 
          AND CONSERVATION, INDEPENDENT WOMEN'S FORUM

    Ms. Gunasekara. Thank you. Chairman Fallon, Ranking Member 
Bush, Members of the Subcommittee, thank you for the 
opportunity to participate in today's hearing.
    Rising energy costs and inflation have created immense 
financial burdens on the American people. One in six Americans 
is behind on their electricity bills. The cost for an average 
household has gone up by around $10,000 over the past two 
years. Everyday goods, like groceries and gas, are exorbitantly 
expensive. Beyond high costs, Americans have had to endure 
supply chain disruptions, creating shortages on baby formula, 
over-the-counter cold medicine for children, women's hygiene 
products, and many more. This constant drip of daily hardship 
is suppressing opportunity, and the reality is weighing heavily 
on the American psyche.
    A poll came out yesterday revealing that 78 percent of 
parents fear their children will be worse off than them. Now, 
these outcomes are not the result of some uncontrollable forces 
outside the reach of our national leaders. It is actually the 
result of bad policies being implemented and pushed by the 
Biden Administration, and among the worst is the ongoing war 
against American energy. Our lives and our economy run on 
energy. Eighty percent of this energy that we use comes from 
coal, oil, and natural gas.
    Since January 2021, President Biden and Democrats in 
Congress have taken over 125 actions aimed at shutting out the 
use and development of the very energy resources we need more 
of, not less. Suppressing domestic supply and setting America 
on a path toward energy scarcity has exacerbated inflation and 
made costs skyrocket. These cost increases are extremely 
pervasive and impact Americans in very different ways. I would 
like to highlight a few.
    Low-income Americans are the hardest hit by high energy 
prices. They are being forced to choose between heating their 
homes or putting food on the table. One recent survey found 
that in the face of high energy costs, 36 percent of low-income 
households will go without food for a day, 41 will go without 
medical care or dental care, 31 percent will not fill a 
prescription or take less to try and stretch the supply. These 
short-term consequences are unacceptable and truly 
heartbreaking, and in the long run, it can lead to more poverty 
and longer-term generational dependence.
    For small businesses on Main Street, it is getting harder 
to keep afloat. They struggled through COVID only to be met 
with increased overhead in the form of higher electricity 
bills. Power disruptions caused by an increasingly unreliable 
grid brings productivity to an absolute halt in some instances. 
They have also been met with higher taxes, and they have had to 
deal with the woke investment trend of ESG, which inhibits 
access to credit or investors if they don't check the right 
boxes.
    Also, middle-class moms, or as I like to call them, the 
CEOs of kitchen table economics, are forced to make tough 
decisions. Typically, they are not forced to choose between 
essentials like heating and eating, but they are forced to make 
tough decisions that impact the quality of life of which they 
have worked so hard to achieve. Moms are nervous about filling 
up their gas tanks and thinking about what they can cut from 
their planned dinner. Moms are worried that if their son or 
daughter makes the team that they have been working so hard to 
actually make, are they going to be able to afford the 
equipment or the uniform? They are foregoing trips to see 
family members, especially during holidays, where it has become 
so expensive, and they have canceled summer vacations. It is a 
sinking feeling for so many parents that have worked hard to 
live in a good, safe community, but have to cut back on how 
their children get to actively engage and enjoy that community 
because it is too great a financial burden to bear.
    This is so frustrating because none of this is necessary. 
It is not required to improve the environment, it is not 
required to lower emissions, and it is not required to ensure 
we create a planet future generations can continue to enjoy. We 
know how to expand our energy productivity while protecting the 
environment. Just a few years ago, we were top energy 
exporters, and we continue to cut air pollution, cleanup water 
quality, and we lead the world in cutting greenhouse gas 
emissions. Best of all, our economy was experiencing massive 
growth.
    There are numerous policy options available to fix the 
current situation. We need to be building a future of energy 
abundance. Congress can help by prioritizing solutions that 
strengthen our energy system with proven reliable technologies 
while encouraging continued innovation. We do not need to ban 
certain technologies or cancel U.S. coal, oil, or natural gas. 
With the right policies in place and a pragmatic mindset from 
our leaders, we can build strong energy systems that reliably 
deliver low-cost energy whenever it is needed.
    Again, thank you for your time. It is an honor to be here, 
and I look forward to your questions.
    Mr. Fallon. Thank you very much. The Chair recognizes Dr. 
Paul for his statement.

   STATEMENT OF MARK PAUL, ASSISTANT PROFESSOR OF ECONOMICS, 
   EDWARD J. BLOUSTEIN SCHOOL OF PLANNING AND PUBLIC POLICY, 
                       RUTGERS UNIVERSITY

    Mr. Paul. Chairman Fallon, Ranking Member Bush, and Members 
of the Subcommittee, thank you for inviting me to testify 
today. My research agenda concerns the economic and policy 
pathways to achieve decarbonization in the United States. My 
testimony today is based on my scholarship, and the views I 
present with you are my own.
    Climate change is the greatest crisis humanity has faced. 
It poses an existential threat to the well-being of the 
American people and to the strength and stability of the 
American economy. If we continue with business as usual, the 
planet will be on track to warm by three degrees Celsius above 
pre-industrial levels by the end of the century. The effects of 
this level of warming would be catastrophic, causing severe 
damage to the physical and economic security of the Nation.
    At the same time, recent price spikes in energy, fueled by 
Russia's invasion of Ukraine, geopolitical instability, and 
corporate price gouging have indeed highlighted the need to 
transition to a clean energy economy to protect consumers and 
achieve our shared goals of economic prosperity and energy 
independence.
    My testimony will focus on three points. First, the 
economic costs of inaction are substantially larger than the 
cost of rapidly and equitably decarbonizing the economy. 
Second, the evidence is clear that an investment-led 
decarbonization effort, as is being undertaken following the 
passage of the Inflation Reduction Act, will create millions of 
good jobs, strengthen the economy, and lower energy costs for 
American families. And third, decarbonizing the economy will 
bolster domestic energy security and reduce inflationary 
pressures associated with historically volatile fossil fuel 
prices, thus promoting economic and national security goals. 
Indeed, high energy prices are not the result of the energy 
transition, but are fueled by a combination of international 
conflict, corporate profiteering, and supply chain disruptions.
    I begin with the costs of business as usual. Climate change 
already presents a clear and present danger to American lives 
and livelihoods. In 2017, for example, extreme weather events 
linked to climate change were responsible for over $300 billion 
in damages, wiping out more than half of the Nation's economic 
growth that year. In a world that warms to 3C or more, recent 
studies estimate that that could reduce GDP by 10 percent 
permanently. To avoid these effects, peer-reviewed research 
finds that limiting warming necessary to such levels would 
require no new fossil fuel extraction and a managed wind down 
of existing extraction.
    Turning to my second point, decarbonization should be 
understood as an economic opportunity for the United States. 
Empirical studies find that just in GDP terms, decarbonization 
would bring trillions in benefits, including creating upwards 
of 25 million new American jobs in the next 15 years. What is 
more, this transition would help the average American family 
save between $1,000 and $2,500 a year on energy bills. 
Decarbonizing the economy is also crucial to bolster domestic 
energy security and help insulate the United States from 
international conflicts that have repeatedly led to energy 
instability. Putting the Nation on a path toward 
decarbonization must be understood as a path that prioritizes 
both national security and economic prosperity.
    While the United States has long sought energy 
independence, increasing extraction of fossil fuels has not 
achieved these goals and simply cannot due to the international 
nature of fossil fuel commodity markets. The clean energy 
transition, on the other hand, will delink the U.S. economy 
from hostile authoritarian regimes and position the U.S. to 
support other nations in doing the same.
    Finally, I would like to talk briefly about inflation. 
Energy played a key role in recent inflationary events. Most of 
the price increase in energy markets were first experienced 
across nations and, thus, not a unique phenomenon to the United 
States, and second, were largely attributable to the illegal 
Russian invasion in Ukraine.
    Complementary research finds that a substantial portion of 
energy price increases faced by American consumers can be 
attributable to corporate profiteering, a key component of 
inflation today. Big Oil took advantage of the crisis to rake 
in record profits. These price increases disproportionately 
benefit low-income communities and communities of color, 
further adding to inflation, inequality, and macroeconomic 
instability. There is strong evidence that Biden's use of the 
SPR along with the passage of the Inflation Reduction Act has 
put downward pressure on energy prices, thus reducing 
inflationary pressures in the economy. The Treasury Department 
estimates that the SPR reduced the price of gas by $0.20 to 
$0.40 per gallon.
    Thank you for the opportunity to speak with you today, and 
I look forward to your questions.
    Mr. Fallon. I want to thank all the witnesses again for 
your testimony, and I think that we are all aware that 
inflation remains three times higher, you know, than the target 
rates here. So, I have a question for Dr.--and I apologize if I 
called you ``mister'' before--but Dr. McPherson-Smith. Has the 
United States reduced our carbon emissions or increased our 
carbon emissions over the last roughly 20 years?
    Mr. McPherson-Smith. Consistently decreased.
    Mr. Fallon. Is it in line with your research that it is 
about a 20 percent decrease over the last 20 years?
    Mr. McPherson-Smith. Ballpark, yes.
    Mr. Fallon. OK. And has China increased or decreased their 
carbon emissions over the last same period of time, 20 years or 
so?
    Mr. McPherson-Smith. In an unparalleled fashion, increased.
    Mr. Fallon. Increased. Over 100 percent, 200 percent maybe 
even.
    Mr. McPherson-Smith. It is going up. I mean, it depends how 
far you want to go back, but year-on-year, we are looking 
ballpark figure, 10 percent.
    Mr. Fallon. Why do you think our friends on the other side 
of the aisle don't ever talk about China's emissions or India's 
emissions and it is always the United States' emissions, even 
though we produce energy in the cleanest fashion in the world?
    Mr. McPherson-Smith. Because virtue signaling doesn't win 
elections.
    Mr. Fallon. And you know, we are all on the same planet. 
The United States isn't, you know, its own planet. We are just 
one of the countries. So, Mr. McPherson, Dr. McPherson-Smith, 
please explain how high energy prices lead to higher overall 
inflation.
    Mr. McPherson-Smith. So, consumers use energy. They use it 
to gas up their car or they use it to power up their Tesla, but 
we also have to remember that businesses themselves use energy. 
So, unless you are living on a subsistence farm, for example, 
you are probably going to shop in a physical shop, or maybe you 
use Amazon, whatever. These companies transport their goods and 
services. They have to keep the lights on themselves, and so 
these costs flow through. It is known as flow-through within 
inflation.
    Mr. Fallon. So, energy just touches everything, right? I 
mean, the cars, the fuel, the trucks, the stores, that people 
are driving to and from work. How did the impact of energy 
prices on inflation change from the Trump Administration to the 
Biden Administration?
    Mr. McPherson-Smith. So we have seen inflation, energy 
inflation itself, up about 40 percent under the current 
Administration. That is from taking office in January 2021 up 
until about January of this year. That is down from the 60 
percent we saw last summer.
    Mr. Fallon. You think this--the difference was a result of 
deliberate policy choices?
    Mr. McPherson-Smith. If it were an accident, it would be 
spectacular in size and scale.
    Mr. Fallon. Ms. Gunasekara, what energy policies did the 
Biden Administration implement that catalyzed energy price 
inflation?
    Ms. Gunasekara. Well, there is certainly a number. I think 
what really set the table was the canceling of the Keystone XL 
pipeline, but I think most offensively, it was shifting the 
role of the Federal agencies. Instead of looking at 
environmental problems, in particular, and fixing them by 
making them more efficient, using the might of the Federal 
Government, through its regulatory role, to squeeze certain 
industries out of existence or to squeeze their operations in a 
sense to where they become so expensive that it becomes 
difficult to extract and utilize the very resources that we 
need more of.
    Mr. Fallon. And who is impacted by high energy prices and 
inflation the most?
    Ms. Gunasekara. Well, certainly those that are the most 
vulnerable when it comes to economic standing in this country. 
The low-and fixed-income individuals are the ones that are 
impacted the worst. As I expressed, it truly forces them in a 
situation where they have to choose between heating their homes 
in the dead of winter or putting food on the table. And there 
are all sorts of other damaging decisions that they will 
ultimately make because of the impact of high energy prices.
    Mr. Fallon. Yes, I mean, $5,000 is nothing to sneeze at as 
far as the purchasing power that is lost in real dollars. The 
Biden Administration has championed, I think it is clear, a 
radical climate change agenda at the expense of economic 
prosperity for all Americans and falsely advertised their 
efforts as a necessity for economic mobility. Do you believe 
that forcing low-income Americans to choose between gas in 
their tanks to get to work or putting food on the table for 
their families sounds like environmental justice to you?
    Ms. Gunasekara. No. I think that it is distracting the 
actual impact, which is an economic injustice. And I have got a 
board member that works under the Center, who has looked 
extensively into this, and what she often says is that high 
energy prices impede upward mobility, especially for low-and 
fixed-income households. So, to suggest that some version of 
climate justice is to make lives more expensive while ignoring 
the real economic impact that that has on the most vulnerable 
members of our society, again, I think that is a distraction, 
and it is not indicative of thoughtful policy we should be 
focused on if we truly want to help people live better lives.
    Mr. Fallon. Thank you very much, and you did that exactly 
on the five-minute time. I appreciate that. I now recognize 
Ranking Member Bush for five minutes of questions.
    Ms. Bush. Thank you, and thank you to our witnesses for 
being here. Despite House Republicans' claims to the contrary, 
we understand that the United States is currently the world's 
largest oil and natural gas producer. The U.S. is also an 
enormous consumer. These embarrassing facts drive energy 
insecurity in this country, and it is important to understand 
how dangerous our reliance on fossil fuels--how that affects 
regular people.
    In St. Louis, in my community, we experience energy 
insecurity in a myriad of ways. For me, when I was a young 
single mom of two, I became aware of the vast disparity in 
energy security. My electricity and heating bills were at times 
$1,800 a month for just one of them, which was double my rent. 
These high bills made my family struggle. When we want to talk 
about understanding economic justice or environmental justice, 
let us talk to people who actually experience it and have which 
some of those folks are sitting up here.
    A high utility bill meant I had to choose between paying 
off my electric bill or buying food for my babies. One winter, 
while my kids were still babies, when the utility bill was so 
high, the company shut off our heat and wouldn't make a payment 
plan, and we went the entire winter without heat, and because I 
connected my home to heaters, we almost burned the house down. 
I will never forget that cold, I will never forget that energy 
insecurity, but thank goodness my kids will never remember.
    Last year, St. Louis experienced two 1-in-1,000-year 
flooding events within three days. Our community was 
devastated, and we are still rebuilding homes and 
infrastructure. The event was made far more likely and severe 
by the burning of fossil fuels that is driving this climate 
crisis. In St. Louis, we know a lot about energy insecurity. We 
have seen power outages and electric wires underwater, as we 
have seen in other places. We have gotten asthma from dirty 
energy, which I have. We have become unhoused due to high 
energy bills, which I have.
    So, Dr. Paul, which is more affordable, let me ask you, 
solar energy, oil, or gas?
    Mr. Paul. According to recent data, renewables are 
substantially cheaper than new fossil fuels. So, to give you 
some numbers here, utility-scale solar is one-third cheaper 
than new natural gas here in the United States, and offshore 
wind is roughly 40 percent cheaper. To boot, solar, on average, 
utility-scale solar goes only one percent over budget. On 
average, wind goes four percent over budget. Fossil fuel 
projects, on the other hand, go on average 33 percent or more 
over budget. So, renewables are substantially cheaper.
    Ms. Bush. Thank you. So, what is more likely, Dr. Paul, to 
give my children asthma, a gas facility or a wind turbine?
    Mr. Paul. Unfortunately, there is strong evidence to 
suggest that fossil fuels are directly linked to asthma in the 
United States. Households, for instance, with gas stoves in 
their houses experience far higher rates of asthma for their 
children, double-digits higher. Wind turbines, on the other 
hand, are not associated with asthma or other public health 
concerns.
    Ms. Bush. Thank you. Dr. Paul, which is more likely to 
fluctuate, solar energy in a country where the sun rises every 
day or limited fossil fuel resources that are subject to global 
spikes from wars and pandemics?
    Mr. Paul. There is strong evidence to suggest that prices 
driven by a clean and renewable grid will be substantially more 
stable and will help delink the United States' economy from 
international conflicts, those that drive repeated price spikes 
for fossil fuels. So, both this most recent event with Russia, 
as well as the 1978-1979 crisis, which that inflationary crisis 
was also driven by political instability this time in the 
Middle East.
    Ms. Bush. Thank you. Finally, I want to talk about the 
scale of our need. To achieve energy security, we know we not 
only must never develop new fossil fuel infrastructure again, 
but we also must invest in public renewable energy. So, lastly, 
Dr. Paul, what scale of further public investments are needed 
to deliver energy security and stem the climate crisis?
    Mr. Paul. If we actually want to decarbonize the country as 
we have promised to do, by rejoining the Paris Climate 
Agreement, then we need to invest substantially more in deep 
decarbonization efforts. The Inflation Reduction Act is a key 
downpayment, but is just that, a downpayment. We need hundreds 
of billions of dollars more in public investments to direct the 
economy toward decarbonization and improve the health and 
affordability of our national economy.
    Ms. Bush. Thank you, and I yield back.
    Mr. Fallon. Thank you. The Chair recognizes Congresswoman 
Boebert for her questions.
    Mrs. Boebert. Thank you, Mr. Chairman. Today, we are here 
to conduct some oversight on the Biden Administration's 
policies that are regulating our communities into poverty. The 
Biden Administration's all-out war on domestic American energy 
has resulted in record high inflation, a crisis that has 
shifted the cost of Joe Biden's multitrillion dollar spending 
spree to the American taxpayers. While my colleagues on the 
other side of the aisle want to play the blame game, they seem 
to be pointing the finger at everyone but themselves.
    It is really unfortunate to hear energy crisis stories, 
energy poverty stories where a mother has to choose between 
feeding her family or paying the electric bill. But, that is 
where more than 20 million Americans are right now because of 
Joe Biden's energy policies that he enforced on Americans, 
January 20, 2021, where we were energy secure, and he 
completely surrendered that energy security. This week, House 
Republicans are pushing back against the left's anti-American, 
anti-energy policies to pass H.R. 1 to put us back on track 
toward energy independence and, in turn, reduce inflationary 
pressures and lower costs for families.
    Dr. Paul, in your recently released paper, `An Economist's 
Case for Restrictive Supply Side Policies', you advocate for 
nationalizing the United States' oil and gas industry. Do you 
still agree with that statement?
    Mr. Paul. Yes. In that research paper, we highlight 10 
policies that would facilitate and manage decarbonization.
    Mrs. Boebert. So, let me get this straight, Dr. Paul. So, 
you support a communist-style takeover of our oil and gas 
industry because that is exactly what this is, nationalizing 
our oil and gas industry.
    Mr. Paul. The majority of countries around the globe that 
have substantial fossil fuel reserves have public ownership of 
those reserves so that they can manage it----
    Mrs. Boebert. This is a communist-style takeover, and we 
have even heard from my colleagues on the other side of the 
aisle that they never want to invest in fossil fuels and the 
infrastructure of it here in America again, which is quite 
alarming.
    Dr. McPherson, prices for heating American homes rose by 
more than 27 percent in the past year. And in my home state of 
Colorado, we had a very cold winter, which means these 
increased costs hit even harder for the people that live in my 
district, in Colorado's 3d District. Do you think that the 
Biden Administration's proposal to place a ban on gas stoves 
nationwide will reduce energy prices for people in my district?
    Mr. McPherson-Smith. No, it is going to force them to, 
unfortunately, have to purchase a new stove if that were to 
come to pass.
    Mrs. Boebert. Yes, and we have seen this Administration 
make other extreme proposals for families concerned about 
energy costs, including Mayor Pete, who had the nerve to say 
that families concerned about high gas prices should just shell 
out $55,000 for an electric vehicle. So, we have some 
politician saying, you know, just go buy brand new electric 
appliances, others saying completely ditch your car and get an 
electric vehicle. Now, Dr. McPherson, do you think that simply 
buying new electric vehicles, as Mayor Pete recommended, is a 
realistic energy solution for American families living month-
to-month and already struggling to pay their bills?
    Mr. McPherson-Smith. There are hidden inflationary effects 
within electric vehicles, which in the right place, in the 
right context, for the right people, are excellent. But we have 
to remember, to fill up an electric vehicle, at the moment, it 
takes about 30 minutes or so to fill up a tank, so to speak. 
You can get about 170 miles out of that. But if you have got 
kids, for example, you got a family, you have got somewhere to 
be, you have got to be at work, that half an hour is going to 
add up.
    Now, if you are trying to transport freight, for example, 
across the United States, half an hour every time to fill up is 
going to add up. Now, that is either going to be reflected in 
workers' wages because they are going to demand more because 
that time and their time should be compensated, so that will be 
inflation, or workers won't be compensated for all that time 
that adds up. There are hidden inflationary effects that we 
need to think seriously about.
    Mrs. Boebert. Thank you, Dr. McPherson. And we have seen 
states like California say that we want to ban electric 
vehicles by 2035, and then the next week saying, hey, please 
don't charge your electric vehicles because our grid cannot 
handle this. You know, with this, there is a lot of talk of 
decarbonization going on. I am pro-forest management, which 
would certainly help with reduce of carbon emissions that are 
emitted with the catastrophic wildfires. And I would encourage 
the witnesses to also just consider the fact that these solar 
panels require mining to be done in China-owned mines in the 
Congo for that cobalt where that child and slave labor is being 
used. Thank you, Mr. Chairman, I yield.
    Mr. Fallon. The Chair recognizes Congresswoman Brown for 
five minutes.
    Ms. Brown. Thank you, Mr. Chairman. Now, I have to admit, I 
am a little confused as to why we are having the same hearing 
again. We held an almost identical hearing just three weeks 
ago. And at that hearing, we considered factors driving 
inflation and gas prices, among them a once-in-a-century 
pandemic and Russia's assault on Ukraine. Then, like now, we 
discussed the Biden's Administration's exceptional action to 
counter these twin crisis and bring solutions to the American 
people. At the hearing three weeks ago, we sadly heard the same 
misinformation about the Strategic Petroleum Reserve and the 
status of American energy independence from my friends on the 
other side. Now, I am happy to set the record straight once 
again.
    The Biden Administration took bold and necessary action to 
secure America's energy needs in a time of international 
disruption. We had no rolling blackouts, our gas prices came 
down, and inflation is receding. This should be credited to the 
Administration, though my colleagues hold regular hearings to 
grasp at straws and make it appear otherwise. Not only did the 
Biden Administration and congressional Democrats mitigate 
impacts in the short term, but we set the country on a brighter 
path. Due to the Inflation Reduction Act, 99.6 percent of 
businesses in Ohio will be eligible for tax credit on solar 
power installation. That means money into pockets, all while 
addressing the climate emergency. The Inflation Reduction Act 
will also provide grants that allow the average new homeowner 
in Ohio to save 12 percent on their utility bills.
    So, Dr. Paul, how have we addressed American energy needs 
and the climate crisis in recent legislation, like the American 
Rescue Plan and the Inflation Reduction Act?
    Mr. Paul. Thank you for those questions. I believe there 
are two things that the Biden Administration has done that have 
helped promote energy security and stability for households. 
One is helping put money in needy American households' pockets. 
By pursuing a economic agenda that prioritizes low-income 
workers across this Nation, we are helping lift wages so that 
the Biden Administration can ensure that people can afford 
their bills. Second, by pursuing a clean and renewable domestic 
energy sector, they are trying to make energy both more 
affordable and more reliable and actually reduce energy 
poverty.
    The main challenge right now that we see associated between 
inflation and energy is the fact that fossil fuel firms are 
still profiting in record ways.
    Ms. Brown. Thank you for that. Now, Dr. Paul, how would 
Republican energy proposals, like expanding fossil fuel 
production, gutting environmental review regulations, and 
eliminating the Greenhouse Gas Reduction Fund, exacerbate the 
climate change in the near future?
    Mr. Paul. Unfortunately, Republican plans are intended to 
increase the extraction of fossil fuels. The IEA cites that if 
we are to meet our goals of limiting warming to 1.5 degrees 
Celsius, no new extraction can occur. Further, research 
published in the Journal of Science notes that if we are to 
meet our warming goals, we actually need to develop a plan for 
a managed wind down of already-existing extraction. So, there 
is simply no way we can meet our global warming goals and 
increase the extraction of fossil fuels. Further, since 
renewables are cheaper, we will be locking in expensive, dirty, 
polluting energy for current and future generations that will 
harm both the health and economic stability of the Nation.
    Ms. Brown. Thank you, again. So, I will close with this. 
Congressional Democrats and the Biden Administration continue 
to work tirelessly to address the energy needs of the American 
people, while responsibly addressing the climate emergency. It 
is my sincere hope that we can move toward bipartisan solutions 
better for the environment and our constituents. And with that, 
Mr. Chairman, I yield back the balance of my time.
    Mr. Fallon. Thank you. The Chair recognizes Congressman 
Edwards for his five minutes.
    Mr. Edwards. Thank you, Mr. Chair. Dr. McPherson, you 
referenced ESG scores in your opening comments. How could ESG 
metrics be making energy more expensive?
    Mr. McPherson-Smith. Sure. So, now, there are a variety of 
different metrics out there, so we need to be somewhat 
specific. But, generally speaking, the SEC, by its own 
admission, is for the proposed disclosure, will have billions 
upon billions of dollars in compliance costs, first and 
foremost. So, there are additional costs to businesses across 
the board, which will trickle down to consumers. In addition to 
that, though, depending on how the ESG measure is structured, 
it would be very easy to rank lower companies that do produce 
greenhouse gas emissions. That would stymie investment, make it 
more expensive for them to borrow. Those higher borrowing costs 
for CapEx, or whatnot, would once again be passed through to 
consumers.
    Mr. Edwards. And can you tell us how the Inflation 
Reduction Act provides billions to fund green energy 
initiatives, and are those initiatives currently bringing down 
the price of energy?
    Mr. McPherson-Smith. So, the price of energy still remains 
far above what it was when President Biden took office by about 
40 percent or so. If one were to argue that the IRA is reducing 
costs, we are yet to see it in a substantial way vis-a-vis when 
President Biden took office.
    Mr. Edwards. And are there any hurdles that you see to 
sourcing the raw materials needed to implement the renewable 
energy initiatives outlined in the Inflation Reduction Act?
    Mr. McPherson-Smith. The United States has a wealth of 
natural resources, and, in theory, we could mine these 
resources here at home. However, due to onerous restrictions, 
the NEPA process, capricious removals of land from leasing, all 
things we have seen under the Biden Administration, 
unfortunately it just takes far too long. So, on average, it is 
believed that it can take between five and seven years to 
permit a mine here in the United States. In Canada and 
Australia, they can do it in three to five years.
    We do not need to repeal all of our environmental 
regulations. We need to protect the environment, but we also 
need to learn from comparable countries like Canada, like 
Australia, who can do it just so much quicker and in a 
responsible way.
    Mr. Edwards. And Dr. McPherson, President Biden has just 
proposed a $6.8 trillion budget. If fully implemented, how 
would that budget effect inflation?
    Mr. McPherson-Smith. It is a simple question of supply and 
demand when it comes to energy. We know over the past few 
years, the past two years, to be specific, about 25 percent of 
the inflation that we have seen is either related to direct 
energy costs or that pass-through that affects businesses that 
then affects consumers. Now, if the Biden Administration were 
to implement that budget, but maintain its current energy 
policies, that will increase demand for energy across the 
board, wherever it is from, but stymie supply. That is going to 
push prices higher.
    Mr. Edwards. Not good news for folks back in my district. 
Last question, Dr. McPherson, President Biden said in 2021 that 
inflation was just temporary. Did that end up being true?
    Mr. McPherson-Smith. I mean, maybe it is a question of 
semantics because it is still here.
    Mr. Edwards. All right. Thank you, Mr. Chair. I yield.
    Mr. Fallon. The Chair recognizes the gentlelady from New 
Mexico, Ms. Stansbury.
    Ms. Stansbury. Thank you, Mr. Chairman, and I want to greet 
everyone who is here with us today, and thank you, our 
witnesses, for coming to testify today.
    I want to just take a few moments to really talk about what 
drives global oil and gas prices and how that impacts domestic 
production. So, Dr. McPherson-Smith, I really appreciate you 
being here and sharing your thoughts on the macro situation 
with respect to oil and gas, but let me just ask you very 
briefly, are you familiar with the Permian Basin?
    Mr. McPherson-Smith. Yes.
    Ms. Stansbury. Yes. So, the Permian Basin is the largest 
unconventional oil and gas basin in the United States, which is 
actually in New Mexico, which is my home state as well as 
Texas. And have you ever been there?
    Mr. McPherson-Smith. I have not.
    Ms. Stansbury. And are you aware of the astronomical growth 
in drilling that has happened in the Permian Basin over the 
last decade-and-a-half?
    Mr. McPherson-Smith. Yes.
    Ms. Stansbury. You are. So, are you aware of how many wells 
were actually in operation in the basin in 2010 when this huge 
increase in production began. Take a stab.
    Mr. McPherson-Smith. I will trust you to inform me of that.
    Ms. Stansbury. No idea, right? So, 350 wells were in 
production in 2010. How many wells do you think are in 
production as of last year?
    Mr. McPherson-Smith. Again, I trust you to inform us.
    Ms. Stansbury. Well, I appreciate that. I know you are here 
to be an expert witness for us. As of 2021, there were 4,524 
wells in the Permian Basin. That is a 1,292-percent increase in 
the number of wells in the Permian Basin. And Dr. McPherson, do 
you know why there was such an astronomical increase in 
production in the Permian Basin?
    Mr. McPherson-Smith. It sounds like a lot of jobs were 
created, and there was a high demand for work, a high demand 
for oil.
    Ms. Stansbury. So, you don't know. So, the reason why there 
was such an astronomical increase in production is because of 
development of technologies that allowed for horizontal 
drilling and for increased production in formations like the 
Permian, which is why domestic energy production during that 
decade went through the roof and why the United States became 
one of the largest oil and gas producers in the world. Now, I 
would expect our expert witnesses who are here to testify on 
oil and gas markets to understand what is actually driving 
global markets and production. Dr. McPherson-Smith, do you know 
how many million barrels a day are being produced by the 
Permian right now?
    Mr. McPherson-Smith. Again, I trust you to inform us 
because there are 12 million barrels being produced nationally.
    Ms. Stansbury. Right. 5.6 million of them are coming out of 
the Permian itself. It is one of the largest-producing basins. 
That is an all-time high in production in the United States and 
it was hit in the end of last year, and, in fact, it is going 
to hit an all-time high again this year. In fact, in the 4th 
quarter of this year, it is anticipated that the Permian is 
going to be producing over 6 million barrels of oil a day. This 
will be the largest increase in domestic oil production in the 
history of the United States.
    OK. So, let us talk about facts and what is actually 
happening with domestic production. Now, there was a little bit 
of a dip in that decade-and-a-half of increased production, and 
that happened in the spring of 2020. And Dr. Paul, can you tell 
us what happened in the spring of 2020?
    Mr. Paul. There was a global pandemic and an unprecedented 
recession.
    Ms. Stansbury. Exactly. There was a global pandemic. There 
were lockdowns. People were in their houses. They weren't 
driving their cars. And so, as a response to the market, our 
oil and gas companies reduced their production because oil 
prices dropped so low that spring that it was no longer 
profitable for them to be operating their drill rigs, OK? And 
they had over-capitalized in places like the Permian where they 
had literally sunk billions of dollars into individual wells 
because these are massive operations. These are global 
multinational companies, right? A single well could have $2 
billion in capital actually in the ground due to the horizontal 
drilling infrastructure. But it wasn't profitable at the time 
for them to have increased production because of that over-
capitalization and the price of oil.
    Now, the price of oil, of course, did recover, as we know, 
and, in fact, it not only recovered, but it spiked last year, 
and it spiked last year because of another global incident. Dr. 
Paul, can you tell us why did it spike last spring?
    Mr. Paul. Largely due to the Ukraine war led by Russia.
    Ms. Stansbury. Right. So, we had another global shortage. 
One of our major international oil producers, which is Russia, 
invaded Ukraine. There was another shortage. They worked with 
OPEC+, and then they collaborated to constrain global oil 
production, and so we ended up in a situation with sky-high 
prices and domestic companies that were not producing at their 
capacity. Now, what they have begun to do is they have begun to 
produce again, and we expect to see huge production in the next 
year as we are tackling the climate crisis. Thank you, Mr. 
Chairman. I yield back.
    Mr. Fallon. Thank you. The Chair recognizes the gentleman 
from New York, Mr. Langworthy.
    Mr. Langworthy. Thank you so much, Mr. Chairman, and thank 
you very much for the witnesses for joining us here today.
    In my home state of New York, our former Governor, Andrew 
Cuomo, our current Governor, Kathy Hochul, their 
administrations have halted our ability to safely extract 
natural gas. And, as you may or may not know, my district, New 
York's 23d District with New York's Southern Tier along the 
Pennsylvania line, has the Marcellus Shale in it, you know, 
arguably the Saudi Arabia of natural gas that straddles the New 
York and Pennsylvania line. And while New York state policy has 
crushed my district's ability to create jobs and opportunity 
and lower natural gas costs, the Pennsylvanian economy has been 
transformed in some formerly depressed areas of that state. 
Meanwhile, we suffer, and I want to take some time to look at 
the Biden Administration.
    Ms. Gunasekara, we have heard talk of the Biden 
Administration looking toward mass electrification of the 
energy grid. Now, just last December, Western New York was hit 
with some of the worst blizzards the U.S. has ever seen, the 
deadliest storm I have ever lived through, and I am from 
Buffalo. The storm left thousands without power and nearly 50 
dead. In your opinion, does mass electrification of the energy 
grid pose any risk to the American people?
    Ms. Gunasekara. Yes, absolutely. I think putting too many 
eggs in any one energy basket is a irresponsible approach to 
the importance of energy policy.
    Mr. Langworthy. Yes, as I have warned our Governor that her 
mass electrification plans, you know, could have very easily 
added one, if not two, zeros to our death toll in that horrible 
storm. You know, we need to take moments like that to 
reevaluate this path that we are on. Dr. McPherson-Smith, would 
greater domestic production of natural gas reduce the price of 
energy across the Nation?
    Mr. McPherson-Smith. Absolutely.
    Mr. Langworthy. Now, would the jobs created by domestic 
production of oil and natural gas benefit Americans and the 
economy as a whole?
    Mr. McPherson-Smith. I believe so.
    Mr. Langworthy. And last, the Inflation Reduction Act, it 
provides billions to fund green energy initiatives, but are 
those initiatives actually bringing down the price of energy in 
your opinion?
    Mr. McPherson-Smith. I mean, again, I believe it is perhaps 
too early to say. Again, inflation and energy inflation remains 
above what we encountered when President Biden first took 
office.
    Mr. Langworthy. I mean, my constituents, you know, have 
seen drastic increases in the cost of propane and home fuel 
oil, as well as, you know, their electric bills this year. It 
has been a very difficult winter for, you know, many, 
especially the lower-income or fixed-income seniors that live 
in my district. I am a supporter of an all-of-the-above energy 
approach. However, right now, I don't think that we are in the 
position to shut off, you know, fossil fuel exploration. You 
know, at this point, Dr. McPherson, you know, there have been a 
lot of things posed to you. If you would like to take any time 
to kind of elaborate on other points, I mean, I would welcome 
you to do so.
    Mr. McPherson-Smith. Thank you. To pick up on the point you 
made about the importance of an all-of-the-above energy policy, 
it would be imprudent for us to rush too quickly into any 
solution. We know that energy policy needs to be nuanced. 
Energy policy cannot follow a one-size-fits-all approach for 
the diversity that we see across our country. I challenge 
anyone to point to a similarly developed and industrialized 
country that has such diversity climatically. If you think of, 
between Alaska and Hawaii, for example, they have different 
energy needs, and we need to tailor energy policy and support 
energy development to meet those individual needs.
    Mr. Langworthy. I think it is a sad moment in our country 
when our American President goes on bended knee to the Saudis 
and OPEC nations to beg for more oil when we have the 
opportunity to explore more energy right here at home, and H.R. 
1 will get us on the right direction to do this. I mean, 
Americans don't want handouts from the government. They just 
want a fair shake, and they want the opportunity to make ends 
meet. And greater domestic production on all-of-the-above 
strategy, whether it is natural gas or oil or any of the other 
opportunities that we have to create fossil fuels here at home, 
will do just that. So, I thank you very much for your time and 
your testimony, and I yield back, Mr. Chairman.
    Mr. Fallon. Thank you. I want to thank everybody again, and 
all the witnesses for their testimony today. In closing, I want 
to thank our panelists, again, you know, just very insightful.
    With that and without objection, all Members will have five 
legislative days within which to submit materials and to submit 
additional written questions for the witnesses, which will be 
forwarded to the witnesses for their response.
    Mr. Fallon. If there is no further business, without 
objection, the Subcommittee stands adjourned.
    [Whereupon, at 3:49 p.m., the Subcommittee was adjourned.]

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