[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.]
[all]