[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
UNLEASHING AMERICAN ENERGY, LOWERING ENERGY COSTS, AND STRENGTHENING
SUPPLY CHAINS
=======================================================================
JOINT HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY, CLIMATE, AND GRID SECURITY
AND THE
SUBCOMMITTEE ON ENVIRONMENT, MANUFACTURING, AND CRITICAL MATERIALS
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 7, 2023
__________
Serial No. 118-6
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Published for the use of the Committee on Energy and Commerce
govinfo.gov/committee/house-energy
energycommerce.house.gov
_______
U.S. GOVERNMENT PUBLISHING OFFICE
52-299 PDF WASHINGTON : 2024
COMMITTEE ON ENERGY AND COMMERCE
CATHY McMORRIS RODGERS, Washington
Chair
MICHAEL C. BURGESS, Texas FRANK PALLONE, Jr., New Jersey
ROBERT E. LATTA, Ohio Ranking Member
BRETT GUTHRIE, Kentucky ANNA G. ESHOO, California
H. MORGAN GRIFFITH, Virginia DIANA DeGETTE, Colorado
GUS M. BILIRAKIS, Florida JAN SCHAKOWSKY, Illinois
BILL JOHNSON, Ohio DORIS O. MATSUI, California
LARRY BUCSHON, Indiana KATHY CASTOR, Florida
RICHARD HUDSON, North Carolina JOHN P. SARBANES, Maryland
TIM WALBERG, Michigan PAUL TONKO, New York
EARL L. ``BUDDY'' CARTER, Georgia YVETTE D. CLARKE, New York
JEFF DUNCAN, South Carolina TONY CARDENAS, California
GARY J. PALMER, Alabama RAUL RUIZ, California
NEAL P. DUNN, Florida SCOTT H. PETERS, California
JOHN R. CURTIS, Utah DEBBIE DINGELL, Michigan
DEBBBIE LESKO, Arizona MARC A. VEASEY, Texas
GREG PENCE, Indiana ANN M. KUSTER, New Hampshire
DAN CRENSHAW, Texas ROBIN L. KELLY, Illinois
JOHN JOYCE, Pennsylvania NANETTE DIAZ BARRAGAN, California
KELLY ARMSTRONG, North Dakota, Vice LISA BLUNT ROCHESTER, Delaware
Chair DARREN SOTO, Florida
RANDY K. WEBER, Sr., Texas ANGIE CRAIG, Minnesota
RICK W. ALLEN, Georgia KIM SCHRIER, Washington
TROY BALDERSON, Ohio LORI TRAHAN, Massachusetts
RUSS FULCHER, Idaho LIZZIE FLETCHER, Texas
AUGUST PFLUGER, Texas
DIANA HARSHBARGER, Tennessee
MARIANNETTE MILLER-MEEKS, Iowa
KAT CAMMACK, Florida
JAY OBERNOLTE, California
------
Professional Staff
NATE HODSON, Staff Director
SARAH BURKE, Deputy Staff Director
TIFFANY GUARASCIO, Minority Staff Director
Subcommittee on Energy, Climate, and Grid Security
JEFF DUNCAN, South Carolina
Chairman
MICHAEL C. BURGESS, Texas DIANA DeGETTE, Colorado
ROBERT E. LATTA, Ohio Ranking Member
BRETT GUTHRIE, Kentucky SCOTT H. PETERS, California
H. MORGAN GRIFFITH, Virginia LIZZIE FLETCHER, Texas
BILL JOHNSON, Ohio DORIS O. MATSUI, California
LARRY BUCSHON, Indiana PAUL TONKO, New York
TIM WALBERG, Michigan MARC A. VEASEY, Texas
GARY J. PALMER, Alabama ANN M. KUSTER, New Hampshire
JOHN R. CURTIS, Utah, Vice Chair KIM SCHRIER, Washington
DEBBIE LESKO, Arizona KATHY CASTOR, Florida
GREG PENCE, Indiana JOHN P. SARBANES, Maryland
KELLY ARMSTRONG, North Dakota TONY CARDENAS, California
RANDY K. WEBER, Sr., Texas LISA BLUNT ROCHESTER, Delaware
TROY BALDERSON, Ohio FRANK PALLONE, Jr., New Jersey (ex
AUGUST PFLUGER, Texas officio)
CATHY McMORRIS RODGERS, Washington
(ex officio)
Subcommittee on Environment, Manufacturing, and Critical Materials
BILL JOHNSON, Ohio
Chairman
EARL L. ``BUDDY'' CARTER, Georgia PAUL TONKO, New York
GARY J. PALMER, Alabama Ranking Member
DAN CRENSHAW, Texas DIANA DeGETTE, Colorado
JOHN JOYCE, Pennsylvania, Vice JAN SCHAKOWSKY, Illinois
Chair JOHN P. SARBANES, Maryland
RANDY K. WEBER, Sr., Texas YVETTE D. CLARKE, New York
RICK W. ALLEN, Georgia RAUL RUIZ, California
TROY BALDERSON, Ohio SCOTT H. PETERS, California
RUSS FULCHER, Idaho NANETTE DIAZ BARRAGAN, California
AUGUST PFLUGER, Texas FRANK PALLONE, Jr., New Jersey (ex
MARIANNETTE MILLER-MEEKS, Iowa officio)
JAY OBERNOLTE, California
CATHY McMORRIS RODGERS, Washington
(ex officio)
C O N T E N T S
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Page
Hon. Jeff Duncan, a Representative in Congress from the State of
South Carolina, opening statement.............................. 2
Prepared statement........................................... 4
Hon. Diana DeGette, a Representative in Congress from the State
of Colorado, opening statement................................. 7
Prepared statement........................................... 9
Hon. Bill Johnson, a Representative in Congress from the State of
Ohio, opening statement........................................ 11
Prepared statement........................................... 13
Hon. Paul Tonko, a Representative in Congress from the State of
New York, opening statement.................................... 16
Prepared statement........................................... 18
Hon. Cathy McMorris Rodgers, a Representative in Congress from
the State of Washington, opening statement..................... 21
Prepared statement........................................... 23
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 26
Prepared statement........................................... 28
Witnesses
Mark W. Menezes, Former Deputy Secretary, Department of Energy,
and Former Chief Counsel, Energy and Environment, House
Committee on Energy and Commerce............................... 30
Prepared statement........................................... 33
Answers to submitted questions............................... 253
Jeff Eshelman, President and Chief Executive Officer, Independent
Petroleum Association of America............................... 40
Prepared statement........................................... 42
Raul Garcia, Legislative Director for Healthy Communities,
Earthjustice................................................... 47
Prepared statement........................................... 49
Katie Sweeney, Executive Vice President and General Counsel,
National Mining Association.................................... 60
Prepared statement........................................... 62
Answers to submitted questions............................... 256
Tyson Slocum, Energy Program Director, Public Citizen, Inc....... 77
Prepared statement........................................... 79
Bernard McNamee, Former Commissioner, Federal Energy Regulatory
Commission..................................................... 94
Prepared statement........................................... 96
Answers to submitted questions............................... 259
Legislation \1\
H.R. ___, the Promoting Interagency Coordination for Review of
Natural Gas Pipelines Act
H.R. ___, To amend the Toxic Substances Control Act with respect
to critical energy resources, and for other purposes
H.R. ___, the Critical Electric Infrastructure Cybersecurity
Incident Reporting Act
----------
\1\ Submitted legislation has been retained in committee files and is
available at https://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=115306.
H.Con.Res. ___, Expressing the sense of Congress that the Federal
Government should not impose any restrictions on the export of
crude oil or other petroleum products
H.R. ___, To require the administrator of the Environmental
Protection Agency to authorize the use of flexible air
permitting with respect to certain critical energy resource
facilities, and for other purposes
H.R. ___, To repeal section 134 of the Clean Air Act, relating to
the greenhouse gas reduction fund
H.R. ___, To amend the Solid Waste Disposal Act to treat the
owner or operator of a critical energy resource facility as
having been issued an interim permit for the treatment,
storage, and disposal, of hazardous waste, and for other
purposes
H.Con.Res. ___, Expressing disapproval of the revocation by
President Biden of the Presidential permit for the Keystone XL
pipeline
H.R. 150, the Protecting American Energy Production Act
H.R. 484, the Natural Gas Tax Repeal Act
H.R. ___, To require the Secretary of Energy to direct the
National Petroleum Council to issue a report with respect to
petrochemical refineries in the United States, and for other
purposes
H.R. ___, the Securing America's Critical Minerals Supply Act
H.R. ___, the Unlocking our Domestic LNG Potential Act of 2023
H.R. ___, To amend the Clean Air Act to prohibit the phase out of
gasoline and prevent higher prices for consumers and for other
purposes
H.R. ___, To prohibit the importation into the United States of
unirridated low-enriched uranium that is produced in the
Russian Federation, and for other purposes
H.R. ___, To authorize the administrator of the Environmental
Protection Agency to waive application of certain requirements,
sanctions, or fees, with respect to processing or refining of
critical energy resources at a critical energy resource
facility, and for other purposes
H.R. ___, the Promoting Cross-border Energy Infrastructure Act
Submitted Material
Inclusion of the following was approved by unanimous consent.
Letter of February 6, 2023, from Amanda E. Eversole, Executive
Vice President and Chief Advocacy Officer, American Petroleum
Institute, to Mrs. Rodgers..................................... 178
Slide presentation, ``API/OMB Meeting--EPA's Risk Management
Plan,'' American Petroleum Institute, June 23, 2022............ 180
Executive Summary, ``Commercializing Innovative Chemical
Products,'' Coalition for Chemical Innovations, October 2022... 187
Letter of February 7, 2023, from Chet Thompson, President and
Chief Executive Officer, American Fuel & Petrochemical
Manufacturers, to Mr. Johnson, et al........................... 191
Report, ``Critical Considerations and Factors for US Refiners to
Address as Part of an HF Alkylation Technology Conversion,'' by
Becht, October 28, 2022\1\
Letter of February 6, 2023, from Charlie Riedl, Executive
Director, Center for Liquefied Natural Gas, to Mr. Duncan and
Ms. DeGette.................................................... 195
Letter of February 6, 2023, from Rich Powell, Chief Executive
Officer, ClearPath Action, to Mrs. Rodgers and Mr. Pallone..... 198
Report of the National Fire Protection Association, ``Home
Cooking Fires,'' by Marty Ahrens, July 2020\1\
Letter of February 3, 2023, from Maria Korsnick, President and
Chief Executive Officer, Nuclear Energy Institute, to Mrs.
Rodgers and Mr. Pallone........................................ 199
Commentary, Geoff Moody, Senior Vice President, Government and
Policy, American Fuel & Petrochemical Manufacturers,
Hydrocarbon Engineering, September 2022........................ 201
Letter of April 6, 2022, from Rep. Elissa Slotkin, et al., to
Michael Regan, administrator, Environmental Protection Agency.. 202
Letter of February 6, 2023, from Jon Indall, Counsel, Uranium
Producers of America, to Mrs. Rodgers and Mr. Pallone.......... 204
----------
\1\ The information has been retained in committee files and is
available at https://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=115306.
Letter of February 6, 2023, from Todd Abrajano, President and
Chief Executive Officer, U.S. Nuclear Industry Council, to Mrs.
Rodgers and Mr. Pallone........................................ 205
Advertisement, ``The Torrance Refinery Has Been Using MHF
Safely,'' United Steelworkers.................................. 207
Article of June 16, 2023, ``Gov. Whitman, Retired Generals Call
on EPA to Protect Against Chemical Plant Disasters,'' by David
Halperin, Republic Report\1\
Letter of February 5, 2023, from Coming Clean, et al., to Mrs.
Rodgers, et al................................................. 208
Letter of February 2, 2023, from Paul N. Cicio, President and
Chief Executive Officer, Industrial Energy Consumers of
America, to Mr. Duncan and Ms. DeGette......................... 213
Letter of February 6, 2023, from Steven Goldsmith, President,
Torrance Refinery Action Alliance, to House Committee on Energy
and Commerce................................................... 216
Press release of April 13, 2021, Chevron and Honeywell........... 220
Report by the U.S. Chemical Safety and Hazard Investigation
Board, ``ExxonMobil Torrance Refinery: Electrostatic
Precipitator Explosion, Torrance, California,'' May 2017\1\
Report by the U.S. Chemical Safety and Hazard Investigation
Board, ``Fire and Explosions at Philadelphia Energy Solutions
Refinery, Hydrofluoric Acid Alkylation Unit,'' October 11,
2022\1\
Report by the Government Accountability Office, ``Chemical
Accident Prevention: EPA Should Ensure Regulated Facilities
Consider Risks from Climate Change,'' February 2022\1\
Report by United Steelworkers, ``A Risk Too Great: Hydrofluoric
Acid in U.S. Refineries,'' April 2013\1\
Article of June 14, 2022, ``Natural gas plummets as Freeport
delays facility restart following explosion,'' by Pippa
Stevens, CNBC.................................................. 223
Letter of February 7, 2023, from 350 New Orleans, et al., to Mrs.
Rodgers, et al................................................. 226
Brief of August 5, 2022, ``Inflation Reduction Act's Proposed
Methane Fee Would Have Negligible Impact on Natural Gas
Prices,'' by Brian C. Prest, Resources for the Future.......... 230
Report, Clean Jobs America: Nearly 3.3 Million Clean Energy Jobs,
by E2 and Clean Jobs Count..................................... 231
Letter of February 6, 2023, from Center for Biological Diversity,
et al.......................................................... 237
Letter of February 7, 2023, from Daniel Rosenberg, Director of
Federal Toxics Policy, Natural Resources Defense Council, et
al., to Mrs. Rodgers and Mr. Pallone........................... 239
Letter of January 25, 2023, from Senator Cory A. Booker, et al.,
to Michael S. Regan, administrator, Environmental Protection
Agency......................................................... 243
Letter of February 7, 2023, from Earthjustice, et al., to Mrs.
Rodgers, et al................................................. 251
----------
\1\ The information has been retained in committee files and is
available at https://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=115306.
UNLEASHING AMERICAN ENERGY, LOWERING ENERGY COSTS, AND STRENGTHENING
SUPPLY CHAINS
----------
TUESDAY, FEBRUARY 7, 2023
House of Representatives,
Subcommittee on Energy, Climate, and Grid Security,
joint with the
Subcommittee on Environment, Manufacturing, and
Critical Materials,
Committee on Energy and Commerce,
Washington, DC.
The subcommittees met, pursuant to call, at 10:01 a.m. in
the John D. Dingell Room 2123 Rayburn House Office Building,
Hon. Jeff Duncan (chairman of the Subcommittee on Energy,
Climate, and Grid Security) presiding.
Members present: Representatives Johnson (Subcommittee on
Environment, Manufacturing, and Critical Materials chairman),
Burgess, Latta, Guthrie, Griffith, Bucshon, Walberg, Palmer,
Curtis, Lesko, Pence, Armstrong, Weber, Balderson, Pfluger,
Rodgers (ex officio), DeGette (Subcommittee on Energy, Climate,
and Grid Security ranking member), Tonko (Subcommittee on
Environment, Manufacturing, and Critical Materials ranking
member), Matsui, Castor, Sarbanes, Cardenas, Peters, Veasey,
Kuster, Blunt Rochester, Schrier, Fletcher, and Pallone (ex
officio).
Also present: Representative Dingell.
Staff present: Sarah Burke, Deputy Staff Director; Michael
Cameron, Professional Staff Member, Innovation, Data, and
Commerce; Jerry Couri, Deputy Chief Counsel for Environment;
Lauren Eriksen, Clerk, Oversight and Investigations; Nate
Hodson, Staff Director; Tara Hupman, Chief Counsel; Peter
Kielty, General Counsel; Emily King, Member Services Director;
Elise Krekorian, Professional Staff Member, Energy; Mary
Martin, Chief Counsel, Energy and Environment; Jacob McCurdy,
Professional Staff Member, Energy; Brandon Mooney, Deputy Chief
Counsel for Energy; Kaitlyn Peterson, Clerk, Energy and
Environment; Carla Rafael, Staff Assistant; Peter Spencer,
Senior Professional Staff Member, Energy; Michael Taggart,
Policy Director; Timia Crisp, Minority Professional Staff
Member; Waverly Gordon, Minority Deputy Staff Director and
General Counsel; Tiffany Guarascio, Minority Staff Director;
Anthony Gutierrez, Minority Professional Staff Member; Caitlin
Haberman, Minority Staff Director, Environment, Manufacturing,
and Critical Materials; Mackenzie Kuhl, Minority Digital
Manager; Kris Pittard, Minority Professional Staff Member;
Kylea Rogers, Minority Policy Analyst; Andrew Souvall, Minority
Director of Communications, Outreach, and Member Services;
Medha Surampudy, Minority Professional Staff Member; Isaac
Velez, Minority Intern; and Tuley Wright, Minority Staff
Director, Energy, Climate, and Grid Security.
Mr. Duncan. The Subcommittee on Energy, Climate, and Grid
Security and the Subcommittee on Environment, Manufacturing,
and Critical Minerals will now come to order.
The Chair now recognizes himself for 5 minutes for an
opening statement.
OPENING STATEMENT OF HON. JEFF DUNCAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF SOUTH CAROLINA
First of all, I want to thank you all for being here. And I
thank all of our witnesses for being here, as well. I
preemptively want to say that we all appreciate your patience,
as this might be a long day.
I am excited that we are holding our first legislative
hearing, a joint hearing with the Energy, Climate, and Grid
Security Subcommittee and the Environment, Manufacturing, and
Critical Minerals [sic] Subcommittee. Our goal is to enact
policy that delivers affordable, reliable, and clean energy to
all Americans, a goal I believe we all share on this committee,
regardless of party.
In our hearing on restoring American energy dominance last
week, we heard how the Biden administration's energy policies
are making energy unaffordable and less reliable for American
consumers. The aggressive Rush to Green agenda is compromising
our security by creating vulnerabilities in our energy supply
chain, making us more reliant on our adversaries for energy and
critical minerals.
I believe in unleashing all sources of American energy,
from nuclear, oil, and gas to hydropower, renewables,
hydrogen--a truly all-of-the-above approach. We also believe in
unleashing innovation by creating a regulatory structure that
encourages investment and growth in the private sector.
We have said it before: American energy production and
reducing emissions are not mutually exclusive. We produce
energy cleaner than anywhere in the world.
Unfortunately, many of our energy policies coming out of
the Biden administration prioritize climate goals over reliable
and affordable energy. They compromise the ability for
Americans to afford their power bills and keep on the lights.
They also fail to address the significant permitting barriers
to bringing more clean energy online.
The bills we are reviewing today offer solutions. They will
bring down the cost of energy, reduce emissions, strengthen our
energy supply chains, and pave the way for restoring American
energy dominance. We did invite the FERC Commissioners,
Secretary of Energy, and the EPA administrator, all who,
unfortunately, were unable to attend. I am hopeful that we can
have them in front of this committee soon to give the
administration's perspective.
I am, however, pleased we are moving this legislation
through regular order, with a full committee hearing last week
to inform us of the state of American energy. The legislation
in front of us today will address some of the issues and propel
the United States into American energy dominance.
For example, my bill protects American energy production by
prohibiting the President from declaring a moratorium on
hydraulic fracturing. This is necessary because President Biden
has repeatedly stated that he would end fossil fuel production
in the United States.
Representative Pfluger's bill repeals the costly natural
gas tax created in the Inflation Reduction Act. The Promoting
Cross-border Energy Infrastructure Act encourages the
construction of energy infrastructure across the borders of the
U.S., Canada, and Mexico, helping us secure Western hemispheric
energy security.
Several bills also address the importance of American
energy exports in the global markets. The world is safer when
America is energy dominant, and Representative Johnson's bill
to unlock our domestic LNG would make it easier for FERC to
approve export terminals to deliver clean energy to our friends
and allies.
We also will be taking up a resolution that expresses
support for the free trade and export of crude oil and
petroleum products. This is necessary because President Biden
and the Democrats on this committee have advocated for
reinstating the crude oil export ban. Lifting the export ban in
2015 has lowered prices while also increasing our leverage
globally. It would be shortsighted to reverse this.
We will also focus on securing our nuclear supply chain
with a bill to wean off reliance on Russian uranium. Our grid
and energy infrastructure increasingly have come under attack.
The critical Electric Infrastructure Cybersecurity Incident
Reporting Act will increase transparency between critical
electric infrastructure owners and the Department of Energy to
strengthen our systems.
Just over 2 years ago, America was energy dominant for the
first time since 1952. We were the largest energy producer in
the world, while also leading the world in emissions
reductions. We can and should be a world leader, and these
bills will help get us there. It is time to stop handing over
leverage to the CCP, Iran, and the OPEC cartel. Not only
leverage, but American dollars.
Every American should have access to reliable energy. The
most recent blizzards underscore the need for resilient energy
infrastructure and a diversified generation mix capable of
responding to storms. It is time to flip the switch, unleash
American energy production. These bills are the first step in
achieving energy dominance.
I look forward to hearing from our witnesses on these
bills.
[The prepared statement of Mr. Duncan follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Duncan. And I now recognize Ranking Member DeGette.
OPENING STATEMENT OF HON. DIANA DeGETTE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO
Ms. DeGette. Thank you so much, Mr. Chairman. I am happy to
be here today, and I would humbly suggest if we want to reduce
our reliance on OPEC and other bad actors internationally, we
should reduce our reliance on oil, since it is an international
market.
And when I looked at these bills, they don't just unleash
America's energy potential. They tether us more fully to a
global commodity that strains our budgets and also causes real
harm to our environment. They expand oil and gas drilling
throughout the country, and they undo many of the bedrock
environmental laws that we have put in place to ensure every
American has access to the clean air, clean water, and a clean
environment.
The bills that we are considering today bolster an industry
that is already reporting record profits. Last year the United
States produced an average of 11.9 million barrels of crude oil
a day. Now, that is the second highest level in U.S. history.
And the oil and gas industry is on track to produce even more
in the years to come. According to the Energy Information
Administration, the U.S. is on pace to produce 12.4 million
barrels a day this year, which is an all-time record, and up to
12.8 million barrels a day in 2024.
So I am not really sure why the majority thinks we need to
give even more incentives for big oil to produce more oil. So
if--and the title of this hearing, ``Unleashing American
Energy,'' it really means--is giving big oil unfettered access
to do as they please, well, I guess that is what these bills
do.
But again, they do nothing to unleash our Nation's true
energy potential. They don't do anything to protect the
American people from the volatility of the global oil market
and the skyrocketing prices we saw last summer. They don't do
anything to combat the climate crisis or deliver environmental
justice to some of the most vulnerable communities across this
country.
So if we really, really want to unleash America's energy
potential and drive down the cost of energy, then we need to
break our addiction to oil and we need an orderly transition to
cleaner, renewable energy sources. Not only will doing so help
continue to reduce the harmful emissions that are driving the
climate crisis, but it reduces our dependance on the global oil
market, and it will reduce energy bills that many Americans are
struggling to afford.
Clean energy is now one of the cheapest sources of energy,
and it is why countries around the world are already making the
transition to expand the use of new technologies that will
serve as a foundation for them to continue to grow their
economies into the future. And we cannot fall behind in that
effort. We can either be the leaders of a global clean energy
transition or our adversaries will, because they understand the
risk as much as we do.
So, instead of furthering our dependance on oil, we should
actually be fueling the innovation of new technologies that can
provide clean, renewable energy that is both reliable and
affordable, and also by increasing our grid security. We need
to build the foundation and we need to invest in training for
the energy workforce so they can take on the jobs of the
future. This is how we unleash America's energy potential.
So, Mr. Chairman, I want to say this again, because I think
there is some confusion. People seem to think that if we
produce more oil and gas domestically, even though we are
producing record amounts, this is going to make us independent
from international energy levels or from OPEC price increases.
That is simply not the case, because it is an international
market. And we saw that last year when oil and gas prices went
up so much, even though there was the ability to have increased
domestic production.
So I think that, by working together, we could find
bipartisan solutions. We all have the same goal: a solid energy
source, transition to renewable energy, and combating the
climate crisis, and building the foundation to make sure that
can happen.
I don't think these bills are the solution, so I think we
should go back to the drawing board and get that right.
[The prepared statement of Ms. DeGette follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Ms. DeGette. And with that, I yield back.
Mr. Duncan. The Chair now recognizes the chair of the
Subcommittee on Environment, Manufacturing, and Critical
Minerals, Mr. Johnson, for 5 minutes for an opening statement.
OPENING STATEMENT OF HON. BILL JOHNSON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OHIO
Mr. Johnson. Well, thank you, Mr. Chairman, and good
morning, everyone. I, too, want to thank our panelists for
being with us this morning.
You know, my constituents back at home in Ohio know
firsthand the importance of affordable American energy and that
abundant, affordable energy is vital to economic growth, and it
is a key factor in ensuring our national security. Last week we
heard about some of the domestic problems we face in meeting
these challenges.
Today we will discuss thoughtfully removing some of the red
tape and delays that can prevent constructing new critical
energy projects, keep capital on the sidelines, and--that are
killing innovation dead in its tracks. I am eager to get going
on proposals to streamline the process for building essential
energy projects in America. Producing more American energy will
help reduce global emissions, improve energy reliability, and
lower costs for American consumers.
President Biden's war on affordable and reliable energy--
and the problems that war creates--is not limited to killing
the use of oil, natural gas, and coal. His administration's
policies are blocking progress on the President's own stated
goal to develop domestic resources essential for the very
energy alternatives he prefers, such as wind, solar, and
batteries.
For example, the supply of minerals necessary to build
these alternative energy sources is insufficient to meet some
of this administration's climate goals, including a carbon-free
power sector by 2035 and ensuring widespread use of zero-
emission vehicles.
In addition, many of these critical minerals and the
refining and processing capacity for them is controlled by
adversaries like China and Russia. We cannot stake our future
on certain technologies that then rely upon our enemies for the
minerals and mineral processing needs to develop them.
This administration must stop promising Utopia while
prohibiting our own mineral production, like canceling leases
for new nickel and copper mines in Minnesota, blocking new
lithium mines in Nevada, and rescinding a land swap necessary
for a copper mine in Arizona.
Fortunately, the legislation we are considering today would
reorient the law to reestablish America's energy dominance
without weakening America's global leadership in advancing our
higher environmental and labor standards.
So today we will consider a bill amending the Toxic
Substances Control Act to require EPA to review and make timely
decisions on the manufacturing of a new chemical or a new use
of an existing chemical that is a critical energy resource.
This bill still emphasizes risk protection but will prevent the
marketplace from waiting an excessive amount of time for
critical materials needed to meet our emissions, climate, and
energy expectations.
We will also review legislation directing the EPA
Administrator to allow more regulatory flexibility in enforcing
air quality permits for critical energy resource facilities
like processing and refining facilities.
Another measure amends the Solid Waste Disposal Act to
allow for critical energy resources engaged in mineral
processing to receive interim permit status for the treatment,
storage, or disposal of their waste, a permit that the EPA must
still review.
There is also a bill which authorizes EPA only during
national security and energy security emergencies to waive
certain regulations necessary for processing or refining of
critical energy resources.
Additionally, we will look at legislation preventing EPA
from imposing expensive design analysis requirements on already
constructed gasoline refineries, which would elevate the EPA's
view of what makes sense above what industry experts and best
practices prove makes sense.
Staying on refineries, we will examine a bill to have the
Department of Energy and the National Petroleum Council assess
and report on the importance of petrochemical refineries in the
United States, including a review of opportunities to expand
capacity of such facilities, risk of such facilities, and an
assessment of Federal and State regulations or policies that
have contributed to a decline in the capacity of such
facilities.
Finally, we will review a bill repealing the wasteful
Greenhouse Gas Reduction Fund, which was established in the
Inflation Reduction Act.
So, as you can see, a lot of work needs to be done to
establish an energy strategy that encourages innovation, that
drives investment, and benefits our economic and national
security while we remain good stewards of our environment.
I want to also note that we are moving these in regular
order. It is really good to be back to legislating through
regular order.
I believe the new Republican majority on the Energy and
Commerce Committee is leading with solutions to our Nation's
energy and critical resource challenges, and I look forward to
hearing from each of you as we talk today.
[The prepared statement of Mr. Johnson follows:]
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Mr. Johnson. And I yield back the balance of my time.
Mr. Duncan. I thank the gentleman. I will now recognize the
ranking member of the Subcommittee on Environment,
Manufacturing, and Critical Materials, Mr. Tonko, for 5
minutes.
OPENING STATEMENT OF HON. PAUL TONKO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW YORK
Mr. Tonko. Thank you, Mr. Chair. I strongly support this
committee's efforts to examine and legislate ways to enhance
our long-term energy security, affordability, and
sustainability for the American people.
But, unfortunately, nearly all of the bills before us today
continue to look backwards toward the energy needs of our past
rather than embracing the energy opportunities of the future.
And those opportunities are overwhelmingly about positioning
the United States to become the global leader in the clean
energy technologies and supply chains that will dominate the
energy system over the next several decades.
We need our national energy policy to have vision, and that
vision cannot solely be how to further enrich oil and gas
companies, which are raking in record profits. That is why we
should be celebrating the Inflation Reduction Act's nearly $370
billion in clean energy and climate investments, which are
already beginning to support the deployment of new clean energy
resources, commitments in domestic manufacturing, and a
significant reduction in climate pollution.
But, sadly, two of the bills being considered today would
repeal critical sections of the IRA, which were developed and
enacted by the Democrats of this committee in the 117th
Congress. The Greenhouse Gas Reduction Fund is going to
facilitate historic investments to decarbonize our grid, our
transportation system, and buildings by supporting well-paying
jobs and guaranteeing benefits in disadvantaged communities.
And the Methane Emissions Reduction Program provides industry
with significant funding to adopt emission-reducing
technologies before using a market-based approach to
incentivize pollution reductions. This is a sensible program
that provides certainty for industry while incentivizing the
reduction of superpollutants from the oil and gas sector.
I am also concerned that several of the bills under
consideration would create new loopholes and--in important
environmental laws, allowing a broad and inadequately defined
group of polluting industries to get fast-tracked for approval
with little consideration for the potential harms they may pose
to Americans' air, water, and safety. This is not the way to
achieve our shared goals of a more secure, affordable, and
cleaner energy system.
But there are steps that we could take together that would.
We could have focused hearings to wrestle with complex energy
issues. How should hydrogen pipelines be regulated? What
reforms are needed to the hydropower licensing processes? How
can we build more interstate and interregional transmission
lines to improve the reliability and affordability of our
electricity system while enabling greater deployment of cost-
effective, clean energy resources?
I suspect these questions may interest Members on both
sides of the aisle, and each of those topics could be the
subject of a narrow, largely bipartisan hearing. This approach
would certainly require work and negotiations, but that is
surely true of any serious effort to enact bipartisan energy
legislation.
Unfortunately, the approach being offered today will not
achieve this goal. We are considering 17 Republican bills
covering a wide range of topics and amending numerous statutes.
Several of these draft bills were seen for the first time just
a little over a week ago.
During the Democrats' time in the majority, we often tried
to give our minority counterparts an opportunity to contribute
to legislative hearings' agendas. As far as I am aware, that--
there were not discussions of potentially Democratic-sponsored
bills that could have fit this hearing's theme.
I also expect we will hear criticisms of the administration
for failing to attend today. I agree with my Republican
colleagues that we should seek and expect to hear from the
agencies at legislative hearings, but we should also make
efforts to accommodate their participation, including by
providing legislative texts well in advance and being flexible
with the hearing calendar.
When the Republicans were last in the majority during the
Trump administration, EPA did not testify at any legislative
hearings in 2017 and only twice in 2018. We should be
consistent both in our expectations that the administration
provide witnesses and technical assistance on legislation, and
that we need to be flexible to accommodate schedules to ensure
that their participation is well informed and instructive to
the development of legislation.
So, while I am disappointed in the process that has led us
here today, I still believe there are bipartisan policies that
we can and should work on together to achieve the goals of this
hearing's title. And with that said, I look forward to the
discussion on the 17 bills before us today.
[The prepared statement of Mr. Tonko follows:]
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Mr. Tonko. And with that, Mr. Chair, I yield back.
Mr. Duncan. I thank the gentleman. It is now my honor to
recognize the chair of the full committee, Mrs. McMorris
Rodgers, for 5 minutes for an opening statement.
OPENING STATEMENT OF HON. CATHY McMORRIS RODGERS, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON
Mrs. Rodgers. Thank you, Mr. Chairman, Chairman Duncan,
Chairman Johnson. It is great to be kicking off our legislative
agenda with you.
Our goal on Energy and Commerce is to ensure reliable,
secure, and affordable energy, and that it is available to
power homes and businesses across this country.
America has been blessed with abundant natural resources.
We should be looking toward developing a predictable regulatory
landscape across the board that inspires innovation,
entrepreneurship, and technological leadership. Hydropower,
nuclear, fossil energies, wind, solar, and batteries: we need
all of them in order to secure a stronger, more prosperous
America, reduce costs and emissions, address climate issues,
and create more robust and resilient communities.
Rush-to-green energy policies, both at the State and
Federal level, have curtailed reliable energy and
infrastructure, resulting in everything from blackouts to
spiking prices. We have seen the devastating impact these
policies have had on people in Europe, where forced government
transition away from reliable energy sources resulted in more
dependance upon Russia. These policies are unsustainable and
lead to greater reliance on countries like Russia or, in our
case, China.
If we cede our energy leadership to countries like Russia
and China, they will always leverage that influence to advance
their own authoritarian agenda. This is not the future that any
of us want. The best way to address future risks, whether they
be climate change or global price shocks, is with a strong
economy and a more secure, abundant energy supply here at home.
We need to put energy security back at the center of energy
policy.
The solutions we are discussing today reflect key steps to
return from the path of shortages and high prices to a path of
prosperity. We have several bills that will help unlock
American natural gas and its delivery systems. To provide
reliable, affordable, and clean natural gas is essential for
heating our homes and businesses and strengthening America's
global standing, all while continuing to lead the world in
reducing carbon emissions.
These solutions build on the lessons of the shale
revolution, which proved energy expansion can be unprecedented
and bring energy security while also helping drive down
American emissions.
We also need to restore America's leadership in clean
nuclear energy. I am leading a bill that aims to eliminate our
reliance, which is currently 24 percent, on Russian nuclear
fuels for our nuclear reactors. Expanding our leadership and
developing and expanding nuclear energy is going to be one of
the top priorities of this Congress. And addressing our
reliance on Russian fuel is just the beginning.
To unleash American energy, we also need a regulatory
environment that doesn't hamper industry. Several measures
improve regulatory flexibility to assist with the reshoring of
industries that manufacture and process critical energy
materials. These bills strengthen existing regulations, and
provide new authorities to enable the EPA and States, working
together, to permit new and expand existing manufacturing--
manufacturing that is key for strengthening our energy
security, national security, and ending our reliance on China.
It is also a necessary step as we incorporate technologies like
electric vehicles and renewables into our energy mix.
Additionally, we will consider bills that make sure the EPA
focuses on its core mission, which does not include forcing a
transition to more expensive, less reliable energy sources and
systems.
Many of these issues have been bipartisan in the past, and
I do hope and expect us to come together. This hearing is an
opportunity to provide feedback as we work through regular
order.
And I should note that it is disappointing representatives
from the Department of Energy, the Federal Energy Regulatory
Commission, the Environmental Protection Agency declined to
appear. Appearing before this committee is an important part of
their obligation to Congress, and we expect them to fulfill it.
In closing, I look forward to our discussion today on how
this committee can improve American energy leadership,
security, and people's lives. It is time to get to work.
[The prepared statement of Mrs. Rodgers follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mrs. Rodgers. And with that, I yield back, Mr. Chairman.
Mr. Duncan. I thank the chairwoman.
I want to pause and just say that Congress's thoughts and
prayers are with the folks in Syria and Turkey after the
devastating earthquake.
And I now recognize the ranking member of the full
committee, Mr. Pallone, for 5 minutes.
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Chairman Duncan.
Committee Republicans are showing today that their top
energy and environmental priorities are to do the bidding of
Big Oil, and to undermine our Nation's bedrock environmental
laws. And these are not the same priorities of committee
Democrats.
Over the last 2 years, Democrats delivered historic wins
for the American people. We enacted laws that are already
creating good-paying jobs, cutting costs for working families,
and advancing homegrown clean energy, all while tackling the
worsening climate crisis. And while we want to build upon these
successes for the American people, House Republicans are stuck
in the past and failing to address the energy challenges and
opportunities we face today.
I would like to start by highlighting my serious concerns
with some of the fossil-focused bills that we are discussing
today. The Cross-border Energy Infrastructure bill is nothing
more than a shadow approval of the Keystone Pipeline
masquerading as legislation. It establishes that every single
cross-border energy project is in the public interest, a
radically higher bar than exists now. And this is not serious
legislation.
Representative Burgess's bill would put the Federal Energy
Regulatory Commission in charge of permitting reviews that it
doesn't have the expertise or the time to lead, and the
Unlocking our Domestic LNG Potential Act would eliminate the
requirement that the Department of Energy determine that
exporting natural gas from a U.S. facility is in the national
interest. This legislation would effectively greenlight sending
unrestricted amounts of LNG to adversaries like China. It is
just more proof that committee Republicans are more interested
in doing the bidding of their fossil fuel friends than actually
protecting our energy security.
And I am also deeply disappointed with the legislative
proposals being considered in the Environment Subcommittee's
jurisdiction. Two of the bills would revoke programs enacted as
part of the Inflation Reduction Act that are projected to cut
climate pollution, reduce the deficit, and leverage private-
sector investment in clean energy projects across the Nation.
H.R. 484 targets the Methane Emission Reduction Program,
which establishes a suite of incentives to drive down excess
methane pollution and remediate the effects of the pollution
that does occur. This program fundamentally ensures polluters
pay for wasted methane, and not customers.
Republicans also target the Greenhouse Gas Reduction
Program, which invests $27 billion in non-State and local
climate finance institutions that support the rapid deployment
of low- and zero-emission technologies. My Republican
colleagues claim to support all-of-the-above policies, yet they
oppose a program that invests in clean energy projects.
We are also considering bills that allow so-called critical
energy sources to bypass commonsense environmental protections.
One bill would circumvent consideration of safer technologies
to avoid chemical disasters under the risk management program,
while another bill would undercut protective health policies
that were developed and passed on a bipartisan basis by this
committee in the Frank Lautenberg Act. And we should not be
putting polluters over people by waiving critical public health
and environmental protections that keep American communities
safe.
Now, if Republicans really want to unleash American energy,
I invite them to stop trying to tear down critical climate and
environmental programs, and work with us to build a better
future for all by investing in clean energy and bolstering our
environmental safeguards.
I can't find much value in the legislation before us today,
which is unfortunate, since many Members are interested in
working on clean energy permitting. And instead, my majority
colleagues scheduled a hearing on 17 Republican bills or
discussion drafts without even asking Democrats if we have any
bills that would address the underlying topic. If they truly
want to enact legislation that addresses energy security and
affordability, this is not the path. The American people
deserve better.
Finally, I must set the record straight about why the
administration could not testify at today's hearing. The
majority claims they gave the administration 2 weeks' notice
and that the administration said this was not enough time to
secure witnesses.
What they left out is that the 2 weeks' notice came in an
email right before midnight on January 24th. It did not contain
the list of bills for the hearing, the legislative text of the
bills, or any information about other invited witnesses. How
were the agencies supposed to prepare for a hearing when they
have not been told what bills they are supposed to be
commenting on?
And to be clear, only 2 of the 17 bills had been introduced
when this hearing was noticed 1 week ago. If the bills were not
ready to share with the administration or with Democratic
Members, then this hearing should have been postponed until a
later date.
[The prepared statement of Mr. Pallone follows:]
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Mr. Pallone. And with that, Mr. Chairman, I yield back.
Mr. Duncan. I thank the gentleman. This now concludes with
Member opening statements.
The Chair would like to remind Members that, pursuant to
committee rules, all Members' opening statements will be made
part of the record.
I want to thank all the witnesses for being here today and
taking time to testify before the subcommittees.
Each witness will have the opportunity to give a 5-minutes
opening statement, followed by a round of questions from
Members.
There are some lights in front of you. Green means go,
yellow means you have got 1 minute, a 1-minute warning, and red
means you need to wrap up.
Our witnesses today are the Honorable Mark Menezes, Mr.
Jeffrey Eshelman, Mr. Raul Garcia, Ms. Katie Sweeney, Mr. Tyson
Slocum, and the Honorable Bernard McNamee.
We appreciate you being here today. I will now recognize
Mr. Menezes for 5 minutes to give an opening statement.
STATEMENTS OF MARK W. MENEZES, FORMER DEPUTY SECRETARY,
DEPARTMENT OF ENERGY, AND FORMER CHIEF COUNSEL, ENERGY AND
ENVIRONMENT, HOUSE COMMITTEE ON ENERGY AND COMMERCE; JEFF
ESHELMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, INDEPENDENT
PETROLEUM ASSOCIATION OF AMERICA; RAUL GARCIA, LEGISLATIVE
DIRECTOR FOR HEALTHY COMMUNITIES, EARTHJUSTICE; KATIE SWEENEY,
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL, NATIONAL MINING
ASSOCIATION; TYSON SLOCUM, ENERGY PROGRAM DIRECTOR, PUBLIC
CITIZEN, INC.; AND BERNARD McNAMEE, FORMER COMMISSIONER,
FEDERAL ENERGY REGULATORY COMMISSION
STATEMENT OF MARK W. MENEZES
Mr. Menezes. Good morning. Madam Chair McMorris Rodgers,
Ranking Member Pallone, Subcommittee Chairmen Duncan and
Johnson, Ranking Members DeGette and Tonko, and members of the
subcommittee, thank you for the invitation to testify on
legislative solutions designed to promote U.S. energy
production, lower energy costs, and to strengthen our supply
chains of critical minerals and energy resources. Today's
hearing features bills designed to achieve these important
goals.
Now, in order to unleash American energy, it is important
that Congress ensures the legislative will of the people is
carried out by the President and the executive branch.
Frequently, the executive branch is at odds with the laws of
Congress, and takes actions without clear congressional
authority. Several of the bills under consideration today make
congressional intent clear to the executive branch.
The Protecting American Energy Production Act clarifies
that States have primacy regulating hydraulic fracturing.
Congress made this clear in the overwhelmingly bipartisan
Energy Policy Act of 2005. Our global friends and allies are
grateful for our production and export and have come to rely on
U.S.-produced oil and natural gas as a reliable source of
energy and an alternative to Russian supply. This bill
prohibits the President from issuing any moratoria on hydraulic
fracturing, thus preserving States' rights.
Similarly, the sense of Congress resolution opposes the
executive branch placing restrictions on the export of oil and
petroleum products. This makes clear the congressional intent
that the President and all Federal agencies follow the law as
written when a bipartisan Congress lifted the oil export ban in
2015.
The Unlocking our Domestic LNG Potential Act removes
redundant reviews and the need for multiple Federal permission
slips to produce and liquefy LNG for export. The bill makes
clear that it is FERC and not the Department of Energy which
has the exclusive authority to approve or deny requests to
export natural gas to a foreign country.
The Promoting Cross-border Energy Infrastructure Act makes
clear that it is the DOE and FERC, the Federal agencies with
expertise in energy, that have the authority to grant or deny
the interconnections and modifications of cross-border
electricity lines and pipelines without the need for a
presidential permit.
Turning now to lowering energy costs, it is important that
the Members appreciate that, with the shale revolution, the
U.S. now has an abundance of cheap natural gas which is
replacing baseload coal, complementing the increased deployment
of wind and solar, and is the primary reason why the U.S. leads
in actual emission reductions.
The Promoting Interagency Coordination for Review of
Natural Gas Pipelines Act ensures increased access and delivery
of supply to lower natural gas costs by authorizing FERC to be
the lead agency to coordinate other agencies, establish
reasonable timelines, and keep track of progress of the
permitting and environmental reviews required under NEPA and
other laws.
Reducing costs of government can save taxpayers dollars to
offset the cost of energy. The repeal of the Greenhouse Gas
Reduction Fund repeals the $27 billion appropriated to EPA to
provide grants and financial assistance to States,
municipalities, Tribal governments, and nonprofits for zero-
emission technologies. While laudable and generous, there is
little oversight of EPA required by Congress to administer this
fund. Remember, EPA's requested budget in 2022 was only $11.4
billion.
Another bill to lower energy costs is the Natural Gas Tax
Repeal Act, which repeals the methane waste fee and statutory
methane regulations included in the nonbipartisan Inflation
Reduction Act. EPA has proposed a supplemental rule to regulate
methane emissions open for public comment now, which
essentially does the same thing without the methane waste fee
but with Clean Air Act penalties.
Turning now to strengthening our supply chains, we know the
U.S. relies on imports for 31 of 35 of our critical minerals
necessary for the U.S. defense and our clean economy, 14 of
which we are totally dependent on imports. To ensure critical
energy resources, Congress should designate DOE with the
responsibility to do this. That is what Securing America's
Critical Mineral Supply Act does. It amends the DOE
Organization Act to give DOE the responsibility of securing our
supply of critical energy resources.
Congress should ensure our critical energy facilities
produce our critical energy resources during emergencies and
threats to our energy security. Several of the bills under
consideration here today do just that.
The National and Energy Security Waiver bill authorizes the
EPA Administrator, in consultation with DOE and the Governor,
to waive certain requirements, sanctions, or fees during times
of threats to our national or energy security to maintain an
adequate supply of gasoline and diesel and other critical
refined resources.
Another bill addresses EPA's backlog of pending
applications to complete risk assessments of chemical
substances necessary today to produce our critical energy
resources. EPA's backlog is so great that U.S. companies are
hesitant to make capital investments to produce critical
battery components necessary for the deployment of EVs. This
inexplicable delay is a problem China and our global
competitors simply do not have.
Likewise, the interim permit bill for safe storage and
disposal of critical energy resources allows temporary onsite
storage and disposal similar to past practices and, like other
bills, a commonsense approach to accelerate U.S. development of
critical mass----
Mr. Duncan. I am going to ask the gentleman to wrap up his
opening.
Mr. Menezes. [continuing]. Our transition to battery
technologies, EV use, and grid scale battery storage.
I will. I am in the course of wrapping up.
Since 2009, EPA has had the use of its flexible air
permitting rule. EPA limits its use, and so we have a bill to
allow that.
Congress also needs to ensure that interstate electric
transmission infrastructure----
Mr. Duncan. I am sure a lot of this will be covered in the
question-and-answering, so I am going to ask you to wrap up.
Mr. Menezes. It is. Well, with that, I will, in fact, thank
you for the opportunity to testify today.
I ask that my written statement be included in the record,
and I look forward to your questions.
[The prepared statement of Mr. Menezes follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Duncan. Thank you for that, and I apologize, but we do
have a broad panel. So the Chair will go to Mr. Eshelman.
STATEMENT OF JEFF ESHELMAN
Mr. Eshelman. Good morning, and thank you for having me
here today. It is a pleasure to be here. I am Jeff Eshelman,
president and CEO of the Independent Petroleum Association of
America.
I would like to thank Chairman Duncan and Chairman Johnson
for gathering this hearing today. We really appreciate being a
part of it.
As you know, the American natural gas and oil industry is
very diverse and consists of many sectors. My organization,
IPAA, represents the exploration and production part of the
industry. The independent companies who don't have refineries
or gasoline stations, these companies specifically search for
and produce the Nation's gas and oil wells.
There are about 6,000 independent producers exploring and
producing for the Nation's energy supply each day. They are
spread across 33 States. And here is the kicker that a lot of
people don't recognize: Collectively, these small businesses,
the 6,000 of them, are responsible for developing 91 percent of
the Nation's natural gas and oil wells, accounting for 83
percent of America's oil supply and 90 percent of our domestic
natural gas supply.
Through good times and bad, our companies invest billions
in new projects, searching for America's energy. So the
characterization that this industry is Big Oil is actually a
big myth. It is the independent, smaller companies that are
drilling most of the wells and providing for most of the energy
in this country.
Through the effort of independent producers, today America
is a world leader in natural gas and oil production. And we are
doing it responsibly. In this time of continuing uncertainty,
one thing is certain: A healthy oil and natural gas industry is
good for America. It is good for our economic and national
security, as well as for our allies across the globe.
Let me take a few minutes to address some of the strengths,
weaknesses, opportunities, and threats that we see at IPAA.
Strengths. Natural gas is actually good for the
environment. Today the Nation has its cleanest air in 20 years.
In fact, total greenhouse gas emissions continue to decline,
despite production and consumption of natural gas increasing.
Our industry is committed to reducing leaks and improving
pipeline infrastructure. American producers are taking the
right, responsible approach to these issues.
Other strengths of our industry include that we have
America's vast natural gas supply right under this ground,
about 100 years' worth. Oil and gas will remain America's
largest fuel source through 2050. And coupled with wind, solar,
hydro, nuclear, coal, batteries, America has a strong, reliable
energy portfolio.
The weaknesses we see. Inflation, which affects all
Americans. Our industry is not just producing energy, but it is
also consuming it. A weak economy results in a weakened
industry.
Labor and service costs--for example, purchasing tubular
goods--have driven up the costs of drilling and completing
wells by 30 percent year over year. It is often difficult for
us to find a new workforce, to even find trucks.
And the need for a takeaway capacity through pipelines and
gas storage are essential.
But there are some good opportunities to keep in mind.
America's natural gas and oil production are vital here at
home.
On the legislation being discussed today, IPAA strongly
supports H.R. 150, the Protecting American Production Act,
sponsored by Congressman Duncan. This legislation prohibits the
President from declaring a moratorium on the use of hydraulic
fracturing unless Congress authorizes such a prohibition.
IPAA also supports H.R. 484, the Natural Gas Tax Repeal
Act, sponsored by Congressman Pfluger. This legislation would
strike language designed to establish a tax on natural gas
imposed on America's independent oil and natural gas producers.
IPAA recognize that the importance of managing our
emissions of methane and other volatile organic compounds, and
we are committed to working diligently to comply with State and
Federal agencies.
Now the threats. And mostly it is about uncertainty in our
industry. Uncertainty breeds inaction, and that is not an
option for us. So what are the threats that create uncertainty
for our businesses?
Well, we have lawsuits, we have new permitting
infrastructure regulation threats, we have proposed threats of
new regulations with the Endangered Species Act and increased
taxes on methane, we have the Securities and Exchange
Commission looking at climate plans, we have bans and setbacks,
we have electrification proposals, like for natural gas stoves
that we have seen so much about in the news, and there is
delayed-lease sales in onshore and offshore. And there is so
much more.
But I want to work with this committee--or IPAA wants to
work with this committee to make sure that we can address these
threats, strengths, weaknesses, and opportunities. Thank you
for the opportunity.
[The prepared statement of Mr. Eshelman follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Duncan. I thank the gentleman. The Chair will now
recognize Mr. Garcia for 5 minutes.
STATEMENT OF RAUL GARCIA
Mr. Garcia. Thank you, Chairman. Thank you, all the ranking
members, for the invitation to speak. My name is Raul Garcia. I
am the legislative director for healthy communities at
Earthjustice.
In giving an opinion about the 17 bills that we are
considering today, I can't--I don't have enough time to go one
by one. But there are some narratives that the bills overall
establish for us.
Overall, there are litany of exemptions, a litany of go-
arounds, and a litany of ways that big industries get to go
around laws that we have in the books already that were put in
the books by Congress in bipartisan support in order to protect
the communities that this very Congress represents.
And so, when we talk about already having industries that
act responsibly, one has to beg the question: If they are
acting responsibly, why do they want to waive the laws that
hold them accountable to acting responsibly? And we have not
gotten an answer on that front.
But we also have to remember that what is at stake here is
broader than the simple choice that the proponents of these
bills give us. So they give us a false choice between having
healthy communities, a healthy environment, and energy
security. And that is simply not true. We can have both. But it
is a clever twist.
I mean, it is a clever ploy, even if it is a cruel one.
Because on the one hand, some of these bills actually repeal
parts of the laws they have made--that have made it into the
books that would speed up a transition to clean energy, that
would give us energy security in a clean and healthy way, like
the--like parts of the IRA, particularly the Greenhouse Gas
Reduction Fund. Now, that would speed up distributed solar
energy so that people can have energy at their own homes so
that grids going down are not a problem for an entire State.
But we want to take that away in these bills.
And then, on the back end, we actually want to give
industry loopholes that they can use in order to not comply
with the Clean Air Act, with the Toxic Substances Control Act.
These laws were established by this Congress in bipartisan
fashion to protect the air that we breathe, and the toxics that
are in our environment, the water that we drink, the makeup
that we put on our faces, everything that goes into our
stomachs. And we want to peel that away.
Now, we hear a lot about energy security and this phrase of
critical minerals, critical energy sources. So let's talk about
critical energy sources. Few bills of the 17 that we have here
today actually establish a definition for critical energy
sources. What they actually say is, ``Let's leave that
definition up to the Secretary of Energy.'' That is a Trojan
horse. That means everything can suddenly become a critical
energy source.
And so what are we talking about when we are talking about
these sources? We are talking about making sure that we have a
responsible way to get to clean energy that establishes safe
protections for our communities. And these bills, frankly, do
exactly the opposite.
And so, when we talk about the Toxic Substances Control
Act, for example, one of the bills would have us consider the
economic impacts, the economic costs of--when determining
whether a substance is toxic or not. So that would mean that,
if we put poison in three cups of water, we are going to drink
them all and figure out what the economic cost is going to do
to us.
So the--another question that I have for the proponents of
the bill is, what is the cost of a human life? What is the cost
that that poison is going to inflict on a human being? Because
it is good to talk about everything that is on paper and laws
and exemptions and procedures. How do we explain the emissions
coming out of the fossil fuel industry or the mining industry
to our communities who are suffering from cancers, from asthma,
from cardiac conditions? But we haven't talked about that here
yet.
And so I believe that that is what we need to focus on, and
that is what we need to do. And so these bills, by and large,
fail, flat-out fail to address what communities across the
country are dealing with.
Thank you.
[The prepared statement of Mr. Garcia follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Duncan. Thank you. I now recognize Ms. Sweeney for 5
minutes.
STATEMENT OF KATIE SWEENEY
Ms. Sweeney. Thank you. Good morning, members of the
subcommittee. I appreciate being here on behalf of the National
Mining Association's mineral and hardrock mining companies to
talk about the need to strengthen our mineral supply chains to
unleash American energy and lower energy cost.
Domestic mining, conducted under world-leading
environmental safety and labor standards, is critical to
securing virtually every key supply chain, especially energy.
But the right policies are needed to unlock our full potential.
Minerals are an integral part of all current forms of
energy and for those we hope to rely on more in the future.
From copper, nickel, and silver, and renewables to cobalt, and
lithium, and EVs to barite, and molybdenum that keep oil and
gas moving, to uranium and coal, which produced over 40 percent
of our electricity, minerals security makes energy security.
As we enter the most mineral-intensive era in human
history, the International Energy Agency estimates demand for
some minerals required for energy generation transitions could
grow by more than 40 times by 2040. Urgent action is needed to
secure these essential supply chains. But recent U.S.
Geological Survey information shows our country is headed in
the wrong direction.
Despite the rhetoric around securing our mineral supply
chains, we are at a crisis point. In 2022, the U.S. reached its
highest recorded mineral import reliance. Imports made up more
than one-half of U.S. apparent consumption for 51 nonfuel
mineral commodities, up from 2021, when only 47 commodities met
that metric.
We are more dependent than ever before on China and others
for minerals essential to modern life. And each new
announcement of a blocked mine, such as Twin Mines--Twin Metals
Project in Minnesota, or foreign sourcing agreements with
countries with documented problematic labor practices locks in
our position of competitive weakness.
The U.S. must focus on supplying these minerals at home as
well as restoring domestic smelting, refining, and processing
capabilities. In a 2019 hearing, Benchmark Minerals talked
about growing mineral demand for EV batteries and lack of
domestic production, cautioning that those who control these
critical raw materials and those who possess the manufacturing
and processing know-how will hold the balance of industrial
power in the 21st century auto and energy storage industries.
Automakers understand that truth and worry that the coming
battery minerals shortfall will decimate the EV revolution.
Ford's president and CEO recently highlighted the need to focus
on domestic supply chains all the way to the mines to reduce
our reliance on minerals sourced from countries with documented
child labor practices and corruption.
Without permitting reform, the U.S. will be watching the
global competition for energy dominance from the sidelines.
Providing additional funds or incentives for projects that will
never be approved does nothing. As the IEA concluded in a
recent report, governments must leverage private investment in
sustainable mining but also ensure clear and rapid permitting
procedures to avoid potential supply bottlenecks.
Opening or expanding a U.S. mine typically involves
multiple agencies and tens or even hundreds of permitting
processes at the local, State, and Federal levels. Delays arise
from duplication among agencies, absences of firm timelines,
and failures in agency coordination. Necessary authorizations
take an average of 7 to 10 years, one of the world's longest
permitting processes. Valid environmental concerns should be
fully addressed, but permitting processes should not serve as
an excuse to trap mining projects in a limbo of duplicative,
unpredictable, endless, and costly review.
We can build on important work done by this committee to
support new domestic production and processing. Chair McMorris
Rodgers and Natural Resource Chair Westerman's Securing
American Mineral Supply Chains Act offers commonsense solutions
to reestablish a domestic mineral supply chain. The act
prioritizes responsible development and would provide certainty
to mining companies, investors, and manufacturers; establish
lead agencies and improve permitting timeliness; maintain
access to mineralized Federal lands unless withdrawn by
Congress and unless the USGS can assure that the withdrawal
does not threaten supply chains; support research, development,
and demonstration funding; and workforce development and
training.
It is time for the United States to walk the talk on
mineral security. As our minerals needs skyrocket for
everything from EVs to advanced energy technologies, the U.S.
is stumbling when it comes to our supply chains.
NMA appreciates this committee's prioritization of these
issues and is eager to help craft solutions. Thank you.
[The prepared statement of Ms. Sweeney follows:]
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Mr. Duncan. Thank you for that. The Chair will now
recognize Mr. Slocum for 5 minutes.
STATEMENT OF TYSON SLOCUM
Mr. Slocum. Thank you, Mr. Chairman, Ranking Member,
members of the committee. It is my pleasure to be here today. I
am Tyson Slocum, and for the last two decades I have been the
director of the energy program with Public Citizen here in
Washington, DC.
So liquefied natural gas exports are the disruptive event
that is radically upending domestic energy markets. For the
first time in history, American natural gas consumers--whether
they be households, operators of power plants--are forced to
compete with their counterparts in Berlin and Beijing on price.
That is why, coast to coast, Americans are now paying
significantly higher prices for electricity and to heat their
homes.
There have been periods in the last 2 months where prices
on the U.S. West Coast and in New England have been more
expensive for natural gas than in Ukraine. That is because we
are now--because, prior to LNG exports, our domestic markets
were insulated from global calamities. War could break out in
Europe, and there would be no bump in price. Now our domestic
benchmarks are directly linked with global events like the same
that has been the way with oil and gasoline markets for more
than a generation.
So this is not a crisis of inadequate natural gas
production. We are breaking records on natural gas production
in the U.S. every month, according to the Energy Information
Administration. Twenty percent of U.S. natural gas production
is exported out of the United States, and that is what is
driving the imbalance.
But on the production side, we are far and away the largest
producer on the planet. The number 2 and number 3 global
producers of gas, Russia and Iran, combined don't produce as
much as the United States every day. So we are not going to
produce our way to lower prices as long as the export spigot
remains open.
So, of course, a focus of policy on energy efficiency and
promoting zero emission alternatives to gas has to be part of
the solution. But in the meantime, we need stronger regulation
over LNG exports, not less. And so I am just going to briefly
cover 4 of the 17 bills.
So H.R. 647 would eliminate the requirement that natural
gas exports be consistent with the public interest. That is a
standard that has been in place for 85 years, and we believe
that it is crucial that all natural gas exports continue to be
subject to that public interest standard.
The Cross-border Energy Infrastructure Act would require
FERC to approve any natural gas export pipeline within 30 days
of receiving the application. So that is a de facto approval.
We are a party in a case at FERC right now involving a
natural--a proposed natural gas cross-border pipeline, a 155-
mile pipeline that would connect the Permian Basin at the Waha
Hub to Mexico, and then directly send that U.S.-produced gas
through Mexico to new LNG export terminals on Mexico's Pacific
coast.
Thankfully, there is a public interest review, and we are
an intervener in that FERC proceeding, where we are going to
raise concerns about the threat to the public interest of
exporting Permian gas directly to China. And removing that
review would not be advisable.
H.R. 484 would eliminate the methane fee in the recently
enacted Inflation Reduction Act. What is wild about this is the
Inflation Reduction Act bends over backwards to accommodate the
oil and gas sector. Congress appropriates a billion and a half
dollars in grants to the oil and gas sector to help them invest
in facilities to reduce their methane emissions. I don't see
the oil and gas industry complaining about a billion and a half
dollars in taxpayer grants to help their business. And in
addition, the fee is waived if you successfully comply with EPA
regulations on methane emissions. So that makes the industry a
partner with effective regulation. And so I don't think that
that legislation is advisable.
And last, I just want to touch on the bill that would
prevent the EPA from requiring oil refineries using
hydrofluoric acid alkylation to explore less hazardous
alternatives. It is important to note that, in October of 2022,
the U.S. Chemical Safety and Hazard Investigation Board, in
response to a series of tragic accidents with a hydrofluoric
acid alkylation, recommended and urges the EPA to subject these
facilities to hazard reviews. So I think it would be imprudent
to remove that opportunity.
Thank you so much. I look forward to your questions.
[The prepared statement of Mr. Slocum follows:]
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Mr. Duncan. I thank the gentleman. The Chair will now
recognize Mr. McNamee for 5 minutes.
STATEMENT OF BERNARD McNAMEE
Mr. McNamee. Thank you, Mr. Chairman. Chairman Duncan,
Ranking Member DeGette, Chair Johnson, Ranking Member Tonko,
Chair Rodgers, and Ranking Member Pallone, members of the
committee, thank you for inviting me to participate in this
hearing. I am Bernie McNamee, and I am here and want to make it
clear that I am only expressing my own views, and they are not
of my employer or any of its clients.
Today we are facing a new energy crisis. The people of
the--the American people are facing a new energy crisis.
Americans are now faced with energy scarcity, artificial
shortages of natural gas and oil despite massive reserves in
the United States, and an electric grid that is less reliable.
Nor can all this be blamed on Putin's war in Ukraine.
Misguided government policies, as well as the politicization of
capital, are causing much of the current energy crisis in this
country. The energy challenges are wide ranging.
We have the means to reinvigorate our energy priorities for
the benefit of the American people. Many of the bills here
today will help do that. But recognizing the limited time for
these opening comments, I will focus on three major issues:
permitting reform, the importance of natural gas to energy
security, and restoring reliability to our electric grid.
Permitting reform. Over the years we have seen a number of
initiatives to speed up environmental reviews, including
permitting reform. And the problem is not just agencies
reviewing projects. The substantive aspects of various
environmental laws contribute to the rejection, delay, and cost
of energy projects. Therefore, attempts to make the bureaucracy
work more efficiently may not result in more projects being
approved or constructed.
To address permitting challenges, Congress should look at
the substantive requirements in various laws and agency
regulations that they are implementing, so as to ensure that
they properly protect the environment but also do not create
artificial barriers.
But there is another problem, and it is related to NEPA
litigation. As enacted by Congress, NEPA does not provide for a
private cause of action. But the courts have allowed agency
actions on NEPA decisions to be challenged in court through the
Administrative Procedures Act. The result is that agencies now
spend an inordinate amount of time and effort trying to address
every minor comment and issue raised in environmental reviews.
And no matter how good an agency's review is, the agency's
action can still be challenged in court, which can then hold up
a project for years. Such delays can end up killing a project
or making it more expensive.
Congress should consider reforming NEPA and the EPA to
limit how legal challenges can be made against agency actions.
But of course, this is a two-edged sword. We want agencies to
be accountable, so Congress will have to engage in a careful
balancing of its authorities.
Next, natural gas energy security. American energy security
and affordability is vitally dependent on access to
domestically produced natural gas. Natural gas is important for
home heating, manufacturing, but also provides about 38 percent
of our electric generation. Unleashing natural gas production
should be a priority, and natural gas pipelines are very
important to get end product to users.
Furthermore, Federal and State policymakers need to
recognize the interdependence of the electric grid and natural
gas, especially natural gas pipelines. This means ensuring that
pipelines are also safe from cyber and physical threats, which
I also know is being considered by this committee.
Finally, restoring the reliability of the electric grid.
Electric reliability is decreasing in many parts of the
country. And we have seen this in California, Texas, and part
of the East Coast this past December. And these failures have
not been the usual causes for power outages, which are usually
downed power lines. What we have been seeing is a lack of
enough generation on the grid, dispatchable generation to keep
the power going.
This is the result of policy choices, in particular the
convergence of subsidized renewables and regional transmission
organizations. Though described as electric markets, RTOs are
actually complex regulatory constructs. And, unlike traditional
utilities, generators and RTOs have no obligation to serve
customers. Furthermore, RTOs and generators are not passing the
full economic benefits of no-fuel and subsidized renewables to
customers. The end result has been higher prices for customers,
less reliability, and little accountability.
This can be contrasted with traditional utilities which
engage in an integrated resource planning to provide
reliability, have the rate set in a manner that is--provides
the economic benefits of fuel diversity to customers, and is
accountable to State public utility commissions and
legislators.
As you look at the various issues about reliability,
particularly the interaction between natural gas and electric,
you may want to consider reforms to the Federal Power Act, FERC
oversight, and enhancing the role of the States. Reliable,
affordable, and abundant energy is essential for the American
people and the Nation.
I am grateful for the committee's work. Thank you for
having me here. And I ask that my written comments be put in
the record.
[The prepared statement of Mr. McNamee follows:]
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Mr. Duncan. Well, let me thank you all for your testimony,
and we will now move into the question and answering portion of
the hearing, and I will begin the questioning, and I will
recognize myself for 5 minutes.
Seeing Ranking Member DeGette's coffee this morning, I am
reminded that America runs on Dunkin.
[Laughter.]
Mr. Duncan. I spell it a little differently.
The truth of the matter is, America runs on energy. For
example, my bill, Protecting American Energy Production Act,
clarifies congressional intent that States have primacy
regarding hydraulic fracturing. It also prohibits the President
from issuing any moratorium on hydraulic fracturing.
Two years ago, America was energy dominant for the first
time since 1952. We went from the largest net importer to the--
to a net exporter. We became number 1 in--oil and gas producer
of the world. We became a global price setter, undercutting the
leverage of OPEC. Finally, we achieved the--President Jimmy
Carter's mission for the DOE: We were no longer reliant on
foreign adversaries for our energy security.
We have now seen a reverse of this. The Democrats' energy
policies have made us weaker and more reliant on other nations
for energy and our supply chains. The Biden administration and
congressional Democrats have taken over 100 actions to make it
more difficult to produce oil and gas here in the United
States. This may be why--that the administration didn't want to
testify today. They know they have taken all executive action
possible to undercut American energy production.
President Biden has then blamed energy companies for not
producing enough, while pushing a rush-to-green energy agenda
that would make us overwhelmingly dependent on China, Russia,
and our adversaries for energy.
The bottom line is we have the resources here in America to
meet all of our energy needs and help those around the globe,
abundant natural resources.
The goal of the legislation we are reviewing today is the
reverse of this: to make American energy and its supply chains
more secure while driving down consumer costs and emissions.
So, Mr. Eshelman, I appreciate your comments on the shale
revolution. We are going to talk about the hydraulic fracturing
and the moratorium today.
The innovation and entrepreneurial spirit helped make
America energy dominant and a global leader in emissions
reductions. This didn't happen in countries with price and
supply controls. What would happen if this administration
sought to curtail the use of hydraulic fracturing?
Mr. Eshelman. Well, it would----
Mr. Duncan. Mr. Menezes.
Mr. Eshelman. It would be----
Mr. Duncan. Or Mr. Eshelman, I am sorry.
Mr. Eshelman. Yes, so it would be devastating. I remember
back in 1994, when I worked at IPAA, we issued a request to the
Commerce Department called a Section 232 because we were so
dependent on foreign oil that we wanted a national security,
basically, ranking for America, that it is a threat to the
United States, all this foreign oil coming into America.
But now, if we look back 20 years later, 30 years later,
America has become energy independent, basically. We produce 12
million barrels of oil a day. We have--imports about 7 million,
so it is not even half, because we also export about 3 to 4
million. So it has made us a global leader. It has created
jobs. It has brought down prices. It has taken down the trade
deficit, it has helped local communities.
I know, Mr. Joyce--I am from Pennsylvania, Dr. Joyce--and
we are the number 2 natural gas producers. It has made our
counties rich.
And so we operate in every community across the country,
pretty much. We live in the communities. We are not
headquartered all the time in Houston, or wherever you might
think Big Oil is. So jobs, deficit reduction, helping local
communities, it has done so much.
Mr. Duncan. Thank you for that. Yes, I meet with gas
producers and pipeline managers all the time, owners.
And Mr. Slocum, you mentioned our natural gas production. I
would argue that we have so much natural gas in this country we
can't truly measure how much. You talked about, I think, 20
percent that we are exporting. Producers and pipelines tell me
that they could provide more natural gas to the Nation if they
had somewhere to put it. They just don't have anywhere for the
gas to go. They are at capacity on the pipelines, what is
produced in the Marcellus. They could produce more, they just
don't have anywhere to send it.
My communities need it. My State needs it. The rest of the
Nation needs it. Natural gas is what got us here in our
emissions goals.
The goal of these bills today is to counter misguided
energy policies that will offshore investment, make us reliant
on countries that don't share our values. If they had their
way, we would be relying on critical minerals primarily
produced in countries with no regard for human rights or
emission reduction goals, countries like China. These bills
would reflect that the U.S. is serious about building out all
forms of energy here, a true all-of-the-above approach.
What happens, Mr. Menezes, if we recede from the world on
the energy production, would it be cleaner?
Mr. Menezes. Well, we need to maintain our ability to
produce because our global allies and partners have really
become--to depend on U.S.-produced LNG. They prefer to do
business with LNG. After Putin's invasion, Europe came to us
asking us to increase production. So they have--really have
come to rely on us.
Plus, with the agreement with the Biden administration to--
that our U.S. LNG providers were going to produce more and
provide Europe over this winter and next winter, also came the
realization that natural gas helped Europe meet its net zero
goals.
Mr. Duncan. Yes.
Mr. Menezes. And indeed, so countries are looking to U.S.
for LNG to help meet net zero goals, which, you know, the U.S.
is proud to be a leader in that.
Mr. Duncan. Yes. My time is expired, but lessen their
dependance on Vladimir Putin and others for their energy
sources.
And I will go to the ranking member, Ms. DeGette, for 5
minutes.
Ms. DeGette. Thank you so much, Mr. Chairman. The first
thing I want to start with, Mr. Chairman, so we get this
subcommittee off on the right foot, is I know the
administration would love to come and testify on these bills.
And so, first of all, I think we should have another
hearing with the administration on these bills. Secondly, if
you expect the administration to come, then we would expect
that you give them the same comity that we did when Mr. Trump
was in the White House, and give them advance notice. But in
addition, you have got 17 bills up today, and they only had
notice of what 2 of those bills were. So if you really want
fulsome testimony, you need to give them the bills.
The second thing I want to point out is that I have good
news for you, Mr. Eshelman and everybody else and you, Mr.
Chairman, which is, you know, we have a lot of fracking in my
State of Colorado, too. And I have been dealing with it for
some time. And as you know, fracking occurs a lot in places
where traditional drilling did not. And so it is really
important--so I don't think anybody is seriously saying we
should eliminate fracking.
But what I am saying and what many are saying is we should
have adequate environmental and security legislation to make
sure that it is safe for the communities around it. And I don't
think you could disagree with that. Is that right, Mr.
Eshelman?
Mr. Eshelman. I believe you are correct, that the States--
--
Ms. DeGette. Thank you.
Mr. Eshelman. [continuing]. And local communities are doing
their part.
Ms. DeGette. Right.
Mr. Eshelman. But I don't think the Federal Government can
put----
Ms. DeGette. OK, thanks.
Mr. Eshelman [continuing]. A one-size-fits-all on----
Ms. DeGette. I have only got 5 minutes, unfortunately. So I
would like to talk to you, Mr. Slocum, for a minute about this
notion of increasing oil and gas production in the United
States, whether it is traditional drilling or fracking, and
this concept that that will somehow make us independent from
foreign oil. And the chairman was talking to you about that.
Is that correct, that if we have increased oil and gas
production here, that that will make us independent from
international oil? And if not, why not?
Mr. Slocum. Yes. No, that is not correct, because, as you
noted, oil and gasoline markets are globally priced, and they
have been since the futures exchange opened in 1982 in New
York.
And so that is why whenever--during the first Gulf War in
1990, we saw significant price spikes here in the United
States, even though there were no domestic impediments to that.
It was because the commodity is a globally priced commodity.
And prior to the export boom of natural gas, natural gas was
insulated. And now that we have got LNG exports, Americans are
now exposed to global natural gas price shifts.
Ms. DeGette. So what would the best way to become
independent from these--this foreign market?
Mr. Slocum. To get our economy off of volatilely priced,
globally priced fossil fuels like oil and natural gas----
Ms. DeGette. And move more into renewable fuels that were
domestically developed?
Mr. Slocum. Correct.
Ms. DeGette. OK. Now I want to ask you one more thing about
H.R. 484, because one of the focal points I have been working
on for some years is reducing methane emissions. And so H.R.
484 rolls back the Obama-era methane rule that had bipartisan
support and industry support, including BP and Shell.
So I want to ask you why section 60113 of the Inflation
Reduction Act is so important.
Mr. Slocum. It is so important because methane is an
incredibly powerful greenhouse gas, far more destructive than
CO2. It is shorter-lived in the atmosphere, but
capturing those methane emissions from the oil and gas sector
is critical if we are going to successfully address the climate
crisis.
And so that is why I thought that the methane provisions in
the IRA were extremely fair. They provide----
Ms. DeGette. And it gives the----
Mr. Slocum. They accommodate industry----
Ms. DeGette. Yes.
Mr. Slocum [continuing]. To help industry achieve those
emission reduction----
Ms. DeGette. They actually give funding to the industry to
help them comply with the bill, right?
Mr. Slocum. Correct.
Ms. DeGette. And finally, Mr. Garcia, I want to thank you
for your testimony. But I would particularly ask the committee
to look at your written testimony, where you analyze every one
of these 17 bills and talk about the fundamental problems. I
don't have time in 5 minutes, like you didn't have time in your
testimony, but it is really helpful analysis. And I think we
should really try to work together to move this discussion
forward rather than just rehashing tired debates that we have
had over all the many years I have been on this committee.
With that, I yield back. And welcome to the new chairman.
Mr. Johnson [presiding]. The gentlelady yields back, and
the Chair now recognizes himself for 5 minutes for the purpose
of asking questions.
And let me--I want to touch on my legislation, the
Unlocking our Domestic LPG Potential Act. And I mentioned last
week how unleashing U.S. LNG exports strengthens America's
geopolitical posture on the world stage, but it can also bring
considerable benefits here at home.
Mr. Menezes, thank you for you--thank you for mentioning my
legislation and for saying how America can lead the way in
providing the world's energy. Can you explain how increasing
U.S. LNG exports can have a positive effect on increasing
production here at home, bringing with it the jobs and economic
growth in places like my district in Ohio that sits atop the
Utica and Marcellus Shale?
Mr. Menezes. Thank you very much for the question. Indeed,
you know, throughout the world, many of our friends and allies
are coming to the United States and asking us to try to produce
as much LNG for the purpose of export. They are aware that,
when we produce natural gas, it is used, obviously, to drive
our very powerful economy. But they have come to look to us,
really, as part of the solution. They do not want to go to any
of the monarchies if they have to. They do not want to go to
Iran. And they certainly now have announced that they are no
longer going to rely on Russia. So they have looked to the U.S.
to replace this supply.
We need to look at a future where Russia will no longer be
a reliable provider. Now, Russia will likely do deals with the
monarchies and perhaps China, but it is important for our
friends and allies to know they can depend on the United
States.
And so with that demand for export, increases domestic
production and lowers prices.
Mr. Johnson. Thank you, Mr. Menezes. Now let's shift gears
a bit.
We have an impressive slate of bills from our Members on
the Environment, Manufacturing, and Critical Materials
Subcommittee that would address some of the major challenges
that we are facing. Ms. Sweeney, please allow me to start with
you, because you mentioned in your testimony that some critical
materials needed for future industries and technologies like
lithium and cobalt will skyrocket some 30 or even 40 times
beyond current demand right now. Frankly, this increase is hard
to even comprehend.
The bottom line is we need a lot more mining and a lot more
mines, and it is going to have to be done somewhere. So, Ms.
Sweeney, wouldn't we want to do more of this right here in
America?
Can you tell us how, if we had the right permitting reforms
and regulations in place, our domestic mining industry would be
able to extract the minerals and metals we need in a safer and
more environmentally responsible way than in other countries?
Ms. Sweeney. Thank you so much for that question. And yes,
we have about 6.2 trillion of value of minerals known in the
U.S. today. And there is further mapping all the time. So there
are more minerals that will be found, and we can mine here
under the best standards--environmental, labor, and safety
standards--in the world.
But we do need the right policies in place to really unlock
that potential. And permitting is one of the impediments. We
need more efficiencies. We are not asking for environmental
shortcuts. We are asking for a more efficient process, similar
to the processes that are similarly stringent in Canada and
Australia, but they do more to focus on coordinating amongst
the various agencies. They have firm timelines in place.
Mr. Johnson. OK. All right. Well, thank you.
And back to you, Mr. Menezes, very quickly. We are
considering multiple bills today to allow America to protect
its, quote, ``critical energy resources'' when America is under
threat. Would you agree that, in addition to, say, oil and gas,
this definition could also include critical minerals and rare
earths?
Mr. Menezes. Absolutely. They are going to be necessary for
our transition to a cleaner----
Mr. Johnson. OK. Would you agree this is a broad
definition? Could it also include things like battery and solar
components, perhaps electrical, steel?
Mr. Menezes. Yes, it can include all of those necessary for
our energy production and use.
Mr. Johnson. OK. Well, thank you, because it is essential
that we protect all of these components and their manufacturing
supply chain.
I do want, in my remaining time, I want to go back. I
heard, Mr. Garcia, you mentioned that these bills are replete
with exemptions and go-arounds. These bills are actually the
removal of burdensome regulatory barriers that are--to
advancing a true, all-of-the-above, market-driven energy
strategy, the kind that the President actually wants.
But yet these barriers for permitting, for mining, for
exporting clean natural gas, you name it, those are things that
would promote the President's agenda. But this administration
doesn't want that. And that is what we are trying to break down
today. Because good, solid energy policy is also good climate
policy. And we believe Republicans are offering those up today.
And with that, I would yield back. And now I recognize our
colleague, the ranking member on the Environment and
Manufacturing and Critical Materials Subcommittee, Mr. Tonko,
for 5 minutes.
Mr. Tonko. Thank you, Mr. Chair.
Mr. Garcia, thank you for your testimony. I am grateful to
you and the Earthjustice organization for the partnership with
frontline communities seeking protection from environmental and
health threats.
Yesterday, Members received a letter from Earthjustice and
seven other environmental organizations expressing opposition
to five bills under consideration today. While I understand you
have several concerns with each of these bills, the broad
definition of ``critical energy resource'' seems to be a common
issue. What is your understanding of what could be included in
these bills' definition of ``critical energy resources,'' and
what risks might this pose to the communities with which you
partner?
Mr. Garcia. Yes, absolutely. As I mentioned, the bills
themselves don't actually give us a definition of what
critical, whether it be critical minerals or critical energy
sources, actually are. And so it really defers to the Secretary
of Energy in any given administration to determine what these
are. And so that means that virtually anything can become a
quote/unquote ``critical energy resource.''
And so, you know, the idea here is that we have to make
sure that the energy that we produce is clean, but the
manufacturing that goes into the creation of that clean energy
also has to be clean, and it has to protect communities
themselves.
And so, when we are talking about broad outlines, right,
and broad schemes that do go around the laws, it is going to be
particularly problematic because, again, we are talking about
laws and regulations. And we certainly heard about red tape,
but few people actually mentioned that it is not red tape, it
is actually protections that people rely on. NEPA, the National
Environmental Policy Act, is at times the only law that
communities have on the ground to actually know what is going
to happen in their back yards and then to be able to comment on
what is going to happen, say, on a mining project or on a
drilling project or an energy project.
And so we have to really think about how expansive this
definition can really get, because, you know, when we are
talking about the--for example, the TSCA bill, it says that for
critical energy sources you have to study the economic costs to
see if the substance is safe, which is backwards. A substance
is either safe or not. It is either poisoning or it is not. And
you can't figure that out afterwards.
It also puts these chemicals on the market before the
determination of whether they are safe or not is actually made.
And so you can imagine that, right? Like, you--hey, you got
three cups in front of you. ``Go ahead and drink them all. We
will find out later if one of them is poisoned.'' It is
backwards logic. And that is what we are doing to our--that is
what we would be doing to our communities day in and day out,
if we allowed this to move forward.
Mr. Tonko. Thank you.
Ms. Sweeney, your testimony highlighted the increasing
international demand for critical minerals and the strategies
developed by several foreign governments, including the UK and
Canada, to address these growing demands. A common thread
highlighted in these strategies is the importance of bringing
greater transparency to supply chains.
I know that the National Mining Association has said that
the Inflation Reduction Act's clean vehicle tax credit, coupled
with other provisions in the IRA, can help U.S. energy security
and supply chain resilience. As you know, a key component of
this tax credit is verifying material sourcing, and I want to
hone in on that verification effort.
What do you see as the need for increased supply chain
transparency and tracking in helping verify and promote
compliance with the domestic sourcing requirements in the
recently enacted battery incentives?
Ms. Sweeney. Thank you very much for that question. That is
a great question, and transparency is needed.
I mean, there is information that we do get from the U.S.
Geological Survey about where minerals come from, but it can be
quite complicated to trace them back to the source, and
additional resources are probably needed to be able to do that.
Mr. Tonko. So what----
Ms. Sweeney. Of course, if we get them here, we wouldn't
have to trace too far.
Mr. Tonko. Right. But what specifically should we do to
improve that tracing, tracking opportunity?
Ms. Sweeney. You know, I have not spent a lot of time
thinking about that. I would love to get back to you with an
answer.
Mr. Tonko. Sure. Thank you. And I also believe Congress
should consider other methods for meeting our critical mineral
demands, including investing in R&D to develop alternative
battery chemistries that are less reliant on critical minerals,
and putting a greater emphasis on the recycling of critical
minerals already in commerce.
Mr. Garcia, do you believe more can be done to achieve more
sustainable sourcing through recycling and reuse of critical
minerals, provided this is done using safe and environmentally
sound processes?
Mr. Garcia. Yes, absolutely. And the laws that are in the
books, far from being obstacles, are actually guides. They
guide us in order to make sure that, while we are doing more
recycling of these minerals and while we are figuring out what
we want to do in terms of the next innovation, that we are
doing it in a way that it is safe. And so, far from obstacles,
these are guideposts that we need to make sure that we are
keeping in mind as we move forward in innovation.
Mr. Tonko. Thank you very much.
With that I yield back, Mr. Chair.
Mr. Johnson. The gentleman yields back. The Chair now
recognizes the chairlady of the total committee, Energy and
Commerce, Mrs. McMorris Rodgers, for 5 minutes.
Mrs. Rodgers. Thank you, Mr. Chairman. Our goal is to put
security back at the center of our energy policy. That is what
this, the package before us today--each of these bills is
central to our energy work.
And flipping the switch for more American energy and
energy-related industrial activity, it is key, while
maintaining America's highest labor environmental safety
standards. There is nothing in any of the bills before us that
would undermine those high standards.
And I--and, you know, Russia's invasion of Ukraine, it
didn't cause the energy crisis. It just exposed what was going
on in weakening American energy security. The risks extend way
beyond oil and gas supplies to vulnerabilities in the civilian
nuclear sector.
The sad fact is our domestic fuel infrastructure, from
uranium mining and conversion to enrichment services, has
eroded. Upwards to 24 percent of America's fuel this year--this
year--will be Russian sourced, which places our fuel supplies
at greater risk of disruption.
Mr. Menezes, during your time as Deputy Secretary of
Energy, DOE highlighted the importance of restoring American
nuclear leadership in the world. Would you speak briefly as to
why a strong nuclear industrial base, from fuels to
technological development, is critical to domestic nuclear
development, quality energy supplies, and to our national
security?
Mr. Menezes. Well, thank you very much. I mean, we have
always been aware of the need for the U.S. to maintain its
global leadership in nuclear technology, but it became more
apparent as I began to travel overseas and to see the role that
Russia and China is playing, doing deals with our friends and
allies across the world, trying to bring their nuclear
technology to them.
Now, one might say, well, you know, that is not a big deal,
but it is a big deal, because what we are doing is we are
ceding the leadership, the technological leadership, the
institutional knowledge, and the 50- to 100-year relationships
with China and Russia--with our friends and allies. They are
turning away from the U.S. So that is an important thing: We
are losing the global leadership.
We have 123 requirements in our law. China and Russia do
not. And so we should all be concerned about maintaining that.
Regardless of how you feel about nuclear energy, we need to
maintain that leadership. It is very real, and it is very
threatening.
And then our own history is that we really have--we need to
improve our mining, our milling, our conversion, our fuel
fabrication, and, of course, enrichment. And so I really--I ask
this committee to please look seriously at it.
We released a report in 2020 where we tried to look at it
in a very broad view, and I would like to submit that in the
record, as well, with my testimony. Thank you.
Mrs. Rodgers. Thank you very much.
Ms. Sweeney, just to build on this a little bit, my
legislation is designed to send a clear signal to industry that
a date certain America's nuclear industry can no longer rely on
Russian-sourced, low-enriched uranium. What do you believe this
signal would mean for building out our domestic fuel industry?
Ms. Sweeney. It is a lifeline. Frankly, you know, talking
about insecure supply chains, our reliance on foreign sources
of uranium, over 97 percent is foreign. It is just crazy when
you think about that. And that industry is on the precipice of
extinction. They need that lifeline.
Mrs. Rodgers. So this week we are all talking about a
Chinese spy balloon that made its way across America,
underscored the importance of Americans and--having safe and
secure systems, supply chains. It is real. The threat from
China is real. It is active.
So Ms. Sweeney, what do you believe this event says about
the urgency for us building out our mineral, metal, and energy
materials supply chains?
Ms. Sweeney. It is such an important topic. You know, we
need to be able to rely on ourselves for as much as we can, and
we have so much here that we can be using. We have the great
workforce, we have great transportation infrastructure. We can
and should be doing it here, and that will protect us, you
know, in energy crisis, in military crisis, in economic crisis.
Mrs. Rodgers. So would you speak to where do we get the
minerals and the metals that we need right now? Where do they
come from?
Ms. Sweeney. Could you repeat that?
Mrs. Rodgers. The minerals, the metals that we need in
energy, in----
Ms. Sweeney. Oh, oh----
Mrs. Rodgers. Yes, yes.
Ms. Sweeney. China, mostly China, right? And the
processing, as well.
I mean we are 80 percent reliant on rare earths that come
from China. Processing, they do about 90 percent of the rare
earths processing there.
Mrs. Rodgers. And what has been happening recently in
America, as far as making more of this available in America?
Ms. Sweeney. Well, we have gotten a lot of funding for new
projects in the U.S., but what we are lacking is the permitting
reforms to accompany that. So what--we are seeing money going
to projects, but we are not seeing approvals happening. So it
is really delaying our ability to unleash our full potential.
Mrs. Rodgers. Yes, you can't build without permitting
reform.
I yield back, Mr. Chairman.
Mr. Johnson. The gentlelady yields back. The Chair now
recognizes the ranking member of the Energy and Commerce
Committee, Mr. Pallone, for 5 minutes.
Mr. Pallone. Thank you, Chairman. I am going to try to get
in some questions for Mr. Slocum and Mr. Garcia.
So, Mr. Slocum, in your testimony you talked about how
increased LNG exports have increasingly tied American natural
gas markets with global markets, meaning that American
consumers are now sharing in the volatility that global markets
are experiencing due to Russia's invasion of Ukraine. And
American natural gas markets are currently reflecting that
volatility.
Last year, American natural gas futures fluctuated wildly
from a low of just under $4 per unit to nearly 10. I don't know
how families in New Jersey are supposed to budget for gas to
heat their homes when it could double in price on them with no
warning whatsoever.
So first question, Mr. Slocum: Can you talk about how
increased LNG exports have increased home energy costs for
Americans?
Mr. Slocum. Yes. So the Department of Energy has authority
to review export applications, and it has approved every one.
And so, as a result, we went from zero LNG exports in 2016 to
now we are the largest LNG exporter in the world. And what that
has done is it has forced consumers in New Jersey and Texas and
elsewhere to compete with our foreign counterparts for that
gas.
And obviously, we want to help our allies in need after the
Russian invasion, but I think that there needs to be a balanced
assessment because, when there are physical shortages in New
England and extremely high prices on the West Coast, it is
clear that the level of export is creating detrimental impacts
for energy affordability at a time when families are already
stretched thin with high energy prices.
Mr. Pallone. Well, thank you.
Now, I wanted to enter into the record--if I can ask
unanimous consent to enter into the record--a CNBC article from
last June detailing the decrease in U.S. natural gas prices
after the explosion at a Freeport LNG terminal. If I could ask
unanimous consent, Mr. Chairman.
Mr. Johnson. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Pallone. Thank you.
So if--my understanding is that, you know, because that
Freeport terminal export was closed, that we had more natural
gas here, and prices went down. Accurate?
Mr. Slocum. That is 100 percent correct. So on June 8th,
2022, there was a massive explosion at the Freeport LNG
facility, which alone accounts for 20 percent of all of U.S.
LNG exports, so it is a very large facility. And the futures
market immediately reacted to the fact that that 20 percent
export capacity was going to be offline for some time by
sending domestic prices significantly lower, a recognition of
the direct impact that exports have on domestic pricing.
Mr. Pallone. All right. Let me just focus on Mr. Johnson's
bill, Mr. Slocum. Then I have to get to Mr. Garcia.
Can you talk about how removing the requirement for DOE to
find that LNG exports are in the public interest would worsen
the problem of expensive natural gas?
Mr. Slocum. Correct. Right now, under the standard
established in 1938, Congress dictated that no exports are
allowed to occur unless they are found to be consistent with
the public interest. And right now the Department of Energy
performs that test.
We banded together with a number of other organizations in
October, noting some methodology flaws in the way that the
Department of Energy currently does that. But the statutory
requirement is very important to ensure that exports are
consistent with the public interest. And I think removing that
public interest standard would not be advisable.
Mr. Pallone. All right. Let me go to Mr. Garcia about
methane.
Consumers are also paying for market failures that make it
cheaper for the industry to waste methane than to install or
upgrade equipment to prevent leaks. And this leaked or
intentionally wasted gas never makes it to consumers, but they
are nevertheless stuck with the bill. So that is why we enacted
the Methane Emission Reduction Program to ensure consumers stop
paying for wasted energy or the harm its emissions cause.
Cleaning up legacy damage and preventing future pollution from
the oil and gas industry were also reasons for the program.
So Mr. Garcia, you have got less than a minute. Could you
speak to how frontline communities would benefit from holding
the oil and gas industry accountable for its methane pollution?
Mr. Garcia. I mean, throughout we see, whether it be oil
and gas production or petrochemical facilities across the
country do some of the worst damage to communities across the
country. And we can almost pinpoint the communities, the
Ironbound community out in New Jersey, the Cancer Alley between
Baton Rouge and Louisiana--sorry, and New Orleans in Louisiana.
All you have to do is really go--and I really encourage
everybody on this committee--go and take a what they call the
toxic tour of these communities to truly understand what they
are dealing with left and right, day in and day out.
And people say, well, it is their choice to live there.
They were there before. They were there before. And industry
has come in, and they have utterly ravaged the health of these
communities throughout.
And they will tell you about the cancer clusters. They will
tell you about all of the concerns that they have about the
respiratory health, cardiac health. And I honestly can't do it
justice here.
But it is imperative that the protections that we have stay
in the books. And what really needs to be the focus of this
Congress is how do we strengthen protections so that not only
are we addressing the energy needs, which we have heard a lot
about here today--and what we haven't heard, many things, in
fact, anything about--are the health protections that need to
be in place for communities to actually thrive in the face of
oil and gas, mining, and other dirty industries.
Mr. Pallone. Thank you.
Thank you, Mr. Chairman.
Mr. Johnson. The gentleman yields back. The Chair now
recognizes the gentleman from Texas, Dr. Burgess, for 5
minutes.
Mr. Burgess. Thank you, Mr. Chairman.
Deputy Secretary Menezes, let me just ask you a question,
if I could. The statement was made that natural gas prices fell
in June after the unfortunate accident at the Freeport
facility.
Do you know what has happened since then, as far as the
futures on natural gas?
Mr. Menezes. Well, I think today, you know, they are back
at their normal historic lows since the shale revolution. So
that has been the constant thing. There was indeed a blip of
the prices, as mentioned. But you have to look at the long-term
view.
And so DOE has done, like, five studies using EIA and other
experts in the field to look at if, in fact, all of the
facilities that are pending there were actually permitted and
built and exported. The studies have all been--the projections
have been clear: modest increases in prices. And this is going
out to 2040.
Mr. Burgess. Yes. According to Bloomberg, the price did
drop in late June and early July. It then immediately came back
up for the balance of the summer, dropped again a little bit in
September, when perhaps energy demands--air conditioning and
electricity demands--fell off, and currently stands at 2\1/2\
dollars per million BTU, I mean, which is in line with its
historical precedent.
So--but there is probably another reason why they are
paying higher prices in Boston. Can you help us with that?
Mr. Menezes. So on the price of natural gas, there are
several reasons for that. It should not surprise anyone that,
due to limited capacity on the West Coast and the East Coast,
that those prices are going to be high. Those areas of the
country have taken the position to restrict natural gas going
in there. So their constituents should be prepared to pay
higher prices.
On pricing with respect to electricity, that is something
actually different. So the pricing there is done, you know, at
different points within the bid-based markets. And so those
are--it is locational marginal pricing, and it really depends
on the price of natural gas, really, to set the electricity.
But to be sure, when you restrict access to natural gas and
our economy is growing on the use of natural gas, you will have
higher electricity prices at the points where you can't get
natural gas. And more and more of our generation is replacing
coal and ramping renewables. So it is a good thing that it is
growing, but you have got to be careful about how you
characterize pricing.
And with respect to the jump in LNG going down, remember
that was in--the prices went up for the unanticipated Putin
invasion of Ukraine. That is what set the prices up. So when it
came down because of the Freeport accident, it could only come
down, to be frank about it, because the Putin invasion caused
the global prices to go so high.
Mr. Burgess. So what is the principal source for natural
gas in Boston?
Mr. Menezes. I don't know if there is a principal source. I
do know that New England has, you know, the ability to import
natural gas from Yamal and other places. Our Jones Act
restricts, you know, our ability to get natural gas from the
Gulf of Mexico up to New England. So that is----
Mr. Burgess. So let me just ask Mr. Eshelman.
Are--those are your independent producers that are selling
in Boston?
Mr. Eshelman. No, we are not up in Boston. I was going to
say probably the biggest source of methane in New England is
dairy farms.
Mr. Burgess. Is what?
Mr. Eshelman. Dairy farms.
Mr. Burgess. Well, look. And Mr.--or Secretary Menezes, I
appreciate your thoughts on this and the restriction of natural
gas. One of the bills we have under discussion is to help get
product that is stranded in the Permian Basin and get it into
the stream of commerce. So I appreciate your comments on that.
Mr. Menezes. Just on a point on that, so, I mean, the
President was taking the credit for increasing exports so they
could get to Europe. You know where the exports were coming
from? The exports were coming from the Permian Basin in----
Mr. Burgess. Correct.
Mr. Menezes [continuing]. Texas to the export facilities
there with--beyond Federal overreach. That is the source. The
President didn't make that point when he was taking credit for
increasing production to help our European----
Mr. Burgess. Well, maybe you could help him with that line
in the State of the Union tonight. He likes to take credit for
stuff.
But, look, I really appreciate your efforts on helping us
with the bill to get the siting and the permitting for natural
gas pipelines.
Yes, I get the concern that you don't--in the production of
natural gas, you don't want flaring and venting. The problem
with stranded gas in the Permian Basin is you can't get it--
sometimes you can't get it to market. So this is an effort to
do that. And I appreciate you pointing out how we are helping
the President in the process.
So thank you all for being here today, and I appreciate the
lively discussion.
And I will yield back, Mr. Chairman.
Mr. Johnson. The gentleman yields back. The Chair now
recognizes the gentlelady, Ms. Schakowsky, for 5 minutes.
Ms. Schakowsky. Thank you to our witnesses.
Drill, baby, drill is what Big Oil and Big Gas wants right
now. And it seems as if, from the list of bills that are being
considered today, that that is what my Republican colleagues
want, as well. It is really a wish list, I think, and a laundry
list of policies on the Big Oil agenda.
So, Mr. Slocum, I want to ask you, consumers have been on a
natural gas roller coaster, with prices reaching their highest
level since 2008. Do the bills that we have--or that we are
considering today do anything to combat the high gas prices
that consumers have suffered for this last year?
Mr. Slocum. I am unable to find any consumer protections in
these proposed bills. In fact, I think that the expansion of
exports would likely hurt consumers.
What is striking to me is the lack of any energy efficiency
or demand reduction initiatives in this legislation. It is not
always about supply, it is also about demand.
And how do we get more tools in the hands of consumers to
help them avoid these high costs? More incentives. More funding
for building efficiency, for building electrification, if
municipalities and States want to go that direction.
Weatherization. All of these types of tools can empower
consumers to avoid their exposure to increasingly volatilely
priced fossil fuels for energy.
Ms. Schakowsky. So I want to ask you this. So in that case,
what can--tell us what we can do to encourage the utility
companies to transition away from fossil fuels, while at the
same time, of course, lower home energy costs and promote
energy efficiency.
Mr. Slocum. Right. I think----
Ms. Schakowsky. I mean, we want to hear your ideas of what
we can do going forward.
Mr. Slocum. Well, I think, you know, Congress already has
directed a lot of financial incentives through the Inflation
Reduction Act to try to spur the deployment of a number of
different clean energy and energy efficiency technologies. And
I think anything else that Congress can do to assist States
with ensuring that utilities are making those investments in
energy efficiency.
There are a number of States that have recognized that
prodding their utilities to invest more in their consumers to
increase energy efficiency is the best path forward. And so
providing more regulatory incentives and financial incentives
for utilities, for building owners, for landlords, and for
homeowners to deploy and adopt energy efficiency technologies
and clean energy technologies, that is only going to help
reduce customers' bills and their exposure to volatilely priced
fossil fuel energy.
Ms. Schakowsky. Can you give us some examples of things
that are happening around the country that are delivering that
kind of good outcome?
Mr. Slocum. Sure. So I live in Maryland, which has very
proactive--it is called Empower Maryland, where the Public
Service Commission, backed by the legislature, requires
utilities to invest not necessarily in building new power
plants to meet demand, but investing in consumers to help
obtain energy efficiency initiatives. So, you know, I live in a
house built in 1900 that needed a whole lot of weatherization
renovation. And that was helped in part because of incentives
through the utility.
And so I think looking at energy providers not as just
providing energy, but assisting customers in avoiding energy
use through improvements in energy efficiency, has to be a
central component. And all investments in energy efficiency are
typically far more cost effective, meaning the bang for your
buck for investing in energy efficiency is always better than
building new energy resources.
Ms. Schakowsky. I thank you so much for your comments----
Mr. Slocum. Thank you.
Ms. Schakowsky [continuing]. And I yield back.
Mr. Johnson. The gentlelady yields back. The Chair now
recognizes the gentleman from Ohio, Mr. Latta, for 5 minutes.
Mr. Latta. Well, thanks, Mr. Chairman, and thanks for our
witnesses for being here today. I really appreciate it.
And one key area that is holding the United States back
from reaching its full potential for energy production is
refining capacity. Last year the Energy Information
Administration estimated that North America lost over 1 million
barrels of fuel per day in refining capacity in a 3-year
period.
Where refining capacity has decreased, demand for energy
has gone in the opposite direction. Our remaining refineries
struggling to keep up with this demand are running at close to
95 percent of total capacity. Any economist will tell you that
the situation--resulting in higher prices for the consumer. And
my legislation, the Researching Efficient Federal Improvements
for Necessary Energy Refining and Refinery Act, would address
this.
If I could start with you, Secretary Menezes, how important
is it for the Federal Government to drive the conversation
towards increasing refining capacity in this country?
Mr. Menezes. We do need a robust refining capacity here,
simply so we don't have to import from any other country, and
we can provide our consumers with what we need. But the fact is
that there hasn't been another major--a new, major refinery
built--greenfield--since 1977. We have built some small
refineries, but we have been closing more of----
Mr. Latta. Sorry, would you repeat that again? What was the
date, again, for our major refinery?
Mr. Menezes. In 1977, the last major greenfield oil
production, I believe it was the Marathon refinery.
Now, there have been some small refineries that have been
built, typically on brownfield sites, but we have been--our
industry has been ratcheting out the inefficiencies back from
the 1970s. And so we have been closing, we have been doing with
what we can.
But the permitting process, essentially, is too difficult
to overcome. I believe we have a North Dakota plant and a Utah
plant that, I think, have basically stalled out because of lack
of permits.
So we are doing--we are making improvements with what we
have had for many years, and that--it operates at the 95
percent efficiency that you say--does not leave much wiggle
room for when the President wants us to increase refining. For
example, we simply, A, don't have the facilities or it would be
too costly for us to suddenly begin to take them out of
mothballs and then try to get them going again.
So that is why we should look at this comprehensively to
see what we can do to help, you know, get a robust, clean,
environmentally compliant refinery.
Mr. Latta. And just to follow up, what is the benefit going
to be to the consumer? What is the benefit to the consumer?
Mr. Menezes. Well, you would have a ready supply of refined
products.
Mr. Latta. Thank you very much.
You know, we have talked a little bit earlier today in
regards to having a strong nuclear fuel security program, and I
totally support it. And I also fully support our chair's
legislation that would ban the importation of Russian uranium.
And, Mr. Chairman, I ask unanimous consent to place into the
record two letters of support in favor of this bill: one from
the Uranium Producers of America and the other from the
organization ClearPath.
Mr. Johnson. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Latta. Thank you very much.
Ms. Sweeney, if I could switch gears real quickly and talk
about your testimony, because, interestingly enough, you know,
just by chance--everybody saw the second page of The Wall
Street Journal today. It is all about what? It is all about
our--what we are going to do about EVs and our batteries in
this country. And it is a very interesting article, and I
thought right--apropos for where we are today.
But, you know, in your--this testimony that you talked--
that you presented today, you know, you have that the lithium
band is going to--demand is going to increase by more than 40
times by 2040, followed by graphite, cobalt, nickel at 20 to 25
percent in that timeframe. Our automakers are warning that the
coming battery shortage could stop the EV revolution in its
tracks.
And also in your testimony you state that, with over $6
trillion worth of mineral resources that we have right here in
this country, you know, it is right in our own back yard.
But it goes right to--a question, then, is on the
permitting and the delays out there, because also in your
testimony you have your chart that shows that, you know, we
could be looking at anywhere from 7 to 10 years to get a
production site up. And I have been to the only lithium
facility that we have in this country, out in Nevada.
But you also state that unexpected permitting delays could
reduce that--mining projects by more than a third.
But do you also--when you think about all of these things,
you know, what are we going to do in this country, especially
when we look to our friends to the north in Canada, that their
permitting is taking 2 to 3 years, and here in this country it
is taking 7 to 10? What can we do?
Ms. Sweeney. You know, they have some efficiencies in
Canada and Australia, you know, which have very similar NEPA
regulations and statute in place that do allow the permitting
process to move a little bit faster.
One of those is actually allowing the project proponent to
prepare the environmental impact statement. The Government then
does a thorough review, and makes sure that, you know, that
meets all the standards, and they allow the opportunity for the
public to comment on the NEPA project--or the analysis, just
like we do here.
But the project proponent is--has the best information.
They are on the ground right there. They know what is happening
on the ground. They have got the data in front of them, and
they have the incentive to move more quickly. And they are only
focusing on one project at a time. When the Government has to
do it, they are looking at a lot of different projects, and it
is just a matter of getting the resources to the project. That
is part of the delays.
Another process that works better----
Mr. Latta. Oh, excuse me. I am afraid my time has expired,
but I would ask, if you could put that in writing, and I will
address that to you then.
Thank you very much, Mr. Chairman.
Ms. Sweeney. Sure.
Mr. Johnson. I thank the gentleman for yielding. The Chair
now recognizes the gentlelady from California, Ms. Matsui, for
5 minutes.
Ms. Matsui. Thank you, Mr. Chairman, and thank you for the
witnesses for being here today.
Recent research from the Energy Innovation shows it is now
cheaper to replace almost every coal plant in this country with
new, renewable generation rather than pay to keep those old
coal plants running.
In my community, our utility, the Sacramento Municipal
Utility District, affectionately called SMUD, is on track to be
zero carbon by 2030. At the same time, our electricity rates
are among the cheapest of any competitors.
Mr. Slocum, fast forward to 2030. Based on current
modeling, will the clean energy transition save consumers
money?
Mr. Slocum. Yes.
Ms. Matsui. OK. Again, Mr. Slocum, given the expected costs
of climate change, will the clean energy transition save our
Government money?
Mr. Slocum. Yes.
Ms. Matsui. OK. I want to follow up on what you said about
what utilities can do. Are utilities doing all those kinds of
things, and making sure that--they are making sure that their
customers have good investments so that we can transition?
As I mentioned, our municipal utility in Sacramento is on
track to be zero carbon by 2030, 5 years ahead of the
President's goal for decarbonizing the U.S. power sector.
The clean energy transition is achievable, it is cost
effective, and the potential benefits are enormous.
Mr. Garcia, if every utility in this country were zero
carbon by 2030, what kind of benefits would we see among the
low-income and minority communities living adjacent to fossil
fuel facilities?
Mr. Garcia. Well, it is going to be a huge impact, and that
is why the investments coming out of the IRA are so important,
because we are basically reducing the process that is poisoning
the communities across the country, right? And so, the less
they have to rely on those dirty fuels, the less poisoned air
they have to breathe.
Ms. Matsui. And for those focused on economic impacts above
all else, what are the potential economic benefits of improved
health in those frontline communities?
Mr. Garcia. Well, throughout the--you know, throughout all
of the economic impacts, they would be quite substantial.
One, because, you know, I mean, you can think about, in
very concrete terms, how much does an inhaler cost for--you
know, for a child per se? And that is a saving. The trips to
the emergency room, the hospital bills.
On top of that, it also makes electricity way easier for
them to get, and not as expensive as it used----
Ms. Matsui. OK. Nature-based solutions are among the most
cost effective and underappreciated tools in our toolbox when
it comes to mitigating and adapting to climate change. And I am
very concerned to see a number of bills here today that would
roll back important environmental protections and threaten
fragile ecosystems.
Mr. Garcia, what would be the cumulative impact of those
bills on our ecosystems, natural lands, and biodiversity across
America?
Mr. Garcia. It would be extremely destructive, not only
because of the--I mean, one is the climate emissions that they
would--that they bring about, and all of the way that they are
going to make--the storms, the droughts, all of that is going
to get worse.
But in addition to that, a lot of these projects are
happening without any regard to nature, and I think that
oftentimes we talk about nature as some distant place where we
don't actually go. But we have to recognize that air knows no
borders. It travels all across our States, and so does water.
And so when we are polluting the water, when we are polluting
the air, when the wildlife can't adapt quick enough, when we
are throwing away grasslands that would protect our
communities, say, from hurricanes or bigger storms that way, we
are all going to end up suffering.
And unfortunately, communities of color and low income are
at the front lines of that suffering.
Ms. Matsui. Certainly, they are the most exposed,
especially to nature's wrath and those dependent on the
resources provided by the natural ecosystems.
How could we work better with low-income, minority, and
frontline communities to protect these ecosystems and improve
the potential of these ecosystems to help mitigate and adapt to
climate change?
Many of these are in low-income neighborhoods, and it is
very difficult to figure out how to work with them.
Mr. Garcia. Absolutely. And, you know, the way that we work
with them is by following the guideposts that laws like NEPA
set in place, because NEPA is really about engaging the public,
engaging frontline communities.
And so making sure that it is not industry's alternative
that gets put front and center all the time, making sure that
communities on the ground are actually being able to say,
``That is actually a conflict of interest,'' making sure that
communities on the ground are able to say, ``That is actually
going to affect my water, so you shouldn't do that,'' and,
frankly, all of those protections that, again, many people here
keep calling obstacles and red tape are those guideposts in
order to engage those communities in a way that is going to be
helpful to them and helpful to the project's sponsor
themselves----
Ms. Matsui. OK.
Mr. Garcia [continuing]. To create better projects.
Ms. Matsui. Well, thank you very much, Mr. Garcia, and
thank you for the witnesses for being here today. Thank you.
Mr. Johnson. The gentlelady yields back. The Chair now
recognizes the gentleman from Kentucky, Mr. Guthrie, for five--
--
Mr. Guthrie. Thank you----
Mr. Johnson [continuing]. Minutes.
Mr. Guthrie [continuing]. Mr. Chair. I appreciate the
recognition.
And there is a cost. First of all, I will bring up
Paradise, Kentucky, in Muhlenberg County. It is--TVA shut down
its coal-fired power plant. It devastated that community, it
devastated the people that live in that community, but it also
devastated everybody in the TVA power area.
December 23rd, 24th, it was a cold day, it was unusually
cold. But TVA wasn't prepared for it. They will give you about
10 different reasons because their board wants them to get out
of fossil fuels. But I will tell you, people are suffering
because of it. We had rolling blackouts, which is hard to
believe in America during this time and this day.
The rising cost of gas, the rising cost of energy affects
people at the low-income level at the most. I hate paying when
we were paying $5--almost $5 a gallon worth of gas. I hate
paying it. But I know people that had to change their lifestyle
because they couldn't afford to pay it. And so this is serious
stuff.
I mean, we don't need technology deniers. We need to
understand that we have to have a system where people have
access to affordable, reliable, and sustainable energy.
And for instance, you know, Germany tried it. We export
coal, the price of coal has increased because the German
economy decided they cannot continue down the path they were
on. If we didn't export coal, then we wouldn't have the
increased price of coal. Therefore, we wouldn't--they wouldn't
have opened mines. And so now it has brought more coal into
production because of the decisions that's happening in Europe.
You know, thank goodness Germany has had a mild winter. You
know, I was praying for a mild winter for Germany because of
some of the decisions they made. You are talking about people
affected? People could have died from the cold weather if it
had moved forward.
So it is important that we are part of this global economy.
And for instance, I was in--I think Ms. Schakowsky has left--I
was in her neighborhood, dropping my daughter off for college,
when I heard that Iran had bombed a Saudi Arabian oil
production facility. And being a child of the 1970s, my first
thought is I better top my car off--because I can get home on
one tank of gas if it is all the way to the full--expecting
disruptions in the gas supply. But because of energy
independence, we didn't have any. And I think it went up maybe
a dime for a half a day, or a day or so.
So the point is we have got to do all the--and I grew up, I
went to college on the Hudson River, about 45 miles from New
York City. You couldn't swim in it when I was there. We don't
want that, absolutely don't want that. Now, it is--fortunately,
it has rejuvenated itself. We put in protections in place.
And so we need communities that are safe, we need
communities that people can live in and enjoy the beauty of the
Hudson Valley, which they can now because of laws that Congress
put into place and efforts that people moved forward.
So we are not selling that, but we want people to have
access to affordable, reliable, and sustainable energy. And one
way to do it--I want to talk, Mr. Menezes and Mr. Eshelman,
on--I have a bill in this, or a resolution with--that says we
don't want export bans on petroleum and natural gas. And the
reason is that it actually produces lower prices for everybody
when producers can engage in the world marketplace. It allows
expansion of supply. So that is why, even though the expansion
of demand allows expansion of supply at the price that is
sustainable, you may get some short-term lower prices, but not
in the long term.
Also, do we want our friends and our neighbors and our
allies to be dependent on dictators? If you are dependent on
dictators, you are vulnerable to them. So when we choose to say
we are going to keep it all here, we are going to say to our
European friends, ``You are going to have to buy from Putin,
you are going to have to buy from Iran, you are going to have
to buy from Venezuela.''
And so, if the two of you would, kind of talk to why it
doesn't make sense to ban exports of petroleum, natural gas,
Mr. Eshelman and Mr. Menezes.
Mr. Eshelman. Well, Congressman, there are a few reasons.
One is if we continue to produce oil here at home, those
are jobs that remain. If we would stop exporting the oil, those
jobs would disappear. So it actually helps when we are
producing more here at home and exporting to keep those wells
pumping.
The other thing I mentioned before is the trade deficit. It
has come down tremendously because of the export of oil and
natural gas to other countries. About 68 percent of our LNG
exports go to Europe. So it helps our allies, and it helps our
own national security. It makes sure that we are on the world
stage and being a player.
And so those are the big themes that I would hit.
Mr. Menezes. And I look at it, really, from a separation of
powers, you know, viewpoint, because having worked for Congress
for many years--and I got, you know, accustomed to the fact
that, unless Congress says it, you know, others can't do it,
and we set the law of the land, and then you go over to the
executive branch, and the first question you ask is, well, if
Congress doesn't prohibit me from doing something, then I have
all the authority I need to do something.
And it becomes relevant when emergencies occur, and the
President wants to take action to solve a problem. What
emergency authorities, you know, do I have? What can I do? What
do I have in the Constitution? What is--what has Congress said
I can and cannot do?
And with respect to bans of oil, Congress has been--has set
a process in place. The President can actually take decisions
to limit exports, but he has to do it following a process that
Congress clearly put in the bill when they decided to lift the
export ban. So he can't simply unilaterally declare an
emergency and take such action.
And this is what you do: You make him follow the law that
Congress enacted. So that is my view of this and why I think it
is important for Congress to express the clear intention to the
executive branch to read the law and follow the law.
Mr. Johnson. The gentleman yields back. The Chair now
recognizes the gentleman from Maryland, Mr. Sarbanes, for 5
minutes.
Mr. Sarbanes. Thanks very much, Mr. Chairman.
Thank you all for your testimony today. As we know, we are
considering several bills that would, according to our
colleagues on the other side of the aisle, unleash American
energy.
But, no surprise, a lot of these bills that are on the
docket here are more of the same. They are really unleashing
more profit-making by the big oil companies, and doing that at
the expense of the American people, in my view. And it is
beyond me why our colleagues, with these pieces of legislation,
would seek to erode what are bedrock environmental laws for the
sake of unleashing American energy, as if we need to choose
between health and safety of communities on the one hand and
promoting energy on the other hand.
One of the bills we have talked about--but I want to come
back to it--that we are being--that we are considering today
would create this new regulatory pathway for, quote, ``critical
energy sources'' under TSCA, and it would circumvent what were
bipartisan reforms that Congress passed in 2016. It would
require EPA to consider nonrisk factors when determining the
risks associated with a substance, which is very backwards
thinking, you would think, in this day and age.
Congress deliberately and explicitly prohibited EPA from
considering such factors when determining whether a chemical
presents unreasonable risk. These factors are, however,
considered in the risk management stage.
The bill would also provide a pathway for a, again,
critical energy source to enter the market without regulation
if EPA does not act in the review period, thereby potentially
exposing communities and workers to toxic chemicals.
Mr. Chairman, without objection, I would like to enter into
the record a letter that we received from the Natural Resources
Defense Council and nine other environmental groups opposing
this particular legislation.
Mr. Johnson. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Sarbanes. Thank you, Mr. Chairman.
Mr. Garcia, getting back to the broader frame here--and you
have spoken to it, but I would like you to do it again, if you
would. Is it necessary to roll these environmental protections
back in order to secure our Nation's energy independence?
I mean, do we need to choose, make this choice between our
environmental laws and energy, or can we do both?
Mr. Garcia. Absolutely not. We don't have to choose. We can
absolutely do both. We have the technology. And in fact, some
of the legislation presented today would actually curtail that
technology, which is sad to see.
Mr. Sarbanes. Arguably, if you look historically, when we
have leaned in with more--a more of an enlightened perspective
on what we need to do with the environment, not only has that
not compromised our economy, it ends up driving new economies
that benefit. The pie grows from that. And I think the same can
happen here. And if we go in the other direction, as is being
suggested by these bills, we could undermine that kind of
opportunity.
So I definitely agree with you, and it is one of the
reasons that we passed in the last Congress the Inflation
Reduction Act, which would put our Nation on track to reduce
greenhouse gas emissions, accelerate the development of
reliable and clean energy.
Unfortunately, again, our colleagues here seem unwilling to
commit to a more sustainable future, as evidenced by their
eagerness to get in there and start repealing all these
things--again, many of them that came to pass and are on the
books because of a bipartisan consensus and understanding that
this is the right thing to do for our environment and for our
economy and for our energy future.
So, Mr. Garcia, let me ask you one last thing while I have
the time. What would erosion of our environmental laws mean for
particularly disadvantaged and underserved communities, which,
as you know, are already overburdened? If you could, speak to
that.
Mr. Garcia. Yes, absolutely. You know, I don't know if I
caught that right, but where--when Mr. Menezes mentioned, you
know, we are not creating refineries and the old refineries
that we had are going out, I am not sure if I caught that
right, but I heard they were brownfield sites now.
Now, think about that. Brownfield sites, which are hugely
contaminated sites that have not been cleaned up, that were
contaminated by industry, are in that place now, and we want
more of these things throughout the country? Right? That is
what is compromising communities everywhere.
And so, unfortunately--and I have to say this very
explicitly--these facilities are not in upper-class White
portions of cities. These facilities exist primarily in
neighborhoods of color, people--where people of low income
live. And so that means that they are the ones absorbing this
pollution, first and foremost.
And even though our laws are not perfect, they offer
protection. We are now to weaken them further with these
loopholes left and right, whether it is the Clean Air Act,
cleanup laws, and planning laws, permitting laws that would
avoid us having to clean up because we are planning correctly--
that seems like it would multiply the damage.
Mr. Sarbanes. I yield back, Mr. Chairman.
Mr. Johnson. The gentleman yields back. The Chair now
recognizes the gentleman from Virginia, Mr. Griffith, for 5
minutes.
Mr. Griffith. Thank you very much, Mr. Chairman.
I am so glad to have another Virginian here today, my old
friend--I hope that doesn't hurt your reputation any; I know we
have known each other at least 20 years, probably more than
that--Bernie McNamee. Mr. McNamee, it is good to have you with
us as an energy expert and somebody who teaches law at the
Appalachian School of Law in Grundy, Virginia, in Buckhannon
County.
Now, I mention that because I recently had an interesting
tour, which is right on your way as you drive there, as you get
to that turn where 460 and 19 separate, and you turn west
heading towards Grundy in Russell County--or excuse me, in
Tazewell County, headed towards Richlands. Just off on your
left behind the Food City is a CONSOL office, and they are
doing some fascinating new work.
They have got a new technique to more efficiently and
cleanly capture coal bed methane, and they are using it right
now at Buckhannon No. 1. As you know, Buckhannon No. 1 is a
huge underground mine for metallurgical coal. That means we
make steel out of it, for those who don't know. The footprint
underground right now is about the size of Washington, DC, and
they are getting ready to open up a new section in the next
couple of years. And so they are capturing, in a very clean and
efficient manner, the coal bed methane out of that mine.
But what people may not realize is they also can use this
technique to capture this from existing mines or mines that--or
areas that have coal that may not have ever been mined, but
because they may be close to the surface or whatever, they have
escaping methane gas. We can use it on that, too, but they
don't get any credit for having a clean, efficient way, because
it is the dreaded fossil fuel. It is natural gas. Oh, my gosh,
egads, it must be bad. But here is a way that American
technology is helping us.
Do you think that is a good way that we should go, and that
if we are going to do something with credits, that we ought to
be looking at things that make it so that smaller steps forward
can be made with existing fuel sources and baseload like
natural gas, et cetera?
Turn your mic on.
Mr. McNamee. Congressman Griffith, it is great to be back
in front of you once again. And I think you are correct--is
that the innovation--the American people have been the ones
that have solved most of our energy crisis and energy
challenges.
You think about the fracking revolution with George
Mitchell in Texas, the innovation that CONSOL is doing, these
resources--and what is neat about natural gas, what is great
about the methane that is being produced is that it is
something that can be dispatched and used to keep the grid
growing. And these are very important things that we need to be
focused on as a country.
It is great to talk about--you know, we think we can go 100
percent renewables, but the reality is, with technology we have
today, we have to have dispatchable energy, and that is going
to come from natural gas, from the methane that is captured at
the coal seam, and these are things that we should not look
negatively about. They have made our economy, people's lives,
and the quality of life for all American people much better.
And it is something we should embrace.
Mr. Griffith. Yes, I appreciate that.
Mr. Menezes, you agree that we probably ought to be using
this technology and rewarding it, instead of excluding it from
being able to receive money from, you know, the Greenhouse Gas
Reduction Program? Because it is a fossil fuel, I don't think
they are eligible.
Mr. Menezes. To be sure. I mean, there are a lot of
technologies that we can be deploying right now to help reduce
emissions. Remember, our quest here is not to choose one type
of energy over another. Our quest here to solve the climate
problem is to reduce emissions.
Mr. Griffith. Yes, and I appreciate that.
Mr. Menezes. So anything we can do to reduce emissions, it
doesn't make any difference whether you are using coal or
fossil, you have technologies to deploy, and the IRA actually
encourages it in some in some ways to do that. So it is
reducing emissions, not saying something should be antifossil
or, you know, or renewables. That is the----
Mr. Griffith. Yes.
Mr. Menezes [continuing]. False narrative. It is reducing
emissions.
Mr. Griffith. And I appreciate that.
Back to you, Mr. McNamee. You know, it is interesting that
that Buckhannon No. 1 mine, it is expanding. A lot of times
people want to talk about, oh, we are going to have new
sectors, and we are going to hire all these people in the
renewables area. And while the CEOs may make good money, the
frontline people don't make nearly what the miners in Buck 1
make. The new section, they estimate, is going to be about an
average of $103,000 a year for people with sometimes not even a
high school education. They are able to get in there, and they
are able to learn a trade and go forward, and that is very
exciting.
Also, as a former FERC representative, I would like to see
us move forward on our pipeline reforms, including possibly
even having collocation. But my time is out, so we will have to
talk about that privately another time.
Mr. Menezes. I would be happy to.
Mr. Griffith. I appreciate. Always good to see you. Thank
you for being here today, and for spending your time with us.
I yield back, Mr. Chairman.
Mr. Duncan [presiding]. The gentleman's time is expired. We
will now go to Mr. Cardenas for 5 minutes.
Mr. Cardenas. Thank you, Mr. Chairman, and also Ranking
Member, for holding this committee today.
As Members of Congress, we have been entrusted with the
duty to protect and improve constituents' quality of life,
their health, and overall well-being. And, as members of this
committee, we have a unique opportunity to examine and put
forth real solutions that advance our Nation's energy
independence while ensuring a healthier future for our children
and grandchildren.
Today we have convened to discuss 17 bills, all of which
are partisan, none of which Energy and Commerce Committee
Democrats were consulted about. Welcome to the Republican
rodeo, ladies and gentlemen. And this ain't my first rodeo. I
have been in the minority in the House of Representatives once
before, and here we go again.
The bills being discussed today are an attack on the
environmental and public-interest laws that are most essential
to ensuring that our constituents can breathe clean air and
drink clean water. These bills will not serve the American
people. They are intended to serve fossil fuel companies who
continue to see record-shattering profits while everyday
Americans pay higher prices at home.
Today's hearing is an--is indicative of my Republican
colleagues' misplaced priorities, and their willingness to
sacrifice the health, the safety of the American people,
starting with frontline communities like the one that I
represent.
My district and too many communities across our Nation know
all too well the challenges of environmental injustices. In
2020 my district was impacted by a methane gas leak, a leak we
later found out had been occurring for over 3 years before the
actual community found out that it was going on right in their
midst. In my district, residents already breathe some of
California's most polluted air, and a chemical disaster can be
a death sentence to vulnerable communities like the one that I
represent.
There are far too many communities across the country that
we were sent here to help protect and to make sure that their
quality of life is secured. But yet, with some of these bills,
they are really focused mostly on what industry prefers, rather
than what the American people truly do deserve.
My first question is for Mr. Garcia. Can you elaborate on
the implications of proposals that hinder efforts from the
EPA's risk management program, and what would happen if they
became law?
Mr. Garcia. Absolutely. So EPA's risk management program
essentially calls on refineries to be able to present safer
alternatives or to try to study safer alternatives to their
methods of production. And so it is a huge problem, because the
bill that we are seeing today would essentially exempt--again,
a loophole--from the Clean Air Act to refineries using
hydrofluoric acid, which is incredibly dangerous for
communities that live near the refineries and that really
depend on the air around the refineries themselves.
And so this is something that it is very much common sense.
In fact, much of the industry is already doing it. The fact
that we are talking about a bill that would eliminate this is
sort of puzzling, because large refineries are doing it. And
again, it is common sense. It is the idea that you should study
to see if there are safer and effective ways to go about the
business that you have already been doing for quite some time.
Mr. Cardenas. Thank you. And what would accountability look
like for communities facing chemical disasters, particularly
those that are low-income communities across the country?
Mr. Garcia. Well, you know, on the foremost, we have to
make sure that--we have seen disasters before. I mean, a couple
of years ago, the plant in Philadelphia exploded and was a
national disaster because of this same kind of lax enforcement
of laws.
So what we really need to focus on is making sure that it
doesn't repeat itself. And particularly for communities of
color and low income, and those that live near those
refineries, We need to make sure that the planning is done
right and that it is reoccurring. We can't just pretend that a
facility that is there and that is exempted from the Clean Air
Act is suddenly going to be responsible enough to do its job.
It has to be held in check, and that is why those laws exist.
Mr. Cardenas. One of the reasons why I ran for office many
years ago was to make sure that I am a voice for the community
that I grew up in, and I grew up in one of the most impacted
communities in all of Los Angeles or Southern California, with
more dumpsites and plants around my home than most people would
ever want to have to deal with.
In your testimony you explained that, under the bill that
amends the Solid Waste Disposal Act, facilities could operate
before securing a permit?
Mr. Garcia. That is right. That is right. It essentially
allows industry to roll out the red carpet, march in, do
everything that it wants to do before we even know whether the
practice is going to be safe, whether the appropriate
precautions are being taken, whether the community's--the
community alternatives, those projects that the community is
actually bringing forward to accomplish the same goal, are
being considered. All of that gets done through those laws, and
somehow it is not going to matter.
And then it is like this, right? And then, once it is
operational, we get the excuse that, well, it is already there,
so we can't draw it back. It is like----
Mr. Cardenas. So----
Mr. Garcia. It is like pouring, like, food coloring in a
cup of water.
Mr. Cardenas. Thank you.
Mr. Garcia. Good luck getting that out.
Mr. Cardenas. Thank you.
Mr. Chairman, I just want to note that I think the clock
was backwards on my----
Mr. Duncan. It was.
Mr. Cardenas. So did it actually start at----
Mr. Duncan. Yes. You got 5 minutes and 44 seconds as of
right now.
Mr. Cardenas. OK. But I noticed that it was going up, in--
rather than going down then.
Mr. Duncan. That is correct.
Mr. Cardenas. OK, thank you.
Mr. Duncan. They didn't reset it, but you weren't shorted
on time.
Mr. Cardenas. OK, thank you so much.
Mr. Duncan. We apologize. They are going to make sure to
reset it.
Mr. Cardenas. No, no----
Mr. Duncan. And I will go to the crossroads of America, the
gentleman from Indiana, Dr. Bucshon.
Mr. Bucshon. Thank you, Mr. Chairman. Today I am speaking
in support of the Securing America's Critical Minerals Act, a
bill that our former colleague, Mr. Upton, introduced last
Congress and I am introducing this Congress, and I am looking
for Democrat cosponsors, if anyone is interested.
I do find it fascinating that some of the same groups that
support total conversion to electric vehicles are also the same
groups that are working to block the mining of minerals such as
cobalt and lithium that are required for the batteries--block
it here in the United States.
Just to mention, you know, that China is a major supplier
of the lithium. And as far as the cobalt goes, I don't know if
anybody has seen the video of the mines in Africa, but,
essentially, slave labor in Africa to get the cobalt. And I
would encourage everybody to look at the YouTube videos of
those mines with little children digging through the dirt,
trying to find cobalt.
So over the last few years we have discussed in these
subcommittees the importance of critical minerals and other
energy resources necessary to providing for our energy needs,
as well as the potential vulnerabilities that exist in the
supply chain and domestic production and capacity limitations.
This bill would ensure that the Secretary of Energy is
engaged productively in addressing the issue. It would require
the Secretary to conduct an assessment of our Nation's energy
supply, identify resources that are critical to our economy and
vulnerabilities in the supply chains of critical energy
resources, and determine the extent to which critical energy
resources play a role in developing new energy technologies.
The bill defines critical energy resources as those that
are ``essential to the energy sector and energy systems of the
United States,'' and the supply chain of which is vulnerable to
disruption.
The bill would also direct the Secretary of Energy to
diversify energy sourcing and increase domestic production,
refining, and processing of these resources.
As a supporter of an all-of-the-above energy approach, I
appreciate our need for a diverse energy portfolio. We must
take steps to ensure we safeguard our supply chains as well as
prevent our adversaries from weaponizing potential
vulnerabilities in these supply chains, and critical minerals
is a large part of our vulnerability--I can't get that out
today for some reason. As a country, we need more production
here.
So, Ms. Sweeney, how potentially could securing America's
Critical Mineral Supply Act help our country and the energy
sector reduce this reliance on China and other foreign sources
of these critical mineral needs?
Ms. Sweeney. Thank you so much for the question, and that
is a really important question.
I think that one area that the act really is important is
having the Energy Information Agency actually look at that
connection between minerals and energy. As I said in my
testimony here earlier, there isn't any form of energy that
doesn't rely on minerals as the--you know, as the base of that
energy. So it is very important to focus on where these come
from, where we are getting them.
And in particular, you know, you mentioned the processing
and smelting and refining. You know, that is an area where we
need to focus attention, as well. It is not just the mines
themselves, but the processing also needs to take place here in
the U.S.
Mr. Bucshon. Mr. Menezes, do you have any comments on that?
Mr. Menezes. Well, I think the bill is especially important
because there are other agencies that also would like to get
resources to look at critical minerals, and it is important to
have the Department of Energy, in its organizational act, have
the statutory authority to be the experts throughout the
interagency process. Those agencies compete at--for Congress
dollars.
And so when you can point to legislation that says we need
this to do our jobs, it is important, really, and we hope that
this would be a strong bipartisan bill to declare the
Department of Energy--the Department of Energy has those
national laboratories. I mean, they are better equipped than
any other agency. But at the end of the day, it is resources.
And so this act is really important for that. Put that
expertise at the Department. It will protect this committee's
interest throughout that interagency process that can get
pretty tough.
Mr. Bucshon. Thank you. I do also want to emphasize what my
colleague, Mr. Guthrie, mentioned.
We now have an example of what happens when you take an
energy approach that this administration appears to be taking,
and that is Europe, and that is countries like Germany. They
are now building coal-fired power plants, importing coal from
in the United States also, and it is probably going to set
their clean energy agenda back decades by getting too far ahead
of themselves and trying to restrict certain forms of energy
rather than taking an all-of-the-above approach and advancing
innovation and technology in every area of energy production.
I yield.
Mr. Duncan. I thank the gentleman. Now we will go to
California, Mr. Peters, for 5 minutes.
Mr. Peters. Thank you, Mr. Chairman. Last week I encouraged
Republicans and Democrats on this committee to engage in a
constructive bipartisan process to enact sensible permitting
reforms to deliver energy security and environmental protection
for the American people. I spoke about the need to reduce
excessive process requirements necessary to build clean energy
projects and reform environmental laws from the 1970s to meet
the challenges of today. I talked about the dismal state of our
electric grid and how we must build 200,000 miles of new
transmission lines by the 2030s to keep the lights on, lower
costs for Americans, and build clean energy projects like
solar, wind, hydropower, and nuclear.
And my Republican colleagues have said publicly they are
committed to advancing permitting reform, and that they are
focused on an all-of-the-above energy agenda to secure our
energy future, and that is why I am a little bit disappointed
about the hearing today. We are discussing 17 bills, and almost
all of them are focused on solely natural gas and oil. And
doubling down on oil and gas will lead to more price
uncertainty and financial pain for Americans.
Speaking of all of the above, the Energy Information
Administration says that a very small amount of the planned
projects on the ground today are going to be natural gas, and
that 86 percent are zero-emission projects. That is what we are
trying to build. But we don't really address that today. There
is no focus today on key energy technologies like solar, wind,
transmission, energy storage, advanced nuclear, hydropower, or
hydrogen. And for a party that claims it doesn't want to pick
winners and losers, Republicans are seeming to pick oil and gas
every single time.
So I am not going to give up hope. But if we are going to
pass permitting reform in this Congress, it has to be
bipartisan. Today we are using our time to discuss partisan
bills that I really don't think will be going anywhere,
relitigating a pipeline that was terminated more than 2 years
ago by the company developing it. I think we could do better.
I am a proud Democrat. I am a former environmental
attorney. I am a climate hawk ready to have hard conversations
about permitting reform. And we can compromise on NEPA, the
Nuclear Regulatory Commission, hydropower relicensing, critical
minerals, interstate electric transmission, and more, but I
really want to get about that business.
Let me ask a couple of questions of the witnesses today,
and thank you for being here.
Mr. Menezes, you helped negotiate the Energy Policy Act of
2005, which included language intended to streamline the
construction of electric transmission lines. Can you elaborate
on why we need to build these lines faster and the importance
of advancing bipartisan legislation to permit these projects
faster?
Mr. Menezes. Well, even today, as it was back then, I mean,
there are probably more difficult things to build and site--
interstate transmission line, but it is hard for me to come up
with what they are.
Mr. Peters. Yes.
Mr. Menezes. Really, it has opposition almost everywhere
you turn. And although the goal of modernizing our grid, to
make it green, et cetera, and to embrace the energy transition,
it is one of the most difficult things to overcome, an
interstate transmission line crossing States of low
populations, et cetera.
So I know Congress has been looking at this. There are ways
to go about trying to do this. We tried it with backstop
authority. Two courts told us we didn't quite get it right.
Mr. Peters. Right.
Mr. Menezes. There's been some proposals over in the Senate
to look at that. And so I think that this is something that
certainly is within this committee's jurisdiction to take
another look at.
Mr. Peters. I drafted the POWER ON Act, which was put in by
the Senate into the infrastructure bill to provide backstop
authority. That is certainly helpful. But when we have a
project that takes 10 years, and 7 of those years are
permitting and processing, we will not be able to build the
grid that we need to electrify this economy. And I think we are
going to lose a lot of the benefit of the IRA if we do--if we
don't.
Mr. Slocum, methane is a superpollutant responsible for
about 25 percent of humanmade warming. Today we hear claims
that we produce the cleanest energy in the world. I am not
sure, if you consider methane, that that is true. But isn't it
essential that oil and gas producers significantly reduce
methane leaks to be the cleanest in the world?
Mr. Slocum. Yes.
Mr. Peters. The IRA included billions of dollars of new
funding to help large and small oil and gas companies reduce
their methane emissions. The EPA is finalizing a new rule to
reduce those emissions from oil and gas operations.
Will the oil and gas industry significantly reduce methane
emissions in the absence of that regulation and strong funding?
Mr. Slocum. I don't think so. I think you need to have that
regulatory structure and--in order for the industry to make
those investments.
Mr. Peters. I agree. And on this too I would reiterate my
willingness to work in a bipartisan way.
One of the things I think we can offer to the small
producers who are concerned about these costs is that the IRA
provides funds to help those companies comply.
I also don't pretend that oil and gas is going away
tomorrow. It is going to be around for a while. While it is
around, we need to make it cleaner, and I am willing to work on
that, as well.
Mr. Chairman, my time is expired. I yield back.
Mr. Duncan. I thank the gentleman. Now we will go to the
vice chair of the Energy, Climate, and Grid Security
Subcommittee, Mr. Curtis, for 5 minutes.
Mr. Curtis. Thank you, Mr. Chairman. I, like many of you,
view PFAS as a four-letter word. And I think on this committee
it has been demonized frequently, and in some cases rightly so.
But it might surprise all of us and my colleagues to know that
a number of products needed for transformation and energy
production require PFAS.
As a matter of fact, semiconductors, green hydrogen
membranes needed for electrolyzers, hydrogen used in fuel
cells, and lithium batteries all require fluoropolymers,
especially plastics. Critical PFAS is used in EV charging
infrastructures, batteries, powertrains. I have a list here of
21 uses in the semiconductor industry of PFAS. So frequently,
when we quick rush to judgment and lump all of these together,
it is probably a mistake.
I have a bill, one of the 17 that has been discussed today,
that would make sure that these chemicals are approved in a
timely manner. There is nothing about this bill that asks the
agency to approve anything that is not safe, that is not
healthy, simply to do it in a timely manner.
In short, chemicals are all around us and necessary for
every industry, but especially to achieve decarbonization of
our economy in the world. If we want a clean future, we need to
approve chemicals more effectively and responsibly. My bill
would help deploy clean energy technology more quickly and puts
the following three conditions on there.
Hard deadlines on EPA's ability to make a decision on the
risk presented by the critical energy resource. I believe, if
we give them 180 days, it will take 280. If we give them 280,
it will take 380. They need to stick to the guidelines that we
have given them.
It prevents the EPA from telling an applicant to suspend
their application unless EPA has reviewed the notice--it sounds
reasonable--and make a determination.
And it requires EPA to consider cost and other nonrisk
factors in determining if an unreasonable risk is present. We
heard earlier from Mr. Garcia that that was akin to killing
people, and I adamantly disagree with that. It does not say
that they should make an unwise decision, simply that they
should take that into consideration, and that seemed pretty
melodramatic to me.
Mr. Menezes, you have experience as a former Deputy
Secretary of Energy. Can you speak to the importance of
chemicals in the energy sector?
Mr. Menezes. Without critical--one of the two--I learned
two lessons when I visited the labs. To achieve breakthrough
technologies, we need two things: one, high-performing
computing to do modeling and continue to do modeling--and it is
modeling that is important--and another thing is we need to
create chemicals and products that do not exist today. They do
not exist, and we need to do that.
And to make that point, they actually gave me a new product
that they had made.
[Holds up a coaster.]
Mr. Menezes. This was at Argonne, and this is cesium
aluminate. It didn't exist before 2017. It is going to be a key
product that is going to be used in our green energy future.
And to even make the point, they used the same product to make
me a 3D printed replica of our Capitol building.
So this is what the future looks like. The problem is that
these chemicals are bollocksed up at EPA. EPA reads risk as
almost any risk is unreasonable, and so they can't seem to make
decisions.
And so all the companies are asking, particularly those
driving toward the EV technologies, et cetera, is, ``Please
tell us what the rules are, tell us what we need to do,'' and
we need to do that.
But China is going to maintain the dominance in the
electric vehicle space, OK? They are beating us. We need to get
our act together, please. Just----
Mr. Curtis. So, first of all----
Mr. Menezes [continuing]. What we need to do.
Mr. Curtis [continuing]. Everybody is not going to believe
that this wasn't a setup, you came prepared with your props for
my question. So you and I didn't rehearse this.
Mr. Menezes. We did not rehearse it. In fact, as I was
reading the bill, it dawned on me that this made a big
impression on me. It was on my desk when I was preparing for
this hearing. This was not set up.
Mr. Curtis. So before we run out of time, my friends on the
Democratic side often emphasize the importance of decarbonizing
quickly, and I agree with them. But then they call bills like
mine undermining environmental laws. Do you think it is
possible to move in a reasonable speed and protect ourselves,
as well?
Mr. Menezes. Of course. We are trying to figure out ways to
get the laws that are on the books to actually produce results.
Please do your job. Stop with the delays.
The applicants go in and they are told--and they are--the
bureaucrats are aware of the 90-day rule. So they will get you
to withdraw and resubmit, because they can't meet the statutory
deadlines. So they are sort of trying to do their job, but we
have reached the point where the backlog now is so significant
that those that want to take advantage of the IRA provisions
can't do it because----
Mr. Curtis. I am going to run out of time, but----
Mr. Menezes [continuing]. They can't get the----
Mr. Curtis [continuing]. So I just want to make two----
Mr. Menezes [continuing]. Can't get their permits.
Mr. Curtis [continuing]. Two quick points. There is a lot
of parallel here with permitting reform.
Just tell us what the rules are, and then let us do it and
make it timely and predictable. That is what people are asking
for.
And Mr. Chairman, regrettably, I am out of time. I yield
the balance of my time.
Mr. Duncan. I thank the gentleman. The Chair will now go to
the gentlelady from an energy-producing area of the State of
Texas, Mrs. Fletcher, for 5 minutes.
Mrs. Fletcher. Thank you so much, Mr. Chairman. Thanks for
holding this hearing. Thanks to you and, of course, Ranking
Member DeGette, as well as our chairman--chairwoman, and
ranking member, and others.
And I have listened to the testimony today and to the
questions. I appreciate all of your time in being here. I think
there has been a lot of really important information conveyed,
as well, in your written testimony. And I am a little bit
concerned about some of the things that I have heard this
morning, specifically some of the bills that have been
introduced for this hearing.
And I would, of course, like to note that we are
considering 17 bills, many of them aimed at repealing some of,
I think, the very good work that we did in the last Congress to
try to address the complexities of the policy that we are
trying to do here.
And so, you know, I would request, hopefully, that we will
get a little more notice in the future in time to review these
bills, because I think that, you know, we all know--and
everyone on this committee should know and understand--that
energy policy is complex. And we have had no better example
than what we have seen happen over the last year, and the
importance of all of us really having a depth of understanding
on this committee as we work to make policy.
Certainly, what we have seen happening in Europe with
Russia's unjustified and unconscionable invasion of Ukraine,
what we have seen happen to our friends and allies in Europe,
what we have seen happen here in the United States as a result
of the market demands and some of the things that we have
talked about today--I disagree with some of our witnesses about
the importance of, for example, exporting natural gas and being
able to help our allies reduce their dependance on Russian oil
and gas at this critical moment.
What we know is this is domestic policy, it is foreign
policy. It has real consequences in our communities. People who
are living, especially in my hometown of Houston, people who
are living near the largest petrochemical complex, arguably, in
the world, there are real-world health impacts. There are real-
world economic impacts. These are also our jobs.
So coming together and building consensus around what we
can do, I think, is incredibly important for this committee.
And I heard a few things today that I just--I want to take up.
Most important, I think, Mr. Menezes, you said--and I agree
with you--that the issue here is that we want to reduce
emissions. That is what we are trying to do, and that is what
the good legislation that we passed in the last Congress really
does. And so, you know, I think that what we did in the
Infrastructure Investment and Jobs Act and, importantly, the
Inflation Reduction Act is really important to accomplishing
those goals.
And I am going to disagree with and I am disappointed to
see the bill 484 that has been introduced by my friend from
Texas, Mr. Pfluger, because I think it undoes the important
work that we did on this committee just last year in trying to
address the impacts of methane and deal with that in a way that
is reasonable and workable for industry.
And we spent a lot of time on this committee and got a lot
of criticism for what we have, a billion and a half dollars to
help small operators employ the technology, this grant program.
And so I want to kind of direct my question there, because I
think, Mr. Eshelman, I saw you shaking your head during Mr.
Slocum's testimony about the IRA and the methane fee. But there
is funding there to help smaller operators in particular,
because that was a real concern that we heard about, the
ability to implement the technology to reduce methane
emissions, which should be the goal of everybody here. And I
think on both sides of the aisle we keep saying that is what we
want to do.
So, you know, I would like to see if there are real
concerns still about the implementation and the ability to
implement that, something that we can do that doesn't involve
repealing what many people in the industry have said is a very
smart solution to try to address the complications but also
address methane emissions. And so that is a concern that I
have. And, you know, the question I have for you is, does this
mean--I mean, it sounds like you don't support this, you want
to see it repealed.
Are your members not going to take the grant money that we
provided to try to assist them? What do you think should be
happening with that?
Mr. Eshelman. As we speak with our members, it has been a
very contentious relationship with EPA, especially the
enforcement office. So we are mostly concerned that this grant
money will come out of EPA. We think it should better come out
of DOE and maybe the Petroleum Technology Transfer Council. So
we are just mostly concerned that it is EPA that is making
these regulations.
Mrs. Fletcher. And so what I am hearing you say is the idea
of the program, the idea of reducing emissions and having some
coming----
Mr. Eshelman. Right.
Mrs. Fletcher [continuing]. Through this legislation, it is
designed to work in tandem with EPA, so that there can----
Mr. Eshelman. Our----
Mrs. Fletcher. The concern you are expressing is the
funding source, versus the idea of what we tried to do with
this legislation. So it sounds like we----
Mr. Eshelman. That would be one----
Mrs. Fletcher [continuing]. Don't necessarily need to
repeal it.
Mr. Eshelman. That would be one of our concerns, yes.
Mrs. Fletcher. OK. Well, I am going to run out of time. I
have a ton of questions. We are going to cover them on this
hearing. I hope I can work with Mr. Pfluger and my friends on
both sides of the aisle to really work on understanding the
depths of this incredibly complicated work we have in front of
us and working together to achieve all of our shared
objectives.
So thank you so much, Mr. Chairman, for the time, and I
yield back.
Mr. Duncan. Agreed, and I look forward to working with you.
The Chair will now go to Michigan, Mr. Walberg, for 5
minutes.
Mr. Walberg. Thank you, Mr. Chairman, and thanks to the
panel today for being with us. It is an important hearing.
Threats to our critical energy infrastructure have
increased year after year. In 2022, attacks on United States
power grids rose to an all-time high. More apparently needs to
be done to protect our critical energy infrastructure, which is
why I plan to introduce the Critical Electric Infrastructure
Cybersecurity Incident Reporting Act.
Mr. Menezes, electric utilities and other energy
infrastructure owners and operators are required to report
critical infrastructure cyber incidents to DOE and FERC. Last
Congress a law was passed that also required some of these
entities to submit incidents to CISA. The FAST Act clearly
establishes DOE as the sector-specific agency for energy
cybersecurity and granted them authority to address grid
security emergencies. As such, DOE has the expertise to best
address some of these threats.
Mr. Menezes, do you agree that it makes the most sense for
energy sector stakeholders to submit threat incidents to DOE
and then have DOE share that information as necessary with
CISA?
And secondly, how can Congress clarify DOE's role in the
process?
Mr. Menezes. Thank you very much. It is very important that
you clarify DOE's role that it is the agency that private
sector and other Government agencies need to report cyber
incidents to. Because when Congress passed CISA, it created
confusion as to where reports needed to go. When we were there,
we knew the importance of cybersecurity. Of course, Congress
had mandated cybersecurity standards. We created the Office of
CESER, which remains today: the Cybersecurity, Energy Security,
and Emergency Response.
But within the interagency--you are hearing this a lot from
me today, I am bringing the experience that I gained in the
executive branch--is that we need to designate DOE to have--to
be the agency that all cyber incident reports on the bulk power
system--this is electricity, it is not oil and natural gas, but
it is electricity--to go to DOE. And that is important because
we have all the expertise there, we have the information
sharing there, we have some of the modeling that the labs
develop to look for anomalies on data pools, et cetera.
So this is an important piece of legislation. It seems as
though, you know, it is a simple thing to do. But we are going
to need all support to get this through. And it is an important
piece of legislation to give DOE clarity.
Mr. Walberg. And I would hope that it would make more
efficiency in the process for Members of Congress to understand
what is going on and get information and more transparency, as
well.
Mr. Menezes. Absolutely.
Mr. Walberg. Mr. McNamee, as a former FERC Commissioner,
how will increased sharing and coordination of cyber incidents
improve the safety and reliability of our electric
infrastructure?
Mr. McNamee. I think it is very important that anything
that can be done to make the sharing information on the bulk
power system and threats to it be done. The threats are real.
As you mentioned in your comments, they are happening all the
time, both cyber and physical securities.
And one of the things that frightens me the most is what
happens with the limited natural gas pipeline capacity up to
the northeast. If there is a physical attack on the pipelines
up there, you are going to lose a lot of power. Then the
problems that you have on the bulk power system in relation to
transformers or the SCADA systems, these things are real
threats. The utilities are being pinged every single day by
foreign actors trying to get into the systems to be able to
flip the switch off when we need it the most, on the coldest
days of the year.
So I think legislation like yours makes sure that there is
focus, and that is, as Secretary Menezes said, that there is
one source in the Government that is absolutely responsible. Of
course, FERC has responsibility for establishing, along with
NERC, reliability standards, SIP standards, but I think it is
important that reporting go through DOE.
Mr. Walberg. Thank you. Being from Michigan, I am extremely
concerned about the current backlog at EPA of hundreds of TSCA
section 5 applications and the impact it has had on our auto
supply chain. Last year my Michigan colleagues and I sent a
letter to Administrator Regan imploring him for the bare
minimum of timely review of two premanufacturing notice
applications that were essential to the launch of an EV battery
plant in the State.
Mr. Chairman, I would like to, if you would allow, to
include that letter for the record.
Mr. Duncan. Without objection.
[The information appears at the conclusion of the hearing.]
Mr. Walberg. Mr. Menezes, the Biden administration is
forcing a transition to electric vehicles, yet it took almost a
year for the EPA to approve this project that would supply the
needed batteries. How will Representative Curtis's draft
legislation improve the efficiency and timeliness of the TSCA
review process so that auto supply chains remain in the United
States?
Mr. Menezes. Well, thank you, and we talked a little bit
about that before.
It basically--it says that, look, not any risk is an
unreasonable risk. Two, it stops them from forcing applicants
to withdraw and resubmit so that they can reset the statutory
deadline there. And basically, it allows them to be able to go
forward after a certain time period that has elapsed while they
were pending review. This will allow us to accelerate our move
to the--through the energy transition, you know, to more EV
use.
The letter that you mentioned, you know, expressed the
frustrations clearly, and I think that is why Mr. Curtis's bill
will go a long way to helping streamline the process, not
remove any environmental protection.
Mr. Duncan. The gentleman's time is expired.
Mr. Walberg. Thank you, Mr. Chairman. I yield back.
Mr. Duncan. Thank you. Now we will go to New York, Ms.
Clarke, for 5 minutes.
Ms. Clarke. Thank you, Chairman Duncan, Chairs Duncan and
Johnson, and Ranking Members DeGette and Tonko for holding this
hearing today. I would also like to thank our witnesses, as
well, for being here to testify on these bills.
There are real challenges in America's power sector as our
Nation begins an economywide transition to clean energy in the
midst of the climate crisis. But I reject the premise presented
today that the only way we can unleash American energy is
through creating loopholes in our bedrock environmental laws
and/or sacrificing the health of our communities. Many of the
bills considered today would not only weaken our economic and
national security but also turn the clock backwards on the
progress that we have made combating climate change and
protecting public health.
My first question is to Mr. Garcia.
In your testimony you state that many of these bills would
circumvent bedrock environmental laws like the Clean Air Act,
TSCA so polluters can profit at the expense of frontline
communities. Could you elaborate on the connection between
frontline communities and what waiving the Clean Air Act and
Solid Waste Disposal Act would mean for communities sited near
these facilities?
Mr. Garcia. Yes, absolutely. I mean, when we are talking
about the Clean Air Act, one of the--again, what they are
seeking to waive with the bill that waives--that addresses the
Clean Air Act is a commonsense practice that many industries
already take on, which is simply to study how can we achieve
the same goals that we already have in a safer way.
And we are dealing with hydrofluoric acid. And it exempts
any refinery that uses hydrofluoric acid from that requirement
to study if there is a safer way to do this. It is problematic,
because hydrofluoric acid is extremely dangerous to the human
body. It is--it can explode. And not only that, but there are
already recorded alternatives that many across the industry
already use in order to do the same thing in a safer way. And
so there is really no other way to characterize this. It is
something that industry absolutely doesn't need. And yet we are
still seeing this bill being pushed through.
So, you know, unfortunately, the brunt of this comes down
on those communities that live near these facilities and the
workers that work in these facilities. Unfortunately, we have
seen facilities like these blow up. And when that happens, it
hurts the people who are there, first and foremost.
And so I think that, you know, Vice Chair Curtis said I was
being melodramatic when I was talking about life and death. But
it really is. It is really hard to not get dramatic when you
are talking to the families of those that get devastated by the
deaths of their loved ones. And so that is what is really at
stake here, and that is why we have--what we have to keep front
and center.
Ms. Clarke. Thank you. My next question is for you again,
Mr. Garcia, and Mr. Slocum.
So much of the discussion today has been focused on how
burdensome regulations are. Can you tell us why it is so
important to center community voices, especially those who have
been historically marginalized, like communities of color and
indigenous populations, when it comes to permitting decisions
in the energy industry?
Mr. Slocum. It is absolutely essential that frontline
communities that are being asked to host all of the hazards
play a prominent role in the siting process.
We are working with an African-American community in the
Florida Panhandle that is opposed to a liquefied natural gas
export terminal that--we learned about it through a FERC
regulatory process. Nobody in the local governments there had
told these folks that this was the plan.
And this is a common, unfortunate occurrence that we see
throughout the country, where the local community does not have
involvement or consent. And it is crucially important that, as
part of any sort of regulatory review, that those frontline
communities play a prominent role in being able to have a say
in the development within their own communities.
Ms. Clarke. Thank you. Well, my time is winding down pretty
quickly.
Let me just say that studies have continued to find that
race, more than any other demographic, is the primary indicator
for living near an energy facility emitting toxic pollutants.
In fact, more than half of the individuals live--living life
close to any hazardous waste site are people of color.
With that, Mr. Chairman, I yield back.
Mr. Duncan. I thank the gentlelady. The Chair will now go
to Mr. Carter from Georgia.
Mr. Carter. Thank you, Mr. Chairman, and thank all of you
for being here.
Mr. Chairman, thank you for continuing on this theme that
we have started with in the Energy and Commerce Committee this
year, and that is about unleashing American energy. This is
extremely important. We have all seen and witnessed what
happens when we neglect American energy dominance and our own
independence. It is to our own detriment. We--it results in
high energy prices and diminished supply chains. And that is
why I am really happy that we continue to focus on this.
And we know about supply chains, but there is perhaps
nothing more important in supply chains when we talk about them
than critical minerals. That has to be perhaps one of, if not
the most, glaring weaknesses that we have. All of you have
mentioned our dependance on China for critical minerals and how
that needs to end. And we all recognize that. And we have got
legislation in this package to fix that.
And I want to talk about some of that, because I am eager
to talk about a bill that I am introducing, and it has to do
with the Solid Waste Disposal Act, and it has to do with
mining. As I understand it, when you get a mining permit, you
get the first permit, then you have to--if you are going to
keep the hazardous waste for longer than 90 days, you have to
get a second permit. But while you are waiting on that second
permit, what my legislation--what this legislation will do will
be to give you an interim permit, if you will, until you can go
through the process to get the second permit.
So I think it makes a lot of sense. It helps us with our
supply chain for critical minerals, and it needs to be done
now, because there is no time to waste. We have got to address
this issue right now. No, it is not a silver bullet, but I
think it is a fix that will help us tremendously.
Ms. Sweeney, I want to go to you, and I want to ask you,
because it is interesting. You say in your written testimony--
and I quote--``an average of 7 to 10 years to secure''--it
takes ``an average of 7 to 10 years to secure--one of the
longest permitting processes in the world for mining
projects''--to receive necessary permits to even begin to build
the mine project. And then you compare this to Canada and
Australia, who have kind of similar environmental regulations
as we have, and there it only takes them a few years, 2 to 3
years, to complete.
How can--how have they been able to maintain comparable
environmental standards to the U.S. and complete the permitting
process for new mines in a fraction of the time that we do?
Ms. Sweeney. They have a lot more coordination up front of
the various agencies involved, whether they be provincial,
territorial, or the overarching Canadian Government. They are
seeking to do, like, one-stop permitting shopping.
They also allow the project proponent to prepare the
environmental impact statement, which really involves a lot of
efficiencies because you are not waiting for the agencies to
have to do that. But the Federal--but the Government does
oversee that to make sure that the rigorous rules are----
Mr. Carter. So there are a lot of lessons we could learn
from them, and a lot of good takeaways from them.
Ms. Sweeney. Absolutely.
Mr. Carter. What would be one of the most immediate that
could help us?
Ms. Sweeney. Up-fronting litigation. I think that is
something in Canada that they are focused on, and getting that
done, so you are not at the end of your 10-year process just
entering into the litigation that could add another 10 years
before you can actually start operations.
Mr. Carter. Good, good. OK, I want to go to Mr. McNamee.
And when we talk about unleashing American energy, part of
that is the structure of the market that the energy goes into.
Can you help me out? Restructured electricity markets like
regional transmission organizations, RTOs, do they lead to
lower rates? Do they lead to greater reliability?
I mean, tell me what the advantage, if there is any, of
these are.
Mr. McNamee. They don't. And the RTOs were originally
structured on the idea to use market forces to get
efficiencies.
But the problem is that there are seven RTOs in the
country, six of them regulated by FERC. The problem is that
they use marginal pricing to set power prices, so you get bids
in by each of the generators into--to bid to meet every 5
minutes of what the energy needed.
And the problem is usually natural gas does set the
clearing price on that, but every other resource is getting
paid that natural gas price. So if you are a subsidized
renewable, you have no fuel costs, you have tax credits, yet
you are getting paid the natural gas price. So the economic
benefits of renewables are not passing through to customers.
Hence the reason energy prices keep going up, despite adding
all these renewables.
And then secondly, you have got a reliability problem,
because none of these generators are like your utility. None of
them have an obligation to serve. And so they bid in, and if
they are picked, they run, if they don't--but then you have
problems like you had in Texas, which you have seen also in
this past winter, where there is no incentive to winterize your
unit because you are, like, ``Well, why should I do it if it is
going to make it more expensive?''
What you want is a system that allows--that is designed to
serve the people, and you need reliability as the number 1
thing.
Mr. Carter. Good. Well, thank you all.
And again, this permitting process is crushing us. We have
got to do something about it.
Thank you, Mr. Chairman. I yield back.
Mr. Duncan. The gentleman--the Chair will now recognize Ms.
Barragan for 5 minutes.
Ms. Barragan. Thank you, Mr. Chair. I am especially
concerned about legislation under consideration today which
says that no hazard assessment is required on the use of
hydrofluoric acid at a refinery to understand the risk of an
accidental release. This chemical is deadly. It is toxic. It is
deadly toxic to people, and it is extremely corrosive. A hazard
assessment is a common, safe safety measure the Environmental
Protection Agency has proposed.
We also know there are safer alternatives available that
many refineries already use.
The refineries in and near my district that still use
hydrofluoric acid--and it is a safety--a serious safety
concern. In 2015 there was a near miss at a refinery near my
district in Torrance, California. An explosion at the refinery
launched debris that landed close to two tanks containing
hydrofluoric acid. People could have been killed.
Mr. Garcia, what safer technologies are available for oil
refineries to replace hydrofluoric acid, and should the oil
industry have to consider them?
Mr. Garcia. Yes. I mean, there are quantities of
alternatives. And that is the saddest part about this bill, is
that there are quantities. One of them is sulfuric acid.
But the idea is that that is what the analysis should tell
you, right? That is what the analysis that industry should have
to do. That is the one that tells you, yes, there are better
alternatives to do this and still accomplish the goal that we
need to accomplish.
And so when we hear about it, just this piece of the Clean
Air Act being completely dismantled, it is really puzzling
because you have everything--industry has everything that it
could want in order to keep this in the books, and that--
actually, compliance is relatively easy. So it is puzzling to
see this.
Ms. Barragan. Thank you.
Mr. Chair, I would like to enter into the record a letter I
led with Senator Booker to EPA on the proposed risk management
plan rule signed by 47 Members and Senators. The letter asks
EPA to finalize a rule that requires refineries to transition
to safer chemicals and processes. This letter was supported by
environmental groups and labor, including the United
Steelworkers and United Auto Workers.
I will hand you that letter at the end of the questioning.
Mr. Duncan. Without objection.
[The information appears at the conclusion of the hearing.]
Ms. Barragan. Mr. Slocum, I am concerned about the
Unlocking our Domestic LNG Potential Act, which eliminates the
requirement that our Department of Energy find imports and
exports to be consistent with the public interest.
What could the consequences of this bill be on domestic
energy prices and our climate?
Mr. Slocum. Well, the public interest should be
comprehensive. It should look at environmental justice
considerations. It should look at climate and clean energy
considerations. So it should be requiring the Department of
Energy to perform those assessments, to require applicants to
document how LNG exports--whether or not they are displacing
dirtier forms of energy abroad, or whether or not they are
displacing renewables by bolstering existing gas
infrastructure.
Right now, the Department of Energy is not performing that
assessment. To eliminate that assessment altogether, which has
been in place for 85 years, would be a huge disservice to
communities, especially in the Gulf, that are being asked to
host these massive facilities.
Ms. Barragan. Well, thank you for that, and thank you for
raising the issue of environmental justice issues.
I share the climate concerns, and I want to underscore the
impact of energy prices because my constituents have been hit
hard by this--by rising natural gas prices. And this shows how
volatile fossil fuel prices are and why we need the Department
of Energy to be a check on the fossil fuel industry's proposals
to have countries like China competing with American consumers
to buy gas. This is why the Industrial Energy Consumers of
America, a coalition of manufacturing companies, has opposed
this bill. I think it is bad for the U.S. manufacturing.
Mr. Garcia, legislation under consideration proposes to
repeal the Greenhouse Gas Reduction Fund that was passed by
Democrats in the Inflation Reduction Act. This fund would
provide low-income communities with grants and loans to reduce
greenhouse gas emissions with zero-emissions technologies. Can
this fund help low-income residents to reduce their energy
bills?
Mr. Garcia. Absolutely. I mean--and we saw that--that fund
is really meant to make sure that we don't make the mistakes
that have happened in previous energy revolutions, where often
people of color and low income get left out. And so this fund
is specifically meant to make sure that low-income and people
of color have access to those funds.
Ms. Barragan. And can the fund help create clean jobs,
energy jobs, in low economic communities----
Ms. Garcia. Absolutely.
Ms. Barragan [continuing]. Low-income communities?
Mr. Garcia. Absolutely.
Ms. Barragan. Well, thank you for that. It is unfortunate,
the Republican talk about lowering energy costs and creating
jobs. They talk about it, but they want to repeal programs that
empower communities to do just that.
With that, Mr. Chair, I yield back.
Mr. Duncan. The gentlelady yields back, and the Chair will
now go to the gentlelady from Arizona, Mrs. Lesko, for 5
minutes.
Before I do that, there are going to be votes called around
1:30. Apparently, there's two votes. We are going to plow
through and get as far as we can, but we will recess and come
back and finish the hearing. Members are encouraged to come
back right after the second vote is called. And vote, come
back, and we will get back on it, because there is another
hearing following this.
Mrs. Lesko, you are recognized for 5 minutes.
Mrs. Lesko. Well, thank you, Mr. Chairman. I love this
committee, because we are talking about energy, critical
minerals on the environment. What could be more important than
that?
Mr. Chairman, I am proud to sponsor the House concurrent
resolution expressing disapproval of the revocation by
President Biden of the presidential permit for the Keystone XL
pipeline. This is a simple resolution, and I hope my colleagues
will support it. Many of my colleagues on the other side of the
aisle have said they disapprove of the cancellation of the
Keystone XL pipeline, and this resolution gives them and the
entire House of Representatives the opportunity to show our
disapproval.
On day one of his administration, President Biden canceled
the Keystone pipeline. Soon after he canceled the Keystone, he
removed sanctions on the Nord Stream II pipeline. This paved
the way for Russia to hold the EU hostage to Russia's energy
and not allow cleaner, U.S.-provided LNG.
Canceling the Keystone pipeline did not stop the drilling
or exporting of the sand oils, as the extreme environmentalists
thought. The 830,000 barrels per day of crude oil from Alberta,
Canada, is still being produced and being shipped via rail or
other pipelines. Canada's oil sands producers were able to
export a record amount of crude in 2022 to overseas markets,
including China and India. So instead of providing well-paying
jobs for Americans, the Biden administration prefers those jobs
to go elsewhere.
The cancellation of the pipeline also did little to stop
emissions. CO2 emissions will increase, since much
of the oil is now transported by the railroads, a much dirtier
method of transit, instead of the pipeline. Rail transport also
increases the risk of derailment and ensuring environmental
damage of spilled oil.
Mr. Menezes, thank you for pointing out in your written
testimony another shortcoming of President Biden canceling the
Keystone pipeline: the fact that the U.S. and its allies would
have had access to Canadian oil to lessen the import and use of
Russian oil. Canceling the pipeline was a horrible financial
decision, in my opinion. Developers of Keystone XL are seeking
to recoup more than $15 billion in damages connected to
President Biden's decision.
Mr. Menezes, what other financial losses can you comment
on, due to the cancellation of the XL Pipeline?
Mr. Menezes. Well, I was going to add that, you know, we
import about 700,000 barrels per day from Russia. So the
Keystone Pipeline could have also been used to offset that
amount as we, along with all other NATO countries and our
allies, have said no to Russia resources. So it is very
significant, as we have been talking about all morning.
The fact is that, if you can increase supply, you are going
to have downward pressure on prices, you know, for our--you
know, for your constituents and for the American people. And I
know, you know, people want to have it both ways, right? They
would like to stop--to have refineries operate, but they want
their constituents to have cheap gas. You can't have it both
ways.
Mrs. Lesko. Thank you.
Mr. Menezes. We can have environmentally compliant
refineries in operation and making rational decisions to remove
the bottlenecks. But that's just commonsense approaches,
really, is everything we are considering today.
Mrs. Lesko. Thank you. My next question is for Ms. Sweeney.
Ms. Sweeney, copper is not listed as a critical mineral,
although it is--I think it uses four times as much copper in an
electrical vehicle as in a standard vehicle and other things.
Why do you think that copper isn't listed as a critical
mineral, and do you think it should be?
Ms. Sweeney. I definitely think that it should be. I think
that it actually does meet the U.S. Geological Survey criteria.
But when they were doing the latest list, they didn't have the
most recent data in front of them. I think, using the data
today, that copper would definitely make that list.
However, you know, in National Mining Association's
viewpoint, anything that you need and can't get really should
be critical. So maybe those kinds of criticality lists don't
just make the most sense because, as technologies change,
something that is critical today may not be critical tomorrow.
You know, people were talking about substitutions. Well,
then you are creating a new critical mineral, because something
that maybe we use now to substitute becomes the next big thing
that everybody is going to need. So if we just had efficient
permitting, criticality doesn't matter so much.
Mrs. Lesko. Well, good. And I hope that copper is added to
the critical mineral list, because I am from Arizona, we
produce lots of copper, and it is unfortunate that the
Resolution Copper Mine has been put on hold. The final impact--
environmental impact statement was approved under the former
administration and now has been put on hold, plus a lawsuit.
So I yield back. Thank you.
Mr. Duncan. I thank the gentlelady. The Chair will now go
to Dr. Ruiz for 5 minutes.
Mr. Ruiz. I would like to inform the gentlewoman from
Arizona that I am very familiar with the copper mines in
Arizona. My family actually worked in those copper mines in
years past. I believe it is the Bisbee Queen's Copper Mines, is
one of those big, big areas.
But thank you, Chairman. I would like to address a
recurring theme that I have seen in multiple pieces of
legislation before this committee today. In these pieces of
legislation I see bills that are sacrificing key provisions of
landmark legislation that help protect people's health, like
the Clean Air Act, to--in order to increase critical mineral
extraction. And that is the wrong approach.
Frontline communities already bear too much of the burden
of the environmental injustice. To name an example, people
living near fossil-fuel-drilling sites are at greater risk for
preterm birth, cancer, asthma, and other respiratory diseases.
I mean, it is a direct link to real people's health, childhood
asthma, COPD, all these other things.
As a doctor, the health of my constituents is my top
concern, and I have seen firsthand that we must do more to
protect vulnerable communities from pollution and other
environmental dangers.
I do want to be clear that I am not against critical
mineral production. I have been unequivocal that we need to
build our domestic supply chains. And as a prime example of
this is right in my own district, in the Imperial Valley, or
the Imperial County.
In the Imperial Valley, the Salton Sea has a massive supply
of lithium. In fact, it is the fifth largest lithium deposit in
the whole world. It has the potential to supply the lithium
needed for electrical vehicle batteries and our clean energy
future. We import the vast majority of our batteries and our
lithium from other countries that are not aligned with our
world views. We call the area Lithium Valley back home to
emphasize the potential that this lithium has to transform the
region.
And beyond powering our country towards its clean energy
future, I believe that Lithium Valley can also provide a model
for how we can both protect our community's health and get the
critical minerals we need. And how do we do that?
So instead of hardrock mining or salt flat evaporation,
breaking up the earth, putting more dust in the air, et cetera,
in Imperial County the lithium is extracted from geothermal
production. So it is in a closed loop cycle, and the brine that
goes through this closed loop as they naturally produce
geothermal energy--which is a good thing--they filter that
brine out to extract the lithium. And so it is better for the
environment and better for our communities. This shows that we
don't have to sacrifice health and the environment. We can have
a win-win for the environment, for our public health, and for
places like the Imperial Valley.
Mr. Raul Garcia--I like your first name, by the way. We
share that. In Spanish we would call each other tocayos. In
your testimony you note that our country doesn't have to make
this false choice between energy creation and protecting the
health and safety of our vulnerable communities.
Tell me more about that, and as it applies to the critical
mineral production, as well.
Mr. Garcia. Well, I think that when we are talking about
critical mineral production, we want to make sure that we are
using the resources that are available to us that are the
safest ways to use the critical minerals. And that, when that
requires mining, it has to follow the law. It shouldn't--we
shouldn't be seeking exceptions to the law in order to make
sure that this happens safely. We actually need to make sure
that it applies.
We also need to make sure that we, as you mentioned, have a
circular economy on critical minerals. So making sure that they
are being recycled, and that when they are being recycled they
are being--the recycling is being done responsibly and in a
clean way, the--whether it is extraction or recycling of it.
And again, those laws, those bedrock laws are in place.
Now, we have talked a lot about permitting in some places
and how long it takes. But I like to point out that a lot of
the delays that happen on permitting are actually not done
because of the requirements of the permitting structures
themselves. They are done because the agencies are being
starved from actual funding in order to carry out the
permitting.
And so, if we want to speed up permitting, when we are
talking about--whether it is a mine or whether it is something
else, you actually need to fund the agency in order to make
sure that the experts are going to do so, are going to get out
the permits in a way that is going to protect communities on
the ground.
Mr. Ruiz. Catch-22, right? Chipping away government in
order to make it as ineffective as possible, and then
complaining that they can't do their job and it is too slow. So
the only result is going to be to eliminate government at all
and eliminate these rules that protect the health. And that is
not necessarily feasible or the right thing to do for the
American people.
But with that my time is over, and I yield back.
Mr. Duncan. I appreciate the gentleman. The Chair will now
go to another gentleman from the crossroads of America, Mr.
Pence, for 5 minutes.
Mr. Pence. I thank you, Chairmen Duncan and Johnson, and
Ranking Members DeGette and Tonko for holding this hearing. And
thank you to the witnesses for appearing today.
The bills before us begin to shore up our national energy
strategy, lower energy prices for Hoosiers, and put our Nation
back on track towards energy dominance.
The Biden administration's electrification-or-nothing
approach is only deepening our reliance on China and leaving
our country vulnerable in the event of a national emergency.
Despite what the Biden administration is telling us, demand for
oil and natural gas will only increase around the world.
Petroleum products are the lifeblood of the American
economy, fueling businesses to bring good-paying jobs and
lowering energy costs for families.
Over the past 2 years, the Biden administration has failed
to put forth a coherent energy strategy. Hoosiers in southern
Indiana deserve answers on why this administration has made it
more expensive for families to heat their homes and for
business and families to keep their lights on at the old
prices. And I hope we hear a little bit of that tonight.
My legislation being considered today would provide waivers
for critical energy resources in the event of a national
security emergency. And I quote, ``If the Administrator of the
Environmental Protection Agency, in consultation with the
Secretary of Energy, determines that the processing and
refining of a critical energy resource at a critical energy
resource facility is important to the national security or
energy security of the United States, then the Administrator
may waive application of any requirement, sanction, or fee
under the Clean Air Act.''
And by the way, I am one of the few--I am old enough, I
actually read the Clean Air Act when it came back--came out
many, many years ago.
This bill would ensure that the Federal Government can act
swiftly to preserve access to energy supplies. And I look
forward to hearing constructive feedback on how to improve this
legislation and provide the Federal Government with tools to
respond in the event of a crisis.
Mr. Menezes, I am going to direct my question and my
comments to you at this point. Back in 2005 I went in with
then-Governor Mitch Daniels when he became Governor in the
State of Indiana, and I was the chief deputy commissioner of
the Indiana Department of Environmental Management. And the
biggest problem in the State of Indiana was overregulation by
the EPA and IDEM. It was inhibiting business growth. It was
holding farmers down. It was costing too much money. The
regulations were just crushing the State of Indiana.
And that got changed. At that point the State of Indiana
was $2 billion in the hole, and today they are $6 billion to
the good.
My question to you: In the event of a national security
emergency that threatens access to critical energy resources,
what sort of emergency authority tools exist to address severe
supply disruptions for different types of energy?
Mr. Menezes. Right. Well, there--that is where the
confusion lies here, because we face emergencies regularly. You
go into the executive branch, you know, as a public official.
So the President and his team typically says, ``What do--what
can we do at this point?'' And it's ``Can--does the
Constitution prohibit it? Has Congress prohibited such action?
Has Congress authorized?''
And with respect to waivers, Clean Air Act, Jones Act
waivers, these kinds of things, Stafford Act, declarations of
emergencies, what waiver authority is there, we have a body of
law that kind of--the executive branch runs fairly well. Where
it gets diffused and confused is anything there after that.
And so, you can look at all of these different laws, and
you don't see anything with respect to, really, energy,
critical energy resources, in there. And so, as a consequence,
being at the Department, you are kind of brought in at the last
minute. In fact, the Department of Defense has a lot of clear,
you know, emergency--they weigh in, they can do things.
Commerce, even Transportation. MARAD under the Jones Act. The
Department of Energy is just like sort of forgotten about. So
you are in there, trying to focus on the importance of energy.
Puerto Rico. I mean, the Governor would tell us--they would
come to Energy and say, ``We can't do anything without energy.
Our water doesn't work, our hospitals can't run. We can't do
anything without energy. What are you doing for energy?'' You
don't have those authorities, those clear authorities on the
books to be able to have Energy play a key role in solving
crises during these emergencies.
Mr. Pence. So would you agree, as a former Deputy
Secretary, that this bill would add a little clarity to that?
Mr. Menezes. Add clarity----
Mr. Pence. And help everybody out, both----
Mr. Menezes. Office of Legal Counsel, believe me, it
would----
Mr. Pence. All right.
Mr. Menezes [continuing]. Help tremendously.
Mr. Pence. Thank you. I yield back.
Mr. Duncan. OK, the Chair now goes to Ms. Blunt Rochester
for 5 minutes.
Ms. Blunt Rochester. Thank you, Mr. Chairman, and thank you
to all of our witnesses today.
Across the country we are already seeing the impacts of the
Infrastructure Investment and Jobs Act and the Inflation
Reduction Act. We are seeing a commitment to a cleaner economy
and cleaner planet, and a commitment to our American
manufacturers and workers.
Just in the 6 months since the Inflation Reduction Act
became law, companies have announced over 100,000 new domestic
clean energy jobs, and billions of dollars in new manufacturing
investments. This historic law--or both of these laws have
actually created a path to a stronger, more resilient domestic
energy system, all while combating the ongoing climate crisis.
But, unfortunately, the bills and resolutions that we see
before us today would force us off that path. They neglect to
address the global shift toward clean, renewable energy and
focus instead on expanding the fossil fuel industry by creating
loopholes for important environmental and public health
protections. We need legislation that not only protects our
domestic energy interests but also protects the environment and
health of all Americans.
My questions are for Mr. Garcia. One of the bills being
heard today relates to EPA's risk management program rule, also
known as the Chemical Disaster Prevention Rule. The proposed
legislation would amend the Clean Air Act to exempt refineries
that use extremely dangerous hydrofluoric acid from assessing
whether they could potentially use safer technologies. I am
concerned about any legislation that weakens the Clean Air Act,
but I am particularly concerned about a bill that guts a
commonsense practice that would save lives and prevent
disasters.
Mr. Garcia, can you speak to how clients that your
organization represents use foundational laws like the Clean
Air Act to protect themselves from dangerous polluters in
courts and how creating exemptions for them using the vaguely
defined ``critical energy resource'' would gut those legal
protections?
Mr. Garcia. Yes, absolutely. So what we see is that the way
that permitting should work, and the way that--whether it is
the Clean Air Act or anything else--it should work in a way
that industry along with the communities are equal partners in
a way that identifies the best science in order to follow
through on whatever the permit would allow, with the health and
safety of the communities most impacted. And that is exactly
what the what the RNP does, right? It is, in fact, a study. And
why would we ever want to stymie innovation in this process?
I believe that, from a lot of folks here today, we keep
talking--we keep hearing about the next chemical and the next
metal and the next thing that we are going to see. Why aren't
we applying the same level of innovation to the standards that
would protect our communities in the process?
And so that--I think that is a question that has to be
answered. But that is what the process is. And the fact that
the bill seeks to exempt it from exploring that innovation is
very problematic in all sorts of ways.
Ms. Blunt Rochester. Another bill that we heard about today
authorizes the use of flexible air permitting with respect to
certain critical energy resource facilities. In your written
testimony, you stated that using flexible air permitting in
this manner would take the science out of air permitting
decisions. Can you elaborate on that statement and discuss the
risks associated with this use of flexible air permitting?
Mr. Garcia. Yes, absolutely. We have--when we are talking
about permitting, there are certain standards that industry or
whoever wants the permit needs to comply with. In flexible air
permitting, as we have it in the bill, essentially, the
administration gets to pick winners or losers, never mind the
actual standards.
And so, when you have an administration that is really not
looking after the health and safety of the people on the
ground, that is really looking for corporate profits and things
like that, it really just allows them to pick favorites. And,
unfortunately, there is a long history of which industries they
pick to be favorites in that process.
Ms. Blunt Rochester. And just as a followup, can you talk
about the public health and environmental implications of that?
Mr. Garcia. Yes, absolutely. I mean, the idea is that you
are leaving out the science, and at the same time you are
ramming the most dangerous alternatives out there down
communities' throats, right?
And so they are the ones that would have to live with, God
forbid, any explosion that happens, the workers themselves.
They are the ones who have to deal with the consequences.
Ms. Blunt Rochester. Thank you so much, and I yield back.
Mr. Duncan. The Chair will go now to Dr. Joyce for 5
minutes.
Mr. Joyce. I want to thank the chairman for holding this
critical hearing today.
As we begin the 118th Congress, we continue to hear from
our constituents at home that the high costs at the pump and in
their electric bills are kitchen-table issues that they deal
with every day.
The fact is, the only way to bring down prices is to
increase supply. We have been blessed in this country to have
plentiful reserves of natural resources. In my home State of
Pennsylvania, we have significant deposits of coal and natural
gas. In the last 20 years alone, new drilling techniques have
led to the shale gas revolution, and Pennsylvania is now the
second-largest net supplier of energy to all other States. In
my conversations with energy producers, they make it clear that
the Commonwealth of Pennsylvania has much more that it can
give.
What is standing in the way of unleashing the resources
under the feet of my constituents? It is the Biden
administration's war on American energy.
At every step, this administration has held up and hindered
the production of American coal, oil, and natural gas. From
creating restrictive and burdensome regulations to attempts to
scare away capital investment from fossil fuels, the Biden
administration has stifled supply and caused prices to rise.
Mr. Chairman, I ask unanimous consent to submit for the
record a report by the National Fire Protection Association,
published in July of 2020, which I will submit at the end of my
questioning.
Just last month, an administration official raised the
possibility of banning gas stoves due to safety concerns. Well,
let's look at the science, a report by the NFPA. These claims
of unsafe natural gas stoves are incorrect. Gas stoves are
incredibly safe to use. In fact, electric ranges are over 200
percent more likely to cause a fire, and over 300 percent more
likely to cause a deadly fire, and close to 500 percent more
likely to cause fire-related injury than gas ranges.
This misguided attempt to ban gas stoves shows yet another
step that the Biden administration is attempting to move the
market away from American energy products like natural gas. It
is time to stop playing political games and do what is best for
our constituents.
No producer single-handedly affects the price, but by
giving businesses regulatory certainty and providing confidence
to capital markets assures that the domestic production of
energy is here to stay. We can lower prices and reclaim
American energy dominance.
My first question is for Mr. Eshelman.
How do aggressive and targeted attempts to discourage
investment in natural gas affect production?
Mr. Eshelman. Well, first off, to hit on your point about
the natural gas stoves, I think this is a real personal
intrusion, that the Government is trying to tell consumers what
kind of choices they can make. So it is what kind of--how you
can cook, what kind of cars you can drive, how you can heat
your home. So that is a very important point to bring up. I
think consumer choice is at risk here with this administration.
Second, business thrives where there is a predictable
landscape. So we need State and local governments and the
Federal Government all work together to streamline their
processes so we can get some permitting done, as well as
exploration and production, and particularly in Pennsylvania.
Mr. Joyce. Thank you. My next question is for Mr. Menezes.
I mentioned the need for regulatory certainty in my earlier
remarks. I have a draft bill that would enable critical mineral
facilities to work with the EPA in advance of the permitting
process so that they can react to surges in the market without
needing to restart the permitting process.
Currently, how do regulated critical materials entities
deal with large increases in market demand, and what relief
would this bill give them?
Mr. Menezes. You know, currently I believe there are some
300 backlogged applications pending at EPA for the permits that
you have requested, and that number is only growing, really, to
take advantage of a lot of the provisions that were in the IRA.
Capital wants to be expended. This new investment will involve
new chemicals, et cetera. They want to get their permits.
A lot of the funding is based on you have to have the
permits first. And so frustration is mounting that we can't
seem to figure out how to get EPA to really just follow the
law, implement the law, get the permits out, and let's try to
embrace the new future with these new chemicals and our
energy----
Mr. Joyce. Thank you for addressing this critical issue.
My time is expiring. Thank you, and I yield.
Mr. Duncan. OK. The Chair is going to go to Ms. Schrier
next. And when she finishes her 5 minutes, we are going to take
a recess for Members to go vote.
Members are reminded we are going to meet again right after
the second vote opens. Vote, come on back. We are going to go
to Kelly Armstrong first up when we come back.
So Ms. Schrier is recognized for 5 minutes.
Ms. Schrier. Thank you very much, Mr. Chairman. And thank
you to our witnesses. This has been a really interesting
discussion.
You know, last week one of my Republican colleagues
acknowledged that there is actually a lot of common ground,
that there is bipartisan agreement that we all want to be good
stewards of the Earth, that careful use of resources is
important, and decreasing greenhouse gas emissions is one
element of how we can be good stewards of this earth.
So I was so inspired by these prospects of bipartisanship
that the very next day I met with Democratic and Republican
House and Senate members at a breakfast discussion about the
real practicalities. Like, let's just get down to nuts and
bolts about how we are really going to get the changes we need
made with clean energy in a timely fashion to actually make the
difference that we need to make.
And one important practicality had to do with how delays in
permitting and years of litigation could thwart our very best
efforts to make the changes that we need to achieve our clean
energy goals. And just to be clear on where I stand, I am not
suggesting in any way that we gut our bedrock environmental
protection laws. But we need to make some pragmatic, necessary
reforms, like faster timelines, in order to have a realistic
shot of meeting these clean energy and emissions goals.
So I am looking for areas where bipartisanship is possible,
and I think we have some opportunity for common ground here.
I also believe and know that our production of renewable
energy is only as good as the electric grid that we have. And
the broader system and our Federal permitting laws were
primarily written for the fossil fuel era. And so it is time to
kind of rethink how we can streamline, and it requires some
very practical conversations, not trying to speed every answer
to yes, but at least getting to a yes or a no quickly so we can
move on.
So, Mr. McNamee, I appreciated your testimony. You noted
that Congress should consider reforming NEPA and the APA to
limit how legal challenges can be made against agency actions.
Of course, this is a, as you refer to it, a two-edged sword,
and that we want agencies to be accountable, we need public
input. And so Congress has to do this balancing act. I was
wondering if you could talk a little bit about this.
And I am confining the way I think about this to the
speeding of clean energy projects.
Mr. McNamee. Thank you for the question. The--one of the
key problems is that the way NEPA litigation--when Congress
passed NEPA, there was no cause of action. They thought they
just wanted agencies to look at the environmental impacts and
make sure they consider it.
The Administrative Procedure Act allows parties to
challenge an agency action for being arbitrary and capricious.
And so then they say, well, if the agency didn't make the
decision properly on NEPA, that is arbitrary and capricious,
and so that can be pulled back. An example: FERC in the last
few months had a--I think it was the DC Circuit sent back an
approval that they made because, even though they addressed the
issue, they forgot to cite--make a citation to a reg. And so
they had to send it back. That just seems to me to be things
that don't need to happen. So there can be ways to streamline
that.
In terms of the clean energy, the thing that I find
somewhat kind of amusing is that the--that often the same
people who didn't like underground natural pipelines suddenly
say, ``We need to fix permitting for, you know, 400 miles of
lattice towers for transmission lines to get wind from the
Midwest to the coasts,'' going through, you know, farms,
ranches, et cetera.
And what I think it is, we have to look at what are the
real problems. Because I think what the renewable developers
have realized is, there is a NEPA problem. There is a problem.
And so we need to come up with a solution that fits one size
for fitting all, not just picking----
Ms. Schrier. And I will give you just some feedback on
that. One of those things pollutes, one doesn't. One, in many
cases, lines are already there. But we--that is a discussion
for another day.
I wanted to just turn at the end to just a really pragmatic
example: hydropower. I come from Washington State. Hydropower
makes up a third of the renewable energy in the United States.
It makes up about half of the electricity we use in Washington
State. And with the looming climate crisis, hydropower is going
to be critical. You know, it provides baseload, just like
nuclear and like natural gas, that wind and solar just can't
provide. And so hydropower is critical.
And right now it turns out that just about 3 percent of
dams in this country generate hydropower. And this is an area
where the chairwoman of this committee and I really agree, that
this is exactly the kind of project where, if you consider the
net environmental benefit, you consider the economics, you
consider the energy benefits, that this sort of project might
be ideal for having a speedier pathway to a yes or a no.
So I want to thank you, and I yield back my time.
Mr. Duncan. The gentlelady yields back.
So Members are reminded that we are going to come back
right after the second vote opens. So vote and come back, and I
am going to take them in order. Kelly Armstrong is up next.
Witnesses are asked to remain. If you need to get up,
stretch your legs, bathrooms are down the hall. Apparently,
there is a lot of people in the lobby out here, so you may not
want to go that way.
And we will stand in recess until we get back.
[Recess.]
Mr. Duncan. All right. We are going to go ahead and get
started. So I will call the subcommittee back in order.
And I will now go to Mr. Armstrong from North Dakota for 5
minutes.
Mr. Armstrong. Thank you, Mr. Chairman. In 2017, when this
committee held a hearing on the Promoting Cross-border Energy
Infrastructure Act, Ranking Member Pallone remarked at the
time, ``With President Trump already approving the Keystone XL
pipeline, it is unclear to me why Republicans feel it is
necessary to strip the President of his authority. Do my
colleagues on the other side of the aisle honestly not have
confidence in President Trump?''
It is not that Republicans didn't have confidence in
President Trump, it is that Republicans didn't have confidence
in future administrations to make rational decisions regarding
energy's infrastructure. We only had to wait a matter of hours
after President Trump left office and President Biden--for
President Biden to revoke the cross-border permit for the
Keystone XL pipeline and prove the exact reason why we need
this bill.
Well, it is clear that the FERC and DOE processes are not
immune from political influence, which I will get to in a
second. They must follow statutory and regulatory guidelines,
as opposed to the impulsive decision-making process used by one
President. Opponents of carbon energy have routinely exploited
the uncertainty of the cross-border process to starve projects
of capital investment because they understand that these
projects can take decades to complete and are not a short-term
investment.
We know that those who are antagonistic to carbon energy
oppose every pipeline project. It has nothing to do with the
merits or the environmental analysis surrounding a particular
piece of infrastructure. To quote a leader of the Keep It In
the Ground campaign, the Keystone XL pipeline was never about
any single pipeline. It was about establishing a litmus test.
Well, the opponents of carbon energy have established that
test, and they know that they can rely on domestic--Democratic
administrations to undermine our energy infrastructure.
Deputy Secretary Menezes, before we go any further, it is
important, I think, to talk about what the Promoting Cross-
border Energy Infrastructure Act does not--what it does not do,
and we need to be perfectly clear. This bill will have zero
effect on NEPA or shortcut environmental reviews. Is that your
understanding?
Mr. Menezes. That is my understanding.
Mr. Armstrong. Thanks. And I am going to switch over to
domestic pipelines for a second.
Mr. McNamee, are political considerations playing an
outsized role in FERC's permitting decisions?
Mr. McNamee. I am concerned that FERC has not always been
focused on the limits of the Natural Gas Act in making its
determinations.
Mr. Armstrong. Have there been any policy changes in the
last 2 years, or is it simply that the regime has changed?
Mr. McNamee. Two things have happened. One, the regime had
changed from majority Republican to majority Democrat Members.
And second, there were proposals for new policy statements that
would have allowed the Commission to deny natural gas pipelines
based on the upstream and downstream natural gas combustion,
which, in my opinion, when I was on FERC, FERC did not have the
authority to make those decisions under the Natural Gas Act.
Mr. Armstrong. Well, what do you think the practical impact
of that would be if they--if prior to putting a pipeline in the
ground, a company had to mitigate both the oil well and the
SUV?
Mr. McNamee. Well, they may not even have an opportunity to
mitigate it. The FERC--if those policies were enacted, the
pipeline might not be approved at all because it would be
declared too harmful. And so, even though it is in the public
interest, it would provide service to customers, and it could
lower prices for customers, that may not be approved at all.
Mr. Armstrong. As somebody who grew up in western North
Dakota, I would say an oil well is like a five-star steak
restaurant and a pipelines is like McDonald's. They both make
money, but they make it in very different ways.
Back to Mr. Menezes. In addition to raising costs and
limiting growth, roadblocks that delay or prevent the
development of energy infrastructure, particularly oil and gas,
threaten the overall resilience of our electric grid, as well.
Can you touch on why that is important, to support efficient
deployment of midstream infrastructure?
Mr. Menezes. As we have been talking about today, we need
to increase supply, but we also need to increase infrastructure
to make sure that supply gets delivered to the American people.
That will bring downward prices onto the commodity that they
are purchasing.
Mr. Armstrong. And there is also global ramifications to an
efficient cross-border process in North America. I mean, we
import a ton of oil from Canada. They are our closest ally and
our neighbor. Maybe I am a little biased, because they are my
neighbor directly to the north.
Mr. Menezes. Well, I don't----
Mr. Armstrong. What are the ramifications----
Mr. Menezes. I mean, we have about eight refineries that
are designed and built to take heavy crude, heavy crude from
Canada. It was also for heavy crude from Venezuela until the
shale revolution. So we have refineries that are designed to
take that oil. It is from Canada, you know, our largest trading
partner. So it only makes sense.
Plus, we talked about earlier that would have been--we
import about 700,000 barrels per day from Russia. That 830,000
from Keystone would have certainly offset that.
Mr. Armstrong. I always used to say anybody who has ever
looked at the process to drill a well in Canada would
understand it is significantly more stringent than potentially
even drilling on our Federal land. When I would talk to my
friends and allies on this issue, I would say, ``What can we do
to make--change people's minds?''
They would say, ``Call it something other than tar sands
oil, because it just sounds dirty.'' It doesn't matter that it
is sour crude that we need for marine diesel. I love my Bakken
sweet crude, but it doesn't work for everything.
So thank you, Mr. Chairman, and I yield back.
Mr. Duncan. I thank the gentleman. So I am assuming I am
going to Ms. Kuster for 5 minutes.
Ms. Kuster. Great. Thank you, Mr. Chairman. Let me get
straight to the point. Most of the legislation before us in
committee today is merely a handout to the fossil fuel
industry, poorly described as an attempt to strengthen our
Nation's energy security.
So let me be clear. Furthering our Nation's independence--
dependance on fossil fuels instead of diversifying our energy
sources not only weakens our energy security, but it also harms
American families by leaving them vulnerable to global energy
price shocks.
In the first legislative hearing of this subcommittee, the
Republican majority has put forward partisan legislation which
stands no chance of being enacted into law rather than focus
our time on meaningful bipartisan efforts to further American
energy independence. These bills simply miss the mark. While I
disapprove of these misguided proposals, I remain committed to
working with my Republican colleagues to find opportunities to
actually deliver affordable, reliable, and domestically
produced energy to the American people.
One of those opportunities is bolstering our baseload
energy resources, such as hydropower and nuclear. In New
Hampshire, the Seabrook Nuclear Power Plant provides low-cost
baseload energy by operating at full capacity nearly year-
round. This past weekend you may have heard about record-
breaking cold on top of Mount Washington in my district. Under
some of this winter's coldest temperatures, Seabrook continued
to deliver reliable baseload energy to the grid.
To protect nuclear energy as a baseload energy resource
nationwide, we must also secure the uranium these plants rely
upon to operate.
Mr. Menees--Menezes? Thank you.
One of these legislative items before us today would
prohibit the import of low-grade uranium produced in Russia. At
a time when Putin's regime is using profits from energy exports
to fund a gruesome war in Ukraine, I would say cutting off
Russian imports is a sound policy. Can you speak to the
importance of reducing our dependance on Russian uranium, from
an energy security perspective?
Mr. Menezes. Well, your question touched on the key points.
Russia simply is no longer a reliable partner for any critical
energy infrastructure resources at all, including the enriched
uranium which our civilian nuclear fleet has become dependent
on, because it can be cheaply produced in Russia and they
export it at cheap prices to ensure that our civilian nuclear
fleet that competes in these RTO markets that we talked about,
they can't bear any cost increase on the cost of fuel.
The bill not only prohibits it, but it phases it out, and
it does provide for some waivers. So it is not as though we are
going to be without the fuel. That should give us enough time,
because there have been some other provisions of the bill to
develop our own abilities for fuel fabrication and, you know,
enrichment.
It is not the easiest thing to do, but we need to reclaim
our leadership and our own ability, frankly, to not only mine
and mill, convert, but also for fuel fabrication. And it is
important because, remember, nuclear is our cleanest emission-
free source of energy in the United States.
Ms. Kuster. Thank you. Like many Americans, I remain
concerned by the record profits that oil companies continue to
rake in while households across the country are struggling to
pay their energy bills.
Mr. Slocum, in your testimony you suggested that Congress
should press FERC, which is responsible for regulating natural
gas markets, to protect American consumers from price
manipulation that could increase natural gas prices and
America's energy bills. What steps can FERC take to improve
price transparency in natural gas markets?
Mr. Slocum. Yes. So FERC has jurisdiction over spot natural
gas markets if there is evidence of market manipulation. But in
the 2005 Energy Policy Act, because of widespread manipulation
of the price indices, FERC requested and Congress inserted into
the Natural Gas Act a provision that allows FERC to establish
its own price transparency natural gas reporting system.
And so, in comments in a rulemaking last year at FERC, I
urged the Commission to undertake this never-used statutory
authority, and what it would do would shine some badly needed
transparency into pricing in natural gas spot markets.
Ms. Kuster. Thank you. Many of my constituents in New
Hampshire rely on natural gas for electricity and home heating,
and I am committed to ensuring that Congress and the
administration evaluate all available tools to ensure the
prices consumers pay are just and reasonable.
To my Republican colleagues across the aisle, please take
seriously my offer to work together on commonsense energy
legislation and put people over politics.
Thank you, and I yield back.
Mr. Duncan. The gentlelady yields back, and the Chair will
now go to the gentleman from an energy-producing area--well,
actually, nuclear energy--that would be Mr. Allen from Georgia.
Mr. Allen. Thank you, Chairman Duncan and Chairman Johnson,
for holding this joint subcommittee hearing today to discuss
the importance of unleashing our domestic energy production,
securing our electric infrastructure and domestic supply
chains. This is critical in delivering lower energy costs to
Americans and becoming energy dominant.
I can't stress enough the importance of having an all-of-
the-above energy strategy, which we have talked about over and
over again here today, and ensuring our supply chains here are
secure.
Yesterday I hosted my first telephone town hall with
thousands of constituents on the line for the 118th Congress.
The most questions I got were about, ``What are you going to do
about energy and the cost of energy? How can we become energy
dominant again? I remember those days when we actually set the
price of a barrel of oil. That was real power, Mr.
Congressman.''
My constituents and Americans across the Nation are
spending money they don't have on energy, should it be at the
pump or trying to heat and cool their homes. The key to
affordability and reliability is a diverse energy portfolio and
removing regulatory barriers that hinder access to our natural
resources right here in the United States. The free market is
key in setting the price for energy.
Mr. McNamee, you mentioned in your testimony how subsidized
renewables are distorting price formation and regional
transmission organizations, which is having a negative impact
on important energy sectors like nuclear and coal, and, in
turn, the reliability of the grid. Commercial nuclear energy is
critical to my district, as it is home to Plant Vogtle, and
currently under construction are units 3 and 4, which are
scheduled to come online later this year. Nuclear energy is
reliable and affordable and emission-free.
Are there ways we can ensure subsidized renewables are not
undermining the market so that the coal and nuclear business do
not become obsolete?
And how does this degrade reliability?
Mr. McNamee. Thank you, Congressman. The primary challenge
in the so-called RTOs, which are in seven parts of the country,
is that they tried to use market forces in order to achieve the
cheapest energy resource for electricity.
The problem is, once you have subsidized resources like
renewables that have no fuel costs, that show up
intermittently, they have tax credits, they undermine the way
price formation works. And the price formation is for every,
basically, 5 minutes of the day during the load curve,
generators bid in to see if they can meet the load. And the
last generator that is picked sets the price that everybody is
paid. So that means if you are wind or solar, you are paid the
same price as the natural gas producer or the nuclear producer.
And what has happened is, when you have these intermittent
resources coming on and off, they are taking up market share,
they are driving a little bit of the marginal price of energy
down, but they are undermining the ability of baseload, like
nuclear, to be able to make the money to stay operating. And
this has become a big crisis in a lot of parts of the country,
where you see electricity prices spiking but reliability going
down.
In Georgia, one of the things is it still has the
traditional vertically regulated, and you mentioned that--
planning the resources. That is exactly what utilities do. They
do integrated resource plannings, they decide what units are
needed to meet the power 24/7, 365 days a year, whether it is
cold or whether it is hot.
And they also--the price of energy is averaged. So
customers are getting the economic benefits of all the
resources.
Mr. Allen. Right. And that might explain why we are--have
two battery plants that are scheduled to come online, as well
in Georgia, one just announced and one is under construction
for batteries for the electric vehicles that are going to power
the future, because we have the most efficient, most abundant
supply of electricity in the country. Thank you for the answer
to that question.
Nuclear energy, as I said, is critical to our national
security. So I would like to now enter into the record two
letters, one from the Nuclear Energy Institute and another from
the United States Nuclear Industry Council, which both
expressed support for the committee's work to establish a
secure nuclear energy fuel supply chain.
Mr. Duncan. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Allen. And now, Ms. Sweeney--and we are not--we are
going to run out of time, but we have talked about the
permitting problem in the mineral supply chains. Can you submit
in writing to me?
What I am hearing is workforce problems. And maybe you can
comment on another question later about the workforce problems
we are having throughout the energy sector.
Thank you, and I yield back.
Mr. Duncan. The gentleman yields back. The Chair will now
go to Ms. Castor for 5 minutes.
Ms. Castor. Thank you, Mr. Chairman.
Fossil fuel prices and energy costs were the primary
drivers of inflation last year and higher gas prices after
Putin's unprovoked invasion of Ukraine. And we had the Big Oil
CEOs here at the committee to talk to them about price gouging.
And we asked each one of them, were they interested in lowering
costs, lowering prices at the pump? We are going through a
crisis of a war with an ally. Inflation was hitting consumers
hard. And they all said no.
Now, just last week the profits became clear. Mr. Slocum,
did you see the profits reported by the Big Oil companies?
Mr. Slocum. Yes, ma'am.
Ms. Castor. How would you characterize them?
Mr. Slocum. Extremely large. And that doesn't even reflect
all of their profitability, because they have been plowing
billions into share buybacks. Chevron, for example, committing
to $75 billion.
Ms. Castor. But wait, they could have used that to lower
the price at the pump, right?
Mr. Slocum. Correct.
Ms. Castor. Shell Oil made more in profit than they ever
have before. Exxon and Chevron, their $90 billion in profit was
called ``epic.'' So this is what profiteering looks like,
doesn't it?
Mr. Slocum. The proof is in the numbers. Yes, ma'am.
Ms. Castor. So I think they have everything they need. Why
would we be bending over backwards to provide a wish list for
the Big Oil companies when they are making--they are banking
the biggest profits ever, and then they are not passing along
these savings, they are doing stock buybacks?
Is there anything in this wish list that is on this agenda
today that lowers the cost for consumers?
Mr. Slocum. I don't see anything in these various bills
that are going to reduce cost to consumers or protect consumers
from the kind of price gouging that is going on.
Ms. Castor. Mr. Garcia, do you see anything?
You have helped shine the light on the litany of this wish
list for polluters in Big Oil today. Is there anything in this
package that would lower costs for consumers?
Mr. Garcia. I can't identify a single thing.
Ms. Castor. In fact, you have helped us go through some of
these bills today. It is like the 1970s have called, and they
want their energy policies back. This is 2023, and clean energy
is cheaper energy. We, with the help of the Inflation Reduction
Act and the Infrastructure Investment and Jobs Act and the
CHIPS and Science Act, we are unleashing American innovation to
lower costs for consumers, to create jobs, to build healthier,
more resilient communities.
Mr. Garcia, is there any reason that you think we should go
backwards to the costly policies of the past, and--rather than
go forward?
Mr. Garcia. None. I mean, quite the opposite, right?
I mean, if we do that, there is going to be a lot of damage
done, both at a climate level for everything that we are going
to face as a country, as a planet, but also in small frontline
communities next to these facilities that, unfortunately, bear
the burdens of these--largely would bear the burdens of these
largely unregulated practices if these loopholes go through.
Ms. Castor. I mean, that is one thing that we never really
talk about when we have this wish list for polluters in Big
Oil, the cost of the climate crisis.
Back home in Florida, because our monopoly electric
utilities have kept us--we are the so-called Sunshine State,
right? But we are reliant about 75 percent on fracked gas for
our electricity. So people are paying higher electric bills as
we have warmer days. That is not smart. That is not consumer
friendly. We are paying higher property insurance.
There was another story out this morning about displacement
because of extreme events. There is a huge pull on the Federal
budget because we are outlaying more and more to tackle
droughts and floods and these extreme events. And then there is
the long-lasting burden of pollution that you highlight.
Again, isn't the future in clean energy? It is cheaper
energy. It will help us lower costs across the board.
Mr. Garcia. Absolutely. I mean, what we are seeing is the
attempt by dirty fuels and dirty industries to circumvent laws
in order to stay afloat longer, when what we really need to do
is make sure that our investments are going to--as you said,
the future, making sure that those investments are happening
quickly and directly into renewable industries that are also
clean industries for our communities.
Ms. Castor. Thank you very much. I yield back.
Mr. Duncan. I thank gentlelady. The Chair will now go to
Mr. Balderson from Ohio.
Mr. Balderson. Thank you, Mr. Chairman. Thank you all for
being here today. My first question is for Mr. Eshelman.
Thank you for being here, Mr. Eshelman. In your testimony
you note that IPAA's member companies are the innovative
leaders that broke the code to usher in the shale oil and
natural gas revolution in the United States. Chairman Johnson
and I can certainly attest to this massive impact the shale
revolution had in the Appalachia Ohio region and the economic
benefits we have seen in our communities.
As you know, the shale revolution and fracking turned the
U.S. into an energy superpower and greatly enhanced our
national security. But we must look forward. Natural gas and
oil will continue to be essential to our energy portfolio for
the foreseeable future.
In addition to prohibiting the President from unilaterally
banning fracking, Chairman Duncan's Protecting American Energy
Production Act also expresses the sense of Congress that States
should maintain primacy for the regulation of fracking for oil
and natural gas production on State and private lands.
Mr. Eshelman, why was this aspect of energy policy key to
the shale revolution?
Mr. Eshelman. Well, hydraulic fracturing is a technology
that has been around for a long time but perfected over the
past 10 years, which unleashed the shale revolution in the
Utica, the Marcellus, and the Permian all around the country
and provided jobs and oil and gas to consumers. So it is a very
important technology that, if we didn't use it, we would
probably lose half of our oil and gas supply tomorrow.
One of the other things I would mention is that there have
been efforts in Congress to ban hydraulic fracturing or have it
regulated at the Federal level. That doesn't work. A one-size-
fits-all regulation does not work for different parts of the
country. So the States are doing it well. They are working with
communities, and it should remain that way.
Mr. Balderson. Thank you. I will follow up with you, sir.
You said it best. The IRA's methane tax will jeopardize the
operations of many oil and natural gas producers and divert
their attention from what they do best: producing the cleanest
and safest oil and natural gas in the world.
As you noted, this tax was included in the Inflation
Reduction Act despite not being considered at a hearing, not
receiving expert testimony, and without an economic analysis.
If this isn't repealed, producers will start paying this tax
next year.
How will the natural gas tax impact rural producers, rural
communities, and, ultimately, how will the tax impact our
constituents who rely on natural gas each and every day?
Mr. Eshelman. Well, I think you hit on it. There was no
congressional hearing on this tax. There was no testimony taken
on it, no analysis done on it. So we really don't know the
answer to that question. That is the problem with this tax.
Mr. Balderson. A followup for Mr. Menezes and Mr. McNamee:
Do you think this tax will ultimately hurt rural communities?
Mr. McNamee. Yes.
Mr. Menezes. We have to keep in mind that those that are
benefiting from fracking, they are the small producers. The
majors do not frack, OK? They are mom-and-pop operators here.
These are the true patriots. These are the true Americans. They
have produced the oil to where, for the first time in history,
OPEC is forced to negotiate with the United States. That has
never before happened since OPEC was in existence.
And so, when you are looking at those provisions, the
methane regs, those fees, it is going to be the small
producers. The majors, they are not going to be impacted,
again, but they don't have the small producing that the IPAA
folks have on the methane.
And remember, the methane we talk about is a pollutant. It
certainly, in great concentrations, can do great harm. However,
it is a product. And so, with the improvement in all the
detection devices, what we have seen already is the industry
moving to detect, take action, and it is a product. And so, by
making the investments, it is more product to actually sell.
And so, talk about a circular economy, that is one, and they
are taking advantage of it now.
Also, EPA has a supplemental pending rule open for public
comment now on methane regulations, which essentially does the
same thing without the fee, but you have the full backing of
all the penalties in the Clean Air Act if you violate those
regulations once they become final.
Mr. Balderson. OK. Thank you very much. We are down to 30
seconds. I want to ask one last question. Please be conscious
of the time.
Mr. McNamee and Mr. Menezes again, Chairman Johnson's
Unlocking Our Domestic LNG Potential Act would streamline the
approval process for American companies to export liquefied
natural gas.
Do you think--during last week's hearing Under Secretary
Paul Dabarr regarding the global environment benefits of the
exporting U.S. natural gas to developing nations, many of which
are reliant on coal from China.
If you all would respond with just written answers, I would
appreciate it.
I yield back, Mr. Chairman.
Mr. McNamee. Exporting natural gas helps both people in
foreign countries and domestically.
Mr. Balderson. Thank you.
Mr. Duncan. All right. I thank the gentleman. The Chair
will now go to Ms. Miller-Meeks for 5 minutes.
Mrs. Miller-Meeks. Thank you very much, Mr. Chairman. I
thank all of our witnesses for having stamina to last through
this hearing.
Iowa is a little-known energy State. We have 50 percent of
our energy from renewables. Over 50 percent of our electricity
is from wind. And we are an exporter, a net exporter of energy
that both reduces greenhouse gas emissions and cleaner burning
engines as part of our liquid fuel portfolio. And it should be
part of a liquid fuel portfolio in all of our energy needs. It
offers, you know, affordable energy to allow us, as a country,
to compete globally on an affordable level.
Imagine when I went to COP 26 and COP 27 that I found out
that energy demand is increasing. It is not decreasing. And I
agree with the witness that we need increased electrification,
but energy efficiency is only going to be able to give us so
much, and it is a very small amount. And to increase
electrification we need electricity, which means we need more
energy sources and to build new energy sources and resources,
not less.
In Europe, as we have seen over the past year--and I saw
when I went to both COP 26 and COP 27--demand is going up.
Energy efficiency, as tried in Germany and UK, has been reliant
upon wind and solar as renewables and have much higher
electricity prices than we have in the United States. So it is
not bringing down electricity prices.
In Iowa, not only are we a source of energy, we also have
the Ames National Laboratory located at Iowa State University
just outside of my district, and it currently leads the
Critical Materials Institute. CMI is an energy innovation hub
of the U.S. Department of Energy. Its focus is innovation to
assure supply chains for materials critical to clean energy
technologies. CMI carries out scientific and engineering
research that facilitates more diverse primary supply chains in
addition to mining, which we wholeheartedly agree we need in
this country, more efficient manufacturing, re-use and
recycling, and development of new materials.
Mr. Menezes, can you speak to the national significance of
diversifying supply, developing substitutes, and driving re-use
and recovery of critical minerals with respect to securing our
Nation's global competitiveness?
Mr. Menezes. Well, we have talked about the critical
minerals, you know, throughout the day. It is important that we
figure out a way for us to have our own access to our critical
minerals, you know, as we are dependent on 31 of 35, we import
14. So I think that is a--that is one of the lessons learned.
And it was really emphasized after COVID. So Congress in
2020 did take action, you know, to do R&D for critical
minerals. And so they were doing it. But after COVID we
realized we really cannot depend even on other countries. While
we have been talking about China, you know, other countries
provide us other critical minerals. So the focus now is really
to do this.
And the Biden administration likewise, you know,
underscored that. And--but we need to do more. And so that is
why today's bill is so important, that we really need to make
sure that the Department of Energy has the expertise to do it.
You mentioned Ames. It is great. Ames is the place where
you go, where you get to see the actual elements that are on
the elemental chart, except for the radioactive ones, of
course. But you can just see, and they are all there in these
little vials. And it is just an absolute great place to go and
visit.
Mrs. Miller-Meeks. I wholeheartedly agree. And as you know,
in December of 2022 the U.S. Department of Commerce found
Chinese solar panel makers had circumvented the U.S. tariffs by
doing minor processing in Southeast Asia--and I think that was
mentioned earlier--including Cambodia, Malaysia, Thailand, and
Vietnam before exporting to the U.S. New tariffs on U.S.
imports from these countries, which account for about 80
percent of U.S. panel supplies, do not take effect until June
of 2024 because of a 2-year waiver from President Biden.
I have concerns about China taking advantage of the waivers
for renewable technologies meant for other countries,
especially when the alternative is American-made products.
There is a similar issue with Chinese companies operating
production facilities for the EV batteries, which we had talked
about through the credits with the Inflation Reduction Act.
Can you please speak to the risk that the waivers for
critical minerals and renewable technologies in other countries
pose to the U.S. national and economic security?
Mr. Menezes. Right. For the first time, then, if this bill
is enacted, the Energy Department will actually have a role in
advising the President and other agencies as to what emergency
actions can take place to ensure that we can protect those
vital sources. And that is why this is needed.
Otherwise, the Department of Energy and its expertise will
lose out to other agencies, who will have other equities to
argue about and for. And so you want the Energy Department to
be at that table to inform the President as to why certain
actions need to be taken to protect our critical minerals and
resources.
Mrs. Miller-Meeks. Thank you so much. I wish I could go
through all of the witnesses, but I don't have time. I have
some other questions which I will submit to the committee, and
then ask you to respond in writing. Thank you very much.
I yield back.
Mr. Duncan. I thank the gentlelady, and the Chair will now
go to the gentleman from the Republic of Texas, Mr. Pfluger,
for 5 minutes.
Mr. Pfluger. Thank you, Mr. Chair, and I appreciate the
opportunity in this hearing. I would like to thank all the
witnesses.
You know, I would hope that what has been said by my
colleagues on the other side of the aisle is actually true,
that we can work together. I am worried about not having
electricity.
There is a narrative here that Big Oil is making big
profits. Does--Mr. Slocum, I don't know if you know the price
of oil on April 20th, 2020. I don't know if anybody on this
panel can tell me what that was. I bet there is one or two.
Negative 37.63. Do we remember that? And do we have hearings
about the profits that we were not making at that time?
Energy security is so important. It is important to our
economy. It is important to our livelihoods. It is important to
our military. You know, when we look at the concept of making
sure we have affordable, reliable energy--Mr. Garcia, can you
tell me what the reduction in methane emissions has been over
the last 10 to 15 years here in the United States?
Mr. Garcia. I don't have that data in front of me, but I am
happy to provide----
Mr. Pfluger. Yes, it is 14 percent, 14 percent.
Mr. Slocum, any idea where that ranks in the world?
Mr. Slocum. I don't know, but I don't know about that
figure. There is----
Mr. Pfluger. That is from----
Mr. Slocum. It depends upon how it is being measured.
Mr. Pfluger. That is from DOE.
Mr. Slocum. Right. Because there has been discrepancies
between actual emissions and recorded----
Mr. Pfluger. OK.
Mr. Slocum [continuing]. Methane emissions.
Mr. Pfluger. The point that I would like to get to here is
we lead the world in reduction of emissions, harmful emissions.
We have producers that are doing this because it is not only
efficient, but it makes sense in a market-based place. And we
do leave this Earth better.
And I would invite you to come to my district to see the
wind and the solar and the problems that they actually have for
the environment, since you have spoken so eloquently on
environment, and see the ranchers and the farmers who operate
this land for generations--seven in my case, my family--who
leave the land better, and use the resources, and put back into
it.
Mr. Eshelman, you mentioned--what percentage, can you
remind us? What percentage of energy comes from small
producers, from independent producers, not from quote/unquote
``Big Oil''?
Mr. Eshelman. That is 91 percent of the wells.
Mr. Pfluger. Ninety-one percent. And disproportionately,
how is the methane, the natural gas tax, how does it affect
those people that don't have economies of scale, that are
independent producers, that--one or two people in their
businesses?
Mr. Eshelman. That is what we are trying to understand. As
I mentioned before, there has never been a hearing on this.
There has never been a study on this. There has never been
testimony on this tax. So we really don't know.
But we are concerned with giving EPA more authority. And
once you give an agency authority, they kind of grow with it.
So that is----
Mr. Pfluger. You know, I figured out very quickly when the
wind energy folks came to see me and they said, ``Mr. Pfluger,
we have a problem with the EPA. We can't get a permit to build
a windmill in your district.''
I said, ``Oh, well, welcome to the club.''
We have more wind energy, by the way, Mr. Garcia, in my
district than the entire State of California. But they can't
get a permit to do that.
Mr. Slocum, is wind and solar--do they provide baseload
capacity?
Mr. Slocum. They do not. But the question is whether or not
baseload capacity is always a requirement.
Mr. Pfluger. Yes.
Mr. Slocum. Especially--you can balance off intermittence
with----
Mr. Pfluger. That is fine, thank you. I think the fact is
it doesn't, and it is not required in States like California,
where they have intermittent electricity, which is unreliable.
However, in most of the United States we want reliable
electricity.
We have these balls in the air. One of them is cost, one of
them is reliability, one of them is geopolitical security. And
the climate is certainly always going to be right there. We do
it cheaper, more efficiently, and also more environmentally
friendly.
Mr. Garcia, you mentioned that--I don't have the exact
note, but that there is no boundary on air pollution. Is that--
does that summarize a previous comment?
Mr. Garcia. For the specific provisions that these--and
loopholes that these bills would bring about, yes, there would
be no----
Mr. Pfluger. No, you said air knows no borders. I found my
note. ``Air knows no borders.'' I just quoted you on----
Mr. Garcia. Air, yes, the air----
Mr. Pfluger. Is that true?
Mr. Garcia. Absolutely, air doesn't know borders.
Mr. Pfluger. OK, so what are the Chinese doing to curb? Do
they have taxes on natural gas in China?
Mr. Garcia. My understanding is that the jurisdiction of
this committee is about what the United States can do.
Mr. Pfluger. So my understanding of what you said is that
air knows no borders. And I want to make the point that, if
that is true, then the people in my district are being affected
by Chinese air, just like they are in your home, just like they
are everywhere throughout the United States or throughout the
rest of the world.
So the competitive advantage that we are giving them,
giving away, the most important resource we have at our
fingertips, is also causing the actual harming of our climate.
And it is coming from China. And we have to take actions here
to compete and to continue to do it better.
I have 15 more minutes of comments. However, the Chair will
not let me use that time, and I yield back.
Mr. Duncan. I thank the gentleman, and now we will go to
Mr. Obernolte from California.
[Pause.]
Mr. Duncan. Is your mic not on? Can you slide over one?
Mr. Obernolte. There we go. I swear I pushed the button.
Mr. McNamee, in your testimony you were discussing the need
to enhance cybersecurity in our natural gas pipelines. And that
really resonated with me because we all lived through the
cybersecurity hack of the Colonial Oil pipeline a year and a
half ago, which, as I am sure everyone in this room knows,
disrupted the supply of gasoline to the entire southeast United
States.
So what can be done? What needs to be done to put those
protections in place for natural gas pipelines?
Mr. McNamee. Well, the industry has generally been working
to try and--to harden their systems, including their electronic
systems, but also there is the challenge of physical attacks.
So I think the primary thing that needs to be done is to--
like the reporting issues that want to be done for the bulk
power system, but also for natural gas. And I think that, you
know, we need to encourage natural gas pipelines, oil
pipelines, the electric grid to all be focused on trying to
find out what is the next thing that is going to happen and
harden it.
Because one of the problems with regulations is it tends to
look backward at what has happened, and, of course, you need to
harden for that. But the bad guys are way ahead, and so they--
kind of constantly be working for what is the next thing. And
being aware of what the next thing is is going to be helpful,
and that is part of what I think that bill will help do.
Mr. Obernolte. Sure. Well, you know, I think that we are
having to transition from seeing cybersecurity of privately
held companies as a business issue to seeing it as a national
security issue, whereas traditionally we just thought of
national security being applicable to the Department of Defense
and agencies of the Government.
Mr. Slocum, first of all, let me thank you very much for
not reading your statement. You know, I think that hearings--we
communicate with each other a lot better when we are not just
reading at each other. And I just want you to know that we
noticed, that we appreciate it, and, you know, I think that is
something we should do some more of.
So you were talking in your testimony about objecting to
removing the required finding of being in the national interest
before liquid natural gas can be exported. And, you know,
just--we heard some other testimony from various witnesses,
including Mr. McNamee, about the way that government action can
create distortions in the markets for energy.
And I am wondering why that wouldn't be the case here,
because every time the Government tries to put their finger on
the scale to try and protect energy markets and manipulate
energy prices, it seems like things can go awry, and
particularly in this case, when you are creating, you know, by
the restriction of natural gas, of liquefied natural gas
exports, you are creating an economic island that then can be
vulnerable to things like arbitrage by people with just a
profit incentive, and the consumer ends up losing anyway.
So what--why would that not create economic distortions
that we need to avoid?
Mr. Slocum. Well, I think because natural gas has
historically been a regulated commodity.
So when it was enacted in 1938, this provision, it was
recognized that natural gas was providing essential services to
homes and businesses. And so, as a result, if you were going to
export it or import it, there had to be public interest
determinations on it because of its essential utility----
Mr. Obernolte. But should it be, is the question. I mean, I
think that is the question that the bill that we are we are
debating is asking, is should it be? Does that actually have
the intended effect?
Because many times, as you know, governmental action does
not.
Mr. Slocum. Well, I mean, right now, as I pointed out in my
written testimony, the Department of Energy is not really
performing a meaningful public interest determination. There
has never been a rejected application to export natural gas by
the Department of Energy, right? So that--so it seems like the
legislation is proposing a solution in search of a problem,
right, that the Department of Energy is not--there is no
backlog of applications. It takes sometimes just months between
the submission of the application of the Department of Energy
and its approval.
Mr. Obernolte. OK, that is an interesting different kind of
line of argument than the one in your testimony. I think both
are interesting. I would love to continue this discussion. I
only have a few seconds left here.
Mr. Garcia, I was going to ask you about this.
Unfortunately, it is going to be a statement, and not an
opportunity for you to respond, and I apologize for that.
But, you know, we have been talking about this economic
valuation between trying to value human prosperity and ranking
that against protecting the environment. And I think everyone
here on the dais would agree that we need to do both. But, you
know, the problem is that we all represent constituents who are
suffering.
In California we pay twice as much for residential
electricity than neighboring States, three times for
industrial, four times as much for commercial. My constituents
pay twice as much for a gallon of gas to put in their car to
commute to work. They don't have a choice to do that. And this
is the problem. You know, we have to make those economic
judgments. And I think that there is a way to effect a win-win.
But I want to thank you all for your testimony. I found it
a very interesting hearing.
I yield back, Mr. Chair.
Mr. Duncan. I thank the gentleman. The Chair will now go to
Mr. Weber from Texas.
Mr. Weber. Thank you, Mr. Chairman. I am going to make a
couple of comments.
First, the--one of the comments on the panel was earlier,
before we went to vote--was that bang for energy efficiency--
you get more bang for your buck than you do more power plants.
And I would submit this for the record and for the panel
that, you know, power plants, I don't know, 100 years ago there
was X number. But American population has doubled, tripled,
increased. And so we are getting more and more people, and
especially with an open border--thank you, President Biden--we
are going to have a lot more people, and we are going to need a
lot more power.
Now, some of you all know I am from Texas, and we talked
about Winter Storm Uri, where we went through that two
Februaries ago, and Texas saw record cold. I am born and raised
on the Gulf Coast of Texas, 20-mile radius, 69 years. I have
never seen it be 18 degrees on the Galveston Island.
So we lost some power. It was a perfect storm. Some of the
industries that normally--plants that normally shut down in the
wintertime weren't necessarily ready for that kind of cold. The
waterlines freeze. South Texas nuclear plant down in Matagorda
County was one of them. I represented them as a Texas State
rep. And so we lost--wind energy failed us. Wind turbines, they
froze up, blades got iced up.
So we are number 1 in wind energy. We are number 2 in solar
panels. And you find out very quickly that, in an incident like
that, you get a lot of cloudy skies. You don't have as much
sun. Solar panels ice up. They got snow on them. And here is
the bad news about solar panels: You know the sun goes down at
night, and so they are not constantly producing electricity.
We actually met with ERCoT and PUC--the ERCoT, Electric
Reliability Council of Texas, and the PUC there in Texas--and
they talked about their plan. There is a website called
PowertoChoose.org, where you can choose your provider. A lot of
the providers--some of the providers advertise 100 percent
green energy. And what that was saying is only solar and wind
power. They were able to provide--because of the subsidies and
whatnot--cheaper rates from those who used natural gas, and
some coal, and even nuclear.
And so the PUC told us--four of us Members of Congress met
in Austin with them--that they were going to put a rule into
place that, if you are a power provider on that website, a
retail electric provider--we call them REPs, R-E-Ps--they had
to increase--they had to include, rather, a part of a base load
that included some reliable, dependable, affordable--and as
your discussion with Mr. Pfluger was--that is natural gas.
We have a lot of wind energy in Texas. I didn't know it
was--most of it was in his district, but I am mighty proud for
that. A lot of gas pipelines, oil pipelines in his district
too.
So I want to go back to Obernolte's discussion about the
Colonial Pipeline system. The Keystone Pipeline comes into my
district in Texas. It is the safest way to move product,
period. Not truck, not rail or barge. It is the safest way. The
President shut it down.
Colonial Pipeline system, about 2 or 3 months after Winter
Storm Uri, was hacked into and was shut down 4 or 5 days. The
Colonial Pipeline system feeds the southeastern part of the
United States. It carries 3.1 million barrels of product today:
gasoline, diesel, and jet fuel. The Keystone pipeline carries
830,000 barrels of product a day. It is literally one-fourth--
more than one-fourth the output of the entire--the Colonial
Pipeline system that feeds the entire southeastern part of the
United States with a leg that goes north.
So it is extremely important that we have a solid
baseline--baseload system that is going to be fossil fuels.
Renewables are great. We like renewables. Make no mistake about
that. I am tired of our friends across the aisle saying somehow
we are in the oil companies' back pockets. That is just a
mischaracterization. But what else do you expect? Did I say
that out loud?
At any rate, renewables can--they can--it can be the
supporting actor in this movie. It cannot be the leading actor
in this movie. And what we are trying to do today is to make
sure that we are building that up.
Mr. Menezes, in your written testimony you outline H.R.
150, Protecting American Energy Production Act, which I am an
original cosponsor of, which would prohibit the President from
declaring a moratorium on fracking, which has started in my
district. You got 29 seconds. Tell us how good it is, fracking.
Mr. Menezes. What are we talking about, the virtues of
hydraulic fracturing?
I mean, certainly for domestic supply, for export to help
our friends and allies all over the world get off of Russia,
natural gas--they have come to us asking.
You will look at what is going on in the private sector.
This is without government interaction. In fact, it is beyond
the reach of the Federal Government. Contracts are being
entered into by European off-takers and Asian off-takers, our
friends and allies, for good old U.S. LNG. If the President
thinks that he can declare an emergency and somehow put a
moratorium on fracking, he is going to upset the entire
geopolitical energy markets.
Mr. Weber. I will say thank you for that.
And Mr. Chairman, I yield back.
Mr. Johnson [presiding]. Thank you. The gentleman yields
back. The Chair now recognizes the gentleman from Alabama, Mr.
Palmer, for 5 minutes.
Mr. Palmer. Thank you, Mr. Chairman. I want to talk a
little bit about where some of your funding comes from, where--
how it is used, and particularly about the $27 billion slush
fund that was put into the Inflation Reduction Act. You stuck
in $27 billion that basically is going to go to Wall Street
firms to set up a climate bank. But it doesn't help the
American people with their utility bills.
It is about 20 million households that are behind on their
utility bills. That is about one in six households. It is
forcing people in some places to literally choose between
keeping their homes adequately warmed and still be able to
afford their groceries and their medicine. I think, if Europe
is any indication, we are going to find out that there are
several thousand people that will be classified as excess
winter deaths. We have seen this in the United Kingdom, we have
seen it in Europe. It has basically become a conduit for seed
money for this new climate bank. And because there was no
clarity in it, you have got climate groups fighting over the
money.
I am just--Secretary Menezes, will this $27 billion slush
fund lower the cost of heating for these American families?
Mr. Menezes. No, the provision is clear. It is to go to
develop zero-emission technologies for States and
municipalities----
Mr. Palmer. Will this slush fund provide natural gas for a
town like Pembroke Township in Illinois that--85 percent
African American? They don't have any means to grow their
economy, they are heating their homes with propane and wood.
Will it help them?
Mr. Menezes. Zero-emission technologies, nonprofits,
municipalities, and States.
Mr. Palmer. Will it do anything for the people in the
northeastern part of the United States that are not using
natural gas, they are using heating oil, and the cost has
almost doubled in the last couple of years--$5 and something a
gallon. Will it help them?
Mr. Menezes. Not that I am aware of.
Mr. Palmer. Yes, and it has nothing to do with natural gas
in that area. It is all about heating oil.
Will it help people who have been--who bought into this
stuff like Dharnai, India, where in 2014 Greenpeace went in and
convinced them that they could supply power for the village
through 100 percent renewables, and 6 years later it is
basically an animal shed because they couldn't afford it, they
couldn't--it wouldn't power appliances like a refrigerator that
most of us take for granted. They couldn't maintain the
batteries. So now they are getting their power from fossil
fuel. It wouldn't help in a situation like that, would it?
Mr. Menezes. I was not aware of that, but I would hope that
is not the consequence of this fund.
Mr. Palmer. Yes, there is a really good paper on this from
the Institute for Energy Research.
My concern is, looking at China's influence and funding
various groups that are pushing renewables, that in many
respects--and I mean this seriously--it undermines our national
security, this mad dash to renewables.
I keep hearing some of my colleagues across the aisle talk
about we don't need to be dependent on foreign sources for oil
and natural gas. Well, I got news for them. We don't have to
be. The only reason that we might be is because we refuse to
access what we have.
I hear them basically ignore the fact that natural gas is
largely responsible for the tremendous reduction in greenhouse
emissions that we have already enjoyed. They ignore the
technological advances, yet they want us to be dependent on
China for the--for wind turbines and for solar panels. Does
that make sense?
Mr. Menezes. Not to me.
Mr. Palmer. It doesn't to me, either. It does concern me,
though, because it becomes a national security issue at that
point. China is already, in some critical minerals, holding
back on shipping those, and some of those are critical for our
national defense, not just our national energy grid.
But having worked for two international companies, having a
little bit of an understanding about this--and there is another
report from the Electric Power Research Institute--we are not
going to be at net zero by 2050. We don't--the engineering
doesn't support it. The technology doesn't support it.
We could be a lot more on the renewable side, but if we
were really smart about it, we would go to next-gen nuclear and
power the world. We would be working in sub-Saharan Africa,
South America, Latin America, and the Caribbean, building
natural gas facilities so that those people could enjoy the
same economic benefits that we do, rather than sitting back and
watching China. They have already built 14 coal-fired power
plants outside of China, and they built, what, maybe one every
two weeks now in China.
So I just--Mr. Chairman, I appreciate the opportunity to
raise these issues about the slush fund that I think was put in
that Inflation Reduction Act, and I yield back.
Mr. Johnson. The gentleman yields back. The Chair now
recognizes the gentleman from Idaho, Mr. Fulcher, for 5
minutes.
Mr. Fulcher. Thank you, Mr. Chairman. And coming up on the
tail end of this, a lot of the subject has been covered
already, so I am going to go--I think I will address this to
Mr. Menezes. It has to do with hydro.
In our State, hydropower, 51 percent of our total in-State
electricity usage, and it is great, at least for us. It is
baseload, it is cheap, it is renewable. Comment on hydro as a
source, and if you agree that it is effective and efficient.
How do we ensure that that is an ongoing predominant baseload
source?
Mr. Menezes. Excellent question. Well, we should be allowed
to continue to use the dams that are in operation to provide
the hydropower, first of all. There is a big movement, of
course, of dam removal, right? So a lot of communities are
facing that. And so that is a real threat to the hydropower
that we have today.
The other thing is, it is going to be impossible to build
any sizable--a new dam. So you are looking at incremental gain,
incremental hydro. And so that is to make improvements in the
existing hydro, perhaps some expansion. And on existing dams,
perhaps you can put some electricity generating turbines there.
But that is really the future on hydro that way.
We do have other potential great technologies. I mean, we
have tidal, we have run of river, we have a variety of other
technologies in the using of hydropower. So I think the future
is still bright on that, but it is going to be very difficult
to maintain, the base load that we have now.
The other thing, of course, is pump storage hydro.
Mr. Fulcher. OK.
Mr. Menezes. That is another good use of hydro power,
that----
Mr. Fulcher. I have heard it said that the greatest battery
in the world is water behind a dam, storage.
Mr. Menezes. Yes.
Mr. Fulcher. I am going to shift to Mr. McNamee, if I may,
please.
Another asset we have in my State of Idaho is Idaho
National Lab. And a lot of research is being done, a lot of
work with small modular reactors is being done there. Talk
about that a little bit. I hear various experts talk about the
benefit of--the greatest benefit being able to decentralize the
grid, for example. Of course, the no-carbon emission is another
factor. Others say it is great for redundant backup.
What is--in your view, what is the most appropriate use,
the most appropriate role for small modular reactors as those
come online?
Mr. McNamee. Well, the ones that you have mentioned are
absolutely important.
And another one is reliability. SMRs are really, I think,
going to transform the way we do the electric grid. And what is
interesting is, because, you know, they are between 5 to 300
megawatts, you can build them in a manufacturing facility, you
can put them on a rail or on a truck, and put them to where
they need to be. The price is going to come down for nuclear.
They can run 24/7. They are designed to be much safer than--not
that current nuclear isn't, but they are going to be safer, the
way they operate.
But what is really going to be amazing is, where we were
talking earlier about having to build long transmission lines
to get wind, let's say, from the Midwest to the coast,
whatever, you can put SMRs on old coal plants and use the
transmission. You are going to save billions of dollars in
transmission. So SMR technology, it is--we are about to be able
to embrace it, and it is going to be a big change.
Mr. Fulcher. Great, thank you. Very helpful for me.
Ms. Sweeney, you are not off the hook. I got a question for
you. In your written testimony you talk about, I think, it is
80 percent, nearly 90 percent of global rare earth elements
from China.
Ms. Sweeney. Yes.
Mr. Fulcher. Is that mainly because that is where those
earths are, or is that for other reasons?
Ms. Sweeney. No, the U.S. was the leading rare earths
producer throughout, I think, the early 1970s. It is really
because China focused on rare earth development, and they
started, you know, printing money and cornering the market, and
then they were able to bring over anybody who wanted to be an
end user of those products. They brought all the processing
into China, and they were able to pretty much control that
market, and still do.
Mr. Fulcher. And here we are. Right, thank you. That is
what I suspected. But one last question for you, and I only
have 40 seconds left, but--and you did touch on this, but I
would like you to touch on it again, please.
Once again, in your written testimony you talked about the
permitting process for mining projects. With the current
administration that we have got, what are some of the things
that that administration could do to make that permitting
process better without going through the statutory process?
Ms. Sweeney. There are a lot of commonsense solutions out
there. I mean, really, it is looking at how to use NEPA the way
it was intended to be used.
So essentially, there are--agencies are supposed to try to
avoid duplication. They are supposed to tier off of each
other's environmental assessments, use the same information.
There are a lot of commonsense solutions that don't need any
changes statutorily.
Mr. Fulcher. Thank you very much.
Mr. Chairman, I yield back.
Mr. Johnson. The gentleman yields back. The Chair is--now
recognizes the gentlelady from Michigan, Mrs. Dingell, for--oh,
I am sorry, Mrs. Dingell. Sorry about that. I got it out of
order. I now recognize the gentleman from Texas, Mr. Crenshaw,
for 5 minutes.
Mr. Crenshaw. Thank you, Mr. Chairman. Thank you all for
being here.
I want to quote the great Thomas Sowell that the first
lesson of economics is scarcity. There is never enough of
anything for all the people who want it. And the first lesson
of politics is to ignore the first lesson of economics. And
that seems to be the rule that I think radical environmentalism
plays when it comes to understanding basic supply and demand,
and how that affects prices.
Now, we can engage in wishful thinking, and we can wish for
a reality that is different than the one we live in, where
supply and demand aren't real forces, and that we can just make
them up and demand the prices that we feel like having and
expect the supply to then be there when we need it. Of course,
that is not reality. We can we can go write fiction novels
about it, I suppose, if we would like. That might be fun.
So I want to talk about supply and demand on something very
specific, and that is our refineries, because this EPA rule has
gotten a lot of attention, and our bill, in response to that
EPA rule, has gotten a lot of attention today.
It is worth noting, first, that 8 refineries have shut down
in the last 5 years. It is one of the great reasons for the
bottlenecks in refinery production and, of course, the reason
for prices going up and staying up. When demand post-COVID shot
up and recovered, the supply could not recover accordingly.
Just the basics here.
Now the EPA wants to make that supply harder. The EPA wants
to target hydrofluoric acid using refineries. That would affect
41 of our 130 refineries. That is 50 percent of all the product
refined.
Mr. Garcia, you talked about this today. I mean, what is
really the intent behind this? And you have said it, so I am
going to paraphrase you, which--the intent is to get them to
change to a sulfuric acid-type refinery. Is that correct?
Mr. Garcia. No, the intent is for them to actually take the
time to explore alternatives that are going to make it safer.
Mr. Crenshaw. Well, there is only one alternative. So you
want them to change, though, right? I mean, you want them to
use the different ingredient for the refineries, is that
correct?
Mr. Garcia. We have talked about innovation. And so the
analysis actually leads to innovation. And so the idea is that,
while there might be one today, there could be more in the
future. But you have to do the analysis in order to discover
what that innovation is going to look like.
Mr. Crenshaw. Would a risk analysis discover innovation? I
have never heard of an innovation, a new technology, discovered
by a risk analysis.
Mr. Garcia. If you are taking into account--if you are
exploring what alternatives are out there, then yes, it will.
Mr. Crenshaw. How?
Mr. Garcia. Again, if you are exploring----
Mr. Crenshaw. Like, you are a----
Mr. Garcia. If you are looking at new science----
Mr. Crenshaw. Is there any idea?
Mr. Garcia. You are looking at new science. I mean, you are
looking at new science, new developments in technology that
come about. And so, as those new developments in technology
come about----
Mr. Crenshaw. OK, so we can write a fiction novel about it.
Mr. Garcia [continuing]. Into which you can actually
implement them, into the refinery----
Mr. Crenshaw. I understand, I understand. There is no
answer.
Mr. Garcia [continuing]. That is how you get progress.
Mr. Crenshaw. There is no answer. Again, we could write a
fiction novel about it. That would be fun. But this is reality.
So in reality, there is one other alternative, which is the
sulfuric acid use of--type of refinery.
Now, if we shut down the 41 refineries to transition to
that, which I suppose is deemed safer for some reason, that
would take 50 percent of our refining capacity offline.
Mr. Menezes, what would that do to our economy and our gas
prices?
Mr. Menezes. Fifty percent of our refined products offline?
Well, we have a demand of about 20 million, 17 million barrels
per day, you know, for refined products. If we lost half of
that, I can only imagine what it would do on all the economies
that depend on trucks, on, you know, transportation, your
constituents that need to drive.
I am not even sure our national energy modeling system at
DOE can model a 50 percent reduction----
Mr. Crenshaw. And we have gotten some numbers on this. It
would take 2 to 3 years for each facility to change. It would
take a minimum of $200 million, or potentially $800 million,
depending on the size. So we are talking billions and tens of
billions of dollars in costs. For what benefit? I don't even
know.
And a guaranteed increase in prices. I mean, we are
fighting for the disenfranchised here, for people who can't
afford to fill up their tanks, and yet all but guaranteeing
that they can't do so for almost no benefit. And that is the
theme, that is the general theme of radical environmentalism:
great cost for almost no benefit. That is a problem.
And so our bill that has been chastised quite a bit in this
hearing is simply in response to that, and says, look, if the
plant already exists, if the refining plant already exists or
is in construction, it is exempt from this new rule. If it is
being planned, then by all means, take into account this
particular rule and risk assessment. That is just--that is
commonsense environmentalism.
And I urge this committee--because we all want clean
energy. Anybody who follows me knows that I am constantly
battling for it. But we have to do so in a way that doesn't
hurt people more than we want to help them.
And I yield back.
Mr. Johnson. The gentleman yields back. And now the Chair
is honored to once again recognize the gentlelady from
Michigan, Mrs. Dingell, for 5 minutes.
Mrs. Dingell. Thank you, Mr. Chairman, and thank you to all
the witnesses who have to be ready to end this.
And I do have to say I am worried about the number of
pieces of this legislation, because I care deeply about making
sure that we are taking care of everybody and that they can
afford the energy of the future. And yet it is many of our
children that are suffering from asthma and many other things,
and that what we are talking about here is going to give
handouts to oil and gas and undermine our Nation's
environmental laws and actually rescind programs that are doing
something about greenhouse gas.
But I want to get to two very specific issues today. I want
to start with the draft legislation to repeal the Greenhouse
Gas Reduction Fund and close by focusing on our critical
minerals supply.
The Greenhouse Gas Reduction Fund, which was established in
the Inflation Reduction Act and based on original legislation I
authored--so yes, I care about it--will invest $27 billion to
develop clean energy projects aimed at reducing greenhouse gas
emissions. Over 40 percent of the funding will also target
disadvantaged communities, communities that for far too long
have carried the brunt of environmental pollution.
For years I have been a champion of a clean energy
accelerator similar to this fund because of its potential to
accelerate the clean energy transition. Therefore, I am
disappointed to see my colleagues on the other side propose
repealing this historic program, which the EPA has yet to even
fully implement, and the benefits which have yet to be
fulfilled.
I am going to start with Mr. Garcia. My first question is
simple.
How will repealing the Greenhouse Gas Reduction Fund affect
our ability to meet our climate goals?
Mr. Garcia. Well, in a lot of the calculations that we are
talking about in terms of economic investment across the
country for energy production, no one is accounting the actual
harm that is coming our way because we keep investing in dirty
fuels.
And so that is one thing that I have noticed about the
proponents of these bills, and it is a larger narrative, is
that they want to sweep all of these consequences under the
table.
You know, if you have hydrofluoric acid in a refinery, yes,
it can blow up. I think that might hurt the economy, right?
So the same thing happens when we are talking about
investment. It is making sure that we are making investments
for the right long-term outcomes. And so that is what the
Greenhouse Gas Reduction Fund really does.
Now, it is not a slush fund. People keep calling it a slush
fund. It is really not. Fifty-five percent of the overall
program funding will be dedicated to projects in low-income and
disadvantaged communities. Eight billion of the 20 billion is
earmarked for low-income and disadvantaged communities, plus a
separate 7 billion program. And so that is something that we
have to keep in mind.
For--since the last industrial revolution, communities of
color and low income have bore the burden that all of these
industries put on their shoulders. And so this is the least
that we could do at this point, and it is something that we
need to see fulfilled, and we need--and it is something that
won't cure the sins of the past but will certainly help get us
to better consequences in the long term.
Mrs. Dingell. Thank you. I had a couple more questions, but
I am down to almost a minute.
So this fund is specifically designed to provide funding
for projects where investment is lacking, effectively filling
in a funding gap rather than duplicating Federal programs.
Mr. Chairman, I am going to ask if I can submit some
further questions on this, because I think it is really going
to hurt frontline communities.
And I would also like to request unanimous consent to
submit a letter for the record from the environmental community
expressing strong opposition to the legislation repealing the--
--
Mr. Johnson. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mrs. Dingell. Thank you. My remaining time is on critical
minerals.
Strengthening supply chains for electric vehicles and
batteries is a top priority for me. We cannot and will not be
dependent on China. And I want to keep my own State of Michigan
as a leader in this sector.
The Bipartisan Infrastructure Law made historic investments
in battery manufacturing and recycling facilities, battery
reprocessing, and critical minerals mining and recycling
research. These investments are a critical down payment, but we
all know that more work needs to be done to meet the demand for
these critical minerals.
Mr. Garcia, what policies should this committee be
exploring to develop and strengthen our critical mineral supply
chains in an equitable, sustainable way?
And you may need to provide more on that for the record.
Mr. Garcia. Absolutely. I will say quickly that it has to
look to strengthen and enforce the laws that are in the books
right now in order to make sure that that extraction and that
recycling happens in a way that protects communities first but
still yields the adequate production that is needed in order to
get new kinds of transportation methods, clean types of
transportation methods on the roads.
Mrs. Dingell. Thank you.
Mr. Chairman, I will yield back, and I do want to work with
you in a bipartisan way, but I have some real concerns. Thank
you.
Mr. Johnson. The gentlelady yields back. And now, seeing
there are no further Members wishing to ask questions, I would
like to thank all of our witnesses once again for being here
with us today.
I ask unanimous consent to insert in the record the
documents included on the staff hearing documents list.
Without objection, that will be the order.
[The information appears at the conclusion of the hearing.]
Mr. Johnson. And pursuant to committee rules, I remind
Members that they have 10 business days to submit additional
questions for the record, and I ask that witnesses submit their
response within 10 business days upon receipt of those
questions.
Without objection, the subcommittee stands adjourned.
[Whereupon, at 3:21 p.m., the subcommittees were
adjourned.]
[Material submitted for inclusion in the record
follows:\1\]
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