[Senate Hearing 118-14]
[From the U.S. Government Publishing Office]
S. Hrg. 118-14
THE FUTURE OF LOW CARBON TRANSPORTATION
FUELS AND CONSIDERATIONS FOR A NATIONAL
CLEAN FUELS PROGRAM
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HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
FEBRARY 15, 2023
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Printed for the use of the Committee on Environment and Public Works
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
52-175 WASHINGTON : 2025
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
THOMAS R. CARPER, Delaware, Chairman
BENJAMIN L. CARDIN, Maryland SHELLEY MOORE CAPITO, West
BERNARD SANDERS, Vermont Virginia
SHELDON WHITEHOUSE, Rhode Island Ranking Member
JEFF MERKLEY, Oregon KEVIN CRAMER, North Dakota
EDWARD J. MARKEY, Massachusetts CYNTHIA M. LUMMIS, Wyoming
DEBBIE STABENOW, Michigan MARKWAYNE MULLIN, Oklahoma
MARK KELLY, Arizona PETE RICKETTS, Nebraska
ALEX PADILLA, California JOHN BOOZMAN, Arkansas
JOHN FETTERMAN, Pennsylvania ROGER WICKER, Mississippi
DAN SULLIVAN, Alaska
LINDSEY O. GRAHAM, South Carolina
Courtney Taylor, Democratic Staff Director
Adam Tomlinson, Republican Staff Director
C O N T E N T S
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Page
FEBRUARY 15, 2023
OPENING STATEMENTS
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware.. 1
Capito, Hon. Shelly More, U.S. Senator from the State of West
Virginia....................................................... 4
WITNESSES
Graff, Michael J., Chairman and CEO, American Air Liquide
Holdings Incorporated, Executive Vice President and Executive
Committee Member, Air Liquide Group............................ 6
Prepared statement........................................... 9
Responses to additional questions from:
Senator Carper........................................... 17
Senator Capito........................................... 22
Cooper, Geoff, President and CEO, Renewable Fuels Association.... 24
Prepared statement........................................... 26
Responses to additional questions from:
Senator Carper........................................... 43
Senator Kelly............................................ 46
Senator Fetterman........................................ 47
Senator Capito........................................... 47
Senator Mullin........................................... 48
Spear, Chris, President and CEO, American Trucking Association... 49
Prepared statement........................................... 51
Responses to additional questions from:
Senator Kelly............................................ 65
Senator Capito........................................... 65
ADDITIONAL MATERIAL
Consumer Reports................................................. 68
Oregon Department of Quality..................................... 83
Press Release; Volvo Leads th Booming Market on Electric Trucks.. 97
Article; Nikola Delivers First Nikola Tre Battery-Electric Trucks 103
Article; EIA, U.S. Energy Information Administration............. 108
Letter from Driveclean........................................... 119
Letter from NACS, Natioanl Association of Convience Stores,
NATSO, Representinh America's Travel Plazas and Truckstops,
SIGMA, America's Leading Fuel Marketers........................ 122
Report, Rhodium Group, Closing the Transportation Emissions Gap
With Clean Fuels............................................... 127
THE FUTURE OF LOW CARBON TRANSPORTATION FUELS AND CONSIDERATIONS FOR A
NATIONAL CLEAN FUELS PROGRAM
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WEDNESDAY, FEBRUARY 15, 2023
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The committee, met, pursuant to notice, at 10:02 a.m. in
room 406, Dirksen Senate Office Building, Hon. Thomas R. Carper
(chairman of the committee) presiding. Present: Senators
Carper, Capito, Cardin, Merkley, Stabenow, Padilla, Fetterman,
Lummis, Boozman, Mullin, Ricketts.
OPENING STATEMENT OF HON. THOMAS R. CARPER,
U.S. SENATOR FROM THE STATE OF DELAWARE
Senator Carper. Good morning, everybody. This is the day
after Valentine's Day. I hope you all had a great Valentine's
Day. We did in our family. My wife renewed my contract for
another year. It is a no-cut contract. I am hopeful that we can
extend beyond that.
Those of you who know my wife know that she is a saint. We
are welcoming some saints here this morning. Not the New
Orleans Saints, but some saints nonetheless.
I will be honest with you. I hadn't really thought a lot
about this issue that is before us today in the last year or
two, but I think we are on to something here. I am excited
about the hearing today. Senator Capito, Ben, and others really
look forward to this hearing and what we are going to learn.
As I think you all know, today is the first Environmental
and Public Works Committee hearing of this 118th Congress.
Senator Capito and I are pleased to welcome our newest members,
Senator Fetterman, Senator Mullin, and Senator Ricketts, as
well. Great to see you again. Thanks for letting me come and
visit with you earlier this month.
We are delighted to be with our returning members as well,
not the least of those, my wingman from DelMarVa, Senator
Cardin. I call him my DelMarVa buddy.
Over the last couple of years, this committee has played a
vital leadership role in passing historic infrastructure and
climate legislation. Much of our success was, I am proud to
say, bipartisan. We have a couple of people here from Wyoming,
and I quote another fellow from Wyoming, who used to say when
he was actually sitting right out where you are, Chris, he said
these words: ``Bipartisan solutions are lasting solutions.''
I see we have been joined by Senator Fetterman. Welcome,
Senator Fetterman, I am glad to see you. Thank you for joining
our committee and being a neighbor. We have Delaware, we have
Maryland, we have Pennsylvania. That is a pretty good
combination.
Over the last couple of years, this committee has played a
vital leadership role in passing historic infrastructure and
climate legislation. Much of our success was bipartisan.
Looking ahead, I am eager to work with Senator Capito and with
all of our colleagues here, Democrats and Republicans as well,
as we aim to build on that record of success and further
strengthen our economy at the same time. Together, I know we
can continue to develop lasting solutions to some of our
biggest challenges.
That brings me to the topic of today's hearing, and that is
exploring policies that support the development and deployment
of low-carbon transportation fuels.
As a Senator from the lowest-lying State in our Country, I
can think of no greater challenge than the climate crisis. My
colleagues have heard me say more times than they want to
remember, Delaware is the lowest-lying State in America, our
State is sinking, the seas around us are rising. That is not a
good combination, so we want to make sure that we are doing
everything we can to address that and create economic
opportunity for the rest of our Country.
Last year, some of you may recall that the National Oceanic
and Atmospheric Administration, affectionately known as NOAA,
reported that there were 18 climate disasters in the United
States, with losses exceeding $1 billion each. Eighteen,
exceeding $1 billion.
They also approached a report, a year ago, that sea level
rise is occurring even faster than predicted. Those 18 costly
disasters underscore the urgent need for further action to
reduce greenhouse gas emissions and to limit the impacts of
climate change.
We were reminded by Albert Einstein years ago that ``in
adversity lies opportunity,'' and that is true here, as well,
and those opportunities are, frankly, enormous. By tackling the
climate crisis, we can continue to fuel the growth of clean
energy jobs in our Country and reduce our dependence on foreign
oil.
Again, to our newest members of this committee, including
our neighboring Pennsylvanian and Senator Ricketts as well, my
colleagues have heard me tell once or twice the story of a guy
named Willie Sutton. I don't know if you have ever heard of
Willie Sutton, a famous bank robber during the Great
Depression.
He finally got caught and was dragged before the judge and
jury and everything. The judge said to him, famously, ``Mr.
Sutton, why do you rob banks?'' He replied, ``Because, Your
Honor, that is where the money is.'' When people ask me, ``why
do we focus on reducing transportation emissions?'' I say,
``Because that is where a good deal of the emissions come
from.''
For some time now, our Nation's transportation sector has
remained the largest source of greenhouse gas emissions in the
U.S. economy, accounting for more than 25 percent of emissions
in America. I think power plants account for close to 25
percent. Another 20 percent comes from our manufacturing
operations, think cement plants, think steel mills, and so
forth.
Through the Bipartisan Infrastructure Law that we all
participated in crafting and passing and the Inflation
Reduction Act, Congress and the Biden Administration have made
significant investments to support American clean energy and
zero-emitting vehicles while also securing the domestic supply
chain of critical minerals for electric vehicles.
Many Americans, including several members of this
committee, are making the switch to electric vehicles and
hybrid vehicles. Still, there is more that we can and must do
to support cleaner fuels for the vehicles on our roads and
provide greater certainty and flexibility for those who produce
these fuels.
As a recovering Governor, while exploring ways to improve
Federal policies, I often look to see what is working well in
the States and try to replicate those efforts. I have called
the States laboratories of democracy forever. They have been,
and they continue to be laboratories of democracy for us to
learn from.
States have learned from the Federal Government's mistakes
when it comes to programs like the Renewable Fuel Standard.
Many States, including Oregon and California, have implemented
or are considering implementing technology-neutral low carbon
fuel standards. These State-level programs have successfully
advanced the production and use of cleaner fuels and kept
consumers and compliance costs low while fostering local
investment and job creation.
As we will hear today, these State programs have fuel
flexibilities, greater long-term predictability, and cost-
containment mechanisms that are not included in the Renewable
Fuel Standard. Unlike the Renewable Fuel Standard, existing
State programs often focus more on emissions reduction
potential when determining what qualifies as a clean fuel. In
addition to reducing the number of questions the States have to
ask when determining which fuels quality for a clean fuels
program, this structure allows multiple options for obligated
parties to comply.
For example, a wide range of stakeholders, including the
Delaware City Refinery, about 20 miles from my house down the
Delaware River, those stakeholders are interested in producing
clean hydrogen as a qualifying clean fuel. They believe they
can do so with their existing infrastructure to secure a
stronger financial future and create new jobs. That is why we
have invested significant Federal resources to support the
development of clean hydrogen infrastructure in our Nation.
However, unlike existing State-level programs, the
Renewable Fuel Standard does not currently consider hydrogen a
clean fuel. Increasing the production and use of clean hydrogen
is a key to reducing emissions in sectors of our economy that
are difficult to decarbonize. Think large trucks, think buses,
big buses.
The challenges with the Renewable Fuel Standard do not stop
at hydrogen. As we are going to hear here today, there are
challenges across clean fuel stakeholders, including biofuels,
which we can address by moving toward a more technology-neutral
approach.
With that, I welcome the discussion on the benefits of
establishing a Federal Low Carbon Fuel Standard, a program that
can provide certainty, provide predictability, and provide
flexibility for all stakeholders while also spurring innovation
across clean fuel technologies to help us meet our ambitious
climate goals.
My hope is that today's hearing is the first of many
conversations on how we can bring industry together along with
environmental groups, along with agriculture and stakeholders,
to further decarbonize our Nation's transportation fuels while
also supporting job creation across our Nation.
We look forward to hearing the perspectives of each of our
witnesses here today. Before we do that, I want to turn to our
Ranking Member, Senator Capito, for her opening statement.
Senator Capito, it is great to be with you.
OPENING TATEMENT OF HON. SHELLEY MOORE CAPITO,
U.S. SENATOR FROM THE STATE OF WEST VIRGINIA
Senator Capito. Thank you, Mr. Chairman, and thank the
witnesses for being here today. I think we have a great panel,
so we will get to learn a lot about this.
For those unfamiliar with a Low-Carbon Fuel Standard, it is
a regulatory process meant to advantage fuels that generate
lower carbon emissions in their production and use over fuels
that emit more. This may be achieved through financial
incentives funded by the taxpayers, decreasing quotas or limits
on market access for more emissive fuels, or a combination of
the two.
I am very concerned by the concept of empowering
bureaucrats to decide what fuel sources qualify, how, and what
associated phase-outs may look like. It sounds like a
combination of social cost of carbon and centralized economic
planning.
We have watched administrations of both parties seesaw on
the execution of regulatory programs that impact American
energy prices, with experience revealing that heavy-handed
regulatory approaches inevitably lead to reduced supplies and
higher prices. Perhaps nowhere has the tug of war been more
obvious than the EPA's Renewable Fuel Standard.
Speaking of that program, in December, EPA proposed the new
RFS ``Set'' rule to establish the required volumes of biofuels
to be blended with conventional gasoline and diesel for the
next 3 years, 2023, 2024, and 2025.
As part of this proposal, EPA has allowed automakers
contracting with certain renewable electricity producers to
generate compliance credits, known as RINs, for the first time
in this program. In fact, EPA says in their proposal that they
are using the creation of electric RINs, or eRINs, which have a
cash value, to incentivize increased vehicle electrification.
Yet another subsidy for EVs was not congressional intent,
nor is it a reasonable interpretation of the statute. This eRIN
proposal has aggravated proponents of the RFS, critics of the
programs, and environmentalists alike, a rare trifecta. The
fact that it is also formulated without any political
accountability should cause us all significant concern.
Speaking of things to be concerned about, one State that
has taken a lot of action recently on transportation fuels is
California. California was the first State to adopt the LCFS.
It is no coincidence that California's gas prices are more than
$1.20 higher than the national average due to its regulatory
policies and taxes. A study from the Stillwell Associates found
that California's LCFS by itself has added more than 22 cents
per gallon in 2022.
Oregon and Washington have followed suit in establishing
their own LCFS programs and have seen their gas and diesel
prices rise.
Last September, fuel prices in Oregon spiked 50 cents per
gallon, the sharpest spike of any State in the Country.
Washington's cap-and-trade and LCFS programs went into effect
at the start of the year, and according to State legislators
and Washington Independent Energy Distributors Association,
gasoline has gone up by more than 34 cents per gallon and
diesel by more than 43 cents on average as a result of the two
policies in the past month and a half.
This stacked LCFS and other environmental regulations and
taxes mean that residents of the West Coast States face the
highest fuel prices in the lower 48. But don't worry, if these
prices make your eyes water, you can just buy an EV. California
is requiring 100 precent of new vehicles purchased to be zero-
emission by 2035 through its Advanced Clean Cars II rulemaking.
That target means higher costs for consumers to buy still-
scarce electric vehicles and hydrogen vehicles and the
potential disruption of interState commerce.
According to Kelley Blue Book, the average price of an
electric vehicle in the United States as of August 2022 was
$66,000. That is more than the median household income in my
State, which is $50,000.
I don't have anything against EVs, and we will eventually
get there. But I think people should be free to buy the
vehicles they want and can afford. It also does not help that
California has some of the most expensive and least reliable
electricity in the Country, with even greater challenges ahead
as nuclear and natural gas plants are forced to retire and the
transportation sector is electrified. But those electricity
prices can be a subject for a future hearing.
Looking at the statistics on fuel and vehicle prices at a
time of significant and sustained inflation, I doubt my State
and many others, particularly in rural America, will want to
import the West Coast's policies, which will also bring higher
prices for at-best hypothetical climate benefits.
This is especially true at a time of sustained high
inflation, which, despite monetary policy and the Inflation
Reduction Act, inflation remains stubbornly predicted to be
between 4 and 6 percent, we saw the figures yesterday, of over
6 percent, well above the 2 percent target of the Federal
Reserve, and is being forecast by groups like Apollo Global
Management to be stuck there for the near-or medium-term.
An LCFS and these other cap-and-trade regulatory process
will only accelerate and lock in those price increases at a
time when American households and businesses can least afford
it.
I look forward to the testimony and thank you again.
Senator Carper. Thank you, Senator Capito.
As our new colleagues probably don't know, I go home at
night, almost every night, to Delaware. I am able to take the
train. Every morning when I head for the train station, I drive
by a BP station where I bought gasoline for about 20 years for
my 2001 Chrysler Town and Country Minivan, which had 600,000
miles on it when I sold it for $1 last year.
I no longer stop at the station and get gas, but every day
I look at the price. I noted that yesterday the price was $4.17
cents, which is down by more than $1 from where we were maybe
this time last year. My hope is that it will continue to trend
down. We will see.
Anyway, we are going to have a healthy debate here, Senator
Capito and I, we may have some differences here. This is
something I am just learning about, and that is why we are
having the hearing. Hopefully, we will all learn something, and
maybe we will learn that there is a way to find, to join forces
and move together down this road. I hope so.
Now, we are going to turn to our esteemed panel of
witnesses. In a few minutes, we are going to hear from them in
this order. First is Michael Graff, the Chairman and CEO of
American Air Liquide Holdings Incorporated. He is also
Executive Vice President and Executive Committee Member of the
Air Liquide Group. We are delighted to see you. Thank you so
much for joining us and thank you for your presence in our
State.
Second, we are going to hear from Geoff Cooper, President
and CEO of the Renewable Fuels Association, and finally, from
Chris Spear, President and CEO of the American Trucking
Association. Chris, it is very nice to see you again.
We are now going to begin our witness testimony. I am going
to ask Mr. Graff if you will proceed with your statement. Your
entire statement will be made part of the record. You may
proceed as you wish.
Thank you so much. Welcome.
STATEMENT OF MICHAEL J. GRAFF, CHAIRMAN AND CEO, AMERICAN AIR
LIQUIDE HOLDINGS INCORPORATED, EXECUTIVE VICE PRESIDENT AND
EXECUTIVE COMMITTEE MEMBER, AIR LIQUIDE GROUP
Mr. Graff. Chairman Carper, Ranking Member Capito, and
members of the committee, on behalf of Air Liquide's more than
20,000 employees in the United States----
Senator Carper. Excuse me, let me interrupt for just a
second. My staff reminds me. It was not $4.17, it was $3.17.
You are right. Hopefully it will continue to drop. I think it
will. We will see. Thanks.
Mr. Graff. On behalf of our 20,000 employees in the United
States, I thank you for the opportunity to testify today. My
name is Mike Graff, and I am the Chairman and CEO of American
Air Liquide, a world leader in sustainable technologies and
solutions that help decarbonize the planet and advance a clean
energy economy while creating high-paying careers.
It is a pleasure to be here today with Mr. Cooper from the
Renewable Fuels Association and Mr. Spear from the American
Trucking Association. I want to thank Mr. Spear and the ATA,
with whom we worked closely during the pandemic to ensure
patients and hospitals had the medical oxygen they needed to
save lives. Thank you.
Mr. Chairman, it was Air Liquide's honor to host you, the
Secretaries of Energy and Labor and the National Climate
Advisor at our Innovation Campus Delaware last August. We share
a core belief: clean energy is about lowering emissions and
growing our economy while creating new, value-added jobs.
As the committee considers the establishment of a national
clean fuels program, we urge you to ensure that any proposal is
technology-neutral and enables emissions reductions through
certainty and flexibility. These are essential to promoting
private sector investment, creating jobs, and minimizing
burdens on the American consumer.
Hydrogen plays an important role in decarbonizing the
transportation sector, and Air Liquide is at the forefront of
that effort. In Nevada, Air Liquide has invested $250 million
in the first world-scale liquid hydrogen production facility,
with the capacity to supply renewable hydrogen for over 40,000
zero-emission hydrogen fuel cell vehicles. Much of this
hydrogen is supplied to California under its LCFS.
Leveraging the versatility of hydrogen and regional energy
ecosystems, Air Liquide is also involved in many hydrogen hub
proposals, which include decarbonization of the transportation
sector.
Mr. Chairman and Senator Fetterman, as mentioned, Delaware
is home to our innovation campus, and Pennsylvania is home to
1,400 Air Liquide employees. As the headquarters of Airgas and
Air Liquide Company, a hub here could unite the East Coast
transportation system with the necessary renewable fuel
infrastructure.
Ranking Member Capito and Senator Cardin, an Appalachian
hub could leverage the region's abundant supply of natural gas,
joint with carbon capture, to produce low-carbon hydrogen.
Senators Sanders, Whitehouse, and Markey, NYSERDA is
leading the effort to convert the Northeast's abundant wind and
hydropower to low-carbon hydrogen via electrolysis, which Air
Liquide already does in this region with the world's first
industrial scale PEM electrolyzer. Similar initiatives are
underway in the Midwest, the Southwest, and the Gulf Coast. Any
clean fuels program must have flexibility at its core to fully
leverage hydrogen within the local energy ecosystem.
Air Liquide is a significant low-carbon fuel supplier that
gives us insight into clean fuels programs like the California
Low Carbon Fuel Standard and the Nation's Renewable Fuel
Standard and their effects on private investment and on the
market.
First, the California LCFS has reduced CO2 emissions while
stimulating private investment. Senator Padilla, the hydrogen
and renewable natural gas that Air Liquide supplies to the
California transportation market falls under the State's LCFS.
We also supply hydrogen for the refining industry, which is
also subject to the LCFS.
Second, the California LCFS employs a performance-based
carbon intensity target and a fuels evaluation methodology that
is agnostic about technologies and feedstocks. This is a key
feature of the program designed to maximize the reduction of
greenhouse gas emissions. However, given the number of fuel
pathways requiring approval, a streamlined process through
pathway standardization would be beneficial.
Third, policies that enable the use of renewable energy
credits and environmental attributes enable investments that
best use regional resources, infrastructure, and technologies
to meet targets and increase the supply of low-carbon and
renewable energy, ensuring consistency in the use of RECs and
EAs across all feedstocks and processed energy, and in avoided
emissions rules, would make the California LCFS more efficient.
Finally, the pathway approval process for the Renewable
Fuel Standard is significantly delayed. Like many entities, Air
Liquide has pending RFS pathway petitions. Ours seeks to
qualify hydrogen for renewable natural gas. Despite favorable
review by EPA, these pathways have not advanced. The RFS
pathways process needs to be transparent and timely in order to
advance the Nation's emission reduction goals.
In conclusion, we urge the committee to ensure than any
national clean fuels program is technology neutral and enables
emission reductions through the program's certainty and also
flexibility.
Thank you for inviting me to participate today, and I
welcome your questions.
[The prepared statement of Mr. Graff follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Mr. Graff, thanks so much. Great to see
you, and thank you. Our best to you and the team you lead back
in Delaware and across the Country and around the world. Thank
you.
Mr. Cooper, Carper welcomes Cooper. Capito welcomes Cooper.
STATEMENT OF GEOFF COOPER, PRESIDENT AND CEO, RENEWABLE FUELS
ASSOCIATION
Mr. Cooper. Chairman Carper, Ranking Member Capito, and
members of the committee, good morning. My name is Geoff
Cooper, and I am the President and CEO of Renewable Fuels
Association, the leading trade association for the U.S. ethanol
industry.
I appreciate the opportunity to share our industry's
perspective on the future of low-carbon fuels and the potential
for a Federal Clean Fuels Program. The transportation sector,
as you said, Mr. Chairman, is the leading contributor of
greenhouse gas emissions in the United States, accounting for
nearly one-third of total emissions annually. Although
transportation emissions have fallen slightly from their peak
in 2006, the pace of emissions reduction must rapidly
accelerate in the years ahead if we are to meet the
Administration's goals of net-zero emissions by 2050.
We believe a properly structured Clean Fuels Program offers
the best opportunity to rapidly reduce carbon emissions from
the transportation sector while simultaneously enhancing energy
security, creating jobs, and reducing tailpipe pollution linked
to poor air quality and health challenges.
RFA supports the development of a national program that is
truly technology-neutral and performance-based. In essence, a
Clean Fuels Program sets annual greenhouse gas reduction
requirements for the transportation sector, and then it allows
the marketplace to determine the most efficient and economical
ways of achieving those reductions without dictating the use of
specific fuels or vehicles.
Under a well-designed policy, we believe renewable fuels
like ethanol offer an effective and immediate solution for
decarbonizing the transportation sector, including light and
heavy-duty vehicles, rail, marine, and even aviation fuels.
Today's corn ethanol already cuts greenhouse gas emissions by
approximately 50 percent on average compared to gasoline.
With the increased adoption of low-carbon farming
practices, Carbon Capture Utilization and Storage, and other
technologies, the U.S. ethanol industry is well on its way to
producing net-zero carbon corn ethanol. In fact, RFA's member
companies have pledged that the ethanol they produce will
achieve a 70 percent reduction compared to gasoline by 2030 and
a net-zero carbon footprint by 2050 or sooner.
Clean fuel policies have already been implemented at the
State level, as you pointed out, Mr. Chairman, and several
countries are beginning to implement their own programs. While
existing State programs like the California LCFS have been
successful in reducing emissions and driving investment,
certain design shortcomings have at times undermined the
technology--neutral intent of those programs and limited the
ability of some low-carbon fuels to provide greater greenhouse
gas emissions benefits.
Still, ethanol and other liquid biofuels have accounted for
nearly three-quarters of the total carbon reductions that have
been achieved under the California LCFS since it began in 2011.
If implemented on a national scale, a Clean Fuel Program
will need to be designed in a way that avoids picking
technology winners and losers and drives the greatest
greenhouse gas emissions reductions at the lowest cost. A
nationwide program should one, use consistent, science-based,
and transparent life cycle analysis methodologies like the
Department of Energy's GREET model for determining the carbon
intensity of all fuel and vehicle options.
Two, it should set clear and predictable annual greenhouse
gas emissions reduction requirements and then stick to those
targets. Three, it should adopt rules for credit generation
that are consistent across all fuel and vehicle pathways.
Four, it should include flexibility for low-carbon fuel
producers to demonstrate process improvements and carbon
intensity reductions across their entire supply chain. Five, it
should include complementary measures to remove technical and
regulatory barriers that artificially limit greater use of
certain low-carbon fuel options, like the current barrier we
have in place today that prevents the sale of E15 during the
summer months.
In closing, we believe a well-designed national program has
enormous potential to quickly reduce greenhouse gas emissions
from the transportation sector and help our Nation achieve net-
zero emissions by 2050. We look forward to working with the
committee as it continues to consider a nationwide clean fuels
standard.
Thank you again, and I look forward to your questions.
[The prepared statement of Mr. Cooper follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Mr. Cooper, thanks. It is great to see you,
and thank you for joining us.
We have been joined by the Senior Senator from the great
State of Michigan, Senator Stabenow, who is also not just a
member of the Ag Committee, but the Chairman of the Ag
Committee. She might serve on the Finance Committee together
with some of you.
The Finance Committee is going to have a confirmation
hearing this morning for the Administration's nominee to head
up the IRS, Danny Werfel, not the football player, the public
servant. He has invited me to come and introduce him. I will be
slipping out in about 10 minutes or so, but I will be back
shortly. Senator Capito has agreed to hold the gavel until I
get back.
Chris Spear, I already gave you a short introduction. I
will just say again, it is great to see you. Welcome. Thank you
very much for all you do and for your testimony today. Welcome.
STATEMENT OF CHRIS SPEAR, PRESIDENT AND CEO, AMERICAN TRUCKING
ASSOCIATION
Mr. Spear. Thank you, Mr. Chairman, Ranking Member Capito,
and members of the committee. I really appreciate the
opportunity to testify on behalf of the American Trucking
Association. For 90 years, the ATA has helped Congress shape
solutions to our Nation's energy and environmental challenges.
Today's hearing is no exception.
The trucking industry starts with ``yes.'' The ATA was a
proud supporter of the bipartisan IIJA. Prior to passage, ATA
testified 25 times before the House and Senate, including this
committee, sharing how our Nation's decaying infrastructure has
given competitive aid to rising global powers, like China. In
short, our first-world economy cannot survive with third-world
infrastructure. Thank you for recognizing that.
To predict the future of low-carbon transportation, one
should start with the IIJA's ability to eliminate congestion.
Right now, our industry loses $75 billion a year sitting idle
in traffic. That is 425,000 drivers sitting for an entire year.
That is 6.87 billion gallons of wasted fuel pumping 67.3
million metric tons of CO2 into our environment.
In short, if you want to eliminate emissions, start with
the top 100 traffic bottlenecks, of which 22 are in States
represented by members of this committee.
IIJA moneys are more than adequate for fixing existing
roads and bridges. There is plenty more for new capacity too,
including truck-only lanes, bypasses, bridges, and parking.
There is no reason this Administration should have to pick
favorites.
Another example: ATA worked with the EPA producing phases
one and two emissions reduction rules. To date, 98.5 percent of
all emissions have been removed from our tailpipes. In fact, 60
trucks today emit what one truck emitted in 1988.
These two rules alone cut CO2 emissions by 1.37 million
metric tons, saved $220 billion in fuel costs, and reduced oil
consumption by 2.5 billion barrels of oil.
The ATA and the ETA created the SmartWay Program, saving
participating fleets more than four billion gallons of fuel,
over $19 billion at today's costs. Those fuel savings resulted
in massive emission reductions of 2.7 million short tons of
nitrogen oxide, 112,000 short tons of particulate matter, and
143 million metric tons of CO2, all by putting the safest,
newest, and most environmentally friendly equipment on our
roads.
This is not a debate about if we get to zero, but when. We
will get there, not just on the timelines proposed by
California. Their excluding our industry in a mad dash to zero
makes their timelines and targets not only unachievable, but
guarantees they will fail.
To get to zero, we have to be honest and we have to be
transparent about the road ahead. Sourcing rare materials
needed for millions of 5,000-pound truck batteries, the
infrastructure needed to charge them, and the additional
electricity needed to power our trucks, full-scale, doesn't yet
exist, and won't, if you allow California to set the Nation's
standard.
Trucking now moves 72.5 percent of our Nation's freight
tonnage. Over the next decade, trucks will be tasked with
moving 2.4 billion more tons of freight than they do today. The
moment that slows or stops, Americans, your constituents, are
going to want answers.
The responsible approach is also the realistic approach.
Achievable timelines and targets do matter. The ATA will
continue supporting policies that are responsible, realistic,
and inclusive of our industry.
Our written testimony provides this committee with just
that, targeting IIJA moneys to reducing congestion, creating
cost parity between current and future equipment and fuel
sources, and the low-hanging fruit, such as drayage, port
interconnectors, and safe, secure truck parking.
We are committed to a cleaner environment, and we have
proven it. We simply ask that we be realistic about the path
forward. Do that, and we will post the best environmental gains
possible.
I thank the committee and yield.
[The prepared statement of Mr. Spear follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Thank you, Mr. Spear.
I am going to ask unanimous consent to enter into the
record a letter from Consumer Reports asking EPW to pursue a
Clean Fuel Standard to decarbonize the Nation's transportation
sector.
[The referenced information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. With that, I am going to slip out and go
over to the Finance Committee and introduce Danny Werfel. I am
going to yield to Senator Capito to preside in my absence.
Thanks so much.
Senator Capito.
[Presiding.] Thank you, Mr. Chairman.
Mr. Spear, I talked in my opening statements about the
prices of diesel and how they have been at a record high in
June 2022. Can you talk about the impacts of when these prices
are way up like they are, and have been for a sustained period
of time, what impact that has on your industry, and how it
impacts the small businesses, many of them small businesses,
some quite large, across the Country?
Mr. Spear. It is significant, Senator. Fuel costs are our
second-highest cost, just under labor. Under that, you have
safety, including training. So a lot of important operational
expenditures, but fuel is our second-highest cost, and that was
before we went to 40-year highs on inflation, which comes as no
surprise with the standard in California and Oregon. We have
litigated it directly because of the cost impact that it has on
our industry, particularly those that are running 20 trucks or
less or owner-operators, one truck.
Senator Capito. Are you in the middle of that litigation
right now?
Mr. Spear. We are, indeed.
Senator Capito. OK. So, would you say then, that these
regulations, as I said in my opening statement, are leading to
higher prices in those particular States?
Mr. Spear. Yes, we are dealing nationally with 40-year
highs on inflation. These two States compounded that problem,
which is why you see fuel costs exceeding $7 in California,
nearly $6.50 in Oregon. That is much, much higher than the
national average as you said.
But if you are a small carrier or owner-operator, you don't
have the luxury of a fuel contract. You are paying retail at
the pump, so you are absorbing that cost into your operational
expenses. It is chipping away. You are going to see
consolidation in our industry as a result, and it is going to
hurt the very small businesses that this committee says it
supports.
Senator Capito. Thank you.
Mr. Graff, I think that Appalachian hydrogen hub sounds
really good to me, and thank you for what you are doing to lend
your expertise. I know we are in competition with a lot of good
ones, as you mentioned, but I appreciate your mentioning that.
Let me ask you a question. I think this is an important
question when we are all looking at what the environmental
impacts can be. You mentioned, Mr. Cooper mentioned life cycle.
So, in order to get to an EV, in order to get to a hydrogen
car, there is a lot that goes before you actually are at the
tailpipe, I guess is how they say it, measuring it before the
tailpipe.
So, a life cycle, have you done an analysis of that, of
what it takes to create the hydrogens that go into these
vehicles, and how the emissions, I guess I am focusing more on
emissions than cost, although we know that does drive up the
cost, if we have to do another process before another process.
What are your thoughts on that, on life cycle analysis?
Mr. Graff. Thanks for the question, Ranking Member Capito.
Clearly, we need to look at every aspect of basically well to
wheel, so to speak, in the approach for any pathway to produce
energy and understand its emissions potential and how we
address that.
In terms of hydrogen, we have been in the business of
producing and transporting and utilizing hydrogen for over 60
years. We have the full capabilities to make sure that hydrogen
itself is well-managed, it is well-contained, and its fugitive
emissions, as you consider its impact on the environment, are
genuinely more second order.
I think we look at safety, we look at what we can do to
make sure that there is safe transport, the safe production,
the safe use of hydrogen. But any fugitive emissions of
hydrogen into the atmosphere has a much lower effect than other
hydrocarbons or other substances that may end up in the
environment.
Senator Capito. OK.
Mr. Cooper, on ethanol, obviously, there is an expenditure
of a great deal of energy to make ethanol. How would you answer
that question on life cycle, both emissions and cost?
Mr. Cooper. We fully support a well to wheels full life
cycle approach when analyzing the carbon intensity of all fuel
pathways. We agree that in particular, when you talk about
electric vehicles, we often hear then referred to as zero-
emissions vehicles. Well, that is ignoring all of the upstream
emissions associated with electricity production.
But for corn ethanol specifically, the Department of Energy
analyzes in great detail that full life cycle, energy use and
emissions involved with farming and harvesting the corn and
processing that corn into ethanol. When you add all of that
together, corn ethanol has an emissions footprint that is about
50 percent lower than gasoline. So that does include all the
farm inputs and all the energy used on the farm, all the way
through the process to the retail gas station, about 50
percent.
Senator Capito. Let me ask Mr. Graff a quick question, too.
Does California have personal vehicles that are hydrogen? That
doesn't exist right now, does it, in any large measure?
Mr. Graff. Ranking Member Capito, there are currently
15,000 hydrogen fuel cell vehicles that have been sold into the
California market. I mentioned earlier that we had built the
first-ever liquid hydrogen production facility to provide
renewable hydrogen into the State. That was specific in working
with the automotive companies to facilitate the introduction of
those vehicles.
Senator Capito. What is the cost of a hydrogen vehicle?
Mr. Graff. I can't speak to the exact cost today. I think
that, depending on the model and the make, you are in the
$50,000 to $60,000 range today.
Senator Capito. And they are quite heavy, as well, correct?
Mr. Graff. No, they are quite light, actually.
Senator Capito. They are?
Mr. Graff. They are much lighter than, for example, a
battery-powered electric vehicle.
Senator Capito. Right. Well, the electric vehicles are a
lot heavier than the vehicles we have.
Mr. Graff. Their weight would be comparable to the weight
you have in other vehicles today.
Senator Capito. OK. Thank you.
Senator Merkley? Senator Fetterman? Senator Stabenow?
Senator Stabenow. Well, thank you very much. Good morning,
and thank you to all of you for being here.
I will say on the issue of hydrogen, I know that there are
joint ventures, partnerships going on right now in Michigan,
and we are with the Army and so on in terms of development of
hydrogen fuel cell vehicles, and they are having great success
on a number of fronts.
Let me start off though, Mr. Cooper, and let me just say
that, as we look at transitions, and I am all for transitions,
and I want to see us get to electric vehicles. I am currently
driving the Michigan-made Chevy Bolt. I think it is one of the
most affordable American-made vehicles right now, in terms of
electric vehicles. I love it. It is here; I love it.
But I know that the reality is that our cars are lasting
longer than ever, even as we transition all the structures and
things that need to happen, that the U.S. fleet is going to be
comprised of hundreds of millions of internal combustion
engines for years to come, so it really is important for us to
understand all of this as we transition.
If we are going to meet our national climate targets, do
you agree that we must secure a robust supply of low-and zero-
carbon liquid fuels to complement the push toward
electrification?
Mr. Cooper. Yes. Thank you for the question, Senator, and I
absolutely agree that yes, we need to embrace the use of low-
carbon liquid fuels. If we are serious about reducing
greenhouse gas emissions as quickly as possible, we can't wait
around for full electrification of the fleet. That is going to
take decades, as you pointed out.
There are roughly 270 million light-duty vehicles, cars,
pick-ups, SUVs, and vans. Today, 1 percent of those are
electric vehicles. It is going to take decades for that
transition to occur, and we should be taking steps now to
further decarbonize those liquid fuels that we know are going
to be, as you said, hundreds of billions of gallons of liquid
fuels will be needed in the decades ahead in these vehicles.
So we think a clean fuel standard is a great way to do that
and really jump start that decarbonization of our liquid fuels.
Senator Stabenow. I am assuming you do not think it is
instead of a Renewable Fuel Standard, that this is about
complementing.
Mr. Cooper. That is correct. A well-done Clean Fuel
Standard would complement a Renewable Fuel Standard, which
really creates the foundation and the bedrock for the renewable
fuels industry.
Senator Stabenow. Could you speak a little bit about the
recent investments that we have made, Congress has made,
including those in the Inflation Reduction Act, that are going
to help us be able to achieve these goals?
Mr. Cooper. Absolutely. Our industry is very excited about
the Inflation Reduction Act and the suite of tax credits and
grant programs in that legislation. It is a game changer for
our industry.
One of the programs in particular is Section 45Z, the Clean
Fuel Production Credit, which is, in essence, the tax version
of a Clean Fuel Standard. It generates a tax credit for clean
fuel producers based on the carbon intensity of their fuel, and
the lower the carbon intensity, the more valuable the credit is
up to $1 per gallon.
Our industry is already making investments based on the
availability of that tax credit in the next few years. Along
with that, we had the expansion and extension of Carbon Capture
and Sequestration credits, a $500 million grant program for
biofuels infrastructure. So yes, it was a wonderful investment
and down payment in low-carbon renewable fuels.
Senator Stabenow. Great. I was very pleased to be able to,
in the agriculture section of that bill, to have the investment
in the biofuels infrastructure.
Mr. Cooper. We thank you for that.
Senator Stabenow. You have already mentioned less carbon, I
am assuming, as you talk about that, it is jobs? I hear jobs,
as you are talking about that as well. I think it is also
important to stress that biofuel production lowers prices at
the pump, and the fact that this last summer, where E15 saved
drivers in some areas as much as $1 a gallon, more at the time
when we saw prices going through the roof, that was a big deal.
I wonder if you might just speak more about how much renewable
fuels save drivers at the pump.
Mr. Cooper. Absolutely. We did see it, especially last
summer when we had record high gas prices. Ethanol was selling
for about a $1 to a $1.25 a gallon less than gasoline at the
wholesale level. So obviously, when you blend more of that
lower cost product, it is going to reduce the price for the
consumer. Still today, if you go to any retail gas station, the
lowest cost fuel option for the consumer is going to be the
fuel that has the highest content of ethanol.
We talked about California. The lowest cost fuel in the
California market today is E85, it is that 85 percent ethanol
blend. It is typically $2 to $3 a gallon less expensive than
gasoline in the California market, and that is being driven by
the LCFS in that marketplace.
Senator Stabenow. Thank you very much. I have other
questions, but my time is up. Thank you, Madam Chair.
Senator Capito. Thank you.
Now, I turn to our newest Senator, Senator Ricketts.
Welcome to the committee. You have 5 minutes for questions.
Senator Ricketts. Great. Thank you very much, and thank you
to all of our testifiers here today about the future of
transportation fuels.
Mr. Cooper, you have a great barber there. That joke never
gets old.
[Laughter.]
Senator Ricketts. One of the things I always talk about is
ethanol. I would say three things: ethanol saves consumers
money at the pump, it is going to help cleanup the environment,
and it is going to create jobs here in America. Ethanol must be
central to any discussion that we are going to have about the
future of transportation fuels.
Senator Stabenow, thank you for mentioning the dollar
savings in some places, because that is awesome. I was going to
put that as one of my talking points today, too, that E10, that
10 percent blend of ethanol and 90 percent gasoline is about 98
percent of all the gasoline that is sold in this Country. E15
and the EPA's decision to allow that last summer helped with
the high inflation that people were experiencing, bringing down
their fuel costs.
Senator Stabenow mentioned the dollar, I think the average
is about 16 cents. I just filled up my gas last time I was
home. It was about 40 to 45 cents a gallon on E10, helping save
that, and of course, E20, E30, E85, as you mentioned, all have
future potential on that.
Also, as we have discussed about ethanol helping reduce
carbon emissions, the use of ethanol blended fuels led to a
reduction of nearly a billion metric tons of carbon dioxide
equivalent greenhouse gas emissions between 2008 and 2020.
Environmental Health and Engineering found that corn ethanol is
46 percent less carbon intensive than gasoline.
In addition, ethanol creates economic opportunities for our
families, especially in Nebraska, there are over 1,000 direct
jobs in Nebraska related to the ethanol industry and creates
the demand for corn from our farmers. I would also note that
the biproduct, the distillers grains, goes into feeding our
livestock. It is just a wonderful thing, there. Ethanol has
always fueled our trucks, cars, and other transportation
vehicles along the American roads and highways.
So, Mr. Cooper, I want you to talk a little bit more about
this Administration, as well as the State of California, has
classified electric vehicles as zero emissions. Biofuels are
considered low emissions. How would a National Clean Fuel
Standard impact the use of biofuels and this new CFS, how would
it work with the RFS, the Renewable Fuel Standard? Would it
replace it, would it coexist? How would that work?
Mr. Cooper. Thank you for the question, Senator. We
certainly believe that an LCFS or Clean Fuel Standard done
right at the national level would complement a Renewable Fuel
Standard. Again, the RFS was primarily about volume and energy
independence and reducing imports. A Clean Fuel Standard is
more directly about reducing emissions based on performance.
We do think the two would work together very well,
complement one another. As I mentioned earlier, the RFS was
really that bedrock and kind of the foundation for the
renewable fuels industry. It is important to keep that
foundation in place. We do think the two would work together.
In terms of how the biofuels industry would respond to a
Clean Fuel Standard, we expect that it would be similar, in
ways, to the response in the California marketplace and in
Oregon. It has been interesting to see some of the different
ways that the markets have responded to those programs in those
States.
As I mentioned, the E85 market in California is off the
charts. They are using more E85 in that State than any other
State in the Country as an outcome of the Low Carbon Fuel
Standard. They are also one of the last two States that hasn't
yet approved E15. Well, guess what? That are moving toward
approval of E15 because the market is calling for it via the
LCFS.
We do believe a properly designed clean fuel standard, and
again, doing the life cycle analysis correctly, would drive
increased use of ethanol and other renewable fuels above and
beyond what it called for under the Renewable Fuel Standard.
Senator Ricketts. I think we have talked about it a little
bit here; I am concerned that any national clean fuels program
could prioritize electric vehicles over liquid fuel vehicles,
including clean biofuels. This will only make us more dependent
on our foreign adversaries who control the majority of the
worldwide production of several key components.
For example, the CCP, Chinese Communist Party, controls 60
percent of the raw lithium mines in the world, 50 percent of
the lithium processing and refining, and 75 percent of the
lithium and battery mega factories. How can you ensure that a
new national low carbon fuel standard won't falsely prop up EVs
to satisfy an agenda and do significant damage to liquid fuels,
including biofuels in the process?
Mr. Cooper. Great question, and thank you, Senator. Again,
if the life cycle analysis is done correctly, and the carbon
intensity scores are developed in a fair and transparent way,
we believe that renewable fuels are going to compete very well
with electric vehicles in terms of the carbon reductions that
they provide.
As the Ranking Member mentioned, internal combustion
engines and conventional vehicles are far less expensive than
EVs. So again, if you step out of the way and let the market
respond to these carbon reduction requirements, we think it is
going to drive the market toward increased use of renewable
fuels, which are the lowest cost option of meeting the carbon
reduction requirements.
If you stack on top of that an EV mandate or something like
California is trying to do, then yes, that changes the
calculation immensely. But we, again, think a truly technology-
neutral standard is going to put renewable fuels in a very
competitive position.
Senator Ricketts. Great. Thank you.
Senator Capito. Thank you. Senator Cardin?
Senator Cardin. Thank you, Madam Chair, and let me thank
our three witnesses. I think it is very appropriate that our
first hearing in this Congress is in regard to the future of
low carbon transportation fuels.
Clearly, Senator Merkley and I have been engaged in some of
the international meetings on the climate crisis. We have a
crisis, so we need to do everything we possibly can in every
aspect. The low carbon emission fuels is clearly part of that.
I am pleased that under the Bipartisan Infrastructure Bill
Maryland has been able to take advantage of many of the new
opportunities under the low or no emissions fuel programs. We
have received three major grants in our State, $15 million to
Montgomery County, Maryland for new hydrogen productionsites,
and acquiring 13 hydrogen fuel cell electric buses. In Prince
George's County, $25 million for 70 zero-emissions electric
buses, and in Ann Arundel County, $1.9 million for four diesel
electric hybrid buses. I say that, because there are three
different technologies, but all of them are adding to our
commitment to reduce our carbon footprint.
Under the Clean School Bus program, Baltimore City is
receiving $9.4 million for 25 electric school buses. We are
taking advantage of these opportunities.
Mr. Graff, you talked a little bit about the hydrogen
issues. It is new technology, but it has limits. Where do you
see the future of hydrogen as a source for transportation
energy?
Mr. Graff. Senator, thanks for the question. Hydrogen
itself is a very versatile molecule. If we are going to achieve
our climate objectives, if the energy transition is going to
occur, it will not happen without hydrogen. The estimate is
that hydrogen itself, long-term, by 2050, will likely account
for roughly 20 percent of the world's energy supply.
That versatility allows us to use hydrogen, produced in a
variety of different pathways, to decarbonize energy intensive
industry and also to decarbonize the transportation sector. The
utilization of that hydrogen, we have talked a little bit about
personal vehicles, but as you grow the vehicle, as you look at
commercial vehicles, as you look at the class A tractors that
are on the highways, if in fact, we want to get to a zero
emission vehicle, in that case, we are in a place where we can
utilize hydrogen paired with a fuel cell, maintain the same
utility you have today, the same drivability, the same
refueling time, the same use regardless of temperature, and you
will be able to utilize because of the small footprint and
weight of the fuel cell along with the amount of hydrogen
necessary to go ahead and carry on board to power that, you
will be able to maintain the payload you have today.
So it has the capability in almost every use in the
transportation sector to see that evolve. The key is to build
out the infrastructure, the key is to build the need for the
vehicles and see this grow and evolve as we have for other
sectors.
Senator Cardin. So, we took a giant step in that direction
under the Inflation Reduction Act, providing certain
incentives. What more needs to be done?
Mr. Graff. The Inflation Reduction Act clearly provides the
capability to produce hydrogen under a variety of pathways,
whether utilizing renewable power or utilizing natural gas with
carbon capture to produce the hydrogen at a lower cost and have
the benefit of low carbon renewable hydrogen.
The key now, given the fact that the transportation sector
is one of the most difficult to decarbonize, is to go ahead and
further incentivize the use to build out the vehicles and fully
utilize those.
As a matter of fact, I was with one of our drivers just
Thursday utilizing one of the Class A tractors we are currently
using to deliver goods in the State of California between our
industrial sites, which utilizes hydrogen and a hydrogen fuel
cell to power it. We just need to build to scale to get there.
Senator Cardin. Thank you.
Mr. Spear, I want to get you engaged here on heavy duty
trucks. I recognize that we have infrastructure challenges that
are very important to the trucker and trucking industry. I
recognize we have supply chain challenges that you have already
mentioned in your testimony. How do we provide the necessary
incentives so that heavy duty trucks are also going to have
themselves a smaller carbon footprint? What additional
incentives do you think are necessary?
Mr. Spear. I think if you want to get the newer, safer,
more environmentally friendly equipment out on the road, you
have to incentivize it. You have been a leader on this. You
sponsored a bill that would repeal the Federal excise tax. This
is a 100-plus year old tax, World War I. It is the only one
left of that era that still exists.
It tacks on 12 percent of the price of the sale of a new
tractor. So that is roughly $25,000 per tractor. Think about
that. Not only is that more expensive, the impact that has on
manufacturing that equipment, jobs around the Country in those
manufacturing facilities, is quite significant. We believe that
repealing that would have immeasurable impact on getting
cleaner, more environmentally safe equipment out on the road
quicker.
Senator Cardin. Thank you for that answer. I appreciate it.
Thank you, Mr. Chairman.
Senator Carper.
[Presiding.] Thank you, Senator Cardin. We are going to
move down to Senator Merkley, and I will ask my questions a
little bit later in the hearing. Senator Merkley?
Senator Merkley. Thank you very much, Mr. Chairman.
I wanted to start, Mr. Cooper, related to your experience
with low carbon fuel standards, particularly the Oregon Clean
Fuels Program. As you look at Oregon's program, has it been a
success?
Mr. Cooper. Yes, we think the Oregon program has been very
successful.
Senator Merkley. Any particular insights or lessons we
should take to mind, as other States consider similar?
Mr. Cooper. Yes, when we think about a low carbon fuel
standard done right, we typically point to Oregon, because we
think the life cycle analysis and modeling and methodology that
they used for their program is more transparent, is more
technology-neutral than what California is doing even. We think
the Oregon program has been a great example and model for the
rest of the Country to follow.
Senator Merkley. Thank you.
Mr. Graff, I want to turn to hydrogen, and specifically
that that is made from fossil gas with carbon capture. The
industry uses the term blue carbon or blue hydrogen, as you are
familiar with. The first peer-reviewed study in 2021 found that
using blue hydrogen, that is fossil hydrogen with carbon
capture, was 20 percent more damaging in terms of greenhouse
gas footprint than using fossil gas or coal directly for
heating buildings, and that it was 60 percent worse than using
diesel directly for heating buildings.
We have a lot of buildings heated by fossil gas and a lot
that are heated by diesel. Do you agree with the studies that
have shown that using fossil gas, even with carbon capture, and
by the way, the assumption in this was 100 percent carbon
capture, no leakage from a geological formation, doesn't make
sense when it comes to trying to tackle greenhouse gas?
Mr. Graff. Senator, thank you for the question. I am not
familiar with that exact study, and we can certainly take a
look at that and spend more time with you and your staff to
talk about it. What I know is this: we have looked at the
emissions reductions and the benefits of utilizing hydrogen.
For example, it could be in the State of West Virginia, it
could be on the Guld Coast, to go ahead and produce large
quantities, what I would call low carbon hydrogen. Sometimes,
people get confused with the various colors, and I just like to
call it what it is, low carbon hydrogen.
We are able to capture that. We are able to capture that
CO2 in those geographies. With large-scale production, like
with autothermal reformers, technology that we have, we can
decarbonize entire energy intensive industrial sites.
If you are going to produce hydrogen only with the need,
for example, to burn it in a home, then you can certainly do
this same thing in order to achieve that. However, when you are
located with the local infrastructure, we can drive this in a
very significant way for the industries that use it. By the
way, if you utilize hydrogen in a fuel cell, it is a very, very
different dynamic than a combustion engine. The benefits of
that are very clear.
Senator Merkley. Mr. Chairman, the point I am wanting to
drive here is, we often talk about with electric cars, it
matters how the electricity is made. The parallel is that is
makes a big difference how the hydrogen is made. The industry
has given it the name, it sounds very nice, blue hydrogen. It
sounds like the best of the best, but in fact, it is made from
fossil gas, and this is the best version where carbon capture
is complete. Even in that case, it is more damaging to the
climate than is burning fossil gas directly for heating homes
or than using diesel for heating homes by a 60 percent factor.
That is assuming that every bit of carbon capture is
perfect, which is rarely that case that you can capture all of
the carbon out of the emissions and that you can store it for
eternity underground with perfect security.
So I think it is very important, the hydrogen conversation
is going to be very relevant as we go forward. When it is made
from electrolysis, that is, from renewable electricity being
used to make it, it has a profoundly different footprint than
when it is made from fracked methane gas.
I want to make sure, as we talk about hydrogen, that we
realize that there are many different forms that have very
different life cycle footprints. If we go down a route that
actually makes things worse in terms of substituting hydrogen
for heating buildings that is made from fossil gas. And then
say that there is no carbon capture, then it is even worse than
that. So this is the best case for fossil gas using. This is
also true in terms of the production of electricity.
There is a much better case to be made that hydrogen for
high-temperature applications in industry, making that hydrogen
from a clean system, making it from renewable electricity. Then
you have a really important application because you have
hydrogen that works in settings where electricity doesn't work
directly, but it is made from renewable electricity to begin
with.
I just want to caution that not all hydrogen is the same,
and not all hydrogen hubs would be the same. Hydrogen hubs that
promote essentially making hydrogen from fossil gas have a very
different footprint than those hubs that would be depending
upon a clean hydrogen. Thank you.
Senator Carper. Thank you for your questions. Thanks for
that cautionary note.
I am happy to have the opportunity, this is the first time
I have been introduced to Senator Fetterman. He is from a State
just north of us in Delaware. John, Delaware and Pennsylvania
used to be the same State. Delaware, on June 15th, 1776,
declared our independence from Great Britain, and we gave
Pennsylvania their independence from Delaware. We still have a
great relationship with your State.
We are delighted that you have joined us in the Senate,
especially on this committee. Thanks so much. Welcome, Senator
Fetterman. You are recognized.
Senator Fetterman. Thank you, Mr. Chairman.
Mr. Graff, I want to start with you. Many Pennsylvanians
are employed in energy production industries. Transitioning to
more clean energies is so important and ensuring metal class
workers are not being left behind in the changing economy, is,
I think, equally important. Are there any barriers, very
specific kinds of special barriers, for workers in the fossil
fuel sector to learn skills in renewable fuel production?
Mr. Graff. Senator, thank you for the question, to begin
with. The evolution of hydrogen, both from a low carbon
standpoint and a renewable standpoint, as I mentioned earlier,
will actually create many value-added jobs in the economy. The
estimate is by 2030 in the United States that the utilization
of hydrogen, as projected to grow, would create about $140
billion of additional revenue in the economy and create about
700,000 value-added jobs.
These are jobs that we are already beginning to build the
work force through in many States today. We are in 50 States
across the Country, and we are at a place where these jobs are
readily available. The skills and the competencies and the
capabilities are readily available. Where necessary, we will
continue to go ahead and train the workers to be prepared to
accept these jobs.
The real benefit here is that these facilities and the use
of hydrogen create for a much cleaner environment, both in
terms of not just in their use in the community, but also in
the workplace.
Senator Fetterman. No additional questions.
Senator Carper. We have been joined by Senator Lummis, who
sent me the nicest note for my birthday last month. I saved it.
I have it right here in my binder. I was going to read it
aloud.
Senator Lummis. Well, I am not sure it is nice to tell
people that in Latin the term ``Senate'' means council of old
people, and then say ``Happy Birthday.'' But that is, I think,
what it said. Thank you.
Senator Carper. We are only as old as we feel. I feel about
20, so let's go. You are recognized for as long as you want to
be recognized.
Senator Lummis. Perfect. Thank you, Mr. Chairman.
Mr. Spear, welcome to the committee. I have concerns that
creating a national Low Carbon Fuel Standard will only
galvanize efforts to enact another anti-consumer regulatory
scheme, such as phasing out liquid fuels through
electrification mandates or banning heavy duty diesel engines.
Do you share this concern, and are there examples of such
efforts in the States that have already enacted their own low
carbon fuel standards?
Mr. Spear. There are, thank you, Senator. As I mentioned
previously, we had litigated in California and Oregon, largely
because of the impact that it would have on our industry,
particularly medium-sized companies with 20 trucks or fewer
down to owner-operators. Those are folks that pay retail at the
pump. They don't have fuel contracts.
So the impact that this has on inflating the cost of diesel
in those States and then those areas is quite measurable. It is
the second-largest cost strain under labor. This is a make-or-
break issue in terms of keeping them out on the road moving
freight. Those costs generally will be reflected in what
consumers pay, your constituents.
It needs to be a gradual process that takes into account
the fact that we are already facing 40-year highs in inflation.
This is just an additive on top and reflected in the fuel
prices, $7 exceeding in California, nearly $6.50 in Oregon.
Those are the highest in the Country, so we definitely are
going to defend our membership when that happens.
Senator Lummis. President Biden recently noted in his State
of the Union Address that the U.S. would continue to need
liquid fuels for at least the next 10 years. Is that a
statement that you agree with?
Mr. Spear. I think it is going to be a little longer than
10, I really do. I believe we will get there, as I said in my
opening remarks, I firmly believe that we will transition in
time, but it has to be inclusive. The timeline has to be
realistic. The targets have to be achievable for that to
happen.
I think this mad rush to zero is going to be very
impactful, not just in State economies, but the national
economy. Something we are very mindful, I think if we pace
ourselves and let the market work its will, we will get to
zero.
Senator Lummis. I know people in Wyoming are concerned
because electric vehicles are tested at sea level, which
Wyoming is not, tested on flat ground, which Wyoming is not,
tested at 60 to 70 degrees Fahrenheit, which Wyoming rarely is.
In fact, today it is zero degrees again in Casper, Wyoming.
Those factors change the distance one can travel on a
charge dramatically, and I don't think that that is well
understood. Hopefully, we can bring some of those factors to
light in the coming months.
Mr. Cooper, thank you for being here as well. As you know,
the EPA issued what is called their ``Set'' rule, which, among
other things, set RVO limits for the next 3 years, and proposed
to create a pathway for electric vehicles' participation in the
RFS.
I am concerned with how the EPA is proposing that auto OEMs
generate eRINs. What is your level of concern with the eRINs
proposal from EPA?
Mr. Cooper. Thank you for the question, Senator, and we
share your concern with the way that EPA is proposing to allow
electricity into the RFS program. We are not opposed to the
inclusion of electricity in the RFS, but it has to be done
right. We share your concern that, in the case of these eRINs,
the generator of those credits would be the automaker, like
Tesla, and that is completely different, completely
inconsistent with how RIN credit generation is done across any
other fuel that is regulated under the RFS. That gives us some
concern.
We are also concerned with the way that EPA would allow
those automakers to benefit from what is called book-and-claim
accounting, which is essentially, the automaker is going to
sign a contract with a renewable electricity producer that
could be thousands of miles away. When that electron enters the
grid, the automaker gets to claim that carbon reduction benefit
from that electron, whether it ever is used to fuel an electric
vehicle or not.
So, we have some concerns with inconsistent application of
that accounting practice.
Senator Lummis. I may have to spend a little more time with
you, Mr. Cooper, to better understand that, but I appreciate
your making me aware of that.
Mr. Cooper. I would be happy to.
Senator Lummis. Do you believe EPA's proposal aligns with
congressional intent when it created the RFS nearly two decades
ago?
Mr. Cooper. That is another concern we have. As we look at
the statutory intent of the RFS program and our understanding
of that intent, it was all about stimulating the production and
use of renewable fuels, not necessarily about stimulating the
production and use of certain vehicle technologies. So we think
if you all in Congress had intended the program to drive
certain vehicle technologies, you would have been more explicit
about that.
Senator Lummis. Is it appropriate for EPA to combine their
eRINs rulemaking with 2023 through 2025 RVOs?
Mr. Cooper. We have asked in the comments we just submitted
to EPA last week that they sever that portion of the proposal,
or that portion of the rulemaking, from the actual volume
requirements. We think EPA should move ahead with finalizing
those volume requirements. But it sounds like they need more
time to really figure out this eRIN proposal and to make sure
they are getting it right. We would prefer to see EPA separate
those two parts of the proposal from one another.
Senator Lummis. Mr. Chairman, I want to thank all of our
witnesses for being here today. Thank you for helping educate
and inform the committee. I yield back.
Senator Carper. I want to thank you for being here and
joining us in a good learning exercise.
We are privileged that the Governor of our State is very
active in the National Governor's Association. We have
something in the National Governor's Association called the
Center for Best Practices. They still have it, yes. It was an
opportunity to for Governors to share with other Governors,
other States, what was working in their respective States. I
loved being part of all of that.
I believe you bring the same kind of thinking to this job
as we did in those days, as well. Thank you so much for joining
us today for your questions.
I want to ask unanimous consent to enter into the record
the testimony of Oregon's Clean Fuels manager, whose name,
believe it or not, is Wind. How about that? Cory Ann Wind.
[The referenced information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. Before the U.S. Senate Committee on
Environment and Public Work, here is what she testified: that
``Oregon's Clean Fuels Program has spurred innovation and kept
consumer costs low,'' and the article that I referred to
earlier actually spends some time elaborating on that. Good.
We have been joined by Senator Alex Padilla from
California. Again, he comes from a State where I used to live,
where I was a Naval flight officer. We always like to think of
States as laboratories of democracy. California just happens to
be a pretty big laboratory.
Thanks so much for joining us. I am delighted that you are
in this hearing and this committee and that you could come with
us and join us today. Thanks so much.
Senator Padilla. Thank you, Mr. Chairman. I am proud to
represent not only a great laboratory of democracy, but the
most populous and diverse State in the Nation, the largest
electric of any State in the Nation, and the fourth largest
economy in the world.
With that being said, let me brag a little bit about
California's Low Carbon Fuel Standard. It is helping to advance
a wide range of clean fuels while at the same time, keeping
consumer costs low and fostering clean fuel investments.
California continues to grow its economy and reduce its
emissions. The program's tech-neutral approach, greater long--
term predictability, and cost containment mechanisms have
provided certainty and flexibility. I know prior to my
opportunity to ask questions, there was a lot of California-
specific comments and questions by my colleagues in the
committee.
This program has been so successful that other
jurisdictions are joining California, which is evident in the
Pacific Coast Collaborative, a regional agreement between the
States of California, Oregon, Washington, and British Columbia
to strategically align policies to reduce greenhouse gas
emissions and promote clean energy.
My first question is for Mr. Graff. You talk about
certainty, flexibility, and technological neutrality as
essential ingredients to any low carbon fuel program. Can you
expand on how California's Low Carbon Fuel Standard provides a
certainty and flexibility to industry?
Mr. Graff. Senator, thank you for the question. There is no
question that California's LCFS program drove the introduction
of zero-emission vehicles and the recognition that, in order to
go ahead and fuel those vehicles, it recognized that the real
point was carbon intensity and it was agnostic in terms of the
pathways for the technologies to get there.
For Air Liquide, we have a long history. It is core in our
culture to be sustainable in our approach. We see our
commitment to our climate goals, the world's climate goals, as
well as the energy transition with hydrogen as a core component
of delivering that.
For us, the ability to go ahead and leverage the ability to
work with the automakers, to provide the renewable hydrogen for
the nascent development of hydrogen fuel cell vehicles was
paramount in our decision to invest the $250 million liquid
hydrogen plant in Nevada to meet those needs.
What is important is that in that plant, we utilize both
renewable power and we use biogas, the attributes of biogas, in
order to produce that renewable hydrogen. As a result, we are
leveraging many technologies in order to go ahead and meet the
needs.
Senator Padilla. If I heard you correctly, California's
program was paramount in your decision, not just whether or not
to make the investment, but where to invest in clean hydrogen
production, is that correct?
Mr. Graff. It clearly enabled the introduction of the zero-
emission vehicles. We needed to demonstrate what that could
mean, not just for the State of California, but for the
Country, and the world, we wanted to find that opportunity to
demonstrate what could happen, and we wanted to locate those
things logistically as close to the market as possible. It is
good to minimize logistics. It also creates value-creating jobs
in those communities in which you are going to use that
product.
Senator Padilla. Thank you.
Followup question for Mr. Cooper. Could you elaborate on
the RFA's pledge to achieve a net-zero carbon footprint by 2050
and talk about how low carbon fuel standards, not just in
California, let us add Oregon to the conversation, may have
contributed to innovation in the biofuels sector?
Mr. Cooper. Absolutely, and thank you for the question,
Senator.
I did mention our pledge, our members' pledge to achieve
net-zero emissions by 2050 or sooner in my opening remarks.
This is a pledge and a commitment that our membership is taking
very seriously. They are already taking steps and making
investments to reach that goal.
Today, ethanol already reduces greenhouse gas emissions by
about 50 percent compared to gasoline, so we are halfway there.
But with the adoption of technologies like Carbon Capture and
Sequestration, with the adoption of lower carbon farming
practices upstream of our facilities, replacing fossil natural
gas with renewable natural gas at our facilities, all of those
practices and technologies will continue to drive the carbon
intensity lower for corn ethanol. We absolutely think we can
get there by 2050 or sooner.
A lot of those investments are happening today, and they
are being driven by the California LCFS, they are being driven
by the Oregon program. Again, our member producers that serve
those markets, their top priority is doing everything they can
to reduce the CI, the carbon intensity, of those fuels.
So they are making investments. That was the purpose of the
program. It is why we think a similar program at the national
level would be a great way to rapidly reduce emissions from the
transportation sector.
Senator Padilla. Thank you both.
My time is up, Mr. Chair. Let me just end with this.
Imagine that: public policy, private investment. Thank you, Mr.
Chairman.
Senator Carper. That is a good note to emphasize.
We have been joined by our new colleague from Oklahoma.
Senator Mullin, we are delighted to see you today.
I just want to mention before I turn to you for your
questions, this committee has a remarkable tradition for
actually working together and working across the aisle to find
common ground that you wouldn't really expect. I worked with
John Barrasso for a number of years on something to reduce
emissions of refrigerants from air conditioners and freezers
and so forth that actually led to the ratification of the
Kigali Treaty and phased down hydrofluoric carbons over the
next 15 years. John Barrasso and I worked together on that for
a long time.
Before that, Barbara Boxer was our Senior Democrat on this
committee. Your predecessor, Jim Inhofe, was our Senior
Republican. You could not ask for two more polar different
Senators, and they somehow managed to find common ground on any
number of issues, to our amazement, including transportation
policy, but other stuff, as well. Jim and I were cosponsors of
the Diesel Emissions Reduction Act for any number of years.
That is something we are proud of on this committee. It is
a wonderful tradition. We hope that we can continue to take
advantage of it with your presence. Welcome aboard. We are
delighted to hear from you. Thanks for joining us.
Senator Mullin. Thank you so much. I look forward to that;
I look forward to getting to know everybody and finding those
places we can work and use good common sense.
I would have loved to have been involved in the
conversations with refrigerants, considering I have owned
several HVAC companies, and I have a pretty strong opinion on
the direction, just because from practical use, right?
I appreciate that. It is an honor to be on the committee.
Sorry about sliding in here late. I am still trying to find
where the committees are.
[Laughter.]
Senator Carper. You are right on time, and the restroom is
right outside the door, sir.
Senator Mullin. I figured that one out. I was in the Armed
Services Committee, and since I am on the back side of that
panel, it took a while to get there.
I would like to visit a little bit with Mr. Spear.
California, obviously, they proposed replacing the diesel
trucks with battery electric vehicles and trucks on the road
for the air source, obviously, board. What has this meant for
the prices of vehicles?
Mr. Spear. It is putting immense pressure on the sale of
new vehicles, but also used trucks, significant costs in making
equipment newer, safer, more environmentally friendly
equipment, less available as a result. They are just out of
reach.
Senator Mullin. As a guy who has a CDL in my back pocket, I
own multiple semis, we have had fleets of vehicles out there. I
have driven in California, and the traffic is pretty bad.
If you put these diesel trucks, which are already heavy and
take up a lot of room, and then you make them all electric, has
anybody done a study on how many more trucks that is going to
add to the road? We have weight issues already, right?
We kind of have two options here. Either we increase the
weight of these vehicles so that they can move, which could
drastically affect safety, or we are going to have to literally
put three-to-one on the road just to be able to move the same
product we are moving now.
Has anybody done a study on that, and what congestion that
is going to cause, and honestly, how much bigger of a carbon
footprint that is going to put on California?
Mr. Spear. Yes, the American Transportation Research
Institute has done some pretty significant recent studies on
this subject and the impact that it is going to have. Looking
logically at the availability of minerals to create those
batteries, these are 5,000-pound batteries or more going into
these trucks. The amount of lithium, graphite, cobalt, that has
to go into these batteries to process that is not readily
available.
We are not sourcing that here in the U.S., and it is not
going to come from China. It is going to come from Congo. That
needs to be decided in terms of availability of the equipment.
Beyond that, the infrastructure to charge it is not in place,
and then the amount of electricity needed to charge it.
ATRI did this study, and they are showing that to charge
all trucks and cars currently on the road would be 40 percent
of current capacity. Think about that. Where is the power going
to come from, especially in California, where there are already
rolling blackouts? This is a question that we believe has to be
answered before you move forward with such an aggressive
timeline that is also, by the way, not just confined to
California. It is going to set the national standard for the
entire Country if the EPA doesn't step in.
We need a national framework. We are interState commerce.
You have driven across the Country in a truck. You understand
that.
Senator Mullin. It occurs to your point, just for the
reference of those that are listening, the average house has a
200-amp service that goes to every house. To charge two
vehicles overnight, these aren't semis, and we are talking
about infrastructure here, just to charge, the average
household has two vehicles, to charge those vehicles overnight,
you would be required to take a 200-amp service house to a 400
amp service house.
As someone that owned a fleet of 300-plus vehicles on the
road every day, I can't imagine how much power it would cost me
at night to charge all those trucks. This is something that is
short-sighted when we start talking about California's
proposals.
I understand what they are trying to get to, but are we
thinking long-range? Are we actually paying attention to the
safety, the effects on the grid? Last time I checked, they
still have rolling blackouts without going all-electric. Where
is that infrastructure going to come from?
Sir, as you say, we work together. This is a point that we
need to have a deep discussion on, because when we start
talking about renewable fuels versus fossil fuels, there seems
to be somewhat of a divide, but we need to be realistic to our
approach.
I am glad that you started your introduction to the
committee for me in this, because I want to be part of a
solution, not of a problem. The Choctaws, who have a privilege
to represent the Choctaw Nation, and I am Cherokee and proud to
be Cherokee, Chief Batton, he says that when we think of
decisions, we think generational, not today, but we think
generational. In this effect, we need to be thinking about, the
effect today and generational, what our long-term goals are.
I look forward to working on the committee. Thank you for
being here. With that, I yield back.
Senator Carper. Thanks again, and welcome to our committee.
Before you arrived here, I just want to mention this again.
I mentioned that I was born in West Virginia, in a coal mining
town. That is where my sister and I were born. That is where I
grew up until we moved to Virginia, and then off into the
world.
I have always focused on job creation and job preservation
as Governor, and even before that. I worked in the division of
economic development. I always focused on job creation and job
preservation. I continue to do that. I always look at adversity
and find opportunity.
There is plenty of adversity in our Country and our planet.
Where is the opportunity for doing something about it? My mom
raised my sister and me in Grace Gospel Baptist Church. She
dragged us there every Sunday morning, every Sunday night,
every Wednesday night, and most Thursday nights. Then we would
go home and watch Billy Graham on TV. She wanted to make sure
we understood.
Senator Mullin. Wait, you all had a TV?
[Laughter.]
Senator Carper. It was a little tiny one. We had three
channels.
She wanted to make sure we understood the difference
between right and wrong. She really wanted to make sure we
internalized the Golden Rule, treat other people the way we
want to be treated. I mentioned earlier, my State of Delaware
is the lowest-lying State in America. Our State is sinking. The
seas around us are rising.
If Bill Cassidy and John Neely Kennedy were here today,
they would tell you, in every 100 minutes in Louisiana, they
lose a piece of land the size of a football field to the ocean.
The folks at NOAA told us last year that sea level rise isn't
just a problem today. It is going to get worse before it gets
better.
That is sort of the environment in which we are operating
here. We somehow have to find consensus to address these
problems and concerns in a way that is fair, but also in a way
that strengthens our economy rather than diminishes it.
Delaware used to be the State that built more cars, trucks,
vans per capita than any State in America. We had a Chrysler
plant with 4,000 employees, we had a GM plant with 4,000
employees. I worked for years to keep those plants alive. We
lost them both in the Great Recession, which was just a body
blow to a little State with less than a million people.
I would just say that when Chrysler decided to close their
plant, I remember being there the day they literally tore down
the plant and leveled it to the ground. I nearly cried. But we
have on a site that used to have 4,000 employees, we have 4,000
people go to work every day in the science and technology
campus that is affiliated with the University of Delaware. In
adversity, lies opportunity. We just have to be smart enough to
figure out how to get there. The way we do it on this committee
is just being honest with each other, working with each other,
thinking outside the box, looking to see what works, and trying
to do more of that.
I remember going to the Detroit Auto Show. We used to go
every year to the Detroit Auto Show. I remember 1 year, being
there, and they have the stands, and every auto producer has a
stand. GM has a stand. Ford has a stand. Some stands are bigger
than others. They have all kinds of different models and trucks
and so forth, and vehicles. One year, I remember meeting a
woman named Mary Barra, who is pretty famous now. She is the
Chairman of GM and chairs the Business Roundtable.
It was the year that the Chevy Volt was selected as the car
of the year. It is a hybrid. The Volt that year got 38 miles on
a charge. The vehicle I drive now, mentioned earlier, my 2001
Chrysler Town and Country Minivan, which I sold for $1 last
year with 600,000 miles on it, but it has been replaced by an
EV that gets 300 miles on a charge.
The numbers are actually getting better. Ten years ago is
when the Chevrolet Volt won car of the year at the Detroit Auto
Show. I remember walking around and visiting one of the stands.
I don't know if it was Toyota, or who it was, but they had a
vehicle, it looked like a framework with two-by-fours framed
into a garage. They had a vehicle sitting in the garage, and
next to it was a frame for a house.
I said to the people from the company that had that
vehicle, ``What is this?'' They said, ``This is a car that is
sitting in a garage and has the ability not only to use
hydrogen fuel cells, but to provide electricity to the vehicle,
provide electricity for the house, cool the house in summer,
warm the house in winter. This is where we are going to go in
the future.'' Ten years later, that is a reality.
There is a lot we can do here, and a lot of ways to create
jobs. I am all about jobs. I think the best thing we could do
is, I used to say in my speeches, I would talk about the least
of these in our society, and I would say, give a person a fish,
you feed them for a day. If you teach a person to fish, they
can feed themselves for a lifetime.
I used to say that was in the Bible. One day, I would say
that in a speech, and there was a minister there. He said to me
after my speech, ``That is not in the Bible.'' Well, I say it
should be.
[Laughter.]
Senator Lummis. Mr. Chairman, may I remark on your
comments? One of the things during the State of the Union
Address when President Biden mentioned this one-decade goal, I
thought about how, without permitting reform, we don't stand a
chance, because one of the largest wind energy facilities in
the Country has been developed in Wyoming by Philip Anschutz.
It took him over 10 years just to acquire the transmission line
right of way, and there is additional permitting that needs to
be done there.
Even for people who desire to move to electric vehicles
that can power houses out of the garage if there is no
electricity available, it is because of the permitting burdens
that come with building transmission lines, it is just an
unachievable goal. I think that, even for people who aspire to
President Biden's goal, that that should become a priority.
Thank you.
Senator Carper. I agree. President Biden, we ended up
voting on permitting reform, as you will recall, at the end of
last year. We ended up not passing it on the 47th vote. The
President worked very hard to try to get it adopted.
I expect the Administration will come back and say, let's
try it again, give it another try. He likes to say, as you may
recall in his State of the Union Address, he kept going back to
the phrase, let us finish the job we have begun.
It is all well and good that we have a lot of promising
ways to create electricity without worsening our carbon
situation here in this Country, but if we create all this clean
energy over here in our Country, and over here we have a lot of
people who need that energy, we have to figure out how to get
it there.
Your point is well taken. I think this is an area where we
can find consensus and should work hard to do that. I know
Senator Capito has offered legislation on this front. I am
hopeful that we can all be part of getting to that consensus.
Thank you.
I have a couple more questions. Do either of you want to
ask another question, is there anything else? OK.
This is a question for Mr. Graff and Mr. Cooper. As a
recovering Governor, I often look to States for policies that
work. I have mentioned this before.
Today, there are States that have implemented or are in the
process of considering technology-neutral low carbon fuel
standards that provide greater flexibility and certainty than
the Renewable Fuel Standard. For example, as we heard last year
from, again, Ms. Cory Ann Wind, that is a great name, Oregon's
Clean Fuels Program manager, Oregon has successfully advanced
cleaner fuel usage, kept consumer costs low, and helped to
foster local job creation.
Oregon is tracking consumer fuel costs as a requirement of
the program, and Oregon has lower fuel prices than surrounding
States, such as Idaho, which does not have a clean fuels
program.
A question, if I can, for Mr. Graff, and also, Mr. Cooper,
for you. What are the most important principle of lessons
learned from State programs that should guide development of a
national Clean Fuels Program, and how are these State programs
protecting the interests of consumers? Mr. Graff, would you go
first?
Mr. Graff. Mr. Chairman, thanks for the question. As I said
in my opening remarks, I think that any program in itself,
first of all, needs to have clear certainty. That is to say,
if, in fact, we are going to make major investments as a
Country or as a business into the infrastructure, into the
production capability, to provide for renewable fuels, for low
carbon fuels, we need to have certainty as to the future. When
we invest, we invest for the long-term. These facilities will
be in operation for 15, 20, 40, 50 years.
The second thing is flexibility, that is the ability to
choose the right solution for that ecosystem. If you have
abundant wind power, solar power, hydropower, for example, you
can produce hydrogen with electrolysis using water. If you have
an abundant supply of natural gas and the capability to store
carbon in sub-surface geological structures like you do in West
Virginia or on the Gulf Coast, then you can utilize hydrogen
with carbon capture in order to produce that hydrogen.
By the way, the byproduct natural gas liquids you produce
are critical and necessary to the local economy to preserve the
jobs and grow the jobs in the chemical industry. That is
critical in terms of the versatility and the flexibility of
what you need to have.
Then the final piece is around technology. We don't want to
pick or choose specifically what technology to apply in a rule
or a law. We want to give the companies, we want to give the
ability to go ahead and pick and choose what makes the most
sense, whether it is renewable power, whether it is biogas,
whether it is hydrogen with carbon capture, whatever the case
may be, and to build that at the appropriate scale to meet the
needs of the local economy.
Senator Carper. Good, thank you. Geoff?
Mr. Cooper. Thank you, Senator. I think my list would be
pretty similar to what we heard from Mr. Graff.
Senator Carper. Repetition is a good thing. Feel free to
repeat.
Mr. Cooper. I won't repeat, but I will say setting clear
and predictable carbon intensity reduction requirements is very
important, and then sticking to them, not backtracking or
changing them retroactively.
Second, life cycle analysis is critically important under a
program like this. Those carbon intensity values for each fuel
pathway, that really is the engine that drives the program.
Having a consistent, transparent, science-based life cycle
methodology is critical to the whole thing. Again, that is why
we think the Department of Energy's GREET model is a great
example for that type of methodology.
Senator Carper. OK, thanks. I am going to pick on Mr. Graff
again for a minute here. It is a question dealing with energy
security. The recent price spikes in petroleum, particularly
following Russia's invasion of Ukraine, all those prices at the
pump, as I have seen witnessed as recently as this morning in
my neighborhood, they demonstrate that global markets continue
to drive fuel prices. The volatile global oil market creates
economic uncertainty, puts pressure on American families and
businesses that no amount of domestic drilling can prevent.
I believe the solution to high oil prices and dependence on
foreign oil is to reduce demand for oil and transition away
from oil over time while giving consumers more choices to fuel
our cars, our trucks, and our vans. Fortunately, clean hydrogen
is an example of a low carbon fuel that can be produced
domestically from renewable fuel resources like wind, like
solar, like biomass.
My question is, how can the use of hydrogen in low carbon
transportation fuels help strengthen our national energy
security? I am going to repeat that. How can the use of
hydrogen and low carbon transportation fuels help to strengthen
our national energy security?
Mr. Graff. Thanks for the question, Mr. Chairman. As you
pointed out, the world's energy needs only continue to grow.
The inherent risks of various energy supplies continue to
evolve. I think we should see everything we have today as
additive, with the idea that hydrogen and its long-term growth
and potential will help fill both a necessary void and provide
the growth in low carbon and renewable sources of energy that
we need for the future.
The application, again, of hydrogen, and the use of
hydrogen, again, is very versatile because it provides the
capability in an industrial setting to decarbonize and provide
the needs for energy intensive industry. We are already
beginning to demonstrate that with some of our projects we are
building around the world, but it also provides the flexibility
and the capability to decarbonize the transportation sector and
provide the additional fueling needs we need for that
infrastructure.
We already had a conversation about personal vehicles, the
introduction of those vehicles, and how it is used. As you
scale those vehicles into commercial vehicles or a Class A
tractor trailer, the utilization of hydrogen is a primary and a
core vector that will allow us to decarbonize heavy
transportation, and in its use, it has basically this----
Senator Carper. Did you say carbonize heavy, or
decarbonize?
Mr. Graff. Decarbonize.
Senator Carper. Thank you.
Mr. Graff. As we look to go ahead and think about its
utilization, which is similar to everything we have today. If
you utilize hydrogen in any of these vehicles, regardless of
their size, you have the same range of drivability. You have
the same utilization. That is to say, in refueling, it is the
same experience you have today. You don't have to wait hours to
recharge. It is the same experience you have today. If you were
to still have your minivan, and you had to fill it with fuel,
it would be the same experience in refueling a hydrogen fuel
cell vehicle.
Senator Carper. Don't let my wife hear you say that.
[Laughter.]
Mr. Graff. The inherent drivability, regardless of
temperature, is paramount. It doesn't matter where you are. We
had a conversation on this earlier. Temperature is not an issue
for a hydrogen fuel cell vehicle and its performance.
At the end of the day, the inherent weight and the size of
the array necessary for just the fuel cells and a full charge
of hydrogen is comparable to what we have today. It doesn't
require additional weight; it doesn't require additional size
from an array standpoint, so you can maintain the same type of
payload you have today.
I think all this is additive, substitutive, and we are able
to go ahead and demonstrate its versatility in almost every
sector, including if you wanted to back up power and back up
the grid.
Senator Carper. OK. Just a quick followup, if I could, Mr.
Graff. I mentioned earlier, you may recall, Consumer Reports
say they support the Clean Fuel Standard because it can, this
is their quote from Consumer Reports, ``help alleviate high gas
prices by providing more fuel options for consumers that are
not tied directly to fluctuating oil prices.''
Mr. Graff, do you agree with Consumer Reports on this
point? Could a technology-neutral clean fuel standard actually
lead to lower costs for consumers?
Mr. Graff. I think any time you have a market-based,
flexible program that allows you to utilize any technology, as
long as it meets the requirements, will create the lowest cost
solution to the consumer. At the end of the day, the consumer
wants power to be or fuel to be available. It wants it to be as
low cost as possible, and clearly, they want it to be cleaner.
I think that the affordability, the availability, and the
ability to go ahead and provide cleaner fuels is paramount as
we think about where we are going to go and the world around
us.
Senator Carper. Good, thanks.
I have a question for the entire panel. Before I do, I want
to just take a couple minutes and give Chris Spear a chance to
comment, especially, if you would, Chris, on the potential for
hydrogen with respect to large vehicles, trucks, vans, and
semis, buses.
My hope is that there is a future there that would involve
hydrogen, the cleaner the better. But are we barking up the
wrong tree, or is there something to this?
Mr. Spear. No, not at all. I think we have a tremendous
amount of innovation that is occurring within our industry, and
a lot of that is domestic innovation. Our trucks are largely
manufactured here in the United States, even foreign flight
carriers, so it is a very exciting space.
I appreciate Michael's comments across the board. We too,
are tech neutral. Our industry will gravitate to different
types of energy sources, fuel sources, that fit their business
model.
I mentioned drayage. Starting in the ports where the
equipment is confined, electrifying there makes a lot of sense.
Don't do it too fast. A lot of that equipment is old, and a lot
of the people servicing those boxes are 20 trucks or less
operations. So if you go too quickly, the cost of an electric
truck or even now hydrogen trucks as they come online are much,
much higher in price.
You have to let parity work its course. That is why I keep
coming back to the timeline. My comments about California and
Oregon are not rhetorical. They are factual. If you have a
timeline and a target that is that aggressive, and in an
economy that size, fourth largest economy in the world, we
service that.
If you want us to keep servicing that and providing those
goods to consumers, your constituents, you have to build in
time to do it. Those wins that we have had with the EPA took 40
years to gets 98.5 percent of the tailpipe emissions out, and
we are committed to the remaining 1.5 percent. Moving to
electric, moving to hydrogen, these are emerging technologies
that will take time, but they are very exciting.
Senator Lummis was talking about Wyoming. I am from
Wyoming, Geoff is from Wyoming. It is a very different climate.
It is going to have different conditions, different
applications. Hydrogen has tremendous potential for longer
haul, not affected by cold or heat. It is a very, very exciting
technology for us, beyond electric.
We will get there, as I said in my opening remarks. It is
just going to take a little bit more time than some States are
providing.
Senator Carper. OK, thank you for that.
The last question is for the entire panel. I want to start
off with Geoff Cooper. Geoff, here is the question. First, I do
appreciate the perspectives that all of you, this entire panel,
have shared with us today. I hope that the dialog can help
further inform thoughtful action to support the development of
national clean fuels policy that will reduce emissions from our
transportation sector and help further grow our economy at the
same time.
That said, I also recognize the challenges in developing a
new program that satisfies everyone will need compromise and
collaboration as we go along that road.
My question is, would you take a moment and share with us
where you believe there is common ground amongst you as a
panel? I am always looking for common ground. Where would the
common ground lie here on this panel? I think I have heard it,
but I want you to sort of close with that thought in mind. Go
ahead.
Mr. Cooper. Thank you, Mr. Chairman, and again, thank you
for the opportunity to testify today. I think this has been a
wonderful conversation and very enlightening.
I do think I have heard lots of common ground amongst the
three of us today around the need to continue innovating and
continue looking at and investing in technologies that reduce
carbon emissions, that reduce dependence on petroleum and
imports in particular, and that continue to stimulate
investment and innovation and new technologies.
I think that is one area where we are all in agreement. I
think a clean fuel standard, again, if properly structured,
would do that.
Senator Carper. Good, thank you. Mr. Spear?
Mr. Spear. Yes, Mr. Chairman. You and I have had
conversations on this, other members of this committee and
staff.
We are all in on this. We start with yes. I think we have
demonstrated that over the last 40 years with the EPA. We need
to collaborate, public and private, setting standards that are
achievable, so the timelines and the targets do matter.
What I hear that is common amongst this panel is tech
neutrality and market driven. To do that, you have to be
inclusive. You have to be transparent. Our industry serves 72.5
percent of the domestic freight in this Country, so there is
really nothing that we eat, drink, or wear that did not, at
some point, touch a truck and 3.8 million drivers out there
making it happen.
It is a very proud industry. It is a hard-working industry.
It is one that we need to keep around as an economy. Going at
the right pace and hitting the right targets, we will get
there. I am convinced of that, and working with our partners at
this table, we are committed to doing that, and we will help
this committee achieve those goals.
Senator Carper. Great, thank you so much.
Mr. Graff, closing thought, please.
Mr. Graff. Thank you, Mr. Chairman, and thanks to the rest
of the panel for their thoughts today, as well.
I fully agree with the other panelists. I think there is
very common agreement, first of all, on the need for clarity,
for certainty, for flexibility, and for the ability to innovate
on various technologies in order to meet the end use consumer's
needs and in order the meet the Country's needs.
I think all of us here and in the organizations or
companies we represent are clearly committed to the long-term
prominence of the U.S., whether that is in innovation, which
has been core to the U.S. since its founding, and the benefits
that brings, whether it is to go ahead and recognize that the
U.S. is clearly, from an energy standpoint, the world leader of
production, and from the standpoint of the future, the
willingness to innovate to demonstrate we are not only the
energy leader today, but we will be the clean energy leader in
the world in the future, as well.
But most importantly, to make sure that in everything we
do, whether that is meeting the economic needs of the Country,
meeting the economic needs of the various representatives here
and the businesses we represent, is to give back to the
community, to make sure we keep our own employees, but more
importantly, communities in mind to what we do, and that we are
able to go ahead and give back in those communities, we are
able to create jobs in those communities and clearly maintain
those jobs and grow the value-added jobs that we can create in
the world around us.
If we continue to manage all that in balance, if we
continue to go ahead and drive that in the right way, we will
continue to propel the U.S. as we all know it.
Senator Carper. Great thoughts. Thank you. We are indebted
to each of you; thank you for spending this time and sharing
your ideas with us and helping to further cultivate an
atmosphere to find consensus on an incredibly important issue.
I am going to make a couple of unanimous consent requests
before we let you escape. I would ask unanimous consent to
enter into the record announcements from Volvo, from Tesla, and
from Nikola about their plans to roll out electric big rigs
with 355-mile range. Let me say that again. I want to make sure
I got that right. They plan, these three manufacturers, to roll
out electric large rigs with 355-mile range, which is quite a
bit.
Volvo is looking to have half of their truck sales to
electric by 2030, proving electric heavy-duty vehicle
technology is advancing quickly.
I would ask unanimous consent to enter into the record
announcements from those companies.
[The referenced information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. I would also like to ask unanimous consent
for the record to submit various articles, reports, and other
documents that help demonstrate the benefits of a Federal
program to help provide certainty, predictability, and
flexibility for all stakeholders while lowering costs for
consumer, spurring clean fuel technology innovation and helping
to meet our climate emissions reductions goals.
[The referenced information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Carper. True confession, I was born in West
Virginia in a coal mining town. I grew up in Danville and
Roanoke. All my life as a kid, I loved cars. I loved cars,
trucks, and vans as a little boy and as a teenager, and even as
a big boy today. It has been a passion of mine.
I am an Ohio State Graduate. I love Ohio State, but I love
Detroit. I am a huge Tigers fan. I was on the phone earlier
this week with Chris Ilitch, the owner of the Tigers, talking
about our team and pitchers and catchers reporting, so this is
something that is just part of my DNA.
The other thing that is part of my DNA is trying to find
consensus and common ground, trying to make sure that the
people that are being born today are going to have a planet to
grow up on and a planet to grow old on. As they grow up and
grow old, they will have jobs that will enable them to support
themselves and their families.
I mentioned earlier, I used to love to go to the Detroit
Auto Show. They have always had it in January. Some of you may
have been there. It was always cold. They moved the Detroit
Auto Show now to June or July, and now we have the Auto Show
here in the winter. I am happy they invited me to come by and
speak at the D.C. auto show last month.
I was struck, as I walked around, I looked at the vehicles
that were being offered at the auto show and thinking about, 10
years ago, when I was starting to first think about maybe
buying an electric vehicle, being at the Detroit Auto Show, we
had the Chevrolet Volt. It was a hybrid. It got about 38 miles
on a charge.
But I walked around the year after that, and after that,
and after that, and there just wasn't much coming along in
terms of electric vehicles and hybrid vehicles. Boy, there is
now. I was stunned when I walked around the huge showroom for
the D.C. Auto Show. There were so many. It was not just little
cars; it was SUVs, it was minivans, like my old Chrysler
minivan, all kinds of vehicles that are being offered these
days. It was exciting to see, and a lot of them are being built
right here in America.
This is a glass half full deal. This is a glass half full
deal. It is not going to be easy to get from here where we need
to go, but it is imperative that we do that.
I will close with a quick story about Albert Einstein that
I occasionally share in this committee, so hopefully you will
not have heard it. I take the train to work; I take the train
to go home most days. I love the train, I love Amtrak. I used
to be on the Amtrak Board. Bill Clinton put me on the Amtrak
Board and gave me a chance to help fashion and form the future
of passenger rail in our Country a little bit.
This weekend, my wife and I had gone up to New York City to
celebrate the birthday of one of our sons. On our way back, we
stopped at a train stop where Albert Einstein used to get on
and off the train. He used to teach at Princeton. As we stopped
in Princeton, at the train station, I was reminded of an Albert
Einstein story about the day he got on the train to go
someplace, and sometimes he would go to New York City, he would
go to Washington, wherever he would go.
One day, he got on the train and got to a seat and started
looking for his train ticket. He looked in his pants, he looked
in his coat, he looked in his briefcase, he couldn't find it.
The conductor comes along and sees that Albert Einstein is
in some duress. He said, Dr. Einstein, we know who you are. You
don't have to worry about it. Just forget about your ticket.
That is OK.
The conductor turned around to walk out of the car to
leave, and he turned around just before he went into the other
car. Albert Einstein was down on his hands and knees looking
for his ticket. The conductor rushes back to Albert Einstein,
and he says, Dr. Einstein, you don't have to do this. We know
who you are. You ride the train all the time. We know who you
are.
Dr. Einstein looked up and said, I know who I am, too, I
just don't know where I am going. I just don't know where I am
going.
I have a pretty good idea, I think we all have a pretty
good idea, where we are going. There is a smart way to get
there, and there is a less smart way to get there. The smart
way to get there is to figure out how to work together to get
to where we all need to go.
One of the ways we will do that is by learning from those,
it could be some States or jurisdiction, whether they have
taken a wrong approach, and we will learn from their mistakes,
and there will be others where they are on to something,
something good, and we want to learn from both. We want to
learn from both. Your testimony today will help get us on the
right path, I think. We appreciate it very, very much.
In closing, I want to again thank our witnesses for your
time and for your testimony today. Clean fuels help safeguard
our Nation's energy security, boost economic opportunity for
our famers, and reduce greenhouse gas emissions. It has been
over 15 years since Congress passed significant revisions to
the Renewable Fuel Standard. Since then, American ingenuity and
innovation, clean vehicle and clean fuel technology has
advanced further than I think a lot of us would have imagined.
With that in mind, I think it is time to revisit our national
fuels policy.
I know this is not an easy issue to tackle. My dad used to
say, you probably remember things your parents said to you. One
of the things my dad used to say to us was, the hardest things
to do are sometimes the things that are the most worth doing.
This is not an easy one, but it is an important one, if we want
to reach our energy security and our climate goals.
As I said earlier, my hope is that today's conversation
will help be the start of more conversations between my
colleagues and us and our other stakeholders, and what a
national fuels program could look like, should look like.
Before I adjourn, some housekeeping. Senators will be
allowed to submit written questions for the record through the
close of business on Wednesday, March 1st. We will compile
those question; we will send them to each of you. We would ask
you try to reply to us by midnight, March 1st. No, I am just
kidding. We will ask you to reply to us by Wednesday, March
15th.
With that, without further ado, this hearing is adjourned.
Thank you all.
[Whereupon, at 12:02 p.m., the hearing was adjourned.]
[all]