[Senate Hearing 118-72]
[From the U.S. Government Publishing Office]








                                                         S. Hrg. 118-72

 LEFT HOLDING THE BAG: THE COST OF OIL DEPENDENCE IN A LOW-CARBON WORLD

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                                HEARING

                               before the

                        COMMITTEE ON THE BUDGET
                          UNITED STATES SENATE

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             March 29, 2023

                               __________

           Printed for the use of the Committee on the Budget







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                        COMMITTEE ON THE BUDGET

               SHELDON WHITEHOUSE, Rhode Island, Chairman
PATTY MURRAY, Washington             CHARLES E. GRASSLEY, Iowa
RON WYDEN, Oregon                    MIKE CRAPO, Idaho
DEBBIE STABENOW, Michigan            LINDSEY O. GRAHAM, South Carolina
BERNARD SANDERS, Vermont             RON JOHNSON, Wisconsin
MARK R. WARNER, Virginia             MITT ROMNEY, Utah
JEFF MERKLEY, Oregon                 ROGER MARSHALL, Kansas
TIM KAINE, Virginia                  MIKE BRAUN, Indiana
CHRIS VAN HOLLEN, Maryland           JOHN KENNEDY, Louisiana
BEN RAY LUJAN, New Mexico            RICK SCOTT, Florida
ALEX PADILLA, California             MIKE LEE, Utah

                   Dan Dudis, Majority Staff Director
        Kolan Davis, Republican Staff Director and Chief Counsel
                   Mallory B. Nersesian, Chief Clerk 
                  Alexander C. Scioscia, Hearing Clerk  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                            C O N T E N T S

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                       WEDNESDAY, MARCH 29, 2023
                OPENING STATEMENTS BY COMMITTEE MEMBERS

                                                                   Page
Senator Sheldon Whitehouse, Chairman.............................     1
    Prepared Statement...........................................    29
Senator Charles E. Grassley, Ranking Member......................     3
    Prepared Statement...........................................    31

                    STATEMENTS BY COMMITTEE MEMBERS

Senator Ron Johnson..............................................    17
Senator Ben Ray Lujan............................................    25

                               WITNESSES

Mr. Claudio Galimberti, Senior Vice President & North America 
  Research Director, Rystad Energy...............................     6
    Prepared Statement...........................................    33
Dr. Gregor Semieniuk, Assistant Research Professor, Political 
  Economy Research Institute & Department of Economics, 
  University of Massachusetts, Amherst...........................     8
    Prepared Statement...........................................   112
Mr. Daniel Raimi, Fellow & Director, Equity in the Energy 
  Transition Initiative, Resources for the Future................     9
    Prepared Statement...........................................   124
Dr. Benjamin Zycher, Senior Fellow, American Enterprise Institute    11
    Prepared Statement...........................................   139
Mr. Lucian Pugliaresi, President, Energy Policy Research 
  Foundation.....................................................    12
    Prepared Statement...........................................   183

                                APPENDIX

Responses to post-hearing questions for the Record
    Mr. Galimberti...............................................   216
    Dr. Semieniuk................................................   218
    Dr. Zycher...................................................   220
    Mr. Pugliaresi...............................................   227
Charts submitted by Chairman Sheldon Whitehouse..................   230

 
 LEFT HOLDING THE BAG: THE COST OF OIL DEPENDENCE IN A LOW-CARBON WORLD

                              ----------                              


                       WEDNESDAY, MARCH 29, 2023

                                           Committee on the Budget,
                                                       U.S. Senate,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 10:00 
a.m., in the Dirksen Senate Office Building, Room SD-608, Hon. 
Sheldon Whitehouse, Chairman of the Committee, presiding.
    Present: Senators Whitehouse, Van Hollen, Lujan, Grassley, 
Crapo, Johnson, Braun, and R. Scott.
    Also present: Democratic Staff: Dan Dudis, Majority Staff 
Director; Matthew Bolden, Climate Policy Advisor; Jonathan 
Misk, Director of Oversight and Senior Counsel.
    Republican Staff: Chris Conlin, Deputy Staff Director; 
Krisann Pearce, General Counsel; Jordan Pakula, Professional 
Staff Member.
    Witnesses:
    Mr. Claudio Galimberti, Senior Vice President & North 
America Research Director, Rystad Energy
    Dr. Gregor Semieniuk, Assistant Research Professor, 
Political Economy Research Institute & Department of Economics, 
University of Massachusetts, Amherst
    Mr. Daniel Raimi, Fellow & Director, Equity in the Energy 
Transition Initiative, Resources for the Future
    Dr. Benjamin Zycher, Senior Fellow, American Enterprise 
Institute
    Mr. Lucian Pugliaresi, President, Energy Policy Research 
Foundation

          OPENING STATEMENT OF CHAIRMAN WHITEHOUSE \1\

    Chairman Whitehouse. Let me call this hearing of the Senate 
Budget Committee to order. As usual, we will begin from opening 
remarks from me and from Ranking Member Grassley, followed by 
my introductions of the witnesses, and then witness statements.
---------------------------------------------------------------------------
    \1\ Prepared statement of Chairman Whitehouse appears in the 
appendix on page 29.
---------------------------------------------------------------------------
    I have been pretty rigorous about trying to keep the 
witness statements to five minutes each, so that we have a 
conversation. So please try to observe that, and also know that 
your full statement, your full report will be made a part of 
the record of these proceedings, and then we will proceed to a 
question and answer round of five minutes per Senator per 
round.
    So Ranking Member Grassley and colleagues, welcome to the 
fifth Committee hearing on our series on the economic and 
budgetary havoc that climate change threatens to wreak. The 
last four hearings on this topic presented expert testimony on 
the outcomes when climate change's physical effects disrupt 
insurance, mortgage and property markets, and how those risks 
are both systemic and multiple, with likely cascades of 
economic disruption throughout the economy.
    Today we'll hear about risks that don't result directly 
from ecological upheaval, but stem from failing to keep up with 
the global energy transition. Market transitions can be held 
back by outside influence, and that occurs suddenly as economic 
shocks.
    These are potential costs of the fossil fuel funded 
campaign of denial, delay, and obstruction, holding back the 
transition, and then having it occur anyway in a sudden 
collapse.
    In other hearings, the operative term was ``systemic 
risk,'' when losses in one sector cascade out through the 
economic system. Here the issue is that the world is moving 
away from oil and gas, but truculent and politically connected 
market actors persist in fossil fuel investments, which then 
crash in value when their unsustainable economics overwhelms 
the artificial politics that supported them.
    The operative term of today's hearing is therefore stranded 
assets. The prospect of investments in fossil fuels becoming 
relatively worthless when there is no one to buy the dirty 
product may sound like a far-off possibility.
    But for the United States, the world's largest producer of 
oil and gas, it could be just around the corner. Why is that? 
That's because Saudi Arabia and pretty much everyone else in 
OPEC can produce oil far more cheaply, and thus can sell it a 
lower price point than the United States.
    If there is ever a rush for the exits, they can sell at 
cost and price us out of the market. For now, prices are 
propped up by the cartel. But just like a run on a bank, when a 
major supplier loses confidence in the cartel and drops prices 
to cost, things will change in a hurry.
    The present artificial market cannot last forever. There 
are too many externalities looming. Even fossil fuel companies 
talk about the inevitably of reaching peak oil or the point at 
which maximum oil demand is reached, followed by an 
irreversible decline. How does that decline come? Is it slowly 
up and then slowly down the other side of the peak?
    Likely not. The International Energy Agency notes that as 
soon as it becomes clear that oil demand is going to decline, 
it will be in the economic interests of these lower cost 
producers to flood the market at prices just above their 
marginal cost of production. That shift could be fast.
    When it happens, all the assets producing more expensive, 
less competitive fossil fuels stateside can't compete with the 
lower price, and they become worthless, stranded. The market 
for American oil dries up fast. Our witnesses estimate that 
stranded U.S. fossil fuel assets could total $397 billion. 
Globally, the losses could total $1.4 trillion. This is what is 
known as the carbon bubble.
    Similar to the systemic risks that rising seas, flooding, 
and wildfires pose to the housing, insurance, and mortgage 
markets, a mass stranding of fossil fuel assets could also lead 
to large economic shocks that reverberate across the broader 
economy with real consequences for the federal budget.
    And as we will hear today, peak oil is on the horizon. As 
Putin's brutal invasion of Ukraine reminded the world, foreign 
energy from petrocrats often comes with strings attached. It's 
in the national self-interest of every single fossil fuel 
importer from the EU to China to exit the volatile and 
expensive oil and gas market as soon as they can, especially 
when more solid energy security can be found in the form of 
renewables, EVs and other low carbon technologies.
    In the same way that a carbon bubble bursting hits the 
United States particularly hard, within the United States 
certain states will be hit particularly hard. States heavily 
dependent on fossil revenue sources, as one of our witnesses 
will elaborate. Preparing for that day by those who represent 
those states is elementary prudence.
    If we want to avoid the worst economic disruptions of a 
carbon bubble, we need an orderly transition to zero carbon 
energy. An orderly transition requires policies to smooth the 
change, precisely the policies the fossil fuel industry has 
spent over three decades fighting.
    Every day that industry uses political power to hold back 
progress, more water backs up behind the dam, making the 
downstream catastrophe more damaging when the grim day arrives. 
Orderly versus disorderly transition has grave ramifications. 
Our choice is clear we can plan for the future and try to 
minimize the economic damages associated with stranded assets, 
or we can just keep plowing ahead and hope that all the 
evidence is wrong.
    Just as the scientists haven't been wrong about climate 
change, something tells me the economists are not likely to be 
wrong about the economic fallout. Ranking Member Grassley.

           OPENING STATEMENT OF SENATOR GRASSLEY \2\

    Senator Grassley. I have had the honor of serving Iowa in 
the Senate for four decades. I've been Chairman of the Finance 
and Judiciary Committees, so I know what it is to be chairman 
of a committee, and I'm honored to serve with you on this 
committee with you as chairman and I'm Ranking Member.
---------------------------------------------------------------------------
    \2\ Prepared statement of Senator Grassley appears in the appendix 
on page 31.
---------------------------------------------------------------------------
    I've seen plenty of problems facing our nation, and most 
were resolved through bipartisanship. Bipartisanship is going 
to be really, really necessary if we're ever going to crawl out 
of our deep fiscal hole that we're in right now.
    Every week since becoming Ranking Member, I've tried to 
focus the conversation on America's fiscal problems. We're 
facing public debt that in a few years will surpass record 
levels set in the wake of World War II. But five of our first 
six hearings this Congress have been about climate change. 
We've discussed sea level rise, hurricanes, wildfires, and the 
state of the insurance industry.
    Climate change is always worth discussing and must be 
discussed. It should be on everybody's agenda. But a more 
immediate threat within this Committee's jurisdiction needs to 
be addressed. The United States is barreling towards a fiscal 
crisis. We've been on an unsustainable fiscal path for decades, 
and that's under both Republican and Democrat. Bipartisan 
pandemic spending accelerated our journey to this fiscal cliff 
that we're facing.
    In times of national crisis, the federal government must be 
able to respond with emergency spending. But once the crisis 
subsides, Congress must tighten its belt to put debt and 
deficits on a sustainable, manageable path.
    Unfortunately, the exact opposite approach was taken in the 
past two years. Despite an economy well on its way to recovery, 
the Democrats who controlled the entire government, all three 
branches or all three political branches, chose to go on a 
multi-trillion dollar partisan spending binge.
    Prominent economists from previous Democrat administrations 
sounded a warning alarm. We had Larry Summers and Jason Furman 
being the most prominent, speaking out. They correctly warned 
that the Biden administration partisan spending spree would 
have consequences. Those consequences are now coming to a head.
    Decades-high inflation is proving difficult to stamp out. 
Rapidly rising interest rates are taking a toll on our economy 
most visibly on our financial system. Several banks have found 
themselves flat-footed holding onto older low interest 
government bonds that nobody wants to take in. The Fed finds 
itself behind the eight ball. Further rate hikes are probably 
necessary to tame inflation.
    But doing so will put more stress on our financial system 
and the broader economy, and yet President Biden and too many 
in Congress refuse to acknowledge what everyone knows to be 
true, that our debt and deficits are unsustainable, at 
unsustainable levels. We can no longer kick the can down the 
road.
    President Biden, I want to tell you for the good of the 
country, you must show presidential leadership. No more playing 
politics. A good first step would be to engage Speaker McCarthy 
in bipartisan talks to raise the debt limit and lay the 
groundwork for fiscal discipline moving forward.
    This Committee should also be engaged. Let's have a serious 
and frank discussion about our dire fiscal situation. Let's 
hold bipartisan hearings with respected economists and policy 
experts from both sides of the aisle. Let's examine our 
finances and find solutions.
    So let me be clear. I support an all of the above approach 
to energy production. The majority of Iowa's energy comes from 
wind. I've been credited with creating the wind energy tax 
credit. We get 60 percent of our electricity today from wind, 
and in three or four years that will be 80 percent. I support 
renewable technologies becoming more and more competitive.
    I hope 30 years ago when I got the wind energy tax credit 
passed, I was 10 or 15 years ahead of any discussion of climate 
change at that time. So I don't think I have to take a back 
seat to anybody doing what we can to fight global warming.
    Now we have oil and gas clearly dominant in the United 
States energy sector. The reality is that fossil fuels account 
for 79 percent of U.S. energy consumption. It's naive to think 
that an energy transition will happen even in ten years, or 
that markets won't be able to keep up.
    Environmentalists blocking the permitting of new energy and 
mining projects will cause further delay. And for the United 
States to change to renewables is entirely proper. But when you 
think about how the third world nations are dependent upon 
cheap energy, and if we want to help them get out of the 
poverty hole that they're in, we're doing an injustice to them 
if we believe in them. Besides, we seem to be backing up the 
use of child labor in the Congo, when we get lithium out of the 
Congo for our batteries for our cars.
    So we need diversity to maintain energy security, and 
energy security is of course national security. Even President 
Biden understands that we're going to need fossil fuels well 
into the foreseeable future. So Mr. Chairman, you've made your 
message on climate change loud and clear.
    But let's also focus on the immediate threats that are 
squarely within this Committee's jurisdiction. I thank you very 
much for listening to me.
    Chairman Whitehouse. Well, I always listen to you, and I 
would simply say that my idea of a good first step would be for 
the Speaker to lay out what his actual plan is, and maybe even 
try a vote on it. My experience is that in a democracy, secrets 
from the public are usually a bad idea, and if it's a bunch of 
bad ideas that are the secret, then that makes it a worse idea. 
So let's see what Speaker McCarthy's plan is with specifics, 
and we'll get going.
    Our witnesses today are Claudio Galimberti, the Senior Vice 
President and North American Research Director of Rystad 
Energy, a leading energy consultancy, where he oversees their 
analysis of global oil demand. He has worked in the energy 
industry for over 20 years. We thank him for his testimony.
    Next, we will have Dr. Gregor Semieniuk, who is an 
assistant research professor at the Political Economy Research 
Institute and the Department of Economics at the University of 
Massachusetts-Amherst. He is an expert on the economic risks 
posed by stranded assets, and has consulted for the United 
Nations Environment Program, the European Commission, and the 
UK government. We look forward to his testimony.
    Daniel Raimi is a fellow and the director of the Equity in 
the Energy Transition Initiative at Resources for the Future, 
as well as a lecturer at the Gerald R. Ford School of Public 
Policy at the University of Michigan. His work covers a wide 
range of energy policy issues, with a particular focus on tools 
that can enable an equitable energy transition for communities 
dependent on the fossil fuel economy. We're glad to have your 
testimony also sir.
    Next is Dr. Benjamin Zycher, a senior fellow at the 
American Enterprise Institute. He was formerly a senior fellow 
at the Pacific Research Institute and the Manhattan Institute, 
an adjunct scholar at the Cato Institute, a senior economist at 
the Rand Corporation and a senior staff economist on the 
Council of Economic Advisors.
    Finally, we have Lucian Pugliaresi, the president of the 
Energy Policy Research Foundation. He previously served at the 
National Security Council under President Reagan, and in roles 
at the Departments of State, Energy, Interior, and EPA. We 
welcome him back to the Senate.
    The last time I think he was testifying in the Senate, it 
was at the Environment and Public Works Committee, where he 
came to testify in opposition to renewable fuel standard 
requirements for ethanol in gasoline, to say that the mandate 
was wrong, that it was anti-consumer, that it raised prices for 
consumers, presumably as a result of raising corn prices. With 
that, let me turn it over to Mr. Galimberti please.

  STATEMENT OF CLAUDIO GALIMBERTI, SENIOR VICE PRESIDENT AND 
       NORTH AMERICA RESEARCH DIRECTOR, RYSTAD ENERGY \3\

    Mr. Galimberti. Thank you, Chairman Whitehouse, Ranking 
Member Grassley and all the Committee Members for the kind 
invitation to be here today. My name is Claudio Galimberti, and 
I'm here representing Rystad, a global energy analysis and 
consulting firm.
---------------------------------------------------------------------------
    \3\ Prepared statement of Mr. Galimberti appears in the appendix on 
page 33.
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    The global energy industry is at a turning point. A 
transition is sweeping across many of its sectors. In some 
areas like electric vehicles, solar PV, wind battery, the pace 
of change has been gaining momentum. In others, commercially 
competitive alternatives to oil and gas are yet to emerge.
    The net effect is that we don't know yet how fast and deep 
the process of energy transition will be. But one thing we know 
for sure: the change already underway is relentless, and it is 
not going to be business as usual. Fifteen years ago, the Shale 
revolution led to a resurgence in American oil and gas 
production, helping play a crucial role in satisfying domestic 
and global demand for hydrocarbon.
    This has kept supplies steady and as a result, prices in 
check through geopolitical upheavals such as the Arab Spring. 
In 2022, Russia's invasion of Ukraine has been perhaps the most 
powerful illustration of how oil and gas supply routes can be 
disrupted within a matter of days. Again, U.S. oil and gas has 
been essential at keeping the market balanced and prices in 
check.
    In a similar fashion when oil began to--when oil began to 
displace coal as the main source of energy in the 20th century, 
technological breakthrough has been slowly but surely 
integrated in renewables and non-fossil fuel sources into the 
U.S. and global energy systems.
    Just as coal was displaced by oil and gas, renewables and 
emerging clean technologies are positioned to take much of the 
pressure away from fossil fuel in the coming years and decades. 
The energy transition is once in a generation opportunity for 
the U.S. With strategic moves such as the Inflation Reduction 
Act, with targeted incentive to accelerate the formation of 
clean tech industries such as hydrogen and CCUS, the U.S. can 
cement its position as an energy superpower.
    Yet oil and gas demand is not going away in the short and 
medium-term. The capital stock associated with energy 
consumption takes time to be replaced, while emerging nations 
aim to grow their per capita energy consumption on the back of 
their urbanization and industrialization.
    The U.S. is currently the largest oil and gas producer 
worldwide, meeting 16 percent of world oil supply and 20 
percent of natural gas. It is one of the cleanest and cheapest 
suppliers, because U.S. production is in the bottom quarter of 
upstream carbon intensity globally, and in the bottom half in 
terms of breakeven costs.
    Hence, if we were to divest too quickly from oil and gas, 
the price of both will increase. Rystad Energy has developed 
three scenarios, energy transition scenarios using our 
proprietary modeling. A fast transition, which we call minus 
sigma, compatible to the 1.6 degree increase in temperature 
according to the IPPC, a slow transition called Plus Sigma, 
compatible with 2.2 and the middle of the ground, meaning 1.9 
degree. Any of these scenarios is still achievable. The fast 
deployment of renewables and EVs in the past five years may 
lead us to think we are on the fast transition.
    Yet extrapolation of trends might fail to grasp supply 
chain constraint, the need for regulatory tightening to achieve 
those targets, and the likely higher costs associated with that 
transition. Also, China's current stranglehold on some 
renewable supply chain nodes could be a risk factor if a 
dramatic reduction in global trade were to occur.
    By the same token, the current lack of competitive 
alternatives to oil in key demand sectors such as 
petrochemical, heavy duty road transportation, aviation, may 
lead us to think that oil is in a slow transition, while 
technological breakthrough could quickly upend these 
assumptions.
    Currently, we think that the mean scenario is perhaps the 
one with the higher chances of coming to fruition for oil. In 
that case, U.S. shale will remain a key energy source for the 
next 10 to 15 years, maintaining today's level of crude 
production and increasing natural gas.
    In a slow transition, shale production would need to 
increase quite dramatically to match global demand. Yet if a 
fast transition comes about, then shale production will need to 
decrease rapidly in response to very low oil prices.
    In conclusion, Committee, the transition is highly 
uncertain and the outcome for oil and gas can be dramatically 
different past 2030, depending on the pace of technological 
development and uptake. Thus, now is the time for the U.S. to 
take a pragmatic approach for energy policy, which leverages on 
the flexibility of shale oil and gas while championing 
renewables. By doing so, the U.S. can maintain its place as the 
leader of the energy world.
    Chairman Whitehouse. Thank you very much. Next is Dr. 
Semieniuk.

     STATEMENT OF DR. GREGOR SEMIENIUK, ASSISTANT RESEARCH 
PROFESSOR, POLITICAL ECONOMY RESEARCH INSTITUTE AND DEPARTMENT 
     OF ECONOMICS, UNIVERSITY OF MASSACHUSETTS, AMHERST \4\

    Dr. Semieniuk. Chairman Whitehouse, Ranking Member Grassley 
and Members of the Senate Budget Committee. Thank you for 
inviting me to testify. It is an honor to do so. My name is 
Gregor Semieniuk. I am an assistant research professor of 
Economics at the University of Massachusetts-Amherst.
---------------------------------------------------------------------------
    \4\ Prepared statement of Dr. Semieniuk appears in the appendix on 
page 112.
---------------------------------------------------------------------------
    I research the economic drivers and consequences of 
structural change in the energy transition. Recent publications 
of my team in Nature Energy and Nature Climate Change analyze 
the macroeconomic and financial risks of global oil and gas 
asset stranding, due to uncertainty about the pace at which 
energy demand is shifting to low carbon alternatives.
    The U.S. economy is a major oil and gas producer and 
therefore exposed to these risks. A key problem is that final 
investment decisions today have to be made for projects that 
require returns years into the future. Financial investors must 
make decisions today about how to value companies based on 
their ability to deliver shareholder distributions years into 
the future.
    The energy transition creates major uncertainty about 
future fossil fuel demand. Here, I focus on reasons for 
downside risk. That is, demand for fossil fuels that turns out 
to be lower than what was expected at the time of investment. 
That can lead to the stranding of the invested assets.
    There are three key reasons for such downside risks to 
materialize, and that depends on the actions of the whole 
world, not just those of the United States. First, importers of 
oil and gas have always had the energy security incentive to 
wean themselves off the imports of fossil fuels.
    Thanks to the fast decline in costs of low carbon 
alternatives, there is now also an economic incentive to do so. 
Cost declines and deployment of renewables continue to outpace 
even bullish projections. Since Russia's invasion of Ukraine, 
transition efforts in importing countries have only 
intensified, with global record investments into renewables in 
2022.
    Thanks to the robust negative correlation between 
cumulative investment and the price of various renewable 
technologies, which is called ``wright's law,'' these efforts 
will lead to even stronger incentives for a fast transition in 
a self-reinforcing cycle. That is advantageous for fossil fuel 
importers, but it creates stranded asset risks for exporters.
    The second reason is the United States does not produce the 
lowest cost product in the world. If other lower cost producers 
expect fossil fuel demand to decline, they are incentivized to 
attempt to capture as much of the remaining market as they can. 
They would do this by flooding the market to lower prices.
    We find that this is the dominant strategy for low-cost 
producers to play, which leaves a diminished market for U.S. 
producers to export to. We calculate that these two causes of 
downside risk combined could lead to revenue losses in the U.S. 
fossil fuel sector of $1.6 trillion in about 15 years. That in 
turn would spur a GDP loss of $1.8 trillion over 15 years. Both 
figures are discounted to present values.
    These losses do not account for medium term lower 
competitiveness in low carbon sectors if the U.S. economy 
remains specialized in fossil fuel compatible technologies 
longer than its competitors.
    Third, U.S. investors are globally active, thereby exposed 
to stranded fossil fuel assets not just in the United States. 
We calculate that 400 billion U.S. dollars in potentially 
stranded assets are currently sitting on U.S. balance sheets, a 
third more than the value of U.S.-based production assets, and 
30 percent of the global total. In light of the 
interconnectedness of financial markets and herd behavior, such 
financial risks could have systemic implications.
    The current undersupply of fossil fuels may suggest that 
stranded assets are really just an illusion. But it is 
precisely the uncertainty about future demand for their 
products that makes oil and gas companies more reluctant to 
proceed with new projects today. Capitalist economies are 
unrivaled in their ability to supply an expanding market.
    The same cannot be said of a declining one.
    Energy security in the short and long run must consider a 
robust diversification away from relying mainly on fossil 
fuels, whose prices will only become more volatile in a 
declining global market. Thank you very much.
    Chairman Whitehouse. Thank you very much, Doctor.
    Our next witness is Mr. Raimi from RFF. Please proceed.

 STATEMENT OF DANIEL RAIMI, FELLOW AND DIRECTOR, EQUITY IN THE 
   ENERGY TRANSITION INITIATIVE, RESOURCES FOR THE FUTURE \5\

    Mr. Raimi. Senator Whitehouse, Senator Grassley, 
distinguished Members of the Committee, thank you for the 
opportunity to provide testimony today. My name is Daniel 
Raimi. I am a fellow at Resources for the Future, and I direct 
our Equity in the Energy Transition Initiative.
---------------------------------------------------------------------------
    \5\ Prepared statement of Mr. Raimi appears in the appendix on page 
124.
---------------------------------------------------------------------------
    RFF is an independent, non-profit research institution. Our 
mission is to improve environmental, energy and natural 
resource decisions through impartial economic analysis and 
policy engagement. The views expressed here are my own, and may 
differ from those of other RFF experts, its officers or its 
directors. RFF does not take positions on specific legislative 
proposals.
    As you've heard, the outlook for U.S. oil and gas 
production is uncertain, but there are hundreds of communities 
around the United States that depend on the production of oil 
and gas for jobs and tax revenue. One crucial issue for these 
communities and indeed the entire nation is the volume of 
government revenue collected from fossil fuels, particularly 
oil and natural gas.
    I'd like to state that although I will be describing the 
risks of government revenue losses from reducing our reliance 
on fossil fuel, I do not view these risks as justification for 
delay or inaction on climate change mitigation.
    On average, from 2015 through 2019, the production and use 
of fossil fuels generated $138 billion per year in revenue for 
local, state, tribal, and federal governments. The largest 
source is the gasoline tax, totaling $49 billion per year for 
states, and $40 billion for the federal government.
    These revenues fund transportation infrastructure and they 
are declining. As fuel economy improves and electric vehicles 
become more common, they will decline further. By 2050, we 
estimate that these revenues will fall by $26 billion per year 
under a business-as-usual scenario, and by 60 billion per year 
under a scenario that limits global warming to two degrees 
Celsius by 2100.
    One option to replace these declining revenues is a tax on 
vehicle miles traveled. This approach would more fairly 
distribute the cost of maintaining our transportation 
infrastructure. More than a dozen states and the federal 
government are currently experimenting with pilot programs that 
tax drivers based on miles driven. In addition, this tax could 
be adjusted to reflect the weight of each vehicle, so that 
drivers pay for the wear and tear that they impose on the 
roads.
    The second largest revenue source is from oil and gas 
production, which generates bonus payments and royalties for 
the federal government, states, and tribes, severance taxes for 
states, property taxes for local governments, and several other 
smaller revenue streams.
    We estimate that these revenues total $34 billion per year, 
with $7 billion for the federal government and $27 billion per 
year for state and local governments. We estimate that by 2050, 
these revenues will be $6 billion higher under a business-as-
usual scenario, and $8 billion lower under a two-degree 
scenario. Under a 1.5-degree scenario, oil and gas revenues 
would be $23 billion lower by 2050 for states and the federal 
government.
    Some local governments, states and native nations are 
highly dependent on coal oil and natural gas to support 
essential services. In Wyoming for example, fossil fuels 
provide more than $7,000 per person in local and state revenue. 
They represent more than half of all state and local revenue in 
Wyoming. In North Dakota, Alaska, and New Mexico, fossil fuels 
account for more than 15 percent of state and local revenue.
    Native Nations, such as the Navajo, Southern Ute, and MHA 
Nation are also heavily dependent on fossil fuels to support 
essential services. Even in states like California, which does 
not rely on fossil fuels for a large share of its revenue, 
local communities such as those in Kern County depend heavily 
on oil production to fund local services and education.
    Transition to a net zero emissions economy will have major 
implications for these communities and governments at every 
level. For governments that rely on fossil fuels, investing in 
economic diversification to develop new sources of revenue will 
be critical.
    Another important step would be investing more of today's 
fossil fuel revenues, which in some places are at all-time 
highs, in permanent funds that provide revenue regardless of 
what happens to future oil and gas production. For the federal 
government, the most economically efficient approach to 
addressing climate change and raising revenue would be through 
pricing carbon.
    But even without a carbon price, the federal government can 
play an important role in supporting local communities that 
rely heavily on fossil fuels. The federal interagency working 
group on energy communities is starting to play this role, 
focused on coal communities. Although the challenges faced by 
coal communities are large and deserve attention, the oil and 
natural gas industry is a far larger employer and revenue 
generator, and a downturn in oil and gas demand will have 
larger impacts on government budgets.
    We've learned from the coal experience that if we want 
energy communities to thrive, policy intervention needs to 
occur well in advance of industry decline. In short, the time 
to design smart revenue policies and invest in these 
communities is now. Thank you again for the opportunity to 
speak.
    Chairman Whitehouse. Thank you very much sir, and now we 
turn to Dr. Zycher.

   STATEMENT OF DR. BENJAMIN ZYCHER, SENIOR FELLOW, AMERICAN 
                    ENTERPRISE INSTITUTE \6\

    Dr. Zycher. Thank you, Chairman Whitehouse and Ranking 
Member Grassley. A large shift away from fossil fuels is 
virtually certain not to occur, because fossil fuels 
overwhelmingly are the most efficient forms of energy now and 
prospectively. Unconventional energy technologies are far more 
costly and less reliable. It is only massive subsidies and 
other policy subventions that allow them to attract investment.
---------------------------------------------------------------------------
    \6\ Prepared statement of Dr. Zycher appears in the appendix on 
page 139.
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    Any such shift resulting from market forces would take 
place over many years or decades as part of the long-term 
process of capital depreciation and investments. There will be 
no market-driven stranding.
    Shifts in the values of capital assets are a constant 
feature of a market economy, in particular resulting from 
technological advances. There is no principle consistent with 
support for a market economy that would imply a role for 
government in response to such shifts.
    Nor will government policies engender a massive stranding 
of fossil capital assets. With perhaps one minor exception, 
Congress has never enacted a statute mandating direct 
reductions in greenhouse gas emissions, because that would 
require sharp declines in the consumption of fossil fuels, that 
is, a substantial increase in energy costs. That would not be 
consistent with the political interests of elected public 
officials.
    IPIC argues that achievement of purported 1.5-degree safe 
limit on global temperature increases would require explicit or 
implicit taxes on fossil fuels equivalent to more than $35 per 
gallon of gasoline by 2030 in constant year 2022 dollars and 
rising sharply thereafter. No Congress will enact such policies 
or any others even remotely approximating them.
    Nor will international policies create a stranding. The 
Paris Agreement, apart from the reality that the national 
determined contributions are meaningless, necessarily contains 
no enforcement mechanism nor could it. The only remaining 
possibility is a massive regulatory stranding of fossil assets. 
It would not survive judicial review under the major questions 
doctrine.
    The energy transition usually is justified on grounds of an 
asserted climate crisis, in support of which there exists no 
evidence, none, in terms of a comprehensive list of climate 
phenomena. Instead, the crisis narrative derives entirely from 
climate models that overstate the mid-tropospheric temperature 
record by factors of about 2.5 on average.
    The models are fine-tuned so as to deny the importance of 
natural influences on climate phenomena, but that is 
inconsistent with a large body of evidence, in particular the 
sharp warming observed between 1910 and 1945.
    Almost all of the adverse IPIC predictions are based upon 
scenarios that IPIC itself describes as low probability, and 
IPIC itself is deeply dubious about the various catastrophes 
often asserted as looming large. NASA reports significant 
planetary greening due to increasing atmospheric concentrations 
of carbon dioxide, and data from the United Nations show that 
global per capita food production has increased sharply since 
the 1960s.
    Cold kills far more people than heat. Just as anthropogenic 
warming might create adverse effects, it also yields beneficial 
impacts which are incontrovertible, and the two must be weighed 
against each other. Government policies to reduce greenhouse 
gas emissions would have future climate effects either 
attributable or indistinguishable from zero, as predicted by 
the EPA climate model under assumptions that exaggerate the 
prospective effects of such policies.
    The Biden administration net zero policy, just to pick an 
example, would reduce global temperatures in 2100 by about 17/
100ths of one degree. That would be barely detectable. Such 
policies cannot survive any plausible benefit cost test. That 
is why the Biden administration has substituted calculations of 
the social costs of carbon, a fatally flawed analytical 
framework.
    Let me conclude with an admonition. The title of this 
hearing contains the phrase ``in a low carbon world,'' a 
blatant attempt to assume the answers to the underlying 
questions. It is therefore deeply misleading. This Committee, I 
think, would be wise to reorient its focus and assumptions, and 
to begin anew. Thank you very much.
    Chairman Whitehouse. And our next witness is Mr. 
Pugliaresi. Please proceed for five minutes.

           STATEMENT OF LUCIAN PUGLIARESI, PRESIDENT,
             ENERGY POLICY RESEARCH FOUNDATION \7\

    Mr. Pugliaresi. Thank you, Chairman Whitehouse,
---------------------------------------------------------------------------
    \7\ Prepared statement of Mr. Pugliaresi appears in the appendix on 
page 183.
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    Ranking Member Grassley, Members of the Budget Committee.
    Thank you for this opportunity to explore some of the 
issues regarding stranded assets and energy transition. Let's 
go to the first slide, please.
    So you know, one of the issue is that the world still runs 
on fossil fuels, and in fact, all the efforts we've made to 
date on alternative fuels and more advanced kinds of fuels have 
been additive to the world's energy supply. Renewable fuels 
have not substituted for fossil fuels but have been added to 
our energy supply.
    This is data through 2019. You'll see there's a slight 
flattening off in coal, but I'm sure when we see the '21-2022 
data, we're going to see coal is up, resulting in the large 
requirements for new gas supplies and in Europe causing greater 
use of coal in Asia, as gas supplies have been diverted to 
Europe.
    Next slide, please. It's very important to understand that 
the North American production platform is an instrument of 
national power and wealth creation and energy security for not 
only all of North America but for the United States. In fact, 
if you look at this data on this slide, between 2010 and 2020, 
the United States alone provided over 80 percent of the 
increment in world demand for oil. It was that increment of 
production out of the United States that helped to moderate 
gasoline prices.
    Next slide, please. There's a lot of discussion about 
stranded assets, and we can see here from the various index 
funds that since 2022, investors have been flooding into 
traditional fossil fuel companies, particularly oil and gas.
    In addition, if we look at the long bond market for 
investment grade equities, there is no evidence at all that 
investors, perhaps our most conservative investors, view oil 
and gas as a risky investment, and some of these bond durations 
go up to 16 years.
    Next slide. There was some discussion about this issue 
already, but I do think that these policies that much of the 
administration's been talking about to halt oil and gas 
development before we have cost-effective substitutes are both 
risky and problematical.
    Actually, this is a fundamental risk towards stranded 
assets, but it's from government behavior. Here you can see 
that some of the high bids in 2018 on federal lands in New 
Mexico generated a billion dollars. Nearly $500 million of that 
was returned to the state of New Mexico for use in schools, 
health care, roads. Somebody is going to have to talk to the 
officials in New Mexico and let them know that under the 
administration's proposals, none of these funds will be 
available.
    Next slide. Okay. Let's talk a little bit about some of the 
modeling. Next slide. Now you can see here the zero, the zero 
net assumptions under the International Energy Agency shows 
that between now and 2050 we must remove as much energy from 
the world system as the entire OECD produces today.
    This is an enormous task, and keep in mind four pillars of 
modern civilization: steel, cement, fertilizers, and plastics, 
have no cost-effective substitute today. These emerging 
economies throughout the world, particularly in Asia, are 
planning to grow. Their populations are going to expand, and 
their economies are going to expand and they're going to need 
vast quantities of energy.
    Next slide. Now one of the--one of the assumptions we're 
often told, or conclusions made is that if we would switch out 
of fossil fuels into renewable fuels, we would insulate 
ourselves from energy security. But as you can see here, it is 
not a given. These renewable fuels require the importation and 
the production of vast quantities of critical materials, and 
these are rising in supply now. They face a broad number of 
energy supply problems.
    Next slide. In addition, right now, if you look on this 
slide here you can see that the U.S. dominates the world 
production of oil and gas. It does not dominate the world 
production of critical materials needed for the transition, and 
these materials, particularly the processing of them, are 
entirely dominated by China.
    Next slide. This is my final slide. Even if the entire OECD 
were to go to net zero by 2050, in the absence of the rest of 
the world engaging in some dramatic and draconian effort to 
reduce its use of energy, total carbon emissions in 2050 would 
only be about ten percent less than they would be in a 
business-as-usual scenario. Thank you, Mr. Chairman.
    Chairman Whitehouse. Thank you, Mr. Pugliaresi. Let me 
start with Mr. Galimberti. For starters, tell me what kind of 
entities rely on Rystad's expert judgments? Who are--what's 
your customer base look like?
    Mr. Galimberti. Thank you for your question, Mr. 
Whitehouse. It's governments, it's all the energy sector. So 
for starting with the oil producer, of course, renewables 
producer. So it's the entire supply chain of energy.
    Chairman Whitehouse. And it's your view that we are at a 
point that you describe as epochal change. Epochal is a very 
strong word to use. Could you describe why you use such a word?
    Mr. Galimberti. We think we are. We think that the evidence 
that it's been accumulating on the investment in renewables, 
investment in batteries, in electric vehicles. Let's take the 
electric vehicle. For the past 100 years, transportation, which 
is half of all demand, has been dominated by an internal 
combustion engine.
    Chairman Whitehouse. So you see this as a really major 
shift, equivalent to gasoline engines replacing horse-drawn?
    Mr. Galimberti. It is possible. It is possible, Senator. 
There are some caveats that are very important for us to 
consider. The first is that so far----
    Chairman Whitehouse. Let me come back to the caveats 
because I just have five minutes, and you can always follow on 
if you don't--if I don't get back to you, because the next part 
of this was Doctor--and by the way, you say the peak could 
happen in 2025, right, just a few years ahead?
    Mr. Galimberti. In the 1.6-degree scenario, yes.
    Chairman Whitehouse. Yes. When that happens, Dr. Semieniuk, 
you talk about the systemic implications of stranded asset 
risk. We've heard the word ``systemic'' repeatedly defined in 
this Committee. It's a mild-mannered sounding word, but it 
means big things, does it not?
    Dr. Semieniuk. Yes indeed, thank you. Financial regulators 
like to think about the risk around the climate change 
transition as physical and transition risks, and transition 
risks are associated with moving away from a fossil fuel-based 
economy in order to mitigate climate change.
    These risks have drivers in government policy and 
technological change that is unanticipated by market 
participants, and there are various transmission channels, and 
one of these channels could be a decline in the asset values in 
the fossil energy sector.
    Chairman Whitehouse. So systemic implies that something 
very big and dangerous might happen?
    Dr. Semieniuk. Well yes. As we all know, the financial 
system is interconnected. A few weeks ago, we saw with Silicon 
Valley Bank that, you know, activities by the Federal Reserve 
have far-reaching implications elsewhere in the system that 
were unforeseen.
    And so the thing with systemic implications is that, you 
know, if we knew them we could hedge against them. That would 
be priced in the market. But so, there is a risk of mispricing 
and it is hard to predict how that could play out.
    Chairman Whitehouse. Let's look at one way it could play 
out, Mr. Galimberti has suggested that 2025 could be peak. On 
the other side of peak, is it likely that participants in the 
oil market will change their behavior as they see a declining 
sales outlook?
    Dr. Semieniuk. Yeah, certainly so. As I----
    Chairman Whitehouse. So it would be prudent--it would be 
prudent to consider that as a distinct possibility.
    Dr. Semieniuk. Oh yeah, definitely.
    Chairman Whitehouse. And the scenario could be that, for 
instance, instead of honoring cartel pricing, Saudi Arabia 
begins to sell at cost plus, and under price American and other 
products; correct?
    Dr. Semieniuk. That could be, conditional on the market 
actually declining, so that there isn't a strain on suppliers 
to actually meet demand, exactly.
    Chairman Whitehouse. Yeah, and if they do that and the U.S. 
products are priced out of the market, that can be--the effect 
in the United States could be much more abrupt than the global 
effect on the fossil fuel market?
    Dr. Semieniuk. To the extent that U.S. producers are not 
able to compete with these prices and that there is a global 
market for the product that is being sold, yes.
    Chairman Whitehouse. And this is not entirely in our 
control, because actors overseas, the EU and Asia reducing 
their fossil fuel dependence could provoke that decline, and 
then we'd have to live with it even if we were still buying 
just as much fossil fuel as ever.
    Dr. Semieniuk. Indeed. There are strong economic and energy 
security incentives for a large part of the global economy to 
try and reduce fossil fuel imports, which are not only more 
costly to use at some point today in some applications but 
also, you know of course, hurt the current account balance that 
drains foreign currency that could be spent on other things.
    Chairman Whitehouse. And just a last question to Mr. Raimi. 
We've heard testimony that the U.S. is particularly vulnerable 
in the event of this market shift. Your testimony shows that 
within the U.S. there are certain states that are particularly 
vulnerable.
    Could you give a brief description of what the economic 
dangers are within those states, if that vulnerability should 
come to fruition.
    Mr. Raimi. Yes Senator, they are substantial. Some of the 
states I mentioned in my testimony, such as Wyoming and North 
Dakota, Alaska, parts of Texas, parts of other states rely 
heavily on oil and gas extraction to fund public services.
    If there is a sharp downturn in demand for oil and gas, or 
prices of oil and gas, then these communities could face 
revenue shortfalls, which could lead local and state 
governments to reduce public services and/or raise taxes.
    That could encourage people to leave the area and leave the 
state, which would reinforce the negative cycle. So it's a 
substantial issue.
    Chairman Whitehouse. Thanks. Thanks for letting me go on a 
bit longer. Ranking Member, I turn to you, Senator Grassley.
    Senator Grassley. You know, quite regularly we Are preached 
at by corporate elitists that think that we ought to be carbon-
neutral by some arbitrary dates, and then we see the hypocrisy 
of how they fly around the world in their private jets, Dr. 
Zycher and then they say they could pay for it, because they 
have the wealth to buy carbon credits.
    And then they talk about how they want to save the planet 
and help the working class of America by paying lip service to 
environmental justice. But no one ever addresses just how 
harmful their decarbonization dreams would be in practice. So 
to you, what impact would federally imposed divestment from 
fossil fuels have on the U.S. economy?
    Dr. Zycher. Well, we have several estimates in the 
literature on the cost of achieving net zero emissions in the 
U.S. and internationally. There is my estimate from a few years 
ago, the cost of the Green New Deal, which is just one 
variation of a net zero policy, for the electricity sector 
alone my estimate was about $500 billion per year permanently, 
or about $4,000 per U.S. household.
    The American Action Forum, Doug Holtz-Eakin, wrote a study. 
He used to be the head of the Congressional Budget Office. He 
used a somewhat different methodology and came up with numbers 
roughly equal to mine, about $500 billion per year.
    Senator Grassley. Let me take you from those two figures 
you just gave us, and tell us the impact that would have on 
poor and working-class American families?
    Dr. Zycher. Well, if you look--if you look at the data on--
from the Energy Integration Administration about the cost of 
electricity from renewable sources, wind and solar power versus 
conventional energy, what you'll see is the cost of wind plus 
gas turbine backup, which you need to avoid blackouts, is about 
four times higher than the cost of natural gas generation.
    And then to answer your question, the question then becomes 
what does that do to household budgets? If you look at the 
Bureau of Labor Statistics reports on the percentage of 
household budgets spent on electric power by income quintile, 
you'll see that for the lowest income quintile it is nine 
percent. For the next quintile it's I think around six percent, 
and it's a slow--it's a declining percentage of household 
budget as you move up the income ladder.
    So there's no question that these policies are really 
highly regressive, unless they are funded by taxpayers through 
the tax system, in which case we should double the cost amounts 
at a minimum, because of the excess burden or deadweight loss, 
if you want to call it that, of the tax system.
    Turner and Lassman did a study of the energy, of net zero 
emissions not only for the electricity sector but for the whole 
economy, electric vehicles, building refits, etcetera, and 
their estimate is $50,000 a year per household permanently 
every year.
    This is not cheap, and anyone who claims that an energy 
transition will occur naturally because of a cost advantage on 
the part of unconventional energy is, I think, being deeply, 
deeply unrealistic.
    Senator Grassley. Okay. Let me go to Mr. Pugliaresi. We all 
know you have a broad background in various departments of the 
government on this whole issue. So do you expect the world to 
forego energy security in an effort to reduce greenhouse gases, 
and will fossil fuel demand collapse and are you concerned 
about fossil fuel assets being stranded?
    Mr. Pugliaresi. So absolutely not, Senator Grassley. We've 
had a long-term project with the Institute of Energy Economics 
in Japan, traveled all through South Asia. What you--when you 
meet the local political leaders and energy planners in those 
countries, they tell you they'd like to buy gas if it were 
cheaper, but if they can't get it, they're going to get coal.
    So our--it's so misguided. We can put a lot of gas into the 
water, we could produce a lot more natural gas in this country, 
and even at the upcoming G-7 meetings you're going to see some 
disagreement on the role of gas.
    Unfortunately, I think our--the current administration is 
sort of opposed to making a strong statement and to promote the 
use of gas for energy security and cost effectiveness.
    Senator Grassley. Thank you.
    Chairman Whitehouse. Senator Johnson.

                  STATEMENT OF SENATOR JOHNSON

    Senator Johnson. Thank you, Mr. Chairman. I just want to 
ask, do any of the witnesses, do you have a cost estimate of 
what we've already spent trying to combat climate change? Mr. 
Pugliaresi.
    Mr. Pugliaresi. Yeah. So we know that for the world, the 
last 20 years Bloomberg has done an estimate that we've spent 
about, in direct subsidies and not mandates, not feed-in 
tariffs, but just money from governments, $5 trillion. And for 
solar, wind, and what we call modern biofuels, and the estimate 
is that is generating about five percent of total primary.
    Senator Johnson. So $5 trillion. We keep hearing that the 
world's going to end in 12 years if we don't do something now. 
Well, we've already spent $5 billion. Mr. Semieniuk, you raised 
your hand here.
    Dr. Semieniuk. Yeah, thank you Senator. Just to add to 
this, the world also spent over $1 trillion in subsidies for 
the fossil fuel sector in 2022. So it's a question both of 
gross spending and net spending and also what that leads to in 
the future.
    Senator Johnson. But again, my point is if we've already 
spent $5 trillion, I mean you're here and we've held now, this 
is our fifth or sixth hearing, again trying to create an alarm 
over climate change is going to create this calamity.
    I mean Mr. Semieniuk, you're talking about stranded assets 
that could cost us $400 billion. We've already spent $5 
trillion and haven't even moved the mark because the rest of 
the world is going to continue to do fossil fuels. Mr. Zycher.
    Dr. Zycher. Yeah. One point I'd like to make in response to 
Professor Semieniuk's comments; most of the global subsidies 
for fossil fuel are consumption subsidies in Third World 
countries designed to maintain social peace. What that tells us 
is that an effort to make fossil fuels even more expensive will 
be resisted heavily by most governments around the world, 
precisely for the same reason that they subsidize the 
consumption of fossil fuels now so heavily.
    Senator Johnson. Again, if we're talking though about if 
it's climate change and what climate change is going to produce 
in terms of economic calamity, you know, higher insurance 
costs, you know, I mean stranded assets.
    The costs that I've listened to in these five hearings 
pale, I mean pale in comparison to what we've already I would 
say wasted, $5 trillion trying to hold back the tides, which we 
cannot do.
    I mean the most recent example, Goldman Sachs. This was 
just in the Wall Street Journal, did their own study in terms 
of the costs of the green energy subsidies in the Inflation 
Reduction Act.
    Now we were told before we voted on that it was going to 
cost about $391 billion, very similar to the cost, you know, 
the calamitous cost of stranded assets. Well, we just spent 
$391 billion that we don't have, mortgaging our kids' future. 
But Goldman Sachs says no, it's not $391 billion. It's $1.2 
trillion.
    So again, to me this calamity is all self-inflicted, and 
all you have to do is just take a look at the total dollars 
we're spending, having apparently no impact because everybody 
keeps predicting things that the world's going to end in 12 
years, and by the way, all the predictions that have been 
ongoing for the last few decades haven't resulted in those 
calamities. They're not true. They've been proven false. But 
sir, you raised your hand.
    Mr. Raimi. Thank you, Senator. I would just point you and 
the Committee to recent work from Resources for the Future and 
other institutions that's been published in peer-reviewed 
literature, not white papers from think tanks, that looks at 
the social cost of carbon and finds that, you know, every year 
in the United States we are essentially doing $900 billion 
worth of damage to society through our CO2 
emissions.
    Senator Johnson. Yeah listen. I have the greatest respect 
for peer-reviewed literature. Mr. Zycher.
    Dr. Zycher. Yeah. The social cost of carbon estimates both 
from the Obama administration on an interim basis, the interim 
estimates from the Biden administration, the RFF estimates in 
Nature, and the forthcoming Biden administration finalized 
estimates are deeply, deeply, deeply problematic.
    They're based upon the inclusion of co-benefits of 
purported reductions in other pollutants already regulated 
under the Clean Air Act; the inclusion of global benefits, 
which is an improper methodologically procedure; the use of 
discount rates that are artificially low.
    That factor alone, if one uses a discount rate of seven 
percent as outlined in OMB Circular A-4, the social cost of 
carbon and almost any integrated assessment model, it goes to 
almost zero.
    Senator Johnson. So let me ask. Who is doing these studies? 
I mean what kind of government grants are they getting from the 
agencies that want to prove climate change?
    Again, this is a self-perpetuating----
    Dr. Zycher. Well, I don't know. I don't care where the 
funding comes from. It's irrelevant analytically.
    Senator Johnson. They're just flawed studies.
    Dr. Zycher. It's just--well the issue is whether the 
analyses are rigorous intellectually, and the answer is no, 
they're not.
    Senator Johnson. Okay. I've run out of time, but I'm happy 
to let your witnesses respond to that if they can.
    Mr. Raimi. I would just encourage Dr. Zycher to engage with 
the peer-reviewed literature on these topics, that is reviewed 
by the top experts in the field.
    Senator Johnson. All right.
    Dr. Semieniuk. Thank you, and if I can still make two 
points. First, I am glad that stranded assets estimates aren't 
any higher than they are, meaning that a transition is a lot 
cheaper than the possible cost if there isn't a transition from 
physical damages.
    Second, subsidies in the developing world are done to make 
fossil fuels affordable. Luckily, renewable energy is now 
actually cheaper than fossil fuels in many applications and is 
set to become even more cheaper than fossil fuels, which tend 
to become more expensive over time as the cheapest reservoirs 
are depleted.
    Senator Johnson. Then the economy will take care of it. If 
it's cheaper, we'll move investments towards those cheaper 
energy sources.
    Dr. Semieniuk. Unless subsidies distort these markets.
    Senator Johnson. Well thank you, Mr. Chairman.
    Chairman Whitehouse. Thanks, Senator Johnson. Well let's 
talk for a minute about subsidies that might distort these 
markets.
    It seems to me that it's fairly elementary economics that 
the negative externalities of a product ought to be included in 
the price of the product, in order for the proper market 
decisions to be made. I think that's basically Milton Friedman 
Econ 101. Does anybody disagree with that proposition?
    (No response.)
    Chairman Whitehouse. Okay. No evident disagreement.
    So if and let's just go back. The most famous negative 
externality is of course pollution, is it not? Across the 
economic literature.
    Dr. Zycher. Are you including the negative externalities, 
Senator, attendant upon renewable, unconventional energy?
    Chairman Whitehouse. I'm asking the general economic 
question, whether we all agree, which we seem to, that negative 
externalities under basic market theory ought to be included in 
the price of the product so the market can work correctly. If 
that's true, then if there are negative externalities that are 
not baked into the price of the product, it would seem to me 
that that would count as a subsidy.
    In fact, economists regularly refer to those socialized 
negative externalities as subsidies. That's a fairly standard 
proposition in economic literature, isn't it, Mr. Raimi?
    Mr. Raimi. Just minor distinction, you know.
    Typically, I think we would refer to unpriced externalities 
as an indirect subsidy.
    Chairman Whitehouse. Yeah.
    Mr. Raimi. Where it's a tax credit or a grant, it would be 
a direct subsidy.
    Chairman Whitehouse. Yeah, but a subsidy, nonetheless?
    Mr. Raimi. Yes.
    Chairman Whitehouse. And that's widely accepted as the 
appropriate terminology in the economic literature; correct?
    Mr. Raimi. In environmental economics, the field that I 
know, yes.
    Chairman Whitehouse. Yeah. Dr. Semieniuk.
    Dr. Semieniuk. And if I may add, the International Monetary 
Fund, to put this into perspective, estimates about one 
trillion or even less in direct subsidies. In '22 they were 
above one trillion. But these indirect subsidies amount to $5 
trillion. I just want to add that our estimates about economic 
competitiveness do not take into account these indirect 
subsidies, because as you say, they are unpriced.
    Chairman Whitehouse. Yeah. In fact, I was going to raise 
that International Monetary Fund number myself. The most recent 
one that I have seen from the International Monetary Fund for 
indirect subsidy of fossil fuel just in the United States is 
$660 billion every year.
    That is a very, very big subsidy for renewables to have to 
climb uphill against. Is that part of--Dr. Semieniuk, is that 
the U.S. part of the number, the $5 trillion number you're 
referring to?
    Dr. Semieniuk. Yes.
    Chairman Whitehouse. Okay. Thanks very much. Do you want 
to--I'm kind of--okay. Well let me ask--I'd like to ask a 
series of questions of Mr. Zycher, if you'd stand by for a 
moment.
    First of all, you seem to be agreeing that negative 
externalities under economic theory ought to be into price, and 
that when they're not, that's an indirect subsidy of the 
product whose negative externalities are not priced. Is that a 
correct statement?
    Dr. Zycher. Yes, that's correct.
    Chairman Whitehouse. Now reviewing your testimony, I'm a 
little bit, just a little bit confused by it, and I'd like to 
go through some of the propositions. You seem to be saying on 
occasions that the earth just isn't warming, that in 2015----
    Dr. Zycher. That's not what I said at all.
    Chairman Whitehouse. Well, you have an exhibit that says 
there are no significant trends in warming. You then separately 
say that there is in fact a 1.1 degree increase since 1880, and 
that roughly half of it is produced by anthropogenic sources, 
which I presume you mean fossil fuel combustion?
    Dr. Zycher. Well, much of it is fossil fuel combustion, not 
all of it.
    Chairman Whitehouse. You say roughly half.
    Dr. Zycher. Anthropogenic sources are man-made. Natural 
variability is not.
    Chairman Whitehouse. And you think that half of the 1.1 
percent increase that we've seen is anthropogenic.
    Dr. Zycher. The available evidence in literature suggests 
that about half of the 1.1-degree temperature increase since 
1850 is anthropogenic. Yes, that's correct.
    Chairman Whitehouse. And of the anthropogenic, it's 
essentially all carbon combustion?
    Dr. Zycher. Well no. It's not all. It's----
    Chairman Whitehouse. Essentially all.
    Dr. Zycher. Some of it is agriculture. Some of it is cement 
production. It's anthropogenic in the form of the emissions of 
greenhouse gases. It's not all fossil fuels.
    Chairman Whitehouse. Okay, I'll take that, emission of 
greenhouse gases, not just pure CO2 combustion.
    Dr. Zycher. Right, right.
    Chairman Whitehouse. So as recently as 2020, you've said 
there's no consensus among scientists about climate science. Is 
that a proposition you'll stand by here today?
    Dr. Zycher. About climate science?
    Chairman Whitehouse. Yep.
    Dr. Zycher. I don't even understand what--I didn't say 
that.
    Chairman Whitehouse. Actually, you did, and we'll get that 
information to you. But no point quarreling----
    Dr. Zycher. Where in my statement do you see that?
    Chairman Whitehouse. No, this is in 2020. It was in a 
document called ``A Critique of the House Republican Climate 
Policy Proposals.''
    Dr. Zycher. There's no consensus on the equilibrium of 
climate--the sensitivity of the climate system. In other words, 
if you emit another ton of greenhouse gases, what is the effect 
on temperatures after the climate system adjusts fully. There's 
no consensus about that.
    Chairman Whitehouse. So saying that one additional aliquot 
of carbon dioxide can't predict precisely a degree of 
temperature increase.
    Dr. Zycher. No. We do not know. We do not know.
    Chairman Whitehouse. That's a different thing than saying 
that there's no consensus among scientists about climate 
science. Would you concede that you may have overstated the 
proposition?
    Dr. Zycher. I would have to see what I said, Senator.
    Chairman Whitehouse. Okay. Well let's move on then, because 
we don't have that in front of us.
    Dr. Zycher. Fine.
    Chairman Whitehouse. In 2019, when President Trump said 
that global warming is a hoax, you said there is very 
substantial truth in that statement. What did you mean by 
saying that there is very substantial truth in President Trump 
calling this a hoax.
    Dr. Zycher. You know, I would be the first to agree that 
the precise use of language is not among Mr. Trump's political 
habits and mannerisms. What he actually said was a lot of it 
was a hoax. Now the argument that----
    Chairman Whitehouse. Is a lot of it a hoax?
    Dr. Zycher. A lot of it is a hoax. I don't know what ``a 
lot of it'' means.
    Chairman Whitehouse. Well, you're the one who said very 
substantial.
    Dr. Zycher. Pardon?
    Chairman Whitehouse. You're the one who used the words 
``very substantial,'' not a lot.
    Dr. Zycher. Well, the argument that there's a crisis 
looming is a hoax. The argument that a U.S. net zero policy 
will make an appreciable difference is a hoax. There are lots 
of hoaxes in this debate. It does not mean anthropogenic 
warming itself is a hoax. It certainly is not.
    Chairman Whitehouse. You said in 2015 that since the 
implementation of the Kyoto Protocol, the satellite temperature 
record essentially has been flat. Now you say 1.1 degree is 
since 1880 and half of it is greenhouse gas emissions; correct?
    Dr. Zycher. Well, the satellite record begins in 1979, not 
1880 Senator.
    Chairman Whitehouse. You used the term 1880.
    Dr. Zycher. Well, that's the surface temperature record, 
not the satellite record. The satellite record begins in 1979, 
and then the question is how you interpret the changes in mid-
tropospheric temperatures over the last 40 years. That's much 
more difficult. But there certainly has----
    Chairman Whitehouse. It was your intention in 2015 to 
convey the notion that global warming was not happening because 
the satellite temperature record was flat, right? What other 
point would you have been making?
    Dr. Zycher. No. There was a hiatus after the--there was a 
hiatus after the El Nino of 1998.
    Chairman Whitehouse. Gotcha.
    Dr. Zycher. Extending to something like 2014 or something 
like that. I'd have to go back and look.
    Chairman Whitehouse. Okay. So you meant that----
    (Simultaneous speaking.)
    Dr. Zycher. That does not mean--that does not mean, 
Senator, that climate change or anthropogenic climate change 
``is not happening.'' There are anthropogenic effects. There's 
natural variability. We don't understand the relationships 
between the two, and to say that the temperature is not 
changing over some short period of time does not mean that 
there is no anthropogenic warming. Of course there is.
    Chairman Whitehouse. I will agree with you on that very 
point. Thank you. I think that's wisely stated. And you concede 
that the ten warmest years in the historical record have all 
occurred since 2010?
    Dr. Zycher. No, that's certainly not correct. That is 
certainly not correct. The argument that you see in the 
literature, especially from the--in the National Climate 
Assessment, that there's been an increase in extreme 
temperatures----
    Chairman Whitehouse. So this, this graph----
    Dr. Zycher. Yeah.
    Chairman Whitehouse [continuing]. Is not, correct?
    Dr. Zycher. No, it is correct.
    Chairman Whitehouse. And are not the top ten temperature 
years all up here in the last----
    Dr. Zycher. Well, I can't really--I can't really--I'm not 
sure which, I'm not sure what the base period is. I can't 
really read that chart very well.
    Chairman Whitehouse. Well, you know it reasonably well, 
because it's actually in your testimony, right?
    Dr. Zycher. Yeah, that's right. Well, I'm not--I don't know 
if it's the same one. I have one very similar to it. It may 
be----
    Chairman Whitehouse. And does your one very similar to it 
also show that the top ten years, the top ten heat years----
    Dr. Zycher. I'm sorry what?
    Chairman Whitehouse. The ten warmest years on the 
historical record have all occurred since 2010. Your graph and 
this graph both show the same temperatures; correct?
    Dr. Zycher. Yeah. I'm not sure. I have to go look.
    Chairman Whitehouse. Okay. Let me go on a little bit, just 
to some of the things that you've said. Has the climate 
industry evolved into a totalitarian ideology?
    Dr. Zycher. Well, climate policy has evolved into a 
totalitarian ideology, controlling how people move, controlling 
the type of heaters they use, controlling the type of stoves 
they use, controlling the characteristics of the homes they 
live in.
    Chairman Whitehouse. And you draw an equivalence in the 
statement that you said ``The climate industry evolved into a 
totalitarian ideology'' is your quote, and you make a reference 
in that quote, in that passage also to Benito Mussolini. What 
is the point of making a reference to Benito Mussolini in the 
context of discussing what you call the climate industry?
    Dr. Zycher. Mussolini's quote was that everything within 
the state, everything by the state, everything for the state, 
and we have arrived not far from the position in which 
everything is climate, everything is part of climate, and 
everything is driven by climate.
    Chairman Whitehouse. All right.
    Dr. Zycher. So it really is, I think, a certain--there is a 
certain totalitarian flavor at a minimum.
    Chairman Whitehouse. And to add to that, you've also 
compared environmentalist views as ``strangely reminiscent of 
Joseph Stalin's view of the difference between one death and 
millions.'' What is your point in trying to compare 
environmentalists and Joseph Stalin?
    Dr. Zycher. The environmental left has made no secret of 
its lack of caring about the deaths of many millions of people 
in the Third World as a result of energy shortages and all the 
rest. I've been quite explicit about that.
    Chairman Whitehouse. Is that why you say environmentalists 
hate humanity?
    Dr. Zycher. Yeah, I do actually. Yes, that is why I say 
that. Or left-wing environmentalists. I wouldn't, I don't know 
that I----
    Chairman Whitehouse. Well, let's talk about a non-left-wing 
environmentalist who is on this Committee, Senator Graham. He 
suggested that Republicans should put together their own 
environmental plan as an alternative of the Green New Deal.
    You responded that he was embracing an anti-human world 
view, and that the mere endorsement of a climate policy implies 
an endorsement of the climate crisis view. Was it your 
intention to compare Senator Graham with an anti-human----
    Dr. Zycher. Those are two separate statements, Senator. If 
fossil fuels are evil, then the factors that increase the 
demand for fossil fuels are also evil. Among them prominently 
are investments in human capital, health care training, 
education and all the rest. If you really believe that fossil 
fuels are evil, then investments in human capital are also evil 
and therefore----
    Chairman Whitehouse. No, I don't think I've said that 
fossil fuels----
    Dr. Zycher. I didn't say that you said that, Senator.
    Chairman Whitehouse. You have said that it's an anti-human 
world view.
    Dr. Zycher. Yeah, and I'm explaining why that is true.
    Chairman Whitehouse. Okay, okay, and what was--what was 
your saying that Senator Graham is embracing that anti-human 
world view by agreeing to work or trying to develop a climate 
policy?
    Dr. Zycher. No. What I said about Republicans endorsing 
climate policies is that if in fact they endorse climate 
policies, then they implicitly or explicitly are endorsing the 
climate crisis narrative, for which there is no evidence. Once 
you adopt that stance, there is no principle to defend against 
the most extreme policy proposals. I never said or thought that 
Senator Graham was anti-human in any sense.
    Chairman Whitehouse. Well, that's good, because he and I 
are friends, and I don't think he is either. Before you 
became--Senator Lujan is here. Let me--are you ready to go sir 
or shall I--okay. Before you began to offer testimony in the 
arena of climate change, you were often consulted and offered 
reports and so forth by the tobacco industry; is that correct?
    Dr. Zycher. No. That's simply not correct.
    Chairman Whitehouse. Nope? You were not part of the Tobacco 
Institute's stable of consultants?
    Dr. Zycher. No Senator. The late Professor Bob Tollison, 
for two or three years running, received small grants from the 
Tobacco Institute to organize sessions at the Western Economic 
Association annual meetings on the topic of--on the general 
topic of whether or not tobacco taxes are efficient 
economically.
    Chairman Whitehouse. Well, I'll tell you what I will do.
    Dr. Zycher. Well Senator, if you would let me answer your 
question, I'd appreciate it.
    Chairman Whitehouse. The question was quite simple--did 
you, were you paid by tobacco industry organizations or 
organized by them to provide testimony, including the Tobacco 
Institute.
    Dr. Zycher. I received about a hundred dollars each year 
for about two or three years, yes.
    Chairman Whitehouse. Okay. Well, here's what I will do, 
because Senator Lujan is ready to go. I will review what I 
consider to be multiple occasions upon which you spoke for the 
tobacco industry against the regulation or taxation of 
cigarettes, and I'll give you the chance in writing to relate 
what your role was on all those various occasions.
    Dr. Zycher. I just told you what the role was.
    Chairman Whitehouse. Yeah, and I'll give you the chance to 
put that in writing.
    Dr. Zycher. Very good.
    Chairman Whitehouse. Senator Lujan.

                   STATEMENT OF SENATOR LUJAN

    Senator Lujan. Thank you, Mr. Chairman, and thank you to 
Ranking Member Grassley for this hearing and to all the 
panelists who are here today. Much of the written testimony for 
this hearing focuses on the financial risks and stranded 
assets.
    These financial risks are real and need to be managed, but 
I want to focus on another area. I would like to highlight for 
the witnesses and for my fellow Committee members, another type 
of stranded risk, in the area of stranded communities or 
livelihoods lost or job opportunities as well.
    Mr. Raimi, your testimony states that communities with 
stranded assets might need a decade or more of support to 
recover. What types of programs will support these communities 
and local governments for the decade it will take for them to 
recover?
    Mr. Raimi. Thank you, Senator. In the short to medium term, 
I think it's likely that these communities will need support 
either from their state governments or from the federal 
government to provide essential services, including education, 
public safety, roads, and other essential services.
    In the long term, I think the goal for many of these 
communities will be to build economic resilience over time, and 
frankly the solutions to building economic resilience are 
complex and they vary enormously from community to community.
    My hope is that the federal government can support the 
priorities of local stakeholders and local community leaders, 
to pursue the economic resilience strategies that they think 
will be most promising for their communities.
    Senator Lujan. And the conclusions of your testimony 
emphasize the urgency of the clean energy transition, and the 
importance of providing support to state and local governments. 
But your testimony does not go as far as suggesting how much 
support, for how long and in what form.
    Does the federal government have an obligation to provide 
support to state and local governments to replace revenue lost 
in the transition to clean energy?
    Mr. Raimi. I think ultimately that will be a question for 
you and your colleagues to decide. RFF does not make specific 
policy recommendations on these types of issues.
    We do provide evidence and research to support your 
decision-making, and what I would say is that if there is 
federal government policy that leads to stranded assets or 
reduced revenue for local governments, it seems logical to me 
that the federal government would help those communities manage 
those negative impacts.
    Senator Lujan. I appreciate that, and one area, Mr. 
Chairman, that we've been able to do some work in an area that 
was completely ignored, which was included in the Bipartisan 
Infrastructure package, was to plug abandoned and orphaned oil 
and gas wells, for example, an area where neglect throughout 
the country, including families where there were maybe one 
generation to the next in inheritance of a well that was not in 
production, that was completely abandoned left there.
    You know, if any of you have been to these, the last time 
that I traveled to some orphaned oil and gas wells, there were 
some cattle grazing near a couple of them. No investment had 
been made in the structures themselves. There was leaking oil 
all around the area that I went in. As a matter of fact, 
there's a--for those of you that are familiar, there's a 
collection to the tank that is a pipe that comes out and then 
there's like a bucket that will capture whatever is coming out 
of it.
    Well, there were no trucks going in. There were cows out 
there, and they were drinking from that bucket, a bucket that 
had a couple of inches of residue on top of the water. And so, 
I'm very proud that we were able to work in a bipartisan way, 
to go out and do some of this additional cleanup.
    Mr. Raimi, that's what I'm trying to get at, is 
opportunities, job creation, looking at areas where there's 
been neglect. In New Mexico for right now, while we're not the 
number one oil or gas producer in the country, and New Mexico 
has been an energy producer for some years, but we have the 
largest methane plumes in the country.
    Makes zero sense to me. If we're not the largest, why don't 
the largest have them? What investments have been made to stop 
that, for example? That's a job creator. As a matter of fact, 
one of the times I went out there was some technology made 
available to us, where we could see methane plumes. You can 
always smell it, but this would allow us to see it.
    When I was looking at this stuff, you could see it for as 
far as--Dr. Zycher, I'll let you finish there, sir.
    Dr. Zycher. I'm sorry.
    Senator Lujan. I wasn't calling on you. I was just--I 
didn't want to get in the way of your conversation. Is what 
could happen from the perspective of not controlling, when we 
saw this space. But having more technology to stop those leaks, 
plug those leaks, creating opportunity in places like New 
Mexico is just another area.
    As there's more investments and decisions being made, we're 
seeing something finally being embraced by the industry in New 
Mexico, when you see the largest producers in the country now 
and around the world embracing renewable deployments and 
changing where they're putting their money.
    I certainly hope that everyone else will catch up with what 
we can be doing in that space. So that's what I was trying to 
get at. I'm sorry for going over my time Mr. Chairman, but I 
really appreciate everyone being here and for us to be able to 
have this conversation. Thank you, Mr. Chairman.
    Chairman Whitehouse. Thanks very much. I'm getting ready to 
conclude but let me just ask Dr. Zycher one last question about 
his tobacco work. There's a report in 1990, in which you are 
cited to have said that ``various proposals for regulation or 
taxation of cigarettes are a figurative gold mine for those 
interested in a display of moral posturing.''
    Is there another motive that is possible for regulation or 
taxation of cigarettes than mere display of moral posturing?
    Dr. Zycher. Is there another motive possible? Sure. There 
are lots of possible motives.
    Chairman Whitehouse. Like public health? Like people not 
dying of cigarette-caused cancer?
    Dr. Zycher. That's a private health, not a public health 
issue, Senator. Lung cancer and emphysema are not contagious.
    Chairman Whitehouse. So if something's not--okay.
    That's an interesting definition of public health. Let me 
conclude by referring back to the previous Republican-invited 
witness, Jessica Wankel, who said that it was very important in 
evaluating the testimony and research that is prepared, to 
understand the funding behind organizations.
    If we could just take a quick look at AEI, through 2020, 
AEI has received more than $4.4 million just from oil and gas 
giant ExxonMobil, the most that any think tank recipient of 
funds from Exxon has ever received. At the same time, AEI also 
received over $28 million from Donors Trust and Donor Capital 
Fund, two organizations that I talk about quite regularly 
because they have essentially no role other than to obscure the 
identity of donors.
    They are an identity laundering mechanism, referred to as 
the ``dark money ATM'' of the conservative movement.
    In addition, nearly $15 million from the Scaife Foundation, 
over $2.2 million from Coke family foundations, and hundreds of 
thousands from the American Petroleum Institute, which it's a 
little on the nose to actually give directly when you could run 
it through Donors Trust, but there they are.
    So I will ask a question for the record, and Dr. Zycher you 
can answer this how you wish. I know you say that your 
testimony here is not endorsed by the American Enterprise 
Institute, but I will ask for any information that you have 
related to the continued fossil fuel funding of your work at 
AEI, and we'll do that in a question for the record, so you 
have all the time in the world to answer is carefully.
    Dr. Zycher. Well, could I make two points about that now?
    Chairman Whitehouse. Fire away.
    Dr. Zycher. First, I'm not involved in fundraising at AEI. 
I have no idea where AEI's funding comes from, and it has no 
effect on my work. Second, you know really Senator, your not 
very subtle effort to imply that anyone that disagrees with you 
is little more than a prostitute, is really rather shameful, 
and I would urge you to abandon it.
    If you have found an error of either fact or analysis in my 
work, I'd love to hear it. Complaining about where AEI does or 
does not get its funding over some time period really has 
nothing to do with the substance of the issues, and I would 
urge you to abandon that line of thinking. But I will respond 
to your written questions.
    Chairman Whitehouse. That would be great, and I would point 
out to you that sitting here as an elected official in 
Congress, trying to find ways to deal with the climate problem, 
I see the malevolent force of the fossil fuel industry through 
its politics and through its dark money everywhere.
    It is the reason that since Citizens United, we have made 
really no bipartisan progress on any significant piece of 
climate legislation, when in the years before Citizens United 
there was abundant bipartisan effort on climate legislation. 
The before and after is clear.
    I think the cause, which is abundant fossil fuel money 
pouring into politics to buy compliance with their narrative, 
is exactly the reason that we are in the bad state we are here 
today. So whatever AEI and other fossil fuel-funded 
organizations might mean to you, they mean quite a lot to me 
because I see their handiwork in this building all the time.
    With that, the hearing is concluded. The record will be 
open for--until noon tomorrow for any questions that any member 
may have. I would ask all the witnesses, if you have a response 
to a question that comes in, please get it back in a week, and 
I thank everyone for a particularly interesting hearing.
    [Whereupon, at 11:35 a.m., Wednesday, March 29, 2023, the 
hearing was adjourned.]




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