    [Senate Hearing 118-75]
    [From the U.S. Government Publishing Office]

                                                             S. Hrg. 118-75

                              WHO PAYS THE PRICE:
                         THE REAL COST OF FOSSIL FUELS

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

                                    HEARING

                                   before the

                            COMMITTEE ON THE BUDGET
                              UNITED STATES SENATE

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  May 3, 2023

                                   __________

               Printed for the use of the Committee on the Budget

             [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                www.govinfo.gov

                              ______

                 U.S. GOVERNMENT PUBLISHING OFFICE
     53-166              WASHINGTON : 2023

                            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

                                  ----------

                             WEDNESDAY, MAY 3, 2023
                    OPENING STATEMENTS BY COMMITTEE MEMBERS

                                                                       Page
    Senator Sheldon Whitehouse, Chairman.............................     1
        Prepared Statement...........................................    30
    Senator Charles E. Grassley, Ranking Member......................     3
        Prepared Statement...........................................    32

                        STATEMENTS BY COMMITTEE MEMBERS

    Senator Tim Kaine................................................    14
    Senator Ron Johnson..............................................    16
    Senator Roger Marshall...........................................    18
    Senator Ben Ray Lujan............................................    20
    Senator Mike Braun...............................................    21

                                   WITNESSES

    Dr. Ted Gayer, President, Niskanen Center........................     6
        Prepared Statement...........................................    34
    Dr. Nicole Deziel, Associate Professor of Epidemiology, Yale
      School of Public Health........................................     7
        Prepared Statement...........................................    41
    Ms. Diana Furchtgott-Roth, Director of the Center for Energy,
      Climate, and Environment, The Heritage Foundation..............     9
        Prepared Statement...........................................    57

                                    APPENDIX

    Responses to post-hearing questions for the Record
        Dr. Gayer....................................................    71
        Dr. Deziel...................................................    74
        Ms. Furchtgott-Roth..........................................    76
    Charts submitted by Chairman Sheldon Whitehouse..................    77
    Document submitted for the Record by Chairman Sheldon Whitehouse.    78
    Statement submitted for the Record by Our Children's Trust.......    83

               WHO PAYS THE PRICE: THE REAL COST OF FOSSIL FUELS

                                  ----------

                             WEDNESDAY, MAY 3, 2023

                                               Committee on the Budget,
                                                           U.S. Senate,
                                                        Washington, DC.
        The hearing was convened, pursuant to notice, at 10:04
    a.m., in the Dirksen Senate Office Building, Hon. Sheldon
    Whitehouse, Chairman of the Committee, presiding.
        Present: Senators Whitehouse, Kaine, Lujan, Grassley,
    Johnson, Marshall, Braun, and R. Scott.
        Also present: Democratic staff: Dan Dudis, Majority Staff
    Director; Matthew Bolden, Climate Policy Advisor.
        Republican staff: Chris Conlin, Deputy Staff Director;
    Krisann Pearce, General Counsel; Nick Wyatt, Professional Staff
    Member; Jordan Pakula, Professional Staff Member.
        Witnesses:
        Dr. Ted Gayer, President, Niskanen Center
        Dr. Nicole Deziel, Associate Professor of Epidemiology,
    Yale School of Public Health
        Ms. Diana Furchtgott-Roth, Director of the Center for
    Energy, Climate, and Environment, The Heritage Foundation

              OPENING STATEMENT OF CHAIRMAN WHITEHOUSE \1\

        Chairman Whitehouse. Let me call the hearing to order and
    express my appreciation to the witnesses for their patience.
    Senator Grassley and I and other members have multiple
    committee hearings taking place during the day and where you
    stand in the queue in those other committees depends on whether
    you have checked in in person. Senator Grassley and I are both
    checking in in person in finance, and I thank you all for your
    patience.
    ---------------------------------------------------------------------------
        \1\ Prepared statement of Chairman Whitehouse appears in the
    appendix on page 30.
    ---------------------------------------------------------------------------
        We are going to start with opening remarks by me and
    Senator Grassley and then I will introduce the witnesses. We
    will proceed with five minute statements and then go on to
    questions and answers.
        I want to welcome everyone to what is our seventh committee
    hearing on the economic and budgetary perils of our
    overdependence on fossil fuels. We have heard repeated
    testimony from non-partisan, knowledgeable industry leaders
    about the threat climate change poses to entire sectors of our
    economy, healthcare, insurance, coastal economies, wildfire
    areas and, of course, the carbon bubble, leaving fossil fuel
    assets stranded. So in light of those threats and warnings,
    what are we, the federal government doing, to protect the
    American people? Well, actually what we are doing is
    subsidizing the danger. As we will hear today, the United
    States subsidizes the fossil fuel industry with taxpayer
    dollars. It is not just the U.S. according to the International
    Energy Agency. The fossil fuel handouts hit a global high of $1
    trillion in 2022, the same year that big oil pulled in a record
    $4 trillion of income. You see the dependence on public funds.
        In the United States, by some estimates, taxpayers pay
    about $20 billion every year to the fossil fuel industry. What
    do we get for that? Economists generally agree, not much. To
    quote conservative economist Gib Metcalf, these subsidies
    offer, and I quote, ``little, if any, benefit in the form of
    oil patch jobs, lower prices at the pump or increased energy
    security for the country.'' The cash subsidy to big oil is both
    big and wrong.
        But the really big subsidy is the license to pollute for
    free. The IMF called this global free pass an implicit fossil
    fuel subsidy. Economists call it an unpriced externality.
    Behind these benign sounding phrases occurs a lot of harm.
        Start with the harmful effects of local air pollution.
    Researchers from Harvard found pollutants from oil and gas
    combustion were responsible for 8.7 million premature deaths
    annually. The increased mortality rates from heat and air
    pollution we heard about at last week's hearing. Then growing
    costs from intensifying disasters, wildfires, floods, droughts,
    which according to the United States Office of Management and
    Budget (OMB) could cost the federal budget $2 trillion annually
    and reduce U.S. Gross Domestic Product (GDP) 3 to 10 percent by
    the end of the century.
        You tally up the harms and the International Monetary Fund
    estimates that the penalty is a $5.4 trillion annual subsidy
    worldwide. In the United States, it is a $646 billion subsidy
    every single year. Worse, this almost certainly undercounts the
    true costs. The London School of Economics reports that studies
    often underestimate the harm of climate dangers by failing to
    account for, as we've heard in these hearings, how hazards can
    cascade across ecological and economic systems.
        The cascades can cause irreparable damage to human well-
    being, to ecosystems and to the U.S. economy. These are the
    systemic risks that we have been hearing about in these
    hearings. And as we'll hear from one of our witnesses today,
    the very act of extracting these dirty fuels has terrible
    consequences for human health, especially for children. From
    high rates of birth defects to childhood leukemia, there is
    ample evidence that communities around oil and gas extraction
    sites pay an especially high price.
        It is textbook economics that the price of a product should
    reflect its true cost. The fossil fuel industry violates this
    rule of market economies. It does so by spending billions of
    dollars on disinformation, false doubt, climate obstruction and
    political dark money. And why not, to protect one of the most
    lucrative subsidies in human history? This, ladies and
    gentlemen, is why we can't have nice things like clean air,
    safe coral reefs, secure coast lines and affordable clean
    energy.
        Over in the House, MAGA extremists are doubling down on
    polluter handouts to their big donors with their Default on
    America Act that put the American taxpayer on the hook for
    climate disaster. That bill is not about debts or deficits.
        It is dirty work for an industry that controls one of the
    main political parties in this country.
        Oil and gas extraction represents only about 5 percent of
    GDP. Farming, manufacturing, food and beverage, insurance,
    finance, restaurants, retail, housing, healthcare, all
    represent a larger share of GDP. Clean energy now accounts for
    more employment than the fossil fuel industry. But for
    political influence, to protect those massive subsidies,
    nothing compares to fossil fuel.
        It is a fundamental principle of democracy that everyone
    should get an equal say. But with fossil fuel, the rich and the
    powerful hoard all the benefits for themselves and leave
    everyone else, often the most vulnerable Americans, to pay the
    price.
        Senator Grassley.

               OPENING STATEMENT OF SENATOR GRASSLEY \2\

        Senator Grassley. Last week's hearing on climate change and
    public health was another missed opportunity to discuss our
    nation's ailing fiscal health. That same day, House Republicans
    passed legislation to reign in excessive government spending,
    lift the debt ceiling and impose meaningful fiscal controls.
    Meanwhile, Senate Democrats haven't lifted a single finger.
    ---------------------------------------------------------------------------
        \2\ Prepared statement of Senator Grassley appears in the appendix
    on page 32.
    ---------------------------------------------------------------------------
        Now instead of working together to write a responsible
    budget, we are here discussing an alleged scheme involving
    fossil fuel overlords. Rather than attacking important American
    businesses that employ tens of thousands of Americans, we
    should work together to reduce an unsustainable national debt.
        Reaching a consensus will require us to respectfully listen
    to opinions of experts whose views may differ from our own. No
    one learns anything sitting in an echo chamber. This is one
    reason why I have invited witnesses with a variety of views
    during this series of climate change hearings.
        Sometimes I have discussed with a witness that I invited on
    this or that subject, but sometimes I have disagreed with
    witnesses I have invited on this or that, but I value their
    opinions. Today is no different. Ms. Furchtgott-Roth and I
    don't see eye to eye on all energy matters, particularly when
    it comes to renewable fuels and wind. However, we do agree oil
    and gas are critical to lowering energy costs, protecting our
    national security and reducing CO2 emissions. We also agree
    that President Biden's war on fossil fuels has been disastrous
    for the economy and terrible for consumers.
        I believe in all-of-the-above energy strategies, oil, gas,
    biofuel, wind. We need them, all for national security and for
    economic success. President Biden, on the other hand, believes
    in all of his preferred and none-of-the-rest strategy.
        It is kind of simple in this town, people say they are all
    of the above. Well, half of them are for none of the above, but
    everything below. And the other half are for everything above
    but nothing below the ground. This sort of one size fits all to
    solving this problem just doesn't make sense.
        I have been saying for 30 years, a long time before climate
    change was much of a debate, that we had four goals that we had
    to have for energy policy, one, fossil fuels, number two, all
    of the alternative energy you can think of and number three,
    conservation, both government-imposed and personally imposed,
    and four, nuclear. It seems to me that that is still a policy
    we are going to have for the next 25 years except for the
    unrealistic views that we can get everything by wind tomorrow.
        Poor policy decisions have consequences. And as a result,
    we have seen energy prices rise substantially across the board.
    This is why the two leading topics of concern that I have heard
    from Iowans during the Biden Administration have been inflation
    and the price of gasoline. The President can deflect blame all
    he wants, but the rise in the price of gasoline has been a
    direct consequence of his administration's energy policies.
        Candidate Biden vowed to end fossil fuels during his
    campaign. On his first day in office, he decided to shut down
    the Keystone pipeline, stifling our ongoing energy independence
    and killing thousands of jobs. Also in January 2021, he issued
    an executive order pausing new oil and gas leases on public
    lands and federal waters.
        And now he complains because Saudi Arabia is cutting down
    on the pumping of oil by $1 million a day and the price going
    up, and we reduced the national strategic reserve to the lowest
    level in 40 years. It just doesn't make sense that we would
    stop jobs in this country to increase more jobs in Saudi Arabia
    and import the oil here and probably dirtier oil than we
    produce in this country. A barrage of his destructive
    environmental regulations followed, which continue to prevent
    the construction of much needed fossil fuel infrastructure.
        Last month, President Biden issued his first veto to uphold
    his 401(k) investment rule. The rule will even hurt everyday
    Americans' investment just to further liberal Environmental
    Social Corporate Governance, or ESG as you know it, whereas the
    federal law requires under the Employee Retirement Income
    Security Act of 1974 (ERISA) that the fiduciary has the
    responsibility to make sure that you get the most return on
    your money. That's what the law says. And this administration,
    through ESG, is violating that law.
        And just a few weeks later, President Biden's Environmental
    Protection Agency (EPA) announced his plan to mandate two-
    thirds of all new vehicles be electric by 2032. These are the
    same Electric Vehicles (EVs) most Americans can't afford. The
    same EVs that they say in California last year don't plug in
    during the heavy use of utilities because you may not get the
    electricity to charge your EV. But Democrats want to continue
    subsidizing these as part of their misnamed Inflation Reduction
    Act, which by now the Congressional Budget Office (CBO) has
    proven to not reduce inflation but actually enhance inflation.
    And that's that green energy program that is within that bill
    that has a price tag that seems to be ballooning way above what
    CBO said it was going to be.
        And to prove that, we have the Joint Committee on Taxation
    telling us its tax subsidies will cost $300 billion more than
    originally advertised, and its costs could rise further once we
    receive updated scores of EV subsidies.
        The average price of an electric vehicle according to
    Kelley Blue Book is $65,000, roughly the equivalent of Iowa's
    median household income. But even if half of the Americans
    could afford an EV, which they can't, an even bigger problem
    exists. We have neither the load capacity nor the materials to
    achieve President Biden's energy overhaul.
        Large swaths of the U.S. electric grid are at risk for
    shortfalls this summer. Grid reliability is a significant
    concern already let alone the concerns over the grid handling
    load of President Biden's electric vehicle fantasy. Moreover,
    we all know that the Communist Party of China has a monopoly on
    critical mineral mining and refining required to build EV
    batteries. They are forcing Uyghurs into slavery to bolster
    their supply chains. That is all being supported by this
    administration. Meanwhile, environmentalists won't allow us to
    permit mining projects here in the United States.
        And think of inconsistency between the human rights
    policies of this administration, which I have no disagreement
    with, but letting the Uyghurs, with forced labor, to produce
    some of the stuff that we are going to use in our electric
    vehicle cars or look at what, I think it is cobalt or something
    else that we get from the Congo Republic, that child labor is
    being used to produce. And this administration and the
    Republicans in this Congress are against using child labor for
    anything as far as that is concerned.
        So not only is this administration pushing policies that
    drive up the price of gasoline, but their policies would make
    us even more dependent on a supply chain that runs directly
    through China. Thank you, Mr. Chairman.
        Chairman Whitehouse. Thank you, Senator Grassley. Let me
    just take a moment and salute you for your long-term leadership
    on conservation issues on alternative fuels, particularly
    ethanol, and on wind power which is important in your home
    state.
        Mr. Grassley. I am the father of the Wind Energy Tax
    Credit.
        Chairman Whitehouse. There you go exactly and have defended
    it very strongly. And we worked together.
        Mr. Grassley. We get 60 percent of our electricity from
    wind. And in 4 years, we will get about 80 percent.
        Chairman Whitehouse. And for what it is worth, my Chevy
    Bolt is very affordable. Let me turn first--let me introduce
    the witnesses. We have Ted Gayer here. He is the President of
    the Niskanen Center. He was formerly the Executive Vice
    President of the Brookings Institute. He served as Deputy
    Assistant Secretary for Microeconomic Analysis at the
    Department of Treasury and as a senior economist on the Council
    of Economic Advisors under President George W. Bush. We welcome
    his testimony.
        Next, we have Dr. Nicole Deziel, who is an Associate
    Professor at the Yale School of Public Health. She is an expert
    on the human health impacts of oil and gas development. Her
    work has contributed to the field's understanding of the
    underlying exposure mechanisms, the unequal distribution of the
    health impacts, and the policies for mitigating these dangerous
    hazards. We look forward to her testimony.
        Finally, Ms. Diana Furchtgott-Roth is the director of the
    Center for Energy, Climate and the Environment at the Heritage
    Foundation and an Adjunct Professor at George Washington
    University (GW). She was formerly a senior fellow at the
    Manhattan Institute and the Hudson Institute as well as a
    fellow at the American Enterprise Institute.
        She served in the White House under Presidents Reagan,
    George H.W. Bush and W. Bush and as Deputy Assistant Secretary
    for Research and Technology at the Department of Transportation
    as well as Acting Assistant Secretary for Economic Policy of
    Treasury during the Trump Administration.
        Dr. Gayer, welcome. You have five minutes to deliver your
    statement.

       STATEMENT OF DR. TED GAYER, PRESIDENT, NISKANEN CENTER \3\

        Dr. Gayer. Chairman Whitehouse, Ranking Member Grassley and
    members of the committee, thank you for inviting me here today.
    My name is Ted Gayer, and I am the President of the Niskanen
    Center. As Senator Whitehouse said, I previously served as
    Deputy Assistant Secretary at the Department of Treasury and a
    senior economist at the Council of Economic Advisors, both in
    the George W. Bush Administration.
    ---------------------------------------------------------------------------
        \3\ Prepared statement of Dr. Gayer appears in the appendix on page
    34.
    ---------------------------------------------------------------------------
        I want to address three points today. First, instead of
    providing subsidies to fossil fuels, our Tax Code should
    promote market incentives that factor in the external costs of
    energies.
        Second, the size of the existing fossil fuel subsidies
    depends on various factors, such as whether one if focusing on
    their overall size or their size compared to subsidies granted
    to other industries, as well as whether, as Senator Whitehouse
    mentioned, when it counts for the external costs of fossil
    fuels.
        And third, eliminating fossil fuels would have a minimal
    impact on both fossil fuel production and prices.
        Historically, federal energy tax policies have at various
    times sought to boost domestic energy production, generate tax
    revenue and promote environmental quality. These goals are
    often in conflict, such as when we impose a gas guzzler tax to
    reduce fuel consumption while we simultaneously subsidize oil
    production to increase output.
        Energy tax policies should instead address the sizable
    external costs of energy consumption, such as the costs
    associated with climate change and in particular pollution by
    implementing a carbon tax that encourages consumers and
    producers to reduce emissions through market incentives.
    However, the presence of fossil fuel subsidies in the current
    Tax Code contradicts this goal.
        Most fossil fuel subsidies are implemented as tax
    expenditures in our Tax Code. The Joint Committee on Taxation,
    which I will refer to as JCT, defines a tax expenditure as a
    provision that deviates from their baseline income tax. If one
    considers a consumption tax as a baseline tax system, then many
    current provisions would not qualify as tax expenditures.
        Furthermore, several fossil fuel tax expenditures apply to
    other industries within and outside the energy sector, so their
    magnitude depends on whether one is interested in their overall
    size or the size compared to subsidies granted to other
    industries.
        There are four significant types of tax provisions for
    fossil fuels: cost recovery, the treatment of inventories, the
    treatment of foreign profits and tax credits. JCT classifies
    most provisions within these categories as tax expenditures.
    According to JCT, the total value of fossil fuel tax
    expenditures from 2022 to 2026 will be approximately $12
    billion. However, this estimate would be smaller if one
    considers the size of these expenditures relative to other
    industries. For example, the last in, first out accounting
    method in some accelerated depreciation provisions apply to all
    industries under current law.
        It is also worth noting that not all oil and natural gas
    companies can fully benefit from these tax provisions. For
    example, small non-integrated oil and gas producers get a more
    generous treatment than big integrated oil and gas producers in
    expensive and intangible drilling costs.
        Fossil fuel subsidies are unlikely to help increase
    production in the United States significantly. The
    Congressional Budget Office estimates that fossil fuel
    subsidies led to a minimal impact of about a half a percent
    more domestic oil production. The U.S. Treasury and academic
    studies, such as the one Senator Whitehouse alluded to, also
    finds similarly small effects of these subsidies on domestic
    production.
        This means that they currently do not achieve the goal of
    insulating domestic prices from foreign supply disruptions,
    particularly since prices are determined in the global market.
        In conclusion, fossil fuel subsidies move us away from
    energy prices that accurately represent the extensive external
    costs associated with their use. My preferred policy is a
    border adjusted carbon tax that creates incentives to account
    for the costs for energy use.
        This would provide incentives for businesses to innovate,
    to use cleaner energy sources and to invest in more carbon
    efficient production techniques.
        Mr. Chairman, Ranking Member Grassley, thank you once more
    for the opportunity to speak today, and I look forward to the
    questions.
        Chairman Whitehouse. Thank you, sir. Dr. Deziel.

    STATEMENT OF DR. NICOLE DEZIEL, PhD, MHS, ASSOCIATE PROFESSOR,
       YALE SCHOOL OF PUBLIC HEALTH, DEPARTMENT OF ENVIRONMENTAL
    HEALTH SCIENCES, YALE SCHOOL OF THE ENVIRONMENT, YALE SCHOOL OF
       ENGINEERING & APPLIED SCIENCE, DEPARTMENT OF CHEMICAL AND
                     ENVIRONMENTAL ENGINEERING \4\

        Dr. Deziel. Chairman Whitehouse, Ranking Member Grassley,
    and distinguished Members of the Senate Budget Committee, it is
    an honor to participate in today's hearing.
    ---------------------------------------------------------------------------
        \4\ Prepared statement of Dr. Deziel appears in the appendix on
    page 41.
    ---------------------------------------------------------------------------
        My name is Nicole Deziel, and I am an Associate Professor
    at the Yale School of Public Health in the Department of
    Environmental Health Sciences. My testimony will address the
    human health impacts of oil and gas development.
        These remarks are informed by a strong body of evidence,
    including my own 9 years of research and more than 25
    publications on the exposures, health and environmental justice
    impacts of oil and gas development. I have five key points to
    share today.
        First, living near an oil and gas development has been
    associated with a range of health problems, with the greatest
    evidence of risks reported for children. In 2021, there were
    nearly a million oil and gas wells in operation and
    approximately 18 million U.S. residents living within one mile
    of an oil and gas well.
        More than 50 peer-reviewed epidemiologic studies, including
    some from my own research group, provide evidence of a
    relationship between oil and gas development and adverse health
    outcomes such as birth defects, childhood leukemia,
    hospitalizations, asthma exacerbations, mental health issues
    and mortality among the elderly. The weight of evidence
    indicates that the risk of adverse health outcomes increases
    with the greater proximity to, or density of, oil and gas wells
    around people's homes.
        The strongest evidence is for health in newborn babies,
    such as birth defects, preterm birth and low birth weight. Such
    associations have been observed across numerous states
    including Pennsylvania, Colorado, Ohio, California, Texas and
    Oklahoma. The consistency of results across multiple studies
    that were conducted using different methodologies, in different
    locations, during different time periods and different
    populations provides confidence in this body of research.
        Two, a growing number of environmental monitoring studies
    have concluded that oil and gas development contributes to air
    pollution, noise, odors, water contamination, radioactive
    releases, seismic activity and increased traffic.
        Three, exposures and health risks are not distributed
    equally across communities, with disproportionate impacts for
    some disadvantaged populations. As we have seen time and time
    again with other industrial and hazardous sites, certain
    subgroups of the population, such as communities of color or
    lower income bear a disproportionate burden of exposures and
    health risks from oil and gas development.
        For example, studies in Texas and Ohio demonstrated that
    oil and gas wastewater disposal wells were more likely to be
    sited in communities of color or areas of lower income. In
    Texas, Hispanic populations were more likely to be exposed to
    flaring, a practice of burning excess gas, yielding light at
    night, noise and noxious odors.
        We found that communities with a higher proportion of lower
    income and elderly populations in rural areas were the most
    vulnerable to groundwater pollution from hydraulic fracturing
    in the Appalachian Basin.
        Finally, a recent California study found that Black,
    Hispanic, and socioeconomically marginalized people had
    disproportionately higher exposure to oil and gas wells.
        Four, the limited availability of monitoring data,
    particularly in rural areas where substantial drilling occurs
    is a challenge to understanding the hazards and risks fully.
        Five, multiple complementary strategies would more
    adequately address oil and gas hazards and better protect
    community health.
        One of the most commonly used policy protections for
    communities near oil and gas wells currently are setbacks,
    which is the allowable distance between an oil and gas well and
    a sensitive receptor, such as a home or school.
        The utility of setbacks is based on the premise that
    hazards emitted by oil and gas operations attenuate with
    distance. While setbacks do offer critical public health
    protections to nearby communities, many states have not updated
    them to reflect the current science. And it is challenging to
    establish a universal distance that protects against all
    hazards because hazards decrease at different rates.
    Furthermore, setbacks do nothing to prevent the release of
    methane or other greenhouse gases that contribute to climate
    change.
        In conclusion, there is clear evidence for health hazards
    from oil and gas development, and these are not being
    adequately addressed by current policies. Thank you. And I look
    forward to your questions.
        Chairman Whitehouse. Thank you, Doctor. And now Ms.
    Furchtgott-Roth, welcome.

    STATEMENT OF DIANA FURCHTGOTT-ROTH, DIRECTOR, CENTER ON ENERGY,
    CLIMATE AND ENVIRONMENT AND THE HERBERT AND JOYCE MORGAN FELLOW
    IN ENERGY AND ENVIRONMENTAL POLICY, THE HERITAGE FOUNDATION \5\

        Ms. Furchtgott-Roth. Thank you very much, Chairman
    Whitehouse, Ranking Member Grassley. Thanks for giving me the
    opportunity to testify today about who pays the price of
    President Biden's energy policies.
    ---------------------------------------------------------------------------
        \5\ Prepared statement of Ms. Furchtgott-Roth appears in the
    appendix on page 57.
    ---------------------------------------------------------------------------
        I direct the Center for Energy, Climate and Environment at
    The Heritage Foundation, and I am an Adjunct Professor at
    George Washington University.
        Let me start out by saying that I am an American due to
    fossil fuels. My father on a job interview here in 1967 was so
    impressed that Americans heated their bathrooms that he moved
    his whole family here from London.
        In London, my dad heated the house with kerosene heaters,
    filling them up every night, which gives me a profound
    appreciation both for fossil fuels and for central heating
    systems.
        Poor and middle class people pay a steep price for
    President Biden's energy agenda. They suffer a decline in
    value, safety and security while the regulations do not
    mitigate climate change because emissions are simply displaced
    to China and other poorer countries.
        Americans' oil and gas jobs are being sacrificed to Chinese
    making wind turbines and solar panels. Americans' auto jobs are
    being sacrificed to Chinese making batteries and mining for
    rare earth minerals. Sometimes Chinese slaves and child workers
    are taking these American jobs. We are supposedly doing all of
    this to improve the climate, but displacing energy intensive
    manufacturing to China does not reduce global emissions.
        In order to produce renewables, China is increasing its
    construction of coal-fired power plants. America has 225 coal-
    fired power plants, and China has over 1,000. That is half of
    all the coal-fired power plants in the world. That is one
    reason why China has increased carbon emissions by over 5,000
    million metric tons over the past 16 years while America's
    carbon emissions have declined by 1,000 million metric tons due
    to the use of our clean natural gas.
        Last week, Stellantis, after closing an Illinois plant in
    December, announced it would be cutting 3,500 jobs due to its
    forced transition to electric vehicles. GM and Ford are also
    laying off workers for the same reason.
        United Auto Workers President Shawn Fain said on April 26,
    ``this is a slap in the face to our members, their families,
    their communities and the American people who saved this
    company 15 years ago. Even now politicians and taxpayers are
    bankrolling the electric vehicle transition, and this is the
    thanks the working class gets.''
        In April, the Joint Tax Committee estimated that green tax
    credits from the Inflation Reduction Act will cost taxpayers
    $570 billion from 2023 to 2033. As of 2022, wind and solar
    power produced less than 6 percent of our domestic primary
    energy consumption. The reality is that the federal government
    is spending billions on renewables, making electricity
    disproportionately more expensive for poor people.
        Fossil fuel companies generate tax revenues for federal,
    state and local governments. The oil and tax and gas extraction
    industry paid 19 percent of income in federal taxes in 2018
    compared to 11 percent for industries as a whole.
        In order to comply with EPA's recent proposed rules to
    regulate tailpipe emissions, 60 percent of vehicles would have
    to be battery powered electric in 2030. These regulations would
    make new and used cars disproportionately more expensive for
    the poor and middle class people who can least afford them.
        The Department of Energy also wants to regulate other
    appliances, depriving Americans of the ability to have a simple
    gas stove. Poor and middle class people will be
    disproportionately paying higher appliance prices.
        Fossil fuels are essential for fertilizers and agriculture.
    If the world gives up its agricultural security, countries will
    see higher food costs and decreased food access with poor
    people disproportionately paying the price for higher food
    costs. Already this year U.S. food prices have risen over 8
    percent. Eggs are over $4 a box, and milk is $4 a gallon.
        President Biden's plan to transition away from fossil fuels
    is making the United States weaker and China stronger without
    noticeable effects on global temperatures.
        Thank you for allowing me to testify today.
        Chairman Whitehouse. Let me begin with a few questions for
    Dr. Gayer if I may. Doctor, your doctorate is in economics,
    correct?
        Dr. Gayer. Yes, sir.
        Chairman Whitehouse. Could you explain what economists mean
    by the term externality, particularly in the context of fossil
    fuels?
        Dr. Gayer. I would be delighted to. I will do it in
    economist talk. You actually did a much better job, I think,
    when you talked about subsidizing the license to pollute for
    free. The idea of textbook economics is you want the market
    price to reflect the cost of producing the good that you are
    selling.
        And in most cases, the market does a fine job of that, and
    we would not need to have any hearings or, I would hope,
    government involvement in it. But we need to account,
    especially when it comes to certain environments, that when a
    production process is causing health costs, such as Nicole had
    referred to, or climate costs, as you and I had talked to,
    those costs are not going to be reflected in the market price.
        And so the economic prescription for that is simple, which
    is to try and set a tax equal to that price, so not to shut
    down a market, not to penalize unnecessarily. It is not a
    matter of retribution. It is a matter of what makes good
    economic sense, and it accounts for the cost of the production
    of a good. So that is internalized into the production and
    consumption decisions. And it relies on the power of prices in
    order to allocate these goods accordingly.
        Chairman Whitehouse. Simply put, if you had two factories
    on the same river, and one was throwing all of its trash and
    waste into the river and the other was paying to have it
    cleaned up, that would be an unfair subsidy of the one that was
    throwing all of its trash and waste in the river, correct?
        Dr. Gayer. Yes. That is much more elegantly put than my
    textbook example, but yes.
        Chairman Whitehouse. If we were to do a carbon price, that
    creates the risk of giving advantage to overseas competitors.
        Dr. Gayer. Yes.
        Chairman Whitehouse. And your testimony calls for your
    carbon price idea to be border adjusted.
        Dr. Gayer. Yes.
        Chairman Whitehouse. Could you explain what you mean by it
    being border adjusted and what kind of effect that would have
    on pollution from other countries, specifically China and
    India?
        Dr. Gayer. Yes. So one of the attributes of a carbon tax is
    relative to a lot of other policies, it is actually not super
    complicated to administer. You levy the tax at the source. If
    it is a domestic source, you levy it at the coal mine or the
    well head. But if you were to just stop there, then imported
    goods would not--their prices would not reflect the carbon
    content of their goods and, as you said, would give an unfair
    advantage to foreign imports.
        And so the idea of a border adjusted tax is to make sure
    that any goods that we import, their costs reflect the same
    external that domestic producers are facing. And so you would
    adjust the tax and make sure that they are subject to the same
    tax.
        The advantage of doing so, I would say, are twofold. One is
    in the realm of economics. As you said, it doesn't--it would
    alleviate or eliminate any competitive advantage that foreign
    companies would have in exporting to the United States if we
    had a carbon tax.
        And, two, it's less about economics and more diplomacy. And
    we need to get it to the world where we are leading the world
    in addressing climate change and doing so and levying a tax
    internally and also on products that people sell to the United
    States is a clear signal that we need reciprocity and this
    needs to be a global solution.
        Chairman Whitehouse. You just passed its carbon border
    adjustment mechanism. They call it their CBAM. That will put
    tariffs on United States goods and far steeper tariffs on
    Chinese goods. And they suggest that will move the European
    supply chain from China to the United States, increasing jobs
    and manufacturing here in the United States, specifically in
    steel, aluminum, cement, pharma and other, you know, major
    industries. Does that sound right to you and how would domestic
    industries benefit----
        Dr. Gayer. Yeah, I----
        Chairman Whitehouse [continuing]. From carbon border
    adjustment?
        Dr. Gayer. I don't know the particular of their pricing,
    but it does sound right to me. And I believe their pricing is
    again reflecting the relevant carbon content of the goods that
    China versus the U.S. exports. And to the extent that we are
    less carbon intensive than the Chinese, we would be subject to
    less of a levy, which would make us more competitive on those
    industries.
        Chairman Whitehouse. Dr. Deziel, your publications that you
    mentioned are peer reviewed?
        Dr. Deziel. That is correct.
        Chairman Whitehouse. What does that mean to the laymen
    listening?
        Dr. Deziel. Yes. Peer review is the process we use in the
    scientific community to ensure the quality of existing
    research. So when we submit journals for publication, they
    undergo intense scrutiny from multiple other scientists who are
    not involved with the work to check the numbers, check the
    assumptions, check the interpretation and make sure the studies
    are valid.
        Chairman Whitehouse. Your work focuses on your multiple
    observations. The proximity to oil and gas production
    facilities has enormous health effects, adverse health effects
    on children. What would you say is the specific vector for that
    and with specific reference to methane, if you would?
        Dr. Deziel. Yes. Thank you for the question, Senator. Oil
    and gas releases so many hazards that it is quite complex.
    There is potential for air pollution, the methane emissions,
    water contamination, the stress of having your community
    disrupted, increased traffic.
        So most studies have not pinpointed the exact factor and
    likely it is a combination of multiple factors that are
    contributing to some immediate harms, like birth defects, but
    also methane is contributing indirectly. It is not toxic to
    children who live nearby, but it is contributing to climate
    change, which is certainly harmful for the next generation.
        Chairman Whitehouse. Senator Grassley.
        Senator Grassley. Thank you very much, Mr. Chairman. My
    first three questions will be to Ms. Furchtgott-Roth. We have
    heard references to an International Monetary Fund (IMF) study
    that claims the fossil fuel industry receives $660 billion in
    annual subsidies from our country, our government.
        According to President Biden's own budget, repealing all
    specific oil and gas related tax preferences would raise only
    $45 billion over 10 years, a far cry from the $660 billion.
    Would you please explain how the IMF arrives at this ridiculous
    inflated figure?
        Ms. Furchtgott-Roth. Sure. Yes, thank you for the question.
    Well, this is a working paper that does not represent the view
    of the IMF, as its authors say at the beginning, and it has not
    been peer reviewed or published in a peer reviewed journal the
    way that Dr. Deziel's articles have been.
        Several features of the working paper are worth noting.
    China has $2.2 trillion in subsidies. The United States
    supposedly has $660 billion in subsidies. The IMF uses the word
    subsidies to include not just direct taxpayer support for fuel
    use, but an estimate of environmental costs for the combustion
    of the fuel.
        Nearly half of the subsidy calculations are related to coal
    use. In fact, to the extent that onshore and offshore oil and
    natural gas development provides additional volumes of natural
    gas that can substitute for coal combustion, it would
    substantially lower the IMF estimates of the effective subsidy.
        In addition, the report makes no adjustment for revenues
    collected by federal, state and local jurisdictions for oil and
    gas development of public and private lands. And according to
    the Department of Interior, the federal government alone
    collected over $100 billion in oil and gas revenues between
    2005 and 2015.
        A further limitation of the paper is it doesn't effectively
    address uncertainty in calculations from the environmental
    costs of oil and gas use, especially given advances in control
    technologies.
        The paper has no estimate of environmental costs from wind
    or solar or hydropower. It discusses benefits of making fuel
    more expensive but not benefits of making it less expensive. No
    estimate of benefits from fossil fuels, such as availability of
    electricity, drinking water and sewage system, cooking systems,
    rather than wood or dung, health benefits or benefits from the
    idea of manufacturing jobs are given by the IMF paper, and
    there are many benefits from fossil fuels.
        Senator Grassley. Agriculture is very important to Iowa's
    economy. Over the course of these climate change hearings, we
    have heard from Democrat witnesses who support market altering
    and consumer policies to limit fossil fuel consumption and
    drive down emissions.
        Conveniently, they ignore the devastating impact that their
    policies would have on working class Americans and small
    businesses, including family farmers. What role do fossil fuels
    play in maintaining food security, domestically and abroad? And
    I know you touched on this a little bit in your opening
    statement.
        Ms. Furchtgott-Roth. Yes. Not only our energy security, but
    our agricultural production and food security depend on fossil
    fuels. Raising the price of fossil fuels raises the cost of
    food and poor and middle class people pay the price.
        Fossil fuel is essential for food production because of
    nitrogen used in fertilizers. In 2021, Sri Lanka President
    Rajapaksa banned synthetic fertilizer and pesticide imports.
        Prices rose in Sri Lanka, and there were riots.
        Protests are also occurring in the Netherlands and in
    Belgium as policymakers attempt to curtail fossil fuels in
    agriculture. Farmers are rioting because they are losing their
    livelihoods in the name of fighting climate change as European
    governments seek to reduce emissions of nitrogen oxide and
    ammonia, which are vital inputs to modern agriculture.
        European farmers are being told that because of the aim for
    NetZero emissions, their industry is being phased out. And this
    disproportionately hurts poor people, who have to pay more for
    food and who cannot afford to do so.
        Senator Grassley. The Biden EPA recently proposed a new
    emission standard for light and medium duty vehicles. This rule
    would require two-thirds of the new cars to be electric by
    2032. Given your background as an economist, can you speak to
    this rule's feasibility and the cost it would impose on our
    economy and the consumer?
        Ms. Furchtgott-Roth. It would impose massive costs on the
    economy. It would require 60 percent of new vehicles sold to be
    battery-powered electric in just 7 years and right now 6
    percent of vehicles sold are battery-powered electric.
        These new electric vehicles cost more, and charging also
    costs more. Used electric vehicles will be hard to find, and
    most Americans buy used vehicles, with electric vehicles you
    don't know how long the battery is going to last. And electric
    vehicles take longer to recharge. They don't go well in cold
    climates. That is why there are only 510 of them in Wyoming and
    fewer in North Dakota and South Dakota because the range is
    very limited.
        They harm the environment through mining for minerals.
        And many of these minerals are mined with child labor or
    slave labor.
        Electric vehicles will make America weaker and China
    stronger because the electric batteries and components are made
    in China as opposed to oil and natural gas, which is produced
    by Americans with well-paying jobs here in the United States.
        Senator Grassley. Thank you.
        Chairman Whitehouse. Senator Kaine and then Senator
    Johnson.

                       STATEMENT OF SENATOR KAINE

        Senator Kaine. I want to thank the Chair for calling this
    important hearing. When we talk about things like externalities
    and social costs, it can often seem like a theoretical concern
    and some of the discussions that I have been in about climate
    change over the years has suggested that it is a tomorrow
    issue. But I just want to tell you in Virginia, it is a today
    issue.
        We have one of the most vulnerable parts of the United
    States in terms of sea level rise in the Hampton Roads area.
    And in Appalachia we are seeing extreme weather patterns that
    are creating more and more events of extreme rain, flooding
    that damages homes, people's livelihoods, infrastructure,
    schools and roads.
        Interestingly enough, some of the rain data in Virginia on
    an annual basis is not changing that much in these communities.
    It is just that the frequency, the randomness, the severity of
    storms is changing, and the infrastructure was not really built
    for that.
        And so now when we talk about climate change in Virginia,
    including in some areas that have traditionally been producers
    of fossil fuel, the coal fields of southwest Virginia, people
    understand it is not a tomorrow issue or it is not somebody
    else's issue. It is theirs.
        We also see species disappearing in our National Park
    species that require a certain temperature level to reproduce.
    As temperatures rise, they have to move higher and higher up in
    the Shenandoah National Park, for example, and eventually the
    acreages where they can live and reproduce are disappearing.
        We also in Virginia see the effects of fossil fuel
    industries in other ways. Black lung disease affects those who
    mine coal. If you mine Appalachian coal, you have about double
    the change of getting black lung disease as miners of coal in
    other parts of the country because of the way the coal was set
    up and the other components that are there. So these are very,
    very serious issues and important to us.
        If I could ask, to Dr. Gayer and Dr. Deziel, when Congress
    has programs that address the social cost of a specific
    activity, such as black lung treatment and benefits related to
    coal mining, can you talk about why it is important to ensure
    that we internalize the cost with policies such as this?
        Dr. Gayer. Thank you, Senator. First, I think you remind me
    of an occupational hazard of being an economist, which is I
    intend to talk in theoretical concerns. So I appreciate the
    reminder that we all need every day, these are real people
    facing real harm.
        Having said that, I am going to slip back into technical
    terms. The reason why we need to reflect the true cost of our
    activities, including our burning of fossil fuels, is for
    everything that you alluded to. This is an activity that causes
    real damages, not just in the sense of global climate change,
    but in the local pollutants that my colleague here Nicole was
    talking about and as you alluded to.
        And so the kind of pointed headed academic textbook answer
    at its heart is to help real people and to have a flourishing,
    dynamic economy that accounts for the costs of the activities
    that spur that economy. And that's why, as I said before, the
    policies that we need to look at or that I would recommend for
    all of you is to ensure that the burning of fossil fuels
    accounts for those costs, those very real costs, that affect
    Americans.
        Senator Kaine. Dr. Deziel.
        Dr. Deziel. Thank you so much, Senator, for raising the
    issue of the workers. The oil and gas extraction workers have a
    high fatality rate. Workers die each year from explosions,
    falls, vehicle accidents and then there are also the exposures
    from all the chemical hazards. They are closest to the hazards,
    whether it be fencing, hydrocarbons, silica dust, which also
    causes lung diseases. And the workers are often overlooked and
    understudied. Most of the health research has really focused on
    the community in part due to difficulty accessing worker sites.
        So I think this is an extremely important issue that should
    be factored into these analysis.
        Senator Kaine. And if I could say, Mr. Chair, the reason
    that I appreciate you doing this hearing is we have proven
    unable during my time in the Senate to do big meaningful
    climate legislation in a bipartisan way.
        The first climate bill that was introduced in the Senate
    was a bipartisan bill, John Warner and Joe Lieberman. But we
    have been unable to do it in a bipartisan way. We were able to
    make some significant advances in the Inflation Reduction Act.
    And we did some things in the Infrastructure Bill that had
    bipartisan votes that can help us.
        But we do climate legislation a lot if you count coming in
    after the fact to try to do a flood insurance program, to try
    to do a Superstorm Sandy cleanup package, to have a Black Lung
    Benefits program. We don't do the prevention and go at root
    causes very well. But we are willing to do legislation at the
    back end when it's really expensive to do it often.
        And I appreciate the fact that we can bipartisan votes for
    a flood relief or Black Lung Benefit program or, you know,
    other programs on the back end. I just am convinced we need to
    more on the front end, and this hearing helps focus on that.
    And I appreciate it, and I yield back.
        Chairman Whitehouse. Thanks, Senator Kaine. Senator
    Johnson.

                      STATEMENT OF SENATOR JOHNSON

        Senator Johnson. Thank you, Mr. Chairman. Dr. Gayer, you
    are an economist so I want to go compare and contrast fossil
    fuels versus green energy in terms of subsidies, in terms of
    externalities, in terms of benefits. So let's first talk about
    the cost of subsidies.
        In your testimony, you said that the subsidies in the U.S.
    for fossil fuel is about $12 billion over 5 years, correct? The
    Inflation Reduction Act, I think it is over 10 years, about
    $400 billion, but a Goldman Sachs study said it would be closer
    to $1.2 trillion. So just compare that $12 billion versus
    $1,200 billion worth of costs is sure subsidizing a whole lot
    more green energy, correct?
        Dr. Gayer. According to those numbers, yes.
        Senator Johnson. One hundred times higher cost and that's
    just one piece of legislation. Let's talk about the benefits. I
    mean, it's undeniable that fossil fuel is going to power 80
    percent of our economy decades into the future, correct? So
    when you are powering 80 percent of the economy, you're, oh, I
    don't know, paying for air conditioning to allow people to
    escape the heat.
        Certainly, China and India are going to use fossil fuels to
    lift their people out of poverty. Mr. Gayer, do you believe
    there is any chance whatsoever that India and China are going
    to stop using fossil fuels?
        Dr. Gayer. Nor do I think we will, yes.
        Senator Johnson. Zero chance of that. Okay. Are you aware
    of the climate alarmist studies? Their own models show that
    even if we eliminated all CO2 emissions in the United States,
    it would have a negligible, less than a degree difference, in
    terms of what their projections say in terms of climate change?
        Dr. Gayer. I don't know which models you are referring to.
    I don't think that's true.
        Senator Johnson. Pardon?
        Dr. Gayer. I don't think that's true. But I don't know what
    you are referring to.
        Senator Johnson. Oh, it's true. Again, if you look at----
        Dr. Gayer. I have to make a----
        Senator Johnson [continuing]. So my point being, okay, we
    could eliminate all of this. We could shoot ourselves in the
    foot. Spend $1.2 trillion, have no impact on climate whatsoever
    and still have 80 percent of our power provided by fossil fuel.
    I think that's crazy.
        Now let's talk about externalities. Okay? No doubt about
    it, and I think it would be nice to be able to figure out some
    way to price that in, but, you know, the pollution from the
    extraction of fossil fuels plus the pollution from burning
    them, again I acknowledge that, but there are also
    externalities to green energy, correct?
        Here is one right here. This is a photo of a cobalt mine in
    the Congo. There is child abuse going on here. This is child
    labor. Is that okay because it's just not occurring in the
    U.S.? Why are we not accounting for all the mining that is
    going to be required to provide the copper, the lithium, the
    rare earth minerals, the cobalt? Have you studied that cost of
    externalities? Have the climate alarmists studied that? Are
    they accounting for whatsoever not to mention the
    impracticality of actually mining enough to produce the number
    of electric vehicles they are contemplating? Ms. Roth, can you
    speak to that?
        Ms. Furchtgott-Roth. It is very important to be able to
    take into account all of these different costs of mining. And I
    find it very surprising that people who are against coal mining
    in the United States are in favor of mineral mining in the
    Congo----
        Senator Johnson. Because it's happening someplace else?
        Ms. Furchtgott-Roth. It's happening someplace else,
    exactly.
        Senator Johnson. Again, I think it is kind of grotesque,
    pretty arrogant. Dr. Deziel, can you tell me, what is the
    biggest adverse event? What is the major one that you are
    finding your studies from fossil fuels?
        Dr. Deziel. The strongest evidence is for risk to children,
    like preterm birth and birth defects.
        Senator Johnson. Okay. So what is the background rate of
    the birth defects that you are talking about? What is the
    background rate?
        Dr. Deziel. Birth defects are quite rare, but we see an
    additional increase----
        Senator Johnson. Okay. So I'm asking what is the background
    rate of a birth defect rate in hundreds of thousands? I mean,
    what's that background rate?
        Dr. Deziel. Well, I can double-check on the statistics.
        But I think----
        Senator Johnson. This is your study.
        Dr. Deziel. Yes, about 3 percent of births have a----
        Senator Johnson. Okay, 3 percent. Okay. What is it then due
    to--in your studies, how does that increase? What does it go
    to? Does it go to 5 percent or 6 percent? Or what is the
    increase off of that 3 percent?
        Dr. Deziel. Thank you, Senator. In the studies, we find
    that there is about a 20 percent increase in risk, which is not
    to say the 20 percent increase in number of cases, but there is
    a 20 percent greater chance of birth defects in children whose
    mothers live----
        Senator Johnson. So that means it would go from 3 percent
    to 3.6 percent? Again, I am trying to understand your study.
        It is very easy to play with statistics. It is very easy to
    scaremonger, which is what climate alarmism is all about. But
    you have to actually take a look at the reality of the
    situation. Again, China and India are not going to stop using
    fossil fuels, nor are we.
        So we can continue to spend trillions of dollars and have
    no impact on any of these things or we can actually concentrate
    on the things we can fix. And, again, if there are some real
    problems, you know, living around drilling that is something we
    can fix without spending $1.2 trillion. So, again, I'm trying
    to figure out what is the reality situation here? What does
    your study actually show?
        Dr. Deziel. Well, and my study and others we see----
        Chairman Whitehouse. You may answer the question and then
    it is Senator Marshall's turn.
        Dr. Deziel. Thank you. Yes, we see up to--for another
    example, in another one of my studies we saw a doubling of risk
    of childhood leukemia in children whose mothers lived within 2
    kilometers of oil and gas sites. And this is consistent across
    more than five epidemiological----
        Senator Johnson. Well, I would like to see your actual
    data. I don't like the percentages. I want to see the data.
        Okay. Thank you.
        Chairman Whitehouse. Senator Marshall.

                     STATEMENT OF SENATOR MARSHALL

        Senator Marshall. Thank you, Chairman, and I am sorry to
    pick on you, Dr. Deziel, but I also want to follow-up on the
    studies. I didn't know that is where my colleague was going to
    take you. How many of your studies you talked about did multi-
    regression analysis?
        Dr. Deziel. Most of the 50 studies that I have been
    referring to used multiple regression analysis, meaning they
    controlled for many other----
        Senator Marshall. I know what it means. And you mentioned
    the word association as opposed to statistically a difference.
        Dr. Deziel. Mm-hmm.
        Senator Marshall. So did any of these have a statistical
    difference or were they all just associations?
        Dr. Deziel. Most of the studies observed statistically
    significant associations, meaning an increased risk of health--
    --
        Senator Marshall. Well, that's two different--you're the
    epidemiologist, but those are two different terms from a study
    to say if there is an association versus statistical
    difference, meaning two standard deviations outside of the
    mean.
        Dr. Deziel. Most of the studies did observe statistically
    significant----
        Senator Marshall. Then why in your testimony did you use
    the word just associated?
        Dr. Deziel. Just trying to use simple terms.
        Senator Marshall. Okay. All right. That's helpful. So much
    of this is done with religion as opposed to science so we are
    trying to see where we can agree on the science.
        Dr. Gayer, for you, you are the economist here, two of the
    tax benefits that are often talked about are the percentage
    depletion allowance and the intangible drilling cost. If we
    eliminated those, how would they impact someone like Exxon or
    Shell, Chevron, some of those big oil companies?
        Dr. Gayer. Marginally. I think every study, if you look at
    the full suite of tax expenditure subsidies, have only a
    marginal effect on promoting production. So it would increase
    their tax bill for sure. But as far as production and prices
    go, it would have a de minimis effect.
        Senator Marshall. So my understanding that the folks that
    benefit from these, from the bottom line, are the small
    producers. Small producers like in Kansas making five or ten
    barrels per day and that these larger companies don't benefit
    from them. So I think that's a common misconception. And I
    think it is so important for national security that we have
    more than four big oil companies making oil and gas for this
    world and that these small oil producers need those to stay in
    business.
        I want to talk about methane for a second as well and
    probably go back to Dr. Deziel. A third of the methane produced
    in this country is from wetlands and about 20 percent from city
    landfills. You spoke about methane in particular. Did your
    studies take that into account? Were these locations close to
    some type of wetlands or to city landfills as well?
        Dr. Deziel. Thank you for the question. Actually, my
    studies did not focus on methane. My studies focused on more of
    the hazardous emissions coming from oil and gas sites. Methane
    contributes to climate change so in that sense it is hazardous,
    but my studies looked at the more immediate consequences of
    exposures to toxic.
        Senator Marshall. But certainly methane is one of the
    major, you know, concerns for greenhouse gases from the oil and
    gas industry. You know, certainly, the oil and gas industry
    needs to own that, that about a third of them do come from the
    oil and gas industry, but a third of them come from wetlands as
    well.
        So are you suggesting we should, like, I don't know, what,
    bulldoze in the wetlands, too? It's a rhetorical question. I
    shouldn't have asked it as well.
        So often in this world we live in in D.C., we try to think
    about the environment in different perspectives. And certainly,
    I just want the chairman to know, my friends across the aisle
    that I want to leave this world cleaner, healthier and safer
    than we found it. But also we need to think about affordability
    and reliability when it comes to energy as well, that this
    administration's policies have been an attack on certainly
    American energy. It's been an attack on American agriculture,
    and it has been an attack on the hardworking Americans as well.
        When we see grocery prices going up 20, 25 percent.
        Energy costs, oil and gas, utility costs as well, going up
    over 30 percent, that is an attack on hardworking Americans. So
    I guess my question is, when we make policies, do we ever think
    about the affordability and the reliability of energy as well?
        I think I will just leave it there. Thank you, Mr.
    Chairman.
        Chairman Whitehouse. The question was rhetorical? You're
    not seeking an answer from any of the witnesses? The question
    was rhetorical, just to be clear.
        Senator Marshall. It is not rhetorical. I think I was just
    out of time and trying to be respectful of our time.
        Thank you.
        Chairman Whitehouse. Okay. I think next up is Senator
    Lujan.

                       STATEMENT OF SENATOR LUJAN

        Senator Lujan. Chairman, thank you very much and thank you
    and Ranking Member Grassley as well and all of the panelists
    that are with us today.
        Dr. Gayer, I particularly appreciated your statement that
    energy policy should account for the sizable external cost of
    energy production. We know what these costs are. The cost is
    climate change. The cost is air pollution. The cost is damage
    to our environment as well.
        One of the costs that I have tried to address is the cost
    of oil and gas wells that have been abandoned by the industry.
    Too often oil and gas companies fail to plug their wells when
    production ends. Some of those wells then go to different
    ownership, but we saw this enormous problem that fortunately
    colleagues came together in a bipartisan way to agree that they
    should be plugged.
        As a result, the wells pose significant risk to the
    environment and surrounding communities by leaking toxic
    chemicals into the air, contaminating groundwater and
    contributing to climate change through methane emissions. One
    of the abandoned wells that I visited before passage of the
    bill was in an area where there was cattle grazing. And anyone
    that is familiar with these wells knows that there is a bucket,
    if you will, that is connected to the tank where a truck will
    go up, and they connect.
        While this particular well had been abandoned, the cattle
    were still eating in the area, and they were drinking from that
    bucket. And there was a lot of stuff in there, as you can
    imagine. And so that is just one example of a challenge that I
    witnessed personally that needed to be fixed.
        So millions of abandoned wells across the nation needed to
    be cleaned up, hence working together in a bipartisan way on
    the Regrow Act.
        This bill provided $4.7 billion to plug oil and gas wells
    that were abandoned by those who profited from leaving this
    mess behind. This wasn't about leaving things better than you
    found them. This wasn't even cleaning up after yourself.
        Now under current statute, we have no choice but to
    remediate them at taxpayer expense to prevent the continuing
    suffering of disadvantaged communities. So my question, Dr.
    Gayer, is yes, or no, is it irresponsible of energy companies
    to abandon their oil and gas and wells and force taxpayers to
    pick up the tab for cleanup?
        Dr. Gayer. I don't know the particular examples. My short
    answer is yes. My long answer is, yes, I think you are right.
    This is an issue that carbon taxation has lots of merits, but
    it is not going to meaningfully address the concern of
    abandoned wells. So regulatory, legal liability and in this
    case, public funding to clean up the mess, I think, is the
    right way to do it.
        Senator Lujan. You touched on my follow-up question, which
    was do you believe that operators should be held responsible
    for their activities' impacts upfront before drilling begins
    rather than offloading the burden on taxpayers?
        Dr. Gayer. So once of the risks is--you are asking a legal
    question to an economist so I don't know the legal aspects and
    I don't know what the current existing law is. But certainly,
    we should have a legal apparatus where you cannot abandon
    harmful materials and leave it to either harm people or for the
    federal government to intervene ex-post.
        Senator Lujan. I appreciate that. Dr. Deziel, last year
    Congress passed the Inflation Reduction Act. And this historic
    piece of legislation is accelerating the transition to a clean
    energy economy, creating millions of good paying jobs and
    providing cleaner air and better health for us.
        There was a substantial investment, $369 billion in
    production and investment tax incentives to promote
    technologies that improve air quality and reduce emissions.
        Yes or no, will the Inflation Reduction Act improve public
    health by reducing air pollution?
        Dr. Deziel. Thank you, Senator. Emission, I mean,
    engineering controls, like emission controls that can be
    implemented at oil and gas sites, is certainly an important
    public health tool for the fossil fuel industry. However, it is
    not enough. These devices only capture certain pollutants like
    air pollutants or potentially methane. They do nothing to
    address noise, water contamination, traffic, the degradation of
    the landscape. So they are an incomplete solution to the public
    health issue of oil and gas extraction. They would have to be
    coupled with some other strategies.
        Senator Lujan. Do you think repealing the Inflation
    Reduction Act would damage the health of citizens across the
    country, especially children and the elderly?
        Dr. Deziel. I think we need as many protections, layers of
    protections, as we can get, including air emission controls to
    protect public health.
        Senator Lujan. Why do we need more protections? Why do we
    need more of those tools?
        Dr. Deziel. Well, oil and gas sites have been shown to emit
    toxic air pollutants and methane. There are many studies have
    concluded that.
        Senator Lujan. So if there are fewer of those protections,
    then that would lead to a concern with public health?
        Dr. Deziel. Yes. Fewer protections would mean more
    exposures and health risks to nearby communities.
        Senator Lujan. I appreciate it. Mr. Chairman, that sounds
    to me like if there was a repeal of the Inflation Reduction Act
    that it would create damage to the health of citizens and the
    elderly and children as well.
        I thank you for the time, and I appreciate the panelists
    being here.
        Chairman Whitehouse. We turn to Senator Braun.

                       STATEMENT OF SENATOR BRAUN

        Senator Braun. Thank you, Mr. Chairman. I have been
    listening to the entire conversation, just not from here. But I
    have been involved in it as a Republican from almost the time I
    got here in the U.S. Senate. And my interest in climate goes
    way, way, way back further than that.
        So I have never seen anything where there could be two more
    disparate views. And you heard it, I think, eloquently from the
    Chairman and Ranking Member Grassley earlier. The question is
    how do you sort through all of this? What is the truth?
        This is the Budget Committee. I am going to weave it back
    into that discussion here in a moment. But the fact is for as
    long as we have been talking about it, whatever modeling has
    been out there has probably not been that good because it has
    not, I think, created enough urgency for many that dismiss the
    idea as even being out there worth discussing.
        And on the other side, I don't think it is given enough
    certainty to where you do what we have done so far, which is
    give so much advantage to our geopolitical competitors that are
    the gross emitters that are there growing their economies,
    building coal-fired plants nearly weekly in places like China
    and India. So how do you sort it all out?
        Well, I think then you have got to come back and take what
    has been kind of weak information, modeling that if it was that
    good, the case would be made. And how do you survive into the
    future to do something about it?
        Then let's look at what else is in play. This comes back to
    budget. We are currently running $2 trillion deficits. And I
    think if the other side of the aisle had its ways, it would
    even be deeper than that because there would have been more
    legislation based upon borrowing money on something that is a
    little amorphous in general.
        Let's look at the other side. The start of the climate
    caucus here with Chris Coons back in July, I think, of '19 and
    there is clear consensus, I think, across the economic
    community here in this country that something is afoot. When I
    talk to the main stakeholders, even in places like Exxon,
        Chevron, they say there is an issue. They also tell me they
    have no idea how they are going to get beyond the low hanging
    fruit, in other words past the things they have committed to do
    2030 to 2035. And the consensus I hear mostly is that it is
    going to take some technological breakthrough that we haven't
    even found yet. A lot is working there as well.
        So do you absolutely plow forward to where it is the
    concept of present value? Present value in finance means the
    variables you know about are what is happening closer to the
    present. In other words if you're spending, investing so much
    currently, you don't know how it is going to turn out until you
    get the uncertain cash flow that occurs down the road.
        I think that is where we are at. I know as one who got
    texts when you got involved in climate, have you gone to the
    dark side? I don't think so. I think we ought to be in the
    conversation. And I get that politically from young
    Republicans, young conservatives, faith-based communities, from
    Evangelicals to Catholics and then you throw farmers in there
    who are conservative politically by nature who know something
    is afoot. I am still involved in that, and I would have to
    agree with that.
        But it gets back to my original point. A lot of this is
    amorphous information that has not been modeled well and then
    let us come back to the financial point. We are consistently
    going broke as a country because we are projected to be $51
    trillion in debt in just 10 years. That is close enough to
    where that is a key figure you can stick into the present value
    analysis. That is not good.
        How do you deal with things out of your control where
    you've got the two biggest emitters in the future that seem to
    be giving it lip service only? And in business and anything
    else you have got to mix the short run survivability with your
    long-term goals. We should have never gotten rid of our energy
    independence like we did because I think that has caused
    political problems across the spectrum, especially on the other
    side of the aisle.
        Budget deficits that look like they are going to worse
    rather than get better, what do we do with it? Where do we go
    from here? We obviously don't want to add further to the
    present value of pain financially. We need to revive whatever
    it is going to take to have reliable base load production on
    the electric side. We are going to need--transportation is
    going to have to be looked at. It would overtax the grid in a
    way that we couldn't do it, but we still need to navigate
    towards something that is affordable.
        I put this out there now as a statement. I will have a few
    questions if you are going to do a second round. I want to
    respect that. But I am saying that the most important thing is
    we have got to survive into the mid and long-term financially,
    and we currently don't look like we are doing it in the way we
    run the federal government in general, whether it is on health
    care, whether it is on climate, whether it is on anything else
    we do. I will yield back and if there is time for further
    questions, I will have a few.
        Chairman Whitehouse. I would be delighted to make time for
    further questions and to have a second round. Senator Kaine
    will lead off with that. Let me just say before Senator Kaine
    begins his questioning that I would like to take a moment to
    express my admiration for you and the sincere and thoughtful
    way you have addressed these issues. You have been a good
    person to work with on climate solutions.
        And to your point, if I had my way, the debt number would
    be much higher, I would just like to say I think the debt
    number would be much lower because I actively support a robust
    carbon price, and I actively support cleaning up the Tax Code
    of its many, I would say, corrupting inequalities. And between
    those two, that would create deficit reducing revenues.
        But with that, let me turn to Senator Kaine, and then back
    to Senator Braun, and then Senator Lujan, if he wants.
        Senator Kaine. I will be less than a minute. And it is just
    a point that I wanted to raise inspired by a question that my
    colleague Senator Lujan asked. He asked whether the repeal of
    the Inflation Reduction Act would have, you know, direct
    effects on people's health.
        And I want to point out in one way it would, and it was one
    of the lesser discussed parts of the Inflation Reduction Act.
    Obviously, the IRA dealt with prescription drug costs.
        The IRA dealt with clean energy. But the IRA also had a
    really important public health provision, which is fully
    funding the Black Lung Benefit program.
        That program had been funded on an excise tax on coal
    extraction. But it was set at a level that fully funded the
    program, but then that excise tax expired and was not
    reauthorized. And it rolled way back, which put the burden of
    the program on the backs of general taxpayers rather than coal
    companies.
        In the Black Lung Benefit--in the Inflation Reduction Act,
    we did a permanent fix of the financing of the Black Lung
    Benefit program so that the miners in Virginia and elsewhere
    who face the significant risk of black lung disease--and in
    Appalachia, because of the condition I mentioned earlier, folks
    are getting diagnosed with black lung disease earlier and
    earlier and earlier in their careers. It used to be something
    that somebody would get diagnosed with maybe in their late 40s
    or 50s. It is not uncommon to see coal miners in their 30s now
    getting diagnosed with black lung disease because of the
    conditions, the amount of silica and other components that they
    have to breathe as they are doing coal extraction.
        But we have fixed--we haven't made coal mining safer, but
    we did fix the benefit program so that at least people who get
    diagnosed can count on the fact that benefit program will be
    there. If the IRA was repealed, we would go back to a situation
    where the funding would not be there, and people wouldn't be
    guaranteed they could have access to a program that would
    protect their health in the tragic circumstances of black lung
    diagnosis.
        So I just wanted to acknowledge that was a really important
    part of the IRA, especially in Virginia and other coal mining
    states. And a repeal would throw that program into jeopardy and
    thus hurt people.
        Chairman Whitehouse. As we switch back to Senator Braun,
    let me put into the record the announcement from EPA regarding
    its pollution standards for cars, light duty trucks, reporting
    that reduced fuel and maintenance costs under the proposed
    standards would save the average consumer $12,000 over the
    lifetime of a light duty vehicle as compared to a vehicle that
    was not subject to the new standards. And with that, Senator
    Braun.
        Senator Braun. Thank you, Mr. Chairman. When it comes to
    the whole budget discussion, I am going to just briefly give an
    answer to the Chairman's comment.
        Running $2 trillion deficits, the Trump tax cuts, which by
    the way were getting close to paying for themselves pre-COVID,
    that is chump change, $150 billion per year. So that is only
    7.5 percent of our current deficits.
        The carbon tax, that is something that, I am not sure how
    you would model that in terms of what it would do, but until we
    get our spending in line with historical revenue generation,
    which has always averaged 17.5 to 18 percent of our GDP other
    than 3 years in the Clinton Administration, we just don't have
    an economy that will give us more revenue. And if you do tax it
    more, you will have lower economic growth over time as another
    consideration philosophically in terms of what you do with
    budget.
        My question to all three of you would be the fact that
    you've got the now second largest economy and the soon to
    become third largest economy, India, which is about ready to
    eclipse Japan's economy, when they are plowing forward, Senator
    Johnson talked about some of it, what is happening elsewhere,
    how do you justify from your own points of view when that is a
    reality, you can actually put some numbers down there, and
    where the savings, in terms of what you do by mitigating
    climate, has got a little more speculation to it?
        Give me the pros and cons from each point of view of how we
    navigate through all of that. And if you want to throw it in
    the context that we are borrowing nearly 30 cents on every
    dollar we spend here, which is a budget consideration, if you
    want to spend money, how do we justify doing that?
        We will start over there, Doctor, on the left.
        Dr. Gayer. Thank you, Senator. First, I want to commend you
    for the framing of the problem. You did say that there was no
    more disparate views. Maybe I am being overly optimistic. I
    hear equal concern for the welfare of Americans, whether or not
    it is health or whether or not it is economic.
        So I am going to try to sell you a little bit on where I am
    for a carbon tax. A carbon tax is less intrusive. It will spur
    innovation. It will protect the economic interests of
    Americans. It is a simpler approach. I think it's a market
    friendly approach, that is why I am for it. So the way that I
    can----
        Senator Braun. How much roughly a year would you say that
    is going to generate?
        Dr. Gayer. It certainly depends on the tax, but you are
    right. It is probably in the order of $100 to $200 billion,
    something--and then of course----
        Senator Braun. And then again, we are talking, just for the
    record, my Carbon Pricing Bill was priced out at about $2
    trillion over 10 years.
        Dr. Gayer. Okay, of revenue.
        Senator Braun. That would be then in line with 10 percent
    of our current deficit. So that means it is a lot of room to go
    from that and say changing tax policy. Still we are spending a
    lot of money that we can't generate through tax policy. Go
    ahead.
        Dr. Gayer. My point is it helps----
        Senator Braun. Yes.
        Dr. Gayer [continuing]. And also the reducing the fossil
    fuel subsidies, although not massive, even smaller helps.
        Senator Braun. But the heaviest lifting would have to be
    done through spending if you want to get to a balanced budget.
        Dr. Gayer. Sure, for taxes. Yes, that's right. So, you
    know, I guess I am trying to be a little bit more optimistic
    that there is a policy out there that kind of joins the two
    sides and their concerns on both the economic and health
    consequences of our energy use.
        On China, I commend you also. It is an issue. It is a
    global pollutant. We heard today about the local pollutant
    effects. Those are real. Those have nothing to do with China in
    the sense that, you know, addressing fossil fuel use here would
    help the health of Americans in that sense.
        But in the global sense, you are right. We have China. We
    have India. It is a global problem. Again, I think I come from
    a bit of optimism on my policy here. One, we don't doubt that
    this is a serious problem so we can't just say because we can't
    solve the global issues we can ignore it.
        I certainly think if we don't have smart policy that
    addresses the issue domestically, other countries are less
    likely to act. But indeed reciprocity should be part of it,
    which is again the border adjustment tax helps with that.
        And, again, I will get to what to what I said before. I
    think a price signal will lead to innovations. I think it will
    give you the tech breakthroughs that you said are necessary. I
    think that is where the answer lies. And quite honestly, as we
    have seen in other sectors, if Americans have tech
    breakthroughs, the Chinese will adopt that technology. And so I
    think there is real hope there as well.
        Senator Braun. Thank you.
        Dr. Deziel. Thank you, Senator, for the thoughtful
    question. I am not an economist so I will just briefly say that
    the studies that I have cited are not about modeling the
    future. They are not amorphous. They are about kids who already
    have cancer, have birth defects, have asthma. So addressing
    fossil fuel now will have very real impacts to communities
    today and that energy justice is an incredibly important issue.
    We all deserve access to reliable and affordable energy, but
    just not at the expense of fence line communities. Thank you.
        Senator Braun. Thank you.
        Ms. Furchtgott-Roth. Yes. Thank you for the question. I
    would say in order to help the deficit, we could repeal the
    $570 billion of green tax credits in the Inflation Reduction
    Act without repealing the whole act, thereby leaving the Black
    Lung program provision as it is.
        I am against a carbon tax because it is regressive. It
    hurts poor people the most. Their prices go up for appliances,
    for food, for other kinds of things. The border adjustment,
    according to the World Trade Organization, might not be
    completely legal. So we might have foreign products coming in
    at lower costs than American products.
        An additional tax would slow GDP growth in the United
    States. These taxes are never perfect. And it is always
    difficult to estimate the amount of carbon in a particular
    product. And so you might find some exemptions, some not. Most
    importantly, this is very similar to a value added tax, which
    we have seen rise over time. They start small.
        Europe has a 20 to 25 percent value-added tax that started
    very small. Canada's rose also. And Congress, you Senators, are
    unlikely to repeal the income tax or any other tax. So this
    would be one tax layered on top of another tax.
        America's air has been getting steadily cleaner. The six
    criteria pollutants, if you look at the EPA data, are getting
    cleaner all the time because of clean, natural gas. If we
    offshore production to China, they are making these electric
    batteries, the wind turbines, the solar panels with coal-fired
    power plants. It is not reducing global emissions or helping
    climate change.
        What we need to do is use our own oil and natural gas
    resources and encourage other countries to use clean natural
    gas also either by us exporting it or by us exporting the
    technology so that they can do fracking also. That would be far
    more useful than these $570 billion in green tax credits, many
    of which, by the way, are going to be benefitting China. EVs
    now apparently they don't have to be made in the United States
    to get the credit if they are leased, because they count as
    commercial vehicles, which opens a loophole to, again,
    subsidizing China, making China stronger and the United States
    weaker. Thank you.
        Senator Braun. Thank you. And thanks for your comments. And
    one final conclusion in terms of a comment from me. We are
    entering into a much broader discussion. It is right in front
    of us now with what is happening over in the House in terms of
    debt limit and all of that.
        I come from the world of being an entrepreneur with an
    emphasis on finance. And I can tell you that you can't run any
    enterprise like we are currently running it. And since the Gulf
    Wars, to date, we have been taking our country and its balance
    sheet into a place that regardless of what you want to do here,
    it's not healthy.
        The crowding out effect of interest in and of itself is
    going to be a heavy weight that gets worse each year. And all I
    can tell the American public, whoever is listening, the numbers
    always win. You can't escape them. And currently, we are in a
    place where we have got time, but it takes political will and
    discipline just like you would have to exercise in any other
    venue to kind of rein things back in so that this place is
    healthy for all the people that look to it for whatever reason
    it might be. Thank you, Mr. Chairman.
        Chairman Whitehouse. Thank you very much, Senator Braun.
    One clarification, if you don't mind, Dr. Gayer, if natural gas
    is used as a feedstock for fertilizer and not combusted, does
    it pay a carbon tax?
        Dr. Gayer. It depends where you are administering the
    carbon tax. So there are different--I am trying to think from
    memory. If you levy it at its source, then it would be in the
    price.
        Chairman Whitehouse. Unless an adjustment were made for----
        Dr. Gayer. And it is a question of how much--you can't get
    100 percent of it. And so you can make adjustments for where
    you want to levy the price and how far upstream you levy the
    price.
        Chairman Whitehouse. And if we wanted to exert pressure on
    countries like China and India to move off of fossil fuels and
    to accelerate their transition to clean energy, what U.S.
    policy would most likely accomplish that?
        Dr. Gayer. That was what I was mentioning to your colleague
    before. I think the carbon tax is both credible. It is
    supportive of a strong U.S. economy. It helps us transition our
    energy. It leads to technological innovation, and it helps us
    both from a diplomatic point of view and also from a
    technological transfer point of view to get other countries to
    move in a similar direction.
        Chairman Whitehouse. With a robust border adjustment
    obviously.
        Dr. Gayer. Exactly, so, yes, sir. Thank you.
        Chairman Whitehouse. Dr. Furchtgott-Roth, welcome back to
    hearings with me. As you know, you are a frequent flyer here in
    the halls of Congress, and I think always called by the
    Republican side and with an astonishing range of expertise.
        My review of your testimony is that you have testified on
    subjects as diverse as the Capital Gains tax, the challenges of
    the 21st Century workplace, Chief Justice Roberts' record on
    women's rights, education reform, the Paycheck Fairness Act,
    residency and right to work issues, medical bankruptcy reform,
    Samoan fishery subsidies, the gender pay gap, a balanced budget
    amendment, that the Affordable Care Act would lead to high
    unemployment rates, that to help older workers find jobs, we
    should roll back the Affordable Care Act, eliminate EPA
    regulations on coal and approve the Keystone XL pipeline, on
    sequestration, on health insurance, on taxation, on empowerment
    in the workplace, on job vacancies, on the American Rescue Plan
    telling employees not to show up for work and on a range of
    climate related issues. Is that a pretty fair summary of the
    breadth of your testimony across various Congressional
    committees?
        Ms. Furchtgott-Roth. Yes, I am fortunate to have been able
    to write six books and hundreds of articles. I have been chief
    economist of the Labor Department, the equivalent of chief
    economist of the Treasury Department and chief of staff of the
    Council of Economic Advisers. So I have had a lot of----
        Chairman Whitehouse. Yeah, that's in your resume. And you--
    --
        Ms. Furchtgott-Roth. Yes. And----
        Chairman Whitehouse [continuing]. Worked before for the
    American Petroleum Institute is that correct?
        Ms. Furchtgott-Roth. Four years at the American Petroleum
    Institute, but unfortunately----
        Chairman Whitehouse. And you worked at the American
    Enterprise Institute, is that correct?
        Ms. Furchtgott-Roth. Yes.
        Chairman Whitehouse. And then the Hudson Institute?
        Ms. Furchtgott-Roth. I did work for the Hudson Institute.
        Chairman Whitehouse. And the Manhattan Institute?
        Ms. Furchtgott-Roth. Yes.
        Chairman Whitehouse. And now the Heritage Foundation?
        Ms. Furchtgott-Roth. Yes, yes.
        Chairman Whitehouse. And every single one of those groups
    is funded by the fossil fuel industry, is that not true?
        Ms. Furchtgott-Roth. Well, unfortunately, I don't have the
    benefit of being able to rely on a family fortune made in the
    Minnesota gas business or having my spouse's family fortune
    come from United Gas. And the Heritage Foundation is a club
    that anyone can join, not just white people. During 2021, it
    had hundreds of thousands of individual foundation and
    corporate support as representing every state in the United
    States.
        Chairman Whitehouse. Do you know how much funding it
    received from the oil and gas baron Koch Industries political
    operation?
        Ms. Furchtgott-Roth. The top five corporate givers provided
    the Heritage Foundation with only 1 percent of its 2021 income.
    Individuals contributed 82 percent, foundations 12 percent,
    corporations 1 percent, program revenue and other income 5
    percent.
        Chairman Whitehouse. The answer is that it is over $5
    million from the Koch's various foundations since 1996, from
    donor's trusts and donor's capital fund, which are the great
    pass-throughs for the fossil fuel industry to obscure their
    role. Heritage has received over $2 million. It has received
    nearly three-quarters of a million dollars from Exxon since
    1998.
        In 2019, Heritage reported on its tax return that its
    various direct mail, telemarketing and fundraising efforts were
    responsible for 19 of the $117 million it received. Can you
    explain where the other $98 million came from?
        Ms. Furchtgott-Roth. As I have said, we have hundreds of
    thousands of individual donors. And I have been writing, as you
    point out, the same things throughout all of my career as a
    professional economist beginning in 1985, and what I write
    doesn't depend on where I work.
        Chairman Whitehouse. You wrote, for instance, in a Forbes
    column last year that renewables actually increase global
    emissions. Do you stand by that comment?
        Ms. Furchtgott-Roth. Yes. Because they are made with coal-
    fired power plants in China. I did explain that renewables
    were--the wind turbines and solar panels are made, and
    batteries are made with coal-fired power plants in China. I did
    explain that if these were made with emissions-free energy,
    such as nuclear power, then the benefits to the environment
    would be much greater. But many environmentalists who are in
    favor of renewables are against dense emission nuclear power
    and therefore making these renewables often raises emissions.
        Chairman Whitehouse. In addition to stating that renewables
    actually increase global emissions, have you also agreed that
    recent data, and I quote here, ``calls into question the
    conclusion that humans are the dominant cause of recent climate
    change.''
        Ms. Furchtgott-Roth. I am an economist, not a scientist.
        Chairman Whitehouse. Well, you wrote that for a Wall Street
    Journal opinion piece in 2015.
        Ms. Furchtgott-Roth. Yes, well, scientists----
        Chairman Whitehouse. Do you stand by it here today in 2023?
        Ms. Furchtgott-Roth. Yes, scientists disagree on the human
    component of global warming.
        Chairman Whitehouse. Okay.
        Ms. Furchtgott-Roth. And in this book, ``Unsettled,'' by
    Steve Koonin, who was Undersecretary of Energy under President
    Obama, and who taught for 30 years at Caltech, and has a Ph.D.
    in physics from MIT, he says that it is uncertain how much
    human activity affects global warming. The case is unsettled.
    And I am no better scientist than he is.
        Chairman Whitehouse. Well, thank you very much. It is
    notable that is the position that the Republican Party intends
    to stand by. With that, the hearing draws to its conclusion.
    Anybody wishing to ask a question for the record, try to get
    that in by noon tomorrow, and one week from that to get any
    answers. So if you got a QFR, please respond quickly with an
    answer within a week. And with that, the hearing is concluded.
    Thank you.
        [Whereupon, at 11:36 a.m., Wednesday, May 3, 2023, the
    hearing was adjourned.]

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