[Senate Hearing 118-328]
[From the U.S. Government Publishing Office]
S. Hrg. 118-328
THE PRESIDENT'S BUDGET REQUEST
FOR THE U.S. DEPARTMENT OF
ENERGY FOR FISCAL YEAR 2025
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HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
__________
APRIL 16, 2024
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT[
Printed for the use of the
Committee on Energy and Natural Resources
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
55-890 WASHINGTON : 2025
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
JOE MANCHIN III, West Virginia, Chairman
RON WYDEN, Oregon JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont MIKE LEE, Utah
MARTIN HEINRICH, New Mexico STEVE DAINES, Montana
MAZIE K. HIRONO, Hawaii LISA MURKOWSKI, Alaska
ANGUS S. KING, JR., Maine JOHN HOEVEN, North Dakota
CATHERINE CORTEZ MASTO, Nevada BILL CASSIDY, Louisiana
JOHN W. HICKENLOOPER, Colorado CINDY HYDE-SMITH, Mississippi
ALEX PADILLA, California JOSH HAWLEY, Missouri
Renae Black, Staff Director
Sam E. Fowler, Chief Counsel
Zahava Urecki, Senior Professional Staff Member
Justin J. Memmott, Republican Staff Director
Patrick J. McCormick III, Republican Chief Counsel
Valerie Manak, Republican Deputy Staff Director for Energy
C O N T E N T S
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OPENING STATEMENTS
Page
Manchin III, Hon. Joe, Chairman and a U.S. Senator from West
Virginia....................................................... 1
Barrasso, Hon. John, Ranking Member and a U.S. Senator from
Wyoming........................................................ 4
WITNESS
Granholm, Hon. Jennifer M., Secretary, U.S. Department of Energy. 7
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
Barrasso, Hon. John:
Opening Statement............................................ 4
Chart entitled ``Changes in Energy Prices''.................. 6
Granholm, Hon. Jennifer M.:
Opening Statement............................................ 7
Written Testimony............................................ 9
Responses to Questions for the Record........................ 53
Hawley, Hon. Josh:
Poster depicting question from Senator Hawley to Secretary
Granholm at April 20, 2023 hearing of the Senate Committee
on Energy and Natural Resources............................ 42
Poster displaying timeline from 2022-2023.................... 44
Manchin III, Hon. Joe:
Opening Statement............................................ 1
United Against Nuclear Iran:
Letter addressed to Secretary Granholm and NREL President
Martin Keller, dated March 25, 2024........................ 145
THE PRESIDENT'S BUDGET REQUEST
FOR THE U.S. DEPARTMENT OF
ENERGY FOR FISCAL YEAR 2025
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TUESDAY, APRIL 16, 2024
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:01 a.m. in
Room SD-366, Dirksen Senate Office Building, Hon. Joe Manchin
III, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JOE MANCHIN III,
U.S. SENATOR FROM WEST VIRGINIA
The Chairman. I would like to start by welcoming my friend,
Secretary Jennifer Granholm, who is here today to discuss the
President's Fiscal Year 2025 budget request for the Department
of Energy. Thank you for being here today, Secretary.
As Chairman of this Committee and Senator from one of
America's energy powerhouses, it has been incredible to witness
how transformative the Bipartisan Infrastructure Law and the
Inflation Reduction Act have been so far. We are more energy
independent today that we ever have been, and we're producing
more energy cleaner than ever before. In 2023, the United
States produced a record 38 trillion cubic feet of gas, a
record 4.7 billion barrels of crude oil, a record 238 million
megawatt-hours of solar power, and a record 6.4 gigawatts of
new batteries installed on the grid. That's the type of all-of-
the-above energy production that we need as a country and that
we aspire to have.
Now, these laws were also crafted with the goal of securing
our energy supply chains and using innovation rather than
elimination to reduce emissions. I fully believe that when it
comes to goals or regulations, if it's not feasible, it's not
reasonable, and there are a lot of technologies that have
received minimal federal support in the past that could help
reduce emissions that could use a boost. A great example is
hydrogen, which we heavily invested in through both of those
laws. Since we last had Secretary Granholm here, the Bipartisan
Infrastructure Law's Hydrogen Hubs were announced, which will
benefit 16 states and attract more than $40 billion in private
investments. West Virginia is proud to be part of the ARCH2
Hub, but the impact of these bills for West Virginia and
America doesn't stop there.
Instead of being left out, as our energy mix evolves,
traditional energy communities are going to play a major role
in our energy future and investments in new energy
manufacturing facilities. This includes brand new projects like
Form Energy's iron-air battery plant in the legacy steel town
of Weirton, West Virginia, which is supported by the advanced
manufacturing tax credits from the IRA. It also includes
upgrades and improvements for existing facilities, like the
Constellium plant in Ravenswood, West Virginia, which has
received $75 million from the IRA and Bipartisan Infrastructure
Law to help them decarbonize.
And it's not just West Virginia. For example, the IRA has
enabled DOE to guarantee a loan for the first-ever restart of a
nuclear power plant, the Palisades plant in Michigan, which
will provide dispatchable and clean power to meet our country's
growing energy demand. The IRA has also mandated federal
offshore oil and gas leasing to continue, and as a result, we
have received the most bids for offshore leases since 2014 and
generated more than $600 million in revenues to help reduce our
debt. And since America's offshore oil and gas production has
among the lowest greenhouse gas emissions in the world, these
projects will displace dirty fuels produced elsewhere. These
bills created a lot of opportunity, which is why I am so
frustrated about the numerous ways the Administration is trying
to reinvent them to fit their political agenda in picking
winners and losers, the law be damned.
Last year, we talked a lot about EV tax credits, which had
been revamped in the law to secure supply chains and very
quickly watered down by the Administration in an effort to
bribe consumers. No sane person can compare the letter of the
law and the proposed guidance and see it any other way. And
unfortunately, we are already seeing the impact of these
deviations from the law. Last week, Treasury announced that
they have reimbursed more than $580 million for EV tax credits
so far this year, which is well beyond the $451 million CBO
projected for all of the year 2024. But we've talked a lot
about how frustrated I am about that and the detrimental impact
I believe it will have on our national security to have our
transportation sector beholden still to China.
Let me raise an issue that has happened since the Secretary
was here last year--the new unworkable requirements for the
hydrogen industry to be eligible for tax credits that were
invented out of thin air. These were things we never heard of.
Adding on these, which are ``additionality,'' ``hourly
matching,'' and ``geographic proximity''--the requirements
could be a death blow to this critical new sector, and you
won't find those words in the law anywhere. Where you will find
them is in a letter sent to the Administration by the climate
groups who want to see hydrogen fail. Meanwhile, the
Administration is also distorting the rules to give an extra 10
percent in tax credits to offshore wind projects located in the
ocean by making the bogus argument that they are in a legacy
energy community. I don't think there's any coal communities in
the ocean that were supposed to get the extra 10 percent to try
to reinvigorate their economy. So, on the one hand, the
Administration is trying to liberalize the credits for the
selected technologies that the left-wing activists want, and at
the same time, they are trying to limit the credits for
technologies they don't like, such as hydrogen, carbon capture,
and domestic mining.
To make it worse, they are doing all of this as proposed
rules--and I think we've spoken about proposed rules--so that
they can avoid any legal action against them to rectify the
situation when they put out the permanent rules. Unless they
change course, we're missing a tremendous opportunity to
realize the full promise of these bills. I bring this up today
because while the implementation of these tax credits is
technically being done by Treasury, the Department has been
working closely with Treasury and playing an important role in
developing the guidance. And I implore you to please step in
and fix the craziness before it's too late.
Now, the tax credits aren't my only concern. The
Administration has put a political pause on LNG export
permitting--at a time when U.S. natural gas prices are as cheap
as ever--before doing any analysis on whether our growth in
exports will actually outpace our reserves or how this will
impact our allies abroad and our own economy. I believe that
studies must be done to make sure that Americans aren't paying
a premium while companies are making a bigger profit by
exporting, but making decisions to appease activists without
any data to back them up is just not how our government should
work. DOE has also tried to rush a transition to efficiency
standards that put U.S. manufacturing at risk. But I was very
glad to see that DOE backed off its original proposal for
distribution transformers and move to a standard similar to
that which I proposed in a bipartisan bill with Senators Brown,
Cruz, and others.
But of course, we're here today because of the President's
budget request for Fiscal Year 2025. I would be remiss if I did
not register my grave concerns about our nation's growing debt
and the larger consequences if we don't get our spending in
check. The Department of Energy's budget request has a 2.3
percent increase over the 2024 levels. So I look forward to
discussing how to ensure the Department has the resources it
needs to stay on the forefront of energy innovation and bolster
our energy security without spending beyond our limits. Within
the request, I was pleased to see funding proposed for several
priorities that are important to my State of West Virginia and
to a lot of other of our colleagues here on the podium. This
includes $385 million for the Weatherization Assistance
Program, which I know is important in all of our states; $900
million for DOE's Office of Fossil Energy and Carbon
Management; a $3 million increase for the Interagency Working
Group on Coal and Power Plant Communities; and continued
support for the National Energy Technology Laboratory, which is
NETL, located in Morgantown. These are important because they
keep West Virginia on the cutting edge of innovation while
ensuring no one is left behind.
Secretary Granholm, I appreciate you being here today to
discuss the issues that are important to all of us. And we may
not always see eye-to-eye, but we have always been friends, and
we always will be. And I have so much respect for you and the
work that you and your Department has always been accessible to
work with. I look forward to hearing your perspective on these
issues.
With that, I am going to turn to our Ranking Member, my
friend Senator Barrasso, for his opening statement.
OPENING STATEMENT OF HON. JOHN BARRASSO, U.S. SENATOR FROM
WYOMING
Senator Barrasso. Well, thanks so much, Mr. Chairman.
Thanks for holding the hearing. Secretary Granholm, welcome
back to the Committee.
You know, looking at America's energy sector, there's some
really good news, and there's also plenty of bad news. The good
news to me is that in 2023, America pumped a record amount of
oil and natural gas. A normal Administration would be cheering
record production, but not this one. No, no, boasting about
record production of oil and gas would offend the climate lobby
in an election year, so the Administration chooses not to take
credit for something. And there's another reason that President
Biden has kept quiet--because he knows that we're producing a
record amount of oil and natural gas despite him, not because
of him. The credit belongs to the innovators, the risk takers,
the roughnecks in my home state of Wyoming and elsewhere. They
are the people who in 2019 made America energy independent for
the first time in 70 years.
And how did Joe Biden celebrate their achievement? Well, as
a candidate, he threatened to throw them out of work. As
President, he's killed pipelines, he's canceled lease sales,
rescinded existing leases, slow-walked permits, and blocked
access to more and more of America's energy resources.
Meanwhile, this President has failed to enforce sanctions on
Iran and has waived sanctions on Venezuela. This is a disgrace.
The reason that we had record production in 2023 has nothing to
do with Joe Biden. It is because more of our energy is produced
on private lands and state lands. There, the producers don't
need permission from Washington to drill. You know, in 2005,
about 68 percent of our oil and 62 percent of our natural gas
was produced on private and state lands. Today, those numbers
have increased dramatically. It's 75 percent of our oil and 90
percent of our natural gas that are produced on private and
state lands. So, while oil production is at a record high, we
actually should be producing even more. In 2020, the year
before Joe Biden took office, the Energy Information
Administration predicted that production would be 14 million
barrels a day by 2023. Well, we actually produced 1.1 million
barrels a day below that forecast in 2023.
When it comes to the production of oil and gas on federal
lands, we're living on borrowed time. We have been able to
maintain output thanks to production on leases that were issued
before Joe Biden became President. In fact, the Biden
Administration has offered the fewest onshore acres for lease
of any Administration since the end of World War II. The
outlook offshore isn't any better. In 2022, the Administration
canceled three lease sales in the Gulf of Mexico and in Alaska.
After Congress restored those sales, the Administration did all
it could to make the leases unattractive to bidders. Then, the
Administration issued a five-year offshore plan with the lowest
number of sales in history. This isn't just incompetence, it's
an ideological effort to choke off American energy production.
So what does it all mean? It means that Joe Biden is
setting America up for a fall. It means that if we don't
reverse the President's policies, it will be difficult to
maintain American oil and natural gas production in the years
ahead. But we don't have to wait years to know the effects of
President Biden's decisions. American families are feeling the
pain right now. This chart shows how much energy prices have
increased since Joe Biden has become President, since he's
taken office.
[The chart referred to follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. It shows what happened four years ago
between 2017 and 2020--March 2020--under President Trump.
Gasoline prices down. Natural gas prices down. Home heating oil
prices down. Electricity prices up only three percent. Total
energy cost unchanged. January 2017 to March 2020, under
President Trump. In every case, prices are not only worse under
Biden, they are significantly worse. Gasoline up 48 percent.
Natural gas up 27 percent. Home heating oil up 44 percent.
Electricity up 29 percent. Total energy costs up 39 percent
since Joe Biden has come into office. This is a record failure.
This is why Joe Biden, for one reason or another, is called the
President of high prices. Between energy costs and grocery
prices, the people of this country are being hurt by this
Administration and its policies.
Joe Biden needs to stop playing politics with our energy
security. He needs to stop worrying about what the TikTok
climate influencers think, and the ones who apparently are
driving the energy policy, according to the New York Times, the
reports related to how policies are being made at the White
House today. The President and his Administration ought to
start worrying about how American families are going to pay
their bills now, as well as 10 years from now.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
And now we are going to turn to Senator Granholm for
opening remarks--or Secretary Granholm.
Secretary Granholm. Thank you so much for the promotion.
The Chairman. A lot of us would probably like to change.
STATEMENT OF HON. JENNIFER M. GRANHOLM,
SECRETARY, U.S. DEPARTMENT OF ENERGY
Secretary Granholm. Chairman Manchin, Ranking Member
Barrasso, and members of the Committee, I am honored to be with
you again today to discuss President Biden's latest budget
request for the Department of Energy. Three years ago, I joined
this Administration believing that if America could come
together around a national energy strategy that we could
restore manufacturing, that we could create jobs, that we could
address climate change, and we could lead the world in clean
energy. And today, we are doing just that. America is back.
Thanks to Congress's efforts and the President's vision, we are
executing a focused, deliberate strategy that positions us to
become energy independent and secure. The strategy positions
our businesses to dominate, our workers to compete, and our
communities to thrive. And it is already working. Since the
passage of the Bipartisan Infrastructure Law, companies have
announced 600 new or expanded clean energy manufacturing plants
on American soil, nearly $200 billion in planned investment for
batteries, for electric vehicles, for solar, wind, nuclear, and
more. Tens of thousands of jobs being created from Anchorage to
Atlanta, from Louisiana to Las Vegas, from Wyoming to Weirton,
West Virginia, and everywhere in between, thanks to the
Bipartisan Infrastructure Law and the Inflation Reduction Act.
Sustaining such growth, though, requires us to complement
that historic funding with durable, long-term investments. So
we're grateful for a Fiscal 2024 year that appropriates more
than $50 billion for the Department. The President's budget
request for Fiscal Year 2025 will empower us to make even
greater progress. Our commercialization tools are giving
American businesses the confidence that they need to capitalize
on this moment while deepening our energy security. But
deepening our energy security is an ongoing project and we need
to fund it year over year. And that's why the budget calls for
significant appropriations for our demonstration and deployment
programs, including our Office of Manufacturing and Energy
Supply Chains and our Grid Deployment Office. We're also making
sure every community can benefit from reliable, affordable
clean energy and efficiency technologies. DOE does this, for
example, through, as the Chairman noted, our Weatherization
Assistance Program, which Congress granted transformational
funding to in the Infrastructure Law. I have seen personally,
firsthand, how that program changes lives, as well as, I have
seen the overwhelming need for it. The budget will bring us
closer to meeting that need for 40,000 more low-income
households. It also dedicates funding for our Interagency
Working Group on Coal and Power Plant Communities, and I have
seen firsthand how that, too, gives communities the gift of
rebirth. It instills pride for the workers who defined
America's energy past and will help to power our future.
It's not just energy workers--after decades of
disinvestment, we are finally rebuilding our manufacturing base
and developing the skilled workforce necessary to power it.
We're also planning our future by doubling down on R&D with an
$8.6 billion request for basic science research and $3 billion
for applied R&D. We will make sure each new generation of
energy technologies is more innovative than the last, from
industrial decarbonization solutions, to geothermal, to fusion.
We're also requesting nearly $2 billion for critical and
emerging technologies, like AI and quantum. Both are key to
economic competitiveness and defense, and DOE is uniquely
positioned to drive them forward. The budget also includes a
historic $25 billion for our National Nuclear Security
Administration. Russia's continued war in Ukraine makes nuclear
deterrent paramount in our national defense and for the
security of our allies. The President's request would give the
NNSA the means to deliver and adapt in the face of evolving
threats, and it would advance the NNSA's wider priorities
around arms control, non-proliferation, counter-terrorism, and
the safe use of civil nuclear power.
So thanks to the bipartisan assistance we've received from
Congress, America is back. We are the envy of the world, but we
cannot afford to lose our momentum, and that depends on your
continued support. Thank you for the opportunity to address you
today. I look forward to your questions.
[The prepared statement of Secretary Granholm follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Secretary.
And we're going to go now, my questions are going to be
deferred to Senator Padilla, who has to go preside.
Senator Padilla. Thank you, Mr. Chair. I appreciate the
consideration, and I will be respectful of the five-minute
limit.
Madam Secretary, thank you for being here. It's not news to
anybody that from coast to coast extreme weather events driven
by the climate crisis have increased both in frequency as well
as intensity. And one of the byproducts of these storms is that
power outages become more and more common, and it can be the
impact of extreme heat in the summer months, freezing
temperatures and ice storms in the winter. Our nation's
electric grid is frequently tested. In many cases it is not
able to weather the storm--pun intended. A weak grid disrupts
the lives of millions of Americans, and beyond that, really
costs the economy billions of dollars by not only impeding
emergency services, for example, but temporarily closing
schools, businesses, and other locations, and in many cases,
even causing massive and dangerous wildfires. This is an issue
that I have been working on since I got to the Senate, together
with you. Can you discuss how the Fiscal Year 2025 budget
supports a resilient grid both at the transmission at the
distribution levels?
Secretary Granholm. Yes, thank you so much for this
question, because the grid, of course, is the foundational
piece of infrastructure for all energy, and it is a grid that
was built, in many cases, decades and decades ago and needs
significant upgrading, in addition to expansion. That is
exactly what we're working on. Thank you for the tools given in
the Bipartisan Infrastructure Law for the Grid Resilience
Innovation Program, for example, for the tools given in the
Loan Programs Office to be able to support additional expansion
and hardening of the grid. All of that is necessary.
Unfortunately, for the grid program, for example, the
competitive solicitations are far oversubscribed. Even though
the generosity of Congress to be able to give us $20 billion
for that was, obviously, very needed, but we need so much more
going forward. The bottom line is--both on the transmission
side and getting power from where it's generated to where it's
used, and on the distribution side, in the local communities--
both are critical. On the distribution side, I am pleased to
say that we have been--and part of this budget requests
additional funding for our Grid Deployment Office for
microgrids, to be able to create that resiliency at the local
level, in addition to what we're doing on the transmission
side--both very important. We really appreciate the support
this Congress has given us.
Senator Padilla. Thank you, and I'll just plant a seed,
looking forward to working with you and our Chairman on
reconductoring of transmission infrastructure----
Secretary Granholm. Yes.
Senator Padilla [continuing]. Both for capacity and
efficiency objectives.
One additional question I wanted to make sure to raise
today is in regards to geothermal, right? As part of our shift
toward cleaner sources of energy, geothermal energy is
considered renewable gold. It has the potential to provide 24/7
clean, reliable, and dispatchable power to the grid, and it's
vitally important in the face of a changing climate and the
extreme weather events that I discussed. Now, scaling these
technologies is especially urgent in places where geothermal
resources are abundant, like my home state of California. Can
you speak to the importance of supporting the full spectrum of
technology development for geothermal technologies, everything
from early stage R&D to commercialization and upscaling?
Secretary Granholm. Yes, thank you so much for this. Our
Geothermal Technologies Office has been working on this for a
long time, but we got a big boost with the ability to use tax
credits to incentivize the generation of geothermal power. We
also have just launched an enhanced geothermal commercial
liftoff report. And I meant to say in the last question, we,
just today, are announcing a liftoff report for innovative grid
technologies, which include reconductoring and grid-enhancing
technologies. But on geothermal, from conception--the best
technologies, the best ways of using hydraulic fracturing to be
able to get at places we wouldn't otherwise be able to get at,
the best strategy from a commercial liftoff point of view and
the best demonstration of geothermal, like with a company
called Fervo, which is using skill set and technology from the
oil and gas industry to do enhanced geothermal, and is very,
very promising--to deployment of more traditional geothermal,
and deployment of geothermal at home, in other words, heat
pumps using geothermal. That full spectrum is exactly what the
Department of Energy has been working on, and with your
continued support, the one big hurdle that exists from our
enhanced geothermal liftoff report is the fact that the capital
costs of those projects are expensive. And so, figuring out a
way to support those capital costs is teed up as the next
hurdle we can challenge together.
Senator Padilla. Thank you very much. Thank you again for
your consideration, Mr. Chair.
The Chairman. Absolutely, Senator.
Senator Barrasso.
Senator Barrasso. Thanks so much, Mr. Chairman.
Secretary Granholm, in 2023 the U.S. produced a record
amount crude oil, natural gas. Good thing or bad thing for the
country?
Secretary Granholm. Good thing.
Senator Barrasso. Great.
Largest exporter of liquefied natural gas in the world.
Good thing or bad thing?
Secretary Granholm. Good thing.
Senator Barrasso. Our allies, more or less secure as a
result of what we've been able to do?
Secretary Granholm. It's a good thing.
Senator Barrasso. So world demand for liquefied natural gas
is expected to increase significantly between now and 2040.
Energy needs are up. I mean, they are talking about in the next
five years, U.S. energy demand may be adding a new California,
just in terms of the amount of energy that's going to be
needed. The New York Times had a front-page story about that.
So, are America's interests better served if the world buys LNG
from us or from Qatar?
Secretary Granholm. We think that our LNG is produced in a
cleaner fashion, and that's why one of the reasons the demand
for our LNG is up to 14 billion cubic feet per day that we are
exporting currently, including the 48 billion that have been
authorized, but have not yet exported----
Senator Barrasso. Same with Russia? Better using ours than
Russian?
Secretary Granholm. Of course.
Senator Barrasso. Better using ours than Iran? Great.
So the Inspector General has included a written statement
in the President's budget and we have a letter to that affect.
And the Inspector General explains that the President's budget
will substantially inhibit her from performing the duties of
her office. She said we won't be fully funded in the office in
terms of the things that they need, which is the amount of
money that you talked about that's going out. Is there a reason
you're not willing to fund the Office of Inspector General in
the budget?
Secretary Granholm. The Office of Inspector General has
gotten the second largest percentage increase in their budget,
a 73 percent increase in her budget, to be able to correspond
with the increased amount of funding that is going out the
door. We support the Inspector General. We meet with her all
the time, and she is getting a significant increase in funding
under the 2025 budget.
Senator Barrasso. Even with the President's budget request,
the Inspector General is going to still be short about $170
million to deal with the amount of money that the Department of
Energy has gotten over this period of time in the legislation
that you have outlined this morning.
Secretary Granholm. We support the Inspector General, which
is why we've asked for such a large increase in her budget.
Senator Barrasso. Jigar Shah, the head of the Department's
Loan Office, recently stated, ``I don't think anyone is really
accusing us, except rhetorically, of pushing money out the door
quickly.'' The Inspector General said, ``There is no precedent
in the Department for this level and pace of financing,'' and
she said, the Department's funds are already moving quickly and
internal controls are ``untested.'' So who is right? Mr. Shah,
who says nope, or the Inspector General, who has said we have
gone out really fast and the internal controls are still
untested?
Secretary Granholm. We are testing those internal controls
thanks to the advice that she has been providing on how to
create them. The reason why it seems fast is because literally
no loans were set forth in the previous Administration.
Currently, there are 18 loans that have either closed or
provided a conditional commitment and 205 in the pipeline,
which tells you that the Loan Programs Office is doing a
terrific job of being open for business. But, that said, it
does take time to get a loan through, and that's because of the
internal controls that LPO is using.
Senator Barrasso. Well, as we've had a previous hearing on
this, I can tell you, Mr. Shah is open for business, and I
think it's distressing and it's a terrible situation going on
with him right now.
Different topic--last month you testified that it is
possible the Administration could impose its own ban on imports
of Russian uranium. You also said the legislation solidifies
the ban more concretely than if just the Department had done
it. So your preference is for Congress to enact a ban on
imports of Russian uranium. Is that correct?
Secretary Granholm. That would be my preference, yes.
Senator Barrasso. And I agree with you, and so, I think, do
American's nuclear fuel suppliers.
Another topic: so along with Russian uranium, if the
Administration does impose its own ban on Russian uranium
imports, will you commit to adhere to the same limits and
conditions in terms as found in the legislation that has
already passed the House?
Secretary Granholm. We would abide by whatever Congress
passes, of course.
Senator Barrasso. Okay, and will you commit to promptly
notify this Committee if the Administration does issue any
waivers on the ban?
Secretary Granholm. Of course.
Senator Barrasso. Okay. Additionally, in February, Deputy
Secretary Turk defended the Department's decision to stop
approving LNG exports. He cited a forecast by the International
Energy Agency showing a decline in the world's demand for
natural gas, but the Department's own Energy Information
Administration forecasts that the world's demand for natural
gas is going to grow significantly. Why did he ignore the
Department's own forecast for world demand for natural gas, and
do you think it's appropriate to cherry-pick data to justify
different policies in the Administration, like the ban on
natural gas exports?
Secretary Granholm. I can only assume that what he was
suggesting is that there's a range of projections regarding the
world's use of natural gas, which is one of the reasons why we
are doing our own modeling through the National Energy
Technology Lab and the Pacific Northwest National Lab while we
update our analysis.
Senator Barrasso. Well, thank you, and I agree with that
assessment because unfortunately, he chose one that was not the
Department modeling, and I thought the Department modeling was
a better response to what actually the needs are going to be.
Mr. Chairman, thank you.
The Chairman. Thank you, Senator.
Secretary, the immediate response to the Administration's
proposed guidance of the 45V tax credit on hydrogen is clear.
If implemented, it's going to jeopardize the viability of the
industry before it even gets a chance to get off the ground.
All the hubs are in jeopardy and all of them have basically
sent letters requesting a change immediately. Treasury's
requirements on additionality, time matching, and regionality
are just not workable. They are saying you have to have new,
dedicated power located directly to support the hydrogen
operation, which was never in there. We just want to make sure
hydrogen gets a foothold. The industry response includes a
letter from all seven DOE hydrogen hubs, who wrote in February
of this year that the projects will no longer--no longer be
economically viable unless the guidance is significantly
revised.
So, the only thing I would ask is, are you involved or do
you think that we should heed the warning of DOE's own seven
hubs that you all--that you have been involved, I think, in all
seven, basically, of how they've come out and how we heralded
these wonderful opportunities and success? And do you have any
insight to what you all are thinking and what might be changed?
Secretary Granholm. Yes, thanks for the question.
Obviously, we want these hubs to succeed and we put out--we
meaning the Administration, the Treasury Department--put out
specific questions that they were inviting responses for as
they finalize the rule. We've gotten over 30,000 responses, and
they are working through those responses, but the bottom line
is, clearly, we want the hubs to succeed.
The Chairman. They understand the concerns that the hubs
have, and they are all in sync on this too. It's not just one.
When you have the California hub and the West Virginia hub in
sync, you've got a problem. And I hope they understand that. So
we're looking forward to those changes so we can get started
with our hubs.
My next question is that we've spent a lot of time on DOE's
critical role in our nation's scientific research enterprise
for the Endless Frontier Act, which ultimately became law as
the CHIPS and Science Act. It's clear the research facilities
that the DOE stewards are imperative for scientific innovation,
national security, and economic growth. The current
conversation around the future of artificial intelligence (AI)
is no different. America must accelerate our efforts to compete
and defend against our adversaries like China on AI, and the
Department of Energy has a central role. The Department and its
national labs have the computing resources. We have those in
our national labs. Our Majority Leader, Senator Schumer, is
pushing for this to go toward the National Science Foundation,
which is a duplication--in my evaluation, it is just
duplicating, and we're not going to get further ahead or as
quickly as we need to get ahead if we go back and try to
reinvent the wheel again.
I don't know what your input is on this, but being over the
labs, I think you might have some thoughts about this.
Secretary Granholm. I appreciate you anticipating--yes, I
think our national labs are obviously in the driver's seat on
both the technology--we have the tools, we have the largest
exascale computers in the world, we are obviously using AI in
all of the labs, but we also recognize that the National
Science Foundation has a role for AI at the level of
democratization of AI. Our collaboration with our Office of
Science and Technology Policy at the White House has been very
important. We really appreciate the fact that Congress has
identified AI as a priority as well. I am very concerned, both
about the bad uses of AI, but hopeful about the good uses of AI
and I am concerned about the amount of energy that AI----
The Chairman. We are just very much concerned about the
money, the limited amounts of money we're going to have. It's
going to be divided up, and it has more--those resources could
get better results----
Secretary Granholm. Yes.
The Chairman [continuing]. If we stay with what we already
have. That's going to be the question we all have to probably
get our heads around.
My final one is about our SPRO. Our Strategic Petroleum
Reserve contained about 640 million barrels of crude oil. About
290 million barrels, more than 40 percent, was sold from 2021
to 2023, bringing us to its lowest level in 40 years. The
majority of those sales was the Administration's 180-million-
barrel emergency release in 2022, when oil prices were high and
gasoline was going to $5. But Congress is also to blame. We
ordered over 80 million barrels in sales since 2021 to offset
spending in other areas. I am glad to see DOE has begun
refilling the reserve. I am told there is only enough funding
to bring us back to around 400 million. Do you think the 400
million is a large enough reserve? Has DOE done an analysis
about the right size of the reserve that we need to face an
emergency? And if it's not enough, what do we need to do to fix
that?
Secretary Granholm. Yes, we are--first of all, we have the
largest oil reserve in the world right now. And we are----
The Chairman. Which is less than 400 million----
Secretary Granholm. Yes, 365----
The Chairman. Yeah, right.
Secretary Granholm. It is less than what it was, and I'm
glad you recognize that the responsibility for the drawdowns
occurred both, yes, the Biden Administration during the war in
Ukraine, but also Congressional sales. Actually, Congressional
sales have accounted for about 217 million barrels since the
peak, and there's about--and we appreciate Congress's
willingness to cancel the 140 million in Congressionally
mandated sales that were teed up. There's about another 100
million more that will be teed up between now and 2023. We can
talk about that.
But we are buying back, and we want to buy back at a rate
that is good for the taxpayers. So, we----
The Chairman. You're not buying right now at the $85 to $90
range?
Secretary Granholm. In the past few months we had because
it was below $80.
The Chairman. Okay.
Secretary Granholm. And in fact, we were shooting----
The Chairman. That's your cutoff?
Secretary Granholm. But in the latest round it came in
above, so we canceled that one, but we still have a strategy of
continuing to do this at a value for the taxpayers, noting that
we sold at $95 per-barrel and we want to buy back at a rate
that saves them.
The Chairman. Okay.
Senator Cantwell.
Senator Cantwell. Thank you, Mr. Chairman.
Secretary, thank you so much for coming to the Pacific
Northwest and looking at all the transformation that's underway
that our region is helping with and you are leading. We very
much appreciate that.
I wanted to ask you, obviously, about the Hanford budget.
We're very pleased that the request is an increase from what we
secured last year. So thanks to the Administration and Senator
Murray and my colleagues for that. We're proud of the work that
we need to do to meet the milestones. In a couple of weeks, the
U.S. Department of Energy and the State Department of Ecology
and Environmental Protection will be announcing a conclusion of
holistic negotiations to update the consent decree. And you
know how important that Tri-Party Agreement is. This is the
result of long talks to improve the removal of waste from 177
underground tanks that contain the most dangerous and difficult
decades of plutonium. And so, obviously, I want a commitment on
the future tank negotiations to make sure they have milestones,
and can you detail how you will roll out the agreement and get
comments so that we know that they are taking--you, DOE--is
taking that seriously?
I also, sorry to throw a lot at you, but I figure I would
just throw it all out and you can help respond and if we run
out of time, we can respond for the record. I do hear concerns
about, also, the transformation of the Tri-Cities past these
things. You know, they obviously think, and are, really, a
clean energy hub for a lot of deployment. So they want to know
what can happen on the transformation of acreage to a broader
range of clean energy development. So I understand a vision has
been shared with DOE officials, but the current DOE plan would
not allow for this kind of development. So I want to make sure
that we're continuing to think about how the Tri-Cities
continues to play this massive leadership role on energy
transformation.
You answered Senator Manchin's point about the hydrogen
hubs. I just want to weigh in because I feel like this is such
a critical point to get these 45V credits done correctly. I'm
assuming you agree that the whole point of this is to
decarbonize hard-to-decarbonize sectors like maritime and
aviation, fertilizer, and things of that nature. So our goal,
and my question is, should our goal really be reaching this
decarbonization within these sectors? I think some people are
thinking that we should go a different route. I mean, it would
be like if we said at the very beginning of electric vehicles,
you could only charge an electric vehicle from clean energy.
And so the whole point is, what is the milestone going to give
us for 45V? I'm assuming that we want to try to, by 2050, cut,
in these sectors, cut the carbon by some significant amount,
and that should be the goal of the 45V. So you can tell me
whether you agree with that.
I am curious on fusion, whether you think 48C should be
applied to fusion. We're also a hub in this particular area and
want to know whether you think we should be thinking about
broadening that. And then, on the transmission, to my
colleague's point, we will need 56 percent more transmission by
2040. That's according to you and your estimates. And the
Pacific Northwest Power and Conservation Council calculates the
region will need 3,500 megawatts of new renewable energy by
2027. So what can you do to help us make sure, since most of
our transition comes from EPA, how can you help us make sure
transmission gets built?
Oh my gosh, I can see I am----
Secretary Granholm. Can I just quickly hit them?
Senator Cantwell [presiding]. Since I think officially I'm
chairing at the moment, yes, go ahead.
Secretary Granholm. Okay, so Madam Chairman.
Senator Cantwell. Quickly, because my colleagues.
Secretary Granholm. Yes, yes, just very quickly.
Hanford, yes, exciting that they are reaching conclusion.
Obviously, we'll work with the community and make sure that
it's transparent. Clean up to clean energy, which is one of the
things you talked about. We've taken requests for proposals.
We've gotten those. We're evaluating them. We're also in the
process of transferring about 150, I want to say, acres to the
Tri-Cities area for economic development, too. So, again,
continuing to work with them very, very closely.
Hydrogen is the Swiss Army Knife, as everybody has said, of
clean energy. And yes, decarbonization has to be a key
component of it in addition to its other uses.
Senator Cantwell. So you think--just on that point--you
think in the next few years, if we went for some short-term
goal of just driving production of the hydrogen--look, we're a
very green source, I mean, that's why, I think, we won the hub,
because we're a green source.
Secretary Granholm. Of course.
Senator Cantwell. But the whole point is to significantly
decarbonize the sector, is that correct?
Secretary Granholm. That's correct.
Senator Cantwell. Okay. So that overall goal should be part
of the calculation.
Secretary Granholm. Absolutely.
Senator Cantwell. Okay, thank you.
Secretary Granholm. Absolutely.
Fusion and 48C, interesting, I hadn't thought about that
and I'd like to have further conversations about it. I know
that those decisions have been made by Treasury already in the
first round of 48C, and we don't have insight into that since
it's tax information and proprietary. So I'm not even sure,
unless the entities who receive the designation raise their
hands.
Senator Cantwell. But do you think if we really do, or are
on the precipice of a fusion hit that the manufacturing aspect
for the United States in acceleration of this would be a good
idea?
Secretary Granholm. Certainly, of course it would be a good
idea.
Senator Cantwell. Yes, thank you. Okay.
Secretary Granholm. Yes, absolutely.
And on transmission, I just refer again, I want to just
say, we have got to increase our transmission capacity.
Reconductoring is one of the ways to do that. Grid-enhancing
technologies, like dynamic line reading, are another way to do
that. We have got to have a full suite of strategies in
addition to building new transmission, but making our current
transmission stronger, better, and able to have greater
capacity is also a key component of it.
Senator Cantwell. Well, I just want to thank you. I mean,
we've had other Energy Secretaries and they've been part of
this equation, but you are making the transformation happen.
It's not easy, and you're able to articulate how and why it's
so critical. So thank you.
Secretary Granholm. Thank you.
Senator King [presiding]. On behalf of the Chairman,
Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman.
Madam Secretary, good to see you. I was out in Chena, and
the proprietor, Mr. Karl, sends his regards. In that vein, we
had an opportunity to talk further about geothermal, and I have
had the chance to talk with you about the Makushin project. It
has been kind of reconfigured, if you will, and I don't think
that's the right word. But I do want to have further discussion
with you and Deputy Secretary Turk about geothermal and how we
really work to remove some of the barriers that I think we see
with regards to the promise of geothermal. And I know that
there are good intentions, but for some reason, we're not
seeing them translate into the opportunities that we need. So
that's not a question for you, but more of an ask, and just
kind of an alert that I would like to follow up, specifically
with regards to geothermal and the potential there.
Water energy--marine hydrokinetic energy. As you know,
we've got more than our share of water around us, whether it's
in our rivers, the potential for more hydro. I'm not sure why
the Administration has proposed a 20 percent cut to the Water
Power Program in its FY25 budget request. It looks like you've
increased funding for just about every other renewable. And
again, we seem to focus a lot on the favored children--wind and
solar--but we have such opportunity within our marine energy
opportunities. I don't know if you have proposed a target for
marine energy deployment, whether we can expect something in
this area. What can you tell me that's good and exciting,
because I'm talking to a lot of people that are very, very
excited and they feel like they are just having to do it on
their own because they are kind of alone out there in trying to
advance any of these technologies.
Secretary Granholm. Okay----
Senator Murkowski. Go ahead.
Secretary Granholm. One, on the cut. The two main reasons
for that cut were that one, we have funding provided in 2023
and 2024 for hydropower demonstrations and irrigation
modernization and low-impact hydropower. They were already
funded. And so they were pulled out because those
demonstrations are already ongoing. We could come back and talk
about 2026 and whether we need to re-up that again, but we're
funded already in 2025. And similarly, we had a $29 million
reduction for the marine energy infrastructure support at the
Marine Coastal Research Lab and PacWave. And again, in 2024,
because we got that funding late, the 2024 funding provided
funds needed for both sites. And so, PacWave is expected to be
completed in the summer of 2024. So we didn't need that
funding.
Bottom line, though--completely agree with you on kinetic
hydropower, on all hydropower.
Senator Murkowski. All hydro.
Secretary Granholm. Hydro, I mean, dams, et cetera, we need
to really lean in on this clean baseload power. And a lot of it
is that it's expensive. The upfront capital is expensive for
people, and that's, you know, figuring out that because there
wasn't that sort of carve-out for that in the Bipartisan
Infrastructure Law.
Senator Murkowski. Right.
Secretary Granholm. I totally would be very supportive of
that.
Senator Murkowski. But I think you see this looming threat
with the average age of a U.S. hydropower production facility
in this country right now being 64 years old.
Secretary Granholm. Yes.
Senator Murkowski. And so, we have to modernize. We have to
upgrade. We have to make these investments again in this
extraordinary baseload resource. And so how we're going to move
forward with that, again, I want us to be leaning in.
I want to ask, very quickly, on critical minerals. You and
I have had the conversation about the need for more natural
graphite. The opportunity that we have in Alaska with Graphite
One, a natural graphite project, identified a graphite source,
probably the most exciting in the country right now. And we've
gotten minimal support from Department of Energy right now, and
it hurts to kind of look at some of the support that the
Administration is giving for imported critical minerals from
places like Mozambique to process here in this country. But I
want to ask more specific to this, because in January, when
Secretary Turk was here, I asked him at the time to confirm if
DOE funding programs like the LPO only consider non-mine
project infrastructure investment, and are not able to assist
domestic extraction projects. And he was vague on it. He said
that DOE is trying to be creative, but we made very, very, very
clear in IIJA that DOE had the authority to ``support mineral
production, processing, manufacturing, and recycling
activities.'' And yet, what I hear, at least from Graphite One
and from others, is that no, the Administration actually will
not provide such assistance, and they've said that you have to
have a pilot project operating before they are eligible, and at
that point, only supporting or processing and downstream
infrastructure, not the mine itself. And so it's contrary--what
they are being told is contrary to what we wrote into law. So
this is something that I have asked for clarification on. I
don't know if you have anything further that you can add. If
you can share with me that DOE will support this, then that's
good news and we want to follow up with that.
Secretary Granholm. I would like to come sit with you and--
--
Senator Murkowski. Okay.
Secretary Granholm [continuing]. Jigar Shah in your office
to talk about this. It's my understanding, and again, I don't
look under the hood of what LPO is doing while it's in process,
but I believe that there may be a mine that is coming through
the system. I don't know or have any further details about that
and I don't know that it's anything in Alaska. But the bottom
line is, we have to use all these tools to get the supply chain
in the United States, and that means the supply chain for
extraction, and it means extracting the critical minerals. So
whatever we can do to ensure that the tools we have get us to
where we need, I agree with you that we should be using them.
So I want to talk with LPO and come to see you about what's
possible, and also maybe about the follow-up on the Makushin
project.
Senator Murkowski. Let's do that. I'll look forward to
that. And again, Deputy Secretary Turk was looking into this
too. So, between the two of you, and Jigar----
Secretary Granholm. Great.
Senator Murkowski. It would be important information to us,
but hopefully we can move out on that. And I also have a lot of
questions for the record that I'm going to be submitting.
Secretary Granholm. For sure.
Senator Murkowski. Great interest in BABA. Everybody is
talking about BABA in Alaska right now and whether or not there
will be an opportunity for a continuation of the waiver, the
tribal waiver that people are really anxious about. So I look
forward to more discussion.
Thank you, Mr. Chair.
Senator King. Thank you.
On behalf of the Chair, Senator Cortez Masto.
Senator Cortez Masto. Thank you.
Secretary Granholm, it's great to see you again. I have
heard a lot of talk this past week about Yucca Mountain. So I
just want to set the record straight here, if you're able to,
with some yes or no answers to my questions.
Does the Department's Fiscal Year 2025 budget include any
funding to restart the Yucca Mountain project?
Secretary Granholm. No.
Senator Cortez Masto. Does the Biden Administration have
any intention to move forward with nuclear waste storage at the
Yucca Mountain site?
Secretary Granholm. No.
Senator Cortez Masto. And does your Administration support
consent-based siting?
Secretary Granholm. Yes.
Senator Cortez Masto. Thank you.
Can you please provide an update of where we are on DOE's
consent-based siting efforts and what are some of the ways that
the Fiscal Year 2025 budget contributes to this initiative?
Secretary Granholm. Yes. The consent-based siting strategy
is in three phases. We're in the first phase. The first phase
was to fund 12 different consortia of entities that were
exploring whether communities would be willing to raise their
hands. And so those conversations are happening now. The second
phase will be to identify the volunteers because, of course,
communities that raise their hand, they want to know what's in
it for them, what are the benefits, jobs, but also other kinds
of benefits. So that will be phase two. And phase three will
actually be starting operations. So we're only in phase one
right now. It's still going to take, as it has in other
countries that have done consent-based siting, it takes time.
You have to build trust. You have to answer all the questions.
So it takes a little bit of time. So, in this budget year, I
don't think we have funding for consent-based siting because
we're in the process of that first phase, but we will come back
to you in phase two with a funding request.
Senator Cortez Masto. Thank you. I appreciate that.
And then, let me associate myself with Senator Murkowski. I
think she and I are both interested in ensuring that the
critical minerals that we need, that the United States plays a
key role, including that supply chain. And you and I have
talked about this. I am so excited about Nevada right now for
our battery technologies. You may have called this out--for
critical mineral development, for cleaner transportation, you
have been there. Thank you so much for visiting Nevada. It
really is truly the center of the clean energy economy. One
example is the administration's recent designation of a
national regional innovation tech hub for critical minerals
through the CHIPS and Science Act for the University of Nevada,
Reno. We are very excited about that.
Secretary, I'd be interested in learning more about DOE's
recent announcement of the METALLIC project, if you are able
to, and the creation of a future critical minerals supply chain
research facility. Can you talk a little bit about that?
Secretary Granholm. Yes. I don't have the details on the
METALLIC project, but I can tell you that we are, because of
Nevada's unique position in having such an abundance of
critical materials and the processing, actually, which has
begun, which is, of course, something that we lack in this
country, as well as the uses, like batteries, where they end
up, right? So you have the full supply chain happening. So
having a research component that is an anchor for both the
early-stage research and development, but also the applied
aspects of it, is very important, and that is why having it
centered in Nevada was critical.
Senator Cortez Masto. Thank you.
I also want to talk about the workforce. We've talked about
this. In your written testimony you specified the Fiscal Year
2025 budget request calls for about $1.6 billion to support our
clean energy workforce projects across the country. I know the
Bipartisan Infrastructure Law mandated the creation of the 21st
Century Energy Workforce Advisory Board at DOE to further
develop that skilled workforce. Can you talk about the progress
that we have made, if any, on really developing this workforce
that we need for clean energy?
Secretary Granholm. Yes, let me just give you an example.
We have announced, in partnership with the AFL and the UAW, a
battery workforce initiative, which has--the idea is to create
modules that community colleges could then plug in or that
apprenticeships could plug into with all of the components
necessary to be able to create a workforce for this whole new
industry that we're creating in the United States. And so, I am
pleased to say that we have completed that right now, the
curricula is finished, and we are now taking it on the road to
be able to get community colleges, especially those adjacent to
a battery manufacturing factory, to be able to take on. But
that's just one example of the kinds of--first of all, they
have to be place-based. You have to train people for jobs that
are there, right, so that then you can take advantage of the
apprenticeships and the apprenticeship tax credits associated
with the Inflation Reduction Act.
Senator Cortez Masto. Thank you. Thank you, Secretary.
Mr. Chair.
Senator King. On behalf of the Chair, Senator Hickenlooper.
Senator Hickenlooper. Thank you, Mr. Chair. And Secretary,
thank you so much for all of your work and for coming to
Colorado. I read in the papers you go to blue states, red
states, everywhere. Energy really is the universal connector in
this country.
Secretary Granholm. Totally.
Senator Hickenlooper. So I agree with our friends here that
you're doing a great job.
The Biden Administration has been clear that increasing
domestic mining, and Senator Cortez Masto was kind of touching
on this, that we need more mining and processing and refining
to have sufficient raw materials to address the major changes
we're going to make in our energy future. I support and am
interested in helping to expand DOE's Mine of the Future
initiative. I thought it would be interesting to--you know,
this approach to revolutionize mining technology and make sure
we have socially responsible techniques in place. Can you talk
a little more about that?
Secretary Granholm. Yes. The Mine of the Future is a way of
being able to do extraction in a sustainable way that is sort
of more laparoscopic, if you will, that you really go in a
using a small opening and doing your exploration and extraction
without disturbing the ground around you. And so, that Mine of
the Future notion is something we would love to support and
encourage mining companies to take on in partnership with us.
We see an opportunity there for pilots. I also would be remiss
if I didn't say thank you to those of you who are eager to
update the Mining Law so that we can really embed the notion of
sustainability into our practices, like our allies have done--
like in Canada, for example. There is a way that we can lead on
extraction in a sustainable way as a nation, and I applaud your
interest in making that happen as well.
Senator Hickenlooper. Well, we're all in. And just
tangential to that, the R&D around the alternative materials
and, you know, battery chemistries, that research. You're
pushing full speed on that as well. I really support that.
Secretary Granholm. Oh, yes, we certainly are. I mean, we
want to have the full spectrum, soup to nuts. So from
responsible extraction to processing, and obviously, all of the
battery components--the anode, the cathode, the separator
material, the electrolyte, we want all of those components of
the supply chain built in the United States. And we're seeing
it happen, and this is what's so amazing is that policy is
actually working and that we're seeing all of these battery----
Senator Hickenlooper. Don't sound surprised.
Secretary Granholm. Well, sometimes you wonder, but this is
such great news that people should take home and say, look, I
mean, we have such a low unemployment rate in part because of
the work that has been done here to generate investment in
manufacturing across this country, and the battery place is
exactly one place. Of the 600 factories that I talked about in
my opening statement, 400 are in the EV or battery space, all
pockets of America, and that's all of these components. So it's
so exciting to see those incentives actually having an impact.
Senator Hickenlooper. Yes, it's been gratifying for all of
us, I think.
You also said that you're obsessed with geothermal energy.
Secretary Granholm. Yes.
Senator Hickenlooper. And I have a copy of the next
generation geothermal liftoff report and I'm excited. I mean,
that is, I think, one of the most--you know, for a dry,
scientific study--one of the most exhilarating reads you could
have right now. And I thought I'd give you a moment just to
talk about that because I think, you know, you begin to read
how much more widely accessible it is and the potential--pretty
close to 15 percent of the new energy we're going to need and
especially baseload energy. So, talk a little bit about that.
Secretary Granholm. Yes, I mean, this is--as we consider
the energy demand increases that we're all seeing, right,
whether it's from AI or from electrification or from all these
new factories coming online, we have to identify clean,
baseload solutions. And geothermal is clearly a clean baseload
solution, as is hydroelectric, right, as is batteries with
renewables, but I think that geothermal is such an untapped
source. And the notion of us actually achieving these
technology breakthroughs for enhanced geothermal that allow us
to extract geothermal, not just where it's super, super hot,
but even where it's not super hot, where you can almost get
geothermal in ubiquity across the country. That is an amazing
breakthrough in technology, and therefore can really help us to
achieve the goal which we have of meeting that increased energy
supply.
The big challenge, I think, Senator, and this is something
I'd love to work with you all on--and there seems to be a great
interest in geothermal--is this up-front capital cost. Now,
some of that can be addressed through, for example, the Loan
Programs Office, and we're encouraging geothermal companies to
go to the Loan Programs Office, but some of it could be
addressed through additional up-front capital help and support
from Congress. And we should talk about that because obviously
the Production Tax Credit is terrific, but we may need a little
juice on the capital up-front.
Senator Hickenlooper. Sure.
Well, I'm reading that as a commitment to work with our
staff----
Secretary Granholm. Yes.
Senator Hickenlooper [continuing]. To find that $4 or $5
billion to do a demonstration project that could really make a
difference, because it is wildly exciting.
I yield back to the Chair.
Senator King. Thank you.
On behalf of the Chair, I call on myself.
[Laughter.]
Senator King. Madam Secretary, you've covered a lot of
ground today, and just to refer back to the final question from
Senator Hickenlooper, one of the problems with a lot of these
energy technologies is high capital cost, but they have
extremely low or no operating cost.
Secretary Granholm. Right.
Senator King. And so that's why we have to develop
incentives to get these in place because then, with hydro very
close to zero, nuclear, geothermal--in the long run, if we can
get over the capital hump, we can really make a difference in
people's bills at home.
Now, let me turn to another--I take it you agree, you
nodded.
Secretary Granholm. I agree.
Senator King. Thank you. Nods don't show on the record.
But let me turn to another issue--transmission, which you
have discussed. Transmission, in many states now, is more
expensive than generation. And it's going to get more so
because of the enormous buildout of the grid that's necessary
for the electrification of the country. You have mentioned
several times grid-enhancing technologies, reconductoring,
which I am all in favor of, very much so. The problem is, the
incentives in the industry or toward building and the cost,
it's a rate-based, you know, you understand how that works. So
we need to have incentives for doing the cheaper things first
or perhaps even mandates that say you have to demonstrate that
you've done the grid-enhancing technologies--that dynamic line
monitoring or reconductoring--before you build the big, new
transmission line, which may be obviated by the grid-enhancing
technologies. Your thoughts?
Secretary Granholm. Yes, it requires a different mindset,
perhaps a slightly different business model----
Senator King. Right.
Secretary Granholm [continuing]. On the part of the
utilities who, you know, are understandably conservative.
However, you're seeing a lot of utilities----
Senator King. But their financial incentive is to build----
Secretary Granholm. Is to build, right, because they get a
return on investment----
Senator King. Right.
Secretary Granholm. That corresponds. And you know, what a
fantastic thing it is, and I encourage you to take a look at
the liftoff report that we issued one hour ago on innovative
grid technologies because if you just look at what the
estimates are of the necessary expansion of the grid between
now and 2033, which is according to NARUC, I think it's about
90, 91 gigawatts. The grid-enhancing technologies and
reconductoring can achieve between 20 and 100 gigawatts, and
they are at five percent of what the cost is of buildout.
Senator King. I hope you'll communicate with your friends
at FERC because they just issued an order that did not require
the utilities to even study these grid-enhancing technologies
before embarking on a transmission project. I disagree with
that decision. I don't understand it, but I think that's
something we need to continue to press on because it's not
going to happen by us talking about it----
Secretary Granholm. Right.
Senator King [continuing]. But there have to be incentives,
and it may be shared savings to the utilities, if they use
these lower-cost technologies.
Let me change the subject for a minute, just to clarify.
The pause in the approval of LNG terminals is indeed a pause,
is it not?
Secretary Granholm. Correct.
Senator King. It's not a ban. It's not a stop.
Secretary Granholm. Correct.
Senator King. And all you're doing is using that time, a
matter of months, I understand, to update the data on impacts
on domestic prices and environmental impacts. Is that correct?
Secretary Granholm. That's correct.
Senator King. And the problem is, I sat in this seat seven
years ago, when a representative of the gas industry said
exports of LNG will never exceed nine percent of production.
Well, right now, they are at 14 percent of production. As you
testified, they are going to 48. And it just seems to be
prudent to understand the implications of that before we
approve massive new projects that may end up significantly
increasing domestic prices or environmental impacts. Is that
the case for the study?
Secretary Granholm. Yes. Prices at home--hugely important
on our manufacturers, et cetera, and also the impacts of on our
allies overseas.
Senator King. Our low domestic gas prices are a huge
asymmetric advantage around the world.
Secretary Granholm. Yes.
Senator King. And I'm concerned that we will, in effect,
export that advantage by not understanding the implications of
going from 48 percent of production to something approaching 60
or 70 percent of production. We've got to understand that, and
that's what the pause is all about, is it not?
Secretary Granholm. Yes, to do the update.
Senator King. I appreciate that.
Finally, on methane--fossil fuels are going to be part of
the transition. Methane is the low-hanging fruit of climate
change. I hope that you will be working--we now have space-
based assets that can detect methane leaks to find out how to
detect leaks, how to remedy them, and how to bring them to the
attention of the manufacturer, because this is one of the
places where we can really make a significant difference with a
relatively low cost.
Secretary Granholm. Yes, in fact, if you talk to the oil
and gas industry, they'll say ``we can do this, we can button
this up.'' It's the detection that has been slow, but now we do
have, as you noted, satellite assets as well as on-the-ground
assets to be able to regionally detect where these leaks are
happening. It makes sense from a financial point of view and
certainly it makes sense from a climate point of view.
Senator King. Thank you very much.
Secretary Granholm. Yes.
Senator King. Thank you for your testimony and your adept
answer to our questions.
Senator Manchin.
The Chairman [presiding]. Senator Daines.
Senator Daines. Chairman, thank you.
Good to have you here, Secretary.
Secretary Granholm. Nice to see you.
Senator Daines. It has been two and a half months since
President Biden paused LNG exports in order to study their
impacts. We are no closer to knowing when this pause will be
lifted or if it ever will be lifted. If DOE follows the facts
and looks at previously published reports, this study will come
back the same as all the other previous studies. U.S. LNG
exports builds jobs, it strengthens the economy, and it reduces
global emissions. But I fear, and I'm not alone in this--I just
met with the Ambassador from Croatia, and they are just shocked
around why the United States would pause LNG exports in the
midst of a war on the continent of Europe where Putin has
weaponized LNG, weaponized natural gas. But I look no further
than the White House website, where the first quote in their
press release lauds, and let me quote, ``this Administration's
historic efforts to meet the global commitment to phase out
fossil fuels.''
Is LNG a fossil fuel?
Secretary Granholm. Yes, it is.
Senator Daines. This is followed by the second quote, which
features ``hashtag stop LNG.'' So, Secretary Granholm, if this
pause is truly about updating studies, then why do the majority
of the quotes in the President's own press release say stop LNG
and phase out fossil fuels?
Secretary Granholm. I haven't seen those, but I can tell
you that this is a pause.
Senator Daines. I encourage you, if you haven't seen it,
we'll make sure you get it. It's right on the White House press
release. You work for the President of the United States.
Secretary Granholm. I have not seen that press release or
that quote, but I can tell you that it is a pause to update the
study because so much has happened since the last time the
study was done. We were only exporting four Bcf of LNG at that
time, and now we are exporting 14 with another 12 Bcf under
construction and another--and 48 total authorized. This pause
doesn't affect any of that.
Senator Daines. Well, you know, we've been exporting LNG
since 2016. And DOE has done numerous studies since then,
including one that showed that LNG exports to Europe have the
lowest life cycle emissions. So, what exactly is DOE looking
for that hasn't already been published?
Secretary Granholm. Well, first of all, as Senator King
noted, the fact that we would be potentially exporting up to 48
billion cubic feet, when at the last study it was just four,
and we use natural gas here at home. We produce about 100
billion cubic feet of natural gas at home. That would mean that
we would be exporting--if, in fact, it was all built, and I'm
not saying it's all going to be built--half of our production.
What does that do for prices at home? Volumes of these----
Senator Daines. When will the study be completed?
Secretary Granholm. Around the end of the year.
Senator Daines. Around the end of the year.
So, what information could DOE find during the study that
would cause it to deny all future export applications?
Secretary Granholm. We're not in this to deny all future
exports.
Senator Daines. But the website--I'd love to have you go
see the White House press release that says ``phase out fossil
fuels'' because I don't believe what you're saying on prima
facie. I think there is an ideology here, as clearly
articulated on the White House's own release that says ``phase
out fossil fuels'' and ``hashtag stop LNG.'' That doesn't seem
to be talking about pricing. That seems to be a radical
ideology now to go to zero fossil fuels.
Secretary Granholm. Well, I can tell you that our
instructions to the national labs who are doing the study is to
follow the science and the data. And that's all it is. It's
look at what the science and the data show, both on prices at
home, what the global demand will be in light of all of these
countries saying that they are making different pledges, what
the demand will be on the part of our allies so that we can
assure they are well supplied.
Senator Daines. As we're watching Russia continue to
destroy Ukraine, when our allies are pleading with us for more
U.S. LNG. I was over----
Secretary Granholm. Our allies are getting their LNG. I'll
just be super-clear about that.
Senator Daines. But no, Madam Secretary, with all due
respect, the chilling message you send by pausing LNG permits
is being heard around the world.
Secretary Granholm. It is a pause.
Senator Daines. I get that.
Secretary Granholm. It is a pause for a study. You don't
need to hype it out beyond what it is. It is a pause to get
data.
Senator Daines. So why couldn't you do the study in
parallel here instead of putting a pause on permits? Because
time is of the essence.
Secretary Granholm. Because there are----
Senator Daines. We're talking about a couple of permits.
The message that sends, I will just tell you----
Secretary Granholm. Well----
Senator Daines. Maybe you're talking to different allies
than I'm talking to but they are wondering what's going on.
Secretary Granholm. I am sending a different message
clearly than others have been sending. The message I am sending
is, all of your LNG that you have under long-term contract is
going to be all right because you are already exporting and it
has already been authorized. We are taking several months to do
a study to determine what the impacts are of additional LNG
authorizations both globally and at home.
Senator Daines. I respectfully ask you to stop this highly
political pause and get back----
Secretary Granholm. It is a scientific pause, sir.
Senator Daines [continuing]. To the mission of the
Department of Energy.
Secretary Granholm. It is a scientific pause. We're
gathering the data.
Senator Daines. Well, I think you are yielding to the
radical elements of the left who want to see--go back to the
White House press release that says ``stop fossil fuels,
hashtag stop LNG.'' That doesn't sound like a pause. That
doesn't sound like cost. That sounds like an ideology that
wants to keep LNG from ever being shipped anytime. That's a
radical ideology. It's out of step with the American people.
Thank you, Mr. Chairman.
The Chairman. We have Senator Hirono.
Senator Hirono. Thank you, Mr. Chairman.
Just to briefly refer to what the Secretary was just
testifying to, my understanding is that there are already a lot
of LNG permits out there and it's not as though we need to have
more, but just to have a pause. And I mean, really, for some
people on the Right to keep talking about this, and you know, a
lot of them don't think that global warming is a problem
either. They think global warming is a myth.
So let me get to wildfire risk. It has been over eight
months since Maui experienced the deadliest wildfire in the
U.S. in over a century, and this disaster demonstrates the need
to invest in upgrades to the electrical grid that improve
monetary and reduce the risk of wildfires and help restore
power. The Infrastructure Law established the $10.5 billion
Grid Resilience and Innovation Partnerships (GRIP) program to
improve the resilience of the power system against growing
threats of extreme weather and climate change. You told Senator
Padilla that the grid resilience funding Congress provided in
the Infrastructure Law is oversubscribed. What level of demand
for grid resilience improvements is DOE seeing, and what is
DOE's role in helping lower-income areas still have a reliable
grid in the face of wildfire and other climate change risks?
Secretary Granholm. We are grateful for the Grid Resilience
Innovation Program because it did give us a significant amount
to be able to address these needs but, as I mentioned, we could
not possibly fund all of the requests out there, and they were
good. They are all good requests. I am hopeful that we can
revisit this with Congress in a future budget year because I
think it is hugely in demand. We're in a second round of grid
funding. There's a second round of the competition that is
occurring. It is right now underway. In this second round, we
are prioritizing things like grid-enhancing technologies and
reconductoring to make sure that we can get the biggest bang
for our buck so that the rate-basing of transmission lines is
not forced upon ratepayers, that we can really encourage the
cheapest form of grid-enhancing technologies.
But this is a huge issue, not just in Hawaii, and I know
Hawaii won in the first round of GRIP funding for the Lahaina
and Maui wildfires that HECO received. More needs to be done
though.
Senator Hirono. Did it surprise you that this program would
be so oversubscribed?
Secretary Granholm. Well, I wouldn't say it really
surprised me given the size of the grid and when it was built
because we have such massive needs and such a crickety old
grid. So we're going to have to, as a nation, decide that this
is a piece of the infrastructure, like the national highways,
that we've got to get serious about investing in, and investing
in a smart way by prioritizing the things we know we can do
that are less expensive, but also building out what we need to
do to get power in where it needs to be.
Senator Hirono. I agree with you.
I want to talk about the transitioning to electric
vehicles. Hawaii has the second most expensive gasoline prices
in the country at $4.74 per-gallon. And whenever global oil
prices increase, we see the impact in Hawaii, the cost of
gasoline. So one of the reasons I supported the Inflation
Reduction Act and the Infrastructure Improvement and Jobs Act
was to help people find a more American-made, affordable
electric vehicle to avoid high prices at the gas pump. How is
the transition to electrical vehicles going in your view, and
do you know if more people are using the EV tax credits now
that they are available at the time of the sale--the purchase
of the car?
Secretary Granholm. Yes, thank you for that question, and
Treasury just put out--I think yesterday--an assessment of the
uptake, which is very robust at the dealership. Last year we
sold just slightly less than 10 percent of the fleet of light-
duty vehicles, which were all electric, and if you added
hybrid, it would get to about 17 percent. So there is great
interest because of the price of gas, because people want to
see more choices in terms of their transportation. We're
excited about that, but we have also got to work continuously
on building out the infrastructure necessary to get people
comfortable to buy electric vehicles, and that means the
electric vehicle charging infrastructure.
Senator Hirono. And, I don't want to interrupt you----
Secretary Granholm. Yup.
Senator Hirono. But my time is--and one of the goals of
this Administration is to lower costs for our families, and one
of the ways we can do that is to encourage them to buy or to
use energy-efficient appliances. So before the attack--Iran's
attack in Israel--the House was spending a lot of time trying
to undo this Administration's encouraging of the use of energy-
efficient appliances. Can you just explain briefly the benefits
the American people will enjoy from the DOE's improved
efficiency standards for appliances?
Secretary Granholm. Yes, DOE has been doing efficiency
standards since 1975, over 60 different products. I will just
give you one example. If you bought a refrigerator in 1975 and
you bought one today, your today's refrigerator would cost you
half the amount that it did in 1975. It would be 20 percent
larger and it would use one quarter of the electricity. Energy
efficiency standards save money and they are certainly helpful
in reducing greenhouse gas emissions.
Senator Hirono. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
And we have Senator Cassidy.
Senator Cassidy. Madam Secretary, I actually thoroughly
accept that we need to decrease emissions, but I'm afraid that
the Administration is so ideologically focused that we're doing
otherwise. Tell me, in the analysis of the natural gas export,
are we looking at the fact that because we are exporting less
natural gas that other countries are using more coal and the
greenhouse gas footprint of Germany burning more coal is
obviously much worse than if they were burning clean U.S.
natural gas? Is the end-user having to substitute coal for
natural gas part of the life cycle analysis?
Secretary Granholm. First, just to clarify, we are not
stopping the export of natural gas----
Senator Cassidy. Yes, but you're stopping the permitting,
which means it's creating uncertainty, which means that there
are contracts that are going elsewhere, if you will.
Secretary Granholm. We have authorized 48 billion cubic
feet of natural gas. That is a massive amount. All of that is
still going forward, if people can get final investment
decisions. Currently, we are exporting 14 billion cubic feet.
Another 12 billion cubic feet are under construction. None of
that is stopped. None of it.
Senator Cassidy. Yes, but let's not be disingenuous. The
fact that there is a pause means that--this regulatory pause
driven by an Administration which sometimes does not look at
end results--means that investment decisions are being changed.
Secretary Granholm. Well----
Senator Cassidy. But my point being----
Secretary Granholm. We have spoken with our----
Senator Cassidy. But if I might go to the point.
Secretary Granholm. Yes.
Senator Cassidy. Is the life cycle analysis looking at the
fact that countries may end up using coal instead of natural
gas or import natural gas from countries which don't have our
same stringent environmental standards?
Secretary Granholm. Yes, fuel switching is definitely part
of the analysis.
Senator Cassidy. So it'll show, just to be clear, that
China will be using more coal, and the impact on global
greenhouse gas emissions, as opposed to substituting U.S.
natural gas, or Germany, or whomever.
Secretary Granholm. Fuel switching by any country or
countries will be part of the life cycle analysis.
Senator Cassidy. I have to admit, the fact that it is so
obviously and so transparently a major contributor to
greenhouse gas emissions, that we still need to do the study,
again, indicates to me that there's another reason to do the
study. But that's an editorial comment.
We had testimony here about a year ago, and I forget quite
from where, but it was around, I think, Oklahoma, Kansas,
someplace like that, and they were talking about how the
regulations requiring them to go to renewables were endangering
their capacity to meet surges, and you just talked about the
rickety old grid. The fact that we have to bring electrons from
the Panhandle of Texas all the way to Atlanta obviously makes
the grid more important, whereas, if somebody is producing
locally, the local grid is more easily maintained. It doesn't
have to be as high wattage, et cetera. And I say that because a
statement was just made that the Administration is focused on
reducing energy costs. Can we hold up that chart? This is
actually what has happened since the Administration has taken
over. This is what the cost of energy has done. This is not
holding down energy costs. There is a term used in Europe--
energy poverty.
[The chart referred to appears on page 6 of this hearing
document, where first introduced by Senator Barrasso.]
I remember reading an article in the New York Times--the
ideological New York Times--about a family in western
Massachusetts, in which the church had to pay the utility
bills.
Now, I say that because I think there has to be a little
bit of table setting. A lot of these things which theoretically
are going to lower costs, in reality have increased costs for
the average American family. Pipeline permitting becoming more
difficult, for example, means that it's more difficult to get
cheaper burning natural gas, and therefore, people's utility
bills are going up. I think Senators King and Manchin have
discussed that in the past. Any comments on all that?
Secretary Granholm. Yes. Number one, there is no doubt that
we are all focused on reducing costs for people, and energy, of
course, being a big component of that. Natural gas prices----
Senator Cassidy. By the way, that chart would suggest that
it's not being very successful as a----
Secretary Granholm. Well, that chart also starts in January
2021 in the middle of the pandemic. So let's be clear about
what it actually looks like out of pandemic. Nonetheless, it is
important to recognize that the price, for example, of natural
gas is at very low prices right now. The price of solar, very
low. What's causing the increase in energy prices? One
contributing factor is the investments in the grid that are
necessary, this old grid that gets rate-based among ratepayers,
and it's one of the reasons why it's so important for us all in
leadership to take a look at how we invest in the national
electric grid so that we are not forcing ratepayers to bear
that burden.
Senator Cassidy. Now, may I say that also one thing
contributing to the high cost is the inability to permit new
natural gas lines? And if you can't get adequate amounts of
natural gas to a utility, they are going to have to pay more
for whatever source they get it from, and that's a major
contributor. We can speak of power lines, but local generation
is often natural gas, and that has been inhibited, that
pipeline development has been inhibited by this
Administration's policies.
Secretary Granholm. Well, that's not under my jurisdiction,
so I don't have data on that, but I know that this
Administration is interested in lowering costs for people,
which is why they've increased the amount of money for LIHEAP
for weatherization, increased the ability for people to buy
electric vehicles at the dealership by reducing those costs,
increased the ability for people to do insulation in their
homes so that they can reduce the cost, all of these things,
all driving toward reducing the cost of energy. The cost of
natural gas is not high. It is the cost of the infrastructure
associated with the energy grid that is expensive.
Senator Cassidy. Yes.
I yield. Thank you.
The Chairman. Senator Heinrich.
Senator Heinrich. Thank you, Chairman.
Welcome, Secretary. I want to ask you about the Loan
Programs Office. Projects that are financed under the LPO
undergo very extensive scrutiny and due diligence before being
approved. Can you just elaborate on the rigor of the approval
process, what safeguards are in place that ensure taxpayer
funds are protected and administered prudently? Yes, go ahead.
Secretary Granholm. Yes, thanks for asking that. It's, you
know, the Loan Programs Office has really shifted its
structure, I'll say, since this Administration came into being.
So the first thing that's important to know is that the Loan
Programs Office now is not the first dollar in, but the last
dollar in, to safeguard the taxpayer, and the Loan Programs
Office does not take risk on technology. They are funding a
business model and they are looking at the risk associated with
the market. And so, as part of this, there are seven steps to
be able to get a loan.
Senator Heinrich. Basically, because banks won't take the
first risk, right?
Secretary Granholm. Right.
Senator Heinrich. They need to see something get proven out
in the marketplace, and then they'll come in and build number
three or four, but they typically won't build one or two.
Secretary Granholm. Very well said, and I should have said
that in that way, but that's exactly what it is. So, we'll
first do a recruitment from our Business Development Office.
They have a two-stage application that they have to go through.
That application includes a risk assessment of their business
strategy, their leadership team, their marketing strategy, and
their technology strategy. Then there is an approval and a
second part, and then it goes to due diligence, and then it
goes to a conditional commitment, and then it goes to--before
it goes to conditional commitment, it goes to the interagency
for review--Treasury, it goes to Management and Budget, it
comes back, there's a conditional commitment, there's a
financial close, and then there is monitoring.
So there are all sorts of steps that----
Senator Heinrich. And in those steps, are political
appointees involved, or is that being done by professional
staff?
Secretary Granholm. No, other than the recruiting, which
Jigar Shah does, it is all done by professional federal
employees.
Senator Heinrich. I want to ask you about industrial
decarbonization. We saw some pretty incredible announcements
adding up to $6 billion in that sector. I think we're at a
place now where we very much understand how to decarbonize the
grid. We understand how to decarbonize transportation, which is
now the leading source of pollution. The big thing that we need
to make progress on is industrial decarbonization. It's cement,
it's steel, it's aluminum. Talk about some of the progress that
is being made there and what you're excited about within the
industrial decarbonization bucket.
Secretary Granholm. Yes, this is such a great story,
because again, there has not been a decision on the part of the
Federal Government to really invest in the technologies that
decarbonize the hardest to decarbonize sectors. So, the funding
that has gone out under the industrial decarbonization program
went to all range of technologies, including cement, to help
make green cement, steel, to help make green steel, to glass,
all these glass providers, glass producers. And it is, you
know, the decarbonization component of things is really a
partnership with industry because they want to decarbonize as
well. It saves them dollars. So we're very excited about the
projects that we announced. And we will have another phase of
this, but super-excited to get the enthusiasm that we saw from
across the country in these projects that otherwise seem to,
you know, they don't get as much attention, I think, as some of
the other kinds of technologies, but these technologies are
hugely important.
Senator Heinrich. Yes, it's a shame because I think your
recent announcements are probably the biggest thing to happen
in this sector, ever.
Secretary Granholm. Yes.
Senator Heinrich. And you know, I don't think we were quite
ripe when we did the Inflation Reduction Act for as much focus
in this sector as we probably should have put in that
legislation, but now, it is definitely moving quickly.
I want to ask you one last question with my remaining time.
Talk to me about the home efficiency rebates and home
electrification appliance rebates. What's the time frame for
getting those approved? I know my state was the first state to
approve--to apply for both the home efficiency rebates and the
home electrification and appliance rebates. How is that coming
along?
Secretary Granholm. Yes, thanks for your leadership on
this, by the way, because I know part of this was your baby and
these states are very excited about it. There are 16 states in
the pipeline. All these states have the opportunity and all
have received preliminary funding to be able to build their
program. New Mexico raised their hand right away and said we
want to lean in and be among the first states, which is
terrific.
Once they are approved and they are submitted, it goes
through a whole series of steps, but each program goes to NREL,
their Golden field office, to be able to get the final thumbs-
up. Once that happens, all the funding goes to the states for
them to build their program. We are hoping that we can convince
states to accelerate their strategies so that we have the
summer of rebates, if you will, to be able to see people get
these appliances in their hands, but it's up to the states.
It's up to the state timeline. Some states have leaned in and
some states have not, but we want to encourage all to lean in
because it's all about the citizens.
Senator Heinrich. So, just bearing out that there are a
number of steps that states are going to have to take,
potentially these programs could be up and running this summer?
Secretary Granholm. Oh, they could be, sure, if the state
were willing to go. Now, they have to get their stuff into us.
We have a sample application on the website so it makes it
easy. We have a sort of concierge service working with the
states to encourage them to apply. A lot of states are
resource-scarce. Their energy offices already applying for all
these other grants feel very, you know----
Senator Heinrich. Stretched.
Secretary Granholm. Stretched. So that's why getting that
initial money so they can hire up to be able to do the program
is very important, and I understand that that takes time, but
we're eager to encourage those who can to do the summer of
rebates.
Senator Heinrich. Chairman, I apologize for going a little
bit long.
Secretary Granholm. That was my fault.
Senator Heinrich. I appreciate your discretion.
The Chairman. No problem.
Senator Hawley.
Senator Hawley. Thank you, Mr. Chairman.
Madam Secretary, nice to see you again. When you were here
last, I talked with you about the fact that more than 130
officials in the Energy Department reported more than 2,700
trades of shares, bonds, and options in companies that ethics
officers said were directly related to the agency's work. This
is institutionalized corruption. And I asked you, point blank,
do you own any individual stock? And you told me, ``no.'' Let's
just look at it.
[Poster of the question and answer referred to follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Hawley. It was not a difficult question. Do you own
individual stocks, Madam Secretary? You said, ``no.'' In fact,
you repeated it three times to me--``no, no, no.'' Turns out,
that was false. You did own multiple individual stocks and you
neglected to report it to this Committee for months afterwards.
Why did you mislead this Committee?
Secretary Granholm. Oh, my goodness.
Senator Hawley. That was exactly my response. So why did
you mislead this Committee?
Secretary Granholm. Senator, I believed that I had sold all
individual stocks, and I was incorrect. So I came back and
told----
Senator Hawley. So you just don't know your portfolio?
Secretary Granholm. Pretty much.
Senator Hawley. It's a big one, I guess, huh?
Secretary Granholm. No, it's extremely small.
Senator Hawley. Apparently not. Someone manages it for you?
Secretary Granholm. So I came back as soon as I found out
that, in fact, I had not sold all individual stocks.
Senator Hawley. Wait, wait, wait, wait, no, that's not true
either. Let's just look at the timeline.
[Poster of the timeline referred to follows:]
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Senator Hawley. Let's not--I will just remind you you're
under oath. Madam Secretary, you testified you didn't own any
individual stocks. You didn't sell the stocks for a whole other
month, and after you sold the stocks, you waited another month
before you informed this Committee. Why did you mislead us and
what were you hiding? Why did you wait so long? Why did you
hide this?
Secretary Granholm. I did not hide it because I brought it
forth to the Committee when I realized that we had made a
mistake.
Senator Hawley. Really? What explains the delay? Why did
you wait for a full month to explain your actions to this
Committee, your false testimony?
Secretary Granholm. That's less than a month, and I sent a
letter explaining what had happened----
Senator Hawley. May 15 to June 9. Are we going to----
Secretary Granholm [continuing]. That I made a mistake
because I owned a Ford stock that would----
Senator Hawley. You mislead this Committee and you--wait,
what were the stocks? What were the stocks that you owned?
Secretary Granholm. It was a Ford stock that my husband had
owned since he was very young and I just was not aware of it.
Senator Hawley. And what were the others? You've sold six
stocks. What were the other five?
Secretary Granholm. I sold non-conflicting stocks.
Senator Hawley. What were they?
Secretary Granholm. Honestly, I don't even know. I do know
the Ford one because that was a conflict and that's why I
raised this.
Senator Hawley. You're here before this Committee a year
later after actively misleading us, after denying and delaying
and delaying and now you won't tell us. Was one of them
Proterra?
Secretary Granholm. No.
Senator Hawley. You sat on the Board of Directors of
Proterra. You made millions in end reports and stock options at
Proterra. Then you promoted Proterra stock and Proterra
products as Energy Secretary.
Secretary Granholm. Sir, sir, sir.
Senator Hawley. Was that one of the stocks that you sold?
Secretary Granholm. This is so--I mean really? Really?
Senator Hawley. Was that one of the stocks that you sold?
Yes, really.
Secretary Granholm. No, no.
Senator Hawley. You were presiding over institutionalized
corruption in your Energy Department. You have violated the
STOCK Act nine separate times. You have been referred by the
Inspector General for violations of the Hatch Act. It is
institutionalized corruption that you are now the face of. And
here's what I'm trying to figure out--I just want to know who
really runs the Energy Department. Is it you or is the mega
corporations, whose stock that you own, that you're making
profits on?
Secretary Granholm. Oh, my goodness.
Senator Hawley. Or maybe it's the foreign billionaires who
fund your conferences. Let's try something else. Do you know
the names of the foreign billionaires who fund the conferences
you go to? Since you don't know the stocks, do you know the
names of the foreign billionaires?
Secretary Granholm. This is unbelievable to me, Mr.
Chairman, to be accused like this.
Senator Hawley. Let me help you. One of them is Hansjorg
Wyss, a Swiss billionaire, who has used various dark money
front groups----
Secretary Granholm. I do not know what you are talking
about.
Senator Hawley [continuing]. To funnel foreign money into
American politics. He has used the Berger Action Fund, $20
million that then sent money to the Fund for a Better Future
that then sent money to the Climate Power group that has funded
conferences you've attended. Do you know who this is? Do you
think it's a good idea to attend conferences funded by foreign
billionaires?
Secretary Granholm. I have no idea who that is. I have no
idea what you're talking about. I have no idea what you're
talking about.
Senator Hawley. You don't know the stocks. You don't know
the billionaires. You would take no responsibility.
Secretary Granholm. The Ford stock----
Senator Hawley. Meanwhile, your Energy Department--
executives in your Energy Department are trading stocks in
companies that they have direct oversight over, and you were
too.
Secretary Granholm. That is incorrect. Nobody in the
Department of Energy, and we have a strong ethics office,
trades stocks in anything that they have oversight over. People
may own individual stocks----
Senator Hawley. That is simply not true, Madam Secretary.
Secretary Granholm. Sir, this----
Senator Hawley. The Wall Street Journal has reported on
this extensively.
Secretary Granholm. The Wall Street Journal----
The Chairman. Senator, if I may? If I may, Senator? If I
might just ask a question?
Is it possible that maybe we can continue this at a later
time, but if you had any questions on the direct energy
policies?
Senator Hawley. Mr. Chairman, this is directly relevant to
institutionalized corruption in the Department of Energy that
she oversees. You're, I think, about to say that the Wall
Street Journal report is wrong.
Secretary Granholm. The Wall Street Journal report did not
say that people in areas that they were directly overseeing had
stocks. They did not. Our Ethics Office consults with all of
our employees that have a reporting requirement about their
stockholdings. They do not own stocks in areas that they have
any influence over, nor do I.
Senator Hawley. Madam Secretary, all I have to say is, this
record is just deplorable. It is despicable. It is outrageous
that hundreds of officers in the Energy Department are trading
shares. It is outrageous that you mislead us. It is
outrageous----
Secretary Granholm. That's incorrect.
Senator Hawley [continuing]. That you are continuing to
mislead us and it is outrageous you're going to conferences and
events funded by foreign billionaires using dark money to try
to influence our politics. This has got to change. And frankly,
you should go.
Thank you, Mr. Chairman.
The Chairman. Senator Lee.
Senator Lee. Secretary Granholm, demand for electricity is
soaring. It's skyrocketing, in fact. This is happening for a
number of reasons, including due to the emergence of AI, of
data centers, semiconductor reshoring, clean tech
manufacturing, and of course, electric vehicle use. A recent
New York Times report addressed this issue and estimated that
electricity demand from data centers alone without taking into
account any of those other factors is going to triple by 2030,
just in the next six years, using as much power as 40 million
homes. Now, NERC has sounded the alarm and NERC sounded that
alarm by, you know, regarding this pending reliability crisis
that's coming, due specifically to the lack of electricity
supply. Demand is soaring, and it's soaring at the same time
when the premature retirement of coal-fired power generation
units is happening, and it's happening without replacement
dispatchable generation capabilities. And so, these factors
have led to an overreliance on sources like wind and solar,
sources that while clean, are entirely weather-dependent and
can't give us a source of baseload energy supply. Grid-scale
battery technology is often touted as the answer to this, but
of course, grid-scale battery technology is nowhere close to
being ready for deployment and use.
So, Madam Secretary, do you dispute NERC's findings on
this, or is it true that we have a reliability crisis looming?
Secretary Granholm. We certainly have a looming demand-for-
energy crisis, and NERC, I think, put 91 gigawatts to that by
2033 that we would have to add to account for the increase in
demand.
Senator Lee. Okay. Now, in the meantime, and I'd like to
get a yes or a no answer out of this one, if you can. Yes or
no, does the Biden Administration support a transition to net
zero?
Secretary Granholm. Yes.
Senator Lee. Okay. Now, look, the basic laws of supply and
demand tell us that if we don't get our act together, we'll see
rolling blackouts across the country. And yet, you continue to
advocate for a transition, even a rapid transition, to net
zero. According to a report compiled by McKinsey and Company in
2022, ``Global spending on physical assets on the course to net
zero would need to reach about $275 trillion by 2050, or $9.2
trillion per-year on average.'' Now, this factor, of course,
doesn't consider the economic ripple effects that would stem
from more expensive energy and energy being made less reliable.
One also has to consider the impact of lost jobs related to
those same factors. It's fair to say that a net-zero transition
is going to require enormous sacrifice by American families,
with low-income households being hit the hardest. This is
deeply concerning to every American. It ought to be concerning
to Americans of every background, of every political stripe,
but more than anything, this is isn't so much about Left versus
Right, Democrat versus Republican, as it is rich versus poor.
Rich folks can handle significant increases in the price of
energy. Poor folks can't, especially when they find that
increases in the price of energy spill over into literally
everything they buy, into everything that they do. And when
you're living at the margins like that, you're not going to be
able to handle that.
So, Madam Secretary, if the United States, consistent with
your ambitions, with your plans, with the ambitions of the
Biden Administration, if it completely transitions over to get
to net zero, exactly how many degrees will global temperatures
decrease as a result of moving to net zero?
Secretary Granholm. Well, we want to keep global
temperatures from rising more than one and a half to two
degrees. Net zero is by 2050. So there is time to be able to
get there. If we see temperatures rising greater than that, of
course, the costs for poor people and for people overall,
because of these extreme weather events, will be catastrophic.
Senator Lee. Okay, but let's get back to my question. If we
get to net zero--when we get to net zero, should we get there
at some point--if we get there, what impact will that have on
global temperatures?
Secretary Granholm. As I say, the striving to net zero is
to prevent the temperatures from rising more than one and a
half to two degrees.
Senator Lee. Yes, still not the answer to the question. The
question is what impact is that going to have? We just talked
about the fact that it's going to cost $275 trillion to get
there and we talked about the fact that it's going to cost the
global economy, you know, $9 or $10 trillion a year in order to
get there. So what does that buy us? What does that do?
Now, you're saying yes, we're trying to not have
temperatures increase more than the defined amount that you
just described, but what impact does this have? What does it do
for global temperatures if we get to net zero?
Secretary Granholm. Perhaps I'm not understanding your
question. I think I have answered that, and the whole point is
to prevent these extreme and accelerating weather events we
have had--year after year of record heat. We've had year after
year of increased extreme weather events, just in this country.
Senator Lee. Look, I understand the Biden Administration's
affinity for blaming everything, including bad weather on
Republicans and on climate change, which they always associate
together. And I fail to understand how you can definitively say
that a complete transition to net zero is necessary when you
don't even know the impact that it would have on global
temperatures. You can't tell me, sitting here today, what it's
going to do. You tell me what you fear might happen if we don't
do that. You tell me that you think temperatures will increase
less if we do this than if we don't. I don't get this,
especially when, if what you're talking about is, you know, a
large number, it would seem fanciful and not backed up. If it's
a smaller number, it could be dismissed as a rounding error.
And meanwhile, you're talking about completely changing the
global economy. And given the way the United States tends to
honor its legal obligations and its commitments more than other
countries do, we can rest assured that it is going to cost the
United States a lot more money than it is going to in a lot of
places, meaning poor and middle-class Americans will suffer by
far more than anyone and everyone else. I find this completely
unacceptable. This is reverse Robin Hood. It's talking about
stealing from the poor to give to the rich. Nobody supports
that. And we can't endure it. America's poor and middle class
certainly shouldn't have to shoulder this burden.
The Chairman. Senator Hoeven.
Senator Hoeven. Thank you, Mr. Chairman.
Thank you, Secretary, for being here today.
One of the things that, as you know very well from visiting
the Energy and Environmental Research Center (EERC), is that
we're working very hard to develop these new technologies so
that we can keep our baseload energy in place, whether that's
our coal-fired electric plants, but also the work that we do in
oil and gas. You know, we have the best stewardship in the
nation--in the world. Our country has the best stewardship in
the world, and it's because we are leading the way in all these
technologies, which, obviously, you saw at the EERC, and DOE
needs to help us with that. One of them that we talked to you
about is the Plains CO2 Reduction Partnership, PCOR.
So we work on that with the EERC at the University of North
Dakota. Senator Barrasso works on it in Wyoming with the
University of Wyoming. Senator Murkowski, in Alaska, the
University of Alaska at Fairbanks, as well as our esteemed
Chairman, Senator Manchin, works with these regional
partnerships in West Virginia. So they are very important and
really cover the country. And so we, through the appropriations
process, secured funding for those partnerships. There are four
of them that pretty much cover the whole country. And we
directed that Congress move ahead with multi-year funding to
competitively select, you know, these partnerships to go ahead
and provide, again, this work on how we can safely sequester
CO2. And as you know, that's done both for
sequestering as well as enhanced oil recovery.
So my question is, we need to get going on that, and in the
past, there's been disagreement between Congress, in terms of
funding these things, and then the DOE coming in and how they
have approached it. And so my question to you is, will you
commit to promptly issue a funding opportunity announcement for
the RCSP program that's consistent--this is the important
part--consistent with the language that we included for 2024?
Because we have been doing this for a number of years. These
folks, these universities have done a good job across the
country, and then DOE came in and tried to--and did change how
it's being handled. So we put language in this year to make
sure that we move forward with this funding and that it's done
as we've done it in the past, which has been very successful.
Secretary Granholm. The answer is yes--short answer. I was
pleased to see that the Liberty Carbon Management Hub at the
University of North Dakota received funding from the previous
funding opportunity announcement. We are using that same
language to go into this next funding opportunity announcement.
Senator Hoeven. Okay. And it's very important--another
project, you're aware of it, that we've talked about, is Dakota
Gasification Company.
Secretary Granholm. Yes.
Senator Hoeven. Which takes lignite coal and coverts it to
natural gas. Fifty percent of the CO2 stream goes
for EOR, enhanced oil recovery. And now they are capturing
another 35 percent, which takes it up to 85 percent for
geologic storage. Same thing though, EERC, University of North
Dakota, they measure, so you've got an independent entity
measuring to make sure that the CO2 is captured, is
put down a hole, it's sequestered, and then it's safe for the
long term. You know, we've put a lot of programs in place in
North Dakota. We're one of two states in the country that can
do it right now, North Dakota and Wyoming. Same thing--you're
working with them to fund that monitoring project. The first
round, I think, was $1.4 million, but now there's additional
follow-on funding as this project is ramped up. Again, the
largest carbon capture project in the country. Again, I want to
know, will you commit to promptly approving the necessary
funding that you participate in with them as a partner in what
I think is an incredible, you know, incredible project that's
really leading the way forward?
Secretary Granholm. Of course.
Senator Hoeven. Okay. So both of those, I think, incredibly
important.
The last thing I do want to bring up, and I know you've
been asked about it. I haven't been here for the whole hearing,
but I was about a year ago in both South Korea and Taiwan. They
need LNG from us. We don't want them to be dependent on Russia
or somebody else. So, again, in terms of this moratorium on
siting LNG facilities, it's just paramount that we move
forward. And it's not just getting it in places the market
signals that we send. You yourself just mentioned the cost of
LNG is low now. So we need the facilities to provide it to
customers.
What can you do to help advance this process so that we get
back to permitting LNG facilities?
Secretary Granholm. Yes, I mean, as we said, this update
process, which is done with our national labs, will be
completed around the end of the year and the data will show
what the data shows, but the important part is that it takes
into account what our allies need, what we expect the global
demand will be, what the impacts on the ground here are in
terms of jobs and community, and what the life cycle issue is
with respect to LNG. And so all of those, and the cost, of
course, very importantly, the cost at home of exporting a large
amount of LNG for our own manufacturers, for example, our own
consumers of natural gas. So all of that is happening right
now, and this will soon be in the rear-view mirror.
Senator Hoeven. Yes, it is really important that we get
that squared away, not only for our own national security, but
also working with our allies.
Secretary Granholm. But just to remember that everybody who
is currently exporting, this does not affect. Everybody who is
under construction, this does not affect. Everybody who is
authorized, this does not affect.
Senator Hoeven. Well, we both understand the issue, and
your attention to it is very important, and so I thank you for
that.
Secretary Granholm. Great.
Senator Hoeven. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Secretary Granholm, let me just say you and your husband
Dan and I have known each other for probably 20 years or more,
and Gayle and I, we have had a great relationship. And I want
to thank you for your service. No one has ever questioned that
and your dedication and commitment to not only the State of
Michigan, but to the United States of America. And I
appreciate, more than you know, and I know that sometimes
politics gets a little rough here, and I want to apologize for
that. And if you wanted to make any statement whatsoever.
Secretary Granholm. Yes, I just want to say, Mr. Chairman--
--
The Chairman. Sure.
Secretary Granholm. Thank you for the opportunity--the
previous statements made by a member of the Committee----
The Chairman. You and I talked about this, too, afterwards
and we went through all this.
Secretary Granholm. Exactly. About the transparency of my
personal finances, everything is online, everything is publicly
available. So I just want to make sure everybody knows that.
The Chairman. Let me just say one thing, living in
Michigan, if your husband had not bought Ford stock, he would
not be a good Michigander.
Secretary Granholm. Exactly, especially since his dad
worked for Ford.
[Laughter.]
Secretary Granholm. But anyway----
The Chairman. Anyway, the bottom line is that we know the
honorable service you have given and your commitment to this
country and we just want to make sure you're able to continue
that in the best way possible. We're here to support. We're
here to work out our differences and talk about how we make
things better for all and I think that's the spirit with which
we should be approaching this, but we've got to get back on
track, get this politics back on track to where the
government--country comes first, it's not our politics.
I want to thank the witness for joining us today and
bringing your expertise.
The members are going to have until the close of business
tomorrow to submit any additional questions for the record.
And with that, the Committee is adjourned.
[Whereupon, at 11:57 a.m., the hearing was adjourned.]
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