[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

THE AMERICAN ENERGY INITIATIVE, PART 29: A FOCUS ON H.R. 6172

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HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY AND POWER

OF THE

COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

__________

SEPTEMBER 20, 2012

__________

Serial No. 112-179

Printed for the use of the Committee on Energy and Commerce

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COMMITTEE ON ENERGY AND COMMERCE

FRED UPTON, Michigan
Chairman

JOE BARTON, Texas HENRY A. WAXMAN, California
Chairman Emeritus Ranking Member
CLIFF STEARNS, Florida JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania EDOLPHUS TOWNS, New York
MARY BONO MACK, California FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina GENE GREEN, Texas
Vice Chairman DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma LOIS CAPPS, California
TIM MURPHY, Pennsylvania MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire MIKE ROSS, Arkansas
PHIL GINGREY, Georgia JIM MATHESON, Utah
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington DORIS O. MATSUI, California
GREGG HARPER, Mississippi DONNA M. CHRISTENSEN, Virgin
LEONARD LANCE, New Jersey Islands
BILL CASSIDY, Louisiana KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky JOHN P. SARBANES, Maryland
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia

7_____

Subcommittee on Energy and Power

ED WHITFIELD, Kentucky
Chairman
JOHN SULLIVAN, Oklahoma BOBBY L. RUSH, Illinois
Vice Chairman Ranking Member
JOHN SHIMKUS, Illinois KATHY CASTOR, Florida
GREG WALDEN, Oregon JOHN P. SARBANES, Maryland
LEE TERRY, Nebraska JOHN D. DINGELL, Michigan
MICHAEL C. BURGESS, Texas EDWARD J. MARKEY, Massachusetts
BRIAN P. BILBRAY, California ELIOT L. ENGEL, New York
STEVE SCALISE, Louisiana GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington LOIS CAPPS, California
PETE OLSON, Texas MICHAEL F. DOYLE, Pennsylvania
DAVID B. McKINLEY, West Virginia CHARLES A. GONZALEZ, Texas
CORY GARDNER, Colorado HENRY A. WAXMAN, California (ex
MIKE POMPEO, Kansas officio)
H. MORGAN GRIFFITH, Virginia
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

(ii)

C O N T E N T S

----------
Page
Hon. Ed Whitfield, a Representative in Congress from the
Commonwealth of Kentucky, opening statement.................... 1
Prepared statement........................................... 3
Hon. John Shimkus, a Representative in Congress from the State of
Illinois, opening statement.................................... 7
Hon. Bobby L. Rush, a Representative in Congress from the State
of Illinois, opening statement................................. 7
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 8
Prepared statement........................................... 10
Hon. David B. McKinley, a Representative in Congress from the
State of West Virginiia, opening statement..................... 11
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 11

Witnesses

Eugene M. Trisko, Attorney at Law, on Behalf of United Mine
Workers of America............................................. 14
Prepared statement........................................... 16
Mark McCullough, Executive Vice President, Generation, American
Electric Power................................................. 37
Prepared statement........................................... 39
John N. Voyles, Jr., Vice President, Transmission and Generation
Services, LG&E and KU Energy LLC............................... 56
Prepared statement........................................... 58
Robert Hilton, Vice President, Power Technologies for Government
Affairs, Alstom................................................ 64
Prepared statement........................................... 66
John Thompson, Director, Fossil Transition Project, Clean Air
Task Force..................................................... 104
Prepared statement........................................... 106
Daniel A. Lashof, Director, Climate and Clean Air Program,
National Resources Defense Council............................. 124
Prepared statement........................................... 126
John R. Christy, Professor of Atmospheric Science and Director,
Earth System Science Center, University of Alabama in
Huntsville..................................................... 139
Prepared statement........................................... 141
Answers to submitted questions............................... 199

Submitted Material

H.R. 6172, submitted by Mr. Whitfield............................ 4

THE AMERICAN ENERGY INITIATIVE, PART 29: A FOCUS ON H.R. 6172

----------

THURSDAY, SEPTEMBER 20, 2012

House of Representatives,
Subcommittee on Energy and Power,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:05 a.m., in
room 2322 of the Rayburn House Office Building, Hon. Ed
Whitfield (chairman of the subcommittee) presiding.
Members present: Representatives Whitfield, Shimkus,
Walden, Terry, Burgess, Bilbray, Scalise, Olson, McKinley,
Gardner, Pompeo, Griffith, Barton, Upton (ex officio), Rush,
Markey, Green, Capps, Doyle, and Waxman (ex officio).
Staff present: Anita Bradley, Senior Policy Advisor to
Chairman Emeritus; Maryam Brown, Chief Counsel, Energy and
Power; Allison Busbee, Legislative Clerk; Patrick Currier,
Counsel, Energy and Power; Andy Duberstein, Deputy Press
Secretary; Cory Hicks, Policy Coordinator, Energy and Power;
Heidi King, Chief Economist; Ben Lieberman, Counsel, Energy and
Power; Mary Neumayr, Senior Energy Counsel; Peter Spencer,
Professional Staff Member, Oversight; Kristina Friedman,
Democratic EPA Detailee; Caitlin Haberman, Democratic Policy
Analyst; and Alexandra Teitz, Democratic Senior Counsel, Energy
and Environment.

OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

Mr. Whitfield. I would like to call this hearing to order,
and once again, I want to thank the members of the panel for
being here and we look forward to your testimony. All of you
have had a lot of experience in the issues that we will be
talking about, so after we finish opening statements, I will be
introducing each one of you individually.
Today we are holding the 29th day of our American Energy
Initiative hearing. We will be focusing on H.R. 6172, which
would prohibit EPA's proposed New Source Performance Standard
for greenhouse gases from being finalized until it is
technologically and economically feasible. I want to thank Mr.
McKinley of West Virginia for spearheading this legislation,
and I also want to thank the Democratic members who cosponsored
this legislation.
I don't think that anyone is not aware of the fact that
this administration has a strong bias against coal. We all are
familiar with the President's comments in San Francisco when he
was running for President that people would be able to build
coal plants if he is elected President but they would be
bankrupt. Yesterday, many of you read about Alpha Resources
closing down eight coalmines, 1,200 jobs. Patriot Coal recently
announced they were going into bankruptcy. Murray Coal up in
Ohio, West Virginia, Kentucky and Illinois has announced they
are going to be closing down three mines. And I understand the
argument on the other side because they say it has nothing to
with us, it has nothing to do with our regulations, this is
because natural-gas prices are low, which is true. But even if
that were not the case, once this regulation becomes final, no
one will be able to build a new coal power plant in America.
And so I lay that at the foot of the President and his
administration. It is their responsibility and they are
responsible for where we are today as it relates to coal. It
still produces a great portion of the electricity in our
country.
Now, it is easy to talk about the benefits of lowering
carbon dioxide emissions, and I would be the first to admit the
Clean Air Act has been very successful. But I would also say
that when EPA considers the benefits, and there are benefits
from many regulations, that they have a responsibility to
consider the cost and the impact on the health care of the
thousands of people who lose their jobs as a direct result of
the regulations. And of course, they never consider those
costs.
And so this legislation is very simple. It basically says
no, you are not going to be able to implement this until it is
shown that, technologically and economically, it is feasible to
use carbon capture and sequestration and it appoints three
different agencies in the government to make that decision.
[The prepared statement of Mr. Whitfield and H.R. 6172
follow:]

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[GRAPHIC] [TIFF OMITTED] T5564.004

Mr. Whitfield. So I was going to yield to Mr. Barton. I see
he is not here. Mr. Shimkus, do you have any comments you would
like to make?

OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS

Mr. Shimkus. Thank you, Mr. Chairman. I appreciate the
hearing.
There was a huge rally in deep southern Illinois over the
weekend to protect and save coalmining jobs in the country, and
for the administration to continue to make this assault on our
cheapest form of electricity generation, and I think for a lot
of us who have been in this fight for a long time, it is the
multitude of rules and regulations that are coming down from
boiler MACT, mercury MACT, cooling towers to CSAPR. You name
it, there is another rule and reg. No wonder there is
uncertainty in the sector and no wonder they have to make tough
decisions. These tough decisions are the loss of jobs,
coalmining jobs in rural America.
The untold story is also the loss of a taxpaying base to
small, rural America that helps support our schools, our
hospitals, our local communities, our public-safety net. That
is why we are as impassioned as our friends on the other side
saying we just have to stop this assault, so I appreciate the
hearing. It comes at a critical time, and thank you for it.
Mr. Whitfield. At this time I recognize the gentleman from
Illinois, Mr. Rush, for 5 minutes.

OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS

Mr. Rush. I want to thank you, Mr. Chairman, and Mr.
Chairman, we are here yet another time, yet another day, yet
another bill being introduced by my Republican colleagues that
will attempt to roll back the progress that the American people
have made and block and delay EPA rules that are designed to
make our air, land, and water cleaner for the American people
including those people who now currently have and will in the
future work in coalmines.
Today's hearing marks the 29th in a series of hearings that
the majority party has dubbed the American Energy Initiative,
but from each of those hearings, which represents hundreds of
hours of endless debate, endless discussion and endless delay,
we have enacted exactly zero, nada energy policy to move the
country forward. All this hearings and it hasn't produced one
bill that moved this country forward.
Mr. Chairman, if today's hearing feels a bit like dEja vu
all over again, as Yogi Berra would say, to those that are
watching this subcommittee just because we have been here and
we have done this countless times already.
Today's hearing will focus on H.R. 6172, a bill that
prohibits the EPA from finalizing standards of performance
under section 111 of the Clean Air Act for carbon dioxide
emissions from existing or new fossil fuel-fired power plants
unless or until carbon capture and storage is found to be
technologically and economically feasible. Ironically, Mr.
Chairman, this bill comes on the heels of the last markup the
subcommittee held where the majority defeated an amendment I
offered that would have exempted future clean-coal projects
from the arbitrary December 2011 deadline, and my Republican
colleagues' misguided attempts to disrupt the Department of
Energy loan program by prohibiting any funding for future
proposals regardless of the merits or technological advances of
those projects. So as the first attempt to abandon any new
Department of Energy funding for future clean-coal projects,
the majority party is now bringing forth a bill that would
block and delay EPA rules from finalizing the proposed carbon
pollution standards for new power plants or any future carbon
pollution standards for existing power plants until carbon
capture and sequestration is technologically and economically
feasible. This bill to most people would seem simply another
attempt to try and shield the dirtiest polluters from
commonsense air quality standards that would make their
facilities cleaner and more efficient while protecting
Americans' health.
Mr. Chairman, this messaging bill sends a clear message to
industry that if we don't succeed once, twice, 10, 20, or in
this instance, 29 times, we will try and try and try again to
show the industry that we are with them standing shoulder to
shoulder not to be divided by the plight or the affairs of
Americans' public health.
Mr. Chairman, this is a dead-on-arrival bill, as you well
know, and if the stakes weren't so high and important to the
protect the American people, then we could get a laugh out of
29 times and nothing to show for it, these message after
message attempts on the part of the Republicans. Whatever
happened to governing through bipartisan legislation?
Mr. Chairman, I think that this bill and our time here is a
waste of our energy, a waste of our time, and it certainly is
not an attack on coal, it is an attack on progress and what is
best for the American people and common sense.
I yield back.
Mr. Whitfield. Thank you, Mr. Rush.
At this time I recognize the gentleman from Michigan, Mr.
Upton, for 5 minutes.

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN

Mr. Upton. Well, thank you, Mr. Chairman.
This hearing on H.R. 6172 continues the committee's
oversight of EPA's costly regulatory agenda and follows
previous subcommittee hearings on EPA's myriad greenhouse gas
regulations, including its most recently proposed rule that
would establish new emissions standards for fossil-fuel-fired
power plants. We are extremely concerned about the impacts that
this proposed rule would have on the future of affordable coal-
fired power generation in America if indeed it is finalized.
As currently written, the rule requires any new coal-fired
plants to install costly carbon capture and sequestration
technology. However, even President Obama's Department of
Energy has acknowledged that CCS technology is not yet
commercially available and that large-scale commercialization
remains years, if not decades, away.
Leaders in CCS technology and industry stakeholders agree
that significant technical, legal and regulatory hurdles still
need to be overcome in order to successfully bring CCS to
commercial scale. And because CCS technology remains in its
early stages of development, not a single CCS developer in the
world can currently guarantee that its technology will work at
commercial scale, and without such a guarantee, power plant
operators will not, and cannot, make investment in CCS
technology.
In other words, unless and until CCS technology is proven
to be commercially viable and cost-effective, EPA's proposed
rule will effectively prevent the construction of any new coal-
fired power plants in America. But a ban on coal-fired
generation is the end result that the administration probably
is trying to achieve.
We shouldn't be surprised by that. This administration's
position on coal has been crystal clear: President Obama
himself said he wants to ``bankrupt'' coal companies and that
``electricity prices will necessarily skyrocket.'' Meanwhile,
the Secretary of Energy has declared that coal is his worst
nightmare. Those are his words.
This proposed rule would do exactly what the administration
set out to do from the very start: prohibit the future use of
coal in this country. Clearly, there is a war on coal that is
being waged by the administration. Just ask the 1,200 employees
of Alpha Natural Resources that were told this week that they
are going to be out very quickly because of the announced mine
closures forced in part by Federal regs aimed at restricting
the use of coal, or the hundreds, probably thousands of other
miners across the coal belt who have recently received pink
slips too.
If finalized, this rule will have a detrimental impact on
electricity generation in the country and future electricity
prices as well. This is why we are going to continue to
scrutinize EPA's proposed rule and why I appreciate the
gentleman from West Virginia's leadership on this bill, and I
will yield now the balance of my time to Mr. McKinley.
[The prepared statement of Mr. Upton follows:]
[GRAPHIC] [TIFF OMITTED] T5564.005

OPENING STATEMENT OF HON. DAVID B. MCKINLEY, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF WEST VIRGINIA

Mr. McKinley. Thank you, Mr. Chairman.
The EPA is indeed proposing a regulation that future coal-
fired facilities must implement a carbon capture system that
reduces their emissions by 50 percent, but like you have heard
from some of the other speakers, it cannot be performed. There
are no commercial applications available. We have even heard
testimony, as you before from the EPA, saying we know that it
can't be done for 10 years or more. Therefore, the mission here
is no coal-fired electric powerhouses will be constructed in
America until this technology is available.
Now, that has to be coupled with the concept of maybe
through research and development, maybe that will happen, but
we all know here in Congress that this administration has cut
the research money in National Energy Technology Lab last year
40 percent, this year 41 percent. How are we going to achieve
this objective if we don't have the research into the
development of this process?
You have heard the quotes. I will add one more. Joe Biden,
the Vice President, has said that this administration does not
support clean-coal technology. What better manifestation of it
in this particular rule that they are promulgating? They are
trying to bankrupt us to stop us from burning coal and what
they are doing is hurting the working men and women all across
America, putting them out of work, these 1,200 people.
We have learned that AEP has already canceled one of its
own projects, the Mountaineer plant, because they found out
that that cost was going to be, as I understand it, increasing
the utility bills by 80 percent to consumers, to schools, to
manufacturers, and they chose not to do it.
So for anyone that believes that there is no war on coal,
they are in denial. This President, this administration and
those who support him are hurting our consumers. They are
hurting our Nation. They are close-minded about where we are
going to go in developing our fossil fuels, the fuel that
feuded our industry revolution.
So this war on coal must stop. These ideologically driven
regulations must not be implemented until the technology and
the economics justify their cost.
Thank you very much, and I yield back the balance of my
time.
Mr. Whitfield. At this time I recognize the gentleman from
California, Mr. Waxman, for 5 minutes.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA

Mr. Waxman. Thank you very much, Mr. Chairman.
This committee has heard a lot of arguments from victims
and people are being convinced that they are victims by the
government when that is not the case. Let me cite an example.
This committee had a hearing on EPA's proposed regulation of
farm dust. Can anybody think of anything more ridiculous than
regulating farm dust that is ubiquitous to farms? So this
committee rushed legislation to protect the farmers from EPA
regulation of farm dust even though EPA said they had no plans
to regulate farm dust, and we passed a bill. Do you know what
the bill did? It provided for repeal of regulations from open-
pit mining that put out particulate matter and toxic substances
in the air. So the farmers were told they were victims and they
were being used for a different purpose.
It is not the government's fault if a utility decides it is
cheaper to use natural gas than coal. That is what we call
economics. If it is cheaper to use another substance, they will
use it. Do we want to stop them from doing that? Do we want to
stop the free enterprise system?
We don't have the technology to remove the carbon from coal
and store it. It is a technology we all should want to have.
But the industry has no incentive to develop that technology
because they are doing fine selling coal and using coal without
that technology. That would just be an extra expense.
So you have two ways you could get that technology. One is
to say you have got to use it in order to achieve a certain
standard. Well, the best way to achieve that standard, that is
the way the environmental laws have worked in the past as long
as we allow source of electricity to compete as long as it does
not cause unacceptable harm to health and the environment. This
bill picks winners and losers. The other EPA would set a
standard that companies that generate electricity from coal
will not have a free pass on pollution.
But there was another way to do it. That was the way Mr.
Upton proposed in legislation that would have put a fee on
those who get electricity from coal and that fee would have
been used exclusively for research and development of the
technology. That was a bill he introduced in the last Congress
with Mr. Boucher, and I suggested to him that we would take up
that bill and vote for it. If we can't do anything else, at
least do that. Never heard any other word on the subject after
we proposed doing that.
The Republicans in this House passed H.R. 910, the Upton-
Inhofe bill. That would have barred EPA from reducing dangerous
carbon pollution and codified science denial by overturning
EPA's scientific finding that carbon pollution endangers health
and welfare. It is a premise that climate change is a hoax, and
since that time early last year, this Republican House has
proved to be the most anti-environmental in the history of the
Congress.
Republicans have voted more than 300 times on the House
Floor to weaken longstanding public-health and environmental
laws, block environmental standards, defund protections of our
air, water and public lands, oppose clean energy. They voted 47
times to block action on climate change. When they passed that
Upton-Inhofe bill a year and a half ago, House Republicans
argued the science was uncertain, EPA was exceeding its
authority. By now, everybody should understand that they were
wrong on both counts. The science has been clear and clearer,
and just look at all the signs of climate change occurring
around us: recent wildfires, droughts, heat waves, exactly the
type of extreme weather events that scientists have been
predicting for years and that this committee has been ignoring.
Since the passage of the Upton-Inhofe bill, we have sent 17
letters to the chairman of this committee requesting hearings
on new developments in climate science. We haven't even gotten
a reply. Instead, what we have is the leadership of this
committee talking about a war on coal, and if coalminers are
losing their jobs, it is because of the government. Well, it is
because of economics and the unwillingness of the Republicans
who control the House to figure a way out of this issue.
The EPA is not overreaching. The courts have affirmed their
power to regulate in this area. It is about time we try to help
the people in the coal area be viable in a new economy that is
coming. Otherwise you can scare them with talk of war against
them but it is a dishonest approach. It doesn't help them. It
stirs up the feelings of victimology by the people in these
areas, and I suppose it is supposed to help Republicans in the
election. But sometimes let us stop playing politics and deal
with national urgent matters, and this committee has refused to
do it for a year and a half.
Mr. Whitfield. At this time I would like to introduce the
members of the panel. Once again, thank you for being with us
today. We look forward to your testimony.
First, we have Mr. Eugene Trisko, who is an attorney at law
representing the United Mine Workers of America. We have Mr.
Mark McCullough, who is Executive Vice President of Generation
at American Electric Power. We have Mr. John Voyles, Jr., who
is the Vice President of Transmission and Generation Services
at Louisville Gas and Electric and KU Energy. We have Mr.
Robert Hilton, who is Vice President of Power Technologies for
Government Affairs at Alstom Power. And we have Mr. John
Thompson, who is the Director of Fossil Transition Project at
the Clean Air Task Force, and we have Dr. Dan Lashof, who is
the Director of Climate and Clean Air for the Natural Resources
Defense Council, and we have Dr. John R. Christy, who is
Professor and Director of the Earth Science System Center at
the University of Alabama in Huntsville.
So thank you for being with us. Each one of you will be
given 5 minutes to give an opening statement, and you will
notice there is a little clock up here, so once your time is
expired, it is expired. Obviously I am not going to just
immediately cut you off but I wouldn't want you to go on like
10 minutes, but we do look forward to your testimony.
Mr. Trisko, I will recognize you for 5 minutes for your
opening statement.

STATEMENTS OF EUGENE M. TRISKO, ATTORNEY AT LAW, ON BEHALF OF
UNITED MINE WORKERS OF AMERICA; MARK MCCULLOUGH, EXECUTIVE VICE
PRESIDENT, GENERATION, AMERICAN ELECTRIC POWER; JOHN N. VOYLES,
JR., VICE PRESIDENT, TRANSMISSION AND GENERATION SERVICES, LG&E
AND KU ENERGY LLC; ROBERT HILTON, VICE PRESIDENT, POWER
TECHNOLOGIES FOR GOVERNMENT AFFAIRS, ALSTOM; JOHN THOMPSON,
DIRECTOR, FOSSIL TRANSITION PROJECT, CLEAN AIR TASK FORCE;
DANIEL A. LASHOF, DIRECTOR, CLIMATE AND CLEAN AIR PROGRAM,
NATIONAL RESOURCES DEFENSE COUNCIL; AND JOHN R. CHRISTY,
PROFESSOR OF ATMOSPHERIC SCIENCE AND DIRECTOR, EARTH SYSTEM
SCIENCE CENTER, UNIVERSITY OF ALABAMA IN HUNTSVILLE

STATEMENT OF EUGENE M. TRISKO

Mr. Trisko. Thank you. Good morning, Chairman Whitfield,
Ranking Member Rush, distinguished members. I am Eugene Trisko.
I am an attorney in private practice, and I am pleased to be
here today to testify on behalf of the United Mine Workers of
America to support the enactment of H.R. 6172. I have had the
honor of representing the UMWA in Clean Air Act and domestic
international climate change issues for the past 25 years.
H.R. 6172 is sound policy and a commonsense solution to the
threat to new advanced coal generation posed by EPA's proposed
carbon pollution standard rule. That rule sets a uniform
CO2 emissions rate of 1,000 pounds of CO2
per megawatt-hour applicable to both coal and natural-gas
combined cycle units. New coal units would need to employ CCS
technology to comply while new natural-gas combined cycle units
could comply without CCS.
EPA and DOE's National Energy Technology Lab estimates that
applying CCS to new coal-based units would increase the cost of
electric power by 80 percent. CCS has not been commercially
demonstrated in this country as indicated by the findings of
the 2010 Interagency Task Force Report on Carbon Capture and
Storage. EPA's proposed rule is simply a means of forcing
winners and losers in the future market for electric
generation.
The proposed rule also ignores 40 years of EPA regulation
under the Clean Air Act by lumping together these two very
different sources of electric generation into one category
subject to a single emission standard that only one type of
source can meet. The EPA rule says in effect that the best
system of emission reduction for new coal and natural-gas units
is natural-gas combined cycle technology. The mine workers
comments to EPA, which are attached to my testimony, note that
natural-gas combined cycle is a form of producing electricity,
not a best system of emission reduction under the Clean Air
Act.
The UMWA has supported previous legislation to accelerate
the commercial demonstration of CCS technologies including the
Upton-Boucher bill. This legislation has not been enacted and
funding available through DOE has not been adequate to support
successful large-scale demonstration of CCS technology. We are
hopeful that new proposals will be developed to put CCS
demonstration projects on a firmer financial footing.
Coal is an indispensable part of America's energy supply
and must be a core element of any all-of-the-above energy
policy. More than one-third of our Nation's electricity is
generated by coal, mainly in baseload plants. The principal
alternatives to coal for future baseload generation are nuclear
and natural gas. While natural-gas prices have declined
recently, substantial uncertainty surrounds future natural-gas
prices, particularly in view of the 40- to 60-year lifetimes of
electric generation assets.
The United States should take the lead in establishing the
technical and commercial viability of CCS technology for use
both here and abroad. India and China have vast coal reserves
and will continue to rely upon them to support their own
economic development. China alone consumes three times more
coal than we do. Our recoverable coal reserves hold the energy
equivalent of the world's proven oil reserves.
The United States should pursue policies that will
accelerate, not stymie, the full range of advanced coal
technologies including commercial-scale demonstration and
deployment of CCS. Rethinking the EPA carbon pollution standard
rule is an important step in that direction, and we support
this bill. Thank you, Mr. Chairman.
[The prepared statement of Mr. Trisko follows:]

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Mr. Whitfield. Thank you.
Mr. McCullough, you are recognized for 5 minutes.

STATEMENT OF MARK MCCULLOUGH

Mr. McCullough. Chairman Whitfield, Ranking Minority Member
Rush and distinguished members of the Committee on Energy and
Commerce, thank you for inviting me here today. I appreciate
this opportunity to offer the views of AEP on EPA's proposed
Greenhouse Gas New Source Performance Standard and the current
state of carbon capture and storage technology.
My name is Mark McCullough. I am the Executive Vice
President of Generation at AEP. AEP is one of the Nation's
largest generators, owning more than 37,000 megawatts of
generating capacity and serving more than 5 million retail
customers. EPA's generating fleet employs diverse fuel sources
including coal, nuclear, hydroelectric, natural gas, oil and
wind. Due to the location of our service area and historic
importance of coal to the economies of our States,
approximately two-thirds of our generating capacity utilizes
coal.
AEP has a long history of proactive involvement in
environmental stewardship, particularly with regard to reducing
its net carbon emissions. Perhaps AEP's most significant
contribution to technology solutions for addressing greenhouse
gas emissions was a successful completion of a validation scale
demonstration of the world's first fully integrated CCS project
at an existing coal-fired electric generating unit. The
Mountaineer CCS Project treated a 20-megawatt portion of flue
gas from our 1,300-megawatt Mountaineer plant, removed the
CO2, compressed it and injected it into two deep
underground formations from 2009 to 2011, permanently storing
nearly 40,000 tons of CO2.
AEP has long maintained that the Clean Air Act is not a
practical or cost-effective vehicle to limit greenhouse gas
emission and any system to regulate greenhouse gas emissions
should be developed by Congress. Global climate change and
greenhouse gas emissions present a new set of issues that the
existing framework of the Clean Air Act was never intended to
address. As such, regulation of greenhouse gases under the
existing Act is likely to be ill designed and significantly
more costly than a more flexible legislative approach.
The proposed New Source Performance Standard is a fuel-
discriminatory rule that in effect requires CCS technologies
that are not yet commercially available to be used on all new
coal plants. As such, the NSPS is impractical and not legally
justifiable. AEP's main concerns are the combination of two
source categories, coal and natural gas, and setting a single
standard based on EPA's estimate of the emission rate
achievable at a new natural-gas combined cycle unit. This
standard will preclude the construction of new coal-fired
generation without the addition of CCS. However, based on AEP's
experience and EPA's own admission, this technology is neither
commercially demonstrated nor economically viable for coal-
fired electric generation. Without a viable CCS solution, the
NSPS forces reliance on a historically volatile commodity--
natural gas--for new fossil generation, which could burden
consumers with additional and unnecessary future risk in their
energy costs.
AEP believes that technological solutions such as CCS are
critical to reducing emissions. However, CCS technology has not
yet been proved at a commercial scale and cannot be provided
with robust guarantees on performance and reliability.
Furthermore, the path to CCS commercialization is also filled
with significant regulatory and legal barriers regarding the
ownership of storage space and long-term liability, which will
also need to be resolved prior to commercialization. Given the
obvious need for commercially available and cost-effective CCS
in order to meet EPA's proposed NSPS for coal plants, H.R.
6172, introduced by Representative McKinley, provides much
needed Congressional direction in finalizing the NSPS for power
plants and ensures that coal continues as a fuel for a balanced
energy future.
Thank you for the opportunity to testify, and I look
forward to your questions.
[The prepared statement of Mr. McCullough follows:]

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Mr. Whitfield. Thank you very much.
And Mr. Voyles, you are recognized for 5 minutes.

STATEMENT OF JOHN N. VOYLES, JR.

Mr. Voyles. Good morning, Chairman Whitfield, Ranking
Minority Member Rush and distinguished subcommittee members,
thank you for the opportunity to appear before you today to
present comments regarding proposed House bill 6172. My name is
John Voyles, Jr. I am the Vice President of Transmission and
Generation Services for LG&E and KU Energy. LG&E and KU Energy
is a wholly owned subsidy of PPL Corporation and operate
Louisville Gas and Electric Company and Kentucky Utilities
Company, regulated utilities that serve 1.3 million customers
in 90 Kentucky counties and five counties in Virginia.
Today, the company's operated capacity is approximately
8,100 megawatts. Of that capacity, 74 percent is coal-fired, 25
percent is gas-fired peaking units, and the remaining 1 percent
is hydroelectric. Approximately 96 percent of our coal-fired
capacity is equipped with controls for sulfur dioxide and 67
percent of the capacity has SCR for nitrogen dioxide control.
After assessing the impact of the most recent regulations
promulgated by the EPA, the companies developed compliance
plans, which were presented to and approved by the Kentucky
Public Service Commission in December of 2011 and May of 2012.
Those plans include installing additional environmental
controls at four stations, retiring 800 megawatts of coal-fired
capacity and constructing a new 640-megawatt gas-fired combined
cycle unit. These investments are expected to cost up to an
additional $3 billion and projected to raise electric rates by
up to 14 percent and 18 percent for KU and LG&E customers,
respectively, by 2016.
My company has not been standing idly by on the sidelines
waiting for carbon dioxide policy or regulatory developments.
Since 2006, we have invested millions of dollars in research
and development aimed at finding technically and economically
viable carbon management solutions for electric generating
units. We were the founding member of the Carbon Management
Research Group at the University of Kentucky's Center for
Applied Energy Research and a member of the Western Kentucky
Carbon Storage Foundation. The CMRG membership has grown to
include three other electric generators that operate in
Kentucky and the Electric Power Research Institute. We have
made our E.W. Brown coal-fired plant site available to the CMRG
as the test location for a carbon capture slipstream project
which received a $14.5 million supporting grant from the
Department of Energy in 2011. Additionally, we fund research on
carbon capture technology supported by two other DOE grants,
one with the University of Texas and one with the 3H Company.
As a member of EPRI, we continue to fund collaborative research
for carbon management and stay abreast of technological
developments. Through these efforts we track several pilot
projects in North America and across the globe. We are aware of
no full-scale application of carbon capture and storage in
continuous operation on a fossil-fueled electric generating
unit. There are several technical and policy hurdles for CCS
that remain unresolved which I will highlight briefly today.
First, the energy penalty to add CCS technology to a coal-
fired electric generating unit is prohibitively high. Many of
the current pilot projects estimate that the parasitic load and
cycle efficiency penalties to be at least 25 or 30 percent of a
generating station output. For a company like mine, those
penalties would mean if CCS technology were retrofitted to an
existing 2,000-megawatt coal-fired station producing power for
our customers today, the output from the plant would be reduced
by 500 megawatts at a minimum. That loss of production
capability would have to be replaced by some source of energy
supply, creating additional costs for the consumers and perhaps
other emissions to the environment.
However, an even bigger challenge is the application of
CO2 storage technology. While some carbon dioxide is
successfully being utilized in enhanced oil or methane recovery
operations and other pilots have successfully injected small
quantities of CO2 into deep saline aquifers, the
volume of storage necessary to facilitate such operations on a
continuous basis for the life of an electric generating station
has yet to be established. Very serious questions remain
regarding the implications such injection processes have on
mineral and property rights, the monitoring of the
CO2 plume across property lines or State boundaries,
and the verification systems necessary to ensure long-term
monitoring is taken into account. We believe these questions
loom much larger than the simple view that CO2 can
be captured and injected underground and might be done more
cost-effectively with less energy penalties at some
undetermined point in the future.
Until such time as CCS technology is commercially available
to be deployed at full scale in a technical and economical
manner, we are concerned that any standard of performance
proposed for CO2 emissions from existing or new
electric generating units will effectively eliminate coal-fired
generation from the Nation's energy portfolio. On July 16,
2012, we provided testimony to this subcommittee on the U.S.
EPA's proposed Greenhouse Gas New Source Performance Standards.
In those comments, we explained the importance of having
separate standards for new and existing plants by fuel type and
our concern that EPA's proposal for new plants could not even
be met by new gas-fired plants. Those comments assumed that EPA
is required by law to develop greenhouse gas standards. A
clearly better course would be for Congress to pass legislation
relieving EPA of the obligation to develop greenhouse gas
standards until carbon capture and storage becomes an
economically and technologically viable option.
Thank you for the opportunity to comment on House bill
6172.
[The prepared statement of Mr. Voyles follows:]

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Mr. Whitfield. Thank you very much, Mr. Voyles.
Mr. Hilton, you are recognized for 5 minutes.

STATEMENT OF ROBERT HILTON

Mr. Hilton. Thank you. Good morning. My name is Robert
Hilton. I hold the position of Vice President of Power
Technologies for Government Affairs for Alstom. I would like to
thank Chairman Whitfield and Ranking Member Rush as well as the
entire subcommittee for the opportunity to address these key
issues on CCS.
Alstom is a global leader in power generation, transmission
and transportation infrastructure. More than 50 percent of the
power plants in the United States have Alstom equipment, and 25
percent of the world's electricity is generated on Alstom
equipment. We are the largest air pollution control company in
the world. In the United States, Alstom employs about 6,000
full-time permanent employees in 45 States, and 91,000
globally. Alstom provides virtually all power generation
technology options. Significant pillars of our program are
deployment of non-CO2 sources of generation, like
renewables and nuclear, reduced CO2 emissions
through efficiency, and the CO2 capture from fossil
fuels. Alstom invests approximately $1 billion annually in R&D.
Alstom has completed work on four pilot and validation-scale
plants and has 10 pilots, validation, and commercial-scale
plants in operation, design, or construction worldwide. These
CCS projects include both coal and gas generation.
We are here today to specifically address the status of CCS
as a commercial technology. CCS is, within the realm of
innovation, no different than any other technology under
development. It is required to move through various stages of
development at consistently larger scale. Alstom has taken each
of its CCS-related technologies from the bench level to
validation scale with the aim of finally reaching commercial.
However, to date, no CCS technologies have been deployed at
commercial scale. Validation scale is the proof of technology
in real field conditions. This is important. It is at this
point we can say confidently that the basic technology works.
CCS technology is technologically feasible now.
The final stage to reach commercial status is to perform a
demonstration at full scale. It is critical to define the risk
of technology to make offers. This cannot be defined until the
technology can be shown to work at full scale. This is the
first opportunity we have to work with the exact equipment in
the exact operating conditions that will become the subject of
contractual conditions including performance and other
contractual guarantees. This also becomes the first opportunity
to optimize the process and equipment to effect best
performance and seek cost reduction. Based on these criteria,
Alstom does not currently deem its technologies for CCS
commercial and, to my knowledge, there are no other technology
suppliers globally that can do so. I emphasize, however, that
the technologies being developed by Alstom and others work
successfully.
For a number of reasons primarily related to technology
funding and lack of regulatory clarity, the timeline for
commercialization for CCS is not clear. The current DOE program
for first generation-technologies on CCS appears not likely to
become operational until 2017 with the exception of the Kemper
plant. Globally, the picture is similar.
When we look at the history of the EPA and the air-
pollution-control industry, we generally see a harmony of
regulation and technology development. In many cases, we have
had the ability to meet or anticipate the need for certain
technologies and in other cases we have developed the base
technologies either in other industries. In its recent
rulemaking, EPA has required CCS for all new coal plants and,
conceivably gas plants. While Alstom, in conjunction with AEP,
has run the largest plant, we are not ready to do this on 500-
or 1,000-megawatt plants. It has been suggested that the
proposed rule would stimulate CCS development. However,
advancing CCS requires a regulatory approach that recognizes
the steps of the technology development process and the need
for financing. Commercial power plants cannot secure financing
for a plant that includes technology still under development
and that carries with it undefined guarantees.
Coal is an important part of America's future energy mix as
it has been in the past. It is an abundant resource we have,
and we have the technologies to make it clean in all other
respects. CCS is coming but preventing new highly efficient
coal plants from being built to replace older less efficient
plants by requiring a technology not yet in practice is not in
keeping with the needs of the industry or the public. We
believe a more realistic approach would be to provide a
reasonable ramp down of CO2 over time that can take
advantage of efficiency and other technologies to reduce
CO2 in a gradual manner. This would provide the
industry, along with State and local regulators, with the
needed incentive to support CCS.
Alstom believes that the technology will be commercial when
the industry determines that both buyer and seller can enter
into ordinary contractual relations that meet the needs of both
parties. We know that carbon capture technology works. We
believe CCS will play a pivotal role in meeting the needs of
carbon. We need time and support to reach the point of
commercial offerings.
I thank you.
[The prepared statement of Mr. Hilton follows:]

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Mr. Whitfield. Thanks, Mr. Hilton.
Mr. Thompson, you are recognized for 5 minutes.

STATEMENT OF JOHN THOMPSON

Mr. Thompson. Thank you, Mr. Chairman, Ranking Member Rush,
members of the committee. My name is John Thompson. I direct
the Fossil Transition Project of the Clean Air Task Force. The
Clean Air Task Force is a nonprofit environmental group
headquartered in Boston and with offices in Beijing, Illinois,
Ohio, Washington, DC, Texas, New Hampshire and Maine. I am from
our Carbondale, Illinois, office.
Our mission is to reduce the air pollutants associated with
climate change and premature death and disease. We work
throughout the United States and China on these issues, and the
project I direct works to shift fossil fuels to use
technologies that have less impact on the environment.
I want to be clear: worldwide coal use will increase
dramatically in the coming decades as the standard of living in
developing nations improves. Increasing energy efficiency,
greater use of renewables and nuclear power will displace some
of the CO2 emissions associated with this growth in
fossil use but any meaningful climate action must include
widespread use of carbon and storage. It is the only technology
that can remove up to 90 percent of the carbon dioxide from
large stationary sources. Without CCS, it will be difficult, if
not impossible, to avoid the worst aspects of climate change.
The Clean Air Task Force is committed to finding ways to
advance CCS development. Our organization has filed comments in
support of air permits for coal plants with CCS. We have
advocated for coal projects that use advanced technology before
State public service commissions. We have worked to promote
incentives for CCS and EOR, and we have supported regulations
that establish CO2 emission limits that enable CCS.
We have promoted partnerships between U.S. and Chinese
companies that would lower CCS costs and encourage projects in
both countries. I also serve on the National Coal Council,
which advises DOE on coal-related projects.
I would like to make a few points this morning. First, the
value of CCS goes beyond reducing emissions for the purpose of
climate change. Capture of CO2 from industrial and
power sources could be used to expand domestic oil production
through EOR. Currently, EOR accounts for 6 percent of domestic
oil production but with additional supplies of carbon dioxide,
more oil could be produced from domestic oil wells. Estimates
for the amount of EOR that can be produced domestically have
grown in recent years. DOE has estimated that approximately 67
billion barrels of oil are economically recoverable, but to
produce that 67 billion barrels of oil, we need approximately
20 billion tons of CO2. That is an amount that is
equivalent to about 30 years of CO2 emissions from
about a third of the Nation's coal plants.
Now, contrary to assertions earlier today, several coal
plants are proposed or are under construction that show the
feasibility of CCS at scale and would meet EPA's CO2
emissions standards for fossil plants, and they would use the
CO2 for EOR to increase domestic oil production.
These include Mississippi Power's Plant Ratcliffe in Kemper
County and Summit Power's Texas Clean Energy Plant in Odessa,
Texas. Plant Ratcliffe is a 582-megawatts IGCC plant which
began construction in 2010 and is expected to go into operation
in 2014. It will gasify lignite, capture 65 percent of the
CO2 emissions and sell them for EOR. The Texas clean
energy plant is a 400-megawatt gross plant that would capture
90 percent of its CO2 and produce about 200
megawatts of power and fertilizer and produce about 2.5 million
tons of CO2 to produce 7 million barrels of oil
annually.
What I would like to make as points are a couple things
here. First of all, CO2 performance standards are
needed to gain public service commission approval for coal CCS
projects. After AEP's West Virginia Mountaineer project was
denied, Mike Morris, the CEO of AEP made a statement that
included this sentence: ``It is impossible to gain regulatory
approval to recover our share of costs for validating and
deploying the technology without Federal requirements to reduce
greenhouse gas emissions already in place.''
U.S. EPA considered technical feasibility and cost in its
draft CCS rule. They concluded CCS was technically feasible,
and addressed the cost issues through a number of means:
establishing reasonable standards of 50 percent reduction
overall through partial capture rather than full capture of 90
percent. They provided regulatory flexibility. They gave longer
periods of time to comply with the standards, and I think this
approach is reasonable.
I would like to just conclude by saying that the problem
with H.R. 6172 is that you can't consider technical and
economic feasibility in a vacuum. You must consider it in the
context of regulations, and EPA's regulatory approach is
reasonable, and what is more, contrary to the intent of the
sponsors of this bill, I believe this will add confusion to
regulations, which will only help the building of natural-gas
plants. We need certainty. What H.R. 6172, by creating this
regulatory confusion, would do would contribute to the
following problems. It would delay new CCS projects because
regulators would not know whether they had to meet these
standards in order to build them. It would delay the economic
production of oil through EOR, and it would replace
longstanding precedent of promoting technology that has
achieved significant public-health and environmental benefits
with a static, backward-looking approach.
So I would conclude by saying that what Congress really
needs to focus on is two things: we need performance standards
but we also need incentives to move EOR. EPA's regulations
coupled with further incentives I believe is the correct
approach. H.R. 6172 would delay that progress. Thank you.
[The prepared statement of Mr. Thompson follows:]

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Mr. Whitfield. Dr. Lashof, you are recognized for 5
minutes.

STATEMENT OF DANIEL A. LASHOF

Mr. Lashof. Thank you, Mr. Chairman, Mr. Rush and members
of the committee. My name is Daniel Lashof. I am the Director
of the Climate and Clean Air Program at NRDC, and I appreciate
the opportunity to testify before the committee.
NRDC strongly opposes H.R. 6172 for a simple reason: It
would interfere with EPA doing its job, which the taxpayers pay
it to do and want it to do of protecting public health from
dangerous carbon pollution. And let us not make any mistake:
Carbon pollution is dangerous. It is imposing staggering health
and environmental costs in the United States and around the
world now, contributing to more severe heat waves, worsening
smog pollution, fueling more extreme weather that takes the
lives of thousands of Americans and causes billions of dollars
in damage. So EPA is moving forward under the law and following
the science in proposing the standards that it has proposed to
set performance standards for carbon dioxide emissions from
power plants.
Let me just give you one--Mr. Rush commented that this
seems like deja vu. Let me give you one piece of new
information. This was released yesterday, and it updates my
testimony even though it was only submitted a couple days
before NASA released new data showing the minimal arctic ice
that we have ever seen since satellites have been monitoring
this in 1979. The minimum was reached on September 16th. It is
a full 50 percent below the minimum from 1979 when the records
started, about 50 percent below the average from the 1980s and
1990s. And we are confident that this is driven by carbon
pollution, which is trapping heat in the atmosphere, because
not only are we setting this record minimum ice extent but the
thickness of the remaining ice is much lower, making it more
vulnerable, and the warming that we see is not just in the ice.
Heat is accumulating in the oceans, which is a major driver of
this.
Now, this is the arctic. It is far away. Most Americans
don't visit the arctic. None of us own land up there except a
few folks in Alaska, so why do we care about this? The fact is
that what happens in the arctic doesn't stay in the arctic. The
changes here are so dramatic and they affect the energy balance
of the entire earth. They change the position of the jet
stream. They accelerate the melting of the Greenland ice, which
does contribute to more rapid sea-level rise, and they
contribute to enhancing global warming in several other ways
that I detail in my testimony. So this startling image I think
should give us all pause, and recognize that we need to allow
EPA to move forward and do its job.
Now, I want to comment specifically on the proposed
regulation that EPA has issued because we have heard language
about a war on coal, about how the EPA is picking winners and
losers. The fact is that EPA's proposed standards for carbon
emissions are fuel and technology neutral. They set a rate for
all plants that provide the same service of providing baseload
and intermediate-load electricity to consumers. This is the
kind of commonsense performance-based standard that I would
expect Congress to welcome. It is not a command-and-control
regulation. It doesn't say what technology to use. It is
completely technology and fuel neutral.
H.R. 6172 turns that on its head by limiting EPA's ability
to move forward with that regulation until one particular
technology is deemed technically and economically feasible.
Now, as both Mr. Thompson and Mr. Hilton have testified, CCS is
technically feasible. It is not economically feasible for the
simple reason that no commercial entity is building new coal-
fired power plants with or without CCS now. The economics in
the absence of performance standards for carbon dioxide dictate
that we are meeting our electricity needs through energy
efficiency, through expansion of renewable energy such as wind,
and through natural gas, which is much less expensive. So
Congress can no more repeal those rules of economics than they
can repeal the physics and chemistry that is driving climate
change.
The reality is that we hold no other EPA standards up to
this single-technology approach. EPA has moved forward for
decades with performance-based standards, and they should be
allowed to do their job as the American people would like them
to do to set sensible performance standards for carbon
emissions from power plants. Thank you.
[The prepared statement of Mr. Lashof follows:]

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Mr. Whitfield. Thank you.
Dr. Christy, you are recognized for 5 minutes.

STATEMENT OF JOHN R. CHRISTY

Mr. Christy. Thank you, Chairman Whitfield and Ranking
Member Rush and members of the committee. I am John Christy,
Alabama State Climatologist, Professor of Atmospheric Science,
and Director of the Earth Systems Science Center at the
University of Alabama at Huntsville. I am a climate scientist
who builds data sets from scratch to answer questions about
climate variability and to test assertions people make about
climate change. That is really what the scientific method is
all about.
During the heat wave of late June and early July, high
temperature extremes became newsworthy. Claims were made that
thousands of records were being broken and that this is what
global warming looks like. However, these headlines were not
based on climate science. As shown in figure 1.3 of my
testimony, it is scientifically more accurate to say this is
what Mother Nature looks like since heat waves even worse than
these happened before greenhouse gases were increasing like
they are today.
Now, it gives some people great comfort to offer a quick
and easy answer when the weather strays from the average rather
than struggle with the real truth, which is, we don't know
enough about the climate to even predict these kinds of heat
waves as Nature magazine itself reported yesterday.
More evidence is available now to suggest that the climate
is not as sensitive to extra greenhouse gases as previously
thought. A simple comparison between climate model output and
observation makes this point. In figure 2.1 of my written text,
I plotted 38 of the very latest climate model simulations. The
models tend to overreact to carbon dioxide by warming the earth
much more than what has actually happened. This has bearing on
the recent 33-year record low of arctic sea ice coverage that
you saw previously. Model projections warmed by CO2
show somewhat more warming than in that region in the
observations but not too much in figure 2.2.
It is tempting to believe that the models are correct and
the CO2 warming is the main cause of melting the
ice. However, when compared with the area of sea ice around
Antarctica, where as shown in figure 2.3 the temperature is not
increasing and the sea ice is not decreasing. The models fail
the test. The CO2 warming in climate models doesn't
explain what we see. I cite research in my testimony which
again points to natural variability as the main cause.
I encourage you to propose legislation based upon what
observations show rather than speculative climate models.
Basing legislation on observations means addressing the large
year-to-year variations like droughts and floods, which will
always occur and which will continue to cause economic
distress. When it comes to legislation and regulatory actions,
there really is nothing that will definitively alter whatever
the climate is going to do. However, I suspect there will be
some discernible negative economic consequences if energy costs
are made to rise.
As more CO2 is released back into the
atmosphere, there are benefits that are often overlooked. Most
notable of these is the invigoration of plant life on which we
and the rest of the animal world depend for food. Atmospheric
CO2 fundamentally is plant food and therefore our
food. In my opinion, higher food production is a benefit to
society and should be factored in any cost-benefit analysis.
Now, with all due respect to former President Bush, in my
opinion, he was not accurate to say in 2006 that we are
addicted to oil. Oil and other carbon-based energies are simply
the affordable means by which we satisfy our true addictions,
and those are long life, good health, plentiful food, Internet
services, freedom of mobility, comfortable homes with heating,
cooling, lighting and even colossal entertainment systems.
Carbon energy has made all those possible.
Today, carbon energy provides about 87 percent of the
world's energy demand so rising CO2 emissions can be
an indicator that a nation is providing energy for its people,
energy which allows them to live longer, healthier and more
prosperous lives.
But, and I will close with this unpleasant thought,
demanding a reduction in worldwide carbon emissions and without
affordable and reliable energy alternatives means reducing the
opportunities for many of our fellow world citizens to escape
their impoverished conditions.
I thank you for your time and I will be happy to answer
questions.
[The prepared statement of Mr. Christy follows:]

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Mr. Whitfield. Thank you, Dr. Christy, and thank all of you
for your opening statements. At this time I will recognize each
member for 5 minutes of questions, and I will begin by
recognizing myself.
Mr. Trisko, Dr. Lashof in his opening statement made the
comment that the standard under the proposed greenhouse gas
regulation is a commonsense, performance-based, fuel-neutral
standard. Now, it is my understanding that that proposed
regulation reverses 40 years of precedent at EPA in that they
are requiring coal to meet the same standards as any other
fuel, and in the past they had standards for individual fuels--
gas, coal, whatever. Is that your understanding?
Mr. Trisko. In general, yes, Mr. Chairman, and let me
explain the basis for this. We are talking really about setting
particular standards for different types of generation
technologies. EPA has regulated coal for the past 40 years
under subpart (d)(A) regulations covering steam electric-
generating units. These are basically large boilers utilizing
coal or oil. There are not many oil boilers now being built.
The first coal-based NSPS standard was set by EPA in 1971
pursuant to Section 111 of the 1970 Clean Air Act Amendments.
That coal-based standard was subsequently revised by EPA in
1978 pursuant to the 1977 Clean Air Act Amendments that added
the so-called percent reduction clause.
Mr. Whitfield. Excuse me. I asked a question and I am sorry
to interrupt, but we all get caught up in this time clock, but
the bottom line was that in this greenhouse gas regulation, the
same emission standard was set for every fuel, and that had
never been done before.
Mr. Trisko. What had never been done before, Mr. Chairman,
was to combine subpart (d)(A) for steam electric-generating
units--coal or oil--with subpart (kkkk) which covers natural
gas combined cycle units. Those had always been subject to
separate, discrete standards.
Mr. Whitfield. But not under this regulation?
Mr. Trisko. But not under this regulation.
Mr. Whitfield. And that is a significant change, and
because of that, we cannot build a new coal-powered plant in
the United States because the technology is simply not there at
an affordable price. Is that correct?
Mr. Trisko. Yes, Mr. Chairman, because in effect this
regulation raises the cost of electric generation from coal
plants by 80 percent but does not impose any increase in cost
on natural gas combined cycle. Therefore, only natural gas
combined cycle plants would be constructed in the future.
Mr. Whitfield. So in my opinion, this is not a fuel-neutral
proposed regulation.
Now, we recognize that it only applies to new coal-powered
plants but what creates additional problems is that the Utility
MACT applies to existing coal-fired plants, and in order to
meet those standards, they are going to have to modify some of
the existing plants, and there is some genuine concern that if
you modify, then you might be classified as new. Is that your
understanding, Mr. Voyles?
Mr. Voyles. Yes, sir, Mr. Chairman, that is my
interpretation of how we read the rules, that you make
modifications, it does subject you to different parts of the
standard.
Mr. Whitfield. Yes, so, you know, when they were up here
testifying, Lisa Jackson and others, they were talking about
oh, this applies only to new plants but they had already pushed
through the Utility MACT, as I said, that applies, makes you
modify existing plants, and once you modify, then you have got
to meet the new standard. So I think the President's comment
when he was running for President clearly shows that there is a
bias against coal and they are following through with that.
Now, Mr. Trisko, you are here on behalf of United Mine
Workers. Is that correct?
Mr. Trisko. Yes, sir.
Mr. Whitfield. And you read yesterday that Alpha Resources
is closing down eight mines, and I am assuming your membership
is quite concerned about the way things are happening to the
coal industry.
Mr. Trisko. These are not happy times in coalfields
generally, Mr. Chairman.
Mr. Whitfield. And, you know, in my opening statement, I
made the comment that even Lisa Jackson when she was here and
she said well, if other countries don't do the same thing on
greenhouse gas, then our doing it is not going to make any
difference. But the thing that really upsets me is that all
these analyses talk about the benefits on health improving
because of regulations but they never explore, look at,
consider in any way the negative impact on the health care of
the thousands of people in this industry that are losing their
jobs, and they have indicated, no, we don't consider that,
which I do not think is a fair and balanced playing field.
My time is expired. I recognize for 5 minutes Mr. Rush.
Mr. Rush. Dr. Lashof, Mr. Trisko indicated--he spoke
disparagingly of the standards that the EPA is setting, and he
also indicated that this plant that had modifications and that
that plant would be classified as a new plant and it would
suffer some negative responses, would have to newer, higher
standard because of the new reclassification. How do you
respond to some of the things he said?
Mr. Lashof. Thank you, Mr. Rush. Well, you know, it is
funny because the EPA is actually very explicit in its proposal
in saying that it does not apply to modified plants. They have
not proposed any standards that apply to the existing fleet,
and the argument that the existing plants couldn't meet the
current standard is irrelevant because the proposal only
applies to new plants. So, you know, the problem here with this
legislation is, it doesn't actually do anything to promote CCS.
It just blocks other solutions and cost-effective ways of
reducing pollution.
Mr. Rush. I guess that is really my point. I am from
Illinois. Illinois is a coal-producing State. You know, the
President is from Illinois, and I don't think that the
President is waging an attack on coal. I think the President is
taking some postures under his administration to make sure that
coal is usable in the future and that it is not only energy, we
can use coal for our energy needs but also that coal does not
have to be harmful to the climate and to our health.
Mr. Thompson, let me ask you this. Can you talk about some
of the advances in clean-coal technology that has occurred
under the President's administration?
Mr. Thompson. Well, I think perhaps the largest advance has
just been the plants that have broken ground. I have mentioned
two, the Kemper plant, which broke ground in 2010, and the
Texas Clean Energy Project, which will break ground in 2013 and
go into operation in 2017. There has been a lot of funding for
Future Gen and projects like that, loan guarantees that help
advance coal, but obviously there is more work that needs to be
done, and I think Congress should pick up areas that I alluded
to like incentives to promote enhanced oil recovery. There is a
lot of work that can be done on both sides of the aisle.
Mr. Rush. Mr. Hilton, what are the most important things we
should do to stimulate CCS development and deployment?
Mr. Hilton. I think there is really I would say four
things. You know, we do need proper regulatory structure that
provides guidance to States for permitting and for funding of
R&D, and we need financial support. You know, grants don't go
far enough. Kemper goes ahead because it has got a 20 percent
rate increase associated with it. All the rest of the projects
are struggling. But then we have the issues, that sequestration
is not going to happen until we resolve the issue of financial
liability and pore ownership, you know, because you can't--so I
think those are the four things.
Mr. Rush. Those are the things that you think that this
committee could be focused on that would really be of help to
the industry at large. Is that correct?
Mr. Hilton. Yes.
Mr. Rush. Mr. Lashof, how important is CCS technology to
ensuring a long-term future for coal?
Mr. Lashof. Well, NRDC has supported development of CCS
technology. We supported the Upton-Boucher bill as part of
comprehensive legislation that was passed in the last Congress,
and as Mr. Thompson said, there are applications around the
world so I think that there is a real need for the United
States to be a leader in this technology and a big market for
CCS.
The reality, though, is that the bill that this hearing is
about would set up a catch-22 test because it would block the
very standards that would actually create an incentive for the
industry to invest in making that technology commercial.
Mr. Rush. Thank you.
Mr. Chairman, I yield back.
Mr. Barton [presiding]. Thank you. The gentleman's time is
expired. The Chair now recognizes himself for 5 minutes.
Dr. Christy, you have got a very illustrious resume both
academically and professionally. Are you now or have you ever
been a part of the IPCC process?
Mr. Christy. The IPCC, yes, and about every year including
being lead author in one of the assessments.
Mr. Barton. So you would be acknowledged by the U.N.
officials that operate that as a climate scientist?
Mr. Christy. I have my certificate that says I am a Nobel
Peace Prize winner.
Mr. Barton. But you obviously do not appear to share some
of the more generic, popularized conclusions that they have
promoted. Is that a fair statement?
Mr. Christy. That is a fair statement, yes.
Mr. Barton. OK. How do you get along with Dr. Mann?
Mr. Christy. I don't communicate with him since that time
back in--we were lead authors together back in 2001.
Mr. Barton. Is it fair to state--I mean, the popular
presentation is that there are thousands of climate scientists
and they all agree that the world is going to hell because of
CO2 and that the sooner we start restricting
CO2, the better. Obviously you don't share that
opinion. How many climate scientists are there like you, and
are you ever heard or welcomed in those discussions?
Mr. Christy. Rarely am I welcomed or heard in those kinds
of discussions but I would say that, you know, it depends on
how you define a climate scientist, but it is----
Mr. Barton. Well, however you define it, you obviously are
one.
Mr. Christy. I am one. Yes, I actually build climate data
sets from scratch. I qualify as a working-stiff climate
scientist. There aren't very many of us, by the way. Other
people that like to use the term, you know, have some oblique
relationship to how climate might impact something but in terms
of the hard core, there aren't many of us, and I would say that
they are a lot less confident about what climate models can do
and can tell us, and the Nature article that just appeared
yesterday was very clear about the lack of ability of climate
models to tell us what is going on with the world and what will
go on with the world.
Mr. Barton. Is it fair to state, in your opinion and the
scientists that share your opinion, that the science on
CO2 made by man being a primary contributor is
unsettled and that it is not yet conclusive that manmade
CO2 is a primary contributor to global warming?
Mr. Christy. That science is unsettled, and I think the
clearest example of that is in the three figures I put in the
written testimony that show what the real world is doing, what
climate models say it is doing or should be doing, and the two
don't agree.
Mr. Barton. Dr. Lashof, we obviously are very pleased that
you are here. We do want to have a balanced hearing.
Unfortunately, there is only one of you and you are
outnumbered, but we do appreciate you being here. When you
talked about the performance-based standard, Chairman Whitfield
pointed this out, but I think it bears repeating. We could do a
performance-based standard based on wind power or nuclear power
that would be zero, and those are the only two that could
comply with it. On the other hand, we could do a performance-
based standard set on the 1971 standards that were first put
out under the 1970 Clean Air Act and all the conventional power
sources could comply with that. So it is a little misleading to
say we are just asking for performance-based standard when you
know and everybody else at this table knows that the only ones
that comply with the proposed EPA standard are natural gas,
nuclear and wind power. No coal plant can comply.
Mr. Lashof. Well, Mr. Barton, the EPA's authority is to
regulate emissions from fossil fuels.
Mr. Barton. But you admit what I said is true?
Mr. Lashof. No, I don't, because we actually believe EPA
could set a tighter standard than it has.
Mr. Barton. So you are saying that you think there is an
existing coal technology that is economic that can comply with
this standard?
Mr. Lashof. Well, as Mr. Thompson testified, there are two
plants that are under construction that would meet the
standard, and----
Mr. Barton. Well, what is the subsidy to the clean-coal
plant down in Texas? How many--I would almost say billions of
dollars, and I support that plant. But on its own merit, it
can't compete without the tax subsidies and the direct
subsidies to it. Isn't that a fact?
Mr. Lashof. That may be true but----
Mr. Barton. That is not may be true; it is true.
Mr. Lashof. Well----
Mr. Barton. It is true.
Mr. Lashof [continuing]. I think there are plants
potentially that have enhanced oil recovery opportunity that
may be competitive.
Mr. Barton. My time is expired. I want to ask Mr. Voyles a
question. What is the most economic clean-coal technology that
is currently available today for commercialization, and how
much does it add to the cost of the best coal technology that
we already have in place--power plant generation technology?
Mr. Voyles. In our case, the best technology is the recent
unit that we just put in service in 2011. It is a supercritical
coal-fired unit that has got all the available technology. It
actually received an investment tax credit for clean-coal
technology and it has been operating now for 2 years and it
actually produces 20 to 30 percent less CO2 than
other technologies.
Mr. Barton. And how much additional does it cost than the
technology that it is replacing?
Mr. Voyles. Because of its efficiency, it runs all in, in
the $30-to-$40-a-megawatt range. It is a little bit more
expensive because of the amount of controls that are on it but
significantly less than what you would experience if you put in
carbon capture and sequestration.
Mr. Barton. Well, the number that I have been given is at a
minimum----
Mr. Rush. Mr. Chairman, we have to have regular order.
Mr. Barton. You are exactly right, Mr. Rush.
Mr. Rush. I thought you were going to stop at some point.
Mr. Barton. You couldn't be more right, so as soon as I
agree with you that you are right, I am going to recognize Mr.
Doyle. Mr. Doyle is recognized for--is it Mr. Green instead of
Mr. Doyle? I recognize the gentleman from Texas, Mr. Green, for
5 minutes.
Mr. Green. I am finally getting the rules down. If I come
when the gavel goes down, when I come back they will let me
speak. Thank you, Mr. Chairman.
I have a district in Texas. We have refineries and chemical
plants, and I know the EPA, when they exempted coal, they
grandfathered in the existing coal facilities, and yet the
tenor of this hearing and what we hear so much is that all
these layoffs, whether it be Alpha or a lot of them, are based
on the Obama administration and EPA. There is not a coal plant
that in existence that will have to deal with carbon under the
EPA, and yet Canada is requiring their coal plants to retrofit.
I hope that when the EPA gets around to my five refineries and
chemical plants in our district that they would let us have the
same grandfather clause. But that is the concern I have.
And I have an area that produces pet coke, not anything
near what coal does, but we have not been able to use that pet
coke in our own country because of the pollution problems and
burning it, and we export it, and I support exporting coal. In
fact, I know there is controversy over a port up in Washington.
So, you know, is the export market, could that keep our
coalmines open whether it be in West Virginia or Pennsylvania
or western United States? Anyone from the coal industry.
Mr. Trisko. Congressman Green, the United States consumes
approximately 1 billion tons of coal annually, and the
predominant customer for that coal is the electric utility
industry, thus the cause of concern that we have expressed here
today. There is a very robust international market in both
steam coal and metallurgical coal with low-cost producers from
countries such as Australia being able to in effect outcompete
the United States. Now, our exports have increased a good deal
over the course of the last 5 years but at most we are talking
about an export market that is on the order of 60 to 70, 80
million tons a year against that 1-billion-ton utility demand.
Mr. Green. I guess I am trying to understand that if it is
a billion tons that is used in existing coal facilities now and
not one of them is being threatened to shut down because of
carbon capture, it seems like we would continue. Now, I know
there is a lot of things that enter into including the cheap
price of natural gas. I am a big supporter of nuclear power.
The problem is, if we didn't have loan guarantees and even
questionable then, we wouldn't have a nuclear power plant
because of the low price of natural gas. So I think it is a lot
of market conditions, and coming from where I am, I can't not
support natural gas expansion.
Mr. Thompson, you mentioned that several States already set
emission standards for carbon capture for new coal-fired
plants. Can you elaborate? How do companies plan to comply with
these standards?
Mr. Thompson. There are several States that already have
emission limits that are similar to what U.S. EPA has proposed.
Some of them are like California and Washington State. There is
a proposed coal project in California called HECP that seeks to
meet that standard and do so with using carbon capture and
storage. In places such as my State, Illinois, there is
actually a clean-coal portfolio standard that seeks to promote
coal projects with 50 percent capture. And some of those have
not, I think are unlikely to move forward in Illinois simply
because the price of gas is so low, and that is a real
challenge.
But what I think is really important to understand is that
what projects need is certainty, and the regulations that EPA
has proposed are quite reasonable: 30 years to comply if you
want to choose that route in some cases for new plants. The
challenge with H.R. 6172 is that it introduces confusion about
whether or not EPA would be allowed to issue those very
reasonable standards, and in an era of low natural-gas prices,
that uncertainty actually, I would submit, favors the expansion
of gas because someone who wants to finance a project or is
being asked to finance a project is going to say well, you
know, I am not really sure if there is some----
Mr. Green. I am almost out of time, and I understand if
somebody is cost-benefiting it out today and you are building a
new power plant, you know, natural gas will get there. Wind,
solar, nothing will get there without substantial tax
incentives except for natural gas.
I am a big supporter of enhanced oil recovery, and we are
trying to grow that in Texas because we have a lot of fields we
can do, and do you have any suggestions on how we can further
incentivize enhanced oil recovery, use some of that carbon from
other States? And I know there is a potential pipeline from
Mississippi into southeast Texas where our refineries are to be
able to deal with that.
Mr. Thompson. A group of environmentalists, coal companies,
chemical companies have gotten together under the umbrella of
the National EOR initiative and recommended several
recommendations. I will highlight one, and that is to actually
to use a portion of the tax revenue that would have--that comes
from new oil development and put that back into subsidizing
some of the cost of CCS capture. That would allow a lot of
projects to move ahead. So I would direct this committee to
look at the National EOR Initiative's recommendations. I think
that is a great starting point.
Mr. Green. Thank you, Mr. Chairman.
Mr. Barton. I just want the record to show that I gave you
extra time, but it was only because you are from Texas. If you
had been from Illinois or Pennsylvania, I would have been on
you.
Mr. Green. Well, maybe Mike can have a Texas drawl.
Mr. Barton. We want to recognize the gentleman from the
Cornhusker State, Mr. Terry.
Mr. Terry. Since I am from the Cornhusker State, do I get 1
minute?
Mr. Barton. It depends on how you are behaving.
Mr. Terry. Thank you.
Mr. Hilton and Mr. Thompson, I want to ask you, as I am
trying to sort through this, I haven't been able to resolve one
specific question, and that is whether or not technology exists
to meet the proposed standards, and Mr. Hilton suggests that it
is a work in progress. Mr. Thompson, you are saying they are
already building them. So Mr. Hilton, you start first. How do I
resolve this as a Cornhusker?
Mr. Hilton. Well, the first part is, you know, is that it
is technologically feasible. As far as getting to the point
where it is commercially available, we need the proof that the
technology, that what we guarantee and what we are going to do,
and there are no plants currently operating out there right now
at commercial scale. Kemper will reach commercial scale because
it has been able to get the financing, and this is what I have
said that CCS needs. It has a 20 percent rate increase. Summit,
if it goes ahead, because it doesn't have financing yet--it has
an MOU with Sinopec to sell part of the project and get Chinese
financing--it may go ahead and this is the point that I was
making. There are no projects out there that are going ahead on
their own with the financing package that is, you know, there.
And that is what we need as suppliers to be able to sell and
guarantee the performance. Southern also has a unique thing. It
is their technology and they are a self, if you will,
guarantor.
Mr. Terry. Mr. Thompson?
Mr. Thompson. Thanks. I also agree with Bob about the
technology is technically feasible. Here is the difference, I
think, that maybe you are alluding to. Kemper and the Texas
Clean Energy Project are using pre-combustion capture
technology. That has been around for 30 years commercially
available. If you look at my written statements, you will see
what Mississippi Power said in support of that. What Bob is
talking about is the post-combustion capture, and his
technology from his company, I respect his opinion that it is
not ready yet but there are projects in Texas like the
Trailblazer Project. It is a proposed project, would be post-
combustion capture but it is not moving ahead, fully permitted,
that would use this post-combustion capture technology and they
have been able to get warranties from either MHI or Fluor, I
can't remember which, to do post-combustion.
Mr. Terry. Let me interrupt, because you said something in
a previous answer that stood out to me from Nebraska versus
Texas is, we don't have oil fields, and you said having that
available is a key component to its fiscal viability. So what
about our northern coal-fired plants?
Mr. Thompson. Pipelines. We have been supporters----
Mr. Terry. Oh, we have tried that. They are against it.
Mr. Thompson. Well, not everyone is. Seven hundred miles of
pipelines have been proposed by Denbury to go from the Gulf
Coast area through to Kentucky, Indiana, Illinois, and
legislation has been passed in those three States to provide
eminent domain authority to make that happen. So it is not
easy, but that is my short answer.
Mr. Terry. All right. Well, I appreciate that.
Then back to you, Mr. Hilton. You had mentioned the issue
of there is liability issues. Can you in a minute and 15
seconds tell me what the liability issues are specifically and
what other barriers in addition to liability?
Mr. Hilton. OK. The liability issue is obviously if you
sequester, there is going to be need typically in accounting to
have some liability associated with having put that
CO2 in a reservoir, so we expect that that is going
to have to be dealt with just like any other waste that has
happened. It may even end up that way in EOR before it is over,
before things are done. So, I mean, there is a liability issue.
There is an issue of pore ownership, you know, who owns the
pore structure you are putting the CO2 in, and in
the history of the United States, it is the classic, you own to
the center of the earth under your house and so, you know, if
you add in paying royalties to put CO2 under
people's houses if they will let you, you know, you have to get
permission. This is a major issue. So I think those are the
really two biggest issues that we are facing.
Mr. Terry. All right.
Mr. Thompson. I would just say that with EOR, which could
account for a third of the Nation's coal fleet, there are no
liability issues. We have injected over a billion tons of
CO2 in Texas since the 1980s. So there are ways of
addressing this issue even within the EOR context.
Mr. Barton. The gentleman's time is expired. We now
recognized the gentleman from the Keystone State, the winner of
the Congressional baseball game manager, Mr. Doyle.
Mr. Doyle. Thank you, Mr. Chairman.
Thank you for your all your testimony. I have read it. Mr.
Trisko, you mentioned in your testimony a 2008 wires-charge
bill, which I was a cosponsor of, by the way, which would have
provided path forward for CCS funding. Can you tell us a little
bit about where that bill ended up?
Mr. Trisko. Congressman Doyle, the bill eventually ended up
as Section 113 of the Waxman-Markey bill, the larger climate-
change bill, and while that bill passed the House, the
companion legislation in the Senate did not fare as well.
Mr. Doyle. Thank you.
Mr. Hilton, in your testimony, you refer to several
commercial-scale CCS demonstrations planned in other
countries--the U.K., European Union, even China. Can you tell
us how these projects are being funded?
Mr. Hilton. Well, the U.K. projects are being funded by a
billion-pound fund the U.K. government is putting up. Most of
the European projects are a combination of E.U. funding from
what is called the NER-300, which is a grant for allowances
which can be sold and then funded, which is somewhere on the
order of $2-1/2 billion to $4 billion euros worth of funding.
The Chinese projects are a little bit, I am going to say,
different. The Chinese projects get funded because the Chinese
government particularly says that project will go ahead and
where the funding is actually comes from is harder.
Mr. Doyle. From the Chinese government?
Mr. Hilton. Right.
Mr. Doyle. What about the CCS projects here in the United
States like the Summit plant? How is that being financed?
Mr. Hilton. Well, the Summit plant has a significant grant
from the government. It is going to do EOR but its financing,
it looks like it will come from selling part of the project as
an MOU with Sinopec and Chinese banks.
Mr. Doyle. Right. So would you say there is an argument
here then for a commitment to Federal funding for CCS
demonstration projects like we provided in the stimulus bill?
In other words, we need to step up to the plate, don't we?
Mr. Hilton. Absolutely.
Mr. Doyle. Thank you.
This question is for several of the panelists. There has
been a lot of testimony this morning about the state of CCS
technology development and the need for better drivers of CCS
technology. Many of you have addressed this in your testimony
already, but I want to ask you what you think would be the best
driver for commercialization of affordable CCS technology.
Would it be EPA regulation? Would it be a carbon tax, cap and
trade or something else? Just very quickly because I have some
more to say. Go ahead.
Mr. Trisko. Congressman Doyle, we would again advocate
consideration of the wires-charge approach. That is a non-
budget way to raise $10 billion to support CCS demonstrations.
Until we have commercial-scale demonstrations, there will not
be a regulatory structure that will allow that technology to
proceed, and given the state of the Federal budget, which we
are all acutely aware, we need to find a non-budget source of
these revenues.
Mr. Doyle. Thank you.
Mr. McCullough. Yes, I first of all refer you to the CURC-
EPRI roadmap that recognizes the technology roadmap to get to
cost-effective, reliable CCS capture. We would also support the
funding that Mr. Trisko just----
Mr. Doyle. Great. I don't mean to rush you but I have some
more to say.
Go ahead, Mr. Voyles.
Mr. Voyles. And I would only add to what Mr. McCullough
says by saying--and we have talked about the Kemper County
plant. That plant has been progressing without the imposition
of any standards so the industry is investing in carbon
research, trying to develop technology, and that should
continue.
Mr. Doyle. Mr. Hilton?
Mr. Hilton. Clearly, I think a wires charge or similar
thing.
Mr. Thompson. A combination, both performance standards and
incentives that promote enhanced oil recovery.
Mr. Lashof. Yes, I would say we need the standards to make
it clear that if you are going to build fossil plants, you are
going to need CCS in the future to motivate people to invest,
and then we need support.
Mr. Doyle. Dr. Christy?
Mr. Christy. Yes, I would just say please don't raise the
rates of Alabamians for utilities.
Mr. Doyle. OK. Thank you.
This week, Mr. Chairman, in the House, our friends on the
other side are going to bring a bill to stop the war on coal to
the House Floor, and among other things, the bill prohibits any
acknowledgement that global warming is caused by carbon
emissions and it bars the Federal Government from setting any
kind of carbon-emission limit. The bill we are debating here in
the subcommittee also would bar the Federal Government from
setting any kind of limit on carbon pollution. In 2009,
Democrats passed a stimulus bill that provided $3.4 billion to
CCS funding. That was 49 percent of all the energy funding in
the stimulus bill went to CCS. Half of all that funding, CCS.
That bill was denigrated, maligned and smeared by many in this
House chamber. Also in 2009, we took up a cap-and-trade bill
that had $60 billion for CCS funding as well as the $10 billion
in wire charges that Mr. Trisko referred to in his testimony.
That bill as well was smeared, denigrated and maligned by many
on this House Floor.
So here we are today dealing with regulations that are a
result of court-imposed deadlines and we are being told that
the industry doesn't have commercially available tools to meet
these limits. Well, whose fault is that? I would just say to my
friends, when you want to bring a bill forward to invest--you
know, you have to do both. You can't just----
Mr. Gardner [presiding]. The gentleman's time is expired.
Mr. Doyle. No, I would like 10 more seconds.
Mr. Gardner. I am not from Texas.
Mr. Doyle. Let me just say this to my friends. I have
sympathy for what is going on in the coal industry. Bring a
bill to the floor that says we need commercially available
technology before we can do certain regulations, but where is
the money to go with it? There is no commitment to fund the
technology. We do this in nuclear and we do this in other
areas. You know, show me the money. We had $60 billion on the
table and that got voted down. So don't just come here and say
you can't do something because the technology is not available.
Mr. Gardner. The gentleman's time has expired. The
gentleman from Texas is recognized for 5 minutes.
Mr. Burgess. Thank you, Mr. Chairman, and I do feel
obligated to point out that during the first 2 years of the
Obama administration when cap and trade, Waxman-Markey passed
and the stimulus bill did pass, of course the President's party
controlled all the levers of government. Whatever this side of
the dais wanted was absolutely irrelevant because the Democrats
had a 50-vote majority in the House and a 60-vote filibuster-
proof majority in the Senate. It was the Senate that was unable
to do Waxman-Markey because after they saw the public angst
over Waxman-Markey being shoved through the floor of the House
the last day of June 2009, no Senator had the courage to step
forward and say let us talk about this. They wanted to withdraw
from that fight. Whether it was right or wrong, I mean, that is
what happened. Blame us if you want if you can't find any other
reason but the reality was, 60 Democratic votes in the Senate
and the President could not get that bill even considered in
the other body. So don't blame House Republicans. I didn't want
that. I thought it was a bad idea. I thought it was a bad idea
on several levels. I will still vote against it if you are able
to bring it up again. But don't blame House Republicans for
your inability to get that done because you know very well that
thing was forced through this committee, subcommittee, full
committee and the floor of the House and it was in fact to the
detriment of your side because, honestly, you never recovered
the public confidence after you did that. It was done in the
worst possible way, and I would hope whatever happens with
energy legislation going forward it is constructed in a
bipartisan fashion. I think that is the lesson a lot of us can
take away from the last 3 \1/2\ years.
Mr. Hilton, I have a question for you, because when Michael
Williams was Chairman of the Texas Railroad Commission, I think
he came to this committee and testified either in committee or
in a briefing, and he talked about how the State of Texas had
taken title. You were answering some questions from Mr. Terry
about the liability issues. The State of Texas, as I understand
it, took title to the carbon that was pumped back down for
carbon sequestration. Is that not correct?
Mr. Hilton. Yes, that is correct.
Mr. Burgess. Does that help with the liability issue?
Mr. Hilton. It helps in Texas.
Mr. Burgess. Right. Has any other State stepped forward and
done that?
Mr. Hilton. I don't believe so.
Mr. Burgess. Now, Texas, of course, is a little bit
different because we are our own country. We don't have Federal
lands; we have State lands. So there actually is the
availability of State land to do that. In other areas of the
country where there are large amounts of Federal lands, has
there been any discussion about the Federal Government taking
title to the carbon that might be injected under Federal lands?
Mr. Hilton. I can say it has been suggested. I don't know
if the Federal Government itself has discussed it, but, I mean,
people have talked about it, of course.
Mr. Burgess. But even there with the liability cloud
removed as it was in Texas, I mean, it has been a slow go. It
is not something that has really been--there hasn't been a lot
of enthusiasm for it.
Dr. Christy, welcome back to our committee. You have spent
a lot of time here over the years. I really appreciate the
graphic representation that you brought to us today. It is
fascinating because, I mean, I lived through at least half of
it so I actually remember those years very well. There does
seem to be a certain amount of randomness to the temperature
variations that you described. There also seems to be some
clustering. Are you able to make any predictions about, is this
occurring on a cyclic basis? I mean, clearly some of the most
startling temperatures were in the early part of the last
century as opposed to these latter years when the carbon
numbers were supposedly going up. Are you able to make any
predictive statements based upon the data that you have
collected?
Mr. Christy. You know, my most confident predictive
statement is that if it happened before, it will happen again
and probably worse.
Mr. Burgess. Well, history always repeats itself right up
until the time that it doesn't.
Mr. Christy. Yes. In fact, even on the arctic sea ice
thing, I think it would be interesting to note that over
western civilization the arctic has probably been warmer than
it is today.
Mr. Burgess. Well, let me ask you a question because it did
come up that because of the reliance on natural gas when the
price collapsed of natural gas in 2008, apparently carbon
dioxide levels are lower now than what they were predicted to
be. Is that correct?
Mr. Christy. In this country, they have fallen, yes.
Mr. Burgess. Is that happening worldwide or is it just this
country?
Mr. Christy. I believe that is not the case worldwide. It
is still going up thanks to China and India, who are really
burning a lot of coal.
Mr. Burgess. So if we were really able to achieve the goals
that were set forward in Waxman-Markey, the rest of the world
could actually negate any benefit effect if indeed that was the
cause of global warming?
Mr. Christy. Whatever the United States does, it will be
pretty much imperceptible for the global climate.
Mr. Burgess. Very good. Thank you, Mr. Chairman. I will
yield back.
Mr. Gardner. Thank you, Mr. Chairman--or thank you, Mr.
Burgess.
Mr. Burgess. I will yield you additional time.
Mr. Gardner. Yes, that is right. Well, I was maybe getting
even for Mr. Doyle right there.
Mr. Olson, you are recognized for 5 minutes.
Mr. Olson. I thank the Chair, and on behalf of the people
of Texas 22, welcome to our witnesses. Thank you for your time
and expertise today.
Clean air and economic growth are not mutually exclusive.
The great people of Texas 22 aren't buying the notion that EPA
can create jobs by strangling business with overly burdensome
and unnecessary regulations, especially when the electricity
bills are going up. We all know, the people of my district,
Texas 22, our rates by the comments our President made when he
was running for the office in 2008 in San Francisco. You guys
know these comments but just let me read them for you. If
someone wants to build a new coal-fired power plant, they can,
but it will bankrupt them because they will be charged a huge
sum. I served 10 years in the United States Navy. It sounds
like an attack on coal, doesn't it?
My first question is for you, Mr. McCullough and Mr. Hilton
and Mr. Voyles. Do you believe EPA's goal with all these new
rules is to shut down coal plants like the President said in
San Francisco and keep new ones from being built?
Mr. McCullough. Well, the motive is up to someone else to
decide but the effect is that no new coal plants will be built.
Mr. Olson. Mr. Voyles?
Mr. Voyles. I would concur with that.
Mr. Olson. Mr. Hilton?
Mr. Hilton. I would concur with that.
Mr. Olson. Thank you.
Texas is predicted to have a severe supply shortage,
meaning that we will need more electricity than it can
generate. We are the second largest State, the fastest-growing
State in our Nation. We are expected to have a 2,500-megawatt
shortfall in generating capacity, equivalent to five large
power plants, as early as 2014. We have proposed a pet coke
plant in Texas, the Corpus Christi area, Las Brisas Energy
Center, that EPA has been slow walking for more than 3 years.
Some of my colleagues have wrote EPA about 2 months ago and
they haven't gotten back to us yet. So we are optimistic that
we will get something from EPA. But is this the sort of
treatment you guys are getting used to from EPA, no answers, no
responses? I will put it another way: has EPA been a corporate
partner or are they an adversary working against you?
Mr. McCullough. Well, we have certainly had our discussions
with U.S. EPA around many rules, the MACT rule for mercury
being included in that discussion, and saw very little in the
way of response positively for our industry.
Mr. Olson. Mr. Voyles?
Mr. Voyles. We too have had numbers of discussions with EPA
on numbers of rules, and the plant that I spoke of earlier, we
had some discussions with them about the time that was taken to
get our permits but we did finally achieve those.
Mr. Olson. Mr. Hilton?
Mr. Hilton. As a technology supplier, we really don't get
into those kind of discussions per se. We talk about technology
with the agency.
Mr. Olson. OK. One round of questions for all of you
starting with Dr. Christy. Our former EPA regional
administrator, Mr. Al Armendariz, was in charge of overseeing
our power plants. He had resigned his radical agenda. He came
forward to actually crucify--he used that term--to crucify the
oil and gas companies but it went public. He now works for the
Sierra Club, their beyond-coal campaign. What do you think
about that? Are there more people like Dr. Armendariz working
at EPA now?
Mr. Christy. My impression in the Federal Government, there
are several folks like that, have a pretty clear view of what
the climate situation is.
Mr. Olson. Mr. Trisko?
Mr. Trisko. Our experience, Congressman, is that EPA is
staffed by highly experienced experts in environmental
regulation, and if one follows the letter of the Clean Air Act
that has not been amended by Congress for some 22 years except
by virtue of a 2007 5-4 Supreme Court ruling, it is not
difficult to understand how we have ended up in the predicament
we are today.
Mr. Olson. Mr. McCullough?
Mr. McCullough. Yes, I would agree. In the discussions, the
Clean Air Act, I would classify as used as a reason or a crutch
to not be flexible, and it is pretty consistent in that way.
Mr. Olson. Mr. Voyles, your comment, sir?
Mr. Voyles. I don't know that I would add anything that
hasn't already been said. I am not sure where they get all the
employees but they have some expertise that we talk to from
time to time, and I think that they do try to use the Clean Air
Act to the advantage of one side or the other, depending upon
the issue.
Mr. McCullough. Mr. Hilton?
Mr. Hilton. I have great respect for the professionals at
EPA and they do have some terrific experts there, and I think
the comments that Mr. Trisko made are probably very
substantial.
Mr. Olson. Thank you.
Mr. Thompson?
Mr. Thompson. My experience is, the EPA officials are very
professional and some leave the agency to work for industry and
some for environmental groups.
Mr. Olson. And finally last but certainly not least, Dr.
Lashof?
Mr. Lashof. Yes, my experience is similar. EPA Is trying to
protect public health by setting standards. They have proposed
a fuel-neutral and technology-neutral standard, and the public
supports it overwhelmingly.
Mr. Olson. Thank you. I am way over time. I thank the
Chair.
Mr. Gardner. The gentleman from West Virginia, Mr.
McKinley, is recognized for 5 minutes.
Mr. McKinley. Thank you, Mr. Chairman.
Mr. Thompson, I want to focus back in on the enhanced oil
recovery. Are you aware that earlier this year there was an
amendment on the floor that was adopted by Congressman Connolly
that cut the research funding in the enhanced oil recovery?
Mr. Thompson. I am not familiar with that.
Mr. McKinley. So when we hear the folks on the other side
talking about this, if we know this is going to be part of the
solution, this is where we need to be focusing on but yet all
these members, and Mr. Doyle was one of them that voted to cut
the funding. I find that very interesting.
But let me build on that just a little bit. In fact, all
the Democrats did. If the oil industry--because I am somewhat
aware of this process. If the oil industry finds this is a
possibility of increased recovery, instead of--well, how many
of them are contributing from the oil industry, how many of
them are contributing to the carbon-capture research so that
would enable that to occur to provide them with a supply of
material? Are any oil companies contributing to CCS research?
Mr. Thompson. Sure, Shell, among others, is.
Mr. McKinley. Do you have numbers for that, how much? Are
they contributing a million or they are contributing hundreds
of millions of dollars?
Mr. Thompson. No, I don't, but what I would be happy to do
is after the hearing----
Mr. McKinley. I would like to understand more----
Mr. Thompson [continuing]. I would be happy to respond in
writing.
Mr. McKinley [continuing]. Because if they are going to be
the ones that are going to benefit from this, I think they are
the ones that should be contributing the money for it.
Let us go back now to Dr. Lashof. I am just curious. It was
touched on just a minute ago about the CO2
emissions. Are you aware that the CO2 emissions
across North America are down to a low that hasn't been seen in
20 years?
Mr. Lashof. Yes, I am. I have published a report on that a
month or so ago.
Mr. McKinley. And so with that, you think we ought to go
even--we need to continue this message, this fight?
Mr. Lashof. Well, the amount of CO2 in the
atmosphere is 25 percent higher than it was in the year I was
born, 1959, and what we need to do is stabilize that level. The
United States needs to reduce further. Certainly, China and
India also need to reduce. The United States has to provide
leadership.
Mr. McKinley. Because what you are saying is, it is the
main culprit? I think I heard you say that is the main culprit
of global warming.
Mr. Lashof. Carbon dioxide traps heat in the atmosphere. It
would be remarkable if it weren't causing global warming, and
in fact, we are seeing global warming.
Mr. McKinley. So you disagree with Dr. Lewis, Hal Lewis,
when he resigned from his position, the American Physicists
Society when he said this is the greatest pseudoscience fraud
perpetrated on America?
Mr. Lashof. Yes, I totally disagree with that.
Mr. McKinley. I would assume you do. But I think several
others have joined him in resigning because there are other
scientists that disagree with you on that, that this is being
used for other purposes. I look at what Hal Lewis has said, and
if you look back to Milankovic, back to the Serbian physicist
back in the last century, by virtue of his own studies had
predicted that this was going to happen at this time in our
history. Are you aware of that?
Mr. Lashof. I am. Look, scientists will always disagree
with each other. That is what they do. That is how they make a
living is writing papers to disagree with other scientists. If
we predicated policy on unanimity among scientists on any
issue, we would never do anything.
Mr. McKinley. Do you recognize too that National Geographic
just came out with a study that says we are just coming out of
an ice age, a mini-ice age, and therefore we should be
expecting higher temperatures today?
Mr. Lashof. I haven't seen that particular National
Geographic article, but the fact is that the amount of heat
trapping that the excess CO2 that we put into the
atmosphere from burning fossil fuels is now a much bigger
factor in influencing the earth's climate than the Milankovic
cycles and what we have had to start with. We have entered a
new era that many scientists call the----
Mr. McKinley. So my point here is, given that there is not
unanimity--and I remember earlier last year when Lisa Jackson
came before us, she said it is all been decided, that global
warming is anthropogenic, global warming is manmade cause and
it is CO2 driven, that there is no argument anymore,
but you also just acknowledged that it is not, that the science
is still up in the air over that issue. So I accept that there
is not a lack of unanimity on it because what we are about to
do here is allow the EPA to impose a regulation. That is the
purpose of my bill. Just hold back. If we had the scientific
ways of doing it, then to go ahead and implement it, but when
we don't have the technology available, let us hold back
because there is enough evidence that possibly CO2
is not contributing to as much of the problem as you are
suggesting that it is. So let us just hold back. I am over my
time----
Mr. Lashof. Mr. McKinley, if I can just answer quickly, I
don't agree that the science is up in the air. I said that
there is not unanimity among scientists and there won't be, but
the National Academy of Science said that the idea that carbon
dioxide is contributing to climate change is as well proven as
gravity, and I think that is a strong basis for making policy.
Mr. Gardner. The gentleman's time is expired. The gentleman
from Massachusetts is recognized for 5 minutes.
Mr. Markey. Could you recognize someone from the minority
and then come back to me? Is that possible, Mr. Chairman?
Mr. Gardner. The gentleman yields back.
Mr. Rush. Mr. Chairman.
Mr. Doyle. Will the gentleman yield for 30 seconds?
Mr. Markey. No, I am ready to go, if the majority does not
need to have the time. Thank you, Mr. Chairman.
So here is what I would say, that coal has dropped from 51
percent of electrical generation down to 35 percent over the
last 5 years, but there is a concomitant trend as well which is
operating simultaneously which is that natural gas has risen
from 21 percent to 30 percent. So there is a war between fossil
fuels going on in our country right now.
By the way, the same thing is happening on home heating oil
in New England. The market for home heating oil is collapsing
as the price of natural gas is rising. Now, why is that?
Because natural gas is so much less expensive than home heating
oil. The price of natural gas has collapsed in terms of a
source for generation for electricity. And by the way, the same
thing is true for wind. Wind was only 1 percent of all
electricity just 4 years ago. It is now 4 percent of all
electricity.
So coal is losing a marketplace battle. There is no
question about it. It is losing a marketplace battle. Natural
gas is up to 30 percent. It will probably go up a percent a
year every year. That is just a fossil-fuel battle. The same
thing is true for home heating oil. Natural gas is eating into
home heating oil in a very significant way. That is a fossil-
fuel interfuel battle. And I know a lot of people don't like
it, you know, any more than--let us be honest, any more than
the horse industry likes the horseless-carriage industry. It
just moving on, you know, but when the price drops, that is
what you get.
So a lot of people are just trying to blame the concern,
which the Obama administration or members of this committee
that might care about clean air or pollution or science but
that is not what has really been happening. This is all
happening before there was any rule promulgated on
CO2. This is already happening and it is going to
continue to happen because of the low price of natural gas.
Now, again, the Democrats are the party of natural gas and the
Republicans are the party of coal, if that is how you want to
frame it, but that would of course be a wrong frame. That is
the wrong frame. I am just bringing to you the marketplace
reality, the economics of it. When a flat-screen TV costs
$5,000, you don't buy it. When the cost collapses down to $299,
you are buying one. That is what is happening with natural gas.
People are buying natural gas, utilities and homeowners, and
they are moving to it, plain and simple.
So Dr. Christy, I want to read to you two statements. One,
scientific evidence strongly indicates that natural influences
cannot explain the rapid increase in global near-surface
temperatures observed during the second half of the 20th
century, and two, it is virtually certain that increasing
atmospheric concentrations of carbon dioxide and other
greenhouse gases will cause global surface climate to be
warmer. Dr. Christy, do you agree with those statements?
Mr. Christy. Those statements have no magnitude to them, no
metrics to them, so if the increase is 1,000th of a degree due
to the greenhouse effect, you would say yes. You would agree
with those statements.
Mr. Markey. OK. Well, Dr. Christy, those statements are
direct quotes from the 2003 American Geophysical Union
statement on human impacts on climate that you helped to draft.
So Dr. Christy, in 2003, you agreed with those statements, but
the Dr. Christy of 2012 does not agree with those statements.
Dr. Lashof, do you agree with those statements? Is the
science, Dr. Lashof, more certain now than it was in 2003?
Mr. Lashof. Yes, there has been a huge accumulation of
observations and studies which tie the warming that we have
seen to the accumulation of heat-trapping pollution in the
atmosphere. Of course, as Dr. Christy says, there is natural
variability. There will always be natural variability. But on
top of the natural variability there is an undeniable trend
that is very significant and very dangerous.
Mr. Markey. So Dr. Lashof, tell us the status of the arctic
right now, could you?
Mr. Lashof. Right. So NASA released data yesterday showing
that the arctic ice has fallen to about 3.4 million square
kilometers at minimum. It is less than 50 percent of what it
was in 1979. It is about a 49 percent reduction form the
average over the whole period from 1979 to----
Mr. Markey. Thank you, Doctor.
I yield to the gentleman from Pennsylvania, Mr. Doyle.
Mr. Doyle. Thank you, Mr. Markey.
You know, I would just say in conclusion to my friends, and
many weren't here when we passed the cap-and-trade bill in the
House, but I think one thing is clear. Mr. Hilton says, you
know, he has an MOU with the Chinese. We are going to use coal
for the foreseeable future, and even if we don't use it, China
is going to use it, India is going to use it, other countries
are going to use it. It only makes sense that if it is going to
be used, we try to do it in the most efficient and
environmentally safe way. To do that, we have to make an
investment in it. These things are not going to happen by
themselves. So either the Chinese are going to develop the
technology, they are going to come over here and fund the
project and part of that deal is, they get the technology and
then they get to market it to the world or the United States
does it. I would suggest that, you know, if we want to deal
with coal, I would say to my friends on the other side of the
aisle, let us put our money where our mouth is, and if you are
going to pass a bill saying there is no commercially available
technology, then where is the money to make that happen? And
until we do that, other countries will do that and they will
have the technology and we won't.
Mr. Gardner. The gentleman's time is expired. The gentleman
from Virginia, Mr. Griffith, is recognized for 5 minutes.
Mr. Griffith. Thank you, Mr. Chairman.
Dr. Christy, did you want to respond to anything that the
previous gentleman said? I know that he made some assertions
about your positions and you didn't get a chance to respond.
Would you like to do that at this time?
Mr. Christy. I agree with those statements in 2003. I was
one of the authors. There were no magnitudes on those
statements. CO2 is a greenhouse gas. It will cause
surface warming. How much is the uncertainty.
Mr. Griffith. And I would point out that one of the things
that I see as a difference with what is happening now, and lots
of time people like to talk about the market conditions, and
clearly the market conditions are important, but one of the
things that is interesting is, is that there was a reference to
the horseless carriage versus the horse-drawn vehicles, but we
didn't outlaw horses at the same time as the horseless carriage
was being developed and that is the big difference, and while I
am getting older every day and thankful for that, I can
remember in my youth a gentleman who in my hometown still had
his team of horses to plow fields, and people felt he did a
great job and he made a living doing that for a number of years
well into the 1970s, and horses were not made illegal by the
advent of the automobile.
Mr. Hilton, did I hear you say that--and I may have
misunderstood so please get me straight--that in regard to the
Kemper coal-fired power plant with what they are doing that
there would be a 20 percent rate increase?
Mr. Hilton. That is what I have read, yes.
Mr. Griffith. You know, this is part of what causes me
great concern, and Dr. Christy, you touched on this earlier as
well, is that we have all of these requirements and it is not
just the one that we are debating today but we have numerous
requirements coming in and every time we turn around there is a
rate increase. We are already experiencing that in my district,
which is a coal-producing district in southwest Virginia, but
the folks, you know, many counties away from where the coal is
actually dug are watching their electric rates go up and it is
making it hard on the working poor and on the poor folks
because they can't afford a 10 percent increase, or in this
case, a 20 percent increase. And you mentioned that they were
having similar problems in your community in Alabama. Is that
true, or that you have noticed this?
Mr. Christy. I would just say this, that we have many, many
poor people in my State and any increase in cost of living for
them is really a hardship.
Mr. Griffith. And that is true in my district as well, and
I think that is probably true in a lot of the districts across
the United States, that what you have is, you have--when the
price goes up, then it makes it hard.
And you know, what is interesting is, is that everybody
likes to talk about the statement by the President when he said
that they would bankrupt the facilities if they were using coal
or whatever but they also mentioned at that time in 2008 he
mentioned as well because on capping greenhouse gases, coal
power plants, you know, natural gas, you name it, whatever the
plants were, whatever the industry was, they would have to
retrofit their operations. That will cost money. They will pass
that money on to consumers. So I just find it rather
interesting that the consumer side of this equation is often
left out.
And Dr. Christy, you indicated that if the United States
took all these actions and we reduced and continued to reduce
our carbon footprint that it would be relatively--and I don't
want to put your words in your mouth, I don't remember,
something along the lines of negligible, is that correct?
Mr. Christy. Yes.
Mr. Griffith. In the world's output. But wouldn't you agree
with me that it is not negligible to the families that are
having to pay those higher increased prices for electricity to
light and heat their homes or to run factories?
Mr. Christy. Yes. I think anyone who sees their utility
bill rise would feel the effect and it wouldn't be good for
them.
Mr. Griffith. And of course, we have got not just this
regulation but lots of other regulations that are putting
pressure on those prices, and then of course you have all these
folks that are out of work because it is not just the 1,200
folks that are going to be laid off by Alpha Natural Resources,
which, by the way, is headquartered in my district, but it is
also all the other coalmines that have laid off people,
sometimes 20 at a time, 30 at a time that people aren't
necessarily noticing and then the people who are laid off from
suppliers, joint manufacturing, other suppliers to the
coalmines, the railroads that may not have had the effect yet
but will have the effect, etc., and so you are going to have
more and more people who are unemployed because we are
insisting upon--for a negligible result, we are insisting upon
taking our economy and throwing it in the trashcan for a
negligible result on carbon footprint in the world and we are
sending our jobs overseas to other countries and we are
watching as they gain the wealth, and when there comes a time
when there is a technology that may make things better, we
won't have the money to buy that technology because we will
have sent all of our wealth overseas.
Thank you, Mr. Chairman, and I yield back.
Mr. Gardner. The gentleman yields back. The chairman
recognizes himself for 5 minutes.
Thank you to the panelists for the opportunity to be here
today and your testimony. Several years ago when Congress was
considering its first greenhouse-gas bill, I received a letter
from a couple of local rural electric associations that were
talking about the price impact that that particular regulation
would have on their customers. In fact, according to one
analysis in northeastern Colorado, they determined that an
average farmer, the average sprinkler cost for a farmer would
increase by about $2,000 per sprinkler. This is a big pivot
irrigation system, 160 acres. Now, if you are a farmer in
eastern Colorado, you don't just have one pivot irrigation
system; you have got five, maybe ten. That is $2,000 each.
Maybe you have more. And so we are talking about considerable
costs being added under their estimate from the rural electric
association that that particular regulation would have on their
customers' operations.
And so Mr. McCullough, or was it Mr. Hilton, that you
mentioned rate increase of 20 percent. Is that correct?
Mr. Hilton. In Mississippi.
Mr. Gardner. In Mississippi. And I would be curious to see
if Mr. Trisko, are you hearing anything through the various
businesses that you work with on rate increases?
Mr. Trisko. Chairman, we understand that the Kentucky
Public Commission has decided a number of cases. Now, this is
for prospective Clean Air Act regulations for hazardous air
pollutants and the like, not this proposed regulation, and the
rate increases are on the order of 16 to 18 percent.
Mr. Gardner. Mr. McCullough?
Mr. McCullough. Yes, I would agree with that. We recently
pulled down an order for a new scrubber for a plant in Kentucky
that would have impacted customers there by over 30 percent.
Mr. Gardner. Mr. Voyles?
Mr. Voyles. Yes, as I have said in my testimony, the
compliance plans that we recently got approved for the Utility
MACT Rule and the New Source--the National Ambient Air Quality
Standards are impacting our ratepayers by up to 14 and 18
percent, not counting anything on carbon.
Mr. Gardner. And to follow up on Mr. Griffith's questions
as well, these are costs that are passed on to your customers,
your consumers. Is that correct, Mr. Hilton?
Mr. Hilton. Ultimately, of course.
Mr. Gardner. Mr. Voyles?
Mr. Voyles. As well as we have said before, we not only
pass it along to all of our ratepayers but it passes along to
the commercial industry so the food prices are impacted,
McDonald's prices are impacted, everybody's prices are
impacted.
Mr. Gardner. And who does that affect the most
disproportionately in our society? People on a fixed income,
poor?
Mr. Voyles. It certainly presents some significant
challenges for fixed income.
Mr. Gardner. Mr. McCullough, what happens to American
business competitiveness with the rate increases of 20 percent,
18 percent, 14 percent?
Mr. McCullough. Obviously, it further disadvantages them.
We have seen that in our territory with especially aluminum
smelters who--the Century aluminum plant in West Virginia went
out of business with the recession and recently Ormat in our
home State of Ohio has just announced that they are going to
decrease their production.
Mr. Gardner. Dr. Lashof, what happens to an economy where
rates are increasing by 20 percent, the poor being hurt and
those on fixed incomes are being hurt disproportionately?
Mr. Lashof. Well, Mr. Chairman if we could return to the
specific proposal that EPA has put forward, it would not cause
any rate increases.
Mr. Gardner. My question to you is, if rates increase by 20
percent, for a variety of reasons that have been mentioned,
what happens to our economy? What happens to the poor? What
happens to people on a fixed income?
Mr. Lashof. It depends what else is happening in the
economy. If people are using energy more efficiently, their
costs might go down, which we have seen in many, many States
that have invested in energy efficiency. You can't just look at
rates.
Mr. Gardner. If people that have low income are able to buy
something that is more energy-efficient, that will help them?
Mr. Lashof. Yes, and if we provide--and technology is
improving on the efficiency side.
Mr. Gardner. OK. So if people on a fixed income, are poor
can afford to buy something new, then that will help them?
Mr. Lashof. Well, as pollution also imposes more severe
costs on poor people, they are exposed to it more, so the
benefits of air-pollution regulations in fact go to the low-
income people. So the EPA is actually required to look at costs
and benefits when they propose regulations.
Mr. Gardner. We have actually heard testimony in this
committee before where they have failed to do an adequate
analysis on cost and benefits, and this is, I think, one of the
frustrating parts of this entire debate. Nobody doubts that we
can do a better job when it comes to energy efficiency. There
is no doubt about that. Nobody doubts that we have incredible
opportunities in new energy. But the problem is, when we have
regulations that come down from agencies that increase cost on
developing energy, on consuming energy, it hurts our economy
and it hurts the people who are most vulnerable in our society,
and that seems to get left out of this entire debate is the
people who are affected disproportionately are poor and low
income because it hurts the economy and it hurts their ability
to lift themselves and their families out of the position that
they are in.
I see that my time is expired as well, and thank you very
much to the panelists for being here, the witnesses for your
time and testimony today. And with that, this hearing is
adjourned.
[Whereupon, at 12:15 p.m., the subcommittee was adjourned.]
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