[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
EPA POWER PLANT REGULATIONS:
IS THE TECHNOLOGY READY?
=======================================================================
JOINT HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY &
SUBCOMMITTEE ON ENVIRONMENT
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
October 29, 2013
__________
Serial No. 113-51
__________
Printed for the use of the Committee on Science, Space, and Technology
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://science.house.gov
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COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HON. LAMAR S. SMITH, Texas, Chair
DANA ROHRABACHER, California EDDIE BERNICE JOHNSON, Texas
RALPH M. HALL, Texas ZOE LOFGREN, California
F. JAMES SENSENBRENNER, JR., DANIEL LIPINSKI, Illinois
Wisconsin DONNA F. EDWARDS, Maryland
FRANK D. LUCAS, Oklahoma FREDERICA S. WILSON, Florida
RANDY NEUGEBAUER, Texas SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas ERIC SWALWELL, California
PAUL C. BROUN, Georgia DAN MAFFEI, New York
STEVEN M. PALAZZO, Mississippi ALAN GRAYSON, Florida
MO BROOKS, Alabama JOSEPH KENNEDY III, Massachusetts
RANDY HULTGREN, Illinois SCOTT PETERS, California
LARRY BUCSHON, Indiana DEREK KILMER, Washington
STEVE STOCKMAN, Texas AMI BERA, California
BILL POSEY, Florida ELIZABETH ESTY, Connecticut
CYNTHIA LUMMIS, Wyoming MARC VEASEY, Texas
DAVID SCHWEIKERT, Arizona JULIA BROWNLEY, California
THOMAS MASSIE, Kentucky MARK TAKANO, California
KEVIN CRAMER, North Dakota ROBIN KELLY, Illinois
JIM BRIDENSTINE, Oklahoma
RANDY WEBER, Texas
CHRIS STEWART, Utah
VACANCY
------
Subcommittee on Environment
HON. CHRIS STEWART, Utah, Chair
JIM BRIDENSTINE, Oklahoma SUZANNE BONAMICI, Oregon
F. JAMES SENSENBRENNER, JR., JULIA BROWNLEY, California
Wisconsin DONNA F. EDWARDS, Maryland
DANA ROHRABACHER, California MARK TAKANO, California
RANDY NEUGEBAUER, Texas ALAN GRAYSON, Florida
PAUL C. BROUN, Georgia EDDIE BERNICE JOHNSON, Texas
RANDY WEBER, Texas
LAMAR S. SMITH, Texas
------
Subcommittee on Energy
HON. CYNTHIA LUMMIS, Wyoming, Chair
RALPH M. HALL, Texas ERIC SWALWELL, California
FRANK D. LUCAS, Oklahoma ALAN GRAYSON, Florida
RANDY NEUGEBAUER, Texas JOSEPH KENNEDY III, Massachusetts
MICHAEL T. McCAUL, Texas MARC VEASEY, Texas
RANDY HULTGREN, Illinois MARK TAKANO, California
THOMAS MASSIE, Kentucky ZOE LOFGREN, California
KEVIN CRAMER, North Dakota DANIEL LIPINSKI, Illinois
RANDY WEBER, Texas EDDIE BERNICE JOHNSON, Texas
LAMAR S. SMITH, Texas
C O N T E N T S
October 29, 2013
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Chris Stewart, Chairman, Subcommittee
on Environment, Committee on Science, Space, and Technology,
U.S. House of Representatives.................................. 8
Written Statement............................................ 9
Statement by Representative Suzanne Bonamici, Ranking Minority
Member, Subcommittee on Environment, Committee on Science,
Space, and Technology, U.S. House of Representatives........... 13
Written Statement............................................ 14
Statement by Representative Cynthia Lummis, Chairwoman,
Subcommittee on Energy, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 15
Written Statement............................................ 16
Statement by Representative Eric Swalwell, Ranking Minority
Member, Subcommittee on Energy, Committee on Science, Space,
and Technology, U.S. House of Representatives.................. 17
Written Statement............................................ 19
Statement by Representative Lamar S. Smith, Chairman, Committee
on Science, Space, and Technology, U.S. House of
Representatives................................................ 20
Written Statement............................................ 20
Statement by Representative Eddie Bernice Johnson, Ranking
Member, Committee on Science, Space, and Technology, U.S. House
of Representatives............................................. 21
Written Statement............................................ 21
Witnesses:
The Honorable Charles McConnell, Executive Director, Energy &
Environment Initiative, Rice University
Oral Statement............................................... 22
Written Statement............................................ 24
Dr. Richard Bajura, Director, National Research Center for Coal
and Energy, West Virginia University
Oral Statement............................................... 30
Written Statement............................................ 32
Mr. Kurt Waltzer, Managing Director, The Clean Air Task Force
Oral Statement............................................... 40
Written Statement............................................ 42
Mr. Roger Martella, Partner, Environmental Practice Group, Sidley
Austin
Oral Statement............................................... 60
Written Statement............................................ 62
Discussion....................................................... 69
Appendix I: Answers to Post-Hearing Questions
The Honorable Charles McConnell, Executive Director, Energy &
Environment Initiative, Rice University........................ 92
Dr. Richard Bajura, Director, National Research Center for Coal
and Energy, West Virginia University........................... 97
Mr. Kurt Waltzer, Managing Director, The Clean Air Task Force.... 102
Mr. Roger Martella, Partner, Environmental Practice Group, Sidley
Austin......................................................... 105
Appendix II: Additional Material for the Record
Fresh Tech, Difficult Decisions, Basin Electric has a history of
trying new technology, submitted by Representative Kevin
Cramer, Subcommittee on Energy, Committee on Science, Space,
and Technology, U.S. House of Representatives.................. 112
Letter addressed to The Honorable Gina McCarthy, Administrator,
U.S. Environmental Protection Agency, submitted by
Representative Kevin Cramer, Subcommittee on Energy, Committee
on Science, Space, and Technology, U.S. House of
Representatives................................................ 114
Potential Impacts of EPA Air, Coal Combustion Residuals, and
Cooling Water Regulations report submitted by The Honorable
Charles McConnell.............................................. 118
Impacts of Seven EPA Regulations chart submitted by The Honorable
Charles McConnell.............................................. 192
Impact of EPA Regulations report submitted by The Honorable
Charles McConnell.............................................. 196
Peak Year Employment Losses Caused by EPA Regulations (Five key
regions of the U.S.) map submitted by The Honorable Charles
McConnell...................................................... 197
Peak Year Annual Household Income Losses Caused by EPA
Regulations (Five key regions of the U.S.) map submitted by The
Honorable Charles McConnell.................................... 198
Total Employment Losses Caused by EPA Regulations, 2013-2034
(Five key regions of the U.S.)map submitted by The Honorable
Charles McConnell.............................................. 199
Total employment losses caused by EPA regulations over four-year
period, 2013-2016 map submitted by The Honorable Charles
McConnell...................................................... 200
EPA POWER PLANT REGULATIONS: IS THE TECHNOLOGY READY?
----------
TUESDAY, OCTOBER 29, 2013
House of Representatives,
Joint Hearing with the Subcommittee on
Environment and the Subcommittee on Energy
Committee on Science, Space, and Technology,
Washington, D.C.
The Subcommittees met, pursuant to call, at 10:07 a.m., in
Room 2318 of the Rayburn House Office Building, Hon. Chris
Stewart [Chairman of the Subcommittee on Environment]
presiding.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Stewart. The joint hearing of the Subcommittee on
Environment and the Subcommittee on Energy will come to order.
Good morning, everyone. Welcome to today's joint hearing
titled ``EPA's Power Plant Regulations: Is the Technology
Ready?'' In front of each member are packets containing the
written testimony, biographies and Truth in Testimony
disclosures for today's witnesses.
Before we get started, since this is a joint hearing
involving two Subcommittees, I want to explain how we will
operate procedurally so that all Members understand how the
question-and-answer period will be handled. After first
recognizing the Chair and the Ranking Members of the
Environment and Energy Subcommittees, we will recognize those
Members present at the gavel in order of seniority of the full
Committee, and those coming in after the gavel will be
recognized in order of their arrival. And just as a side note,
we had a Republican conference this morning, and that is going
a little bit long. We expect other Members to be joining us
shortly. And in the event that Ms. Lummis and others are not
here for their opening comments, we will allow them to have
that time allocated to them for their comments upon their
arrival. I now recognize myself for five minutes for an opening
statement.
I would like to thank the witnesses for being here today. I
have had the chance to introduce myself and to meet you, and we
appreciate your time and your sacrificing in attending with us,
and we have an excellent panel before us, but I am disappointed
EPA didn't accept our invitation to join us, and perhaps Ms.
McCabe will be able to join us in the future hearing on this
topic.
The significance of EPA's proposed New Source Performance
Standards for new power plants simply can't be understated. As
the first GHG standards for the statutory sources under the
Clean Air Act, the rule does more than affect power plants. It
sets the benchmark for standards affecting all industries,
standards that will touch every aspect of our economy. Most
troubling, however, is the proposal appears to be based on a
hypothetical plant. This is a very dangerous precedent.
Under the Clean Air Act, setting the standards is basically
a three-step process: first, establish the universe of
adequately demonstrated technology; second, determine an
achievable level based upon on that technology; and third, we
consider the cost. In its proposal, EPA conveniently skips over
step one. It then heavily focuses its analysis on modeling
scenarios that project the answers to the steps two and three.
These model-only-based arguments are outlandish to experts and
engineers and to the general public. We don't need to look
further than the botched-out rollout of healthcare.gov to
appreciate the consequences of disregarding testing of a full-
scale product. But EPA thinks it can get away with it due,
primarily, I think to the court's deference.
But the focus of this hearing, and the first question the
EPA must answer, is not what standards do we set or even is
this cost-prohibitive? Instead, our hearing today focuses only
on step one, and that is, is the technology ready? This
question exposes the soft underbelly of the rule. When the
facts and experts make clear the technology is not ready, there
is no need to model emissions levels or ask economists to make
projections.
To be clear, EPA relies on DOE modeling to conduct their
analysis, and this is how they circumvent the step one ``is it
ready'' question. They simply assume that it is ready and then
they plow ahead. The model is only as good as the assumptions
that go into it. Even a critical design review cannot account
for irregular behavior in a full-scale product. Take, for
example, the first Tacoma Narrows Bridge. Everything appeared
to be operational until a 40-mile-an-hour wind toppled what was
the third longest suspension bridge in the world.
Here, because the technology isn't ready, all of EPA's
subsequent claims are purely hypothetical. Its claims are mere
conjecture that ignores the fact that, in DOE's words, the
technology is unproven.
After the Agency has finished looking into its crystal
ball, analyzing an imaginary world, it tries to justify its
claim of adequate demonstration with weak post hoc citations to
cherry-picked literature, experiences with vastly scaled-down
technology components and power plants that are under
construction.
In order to comply with EPA's rule, carbon capture and
sequestration is required. CCS, as it is commonly known, is not
one piece of equipment; rather, is it a complicated system of
many separate technologies. Each piece of this chain, which
includes capture, compression, transportation and
sequestration, must work in a seamlessly integrated fashion on
a full-scale power plant. No CCS project in the world meets
these criteria.
In its proposed rule, EPA points to several examples of
fledgling CCS projects as proof that the technology is
adequately demonstrated, but let us take a look at some of
those examples. If you could look here to the screen, here are
a few examples of the Texas Summit Clean Energy project, which
in EPA's words is ``under construction.'' My favorite picture,
which is coming up, is at the project's web page, ``small
common grave by train tracks in Penwell.'' Actually, this is
the only CCS currently occurring on the site.
Emissions modeling and economic projections based on a
hypothetical plant are irrelevant. EPA's rule won't be
implemented in a fairy tale world. This rule will affect real
power plants and real people. This hearing is about what
unicorns, Bigfoot, and the adequately demonstrated CCS for
power plants all have in common: they are mere figments of the
imagination.
Talk of emissions levels and cost based on a hypothetical
modeling scenario is just a bunch of noise, a distraction from
the fact that the technology isn't ready. EPA attempts to
lawyer its way around this fact but ultimately, EPA cannot
paper over the truth. To quote John Adams: ``Facts are stubborn
things.''
I look forward to our experts' discussion today on this
step one question: is the technology ready?
[The prepared statement of Mr. Stewart follows:]
Prepared Statement of Subcommittee on Environment Chairman Chris
Stewart
I would like to thank the witnesses for being here today. While we
have an excellent panel before us, I am disappointed EPA didn't accept
our invitation. Perhaps Ms. McCabe will be able to join us for a future
hearing on this topic.
The significance of EPA's proposed New Source Performance Standards
(NSPS) for new power plants cannot be understated. As the first GHG
standards for stationary sources under the Clean Air Act, the rule does
more than affect power plants. It sets the benchmark for standards
affecting all industries--standards that will touch every aspect of our
economy.
Most troubling, however, is the proposal appears to be based on a
hypothetical plant. This is a dangerous precedent. Under the Clean Air
Act, setting the standards is basically a three step process: First,
establish the universe of ``adequately demonstrated'' technology.
Second, determine an achievable level based on that technology. Third,
consider the costs.In its proposal, EPA conveniently skips over step 1.
It then heavily focuses its analysis on modeling scenarios that project
the answers to the steps 2 and 3.
These model-only based arguments are outlandish to the experts,
engineers and the public. We don't need to look further than the
botched roll-out of healthcare.gov to appreciate the consequences of
disregarding testing of a full scale product. But EPA thinks it can get
away with it due to the court's deference.
But the focus of this hearing--the first question that EPA must
answer--is not ``what standards do we set?'' or even ``is this cost
prohibitive?'' Instead, our hearing today focuses on step 1: ``is the
technology ready?''
This question exposes the soft under-belly of the rule. When the
facts and experts make clear the technology is not ready, there is no
need to model emissions levels or ask economists to make projections.
To be clear, EPA relies on DOE modeling to conduct their analysis--
that is how they circumvent the Step 1 ``is it ready'' question. They
simply assume that it is and plow ahead. A model is only as good as the
assumptions that go into it. Even a critical design review cannot
account for anomalous behavior in a full scale product. Take for
example the first Takoma Narrows Bridge. Everything appeared
operational until a 40 mile-an-hour wind toppled what was the third
longest suspension bridge in the world.
Here, because the technology isn't ready, all of EPA's subsequent
claims--are hypothetical. Its claims are mere conjecture that ignores
the fact that, in DOE's words, the technology is ``unproven.''
After the Agency is done looking into its crystal ball, analyzing
an imaginary world, it tries to justify its claim of ``adequate
demonstration'' with post hoc citations to cherry-picked literature,
experience with vastly scaled down technology ``components,'' and power
plants ``under construction.''
In order to comply with EPA's rule, carbon capture and
sequestration (CCS) is required. CCS, as it is commonly known, is not
one piece of equipment; rather, is it a complicated system of many
separate technologies. Each piece of this chain, which includes
capture, compression, transportation and sequestration, must work in a
seamlessly integrated fashion on a full scale power plant. No CCS
project in the world meets these criteria.
In its proposed rule, EPA points to several examples of fledgling
CCS projects as proof that the technology is adequately demonstrated.
Let's take a look at one of those examples.
Here are a few pictures of the Texas Summit Clean Energy project,
which in EPA's words is ``under construction.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
My favorite picture is at the bottom of the Project's web page--
``Small common grave by train tracks in Penwell.''
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Actually, that is the only CCS currently occurring at the site.
Emissions modeling and economic projections based on a hypothetical
plant are irrelevant. EPA's rule won't be implemented in a fairy tale
world. This rule will affect real power plants and real people. This
hearing is about what Unicorns, Bigfoot, and ``adequately
demonstrated'' CCS for power plants all have in common--they are
figments of the imagination.
Talk of emissions levels and cost based on a hypothetical modeling
scenario is just a bunch of noise--a distraction from the fact that the
technology isn't ready.
EPA attempts to ``lawyer'' its way around the facts. But
ultimately, EPA cannot paper over the truth. To quote John Adams:
``Facts are stubborn things; and whatever may be our wishes., our
inclinations, or the dictates of our passion, they cannot alter the
state of facts and evidence.''
I look forward to our expert panel's discussion of this Step 1
question: Is the technology ready?
Chairman Stewart. With that, I now recognize the Ranking
Member, Ms. Bonamici, for her opening statement.
Ms. Bonamici. Thank you very much, Chairman Stewart and
Chair Lummis, for holding this hearing today. And to our panel,
welcome to the Committee on Science, Space, and Technology.
I join those who are very pleased by the proposal from the
Administration and the United States Environmental Protection
Agency to take the first steps to set carbon emission limits
for all future natural gas and coal power plants. We have known
for some time that dangerously high levels of carbon dioxide
pollution are altering our planet's climate system. According
to the latest statistics compiled by the EPA, American power
plants released more than 2.4 billion tons of carbon dioxide
into the environment in 2011. Fossil fuel power plants are
responsible for a majority of these emissions, and coal-fired
power plants emit more carbon dioxide than any other source.
Last month, the Intergovernmental Panel on Climate Change
released the global comprehensive scientific assessment
confirming that it is extremely likely that human influence has
been the dominant cause of the observed warming since the mid-
20th century. The report also confirmed that carbon dioxide
increases are primarily the result of fossil fuel emissions,
and have increased by 40 percent since the pre-industrial
period. Addressing the effects of carbon pollution globally
will require an international effort, but the United States can
and must be a leader and set an example for other nations by
reducing our own carbon pollution at home. We must do a better
job of preventing the harmful effects of carbon dioxide
emissions produced by natural gas and coal-fired power plants.
The coal industry's claim that the new carbon rule will
kill jobs and bring down our recovering economy are scare
tactics that have no basis in reality. The EPA proposal will
not apply to existing power plants. The new rule will only
apply to new coal-fired power plants that will be built in the
future.
As we look forward to the EPA issuing the new carbon
emissions standard, it is worth reminding ourselves of what we
get with these standards: better air quality, which means
better health for us, for our children, and for our
grandchildren. In the four decades since it was signed, the
Clean Air Act has saved thousands of lives and helped fuel job
growth.
Additionally, and importantly, the passage of the Clean Air
Act led to innovative advancements in technology. Environmental
protection technology industries created innovations like
catalytic converters, and sulfur dioxide and nitrogen oxide
control technology. When the EPA took steps to require the
application of these technologies, the industry made claims
against those rules similar to the contentions that the coal
industry is using today to undermine the carbon emission
standard for new fossil fuel power plants: that our economy
would be weakened and the industry would be devastated. And as
we know, that did not come to fruition. Those industries
adjusted and incorporated the technologies into their
operations and went on to be more profitable than they had
been, and we got cleaner air and healthier children.
The future of our planet and our environment depends on us
making smart investments in innovative environmental protection
technologies and reducing the amount of greenhouse gases we
emit into our environment. The new EPA rule under the Clean Air
Act will incentivize the development of these technologies that
will in turn result in a safer, more secure and less carbon-
dependent energy future.
And before I close, Mr. Chair, I want to clarify. It is my
understanding that according to the EPA, they did offer to
appear at a hearing in November. They were unable to appear
today because once the government reopened after the shutdown
which, as you know, lasted more than a couple weeks, they did
not have enough time to prepare for today with the backlog from
the shutdown. So I don't think they intended not to show; they
did not get an invitation until September 27th, immediately
before the shutdown.
So thank you, Mr. Chairman. I look forward to the testimony
and answers to our questions, and I yield back.
[The prepared statement of Ms. Bonamici follows:]
Prepared Statement of Subcommittee on Environment Ranking Member
Suzanne Bonamici
Thank you Chair Stewart and Chair Lummis, for holding this hearing
today. And, to our panel of witnesses, welcome to the Committee on
Science, Space, and Technology.
I join those who are very pleased by the proposal from the
Administration and the United States Environmental Protection Agency to
take the first steps to set carbon emission limits for all future
natural gas and coal power plants. We have known for some time that
dangerously high levels of carbon dioxide pollution are altering our
planet's climate system. According to the latest statistics compiled by
the EPA, American power plants released more than 2.4 billion tons of
carbon dioxide into the environment in 2011. Fossil fuel power plants
are responsible for a majority of these emissions, and coal-fired power
plants emit more carbon dioxide than any other source.
Last month, the Intergovernmental Panel on Climate Change released
the global comprehensive scientific assessment confirming that it is
``extremely likely that human influence has been the dominant cause of
the observed warming since the mid-20th century.'' The report also
confirmed that carbon dioxide increases are primarily the result of
fossil fuel emissions, and have increased by 40 percent since the pre-
industrial period. Addressing the effects of carbon pollution globally
will require an international effort, but the United States can and
must be a leader and set an example for other nations by reducing our
own carbon pollution at home.
We must do a better job of preventing the harmful effects of carbon
dioxide emissions produced by natural gas and coal-fired power plants.
The coal industry's claim that the new carbon rule will kill jobs and
bring down our recovering economy are scare tactics that have no basis
in reality. The EPA proposal will not apply to existing power plants.
The new rule will only apply to new coal-fired power plants that will
be built in the future.
As we look forward to the EPA issuing the new carbon emissions
standard, it is worth reminding ourselves of what we get out of these
standards: better air quality, which means better health for us, for
our children, and for our grandchildren. In the four decades since it
was signed, the Clean Air Act has saved thousands of lives and helped
to fuel job growth.
Additionally the passage of the Clean Air Act led to important
advancements in technology. Environmental protection technology
industries created innovations like catalytic converters, and sulfur
dioxide and nitrogen oxide control technology. When the EPA took steps
to require the application of these technologies, the industry made
claims against those rules similar to the contentions that the coal
industry is using today to undermine the carbon emission standard for
new fossil fuel power plants: that our economy would be weakened and
the industry would be devastated. As we know, that never came to
fruition. Those industries adjusted and incorporated the technologies
into their operations and went on to become more profitable than they
had ever been. And, we got cleaner air and healthier children.
The future of our planet and our environment depends on us making
smart investments in innovative environmental protection technologies
and reducing the amount of greenhouse gases we emit into our
environment. The new EPA rule under the Clean Air Act will incentivize
the development of these new technologies that will in turn result in a
safer, more secure, and less carbon dependent energy future.
Chairman Stewart. Thank you, Ms. Bonamici, and regardless
of the reasons why, we do look forward to subsequent
conversations with the EPA, and we anticipate that they will be
accommodating to us at that point.
The chair now recognizes the chairwoman of the Subcommittee
on Energy, Ms. Lummis, for her opening statement.
Chairwoman Lummis. Thank you, Mr. Chairman and Ranking
Member. Good morning, and thank you, witnesses, for joining us
at today's hearing on carbon capture and storage technology. I
do wish the EPA was here today, at least to listen to our
concerns, and I consider an invitation extended on September
27th for a hearing that is occurring about a month later to be
pretty good time to prepare, especially since it is their own
rules that we are asking them to defend.
The EPA has proposed New Source Performance Standards for
any future coal-fired power plant. These standards can be
achieved only through the application of carbon capture and
storage, a technology that is not currently in operation at a
commercial-scale power plant anywhere in the world.
Instead of basing these requirements on technologies that
are actually proven achievable on a commercial scale, EPA is
redefining and stretching the requirement that technology be
adequately demonstrated. This leaves many unanswered questions:
Will the carbon capture technology function as intended when
installed in full-scale plants? Is the pipeline infrastructure
available for transportation on a large scale? And what is the
liability for storage of carbon dioxide over the long term? EPA
ignores many of these questions as the rule only impacts future
coal plants.
The Obama Administration has spent much of the past few
years casting coal as a villain. This regulation effectively
bans the building of new coal plants, and fulfills President
Obama's campaign promise to bankrupt coal companies.
But this hearing is not only about the proposed regulation.
It is also about the legal precedent of mandating unproven
technologies. The distinction the agency makes between coal and
natural gas plants is dubious at best. By claiming that carbon
capture technology is adequately demonstrated for coal, there
is scant justification, legal or technical, for not requiring
it for natural gas units. If EPA is allowed to twist the
definition of ``adequately demonstrated'' to include yet-to-be-
proven technologies for power plants, there is also little
time--excuse me--there is also little to stop EPA from doing
the same for other manufacturers like refiners, cement or steel
plants. Not only would this throw our economy into a tailspin,
it would force manufacturers to flee to countries with less
restrictive environmental requirements, costing jobs and
increasing global emissions.
Coal is our country's most abundant and affordable energy
source. Thanks to the deployment of proven technologies, its
production is much safer and environmentally sound, and the
Clean Air Act has worked. It has produced cleaner air every
year since it was passed. Coal is not only our country's most
abundant and affordable energy source, one that the President
is making clear that his goal is to apply standards to existing
plants as well, thereby making it difficult for existing plants
to stay in business. This policy of picking winners and losers,
of saying we are going to have wind and solar energy but not
fossil fuel energy or nuclear energy, even though those are the
only ones sufficient to create baseload, is reckless, and it is
dangerous for our country if we want to advance economically
and create jobs and return to a sound economy.
I continue to support an all-of-the-above energy policy,
not one based on politics, and all of the above means all of
the above including fossil fuel and including wind and solar.
From an economic outlook, none of this should be taken
lightly. Affordable, reliable electricity is the backbone of a
healthy economy. Rising electricity prices affect everything,
the cost of basic commodities, like food to our competitive
position in the world. And because increasing energy prices act
are like a regressive tax, they hit the poor and those on fixed
incomes the hardest. Just ask any single mother who pulls up to
a gas station when the price of gasoline hovers near 4 bucks.
America cannot afford to allow EPA edicts to control our
energy policy. These new regulations will make life harder for
working families, for single moms struggling to get by, and for
anyone who lives paycheck to paycheck. This is something we
should be guarding against, not encouraging.
I look forward to the hearing. I look forward to this panel
of witnesses. I want to hear you discuss the development of
this technology, its potential as well as its limitations. I
also want to understand the impact this rule could have on
future advances in carbon capturing and also conversion of coal
to liquids and other opportunities that create a cleaner future
for our country while enjoying and utilizing our ingenuity and
our abundant coal resources. If you really want to see whether
somebody is affected by coal, I strongly encourage you to go
out around 12:30 on the west front of the Capitol today. There
is an American energy jobs rally. There are coal miners and the
companies they serve here on the Capitol steps, and if you
think that it is not going to matter or whether you can pass
regulations that the technology is unproven but will suddenly
appear and the prices that won't go up and that coal plants
will continue to be built and those jobs will still exist, try
listening to the people on the Capitol steps here today who
will prove you wrong with their real-life stories.
Thank you very much, Mr. Chairman. I yield back the balance
of my time.
[The prepared statement of Mrs. Lummis follows:]
Prepared Statement of Subcommittee on Energy Chairman Cynthia Lummis
Good morning and thank you for joining us for today's hearing on
Carbon Capture and Storage Technology.
The EPA has proposed New Source Performance Standards (NSPS) for
any future coal fired power plants. These standards can be achieved
only through the application of Carbon Capture and Storage (CCS)--a
technology that is not currently in operation at a commercial scale
power plant anywhere in the world.
Instead of basing these requirements on technologies that are
actually proven achievable on a commercial scale, EPA is redefining and
stretching the requirement that technology be ``adequately
demonstrated.'' This leaves many unanswered questions: will the
installment of carbon capture technology be functional? Are there plans
for transportation on a large scale basis? What is the liability for
storage of carbon dioxide over the long-term?
EPA would like Congress oversight of these standards to include
only its impact on future coal plants. The Obama Administration has
spent much of the past few years casting coal as a villain. This
regulation effectively bans the building of new coal plants, and
fulfills President Obama's campaign promise to ``bankrupt'' coal
companies.
But this hearing is not only about the proposed regulation. It is
also about the legal precedent of mandating unproven technologies. The
distinction the agency makes between coal and natural gas plants is
dubious at best. By claiming that carbon capture technology is
adequately demonstrated for coal, there is scant justification--legal
or technical--for not requiring it for natural gas units.
If EPA is allowed to twist the definition of ``adequately
demonstrated'' to include yet-to-be-proven technologies for power
plants, there is also little to stop EPA from doing the same for other
manufacturers like refiners, cement or steel plants. Not only would
this throw our economy into tail-spin, it would force manufacturers to
flee to countries with less strict environmental requirements, costing
jobs and increasing global emissions.
Coal is our country's most abundant and affordable energy sources.
Thanks to the deployment of proven technologies, its production is safe
and environmentally sound. The President has already made it clear that
his goal is to apply these standards to existing plants as well. This
policy of picking winners and losers through environmental regulations
is reckless and dangerous. I continue to support an all-of-the-above
energy policy, not one based purely on politics.
None of this should be taken lightly. Affordable, reliable
electricity is the backbone of a healthy economy. Rising electricity
prices affect everything--from the cost of basic commodities, like
food--to our competitive position in the world. And because increasing
energy prices act as a regressive tax, they hit the poor and those on
fixed incomes the hardest.
America cannot afford to allow EPA edicts to control our energy
policy. These new regulations will make life harder for working
families, for single moms struggling to get by, and for anyone who
lives paycheck to paycheck. This is something we should be guarding
against, not encouraging.
I look forward to hearing the panel of witnesses discuss the
development of this technology, its potential and limitations and the
impact this rule could have on future advances. Thank you for joining
us.
Chairman Stewart. Thank you, Ms. Lummis.
The Chairman now recognizes the Ranking Member of the
Subcommittee on Energy, Mr. Swalwell, for his opening
statement.
Mr. Swalwell. Thank you, Chairman Stewart and Chairman
Lummis, for holding this hearing, and I look forward to working
with our witnesses today.
I do have to say, I think it is unfair, Mr. Chairman, to
accuse the EPA of not accepting the invitation to be here
today. That invitation was extended right before the shutdown
and they have offered to appear in November. I look forward to
having them here, but you can't turn off the power and then
complain that no one answered the phone, and that is what I
think is happening right here, and I think that is an unfair
way to start this hearing.
Global climate change, though, is one of the greatest
challenges that we face, and last month, the Intergovernmental
Panel on Climate Change released a report which states with 95
percent certainty that human activities are responsible for
climate change. This report was based on a rigorous review of
thousands of scientific papers published by over 800 of the
world's top scientists. The report also makes it clear that if
we do not take steps to halt this damage and make this change,
the repercussions for humans and the environment will be
catastrophic. We need to move forward and take the necessary
steps to combat the warming of our planet before these impacts
become inevitable.
We know that humans are impacting the climate in a number
of ways, through emissions from the vehicles we drive,
deforestation and changes in agricultural practices among other
things. But fossil fuel-based power plants are the biggest
producers of greenhouse gasses, accounting for roughly a third
of our total emissions last year.
I have repeatedly said, just as Chairman Lummis has, that I
favor an all-of-the-above approach to energy production. As I
often say, if we can make it safe, let us make it happen. But I
have to make it clear that we must take steps to make sure that
we are reducing greenhouse gas emissions and lessening their
impact on human health, the environment and global change.
That is exactly what the proposed standards for new coal
and natural burning gases aim to do, which is why I support
their implementation. And like Ms. Bonamici, I want to
reinforce that they will have no effect on existing plants, so
we aren't going to see a wave of shuttered plants and massive
layoffs as a result of their implementation, and if we can
display the first slide? Slide number one that is going to be
displayed shows all of the existing coal plants in the United
States, approximately 600 of them. Slide two is a map of the
United States, and it has on it all of the plants that are
affected by these new standards. You don't need a magnifying
glass to see that the number is zero. Zero plants are affected
by these standards. Zero jobs today will be lost by these new
standards. And I think it is important not to confuse the issue
here.
There are in-depth discussions underway about establishing
standards for existing plants, which the EPA currently plans to
propose next June, and there are ongoing, extensive engagement
with all of the stakeholders to make sure that those standards
will be flexible and won't have negative effects on state
economies and job creation. I think we also cannot discount the
value of certainty. The fact that there was uncertainty in what
the regulations were going to be was also affecting job
creation in existing plants and plans for new plants, and now
that we have standards, that lends certainty to the
marketplace.
Finally, there is nobody I know in Congress who
intentionally wants to destroy or kill a job. I think what we
want to do here is to make sure that we have healthy air for
our children to breathe, a healthy future, and mitigate the
effects on the economy to the best degree possible, but if you
want to count job-killing by the numbers, the cost of the
government shutdown for 16 days: 120,000 jobs, $24 billion to
our economy. There is no policy that we can create today or
that the EPA has created today that will kill as many jobs as
that or wreak as much havoc on our economy as that government
shutdown, and I think if we want to compare the two, that is a
stark, stark contrast.
Finally, my colleagues on the other side of the aisle often
say that our children and grandchildren will be left holding
the bag if we do not reduce our deficits and national debt, and
something I greatly agree with them about, but I think
similarly, future generations will be the ones who will suffer
if we do not take important and meaningful steps to confront
climate change, but in this case, as the global scientific
community has made clear again and again, the consequences of
our inaction will be much, much more severe.
And with that, Mr. Chairman, I yield back the balance of my
time.
[The prepared statement of Mr. Swalwell follows:]
Prepared Statement of Subcommittee on Energy Ranking Member Eric
Swalwell
Thank you Chairman Stewart and Chairman Lummis for holding this
hearing, and I also want to thank the witnesses for their testimony and
for being here today.
Global climate change is one of the greatest challenges that we
face. Last month, the Intergovernmental Panel on Climate Change
released a report which states with 95 percent certainty that human
activities are responsible for climate change. This report was based on
a rigorous review of thousands of scientific papers published by over
800 of the world's top scientists. The report also makes it clear that
if we don't take steps to halt this change, the repercussions for
humans and the environment will be catastrophic. We now need move
forward and take the necessary steps to combat the warming of our
planet before these impacts become inevitable.
We know that humans are impacting the climate in a number of ways--
through emissions from the vehicles we drive, deforestation, and
changes in agricultural practices among other things. But fossil fuel-
based power plants are the biggest producers of greenhouse gasses,
accounting for roughly a third of our total emissions last year.
I have repeatedly said that I am for an ``all of the above''
approach to energy production as we transition to clean energy
technologies. But I have also made it clear that, as part of this ``all
of the above'' approach, we must take steps to ensure that we are
reducing greenhouse gas emissions and lessening their impact on human
health, the environment, and the global climate. That is exactly what
the proposed standards for new coal and natural gas burning plants aim
to do, which is why I support their implementation. And, like Ms.
Bonamici, I want to reinforce that these are only proposed standards
for any new plants that may be built and will have no effect on
existing plants, so we aren't going to see a wave of shuttered plants
and massive layoffs as a result of their implementation. There are in-
depth discussions underway about establishing standards for existing
plants, which the EPA currently plans to propose next June, and there
is ongoing, extensive engagement with all stakeholders to make sure
that those standards will be flexible and won't have negative effects
on state economies and job creation.
It has been my hope that Congress would act on this issue
immediately. Unfortunately, too many of my colleagues choose to ignore
the scientific consensus that human beings are playing a significant
role in the warming of our planet, so I'm not expecting that much will
be done legislatively to sufficiently address this issue anytime soon.
The President made it clear in his State of the Union Address back in
January that, in the absence of Congressional action, his
Administration was going to take the lead in efforts to reduce
greenhouse gas emissions. These proposed standards reflect that
commitment, and I fully support the President in this effort.
My colleagues on the other side of the aisle often say that our
children and grandchildren are going to be left holding the bag if we
don't reduce our deficits and the national debt, and I agree that it
would be irresponsible of us not to take serious steps to put our
fiscal house in order. Similarly, future generations will be the ones
who will suffer if we don't take immediate and meaningful steps to
confront climate change, but in this case--as the global scientific
community has made clear again and again--the consequences of our
inaction will be far more severe.
Chairman Stewart. Thank you, Mr. Swalwell.
Very quickly, we understand that there are differences of
opinion and we can discuss or argue among ourselves whether the
EPA had adequate time, some of us feel that they did, others
may disagree with that. What is really clear is that in a
pattern that has been established for more than just this
hearing but for, frankly, for as long as I've sat in this
chair, we have had to struggle to get them to come and to
participate in many of our hearings, and this is just another
example of that. But as I said earlier, we look forward to
working with them and getting their representatives to come and
meet with us.
With that, we will now turn to the Chairman of the full
Committee, Chairman Smith, for his opening statement.
Chairman Smith. Thank you, Mr. Chairman.
Today's hearing will allow us to hear from top experts in
energy and environmental fields and examine important technical
issues associated with EPA's new power plant regulations.
In the regulatory process, it is often difficult to
separate technical issues from legal issues, and the technology
question we focus on here today is also ultimately a legal
question.
If you take a look at the EPA's rule on air quality
standards, the proposal looks more like a legal brief than a
rule about protecting the air. It appears the EPA is up to an
old legal trick: if you can't win the argument on the merits,
start arguing about the definition of words.
In this proposal, the EPA redefines the law to accommodate
its ever-expanding regulatory agenda. By redefining what the
term ``adequately demonstrated'' means in the Clean Air Act,
the EPA is making another major power grab, one that reaches
well beyond coal. That is because the New Source Performance
Standards for power plants is the first greenhouse gas standard
under the Clean Air Act. Consequently, it sets the precedent
for all other sources, and underpins everything from the price
we pay at the pump to the cost of electricity and food.
If the EPA continues to play fast and loose with the law,
we can expect to see more costly, heavy-handed rules that risk
jobs and economic growth. Working families will bear these
costs.
Even more troubling is the way this proposal appears to
intentionally block the courts from reviewing the rule. By
claiming that no one will build coal-fired power plants anyway,
the EPA wants to prevent the courts from reviewing the rule on
its merits.
Our founders recognized that elections alone may not
provide adequate protection for the liberties they fought so
hard to establish. They made sure that the Constitution
provides a means for the American people to obtain a fair
hearing before impartial judges. One of the most underrated
rights Americans enjoy today may be the right to judicial
review. This proposal is an attempt to prevent judicial review.
Americans deserve to understand exactly what this proposal
would do and retain the right to challenge it.
Thank you, Mr. Chairman. Before I yield back, let me
apologize at the outset. I have another committee that is in
the middle of marking up legislation that I will go to and
another committee is also having a hearing, so I will be
shuttling back and forth but appreciate your holding this
hearing. It is a very, very important one. Yield back.
[The prepared statement of Mr. Smith follows:]
Prepared Statement of Full Committee Chairman Lamar Smith
Today's hearing will allow us to hear from top experts in energy
and environment fields and examine important technical issues
associated with EPA's new power plant regulations.
In the regulatory process, it's often difficult to separate
technical issues from legal issues. And the technology question we
focus on here today is also ultimately a legal question.
If you take a look at the EPA's rule on air quality standards, the
proposal looks more like a legal brief than a rule about protecting the
air.
It appears the EPA is up to an old legal trick: If you can't win
the argument on the merits, start arguing about the definition of
words.
In this proposal, the EPA re-defines the law to accommodate its
ever-expanding regulatory agenda. By re-defining what the term,
``adequately demonstrated,'' means in the Clean Air Act, the EPA is
making another major power grab--one that reaches well beyond coal.
That's because the New Source Performance Standards for power
plants is the first greenhouse gas standard under the Clean Air Act.
Consequently, it sets the precedent for all other sources, and
underpins everything from the price we pay at the pump to the cost of
electricity and food.
If the EPA continues to play fast-and-loose with the law, we can
expect to see more costly, heavy-handed rules that risk jobs and
economic growth. Working families will bear these costs.
Even more troubling is the way this proposal appears to
intentionally block the courts from reviewing the rule. By claiming
that no one will build coal-fired power plants anyway, the EPA wants to
prevent the courts from reviewing the rule on its merits.
Our founders recognized that elections alone may not provide
adequate protection for the liberties they fought so hard to establish.
They made sure that the Constitution provides a means for the American
people to obtain a fair hearing before impartial judges.
This may be one of the most under-rated rights Americans enjoy
today: the Right to Judicial Review.
This proposal is an attempt to prevent Judicial Review. Americans
deserve to understand exactly what this proposal would do and retain
the right to challenge it.
Chairman Stewart. Thank you, Mr. Chairman, and you are
welcome to participate as much as you can. Thank you.
If there are Members who wish to submit additional opening
statements, your statements will be added to the record at this
point.
[The prepared statement of Ms. Johnson follows:]
Prepared Statement of Full Committee Ranking Member Eddie Bernice
Johnson
I want to thank Chairman Stewart and Chairwoman Lummis for holding
this hearing to discuss the EPA's proposal to set national carbon
emission limits for new natural gas and coal power plants. I also want
to thank the witnesses for being here today to provide their input on
this important topic.
The benefits from the Clean Air Act are countless; they come in the
form of lives saved, reductions in illnesses, technological
advancements in environmental protection, and economic growth. I join
my colleagues Ms. Bonamici and Mr. Swalwell in expressing my approval
of the Obama Administration's and the EPA's first steps toward
protecting future generations from the harmful effects of carbon
pollution that threatens our health and is changing our climate system.
And, they are making those steps by advancing clean energy
technologies. We would all prefer to address these important issues
with common sense legislation, but until we can agree on both sides of
the aisle that climate change is a real and pressing problem, bi-
partisan collaboration on solutions does not appear to be possible.
Throughout history industry has often resisted addressing
environmental problems that emerge as a result of a greater scientific
understanding of our impact on the environment and our health. And, in
many of these cases, they simply will not do so without regulatory
intervention and proper government oversight. I challenge industry
leaders to be a helpful partner in reducing our carbon emissions going
forward. If they will, we can have both a cleaner environment and a
strong economy.
Chairman Stewart. As our witnesses should know, spoken
testimony is limited to five minutes, after which the Members
of the Committee have five minutes each to ask you questions,
and your written testimony will also be included in the record
of the hearing.
And I would like now to introduce our witnesses today, and
I will introduce you individually. We will turn the time over
to you for five minutes, then I will introduce the next
witness.
Our first witness is the Hon. Charles McConnell, Executive
Directive at the Energy and Environment Initiative, Rice
University. Previously, Mr. McConnell served as the Assistant
Secretary for Fossil Fuel at the U.S. Department of Energy. At
DOE, he was responsible for the strategic policy, leadership,
budgets, project management, research and development of the
Department's coal, oil and gas and advanced technology
programs, and the National Energy Laboratory's Technology
Laboratory. Prior to joining DOE, Mr. McConnell served as Vice
President of the Carbon Management at Battelle Energy
Technology. And Mr. McConnell, we turn the time over to you now
for five minutes for your opening statement.
TESTIMONY OF THE HON. CHARLES MCCONNELL,
EXECUTIVE DIRECTOR,
ENERGY & ENVIRONMENT INITIATIVE, RICE
Hon. McConnell. Thank you. It is an honor to participate at
this hearing and have the opportunity to have a fact-based
discussion about the science of CCS technology. I might also
add, it is refreshing to prepare my remarks today without any
OMB oversight.
Let me start by saying that we do have a problem. CO2
capture, utilization and storage technology is a requirement to
meet greenhouse gas standards. It is a requirement to meet New
Source Performance Standards, and it has not been commercially
demonstrated at scale and cannot be deemed demonstrated
technology.
CCS is an environmental solution. It is an energy security
issue, and it is also about economic competitiveness. All three
of these things contribute to our success as a Nation. CCS has
the potential to make us stronger and more successful as long
as we don't forfeit that potential by rushing deployment of a
technology that is not yet ready.
The world is and will remain dependent for many decades to
come on fossil fuels to provide low-cost, available and
reliable energy. The International Energy Agency has already
projected by 2050 the world's demand for energy will double.
One point seven billion people in the world today live in
energy poverty. And yet by 2050, because we will need every
single megawatt, megatherm and energy source available to us,
we will still have 85 percent of our energy in the world
provided by fossil fuels. So having fossil technology isn't an
option, it is a requirement, as is an all-of-the-above
strategy.
Commercial CCS technology is not available to meet the
EPA's proposed rule. The cost of capture technology is much too
high to be commercially viable, much the same as the economic
threshold similar to subsidized carbon-free alternatives such
as solar, wind, et cetera. We are investing in all of the above
across the board because it is critical to our future.
In June, the Administration released its Climate Action
Plan, a comprehensive program of domestic GHG emission
reductions. The President's plan can only be achieved through
the broad deployment of low-cost, commercially viable
technology for capturing and permanently and safely storing
CO2 from all fossil sources.
But it is about energy security as well. CCS is necessary
to assure a sustainable, diversified domestic energy portfolio
for our energy security. It enables a true all-of-the-above
energy portfolio. It is also a business strategy. CCS, or CCUS,
where the U means utilization of CO2 for purposes
such as enhanced oil recovery, create a marketplace for
implementation of these applications. It leads to broad
deployment and it also gives us a commercial and business
background to bring that technology to the marketplace.
CO2 EOR has been practiced in this country for over
50 years very successfully, and it includes the safe, long-term
permanent storage of CO2. But as I said, the
technology isn't ready yet. The technology exists for
separation and capture of CO2 at the plant but it
increases the cost of generated electricity by as much as 50 to
80 percent, and that depends on the power plant or the
industrial application in which it is being used. CO2
pipeline and transmission systems are mature but they face
incredible siting difficulties for expansion of this
marketplace.
DOE's regional carbon sequestration partnerships must
continue to develop the needed database to help analyze the
success of this deployment, and of course, the injection of
CO2 faces regulatory barriers as well: unresolved
property rights, long-term liability issues, all of the issues
that in many cases the EPA is very involved in and needs to be
supportive of to allow this technology to move forward.
But the technology is being demonstrated. It is
successfully deployed in some early first-of-a-kind projects
but it is clearly not ready. It is really that simple. Focusing
other questions are hypothetical but not about the demonstrated
results of these plants or projects or the technology
associated with it. The technology can be made ready over time,
and will have to have the support of the EPA as well as the
marketplace and industry.
To summarize, in my opinion, it is disingenuous to state
that the technology is ready, and at the same time, starve the
R&D programs for our Nation's energy security, global
competitiveness or our global leadership in terms of economic
performance. Thank you.
[The prepared statement of Hon. McConnell follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Stewart. Thank you, Mr. Secretary.
Our second witness today is Dr. Richard Bajura, Director of
the National Research Center for Coal and Energy at West
Virginia University. And Doctor, did I pronounce your name
correctly?
Dr. Bajura. Yes, sir.
Chairman Stewart. Thank you. He has spent the past 21 years
facilitating research programs in energy at West Virginia
University, and during this time he developed and managed eight
major interdisciplinary and interinstitutional research
programs addressing a wide range of energy applications from
research extraction to alternative fuels. And Doctor, we turn
the time over to you now.
TESTIMONY OF DR. RICHARD BAJURA,
DIRECTOR, NATIONAL RESEARCH CENTER
FOR COAL AND ENERGY, WEST VIRGINIA
Dr. Bajura. Thank you, Mr. Chairman. Thank you for inviting
me.
I consider coal to be a valuable resource and I believe we
should maintain technology options to keep it as part of our
energy future. As proposed, I think the EPA regulations will
stifle coal's continued involvement.
I will summarize my comments in terms of lessons and
observations that we have gained over the years of using coal
technologies. Pulverized coal technologies are mature,
integrating gasification and combined cycle technologies. There
are only nine of them operating on coal in the world and only
four in the United States. We have also learned that
performance degrades with scale-up. What we learned in the
laboratory doesn't always hold true when we go into the full-
scale system. Many gremlins occur. Also, we have observed that
delays in implementing projects, financing, technology costs
and meeting schedules are important in determining the
deployability of a technology.
The next topic deals with first-of-a-kind and nth-of-a-kind
technologies. Over the years, we have developed what I will
call learning-curve theory. What we find is the most expensive
plant occurs on the first edition. By the time we get to the
nth edition, the technology is mature and costs are reduced.
Learning-curve technology for coal uses a factor that they call
.06, which means that by the time you get to mature technology,
you have reduced the cost by 25 percent. In the case of the
Kemper plant, a $4 billion program, 25 percent reduction is $1
billion. Also in the case of Kemper, we are talking about
$8,000 a kilowatt for the cost of the plant versus $1,000 a
kilowatt for a natural gas combined cycle plant.
Coal is different from gas. Coal comes in three typical
forms: bituminous, subbituminous and lignite. Natural gas, you
can buy it anywhere. It is the same thing. Also, when you look
at the deployment of technologies, what I learned on my
technology is different from what you learn on your
technologies. I don't share my results. As a result, while we
might say we have different examples of technologies, they are
almost first of a kind because they don't share the technology,
they have different systems they apply to different coal.
Technology integration is also important. We have to integrate
a plant that has a new component with a pipeline, with a
reservoir, and in many cases with the grid because we have to
integrate the up-and-down performance of coal plants that might
need changed from baseload to intermittent or peaking time of
the situation.
In terms of the demonstrations that we have talked about
that relate to this hearing, there are nine demonstrations that
are referenced. Three relate to chemicals production. Two are
IGCC plants. One is them is based on the Kemper plant, which
has not demonstrated, and the other one is a first of a kind as
well. Saline aquifers are the kind of aquifers that I think we
are looking at with future-gen deployments, and there is only
one example of that, and that future-gen plant is not going to
be onboard until 2017.
We have heard that capture technology is very expensive for
coal plants. Capture technology for the most part is based on
amines. We know that works. But these technologies were
developed for chemical plants where the products that you sell
can justify the extra cost they would need to use those
technologies. It is very expensive for a standalone coal plant.
Also, we have issues concerned with legal and societal
issues that also affect the cost of a plant and must be
addressed. Cost and feasibility are not necessarily
demonstrated. We can't find guarantees for the projects that we
would want to put in place, and I am concerned with the
legislation in the way it is proposed, it will stifle
development and planning for new plants, and without a driver,
there will be no technology developed. Our friends in China are
very interested in developing coal-based technologies, they
have strong government support and they are ahead of us in
chemicals production, in power generation, and in their next
five-year plan, they will be ahead of us in CCS deployment. We
require strong Federal support to maintain coal's presence in
the marketplace, and I believe Congress and the Federal
Government and the Executive Branch should be more supportive
of coal and maintaining it as part of our mix.
In summary, I don't think the technologies that we are
discussing are ready for deployment in the sense of being
fundable by financiers or getting guarantees. I believe that if
we are not keeping coal in our future mix, we will run out of
workforce. People like me are getting older. And I believe
Federal support will help us to achieve the kind of goals that
we want in introducing new technologies. Thank you.
[The prepared statement of Dr. Bajura follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Stewart. Thank you, Dr. Bajura.
Our third witness is Mr. Kurt Waltzer, Managing Director at
the Clean Air Task Force. In this role, he provides oversight
and support of organizational management as well as ongoing
development and implementation of organizational strategy. Mr.
Waltzer has led the development of incentive policies for
carbon capture that have been included in Federal legislative
proposals and helped lead the NGO support for several carbon
capture projects. Mr. Waltzer.
TESTIMONY OF MR. KURT WALTZER,
MANAGING DIRECTOR,
THE CLEAN AIR TASK FORCE
Mr. Waltzer. Chairman Stewart, Chairman Lummis and Ranking
Members Swalwell and Bonamici, thank you for the opportunity to
testify today. My name is Kurt Waltzer, and I am the Managing
Director of the Clean Air Task Force, an environmental
nonprofit dedicated to catalyzing the development and global
deployment of low-carbon energy technologies.
First, let me explain why we believe CCS is needed. The
world's power sector annual emissions are expected to double
from 12 to 24 gigatons by mid-century. By 2015, China will have
added 900 gigawatts of coal plants on top of our roughly 300
gigawatts of coal plants in the United States. India and other
developing countries are following suit. Without significant
CCS deployment, we simply will not be able to achieve the deep
reductions in CO2 emissions that are necessary to
reduce the risk of catastrophic climate change.
Returning to the question in front of the Committee, CCS is
technically feasible in the context of this rule because the
rule requires partial, not full CCS, and because the rule
allows a plant up to eight years to meet this standard. The 40
percent capture level is well within the experience of the
technology. Moreover, if a plant intends to capture CO2
on the day it opens and can't because of unforeseen issues
with, for example,, completion of a CO2 pipeline,
the air compliance flexibility provision allows the plant to
meet the standard over a longer time frame. The partial capture
and sequestration requirement and flexibility provisions along
with the ability to store CO2 in conjunction with
enhanced oil recovery, or EOR, helps ensure the rule can be met
at reasonable cost, even before any Federal subsidies are
considered.
CATF undertook an analysis of the initial NSPS rule first
proposed in April of 2012. As we can see by figure one on page
8 of my testimony, the cost of electricity at a new coal plant
that meets the partial CCS standard with EOR and takes
advantage of the regulatory flexibility provision is only 13
percent higher than that of a new coal plant without CCS. CCS
has been adequately demonstrated over its 40-year history in
the United States. Since the 1970s and 1980s, large industrial
plants have captured and stored large amounts of CO2
on a per-plant basis up to 7 million tons per year. This
experience is migrating to power plants. Nearly all new coal
plants plan to have some level of CCS installed when they open.
These include projects like the 582-megawatt Kemper plant in
Mississippi, the Texas Clean Energy project and the Sask
Power's coal retrofit project in Canada, known as Boundary Dam.
Each of the components of CCS have had a long history of
use in the United States and around the world. Over 850
megatons of CO2 have been stored underground in
Texas for EOR operations over the last 30 years. There are
currently 4,000 miles of CO2 pipeline connecting
CO2 with enhanced oil recovery projects. Pre-
combustion capture technology has been commercially available
since the 1950s and 1960s with over 200 plant applications
across the world, and post-combustion capture has been
successfully applied to natural gas and coal plants with
commercial guarantees offered from several vendors.
Does CATF also support incentives for CCS? Absolutely. Many
technologies such as SO2 scrubbers that have been
deployed based on emission limits have continued to receive
subsidies in order to make the technology more efficient and
less costly. The EPA has long recognized that such subsidies
are appropriately considered in evaluating the real cost of a
standard. CATF is a member of the National EOR Initiative, an
unusual coalition of advocacy groups, industry and labor
organizations that are coming together in support of self-
financing production tax credits for CO2 EOR sourced
by power plants and industrial sources.
I should note that in addition to EOR's value in reducing
cost, it also provides significant potential scale. The
National Energy Technology Laboratory estimates the technical
potential to sequester CO2 through EOR in the United
States is as high as 80 million barrels, or 4 million barrels a
day, and require 20 gigatons of CO2. That represents
about half of the total U.S. power sector emissions for the
next 30 years.
We believe that EPA's rules on sound legal and technical
footing is not the end of coal. Instead, it is the beginning of
CCS worldwide.
I appreciate the opportunity to testify this morning and
look forward to answering your questions.
[The prepared statement of Mr. Waltzer follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Stewart. Thank you, Mr. Waltzer.
Our final witness then is Mr. Roger Martella, Partner of
Sidley Austin Environmental Practice Group. He rejoined Sidley
Austin LLP after serving as General Counsel of the United
States Environmental Protection Agency, concluding ten years of
litigation and handling complex environmental and natural
resource matters at the Department of Justice and EPA. Mr.
Martella served as EPA's Chief Legal Advisor, supervising an
office of 350 attorneys and staff in Washington and 10 regional
offices. Mr. Martella, welcome.
TESTIMONY OF MR. ROGER MARTELLA, JR.,
PARTNER, ENVIRONMENTAL PRACTICE GROUP,
SIDLEY AUSTIN
Mr. Martella. Thank you, Chairman Stewart, Chairman Lummis,
Ranking Member Bonamici and Ranking Member Swalwell for the
opportunity. I am honored to be before you today with my
distinguished witnesses, speakers as well.
I am going to try to very briefly discuss the intersection
of how these technical issues connect with the legal framework
and try not to give you an entire legal dissertation on this
but just hit the high points, and I will be happy to answer any
questions you have.
Very briefly, the whole reason we are here arises out of a
2007 decision called Massachusetts versus the EPA by the
Supreme Court, and in that decision, the Supreme Court said
that EPA had to consider greenhouse gases alongside the other
air pollutants in the Clean Air Act. I was general counsel at
the time when the decision came down and was tasked with
working with the EPA lawyers, most of whom are still there, and
other talented lawyers in the Federal Government on coming up
with a full range of legal options on how to implement the
mandate in the Supreme Court's decision, and one of the things
we looked at very closely, which was in a 2008 document
released by EPA at the time, is the New Source Performance
Standard program. If you look at, you know, the limited tools
EPA has under the existing Clean Air Act to address greenhouse
gases for stationary sources, the New Source Performance
Standard program clearly stands out. It is the most flexible of
the provisions. It has a history of driving environmental
results. It considers cost-benefit considerations, and of
course as we have talked about today, I think as everyone is
familiar with, Congress directed EPA to focus on standards that
were adequately demonstrated.
So it is pretty obvious if you look at the 2008 document
and work that has been done since that the highlight, the focus
of attention on addressing greenhouse gases under the Clean Air
Act has been on the New Source Performance Standard program
when it comes to stationary sources, and so my critique is not
with that as a general proposition, my critique is how EPA
specifically proposed to go about this in September based on
some of the technical concerns you are hearing today, and I am
just going to again focus on the two words that matter the most
for today's discussion, the words ``adequately demonstrated.''
There is a maxim the law that when Congress uses specific
words, it has to mean something, that you have to actually pay
attention to the specific words that Congress provides in the
statute, and I recognize that that is never necessarily a
black-and-white thing, that everything is a continuum and even
something such as ``adequately demonstrated'' does not lock
anyone into any one interpretation but a continuum of
interpretations unless you otherwise say that we shall do
something or have to do something. So the question here is,
where on the continuum does EPA's approach fall, and it is my
position, it is my opinion that given the technical expertise
of the folks here and other people that I have spoken to, that
this does fall past the end points of what is considered
adequately demonstrated, the notion of requiring a technology
is adequately demonstrated that is not currently in operation
by EPA's own record where EPA has said there is not a single
facility in commercial operation today. About 18 months ago in
April 2012 in the predecessor proposal they said that this
technology was not likely to be adequately demonstrated for
another ten years, that even if we look back on the last 30
months of EPA's experience in granting permits for greenhouse
gas emissions across the country, that it has actually rebuffed
arguments by certain groups that CCS is currently adequately
demonstrated. It came as a surprise to me, and I think it is
past the continuum for them to say back in September that
currently carbon capture and sequestration is within the realm
of options they can consider in saying something is adequately
demonstrated.
Now, having said that, there has been some conversation
already today about what is the precedent of this and what is
the effect of this, does this really affect anyone, and I think
the concern as a whole is from the precedential perspective for
a few reasons. First of all, the result of this rule, if this
rule is finalized as it exists, and I think it is fair to say
that no coal-fired power plant could be built in the United
States unless they could really demonstrated carbon capture and
sequestration of the magnitude EPA requires, and the experts to
my side here, some of them seem to think that is not possible.
So the precedent of that is basically that this rule would have
the effect of preventing an entire source of energy from being
used in new facilities in the future, and so I think one of the
questions that comes up is, is that within the legal authority
of the Clean Air Act? Can the Environmental Protection Agency--
did the Congress intend for EPA to have that kind of authority
to say we are going to basically phase out this type of energy
going into the future. And while I recognize there is not an
apples-to-apples comparison in terms of how this rule could
impact existing sources or even sources in other sectors, I
think it also has to be understood that there is no doubt that
everyone is going to be looking to this rule as the baseline
for how EPA will approach existing sources and how they might
approach other sectors. I don't think they are going to start
with a clean drawing board but they are going to be looking to
other approaches here, even if it is not carbon capture and
sequestration. So I think there is little debate that this will
have precedent on how they are going to approach other issues,
others types of facilities.
So thank you for that, and I look forward to answering any
questions you might have.
[The prepared statement of Mr. Martella follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Stewart. Thank you, Mr. Martella.
To all of the witnesses, thank you for your testimony. I
would like to remind Members that Committee rules limit the
questioning to five minutes, and the chair at this point will
open up the round of questions, and the chair recognizes
himself for five minutes.
Mr. Martella and Mr. McConnell, I would like to come back
to some comments that both of you have made. Mr. Martella, you
said something I think a little more graciously than I would
have in the sense of the meaning of words. I think that this
all started a few years ago perhaps when we heard that famous
phrase, ``It depends on what the meaning of the word is is.''
Redefining words away from their original and their obvious
intent opens up just a Pandora's Box of craziness. Who knows
where it will end, and who knows what the outcome eventually is
going to be, which is the main point of this hearing. This
isn't about climate change. This hearing isn't about the
government shutdown and effects of that. It is not even about
the costs of implementing this rule. This is about--and by the
way, I have enormous concerns with the costs of implementing
this rule, but we are not there yet. This is about one thing
and one thing only: is the EPA being honest in their claim that
a certain procedure has been adequately demonstrated. And in
that, it is not adequately modeled, it is not adequately
hypothesized, it is not adequately wished for. Is it adequately
demonstrated? And demonstrated in the real world and
demonstrated in a way that could be replicated somewhere else
and in fact replicated in a lot of different places because it
is going to have to be in order for it to be implemented like
that.
So with that, Mr. Secretary, I would like to come to you
for just a minute. Let me ask first just some background. When
did you leave your position at DOE?
Hon. McConnell. February this past year.
Chairman Stewart. And how long did you work for the current
Administration?
Hon. McConnell. Two years.
Chairman Stewart. Okay. And I am sure that was a great
experience for you, working for the Administration, and being
here today, I suppose, you and I had a chance to have a short
conversation before the hearing, and I recognize it may be
somewhat uncomfortable for you in the fact that you have taken
a position that is contrary to the current Administration.
Hon. McConnell. Oh, I don't find it difficult at all. It is
a truth that we are pursuing here, and the commercial viability
and technical demonstration is all about what we were doing and
continue to do with a pretty sizable Federal funding of the R&D
that is going on. Now, it seems to me to be a little difficult
to balance the fact that if something is already technically
demonstrated and commercial available, why we would continue to
fund R&D in that regard, it is a bit of a conundrum and it is
puzzling to me.
Chairman Stewart. Well, I appreciate that. That is a great
point.
To any of the witnesses, are any of you aware of any
commercial-scale power plant in the United States that is using
CCS right now, anywhere in the United States?
Mr. Waltzer. Mr. Chairman, Plant Berry at First Southern
Company supplies CCS on their units, a 25-megawatt project, and
they are capturing about 100, 150,000 tons per year.
Chairman Stewart. Okay, and 25-megawatt, is that a small-
or a large-scale power plant?
Mr. Waltzer. It is a slipstream project from the power
plant.
Chairman Stewart. So it is a very small production of power
that is generated from there relatively speaking?
Mr. Waltzer. From that unit, yes.
Chairman Stewart. And that is really one of the primary
concerns we have, and that is, the demonstrated scalability.
You know, I was a pilot for a long time. I was the type of
pilot at one point where we few test flights, and I am telling
you, you can't take something and say it works here on this
scale and then increase that scale by many factors and just
assume that it is going to work exactly the same way; it won't,
which is again one of our primary concerns here.
Dr. Bajura, you mentioned that as well, the scaling up of
technology. I would be interested in your thoughts on that and
your concerns about trying to apply something that is as unique
and complicated as it is and just assume--and if I could, and
then I will allow you to answer this. Quoting from the EPA's
own findings from just several year ago, a typical power plant,
``there is considerable uncertainty,''that is their word,
``considerable uncertainty associated with capacities at
volumes necessary.'' Doctor, do you have comments on that?
Dr. Bajura. Yes. We often test technologies from test tube
size in a laboratory to pilot plant sized to commercial size.
The comment you made earlier about the size of plants, we have
put in place 12 plants in the last six years. The average size
is one gigawatt. That is 1,000 megawatts. We don't do that
casually. We do it by building up, and the reason we do that
is, we learn things as we go from one size to another, the
integration being the very important part.
Chairman Stewart. Thank you. And again, I think the point
there is stated in one fashion or another by the EPA
themselves, that there is enormous concerns with the
scalability on this, and with that, my time is expired.
We now turn to the Ranking Member, Ms. Bonamici.
Ms. Bonamici. Thank you very much, Mr. Chairman, and thank
you all for your testimony.
Mr. Waltzer, I wanted to talk a little bit with you about
the different standards that we have been hearing about today.
We have heard commercially available, technically ready, but
the EPA really does look at whether the technology is
adequately demonstrated, which of course is different in legal
terms. Do you agree with that?
Mr. Waltzer. Absolutely. The Clean Air Act very clearly
allows EPA to consider how the technology applies and other
related industries, and I think in some areas there is a bit of
a gray area relating to your earlier question, Mr. Chairman. So
for example, Dakota Gasification is an excellent example of a
project which is a very large scale, captures 2 million tons of
CO2 per year and sends it up a pipeline to
Saskatchewan for EOR and sequestration. The methane that comes
out of that coal gasification project is delivered in the
pipeline to power plants. It is very similar to a power plant
that was proposed by Tanaska, which would have simply taken
that same industrial configuration and put the power plant
closer to that methane, the coal-to-methane project. So from a
practical perspective, it is not--the Dakota Gasification
plant, I believe, clearly demonstrates that one could develop a
power plant today with commercial guarantees with CCS. In fact,
even though Kemper does have commercial guarantees, I think the
Dakota Gasification plant clearly demonstrates that CCS at a
power plant configuration is in operation today.
Ms. Bonamici. Thank you. I am going to follow up on that a
bit. If finalized, the rule would require that all new coal
plants meet an emission rate between 1,050 and 1,100 points of
CO2 per megawatt-hour. So that is an approximate 40
percent reduction below uncontrolled emission levels, as I
understand it.
Mr. Waltzer. That is right.
Ms. Bonamici. But in addition, the rule allows for up to
eight years to meet the standard. Can you discuss how that
provision was considered in EPA's determination of feasibility
and cost?
Mr. Waltzer. Sure. That provision is, from our perspective,
one of the key aspects that makes this rule-- the design of
this rule very smart and speaks to the technical feasibility of
being able to comply with the rule. With that eight-year
provision, that allows a project developer to do two things.
First, it allows them to have flexibility as their building
their first, second, third or nth-of-a-kind project. It also
allows the developer market flexibility to be able to take
advantage of operating the plant in the early years without CCS
and adding CCS later, which might provide financial value. In
fact, it is that second component which allows, as our cost
analysis shows, for a project to be able to comply with that
standard and have the cost of electricity at that coal unit be
13 percent above the baseline cost of electricity for an
uncontrolled coal unit.
Ms. Bonamici. Thank you. I have another question I want to
get in. So there was a project that American Electric Power was
doing. Their chairman in 2011, Michael Morris, said that ``As a
regulated utility, it is impossible to gain regulatory approval
to recover our share of the cost for validating and deploying
the technology without Federal requirements to reduce
greenhouse gas emissions already in place. The uncertainty also
makes it difficult to attract partners to help fund industry
share.'' So I wanted you to address briefly the--unless we
require carbon emission limits on new coal power plants, does
the technology stand as much of a chance of wider deployment,
and why?
Mr. Waltzer. Well, I do agree with that, but let me address
one important aspect of what you just raised. I would urge the
Committee to consider that in fact this rule is good for the
coal industry, and let me explain that counterintuitive view.
First, the rule provides both certainty and flexibility for new
coal plants regarding CO2 emissions. If you don't
have that certainty, you are not going to be able to finance
new coal plants. No financing, no plants. It is basically that
simple. Second, the rule does something that might have been
hard to imagine 30 years ago. For the first time, new coal
plants and new gas plants are going to have the same emissions
profile. That is important for coal's long-term sustainability.
And third, gas prices are so low that no one is building new
coal, and that is true without CCS, but this rule helps
catalyze technology advancements so that when fuel prices are
more advantageous, coal is even better positioned within the
market.
Ms. Bonamici. Thank you, and I see my time is expired.
Thank you, Mr. Chairman.
Chairman Stewart. Yes, Ms. Bonamici. And Mr. Waltzer, you
almost by yourself require that we come back to a second round
of questioning because I can't wait to engage you with your
comments there about this is good for the coal industry.
With that, then we turn to the chairwoman of the
Subcommittee on Energy, Ms. Lummis.
Chairwoman Lummis. Thank you, Mr. Chairman.
Secretary McConnell, does it make any sense to you that EPA
is concluding that CCS is adequately demonstrated or proven
when the DOE modeling assumes carbon capture technology is
unproven at commercial scales?
Hon. McConnell. No, it doesn't make any sense to me, and in
fact, in 2010, a roadmap was put forth that with demonstration
projects and the development of the fossil program would
produce a commercially ready, technically deployable CCS value
proposition for the marketplace by 2020, and the expectations
were that the demonstration projects, the knowledge, the
understanding and the learnings that would be accomplished
through all of that would produce something that would be
marketplace-ready by 2020. And declaring it ready now, I don't
see as something that makes any sense to me, no.
Chairwoman Lummis. Mr. Waltzer, you mentioned this eight
year period. Is that what Mr. McConnell is referencing? Should
I be drawing a connection between the eight years that you
mentioned and Mr. McConnell's statement about the year 2020
applicability?
Mr. Waltzer. Madam Chairman, from our perspective, just a
quick reference. The original proposal actually had a ten-year
delay. That was in the revision that was made eight years
because that comports with the eight-year review period that
relates to New Source Performance Standards. So I think that is
really what is the--what is driving the eight-year review or
flexibility provision within this rule.
Chairwoman Lummis. Okay. So they are very different. I am
trying to compare apples to oranges here.
Mr. Waltzer. Right.
Chairwoman Lummis. That is helpful. So if the technology is
ready today, why the eight years again?
Mr. Waltzer. From our perspective, we think it is valuable
because we want to see projects built, and we think that kind
of flexibility encourages projects. It reduces their costs. It
provides them flexibility as they are developing pioneer
projects. We like to say we want to avoid pioneer penalties. We
want early-adopter rewards, and this, I think, is in vein with
that concept.
Chairwoman Lummis. Okay. So it is a pioneer situation?
Mr. Waltzer. For any project that--well, there are multiple
pioneer situations. For example----
Chairwoman Lummis. But how does the word, your use of the
word ``pioneer'' comport with the EPA's definition of
``adequately demonstrated''?
Mr. Waltzer. Well, ``adequately demonstrated'' as I
mentioned before can be related to--or can refer to related
industries. So, for example, I would consider--even though we
have a fully commercial-scale gasification project at Dakota
Gasification that is taking CO2 and sending it up to
Alberta--excuse me, Saskatchewan. Locadia proposed a substitute
natural gas program in Indiana, which is very similar. And we
were supportive of that project because even though it wasn't a
power project, it would have created a pipeline from the
Midwest to the Gulf Coast. I would consider them a pioneer even
though that technology is commercial.
Chairwoman Lummis. I think you said CCS is being used today
on natural gas units?
Mr. Waltzer. CCS--well, CCS has been used on natural gas
units for power plants.
Chairwoman Lummis. Okay. So why not require this rule be
applied to gas? Why is it just applied to coal?
Mr. Waltzer. We are actively supporting CCS on natural gas
projects. So, for example, Summit Power has a----
Chairwoman Lummis. So why did the EPA just require it for
coal?
Mr. Waltzer. Well, from our perspective, and I will speak
from our perspective, we see--we don't see this rule as the
last step; we see it as the first step. So----
Chairwoman Lummis. Oh, okay. That is helpful.
Mr. Waltzer. For the eight year review, we would----
Chairwoman Lummis. Dr. Bajura--excuse me because I have one
more question. Dr. Bajura, the Interagency Task Force on CCS
identified five barriers to commercial deployment of CCS. What
has changed in the two years since their conclusion?
Dr. Bajura. We have done some experiments to demonstrate
storage at larger scale but we haven't done any integration to
show how we could put that together with a power plant nor have
we addressed the issue of long-term liability: who owns the
CO2 for 50 years, who is going to take the
responsibility for certifying that the technology was correct
when it was put in the ground.
Chairwoman Lummis. I want to thank all of our panelists. I
hate to interrupt but my time is expired. Thank you all for
being here.
I yield back, Mr. Chairman.
Chairman Stewart. Thank you, Madam Chairwoman.
The chair now recognizes Mr. Swalwell.
Mr. Swalwell. Thank you, Mr. Chairman, and actually, if we
could put slide number one back up there, and Mr. Waltzer, good
morning, thank you to you and all of our witnesses for being
here. Slide one, I held it up earlier, and it will be on the
screen in a moment, depicts about 600 coal plants across the
country. Are you familiar with this map and these plants, and
would you agree, Mr. Waltzer, that the proposed regulations
that the EPA have put out will not affect a single plant that
is on that map?
Mr. Waltzer. Absolutely. Even before this rule was
contemplated and even before gas prices went through the floor,
there was no new coal plant that was proposed without CCS. Any
new coal plant today that has been seriously proposed will meet
the new coal plant standard. For existing units, this rule
doesn't apply so it is not going to have any effect on them.
Mr. Swalwell. And Mr. Waltzer, how many jobs at existing
coal plants will be lost because of these regulations for
future plants?
Mr. Waltzer. There will be no--I think it is simple logic
that if the rule does not apply to existing units, it will not
affect jobs at existing jobs, so no jobs.
Mr. Swalwell. And Mr. McConnell, would you agree that these
regulations will not affect a single job at a currently
existing plant?
Hon. McConnell. No, I wouldn't.
Mr. Swalwell. Okay. Would you agree--so it is your position
that if I have a job today at a coal plant that is already in
existence, I am at risk of losing my job at that plant because
of rules for plants that have not been built?
Hon. McConnell. I think if we focus the argument strictly
on one particular pollutant criteria, we could build an
argument around it but it is much more complex than that. It is
the future uncertainty of rulings. It is the combination of
NOX, SOX, sun particulates, mercury, all of the criteria
pollutants and the landscape associated with that uncertainty
going forward. You see a tremendous amount of retirements going
on across the country today, some 50 gigawatts of retirement.
Mr. Swalwell. But Mr. McConnell, the 600 plants that are in
existence, you agree, these rules do not directly affect those
plants?
Hon. McConnell. No, I don't. Again, as I go back to the
interconnection of all the rulings and the future uncertainty
of it, that has a multiplying effect to the future of all of
those coal plants.
Mr. Swalwell. But you can't give me an accurate number as
to how many jobs are going to be lost at a current plant
because of regulations for future plants, can you?
Hon. McConnell. No, I am not able to provide that kind of
information, no, sir. Again, it is all part of the future that
you or I can't predict.
Mr. Swalwell. And you would agree, though, that 120,000
jobs lost in 16 days during a government shutdown, that is
probably greater than the amount of jobs we can say will be
lost at existing plants?
Hon. McConnell. I am not in a position to comment on that.
Mr. Swalwell. I would hope, though, Mr. McConnell, that you
could comment on something I think you and I may agree upon,
which is that sequestration has affected our ability to make
necessary investments in technology when it comes to carbon
capture, use and storage technologies. Would you agree that
that is not helping us learn more about what that technology
could do?
Hon. McConnell. What I could agree on was that when I took
the job in 2010, and we projected for the next ten years that
we would stay at a certain level of funding for fossil energy,
to move forward and to achieve a commercially demonstrated
technology by 2020, and then seeing the fossil budget cut year
over year with the Administrator's requests going down while
the overall Department of Energy goes up, that made it very
difficult to achieve those targets, and makes it all the more
difficult to understand how we can get demonstrated technology
in place any earlier than 2020 certainly.
Mr. Swalwell. Thank you, Mr. McConnell.
And Mr. Waltzer, can you just go into detail for us about
the current competition between the coal and natural gas
industries and whether that competition is at least a partial
reason, if not the primary reason, for the retirement and lack
of construction of new coal plants across the country? And then
can you just let us know what would the cost of doing nothing
be? Suppose we threw out these regulations and just did
nothing, what would the cost to the environment and economy be?
Mr. Waltzer. So here is what I would say. Project
developers today are building natural gas plants instead of
coal plants, primarily because of where gas prices are. That is
what is happening in the market. In terms of existing units,
gas prices had gotten so low that we for the first time ever
had seen coal power switch over to natural gas, which many of
us thought would ever happen, but that is starting to come
back. So as gas prices are going up, we are starting to see
coal--existing unit coal generation come back on the system.
But because of where gas prices are, we don't foresee, or at
least looking at the market, the market tells us there are no
plans for developing new coal projects because of where gas
prices are today.
Mr. Swalwell. Thank you, and Mr. Chairman, I yield back the
balance of my time.
Chairman Stewart. Thank you, Mr. Swalwell. You know,
regarding your question about existing power plants and will
they be affected, I think Mr. Waltzer, you answered that
question in the previous round, and that is when you said you
view this as just the beginning, and I think that is many of
the fears that so many of us have.
With that, to the Vice Chairman, Mr. Bridenstine.
Mr. Bridenstine. Well, thank you, Mr. Chairman. I can tell
you there are two coal-fired power plants in Oklahoma that are
being shuttered because of EPA regulations, and I can also tell
you that my constituents are facing 25 percent increases in
their prices because of it, and these coal-fired power plants
have, like, 30 years left in their useful lives and we are
shuttering them because of these regulations.
I would like to talk to Mr. Waltzer. You mentioned early-
adopter rewards. Can you talk about that for just one second?
Mr. Waltzer. Sure. We would like to see--from our
perspective, we want to see CCS move forward and we would like
to see a suite of policies that help both deploy the technology
and drop its costs rapidly.
Mr. Bridenstine. Is the Kemper project one of those
projects where you have seen early-adopter rewards?
Mr. Waltzer. Well, in some respects, Kemper has received
incentives, Federal incentives, to move forward. So in that
context, it has gotten----
Mr. Bridenstine. I would like to read you an article from
the Wall Street Journal, and this is just a few weeks ago,
Monday, October 14th, as a matter of fact. Mississippi Power's
186,000 customers who live in one of the poorest regions of the
country are reeling at double-digit rate increases, and even
Mississippi Power's parent, Atlanta-based Southern Company, has
said Kemper shouldn't be used as a nationwide model. Do you
agree with that?
Mr. Waltzer. I believe that the cost overruns associated
with Kemper are not related to CCS. It is related to the fact
that there are commercializing a new gasification technology,
and so from that perspective, I believe Kemper could be a model
for integrating CCS onto power systems.
Mr. Bridenstine. It is interesting you should say that.
They said that their cost overruns are from labor costs, steel
pipe, concrete, other materials, and certainly if it wasn't for
CCS, a lot of these materials wouldn't be required. Is that
correct? And labor.
Mr. Waltzer. I think most of the labor costs and piping
that you are referring to really is based on the fact that they
are effectively developing a refinery technology, which is not
what power companies are used to doing.
Mr. Bridenstine. So these costs, do you know how they are
affecting not just--I mean, we are talking about some of the
poorest people in America being affected by this. They spend a
good portion of their budgets more as a percentage of their
income on their electric bills, and their electric bills are
going up. Do you have sympathy or empathy for them?
Mr. Waltzer. I think that it is important to make sure that
anytime we are moving technology forward, that we try to have
the least amount of impact on the people who can least afford
it. I think that is true in the United States and I think that
is true globally. That is why we are supporting not just these
performance standards but incentives at the Federal level that
will help reduce the costs----
Mr. Bridenstine. Real quick, I want to talk about these
incentives. I am a Navy pilot and I flew in Meridian,
Mississippi. I lived there for a period of time. I can tell you
this, Meridian, Mississippi, just south of Kemper County, is
not a wealthy part of the country. Mr. Newburn Atkinson, a
gentleman, says that his Lucas Road art and jewelry gallery
hasn't recovered from the recession. ``I am already on a
shoestring budget and this economy,`` the 66-year-old says,
``and this may be the deciding factor in me staying open.'' So
here we have people saying that power plants are not being
shuttered; in fact, they are. We have people saying that this
is actually an early-adopter rewards program, which it isn't.
It is punishing people. It is punishing the poor people. It is
also punishing the investors, which prevents investment in
further technologies like this, and then you talk about
incentives. Let us talk about incentives.
We have a chart--do we still have that chart, the
Department of Energy chart about incentives for R&D for
different areas? Do we have that chart? Well, while we are
waiting for the chart to come up, I will share with you what is
on this chart. On this chart, you have incentives for natural
gas and liquid petroleum on the left. It is almost nothing. It
is 64 cents per megawatt-hour. Nuclear is $3.14 per megawatt-
hour. Wind, $56 per megawatt-hour. And then solar on the far
right, if the chart were big enough, it would go through the
roof. For wind, it's $775 per megawatt-hour, or 64 cents for
gas. Now, do you think it would be a good idea to maybe shift
some of those incentives from wind and solar maybe over to the
gas and fossil fuel side?
Mr. Waltzer. We think we should have more incentives on the
fossil fuel side, absolutely.
Mr. Bridenstine. But you don't think it should be taken
from--you know, it is 1,400 times more on solar energy. Do you
think that that might be a good place to start?
Mr. Waltzer. We are not--here is what I can say what we
support. We support, as I mentioned before, the National EOR
Initiative, which is focusing on a production tax credit for
CO2-enhanced oil recovery from coal plants, gas
plants, industrial sources, and what is really unique and
interesting about that proposal is that because you are
generating petroleum through EOR in the United States, you are
also displacing foreign-oil production. That potentially could
add new revenue to the U.S. Treasury, and so that is a really
unique and interesting opportunity, and we think we should
pursue that.
Mr. Bridenstine. I am out of time, Chairman. It is your
mic.
Chairman Bridenstine. Thank you. I am going to return time
now to Mr. Takano.
Mr. Takano. Thank you, Mr. Chairman.
Improving air quality and reducing greenhouse emissions is
a matter that is vitally important to my constituents in
Riverside County, which is located in southern California. I
represent an area that has some of the worst air quality in the
Nation. I remember days growing up when we weren't allowed to
play outside on the playgrounds during my elementary and high
school days for physical education class because the air
pollution was so bad. It is because of the Clean Air Act and
the work by the EPA that my region has seen a tremendous
improvement in air quality. In fact, a study by the EPA shows
that by 2020, the benefits of the Clean Air Act will outweigh
the costs by more than 30 to one. The Clean Air Act has helped
improve public health, and by 2020 it is expected to prevent 17
million lost workdays.
I appreciate hearing from our witnesses today about EPA's
latest effort to limit greenhouse gas emissions under the Clean
Air Act. My first question is for Mr. Waltzer. Mr. Waltzer, do
you know of any other nations that are investing in CCS
technology?
Mr. Waltzer. Yes, several. The United Kingdom, for example,
has a competition for what they call a contract for differences
to build at least two large-scale CCS projects. But probably
the most interesting and notable is China. They are investing
quite a bit in CCS. In fact, Huaneng Power, their largest power
company, has developed their own CCS technology that they are
currently doing a feasibility study with Duke Energy on one of
the Gibson units in Indiana to examine how those costs of CCS
in China, which they claim are fairly low, about $30 a ton,
would equate in the United States.
Mr. Takano. And can you tell me about the overall budget
for R&D for all of these all-of-the-above technologies? I mean,
I understood that chart presented by my colleague from
Mississippi about the distribution of R&D investment but what
has been the size of that budget over the last 3 or four years
and has it been increasing or decreasing?
Mr. Waltzer. Well, the overall size of the DOE budget has
been increasing but I would echo what Secretary McConnell said
with respect to CCS. We believe that the DOE's budget on CCS
should be increased.
Mr. Takano. Now, you used the word ``pioneering'' in your
answer to my colleague from Wyoming. Would you say that the
strategy of the Department or the EPA is really about birthing
this technology, that when we say we have an adequately
demonstrated technology that really the rule is designed to
birth it?
Mr. Waltzer. That has been a role that the Clean Air Act
has played through several pollution control technologies, and
we feel that this is a role it can play here. Just to clarify
some earlier remarks I made, we do see this as the first step.
We do think CCS ought to be applied on natural gas units and
another opportunity to do that will be in the eight-year review
as well as looking at best available control technology through
individual permits after the New Source Performance Standards
are finalized. So we do see this as the beginning of a process.
We don't necessarily anticipate that this is going to apply to
existing units through any rules that are going to be put
forward but we do hope and expect and we would advocate for in
the future that this technology would be applied to natural
gas.
Mr. Takano. Now, real quickly, the Kemper plant is a coal
gasification plant, but the existing coal plants, which will
not be affected by this rule, are not attempting to gasify.
They just strictly use the coal directly into the production of
electricity. Is that correct?
Mr. Waltzer. Right. Most existing units are coal combustion
units.
Mr. Takano. So when you talked about the increased costs at
Kemper, it has to do with this newer attempt, this attempt to
try to gasify the coal, but if coal plants in the future were
to be straight combustion plants, you are contending that the
CCS technology has been demonstrated in other areas and could
work in the context of newer coal combustion plants?
Mr. Waltzer. Well, actually, yes. In fact, the Boundary Dam
plant is an interesting example because, in fact, it is a
retrofit, but it is using the same technology that one would
use if one were building a new coal combustion plant.
Similarly, NRG in the United States is currently developing a
retrofit, a CCS retrofit project, that could also apply to new
coal combustion units.
Mr. Takano. Thank you, Mr. Chairman. My time is up.
Chairman Stewart. Thank you, Mr. Takano.
Now Mr. Weber from Texas.
Mr. Weber. Thank you, Mr. Chairman.
I think we are going to affect coal plants because as that
technology gets so expensive, more plants won't be built and
older plants will retire, employees will lose their jobs, so
that is a given. And look, I think it was Mr. Martella that
said when Congress uses words, it means something. I think that
was you that said that. Is that right, Mr. Martella?
Mr. Martella. Yes.
Mr. Weber. I appreciate that. It is kind of like, if you
like your doctor, you can keep your doctor. If you like your
insurance, you can keep your insurance. That is kind of what
you are driving at, I suspect, and I guess that oil
sequestration is an okay word, or carbon sequestration is okay,
but when you talk about budget sequestration, that is a bad
word. So it is interesting that we see a lot of word games
going on up here.
Let me ask you, are any of you familiar with the Valero
plant in Port Arthur, Texas, in my district that has a carbon
sequestration facility? Mr. McConnell, are you aware of that
plant? Do you know the cost that was involved? Do any of you
all know the cost of that plant? Let me give it to you real
quickly. The Valero project cost $431 million, okay? The
Department of Energy, through the stimulus, or what I call the
spend-from-us, kicked in $284 million. Now, that is 66 percent
of the cost of that plant. Does that sound it is capable of
being duplicated? Does the government have to spend 66 percent
of these facilities and these plants? Does the taxpayer get to
be on the hook? Does that sound like it's capable of being
duplicated? That is a rhetorical question. I will get back to
you.
Ed Holland, the CEO of Southern Energy, the owner of the
plant built in Kemper, Mississippi, came and spoke to the House
Energy Action Team, which I am a member of, about a month ago,
and here is what he--let me tell you something about Southern
Energy and the plant they are building. Four billion dollars.
It creates 12,000 direct and indirect jobs for construction,
1,000 direct and indirect permanent jobs. The project
construction will create $75 million in state and local taxes,
$30 million annually in state and local taxes. So this is a
project that is extremely important and valuable to the
community, and yet because of CCS, which Texas is a pioneer.
One of you, I think it was you, Mr. Waltzer, or it might have
been Mr. Martella that said there was already EOR underway. In
other words, what you really said without knowing it was,
industry was already on this. Industry was already on this
without the mandate from the EPA because they will get it to
work efficiently. They will make it work efficiently.
Now, when Ed Holland from Southern Energy came and spoke to
the House Energy Action Team, he said CCS is not capable of
being duplicated. The cost overruns were enormous, and he
attributed it to CCS. Now, to their credit, the company agreed
to pick up all the cost overruns, and you don't see that very
often when the government mandates something. That is a rarity.
But the cost overruns were attributed to CCS. He told us that
in the House Energy Action Team.
Now, with what you know about Valero's costs, 66 percent
picked up by the DOE, the taxpayers, and the cost overruns at
Kemper, is there anyone on this panel that thinks that is
really capable of being duplicated? Mr. McConnell, yes or no?
Hon. McConnell. Well, I believe that is the reality of
where we are today because it is not technically demonstrated
and commercially available.
Mr. Weber. Thank you. Dr. Bajura?
Dr. Bajura. I support Secretary McConnell's comment.
Mr. Weber. What he said. Mr. Waltzer, what they said?
Mr. Waltzer. Can you clarify?
Mr. Weber. Do you think those two experiences demonstrate
that CCS of that magnitude, on the scale that the EPA is
mandating here, is capable of being duplicated?
Mr. Waltzer. I think we have seen CCS on the scale of 7
million tons per year at projects like Valero.
Mr. Weber. Does the cost or the cost overruns not even come
into the EPA's----
Mr. Waltzer. That is a purely commercial project.
Mr. Weber. That is a purely commercial project, so when it
comes, EPA is real big about attainment; we don't want noxious
gases and we want most of the country to be in attainment, but
they don't use the common sense of determining from a cost
basis whether it is going to negatively impact industry and
jobs. So would you agree with me then, Mr. Waltzer, that in
that instance, EPA might themselves when it comes to common
sense be in nonattainment?
Mr. Martella, do you think that is duplicable?
Mr. Martella. I have to put my lawyer's hat back on, and as
a lawyer, you can only look at the record and what EPA itself
relies upon in making these determinations, and I go back to my
original opinion. Looking simply at things that they said in
this record in the past 18 months or so, I think it is their
own admissions that show none of these facilities are in
commercial operation to the----
Mr. Weber. Was that admission or emission?
Mr. Martella. Admission.
Mr. Weber. Okay. Well, they are putting out some emissions
all right, the EPA is. But I appreciate that opinion, and I am
overrun on my time.
Chairman Stewart. Thank you.
We now have Ms. Edwards.
Ms. Edwards. Great. Thank you, Mr. Chairman, and to our
Ranking Members as well for holding this hearing, and thanks to
our witnesses.
I just have a couple of questions I want to try to get to,
but I want to point out that contrary to some suggestions that
have been made here today, the President's energy strategy in
fact has embraced the all-of-the-above approach. He said that
on many occasions, even when some of us didn't want him to say
all of the above. Indeed, the rulemaking envisions, I think, a
21st century approach to fossil fuel power plants with the goal
of reducing CO2 emissions in new power plants, and I
think it is important to point out the word ``new.'' In the
Recovery Act, the President committed $1.4 billion to this
technology, even in the face of some of us who questioned
frankly the technology, but that being as it might, the EPA has
come up with a rule. It has a specific responsibility, a
particular responsibility to protect our health and
environment, and while industry considerations are interesting,
that is not the principle responsibility of the EPA. But I
happen to think that we can do both, that we can both protect
the environment and we can grow jobs and we can grow an energy
strategy that really embraces all of those responsibilities.
My question, first question, goes to Mr. McConnell.
Something you said kind of caught my attention about the jobs
question. Were you referring to a specific empirical study,
university study, industry study, that points to the number of
jobs that would be lost by applying standards to new power
plants versus old?
Hon. McConnell. I can't quote any specific study here, only
that I have been exposed to a number of studies from several
different sources.
Ms. Edwards. If you can get back to us on that and give us
the particular studies, because I am a data person and I like
to see the data that backs up your conclusions that jobs would
be lost by applying the rule to new power plants versus old
ones, and I would like to see those numbers.
And then my next question goes to Mr. Waltzer. I notice
that in the industry, the oil and gas industry receives
subsidies to the tune of about $7.5 billion a year. Exxon Mobil
made $7.5 billion in profits in 2012, Occidental, $7.1 billion.
The numbers are really huge. It seems to me that if we have an
interest in doing what Mr. McConnell points out in his
testimony is the need to add $100 million a year into
demonstrating these projects and research and development that
$100 million could come out of that $7.5 billion in subsidies
that the industry receives, and so I wonder, Mr. Waltzer, if
you could tell us what the additional needs you see in terms of
investment in R&D and whether we have made the kind of
investments we need to go into the commercial side with these
coal plants and the new regulations? Because if, for example,
we needed to find more money, perhaps my colleagues on the
other side in this very constrained environment would be
willing to remove those oil and gas subsidies so that we could
put the money into demonstrating new technologies.
Mr. Waltzer. Thank you. Let me first go back to what we
think is the most important objective. We think that CCS needs
to be deployed globally and it needs to be affordable. So we
need to move the technology forward as quickly as possible. So
that brings us back to with respect to the oil industry,
enhanced oil recovery as an opportunity in the United States.
We could potentially have 100 gigawatts of coal plants, about a
third of our coal plants, supplying CO2 for EOR that
would produce domestically produced oil if we met the technical
potential for EOR in this country. We believe that a self-
financing tax incentive is a very smart and effective way to
move that technology forward.
What is interesting about that number, 100 gigawatts, is,
if you look with the history of scrubbers and other
technologies, that--you can significantly push the cost down
the cost curve of that scale. It is also going to bring new
technologies into the market. So in terms of research and
development, two interesting technologies, just an example. One
is called chemical looping, which would dramatically increase
the efficiency in coal plants and dramatically reduce the cost
of CCS. Another would be advanced natural gas turbines. There
is at least one company that has a design that would
significantly drop the cost of CCS to the point they think they
can compete in the market today. So it is that sort of mix of
performance standards and incentives that could pull those new
technologies into the market while getting the learning curve
moving forward, and that is our vision for how we think we move
this technology in the United States and how we think--and the
value that that is going to have globally.
Ms. Edwards. Thank you, and my time is expired, and so I
would really love to see us move to a point where we are making
investments through our tax code that are about new
technologies and not just supporting an old industry that is
making record profits. Thank you.
Chairman Stewart. Thank you, Ms. Edwards.
We now turn to the former full Chairman, Mr. Hall.
Mr. Hall. I thank you, Mr. Chairman, and I really do think
if we are having this hearing and working together, and if I
understood your purpose, it is a little bit different to the
five minute dissertation that Mr. Waltzer just gave us. It is
not about gigawatts or anything else that he wants to decide
but I think yours is about honesty and whether or not the EPA
has been honest with this Committee and honest with the people.
That is the first thing I say.
I also admire Mr. McConnell, who chose truth as his purpose
and his pursuit, and he is here with us today, and I want to
point out that we did have hearings from the EPA during the
time of my chairmanship. I think, Mr. Rohrabacher, we had them
two or three times before us, and each time they testified for
days and went all over the country looking for someone that
would testify that fracking was ruining the drinking water, and
if you are looking for honesty you can check them on that
because either Mr. Rohrabacher or I asked the four who were
administrative witnesses that came here, each of them
testifying to the dangers of that, and the liberal press
talking about the dangers of it. We asked this question in
closing: can you tell us anywhere in the United States where
fracking has ruined one glass of drinking water. Each of the
Administration witnesses said no, all four of them. That is a
record. You don't have to have somebody come in here and
testify to that again. It is a record. They themselves said
that. So they are not being honest with us, and I think if we
get a President that will appoint a secretary of some of his
administrations that will follow the law, why, we will take a
good look at some of their testimony when they come before us
and testify under oath, and they were reminded that they were
under oath, that they were operating from the best science.
Let me get to something a little more. This hearing sheds
light on the technological basis for the EPA's conclusion that
CCS has been ``adequately demonstrate'' in its proposal that
CCS should be required for new coal-burning plants. Once again,
the testimony has shown that the EPA's proposed mandate
reflects flawed judgment again. I might ask you, Mr. McConnell,
if you would like to expand on that.
Hon. McConnell. Well, just to be brief, when something is
mandated and determined to be technically demonstrated,
commercially available and it isn't, that makes it impossible
for industry to make an investment, and by virtue of that, it
will eliminate the ability to build new coal generation in this
country. And maybe more importantly, as we think about a global
word that the energy is going to double over the next 50 years,
to get that technology to other places in the world is
incredibly important because this is a global issue, not just a
U.S. issue.
Mr. Hall. And I thank Chairman Lummis, who wished the EPA
could be here and be here and testify again for you all to
hear. I don't know how much time I have left, Mr. Chairman, or
I have run out of time----
Chairman Stewart. You have got about a minute and a half.
Mr. Hall. All right, sir. Mr. McConnell, we in Texas are
very proud to be leaders. Mr. Weber got onto that, and I
certainly agree with his approach. I like the way he identified
some of the President's promises. But the Texas Clean Energy
project is a ``now gen.'' It is integrated classification
combined cycle facility that will incorporate CCS as a
commercially clean coal power plant, and it is my
understanding, and I may be wrong, that this project received a
$450 million award in the 2010 from the Department of Energy's
Clean Coal Power Initiative and received a final air quality
permit from the Texas Commission on Environmental Quality in
2010. My question, I guess, once again, is to you, Mr.
McConnell. Has this project begun?
Hon. McConnell. No, sir. There has been no ground broken
and no construction.
Mr. Hall. What are some of the challenges associated with
it?
Hon. McConnell. The commercial viability as well as the
concerns about the demonstrated technology have made it
incredibly challenging to enable commercial realization, and
that has delayed the start of that plant and construction for a
considerable amount of time.
Mr. Hall. And my last question. What about the status of
other plants, CCS projects around the country? How far along in
construction are they?
Hon. McConnell. Outside of the Kemper plant that has been
mentioned several times, none of them are operational or in
construction, and every one of them require government
subsidies at this point because of the technology readiness and
commercial availability.
Mr. Hall. Once again, I thank you, and Mr. Chairman, I
thank you very much for having this hearing based on seeking
honesty from people who come before us to testify. Thank you. I
yield back.
Chairman Stewart. Thank you, Mr. Chairman.
We now turn to Mr. Massie.
Mr. Massie. Thank you, Mr. Chairman.
I have just a quick question for all of the witnesses. For
given kilowatt-hour or gigawatt-hour production plant, if we
had a typical state-of-the-art coal-fired plant and we had the
same plant but hypothetically with CCS technology, and I say
hypothetically because it doesn't exist yet, the two plants
producing the same amount of energy, one has CCS and one does
not. For each of the witnesses, which one burns more coal? Mr.
McConnell?
Hon. McConnell. To produce the same amount of electricity,
the one with the CCS facilities obviously because of the
parasitic load.
Mr. Massie. Dr. Bajura?
Dr. Bajura. I concur with the Secretary.
Mr. Massie. The one with CCS burns more coal?
Dr. Bajura. Yes.
Mr. Massie. Mr. Waltzer?
Mr. Waltzer. Yes, I agree.
Mr. Massie. What do you agree with?
Mr. Waltzer. The one with CCS burns more coal.
Mr. Massie. And Mr. Martella?
Mr. Martella. I agree.
Mr. Massie. So we are all in agreement that CCS technology
makes a coal plant less efficient. Do all the witnesses agree
with that?
Hon. McConnell. Yes.
Mr. Massie. So I think that is important to start out
there. Now, the coal companies--and let me tell you why I am
motivated to ask these questions. I am from Kentucky. We are
very proud of our electric generation in Kentucky. I don't have
any coal mines in my district yet we have two electric arc
furnaces. One produces stainless steel, one produces steel.
Kentucky is a big producer of aluminum. And so this is not
about coal for me per se, this is about affordable domestic
energy, and this is a very serious step when we increase the
cost of domestic energy.
Mr. Waltzer, how much more costly per kilowatt-hour would
it be to produce electricity with CCS?
Mr. Waltzer. Our study that we submitted in testimony
indicated that to comply with this rule, a new coal plant today
would be about $100 per megawatt-hour, and the----
Mr. Massie. On a percentage basis, what would it be? How
much higher to produce?
Mr. Waltzer. Well, and that was without CCS, and then the
one with CCS would be 113, so it's 13 percent higher.
Mr. Massie. You are saying 13 percent. We had a witness
just about a month ago from the DOE say it was about 50 percent
higher, and so is that because it burns more coal? Is that one
of the reasons?
Mr. Waltzer. So yes, and I can explain the difference
between those----
Mr. Massie. That is all right. I just wanted to check. And
how much more coal does it burn to do CCS?
Mr. Waltzer. Well, you--I would have to go back----
Mr. Massie. At the 40 percent level, the Administration
would receive reduction, correct?
Mr. Waltzer. Depending on if it is 13 percent or 50
percent, which number you are looking at, the amount of coal
you have to burn is proportional to the percentage of energy
penalty that you are paying.
Mr. Massie. So what is the number to achieve the 40 percent
reduction?
Mr. Waltzer. I would have to go back and do the math but it
is--it could be--I don't know. I don't want to speculate. I
would have to go back and do the math.
Mr. Massie. So the coal-fired generation plants in my
district have done a tremendous job of decreasing sulfur
emissions. Particulate, mercury, all of these things have gone
down by probably a couple orders of magnitude in the last 3
decades. But it still remains a fact, does it not, that those
emissions are proportional to the amount of coal burned?
Mr. Waltzer. If I understand your question correctly, is
there an energy penalty on those pollution controls?
Absolutely.
Mr. Massie. What I am saying is, when you burn more coal,
do you emit more sulfur for any given plants?
Mr. Waltzer. It depends on the pollution control.
Mr. Massie. Let me ask that question to Mr. McConnell. For
a given pollution control on a plant, if you burn more coal,
does it emit more sulfur?
Hon. McConnell. Yes, and it would require more handling and
more treatment to process that sulfur, yes.
Mr. Massie. So all things being equal, the effect of
implementing CCS technologies is, we are going to burn more
coal, and with the same emissions controls on mercury,
particulate, sulfur, NOX, we are going to be admitting more of
those, given the Administration's goals?
Mr. Waltzer. That is not necessarily correct. In order to--
--
Mr. Massie. But given the same technology for all of those
things, it looks to me like it would be the same. Let me also
ask you--I want to move on. I have 26 seconds. Will we have to
mine more coal to produce the same amount of power?
Mr. Waltzer. Yes.
Mr. Massie. So all of the externalities that the
Administration associates with mining coal would be increased
with CCS?
Mr. Waltzer. Potentially.
Mr. Massie. Mr. McConnell, would you like to comment on
that?
Hon. McConnell. I might suggest there may not be any coal
mined at all because in fact, the plants will shut down and
there won't be any need for coal.
Mr. Massie. That is my concern. We have a plant in Kentucky
that is shutting down. It is going to affect 139,000 consumers
of electricity in my district, so I think it is a very
important point to make, that CCS is not without costs to the
environment. Thank you.
Chairman Stewart. Thank you, Mr. Massey. We now turn to the
gentleman from North Dakota, Mr. Cramer.
Mr. Cramer. Thank you, Mr. Chairman, and thanks, members of
the panel, for being here. It is hard almost to know where to
begin. I have heard so many things this morning. But I am going
to start with addressing from the North Dakota perspective this
issue of whether or not New Source Performance Standards for
new plants affects jobs in the existing plants, and let me
assure you, it does because it is a further reflection of an
attitude that has been pervasive by this Administration that
tells anybody interested in fossil fuel development, we are
going to punish you as much as we can, and so if you are
considering building a new plant or retrofitting an old plant,
the odds are against you, and it is not like it has been a
hidden agenda. It has been a pretty far-out-there agenda.
I appreciate as well--I am going to use this opportunity to
put a few things into the record--that Mr. Waltzer has
referenced several times the Dakota gas syn fuels plant at
Beulah, North Dakota. I had the opportunity as an energy
regulator for ten years not only to oversee electric rates but
coal mining and pipeline development, and I sited the CO2
pipeline, much of it, that goes to Saskatchewan, and we are
very proud of that project. The company that owns it, Basin
Electric Power Cooperative, which is one of the largest G&T
cooperatives in the country, also owns a lot of electric
generation, coal combustion generation, right near Beulah, and
they engage with their own money in a demonstration project, 50
percent funded by Basin Electric's members and 50 percent
funded by the State of North Dakota through a tax on coal, and
concluded after the feed study that it was in fact not
demonstrated to be economical to do a carbon capture and
sequestration project at this time, and this is in a community
right on the edge of the Balkan where there is a lot of
commercial application for CO2 should it enhance oil
recovery. Obviously, all the incentives are there, and yet even
at that, they concluded by their study that it was in fact not
feasible to do it. So I want to put into the record, Mr.
Chairman, with your permission and the permission of the
Committee, a number of documents referencing this feed study by
Basin Electric, if that is acceptable.
And then I have a question for the panel because I think
there is some premise for this. When we talk about this
adequately demonstrated standard and other standards in
previous Clean Air Act rules, whether it is SOX, NOX, mercury,
that have applied certain standards, has there been a different
or is there a benchmark or some historical lesson we can learn
from previous rules and the availability of technology at that
time versus what we are facing today? Is that a fair
characterization for a reasonable question, Mr. McConnell, and
would you be able to answer?
Hon. McConnell. I think there is an interesting model to
look back into the 1970s when we were all concerned about SOX,
NOX, mercury and suspended particulate. The government and
industry formed a successful partnership together, not at odds
with each other but partnered with each other, to develop
technology to reduce those criteria pollutants by 90 percent
over the next 40 years while we increase the amount of coal-
generated power in this country by 200 percent, and that is
through the miracle of technology. And in fact, I would hope
that as we look to the future, we don't get simply bounded by
what we know today in terms of performance and capabilities but
we are mindful of the fact that the investment for the future
is really where we will be and will need to be, and I certainly
hope that rulings such as this don't promote a partnership
between government and industry. They promote an adversarial
circumstances and tends to block out an opportunity to advance
coal, not promote it.
Mr. Cramer. Doctor, would you agree?
Dr. Bajura. I have concerns about the scale that we are
talking about. I don't think the earlier technologies were as
expensive as what we are discussing here, the earlier
commentary about an energy penalty of 30 percent. It costs a
lot of money when you are talking about a billion dollars per
plant in excessive coal use. I agree with the Secretary. We
need to find a way to move forward if we are going to solve
this problem, and I think government support is essential.
Mr. Cramer. With just the few seconds I have, Mr. Waltzer,
if you could just answer this. You made reference to making
coal cost more, and I am going to paraphrase it. You are going
to have to straighten it out for me. But you are saying that
this actually benefits the coal-generated electricity by
positioning it well for when gas prices rise. Could you
elaborate a little bit on that, how making it cost more
positions it better should gas prices rise?
Mr. Waltzer. So let me be clear. I don't know what gas
prices are going to do. They may go up, they may go down, but
if we take this first step to begin the process of deploying
CCS technology and pushing it further down the cost curve, that
will benefit coal in the future.
Mr. Cramer. I see. I am out of time. Thank you, Mr.
Chairman.
Mr. Weber. [Presiding] Thank you, Mr. Cramer.
Mr. Cramer. If I could, Mr. Chairman, I don't think it has
been ruled on, my request to place into the record these
documents from Basin Electric.
Mr. Weber. Without objection.
Mr. Cramer. Thank you.
[The information appears in Appendix II]
Mr. Weber. We are going to get our act together up here
Dana. We just don't know when, but the gentleman from
California is recognized for five minutes.
Mr. Rohrabacher. Thank you very much. I have been running
back and forth between hearings today. As usual, they schedule
two of the most important hearings that I am interested in at
exactly the same time, so I am sorry if I ask something that is
repetitive that had been asked earlier.
I would like to ask Mr. Martella, you had mentioned earlier
in your opening statement that there was a court decision,
Massachusetts, that the Supreme Court decided that the EPA has
to consider or may consider CO2. You said ``has to
consider.'' Does it say that they have to consider the CO2
or just may?
Mr. Martella. The way I interpreted the decision is, they
have to consider greenhouse gases but they do not have to
regulate them. The court made it clear, it was not forcing EPA
to regulate greenhouse gases but it did have to consider----
Mr. Rohrabacher. That is really an important distinction,
and certainly, the Court did not mandate that they take steps
to take the CO2 out of energy production, did they,
or did they say that has to be considered but they didn't say
they have to do it? Is that right?
Mr. Martella. You are absolutely right. It is an important
distinction. The Court said the EPA can't ignore the
consideration of greenhouse gases but the Court also explicitly
said we are not telling EPA it must regulate greenhouse gases,
just that it has to look at----
Mr. Rohrabacher. So this is not a mandate by the Court.
That is something we have to understand. What we are talking
about is a policy that has been determined that this is the
direction that the Executive Branch wants to go because that is
what they have determined is consistent with their policy
goals, not necessarily with what the Court is saying, not in
contrast to the Court but not in direction mandated by the
Court.
Carbon sequestration--now, I know you have had this
question a number of times so I am assuming that you all agree
that the CCS costs a lot more than if you didn't have to do
that. Is that correct? I mean, everybody agrees to that. And
let me note, our colleague, Ms. Edwards, who I deeply respect,
from Maryland--I wish she was here now--talked about the EPA's
responsibility for public health and environment. Well, most of
the people who support this idea that we are going to do
something about the CO2 and sequestration are
thinking that it is being done, it is a pollutant and they are
doing this in the name of protecting health. Now, am I correct
that CO2 is not a threat to public health? Does the
panel agree with that? CO2 does not affect human
beings in the process of producing electricity. Is that
correct? Is there some disagreement on that? I have been
through many panels on this now. You would be the first one.
Mr. Waltzer. So CO2 is not toxic but the
temperature increases associated with greenhouse gases----
Mr. Rohrabacher. That is a different matter, okay? So
CO2 is not toxic. It is not a pollutant. But we are
going to spend a lot more money on it because we have the
global warming theory that basically CO2 will affect
the climate of the planet. But most of the people and the
public who are looking for more. They are looking at expenses
now, especially when we are in this deficit. They are actually
operating under the thought that what is happening with
sequestration, etc., is being done to protect their health.
Well, that just isn't the case. That is not the case what we
have just heard. It is based on a world climate theory, not on
a personal health concept, that we have to protect people's
health.
Let me just note that what we have just heard with the talk
from Mr. Massey is that not only is this whole sequestration
not being done in order to protect public health, but by his
questioning, he made it clear, and from what your answers were,
that it is actually detrimental to the public health because
you are increasing the level, the amount of sulfur, mercury and
other particulates, etc. that are going into the air because
now you are actually----
Mr. Weber. Will the gentleman yield?
Mr. Rohrabacher. Yes, I certainly will.
Mr. Weber. And I will give you some extra time. Unless the
end goal is to do away with the coal industry. I yield back.
Mr. Rohrabacher. All right. Well, I think that sometimes
people are not totally upfront about what their end goals are,
but we have to look at the policies they are advocating today,
but I would say that what we have heard at this hearing today
indicates that the Administration is rushing forward full steam
ahead on this CO2 sequestration as part of an energy
production guide states in a way that will actually damage
public health but is consistent with their goal of trying to
have a policy that affects the climate of the entire world,
which I might add, is a very questionable theory and is getting
more skeptics every day on that theory.
So thank you very much, Mr. Chairman.
Mr. Weber. Thank you.
And I thank the witnesses for being here today, and that
concludes----
Ms. Bonamici. Mr. Chairman, if I may? Thank you very much
for yielding for just a moment. There were some documents that
were introduced today at the hearing that we did not see
before, staff was not given ahead of time, and I would like to
request that all staff remind Members that it is helpful to get
those ahead of time so that we can raise appropriate
objections, if any. So I just wanted to put that reminder on
the record, that it is important for us to see the documents
ahead of time rather than for the first time at a hearing.
Thank you very much.
Mr. Weber. Thank you, Ms. Bonamici. I appreciate that.
And with that, this hearing is concluded.
[Whereupon, at 12:07 p.m., the Subcommittees were
adjourned.]
Appendix I
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Answers to Post-Hearing Questions
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Appendix II
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Additional Material for the Record
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