[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
NATIONAL ENERGY POLICY REPORT OF THE NATIONAL ENERGY POLICY DEVELOPMENT
GROUP
=======================================================================
HEARING
before the
SUBCOMMITTEE ON ENERGY AND AIR QUALITY
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
JUNE 13, 2001
__________
Serial No. 107-47
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
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------------------------------
COMMITTEE ON ENERGY AND COMMERCE
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL BILIRAKIS, Florida JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia SHERROD BROWN, Ohio
STEVE LARGENT, Oklahoma BART GORDON, Tennessee
RICHARD BURR, North Carolina PETER DEUTSCH, Florida
ED WHITFIELD, Kentucky BOBBY L. RUSH, Illinois
GREG GANSKE, Iowa ANNA G. ESHOO, California
CHARLIE NORWOOD, Georgia BART STUPAK, Michigan
BARBARA CUBIN, Wyoming ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois TOM SAWYER, Ohio
HEATHER WILSON, New Mexico ALBERT R. WYNN, Maryland
JOHN B. SHADEGG, Arizona GENE GREEN, Texas
CHARLES ``CHIP'' PICKERING, KAREN McCARTHY, Missouri
Mississippi TED STRICKLAND, Ohio
VITO FOSSELLA, New York DIANA DeGETTE, Colorado
ROY BLUNT, Missouri THOMAS M. BARRETT, Wisconsin
TOM DAVIS, Virginia BILL LUTHER, Minnesota
ED BRYANT, Tennessee LOIS CAPPS, California
ROBERT L. EHRLICH, Jr., Maryland MICHAEL F. DOYLE, Pennsylvania
STEVE BUYER, Indiana CHRISTOPHER JOHN, Louisiana
GEORGE RADANOVICH, California JANE HARMAN, California
CHARLES F. BASS, New Hampshire
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
David V. Marventano, Staff Director
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Energy and Air Quality
JOE BARTON, Texas, Chairman
CHRISTOPHER COX, California RICK BOUCHER, Virginia
STEVE LARGENT, Oklahoma RALPH M. HALL, Texas
Vice Chairman TOM SAWYER, Ohio
RICHARD BURR, North Carolina ALBERT R. WYNN, Maryland
ED WHITFIELD, Kentucky MICHAEL F. DOYLE, Pennsylvania
GREG GANSKE, Iowa CHRISTOPHER JOHN, Louisiana
CHARLIE NORWOOD, Georgia HENRY A. WAXMAN, California
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
HEATHER WILSON, New Mexico BART GORDON, Tennessee
JOHN SHADEGG, Arizona BOBBY L. RUSH, Illinois
CHARLES ``CHIP'' PICKERING, KAREN McCARTHY, Missouri
Mississippi TED STRICKLAND, Ohio
VITO FOSSELLA, New York THOMAS M. BARRETT, Wisconsin
ROY BLUNT, Missouri BILL LUTHER, Minnesota
ED BRYANT, Tennessee JOHN D. DINGELL, Michigan
GEORGE RADANOVICH, California (Ex Officio)
MARY BONO, California
GREG WALDEN, Oregon
W.J. ``BILLY'' TAUZIN, Louisiana
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Abraham, Hon. Spencer, Secretary, U.S. Department of Energy.. 37
(iii)
NATIONAL ENERGY POLICY REPORT OF THE NATIONAL ENERGY POLICY DEVELOPMENT
GROUP
----------
WEDNESDAY, JUNE 13, 2001
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Energy and Air Quality,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:59 a.m., in
room 2123, Rayburn House Office Building, Hon. Joe Barton
(chairman) presiding.
Members present: Representatives Barton, Cox, Burr,
Whitfield, Ganske, Shimkus, Wilson, Shadegg, Pickering, Bryant,
Radanovich, Bono, Walden, Tauzin (ex officio), Hall, Sawyer,
Wynn, Doyle, John, Waxman, Markey, McCarthy, Strickland,
Barrett, Luther, and Dingell (ex officio).
Also present: Representatives Eshoo and Harman.
Staff present: Sean Cunningham, majority counsel; Jason
Bentley, majority counsel; Joe Stanko, majority counsel; Bob
Meyers, majority counsel; Andy Black, policy coordinator; Pete
Kielty, legislative clerk; Erik Kessler, minority professional
staff member; Sue Sheridan, minority counsel; and Allison
Taylor, minority counsel.
Mr. Barton. The subcommittee will come to order.
We want to welcome you, Mr. Secretary. We want to welcome
you to your first official appearance before the Energy and Air
Quality Subcommittee of the Energy and Commerce Committee.
Today, we are going to hear your views on the national
energy policy. Last month, the President's National Energy
Policy Development Group, which you are a very important member
of, sent a report to the President, to the Congress and to the
country about what we should do about our Nation's energy
policy. I have actually read the report, cover to cover, looked
at the tables and the annex. I am sure my other subcommittee
members have studied the report in some detail, and I
personally think that it is a balanced approach and a good
prescription for what this country needs.
The word balance is used a lot today in Washington, and my
guess is we are going to hear it used a few more times today.
The plan that has been presented to the Congress and the
country is a balanced plan. It is a truly comprehensive plan
for a national energy policy. It includes conservation, energy
efficiency, renewables and other alternative sources of energy.
They are highlighted in the plan. It also alludes to the need
for more use of coal, nuclear power, hydroelectric power,
natural gas and crude oil.
One of the things that is pointed out in the report is that
our Nation is a net importer of energy. Just as we have seen in
California, which is a State that is a net importer of
electricity, when we have a supply demand imbalance, that could
cause problems.
Many of the nations that we import our energy supplies
from, like Canada, are allies and good friends. The same could
be said for Mexico, our neighbor to the south and others who
are not directly located on our borders. We maintain good
relationships with and would assume that in times of trouble we
will maintain that relationship, but that is not always the
case. For example, we import over a half a million barrels of
crude oil from Iraq, a nation that we went to war against less
than 10 years ago and a nation which we continue to have
economic sanctions against.
Our energy policy for the last decade, in my opinion, has
been neglected. We have really neglected the supply side of the
equation. And what we have seen is literally that we have begun
to pay the piper with higher prices across the board in heating
oil, crude oil, gasoline, natural gas and electricity.
I don't think we are in a crisis. I do think we have a
serious problem, and I think to solve this problem we need to
use every element of an energy policy, put it on the table,
study it, vote on it and move forward.
Many people have said that conservation renewables are the
answer and the only answer. I have yet to meet a Member of
Congress who is anti-renewable. There may be one or two, but I
don't know who they are. The problem with renewables is that if
you exclude hydroelectricity, they supply \2/10\ths of 1
percent of a quad of energy for our Nation. A quad is a
quadrillion Btus, and we use a hundred quads a year of energy.
So we can quadruple or increase tenfold renewables, and we are
still not going to make a significant gap any time soon in our
energy supply situation.
Many other people talk about conservation. Conservation is
extremely important, and our Nation has become more
conservative of its energy uses. Our energy efficiency is one
of the best in the world. Obviously, it could do better.
Chairman Tauzin has indicated that the first part of the energy
package we are going to move in this committee is a
conservation package, and I am sure he will talk about that in
his opening statement.
So we are not ignoring conservation and energy efficiency,
but, again, if you have a growing nation with a growing
economy, you have to have growing supplies of energy also.
Two of the components of your comprehensive policy that we
are very supportive of are the renewal of nuclear power and
perhaps increased use of hydroelectric power. We hope to move
the hydroelectric relicensing bill in this committee very soon.
We also hope to move legislation with regards to the nuclear
industry, specifically high-level nuclear waste and Price-
Anderson insurance reauthorization. Hydro and nuclear have no
air emissions at all. New nuclear technologies and developments
and incremental hydroelectric capacity can help promote our
energy security, and we should not ignore them.
Finally, we have come to our fossil fuels. They are the bad
guys in the energy debate, because of their emissions and the
fact that some folks think that we simply just use too much oil
and we shouldn't do that. We can't take them off the table,
however, because they provide, between natural gas and oil,
about two-thirds of our total Nation's energy use. And in
transportation, it is even a higher number. Our transportation
infrastructure is almost totally dependent on oil and its
derivatives, i.e., gasoline and aviation fuel. So we are going
to have to take a look at our conventional fuel sources in that
area.
Similarly, we have to look at coal. Our Nation has become
the Saudi Arabia of coal. No Nation has more coal reserves than
the United States of America. We need to solve the emissions
problem with coal, but coal has to be a part of the supply
equation, also.
Energy has not normally been a partisan issue, and I hope
that it is not going to be a partisan issue in this committee
and in this Congress. Republican consumers and workers need
electricity, gasoline and energy, just as Democrat consumers
and workers need electricity, gasoline and energy.
In the past, members of this subcommittee and the full
committee have studied energy issues on a bipartisan basis and
passed energy legislation on a bipartisan basis. I happen to
think that the members of the subcommittee are the most
educated and knowledgeable in this Congress, and I would hope
that we can--and I certainly intend to work with Mr. Boucher
and I know Mr. Tauzin intends to work with Mr. Dingell, to put
together a bipartisan energy package.
Secretary Abraham, I sincerely want to welcome you today.
We have already formed, in my opinion, an extremely close
working relationship. You have got a very, very difficult job.
In fact, I think you probably have the most difficult job in
this Cabinet, because energy is such an important issue, and it
is an issue that has to be dealt with. It can't be put off the
table.
So I look forward to your comments, but, more importantly,
I look forward to working with you, the Vice President, the
President, EPA and the Department of Interior to really put
together a comprehensive energy package.
[The prepared statement of Hon. Joe Barton follows:]
Prepared Statement of Hon. Joe Barton, Chairman, Subcommittee on Energy
and Air Quality
Today, the Energy & Air Quality Subcommittee holds another in its
series of hearings on national energy policy. We welcome today the new
Secretary of Energy, Spence Abraham.
Last month, the President's National Energy Policy Development
Group, of which Secretary Abraham is an important member, sent a report
to the President and to Congress. I have read the report cover to
cover, and I hope Subcommittee Members have, as well as members of the
press whose job it is to describe it.
The word ``balanced'' is used a lot in Washington, but must
certainly be used here today. This is a balanced plan for a truly
comprehensive energy policy. Conservation, energy efficiency,
renewables, and other alternate energy all have their place in the
plan, as they do in our national policy. Coal, nuclear, hydro, natural
gas, and crude oil also have their place in the plan, as they do in the
real world today.
Our nation is a net energy importer. Just as California needs to
erode its supply-demand imbalance in electricity, our Nation needs to
do the same for energy as a whole. Many of the Nations we import energy
from, such as Canada, are allies and good friends. Others, we maintain
good relationships with, and will usually work with us in times of
trouble. But not always. Still others, such as Iraq, love our
dependency upon energy imports and look to leverage our liability
against us. This year, our average imports of crude oil from Iraq
exceed half a million barrels per day.
Energy policy has been neglected. Our supply has not grown as it
should. Within the last several seasons, we have begun to pay the
price, with price spikes in heating oil, crude oil, gasoline, natural
gas, and, of course, electricity.
In this time of crisis, or in this troubling time, (if some will
not let us say ``crisis''), we must put every element of an energy
policy on the table and ignore nothing. Renewables other than hydro are
only a very small part of our energy inventory, and in many cases the
technologies are not yet economically competitive--but we should not
ignore them, and we should, in fact, encourage renewable technologies.
Our gains in conservation and energy efficiency have been
impressive. Today, we are among the most energy-efficient Nations in
the world. But we cannot ignore further developments in conservation
and energy efficiency, and find ways to achieve them without hurting
consumers and businesses.
Nuclear and hydro energy have two great advantages for consumers,
environmental groups, and lawmakers--both have no air emissions. New
nuclear technologies and developments in incremental hydro capacity can
help promote our energy security, and cannot be ignored. In some parts
of the country, hydro supplies more than a third of our electricity.
Nuclear supplies one-fifth of our electricity nationally, and more than
thirty percent in New England and the Mid-Atlantic.
Finally, our fossil fuels continue to play an incredibly important
role in the generation of electricity, the fueling of our cars, and the
production of goods and services for American consumers. None of them
should be taken off the table, and we should pursue, not neglect, using
our natural resource advantages in a comprehensive plan. Our Nation has
been called the ``Saudi Arabia of coal''. No Nation with such a gift is
wise to ignore it.
Energy is not naturally a partisan issue, and it should not be
partisan here. Republican consumers and workers need electricity,
gasoline, and energy for manufacturing, just as Democratic consumers
and workers need the same. Members of this Subcommittee from both
parties have studied energy issues for a long time and have a great
understanding of what needs to be done. As we prepare legislation
subsequent to the Administration's proposal, I want to do so on a
bipartisan basis. I know the Ranking Member, Mr. Boucher, is ready to
do the same.
Secretary Abraham, I welcome you today. You have already shown
yourself a good study and a forceful advocate. Our Subcommittee
jurisdiction includes a great deal of your department, and we look
forward to working with you. This is a critically important time--we
must get the Nation back on track towards energy stability. The plan
you will discuss today appears to me to be a good one and will
accomplish that goal.
Mr. Barton. Mr. Boucher is not here today. He is in markup
on the broadband bill in the Judiciary Committee, so we would
go to the full distinguished committee ranking member, Mr.
Dingell, for an opening statement.
Mr. Dingell. Mr. Chairman, thank you; and I commend you for
this hearing.
I am delighted to welcome my friend and fellow citizen of
Michigan, Secretary Abraham, to appear before this committee.
We are grateful that you are here, Mr. Secretary; and we
understand that you have been busy and that sometimes it takes
a little while to getting around to come up here and visit with
your friends.
In any event, I would like to say that I am pleased that
our agenda has shifted from a debate over whether to abolish
the Department of Energy or to sell off the Strategic Petroleum
Reserve to a more prudent and national debate over the national
energy policies. And I want to commend you again, Mr. Chairman,
for initiating this hearing and proceeding.
I am not envious of the task which confronts you, Mr.
Secretary. California consumers face astronomical prices,
rolling blackouts and a dysfunctional market, which is causing
real problems, and we can see them extend as far east as the
crest line of the Rocky Mountains.
I would like to note that we are not likely to see this
situation resolving itself, particularly as regards to the
dysfunctional state of the market in California. Gasoline
prices have climbed this year, and they can get worse,
particularly if California's electricity problems forced a
shutdown of a refinery or two or three in the Western United
States or if individual refiners decide to hold a little back
to encourage a modest boost in their bottom line, as the
Federal Trade Commission reported they did last year.
In the Pacific Northwest, which is dependent upon federally
funded hydroelectric power, the lack of adequate snowfall and
rain leaves you with the unenviable task of having to choose
between industries like aluminum manufacturing, which is
historically dependent upon cheap, subsidized electricity, or
the commercial and recreational fishing industries, which
depend on the continued existence of salmon and other species
that are being wiped out by these same hydroelectric plants. Of
course, these are just a few of the short-term issues.
The long-term issues involve equally difficult choices. How
do we export national gas resources in the Rocky Mountains
without trampling on the rights of hunters or adversely
impacting the concerns of the people in the area? This is a
question here, then, of do we give FERC imminent domain
authority, as the administration suggested, as the only and the
best way to assure electric transmission lines get built? If we
do so, what is the way that we define the amount or the way in
which those easements are given by eminent domain?
Is there a new way to ensure capacity without trampling on
the environment, the rights of the States, the rights of
private property owners? How do we convince our American people
that the offshore drilling process poses absolutely no threat
to the protection of the substantial coastal resources or the
substantial revenues that they receive each year from fisheries
and coastal tourism? What is the proper mix of initiatives to
increase supply and initiatives to reduce the demand through
improving efficiency?
Now, America is in a peculiar position of being blessed
with rich and abundant resources of natural energy. However,
any production of these resources must be tempered by a sound
approach. We simply cannot blindly drill, dig and detonate our
way out of today's energy crunch. Clean and safe production of
coal and nuclear energy affords us a great opportunity to
strengthen American energy's reserves and to reduce our
dependence on imports. We should explore these options and not
dismiss them out of hand, but to do this we must have a real
commitment to bipartisanship and no more lip service.
In 1991, when I was chairman of the committee, we started
work together here on both sides of the aisle with a Republican
President to put together the Energy Policy Act of 1992. It was
hard, it was fierce, and it wasn't glamorous, and it wasn't
easy, but it was serious work, and it required a serious and
sincere bipartisan effort, which, believe it or not, this
committee produced. The result of that effort led to the energy
policy that has for the better part of the decade served as our
energy policy.
Today, we are faced with the same tough job, and I hope
that we can generate the necessary commitment to
bipartisanship.
As we begin to consider the President's energy policy, I
can't help but note that it was developed in secret. The Vice
President's task force continued to stonewall Congressman
Waxman and me at every turn in our request for the records of
meetings in which the policy was discussed. They even refused
to cooperate with the General Accounting Office, which is also
investigating the development of that policy.
I believe the American people deserve to know how their
energy policy was put together and who had a seat at the table.
Mr. Secretary, I hope that you can persuade the powers in the
White House to play straight with the public and with us by
providing the necessary information and by seeing to it that we
have an open and a transparent and a proper process for moving
forward in this matter.
The administration's first attempt to push its energy
policy has not yet met with a ground swell of support. Why?
Perhaps because it is light on substance and perhaps because it
is light on conservation and perhaps because it is heavy on
glossy photos and reproductions. Balanced is not a word that
does that document justice. I think it is time to put aside
glossy books and break out the chalkboard so we can get
together to talk about charting a balanced legislative approach
to the Nation's energy concerns.
Mr. Secretary, I stand ready to work with you and with our
distinguished subcommittee chairman and to try, as I did
before, to put together a truly meaningful and bipartisan
legislation on energy. I hope that all will join in this
effort. Thank you.
[The prepared statement of Hon. John D. Dingell follows:]
Prepared Statement of Hon. John D. Dingell, a Representative in
Congress from the State of Michigan
Thank you, Mr. Chairman. I am pleased that we have been able to
arrange for my friend from Michigan, Secretary Abraham, to come before
this Subcommittee. We have earnestly attempted to have you here sooner
but, as often happens at the beginning of an Administration, things
sometimes take longer than we want or expect.
I would observe that I am quite pleased that our agenda has shifted
from a debate over whether to abolish the Department of Energy to a
debate over our Federal Energy policies.
I am not envious of the task ahead of you, Mr. Secretary.
California consumers face astronomical prices and rolling blackouts as
a result of a dysfunctional market. One, I would note, that is not
likely to remedy itself. Gasoline prices have climbed this year and
could get worse, particularly if California's electricity problems
force the shutdown of a refinery in the West, or if individual refiners
decide to hold a little back to encourage a little boost in their
bottom line, as the Federal Trade Commission reported they did last
year.
In the Pacific Northwest, which is dependent upon federally-funded
hydroelectric power, the lack of adequate snowfall and rain leaves you
with the unenviable task of having to choose between industries like
aluminum manufacturing, which are dependent upon cheap, subsidized,
electricity, or the commercial and recreational fishing industries,
which depend upon the continued existence of salmon and other species
of fish that are being wiped out by these hydroelectric plants.
Of course, those are just some of the short term issues. The long
term issues involve equally difficult choices. How do we exploit
natural gas resources in the Rocky Mountains without trampling on the
rights of hunters? Is giving FERC eminent domain authority--as the
Administration has suggested--the only and best way to assure new
electricity transmission gets built, or is there a way to ensure new
capacity without trampling on the environment, the rights of states, or
the rights of private property owners? How do you convince the American
people that off-shore drilling poses absolutely no threat to the
substantial revenues they receive each year from coastal tourism? What
is the proper mix of initiatives to increase supply and initiatives to
reduce demand through improving efficiency?
America is blessed with rich and abundant sources of natural
energy; however, any production of these resources must be tempered by
a sound approach. We simply cannot blindly dig, drill, and detonate our
way out of today's energy crunch.
Clean and safe production of coal and nuclear energy affords us the
real opportunity to strengthen America's energy reserves and lessen our
dependence on foreign imports. We should explore these options, not
dismiss them out of hand. But to do this we must have a real commitment
of bipartisanship, not more lip-service.
In 1991, when I was Chairman of this Committee, I started work with
colleagues on both sides of the aisle and a Republican President to put
together the Energy Policy Act of 1992. It wasn't glamorous work, it
wasn't easy work, but it was serious work that required a serious and
sincere bipartisan effort. The result of that effort led to the energy
policy that has, for the better part of a decade, served as our energy
policy.
Today we are faced with the same tough job; sadly we seem to lack
the same sincere commitment to bipartisanship.
As we begin to consider the President's energy policy, I can't help
but note that it was developed in secret. The Vice President's task
force continues to stonewall Congressman Waxman and me at every turn in
our simple request for records of meetings at which the policy was
discussed. They have even refused to cooperate with the General
Accounting Office, which is also investigating the development of the
policy. The American people deserve to know how their energy policy was
put together and who had a seat at the table. Mr. Secretary, I hope you
can persuade the powers that be at the White House to play straight
with the public, and with us, by providing this information.
The Administration's first attempt to push its energy policy has
not been met with by a groundswell of support. Why? Because it was
light on substance and conservation and heavy on glossy photos and
productions. Balanced is not a word that does the document justice.
It is time to set aside the glossy book and break out the
chalkboard so that we can get about charting a balanced legislative
approach to the Nation's energy concerns.
I stand ready to work now, as I did before, to put together truly
meaningful and bipartisan legislation on energy policy.
Mr. Barton. We thank the distinguished full committee
ranking member.
We now recognize the full committee chairman, the
distinguished gentleman from Louisiana, Mr. Tauzin, for his
statement.
Chairman Tauzin. I thank the chairman and particularly want
to welcome and thank the Secretary of Energy, the Honorable
Spencer Abraham, for being here with us today and beginning
this official dialog.
I want to echo Mr. Dingell's sentiments, first of all. We
worked before in a bipartisan fashion; and, Mr. Dingell, we
will again. We can differ on how well balanced that policy
recommendation we have seen is and how well balanced our
product is going to be, but I happen to think it is an
extraordinarily well balanced set of recommendations, Mr.
Secretary, and we intend to even improve on that as we go
forward.
Let me first say that every day, every week, every month
since I have been privileged to sit on the chairmanship of the
full committee and work with Mr. Barton as a subcommittee chair
along with his ranking members and Mr. Dingell, we have been
preparing for this moment. Our staffs have been working
quietly. We, of course, have interacted with the Vice
President's task force, and we are prepared to begin moving an
energy proposal through this Congress and through this
committee, and it will be comprehensive, and it will be
balanced.
I want to make a few quick points about it. First of all,
on the Crossfire show that I recently appeared on, Bill Press
asked me if it wasn't true that we Republicans were making up
this crisis just to help our oil buddies, implying this was
some sort of vast right wing conspiracy, designing a crisis
that we might need to artificially correct.
Let us test that argument. For the Nation to have a correct
and sound and decent energy policy, Americans ought to know
that they have a secure supply of energy, that they have a
reliable supply of energy, that the energy provided to them is
affordable and that it respects environmental and conservation
objectives of our country. It is a four-point test. And the
question we should ask ourselves is, do we indeed face a crisis
in any one or all of those four elements?
Well, first of all, we are much too dependent on foreign
sources, and Joe mentioned it. When we are buying oil from Iraq
and turning it into jet fuel to go out and bomb Iraqi radar
sites, there is something illogical about that. To be 60
percent dependent upon others for every gallon of gasoline we
produce is not a very secure world I want my children to grow
up in. Americans need to be a little more secure in our
supplies than we are today, particularly when we would like our
energy to be affordable. Why should we rest believing that we
can trust others to price it fairly for us when we depend upon
them for those supplies?
Is it reliable? Well, we have seen the cracks in the
reliability system. We have seen pipeline failures that led to
a series of events of price spikes and incredible shortages in
the Midwest last winter, and we have seen the California
situation.
We know that other potential problems lie in the electric
grids and the pipeline systems and the marketing systems by
which we receive our energy. We know about the boutique fuels
problem and those market dislocations, and we understand that
Americans are very concerned about the reliability of supplies
when the lights go out in California and the lights are shining
in some other part of America, that is not the America that we
have fought for and dreamed for and wished for our children.
We want all Americans to share equally in secure, reliable
sources; and when gasoline prices go up to $3 for a family that
is struggling to survive and has to have transportation to get
their kids to school or go to work, as we live further and
further, in many cases, from our employment because of urban
sprawl and traffic congestion, do we really have affordable
energy in this country? When people can't afford to heat their
homes, keep their homes cool in the summer in my part of the
country, and people are dying of the cold and the heat in the
summer, that is not the America I think we all dream for, fight
for and live for.
When in fact we all have concerns that we haven't paid
enough attention to conservation, that we have become a gas
guzzling society again, and we recognize we can do an awful lot
more to be prudent about the way in which we use energy in this
country, really doing our job in conservation, in protecting
the environment in that regard.
The answer to all those questions is that we are not yet in
crisis, but we are approaching it.
And here are four good points, quickly.
One, I am delighted we have an administration that wants to
be proactive here. This committee wants to be proactive. Too
often, the Congress is reactive to a crisis. America shouldn't
have to wait before in the long lines at the gas station and
before Americans simply can't afford to pay their utility bills
and utilities go bankrupt and lights go out before we take
action. All the signs are there. We have a crisis in every one
of those four categories, and I am so pleased that we are
prepared to be proactive instead of reactive for a change. That
is exciting to me.
Second, I know this plan has been criticized as being a
gift to the administration's friends in the energy industry.
This is a consumers' energy wish list when you read that list.
It is a consumers' energy wish list. It is new ways in which
consumers can take control of this marketplace by reducing
demand, by conservation and renewable sources, by literally
impressing upon Americans the fact that if we are going to use
energy we ought to produce more of it for ourselves instead of
depending upon reliable sources. And it is so broad that it
reaches every aspect of potential security and reliability and
affordable sources of energy for our country, and that is
exciting to me.
I think consumers ought to take some real joy in the fact
that Congress is finally going to be debating a bill that is
going to help consumers feel comfortable that they can have
reliable, affordable sources of energy that won't damage and
destroy the environment and will focus on consumers'
obligations to be more prudent in the use of that energy in
America.
Third, I find very few controversial features of this plan.
Now I know the press has focused on the controversial features,
and we are going to do that in our political debates here. We
always do that. But so much of this plan is noncontroversial.
So much of it ought to fly through this committee, Mr.
Chairman, because this committee knows how to work across the
aisle when we have got a good plan for America. We are going to
do that, Mr. Secretary.
Finally, I am delighted we have a legislator in the
position of Secretary of the Department of Energy. You
understand this legislative process and you know the role of
the legislator in crafting and drafting and producing the
legislation that backs up the proposals and the principles that
the Vice President has articulated in the draft plan. You know
that relationship. You respect it. You are someone we can trust
in that process; and I feel extraordinarily comfortable with
your expertise, your knowledge, your presentation of the issues
that, as I have seen them in the press over the last several
weeks and months, and we are going to have a great relationship
as we move, I think, a comprehensive energy plan that indeed
focuses on energy security, reliability, affordability and
protection of our environment and now conservation objectives.
Thank you, Mr. Secretary.
[The prepared statement of Hon. W.J. ``Billy'' Tauzin
follows:]
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee
on Energy and Commerce
I would like to thank Chairman Barton for holding this important
hearing. I would also like to thank our distinguished witness, the
Secretary of Energy, the Honorable Spencer Abraham.
We're here today to talk about the President's proposal for a
National Energy Policy. Some have tried to criticize the President's
report--unfairly I believe. Anyone who's read the report sees right
away that this is a balanced, responsible proposal.
The problems we're experiencing today are the result of a lack of a
systematic, comprehensive approach to energy policy and our national
security. It's been almost a decade since we've looked at the big
picture and thought critically about reducing our Nation's energy
demands and about how we're going to meet our energy needs.
People have criticized the report as being an energy industry wish
list. This is more appropriately called an energy consumer's wish list.
This report is loaded with policies that will protect the environment,
encourage efficiency, promote renewables, and ensure affordable energy
for all Americans for years to come.
It is refreshing that this report talks openly and honestly about
how we plan to meet our Nation's energy needs. Not only does it talk
about renewables and new pollutant standards, but it also talks about
the source of more than half our Nation's electricity--coal. A number
of my colleagues on the other side of the aisle would have to agree
with me that any discussion of how we intend to meet the energy needs
of the 21st century must involve coal. The questions are how do we make
it cleaner and more efficient. The President's proposal answers those
questions.
It also talks honestly about nuclear power. Two large nuclear power
plants came back on line earlier this month in California, and prices
for wholesale power dropped dramatically. Ask Californians if they
would like to have more nuclear power plants now.
The bottom line is, this report is loaded with potentially
bipartisan solutions to our Nation's long-term energy problems.
Politics aside, there is a lot here that we can all agree must be done.
There are very few things in this report that are controversial.
I thank the Secretary and the Administration for the hard work
they've done putting this proposal together. And I look forward to
working with my colleagues across the aisle when considering these
recommendations in a bipartisan fashion.
Mr. Barton. Thank you, Mr. Chairman.
Now in the absence of Mr. Boucher to give the ranking
minority statement, Congressman Markey of Massachusetts, one of
our distinguished members.
Mr. Markey. Thank you.
Welcome, Mr. Secretary. Welcome to the committee.
There is a part of the last few months that reminds me of
my favorite television show when I was a boy, which was Rocky
and Bullwinkle. At the end of every Rocky and Bullwinkle, there
used to be this little segment where Mr. Peabody, this dog
scientist, used to take this little freckled-faced, red-haired
boy Sherman into the way-back machine, and in the way-back
machine, they used to go and study fractured history from the
long ago past; and to a very large extent that is what is
happening here in this administration.
Back in 1976, when I was being elected to Congress, the
average automobile got 13 miles per gallon. The auto industry
said it was technologically impossible to make automobiles more
efficient, although when I asked my father, pop, what was your
first car, he said it was a model A, 1930, 46 years before. I
said, what did it get for mileage? And he said, well, 12, 14
miles a gallon. I said, how about the Ford Fairlane out there?
He said, well, 12, 14 miles a gallon. Forty-six years later.
Well, this Congress passed laws mandating that automobiles
double their fuel efficiency in the next 10 years, and they
did, and it was successful. And 10 years later, by 1986, the
price of oil had dropped to $12 per barrel because we were
using our technology to be successful.
The United States only has 3 percent of all the oil in the
world. OPEC has 76 percent. That is our weakness. We should
drill in nonenvironmentally sensitive areas all over the United
States, even on public lands, and Bill Clinton increased that
over what President Bush and President Reagan had done in the
1980's and early 1990's. We believe in that. But we cannot
compete with them in terms of drilling. And the
administration's proposal to go to the Arctic National Wildlife
Refuge, to go to other environmentally sensitive lands as an
answer to this, quote, unquote, crisis is, in my opinion,
morally wrong, ethically wrong, generationally wrong.
Is there a national electricity crisis? No, there is not.
Is there a crisis in California because of a law which was
framed very poorly and historic drought in the Pacific
Northwest? Yes, there is. Do the States which touch California
as a result have serious problems? Yes, they do. Does the rest
of the country have an electricity crisis? No, it does not.
Is the answer to drill in the Arctic to build a pipeline
which will come down to California, to a State that doesn't use
oil to generate electricity? No, it is not. That oil would only
go into SUVs to get 14 miles per gallon that should be getting
25 and 30 miles per gallon, because there has been an amendment
attached to every appropriations bill for the last 7 years
since Newt Gingrich took over which prohibits the Congress--
prohibits looking at SUVs because of the increased fuel economy
standards.
It is hot outside today, very hot here in Washington.
Forecasts are that it will go up to 92 degrees. People don't
like to walk outside on days like today, because for that every
15 minutes that we are walking outside, there is about 2 hours
of energy that just drain out through the soles of their shoes.
They lose their energy. People like to stay inside on days like
today. They don't like to walk around and take their breaks.
That is the kind of day it is in Washington.
Now, 35 percent of all electricity used in the United
States on days like today is air conditioning. In Texas, it is
75 percent of all electricity used in the summer is air
conditioning.
Now, if you have got a crises and you are trying to solve
it, wouldn't you look at air conditioning? Well, this
administration did, pursuant to a law which I passed as the
chairman of this subcommittee back in 1986, a law which
mandated that a rulemaking take place which increases the
efficiency of air conditioners. The Clinton Administration
finished that rule about 5 months ago. This administration
looked at that rule and said, oh, that would be too onerous a
burden to impose upon the air conditioning industry. We can't
impose that standard.
Now, this is, by the way, the very administration in a way-
back machine that is trying to argue that we can
technologically construct the technology that can knock down
every Chinese and Russian missile, a thousand at a time if
necessary, coming in the middle of the night at 1,000 miles an
hour. But if you ask them if it is possible to increase the
standards for air conditioners by 30 percent, which the second
largest manufacturer in the country, Goodman, is already
meeting, they say, oh, that is technologically impossible. How
could you impose such a burden upon the air conditioning
industry?
So when we talk of Star Wars, there is no technological
barrier that we can't break because of our national security.
But when we talk about energy, every technological burden,
every technological hurdle is too high. Suddenly, the
technological giant becomes a low-tech lilliputian.
Well, ladies and gentlemen, the budget of this
administration reflects that. One, their plan is a Trojan horse
being used by the energy companies to take off of the books
health and environmental laws which the energy companies have
bitterly opposed for a generation. And, second, there is
underfunding for renewables and for conservation. And where it
is in their budget they tie it to drilling in the Arctic
National Wildlife Reserve, in the most precious reserve that we
should be preserving.
My own feeling is that it is morally wrong, ethically wrong
for this generation to not first ensure that every SUV and
every automobile and every air conditioner is made efficient
over the next 10 years, before we drill in the Arctic
wilderness or other precious, environmentally sensitive lands
that should be preserved for generations to come.
And, second, that this administration should go to OPEC,
and they could demand that OPEC turn on the spigots as they
insisted that Bill Clinton do. It is amazing to me that
Secretary Cheney continues to maintain that OPEC is not to be
blamed for this problem, that it is a refinery issue inside the
United States, even though our refining capacity has increased
a million barrels a day over the last 10 years, while OPEC has
reduced production by 2.5 million barrels a day since January
in their announcements. If OPEC increases their production,
this energy crisis, quote, unquote, largely will disappear.
That is the reality. There is a direct correlation between the
production as it is perceived by the marketplace and the price
at the pump.
So we are at an historic juncture. We believe that we
should work together with the majority to construct a policy
which will work for all regions of the country, but we cannot
allow for a Trojan horse to be constructed which will be
primarily used just to destroy health and environmental laws.
I thank you, Mr. Chairman, and I ask unanimous consent that
Mr. Waxman's opening statement be included in the record at
this point.
Mr. Barton. Without objection, so ordered.
The Chair wants to announce there is a pending vote, but we
are going to continue the opening statements and try to not
have a recess.
The rules of the committee allow the ranking members 5-
minute opening statements. All other members are allowed 3-
minute opening statements. We are going to try to adhere to the
3-minute rule for the remainder of the opening statements.
The Chair would recognize Mr. Ganske for a 3-minute opening
statement.
Mr. Ganske. Thank you, Mr. Chairman.
Well, following Mr. Markey always gets my energy level
going, and we could just plug in Mr. Markey to increase our----
And I wanted to thank you, Mr. Secretary, for being with us
today. This is really an important issue. I had a constituent
pull me aside in the supermarket recently, and she said, you
know, I am all for the environment, but I also--I don't want to
freeze in the winter, and I don't want to cook in the summer.
And in Iowa, which I represent, it is estimated that in just a
few years we will have energy shortages, and unless something
is done about that, we will be seeing blackouts like they are
experiencing in California. So we need to do something about
this.
I do want to take this opportunity to thank this
administration for making I think a very environmentally sound
decision, and that was EPA administrator Christi Whitman's
decision not to grant California a waiver on the clean air
standards. Whitman said, quote, the administration is concerned
about the risks of MTBE and drinking water in California and
other States. Clean air and clean water are equally important.
We do not want to pursue one at the expense of the other.
And whereas I hear some of the members of the other party
talking about this administration being for, quote, big oil, I
would point out that big oil was not exactly enthusiastic about
this administration's decision. But I think it was a wise one,
and I am mentioning this, because it also has energy
implications.
As Mr. Markey pointed out, we are very dependent on foreign
oil. It is important to have renewable fuels as part of our
energy policy. Ethanol and soy diesel and other types of
renewable fuels help us reduce our dependence on foreign oil.
In addition, when those plants grow, they take carbon dioxide
out of the atmosphere instead of releasing stored
CO2 into the atmosphere.
That doesn't mean that coal shouldn't be part of the
solution. We do need to devote additional research and
development funds for helping ensure clean coal technology, for
example.
In terms of natural gas, you know, we are butting up
against supply problems, and we do need to increase this. Most
of the environmental groups would agree that natural gas is the
cleanest burning fuel. In fact, the Sierra Club is already on
the record as being in favor of a pipeline--natural gas
pipeline from Prudhoe Bay. So we ought to look at that, and we
ought to look at some more refinery capacity. We ought to look
at, specifically, more pipelines and high power lines. This
committee has jurisdiction over interstate energy issues,
especially in the transmission area; and I think that is
important. We need to work in a bipartisan way to solve those
energy problems.
Just the other day in Iowa, I took my son out to the golf
driving range. We hit some golf balls. I will tell you, the
wind was blowing across that field at about 40 miles per hour,
and we ought to devote resources to expanding wind as a part of
the energy solution.
I have looked over the administration's proposals, and I
believe that this committee will work in a bipartisan fashion
with the administration to have a balanced policy. But, you
know, we haven't had much of a policy for the last 8 years, and
it is time now to move on, solve some problems, stop the old,
tired, bitter partisan politics that we have seen cause so much
gridlock in this town for a long time.
With that, I will yield back.
Mr. Barton. We thank the gentleman from Iowa.
We would recognize the gentleman from Pennsylvania for a 3-
minute opening statement, Mr. Doyle.
Mr. Doyle. Thank you, Mr. Chairman; and thank you for
reconvening the subcommittee's efforts to move forward with a
cohesive approach to solving our Nation's most pressing energy
challenges.
I want to welcome Secretary Abraham and look forward to
hearing his thoughts on how DOE's mission relates to the
directives of the national energy report, as well as to the
administration's budget request.
As we have learned from California's current energy crisis
and its relationship to the State's electricity deregulation
plan, it is critical for all aspects of energy policy to
interface appropriately with the other. It is critical that we
have consistent and complementary policies in place that enable
us to achieve our energy goals in a thorough and timely manner,
and the key to consistent and complementary policies is
providing adequate funding to support research and development
efforts.
Unfortunately, the national energy report and the
administration's budget request fall short in this regard. For
example, the increase of attention to and the funding of clean
coal technologies comes at the expense of other important
fossil energy research. Thus, when the national energy report
and the administration's budget request is looked at carefully,
I see an approach being advocated that actually discourages
research into new, more efficient, more environmentally sound
technologies. In my view, our national energy policy should pay
special attention to those technologies that are likely to
provide a significant payoff relative to increased efficiencies
and potential for market contribution.
I am particularly interested in seeing a number of
technologies play a more prominent role in the formation of our
national energy policy, including gas turbines, fuel cells,
methane hydrates and combined heat and power. We must set a
more aggressive schedule for heightening R&D efforts in these
areas. Additionally, we must set benchmarks and clearly
articulate what success is within the context of our national
energy policy. If we do not sufficiently define success, we
have no real means of monitoring progress.
Like a lot of people, I was taken aback by the absence of
concrete, specifically detailed goals in the national energy
report. Again, how can a policy proposal be appropriately
reviewed for consideration if a quantifiable objective or
criteria for success is not identified? And how does one
justify the indiscriminate shifting of funds away from critical
programs that support the types of research oftentimes outlined
as important in the national energy report?
It would appear that, in many respects, the national energy
report, as well as the administration's budget request, does
not adequately address our Nation's most pertinent energy
concerns. At this point, we don't have a balanced approach to a
national energy policy but a lopsided one.
It is of the utmost importance that the final product
produced as a result of our discussions on a national energy
policy be a balanced one. We all know the energy demands that
exist, and we must utilize a diverse portfolio in meeting these
demands.
It is not, however, the time to cherry-pick among sources.
As I have mentioned earlier, our national energy plan must be
cohesive, and we must have consistent and complementary
policies in place. We must continue to improve efficiency and
safety of traditional sources, such as coal, gas, oil and
nuclear, while also providing R&D support to new alternative
technologies that enable them to come to market; and we must
not accept the status quo when it comes to conservation
efforts.
As always, I am hopeful that we will be able to reach some
agreement on these matters. I would like to think that the
Department of Energy and the administration will work closely
with the Congress on all energy policy. What we eventually
decide upon will affect all Americans, and we should all work
together toward that goal.
Thank you, and I look toward to hearing from you, Mr.
Secretary.
Mr. Shimkus [presiding]. The gentleman yields back his
time.
I want to yield to the gentlewoman from California so she
can make her opening statement and get to her vote.
Ms. Harman. Thanks to the chairman and thanks to the
regular chairman, Mr. Barton, for letting me sit on these
subcommittee hearings every time. It is important, as a Member
from California, certainly to me and my constituents, that we
move forward with responsible legislation.
I am pleased to welcome the person testifying before us
this morning, because Secretary Abraham was a senator before he
got there and understands why the anguished voices of
constituents make such a difference. I think that as you sit
and listen to us today, Mr. Secretary, you will hear the voices
of 34 million Californians, all of whom are saying, why can't
we have relief from the staggering electricity bills?
I think one of the answers is available to you in your
capacity as Secretary of Energy and in my more complete
statement, which I want to submit for the record----
Mr. Shimkus. Without objection.
Ms. Harman. [continuing] I include that recommendation.
We just heard from Mr. Doyle and we heard from Mr. Ganske
before about the need to invest in renewables. It is our budget
that has been cut, Mr. Secretary. The investment in renewables
has been cut by 50 percent in the 2002 budget. The investment
in energy efficiency has been cut by 30 percent. All the
statistics show that these programs pay off.
And I just want to close on this note, Mr. Chairman. I will
be offering an amendment in full committee when we mark up the
Barton bill to restore the 2002 funding to the 2001 level. I
hope on a bipartisan basis this committee will support it and,
better yet, that the Energy Department will trump me and urge
the restoration of these programs first. Because I think that
you can get this done without the need for this committee to
act. And if you get this done, 34 million people in California
will say thank you.
One final comment. The Vice President was here yesterday
speaking to a bipartisan group of the California delegation. I
raised this issue then. He did not respond at all. He said
nothing about this subject. I hope since it is within your
jurisdiction, Mr. Secretary, that you will bring it to his
attention again. It should be part of your national energy
plan, and it will bring tangible, practical relief right now to
34 million Californians.
Thank you very much, Mr. Chairman.
Mr. Shimkus. I thank the gentlewoman, and she better scoot
if she is going to get there.
I recognize myself for the allotted time; and I want to
thank you, Mr. Secretary, for coming and joining us today. It
is an interesting time to talk about energy, which some of us
on the subcommittee have been doing for 5 years now; and it is
good to see Joe back there as a trusted staffer who served with
us and helped me out many times. And, Joe, welcome.
I basically say, you know, this country has to make a
decision. If it wants to use electricity, we have to generate
it. If we want low-cost gasoline, we have to drill for it, we
have to transport it, and we have to refine it. So, in some
ways, we might be looking back in time when we had to make
those decisions in the past, and those are the same decisions
in the future. The basic economic supply and demand equations
work, and they work in the ability to distribute resources the
best way at the cheapest cost if you allow the markets to work.
I want to also publicly thank the administration and
applaud their decision denying the waiver for the Clean Air Act
for California trying to get out of the Clean Air Act. The
decision will continue to mean cleaner air for California,
lower gasoline prices for those areas in the country that add
oxidents to their gasoline, and it will help our Nation's
farmers.
I also think it builds on this debate as far as a national
energy portfolio, and it will be a constant message that I will
talk about as having some internal ability to produce our own
fuels. Of course, the biofuels movement is big and strong, as
you know, here on the Hill, and we will really want to play a
key role in a national energy policy.
I would also like to commend the administration on this
energy plan, especially their commitment to clean coal
technology. The State of Illinois and Southern Illinois
University in particular have been at the forefront of using
clean coal technology funds to find cleaner ways of burning
coal. SIU is currently working on a low emission boiler system
in Elkhart, Illinois, to reduce emissions from coal plants; and
of course DOE is involved to some extent in that project.
This focus on clean coal technology by the administration
shows that you can balance the environment with supply and
price so that we have clean, reliable, affordable energy.
I also want to add, in addition to the diverse portfolio of
fuels, that we need to talk about nuclear power, and of course
Illinois is a major nuclear power State with about I think 10
generating facilities, one in central Illinois that is close to
my district. But we also have a facility in the deep southern
part of the State of Illinois that is the only U.S. uranium
conversion facility. If it closes, we would have to rely on
foreign countries for our uranium to power nuclear plants.
National securitywise, I think that is very dangerous.
I have been talking with your agency on the conversion
plan. It was called Converdine in my metropolitan--down in the
State of Illinois.
I know that I have mentioned this many times before, but I
feel I need to say it again. The previous administration's fuel
choice was natural gas, mainly because it burns cleaner than
other sources of fuel. While they were promoting natural gas,
they were also limiting where and how we get at creating a
scarce resource. And a lot of these high natural gas prices are
a part of the high prices this summer, and they were the high
cost of heating homes in the fall that many of us experienced.
The result has been much higher than anticipated prices and a
shortage of fuel. The President's energy plan calls for us to
have a diverse fuel mix that uses all our Nation's fuels, not
just one.
I notice in your testimony that you focus on energy
efficiency, and you probably know this committee will be taking
up conservation energy efficiency legislation soon. What I
focus on in the efficiency issue is getting coal power plants
greater than 35 percent, and if we increase that, that helps a
wide range, from the three pollutant strategy also of the
carbon dioxide issue.
Also, efficiency in the transmission grid will be very,
very helpful. I think that is a place where we can put research
and development.
I have gone over my time. Many of my colleagues have come
back. I thank you for this opportunity; and, with that, I will
yield back my time.
[The prepared statement of Hon. John Shimkus follows:]
Prepared Statement of Hon. John Shimkus, a Representative in Congress
from the State of Illinois
Good afternoon, Mr. Chairman and to all whom have shown up this
morning. I am looking forward to this hearing today.
First of all I would like to thank Secretary Abraham for testifying
this morning. I would like to take this opportunity to applaud the
administration's decision to deny a waiver from the Clean Air Act for
California. The decision will mean cleaner air for California, lower
gasoline prices for those areas of the country that add oxygenates to
their gasoline, and it will help our nation's farmers. I think it also
builds on the Bush Administration's plan to increase domestic sources
of energy. This decision was a win for the environment, a win for the
consumer and a win for rural America.
Second, I would like to commend the Administration on this energy
plan, especially their commitment to clean coal technology. The State
of Illinois, and Southern Illinois University in particular, have been
at the forefront of using clean coal technology funds to find cleaner
ways of burning coal. SIU is currently working on a low emission boiler
system in Elkhart, ILto reduce emissions from coal plants. This focus
on clean coal technology by the Administration shows that you can
balance the environment with supply and price, so that we have clean,
reliable and affordable energy.
I know I have mentioned this many times before, but I feel the need
to say it again. The previous administration's fuel of choice was
natural gas, mainly because it burns cleaner than other sources of
fuel. While they were promoting natural gas, they were also limiting
where we were able to get it, creating a scarce resource. The result
has been much higher than anticipated prices and a shortage of fuel.
The President's energy plan calls for us to have a diversified fuel mix
that uses all our nation's fuels, and not just one.
I notice in your testimony that you focus on energy efficiency, and
as you probably know this committee will be taking up conservation and
energy efficiency legislation soon. What I also hope the administration
will focus on is making energy more efficient at the generation and
transmission stages. Currently some utilities are testing
superconductors to transmit electricity more efficiently. Right now
coal efficiency is only about 35%. By improving the efficiency of how
we burn coal and how we transmit power, we can supply more power
without adding as many generation facilities or without increasing
pollution. We have seen nuclear power plants becoming much more
efficient, I believe the 103 nuclear plants that are on-line today,
produce more power than the 110 nuclear plants than were on-line 10
years ago. I hope the administration will continue to focus on this
area as well.
Thank you.
Mr. Shimkus. I will go to the gentleman from Ohio, Mr.
Sawyer, for 3 minutes.
Mr. Sawyer. Thank you very much, Mr. Chairman.
I have a longer statement, but I would like to join with my
colleagues in welcoming Secretary Abraham and saying thank you
for being here and by saying that I really welcome the proposal
that you and the President have formulated with regard to
national policy. I share my colleague's concern that it needs
work, that it--I believe it is too narrow. I think there are
some arenas that need sharper focus, and there are other
elements besides supply that need emphasis.
But we can all agree that the country will require new
sources of oil and natural gas and that our capacity to produce
electricity to meet our needs remains important. But we also
need to find better ways to get energy to people to actually
create regional markets and to improve the efficiency with
which we consume it. In short, we need energy policies that
reflect the complexity of the problem that we are trying to
deal with and not simply its urgency. As we have learned from
California, it is vastly more important that we do it right
than that we do it immediately.
Let me just concentrate for a moment on the transmission
network. Without real improvements, it seems to me we won't be
able to move significant amounts of energy from new plants to
waiting customers, and competitive regional markets will remain
an illusory goal that is just beyond our grasp. There is a lot
of work that needs to be done to have genuine markets for
electricity; and, at least so far as I have read, there are
only limited suggestions in the published plan that I have seen
so far to deal with that problem.
We really need a transmission system that resembles an
interstate highway and not just a collection of two-lane
blacktops. We need an equitable method for building new
transmission capacity. We need to remove bottlenecks. We need
to establish reliability standards for companies so that we
have reserve energy on hand, to a standard that allows
companies to be competitive but which has high expectations to
avoid the kind of problems we have seen in California. We need
rules that encourage investment in transmission lines by also
guaranteeing that all suppliers have equal access to that
interstate highway.
And something that we really haven't talked much about but
I think is an important part of this, we need to encourage
modern transmission technology so we can carry more electricity
more efficiently over existing rights of way, as well as
finding ways to site new rights of way.
In short, Mr. Secretary, I join you in suggesting that we
need a thoughtful, diverse national energy policy to provide
for our future needs. We need a policy that recognizes energy
efficiency as the great untapped energy resource that it is and
uses it to reduce our need to burn more and more fuel. It is a
policy that will capitalize on our ingenuity by encouraging
investment in innovative energy technologies, a policy that
creates infrastructure for the delivery that matches the scale
of our interstate highway system.
We have a great opportunity before us, and I just want to
say thank you for your being here and for the work that we are
beginning today.
Thank you, Mr. Chairman.
[The prepared statement of Hon. Tom Sawyer follows:]
Prepared Statement of Hon. Tom Sawyer, a Representative in Congress
from the State of Ohio
Thank you, Mr. Chairman. I would also like to thank Secretary
Abraham for coming today as we begin to discuss a national energy
policy. Let me begin by saying that I welcome the proposal that
President Bush made last month for a national policy. I welcome the
debate that is beginning. The President has helped focus the nation's
attention on the need to develop a comprehensive approach towards
energy issues. Unfortunately, the President's plan is overly narrow,
unfocused, and emphasizes the wrong element. He presents the nation's
current energy situation as predominantly a problem of supply. But we
should not allow ourselves to have a false sense of security that we
can rely on increasing energy production to take care of our future
energy needs.
We can all agree that our country will require new sources of oil,
electricity and natural gas. But we also need to find better ways to
get that energy to people and businesses, and to improve the efficiency
with which we consume it. In short, we need energy policies that
reflect the complexities of the problems that we face and not merely
the perceived urgency. As we have learned from California, it is vastly
more important that we do it right than that we do it just now.
The President is placing faith in the ability of energy companies
to provide a large enough supply of energy to satisfy our continuously
expanding demand for energy. It reminds me of the faith with which
California officials embraced their electricity restructuring plan.
That wasn't good enough. We must confront our need to be far more
efficient in our use of energy, and confront our need to build an
infrastructure of pipelines and transmission lines that is capable of
getting energy to the people who need it.
On the subject of electricity, the President's plan suggests that
1,300 new power plants will need to be built by 2020, an average of
more than one new plant a week. But the President avoids mentioning a
recent Department of Energy report (Scenarios for a Clean Energy
Future) that shows that approximately half of those new plants will not
be necessary if energy efficiency measures are put in place. The
President also suggests that relaxing environmental regulations will
help by allowing the oldest and dirtiest plants to produce more power.
Reviving old plants is not a necessary step. More plants are being
planned and built, including nearly 14,000 Megawatts over 1998 levels
in Ohio alone.
Moreover, without significant changes to the electrical
transmission network, we still will not be able to move significant
amounts of electricity from the new plants to waiting customers, and
competitive regional markets for retail sales will remain an illusory
goal beyond our reach. The President has made only the most limited
suggestions to improve the electrical transmission system. There is far
more work that needs to be done to have genuine markets for
electricity. We need a transmission system that resembles an interstate
highway, not a collection of 2 lane blacktops. We need an equitable
method for building new transmission capacity in order to remove
bottlenecks in the movement of electricity. We need to establish
reliability standards for companies selling power so that they have
reserve energy on hand to make blackouts less likely. We need rules
that encourage investment in new transmission lines, while also
guaranteeing that all suppliers have equal access to the new interstate
transmission highway. And we need to encourage modern transmission
technology to carry more electricity more efficiently over existing
rights of way.
California stands as a cautionary tale to us as we develop the
electrical aspects of a national energy policy. Those of us in the rest
of the country cannot just continue to expect that we will avoid the
fate of California. We cannot expect that building enough power plants
will be the singular and sufficient way out of the electricity problems
that we face. It is not. Two important ingredients are missing from
that approach. First, we need the efficient transmission highway system
that I mentioned before. Second, we require policies that allow federal
and state authorities to enforce the rules of the electricity
marketplace. But those authorities must have the will to enforce the
rules. So far I have not seen a demonstration of that will from the
FERC.
With regard to national energy policy as a whole, the President
inaccurately protests that ``we're running out of energy in America,''
and so his first response is to follow his instinct to try to expand
the supply of traditional energy sources. We cannot simply build power
plants and drill our way out of our country's energy problems.
California embraced a faulty law because they thought that a
functioning market for electricity would emerge from whatever plan they
put together. Similarly, we must look beyond the President's instinct
to focus on supply as the simple solution to our energy problems.
We need a thoughtful, and diverse national energy policy to provide
for our future needs. We need a policy that recognizes energy
efficiency as the great untapped energy resource that it is, and uses
it to reduce our need to burn more and more fuel; a policy that
capitalizes on our ingenuity by encouraging investment in innovative
energy technologies; a policy that creates an infrastructure for the
delivery of energy that matches the scale of our interstate highway
system. We have a great opportunity before us to create such a
comprehensive and diverse policy, and we should not squander it.
Mr. Shimkus. I thank the gentleman for his punctuality.
Now I turn to the Vice Chair of the full committee, Mr.
Burr.
Mr. Burr. Thank you, Mr. Chairman.
Mr. Secretary, welcome. This is indeed an honor to have you
here, and this committee plans to work very closely with the
Department.
Let me also thank you for one additional thing that I think
has been overlooked. I think through the President's--the
administration's report and through the efforts of you,
everything is on the table as it relates to energy policy. It
is amazing to me as I hear opening statements how different the
view of the world is, especially as it relates to energy.
Clearly when we look through different windows, Members of
Congress see different things, just like the American people
see different things.
I want to pledge to you on behalf of this committee that we
are going to be three things to the Department of Energy. We
will be responsive to the needs that you see and that the
country sees in energy needs; we will always be balanced in our
approach to all the issues that deal with issues in the
Department of Energy; and we will be tough, tough on our
oversight of the many responsibilities that fall under the
Department of Energy.
I want to commend the administration and yourself for what
I think is truly a comprehensive energy policy. Though it has
been referred to as a ``slick book,'' I will tell you that it
is comprehensive.
Congress is a makeup of the American people. This product
in the end will have a test of this subcommittee. It will have
a test of the full Energy and Commerce Committee. It will have
a test of the House and the Senate; and, ultimately, it must
pass the test of a majority of the American people, because
that is the system our Founding Fathers designed.
So regardless of whether they are supporters or detractors,
in the end it will become law if a majority of America is
supportive of it; and that is a system that we have trusted for
quite a while.
I could give the same speech that Mr. Sawyer just gave on
transmission, but it would be the same. It is a shame we had to
go together, because I think we are the two most passionate
people as it relates to that national highway that we need for
electricity transmission, to make sure that the security is
there.
And I would tell you that there was one point of Mr.
Markey's statement that is wrong. Every region does not have a
crisis today. Every region is susceptible to a crisis tomorrow,
because the infrastructure is not there to move power like we
need to.
Mr. Secretary, let me thank you once again. This energy
policy will be developed within the legislative branch. We will
work closely with the administration, but it will have the
input of the American people through its representatives every
step of the way, and I pledge to you our commitment to work
with you on that process.
Thank you, Mr. Chairman. I yield back.
Mr. Barton. I thank the gentleman from North Carolina.
I would recognize the gentleman from Ohio, Mr. Strickland,
for a 3-minute opening statement.
Mr. Strickland. Thank you, Mr. Chairman.
Welcome, Mr. Secretary.
Mr. Secretary, I suspect you are prepared to answer
questions for me regarding the Portsmith gas diffusion plant,
because you know how important that facility is to the workers,
communities and the economy of southern Ohio; and I appreciate,
Mr. Secretary, the attention that you have given to that
facility thus far.
However, I would like to speak to the bigger picture, and
that is the importance of maintaining a reliable and economic
nuclear fuel industry in our country. Undoubtedly, USEC's
premature decision to cease production at Piketon raises
important energy policy questions.
The report issued by the National Energy Policy Development
Group in May, and I quote, recommends that the President
support the expansion of nuclear energy in the United States as
a major component of our national energy policy. I don't
disagree with that recommendation, but I believe it is
incomplete, because it ignores our need to maintain a reliable
and economic domestic fuel supply.
USEC's decision last June to shut down the Piketon plant
leaves us with only one operating gaseous diffusion plant in
this country, located in my friend Ed Whitfield's district in
Paducah. We heard testimony in this subcommittee on March 27 of
this year that advanced technology nuclear reactors will result
in a trend toward higher assay fuel. The Paducah plant is not
licensed to enrich above 5 percent assay, while the Piketon
plant is licensed to enrich up to 10 percent. Yet Piketon has
ceased to produce any product.
I hope, Mr. Secretary, that you can help me understand the
administration's--what I perceive to be incomplete approach to
boost nuclear power supplies. It makes no sense to me to have a
national energy policy that calls for increasing domestic
energy supplies and specifically supports the development of
advanced nuclear reactors yet ignores the fact that in the near
future there could be no domestic nuclear fuel supply to meet
the demands of these new reactors.
Currently, we depend upon Russia for 50 percent of our
nuclear fuel, and USEC is proposing to import even more fuel
from Russia's commercial vendors. And last fall the Nuclear
Regulatory Commission issued a report that predicts that the
Paducah plant may cease to be economically viable after 2003.
In October of last year, the previous administration
proposed a research effort on advanced centrifuge technology at
the Oak Ridge, Tennessee, site. This initiative includes the
use of the modern but now empty gas centrifuge facilities at
Piketon for a centrifuge pilot plant. Experts at Oak Ridge
suggest that new gas centrifuge mechanisms using carbon fiber
components could be perfected and deployed at a cost of $52 per
separative work unit, thus making this a globally competitive
technology.
Presently there is no private sector approach emerging to
ensure that the domestic uranium enrichment industry remains
competitive in the world market. It seems to me there is a role
for the Federal Government here; and before his election,
President Bush agreed. In fact, on October 4, 2000, then
Governor Bush wrote to Governor Taft and stated, ``If I am
elected President, my administration will aggressively explore
how the workforce and the facilities at the Piketon site can
continue to serve our national interest. I believe that our
Nation must continue to pursue research and development of new
technologies for the use of uranium enrichment.''
Mr. Secretary, I was disappointed that the report from Vice
President Cheney's Energy Policy Group did not address the fact
that the U.S. is growing increasingly dependent on foreign
supplies for its nuclear fuel, upon which 20 percent of our
Nation depends for the electricity it uses. To my knowledge,
the report does not in any way illuminate a path forward for
enrichment technology that would honor the commitments made in
the October 4 letter by Mr. Bush--President Bush.
Mr. Barton. If the gentleman could wrap it up. He is about
a minute and a half----
Mr. Strickland. Yes, sir. One more sentence.
Mr. Secretary, we can see the handwriting on the wall, and
I am hopeful that you, sir, will address these concerns and
share with us the administration's approach to ensure a
reliable and economic supply of nuclear fuel before a new
crisis is upon us.
And, once again, I thank you for what you have already
done, sir.
Mr. Barton. We thank the gentleman from Ohio and commend
him on his stalwart efforts on behalf of the Portsmith plant.
He has been ever vigilant on that and continues to be so.
The gentlelady from California, Mrs. Bono, is recognized
for a 3-minute opening statement.
Mrs. Bono. Thank you.
Mr. Chairman, the ongoing electricity energy in California
is a sign of trouble for the Nation as a whole. As you well
know, our energy infrastructure is crumbling. Its supply is not
keeping up with increased demand. In California, we have
learned these lessons the hard way. But while the State must
accept most of the blame associated with its efforts to
deregulate, I believe the Federal Government has an obligation
to show guidance and leadership as well.
In many ways, Washington has helped. Mr. Chairman, under
your and Chairman Tauzin's leadership, this subcommittee
approved a bill which would have brought additional supply
online, while showing compassion for those unable to afford
these high rates, by adopting my amendment to increase aid
under LIHEAP. In fact, many of the concepts in your bill were
implemented by both President Bush and Governor Davis. However,
I also believe the Federal Energy Regulatory Commission should
have and still must be more aggressive in issuing
reimbursements in bringing both electricity and gas prices to
just and reasonable rates.
And I believe that while this administration has done a
commendable job in looking toward the long-term, I call upon it
to continue working with congressional leadership and
California Members to address the short-term needs of our
State.
Mr. Chairman, the National Energy Policy Report contains
many valuable recommendations.
I was quite pleased to see additional emphasis placed upon
increasing energy conservation and efficiency. Specifically,
your recommendation of a temporary efficiency-based income tax
credit for the purchase of new hybrid fuel cell vehicles is
very much in line with H.R. 1864, which I have introduced with
Congressman Dave Camp. I look forward to the administration's
support of this legislation.
In addition, I applaud the report's recommendations to
increase America's use of renewable and alternative energy such
as biomass, wind, geothermal and solar. The increased use of
landfill methane, for which I have also introduced legislation,
is also a step in the right direction. California's 44th
Congressional District has long been a leader in alternative
energy and I look forward to seeing expanded growth in this
area.
Our country must take a comprehensive and serious look at
long-term energy policy if we are to maintain a robust economy
and ensure an adequate supply of power to fuel continued
economic growth. I look forward to continuing to take on this
challenge with the administration.
I look forward to Secretary Abraham's appearance here today
and I thank him for coming.
Mr. Barton. I thank the gentlelady. We would go to the
gentlelady from Missouri for a 3 minute opening statement.
Congresswoman McCarthy.
Ms. McCarthy. Thank you Mr. Chairman. I am going to put the
text in the record. I am just going to mention a couple of
things because of having worked with you over the years----
Mr. Barton. Without objection.
Ms. McCarthy. [continuing] you know probably how I feel
about many of these issues.
I am delighted, Mr. Secretary, that you are here today in
your capacity as our Secretary of Energy and I wanted to share
just a couple of thoughts with you because, as the chairman
knows, I believe that we can create a win-win with this whole
issue of energy use. We can address new technologies and make
those economic development opportunities for our own companies.
We can then export those technologies to developing countries
who need not necessarily coal-fired plants but other means of
producing and obtaining energy. That would be great for our
economy. That would also be great for global warming and would
also be great for national security, because we would depend
less on imports of foreign sources and we would be creating
many more of our own.
So with that in mind, I hope you will comment today on the
Department of Energy's revised budget request which calls for
less than $4 million for the renewable energy production
incentive. That is the REPI program. The funding request is far
short of the estimated $14 million that is needed even for
eligible projects this year, let alone the $25 million needed
to fully fund the program, and will primarily be a shortfall of
funding for landfill gas to energy projects. But landfill gas
to energy products significantly reduce emissions of methane,
the second most abundant greenhouse gas.
I am working on some legislation to reauthorize and improve
the REPI program and to eliminate the bias against landfill gas
to energy projects. But the new program will continue to
require funding. I hope you can give us your thinking on why
the Department has not requested full funding, the program that
promotes renewable energy production and reduces significant
emissions of greenhouse gases. And beyond that, I look forward
very much to your remarks and to the give and take we will have
today and as we work together in the future in a bipartisan way
to address many of these issues that I know the public expects
us to, and to do so in a collaborative effort.
Thank you, Mr. Chairman. I would yield back the balance of
my time.
[The prepared statement of Hon. Karen McCarthy follows:]
Prepared Statement of Hon. Karen McCarthy, a Representative in Congress
from the State of Missouri
Thank you, Mr. Chairman, for holding this very important hearing to
examine the National Energy Policy developed by the Administration. I
am very pleased to have the opportunity to learn from the distinguished
Secretary of Energy, Mr. Abraham what the priorities are and their
proposed legislation to implement their goals.
By working together in a bipartisan manner, we have an opportunity
to create a win-win situation with an energy strategy that invests in
alternative energy technologies for use here at home and for export to
developing nations. Such a plan fosters economic development, addresses
global warming and bolsters our nation's energy security.
Despite the recent attention that the President has been paying to
issues such as efficiency and alternative fuels, I remain concerned
that there is not a clear commitment to these concepts as a part of the
overall national energy strategy. There is a significant discrepancy in
the funding requests for research and development into alternative and
renewable fuels compared to budget needs. I understand that the
Administration has submitted an amended budget request to bolster the
amount of funds for renewable energy, biomass, and related activities,
but this will only restore the original budget cuts to current levels
of funding. This is not a significant commitment to implementing
widespread use of these vital energy sources.
I have visited with Dr. James Spigarelli, President of the Midwest
Research Institute (MRI) in my district, which is the contract operator
of the National Renewable Energy Lab (NREL) in Colorado to discuss the
impact of the budget cuts proposed by the President on NREL. While the
lab itself is slated to receive about a $1 million increase for
equipment, maintenance and repairs, the lab's research activities are
slated to take a $195-199 million cut in 2001 and another $140 million
in 2002. The research to provide the technology that is needed to
address our nation and our global energy needs will be impossible to
recapture in the future. Global economic development opportunities will
be lost.
I appreciate the Administration's support for investing in new
technologies identified by former President Clinton and Vice President
Gore to address the problem of global climate change, I share the
concerns that have been raised by our citizens and our allies abroad
regarding the President's rejection of the Kyoto treaty. By backing
away from our international commitments we are going to reverse a
decade of progress that has occurred since former President Bush signed
the original climate treaty in Rio in 1992.
Our national strategy must help consumers in the near term while
making the necessary investments in research and development for all
areas of potential energy supply, including alternative fuels and
bioenergy, and making each source as clean as possible. This approach,
incorporating a commitment to energy efficiency, biomass and
conservation will provide a more balanced and diversified fuel mix for
the future, bolster our energy security, and help the agricultural
economy as well.
I have repeatedly stressed the point during our review of the
continuing electricity crisis in California and the West that we, as
policymakers, have an opportunity to make a fundamental change in the
direction of our national energy strategy that can have a profound
effect for generations to come.
We should take this opportunity to learn from the past. A working
group of national labs released a report last year entitled, Scenarios
for a Clean Energy Future, which detailed that a solid commitment to
energy efficiency measures could reduce long term energy use by over
twenty percent and that nearly twenty-five percent of the energy used
in 1999 would have been lost had it not been for the energy efficiency
technologies put in place after the Arab Oil embargo of the early
1970s. We have an example of the payoff from a commitment to such
research, in this case the Clean Coal Technology program, in my
district. Kansas City Power and Light has rebuilt the Hawthorn #5
plant, after a fire two years ago, with some of the latest clean coal
technologies that are available to the industry right now.
Mr. Chairman, I had planned to offer amendments during the markup
of the Electricity Emergency Relief Act that go to the points I have
just discussed and I still intend to pursue these important issues. I
believe that the federal government should lead by example, and that we
should take the opportunity to learn from our efforts. To that end I
will continue to work to address conservation efforts at federal
agencies and plan to offer legislation that reauthorizes and improves
the Federal Energy Management Program (FEMP).
I also plan to introduce legislation that will require a study and
inventory of the existing backup or idle generators at federal
facilities across the country so that we can learn what our
capabilities are as far as emergency capacity. These older generators
could run more often, and cleaner, if they were to run on a mix of
biodiesel or be retrofitted to run on natural gas. The technology is
available. Emerson Electric is working with California state government
authorities to take currently installed diesel gensets and retrofit
them to operate on a mixture of natural gas (up to 90%) and diesel, to
achieve substantial reductions in NOX emissions. Further
reductions currently being developed could operate these gensets on up
to 99% natural gas, with even more emissions reductions. This mixed
fuel technology has proven successful on mobile diesel sources, such as
municipal garbage trucks. The addition of after-treatment technologies,
such as Selective Catalytic Reduction or Auto Catalytic Reduction
further reduces emissions of NOX and PM.
Furthermore, we need to increase our commitment to bioenergy
research and development. I plan to champion reauthorization and reform
of the Renewable Energy Production Incentive (REPI) program that rural
cooperatives and municipal utilities use so that all utilities can make
greater commitments to renewable energy and create models that can be
replicated across the country. I hope, Mr. Secretary, that you can
explain why the Department of Energy has not requested full funding of
a program that promotes renewable energy production and reduced
significant emissions of greenhouse gases by electric utilities.
Mr. Chairman, our strategy to address climate change can produce a
reliable supply of diverse fuels that minimize greenhouse gases and
secure our leadership in energy technology to benefit our consumers and
to export around the world. I hope that we can continue to work in a
bipartisan spirit on these additional efforts. Thank you.
Mr. Barton. I thank the gentlelady from Missouri. We would
recognize the distinguished Congressman from California, Mr.
Radanovich, for a 3-minute opening statement.
Mr. Radanovich. Thank you, Mr. Chairman. I want to give you
my thanks, and also Chairman Tauzin, for having this hearing. I
want to welcome you again, Mr. Secretary. Good to see you
again. I too look forward to your testimony.
It was mentioned a little bit earlier by someone that ANWR
would not solve California's problems, and I do say that they
are exactly right. California's problems really are a crisis in
leadership, State leadership in California, and although I
support drilling in ANWR, that is more for the long-term
interests of our Nation, not to solve California's problems.
And I would ask the Secretary and the administration to
perhaps advise California--or recommend three things that they
can do in order to get out of their energy crisis. And that is,
No. 1, suggest that the Governor get out of the energy
purchasing business; No. 2, focus your efforts on making the
utilities creditworthy again so that they can in turn be the
energy purchaser for energy in the State; and No. 3, do what
you can to get the utilities out of the spot market.
It was the utilities being forced into the spot market that
caused the problem in the first place. If we get proper
leadership in the State of California, maybe those three things
will be out of our problem.
Having said that, there still is the issue in California of
supply. And I kind of think energy policy is lot like
environmental policy in that everybody wants to be green
everywhere in the country except in their own backyard. I think
the NIMBY attitude or ``not my backyard'' has been, I think,
the cause of a lot of the Nation's energy shortage. And I
congratulate you on taking the leadership--and the President--
the leadership on developing a policy that makes us more
reliant on our own resources and diversifies our base.
So thank you very much. I look forward to your testimony
and look forward to your helping in solving some of the
national energy problems.
[The prepared statement of Hon. George Radanovich follows:]
Prepared Statement of Hon. George Radanovich, a Representative in
Congress from the State of California
Mr. Chairman, thank you for holding this hearing today on the
National Energy Policy report.
President Bush is to be commended for bringing the need for a
National Energy Policy to the front and center of the nation's
attention. The consequences of not having an energy policy that can
satisfy our energy requirements on a sustainable basis have revealed
themselves in California. There is a need to tell the truth to the
American people and lay the basis for a new and viable U.S. energy
policy.
There are no easy solutions to energy crises, only hard policy
tradeoffs between legitimate and competing interests. The capacity
cushion left from the 1970s which allowed us to avoid these decisions
is now gone. The fundamental challenge we now face is to sustain
economic growth without sacrificing environmental protection.
It is time for Congress to move forward from the debates of the
past and develop a balanced energy security policy that addresses both
the supply side and the demand side of the energy equation. It is not
strategically desirable to remedy our present situation by simply
increasing our dependence on a few foreign sources. We need to respect
the wisdom of the consumer in making choices about energy use. We need
new thinking that focuses on improving the efficiency of the regulatory
processes. We need new solutions that are not simply more corporate
subsidies and tax credits.
Critical scrutiny of the Department of Energy budget, and of the
payback of the investments we have made are essential.
We best serve the interest of the public by avoiding
misrepresentation of efforts made in the common interest. The
President's policy is a balanced first step, and I look forward to a
sincere effort as we address this urgent national issue. Thank you, Mr.
Chairman and I await the Secretary's testimony.
Mr. Barton. The gentleman yield back the balance of his
time?
Mr. Radanovich. I did.
Mr. Barton. The Chair would recognize the distinguished
gentleman from Louisiana, Congressman John, for a 3-minute
opening statement. Congressman John, it looks like, passes. So
it looks like we go to Congressman Barrett for a 3-minute
opening statement.
Mr. Barrett. Thank you, Mr. Chairman. Thank you for
convening this hearing on the administration's national energy
policy. I also want to thank Secretary Abraham for being here
today to offer us more details and answer our questions about
this plan.
Spiraling fuel prices in last few years have negatively
impacted consumers across the country. In Wisconsin, motorists
have faced the second straight season of unreasonably high gas
prices, while residents watched their home heating bills double
this past winter. And while everybody's pocketbooks are
affected, many low-income families and seniors living on fixed
incomes have been truly overwhelmed by rising fuel prices.
It is imperative that Congress and the White House work
together to address these problems. I think that this will be
the first challenge we face with the new make-up of the Senate.
I think that we are going to have to work together if we are
going to really respond to the needs of this country.
I am particularly concerned about a parochial issue that I
am sure Secretary Abraham is familiar with, being from the
State of Michigan, and that is the directional drilling under
the Great Lakes. I have seen conflicting reports as to what the
President's plan intends about that. Obviously I think, Mr.
Secretary, as you know from the Michigan side, the Governor of
Michigan has moved forward, indicated he is moving forward
there. On the Wisconsin side, the Republican Governor and most
of us have said this is not something that we are interested in
because we believe that the potential costs far outweigh any
benefits.
I am also concerned with the President's plan and lack of
near-term relief from high prices at the pump and rising
heating and cooling bills. During the course of the campaign, I
remember the President saying that if he were elected that he
would call his associates in the OPEC countries and tell them
to turn the spigots on. Obviously, we have not seen that with
this administration. In fact, just the opposite has happened.
But any truly effective energy plan must include initiatives to
assure an adequate energy supply, as well as meaningful demand,
management incentives, and adequate environmental and consumer
protections.
We must therefore strive to implement an energy policy that
emphasizes conservation and energy efficiency, two things that
were notably missing when Vice President Cheney first started
talking about this issue. Something that also has to be
included is measures that preserve our environmental treasures
and protects American families from price gouging and unfair
market practices. Again I am hopeful, though, that through an
open and inclusive debate, we can achieve these goals and craft
a sound energy policy that protects the American consumer as
well as America's environment.
I would yield back the balance of my time.
Mr. Barton. We thank the gentleman for that statement. We
would go to Congresswoman Wilson of New Mexico for a 3-minute
opening statement.
Mrs. Wilson. Thank you, Mr. Chairman. I thank you for
holding this hearing and the series of hearings that we have
had on energy policy over the last 5 months. And I thank you,
Mr. Secretary, for being here and joining us today.
We haven't had an energy policy in this country for over a
decade. I think that the President's plan is a good analysis
and a very good first step at beginning to develop the first
comprehensive energy plan we have had in this country in an
area that has been sorely neglected over the last decade.
Your predecessor made the comment--and he is a New Mexican
and he is a former member of this committee--he made a comment
in Boston last year when the prices were starting to go up, and
when he was asked about it, he said the Federal Government was
caught napping. I thought that was a damning indictment of our
past energy policy and I am glad we are starting to address it.
We are more dependent on foreign oil today than we were at
the height of the energy crisis. Fifty-five percent of our oil
is imported mostly from the Mideast, and the fastest growing
import source for oil in this country is Iraq. We talk about
calling OPEC and demanding they turn on the spigots. Who are we
kidding? Our national security is compromised by the fact we
are dependent on foreign sources of oil, including from
countries whose interests are vastly different from our own.
We made tremendous progress in this country on conservation
and energy efficiency over the last 20 years and we will not
give up on that progress. That reduces the demand and preserves
our precious supply.
So where do we go from here? We need a balanced,
comprehensive, responsible energy strategy for this country.
And I think it has four elements:
The first is conservation. It must be a pillar of any
strategy that we put together. There is no going back on the
quality of life that we all enjoy. And I come from a State, New
Mexico, that supplies uranium and coal and oil and natural gas.
We do some of the most far-reaching nuclear research in the
country. And I have several nuclear reactors, all experimental,
in my district. I also come from the most beautiful State in
the Nation. We are not going to compromise that balance.
We have wonderful air, wonderful water, wonderful lives,
and we are going to keep it that way. We are naturally
conservative and will continue to be.
The second part of this strategy is supply. We must
diversify and increase our supply. Mr. Secretary, I am going to
want to talk to you a little bit about natural gas and our
increasing reliance on natural gas for the production of
electricity, because we risk getting ourselves into a situation
20 years from now where we are heavily dependent on natural
gas, do not have enough domestic supplies of natural gas
because we failed to diversify the production of electricity,
including nuclear power.
It is now time to take nuclear energy out of the ``too
hard'' column and reconsider the role of nuclear power in this
country.
The third part of the strategy--conservation, supply--the
third is infrastructure. We don't have the infrastructure today
and the pipelines and the transmission lines and the refineries
to get the energy where it is needed, when it is needed. We
need to address that as a Nation both at the national policy
level and also within industry.
And the fourth part: government reform. There has been too
little discussion of this, I think, but the reality is that
when we are in a crunch is when people focus on the issue and
where you probably get attention as a Cabinet Secretary in the
White House and around the Cabinet table. But the interagency
mechanisms that have existed since 1947, 1948, in this country
on national security that force the Defense Department and the
State Department and the CIA and everyone else to work together
on national security don't exist for energy policy. So when we
are not in troubled times, the Department of the Interior, the
Department of Agriculture, the BLM, or the Department of
Transportation can make----
Mr. Barton. The gentlelady needs to wrap it up.
Mrs. Wilson. Yes sir. They make independent decisions that
affect our supply of energy. We need to reform government so
that can no longer happen. And I thank the chairman for his
indulgence.
[The prepared statement of Hon. Heather Wilson follows:]
Prepared Statement of Hon. Heather Wilson, a Representative in Congress
from the State of New Mexico
Mr. Chairman, once again, thank you for your leadership on the
critical energy issues our nation is facing and for holding this very
important hearing on the National Energy Policy. This hearing is
critical in moving this committee forward on the development of the
legislation that will comprise our comprehensive energy plan.
It is time to move from the discussion of the short-term energy
issues facing California to a strategy and policy that will support the
entire nation. It is time to put aside the debate and discussion of
price caps, alleged price gouging, and insufficient energy supplies
today and move to a higher level where we can debate and discuss the
energy future of our nation. We have been without a national energy
plan for far too long--we are suffering the results of that lack of
planning today. This energy mess that we are in can not be resolved
overnight . . . it will take planning, hardwork, and a lot of
compromise. The Presidents National Energy Policy is a first step in
moving forward to plan, hardwork, and compromise.
Our energy policy needs to provide reliable, affordable clean
energy to support an expanding American economy, growing population,
and a rising standard of living. The comprehensive energy legislation
that we are developing should enable all Americans to know that: When
you flip the switch, the lights should go on, When you fill up at the
gas station, the price should be reasonable and not driven by a foreign
dictator; When you go to work, you should have energy to produce the
goods and services that make jobs, serve customers and improve our
quality of life; When you come home, you should enjoy clean air, clean
water, and clean land with your family.
I believe that:
We can meet America's energy needs while making our
environment cleaner and healthier.
We need a balanced, long term, common sense approach. We can
ease some of the crunch, but there are no quick fixes to
problems that were years in the making.
Most Americans do not believe there are quick solutions.
We must reduce our reliance on single foreign sources of oil
to protect our national security.
The Presidents National Energy Policy has many valuable elements--
in fact members on both sides of the isle are saying that there are
more things they agree with than they disagree about. The issues we
disagree about are the ones we need to continue to debate. The
Presidents plan is consistent with what our long-term strategy needs to
be:
Conservation: Continue to reduce demand and improve energy
efficiency through incentives, standards and leveraging
technology
Conservation must be a pillar of our energy strategy.
In fact, Republicans want to reduce use of energy and the
waste of precious resources. We are, naturally,
``conservative''.
Technology and innovation has reduced energy use and the
impact of exploration on the environment. We need to
continue R&D to advance technologies.
Supply: Diversify and increase energy supply while protecting
the environment. Nuclear, clean coal, distributed generation,
and renewable energy must all be components of our supply.
There is a strong trend toward natural gas-fired electric
generation. While cleaner than other options and sometimes
less costly, it would be a mistake to rely solely on
natural gas for expanded generation.
A new national energy policy will have to balance
competing interests--in this case, the need to protect the
environment and public health with the need to make sure
America`s energy needs are met. Nuclear energy is integral
to meeting our needs.
I want to emphasise the need for nuclear energy to be a
part of the energy strategy--for too long nuclear energy
has been in the too hard column. Today, nuclear power is
safer and produces more power than it did 10 years ago.
Most of the technologies we see in nuclear plants around
the world were developed in America, through the Navy
nuclear program or for the commercial nuclear power
industry. America lost its technological edge in nuclear
power and we need to regain it. Research in new designs and
improved efficiencies can change the economics of nuclear
power and retain America's position. Nuclear power is
critical to addressing our increased energy demand and our
continued need for clean air.
Our energy portfolio must include nuclear power and nuclear power
must be addressed in any national energy policy that
Congress crafts.
It`s time to take nuclear energy out of the ``too hard'' column.
Infrastructure: Modernize and expand the nation's energy
infrastructure including safe pipelines, adequate transmission
and refining capacity, and clean power plants.
Organization: Integrate federal energy, environmental and
economic, and foreign policy development so that we avert
future crises over the long haul. This is a key issue: the lack
of organization and integration in energy, environmental,
economic, and foreign policy has been a major cause of the
current energy crunch.
From what I have read I, would say that the Presidents plan is not
perfect--but it is a great step forward. There are a number of elements
that need additonal debate: ANWR, CAFE standards, the use of tax
incentives, transmission siting and others. However, the plan contains
the key elements that must be in a national energy policy. Working
together we can refine this plan and develop legislation for a
comprehensive energy policy. If we are successful, this may be one of
our most important accomplishments for our future, our economy, our
national security and the future of our children
I look forward to Secretary Abraham's testimony and the discussion
in this committee. Once again, Mr. Chairman, thank you for your
leadership and hard work and I look forward to moving forward on
comprehensive energy.
Mr. Barton. Thank the gentlelady from New Mexico. The
gentleman from Maryland, Congressman Wynn, is recognized for a
3-minute opening statement.
Mr. Wynn. Thank you, Mr. Chairman. Thank you for calling
this hearing on what is obviously a very important issue, and I
am very pleased the Secretary is here to talk to us. I don't
really have a lengthy opening statement. I do have a couple
issues, though, that I would mention in the hopes that the
Secretary would address them in the course of his comments this
morning.
The first is what I refer to enforced fair and reasonable
prices in the California situation. There is, of course, a lot
of contention on the subject of price caps, but it seems to me
there is in fact authority to address this concern that hasn't
been utilized, despite the fact that there is substantial
evidence of price gouging. And the first response has generally
been, well, the market is dysfunctional.
It is my hope that FERC will step up to the plate. If they
did so, perhaps Congress would not have to do so. And I think
the administration ought to comment on the subject of fair and
reasonable prices.
Second, on nuclear waste--and I kind of piggyback on what
my colleague said earlier--it is part of the mix and ought to
be part of the mix, but there is a problem and that is nuclear
waste disposal. We are behind in resolving this issue. I would
very much like to know the administration's position on nuclear
waste disposal, because it seems to me that it is impractical
to expand the use of this energy source unless we resolve the
disposal issues that currently exist.
And finally on the subject of drilling in ANWR, I subscribe
to the belief that the amount of oil there is probably not
sufficient to address our energy concerns in a realistic way.
However, to the extent that the administration believes that
this ought to be part of the mix, I would be very curious to
find out if the administration is committed to a ban on exports
of ANWR oil. Which is to say, it wouldn't make much sense to
bring the oil out of the ground only to export it abroad to
make higher profits, thus worsening the situation in
California, as opposed to--and the rest of the country for that
matter--as opposed to resolving it.
So I would be very concerned about your policy on a ban on
export of ANWR oil. Again, we are delighted to have you here
and I look forward to your comments. I return the balance of my
time.
Mr. Barton. The Chair would recognize Mr. Walden of Oregon
for a 3-minute opening statement.
Mr. Walden. Thank you Mr. Chairman, and thank you for
holding this hearing.
Mr. Secretary, thank you for being here. I spent quite a
bit of time reading through the National Energy Policy that the
Vice President and you and the President put together. I want
to commend you for the work that went into this and for the
recommendations that are contained herein. It is clearly one of
the most comprehensive energy policies this Congress has seen
in many years and gives us a good blueprint from which to build
a policy that will make America energy independent for the
future.
I am especially pleased at some of the recommendations
related to alternatives to conservation. And even though we
have made great progress, as you delineate in here, on
conservation efforts and have saved greatly, and even though we
have cleaned up the air considerably from what was the case in
the 1970's, more work can be done, more incentives can be put
in place.
In my own district we rely 70 percent on hydropower for
generation of power. Of course, that has its own issues related
to fish, which are very important and that we are dealing with
in the Northwest. But there are issues related to the
4(h)(10)(c) credits that I would appreciate getting your
opinion on, because I think we have clearly come upon the point
in the process where Bonneville should be able to access those
fish credits.
Additionally, Bonneville, as you may know, has gone out and
secured and gotten commitments for over 2000 megawatts of wind
power which can be very important in a hydrosystem. So to the
extent the administration is supportive of incentives to
increase these alternatives, whether it be geothermal or solar
or wind, they can provide an extra cushion, and certainly with
a hydrosystem and wind projects, allow us to store power, as
you know, in the water and allow us to shape the power curve.
So I think that is important.
I am also interested in your views related to the RTO in
the West as well as the need to allow Bonneville additional
Treasury borrowing authority so that it can keep pace with its
aging facility, so we don't end up with a Path 15 type problem
in the Pacific Northwest.
So, Mr. Secretary, I look forward to your testimony. I
appreciate your work on this issue. I commend the
administration for their rapid response in less than 5 months
to this problem that has been with us for two decades.
Mr. Barton. The Chair would note that Mr. Waxman's
statement has been, by unanimous consent, been put into the
record at the request of Mr. Markey. But Mr. Waxman is here, so
we will give them 3 minutes to elaborate on the statement that
is already in the record.
Mr. Waxman. Thank you very much, Mr. Chairman. I am pleased
to welcome the Secretary to our hearing. This is our first
chance to examine the President's energy policy. And as a
Californian, I want to express concern over this plan and also
the administration's stubborn resolve to ignore, I believe,
ignore the concerns of Western families; not just California,
but Oregon and Washington.
We have in the proposal from the administration an industry
wish list of regulatory changes and the very real needs of
Californians are going unmet. First of all, the President has
refused to do anything meaningful to address the incredible
price gouging that we are seeing in California and the West.
Wholesale electricity prices have skyrocketed and the
administration's political supporters have benefited
enormously, but due to Federal inaction Western families are
going to be left footing the bill, and regional economies may
be sacrificed in the process.
And also, yesterday the Bush Administration denied
California's request for a waiver from the Clean Air Act's
oxygenate standard. This is a mind-boggling decision. Democrats
and Republicans I think unanimously asked for this waiver. It
benefits ethanol producers that they were denied this waiver,
who support keeping things as they are, but it means more
expensive gasoline, possible shortages, possible pollution of
our drinking water.
I have deep concerns about the President's policy with
regard to the environment as part of his energy proposal. And
all these things I put into my opening statement, which I will
make part of the record, but I wanted to start off this hearing
by expressing some real reservations I have, Mr. Secretary,
about the proposal: whether it is a balanced one; whether
California and the West is being ignored, if not treated very
poorly. I yield back the balance of my time.
Mr. Barton. We thank the gentleman from California. I would
recognize the distinguished gentleman from Arizona, Mr.
Shadegg, for a 3-minute opening statement.
Mr. Shadegg. Thank you, Mr. Chairman. I commend you for
holding these hearings, and, Mr. Secretary, I welcome you here.
The topic of this hearing is National Energy Policy, but all
too often at congressional hearings we talk over the head of
the average American. It seems to me it is worth some time to
focus on what National Energy Policy means for the average
citizen. As my colleague from New Mexico pointed out, we have
had no energy policy in this country for at least a decade, and
probably two.
But what are, then, the consequences of that? Well, as she
pointed out, we are excessively dependent on foreign sources,
more dependent than during the energy crisis. Fifty-five
percent of our oil is imported, and we are growing more
dependent every week on supplies from Iraq. It is the fastest
growing source.
We have not done what we need to do and what we can and
must do to conserve and to improve efficiency. But also we have
not done what we need to do to develop domestic sources, and we
have not built the refining capacity that this country
desperately needs.
All of these failures have direct and real consequences for
the average American citizen. What it means for them is that
they are paying incredibly high heating fuel bills, they are
paying incredibly high gasoline bills, so high that they aren't
able to take vacations they wanted to take, they can't use
their automobiles. And they are facing extremely high
electricity bills.
To add insult to this injury, we are in a situation where
many of them, at least in California and the western part of
the country where I live face the prospect of blackouts and
rolling brownouts. It seems to me the administration has done
the Nation a great favor by focusing this country on the need
to have a National Energy Policy and to have that policy be a
balanced policy. It is critically important that we look at all
of these things. Sure, we must look at conservation and
efficiency, but we also have to look at domestic production and
refining capacity.
With regard to the topic of price caps, price caps will not
reduce a single unit of energy. Indeed, the shortage we face
right now is not because prices have been too high, the
shortage we face right now is because we are way too dependent
on foreign sources and way too reliant on having to go
somewhere else for our energy.
It is critically important that we face this crisis and we
face it now. Not in the short run, but the long run is where
these consequences will hit us the worst.
I commend the administration on its proposal. I think it
has done an excellent job in bringing it forward as quickly as
it has. I look forward to working with you and the President. I
think the American people have to recognize that they pay the
price for excessively high electricity bills and excessively
high gasoline bills. Those are the consequence of no energy
policy, and the long-term payoff of a good energy policy such
as the President proposed is reasonable gasoline prices,
reasonable electricity prices, and a supply that we can all
rely upon. I thank the gentleman and yield back my time.
Mr. Barton. I thank the gentleman from Arizona. We will now
take a 3-minute opening statement from the distinguished
ranking member of the full Science Committee, Mr. Hall.
Mr. Hall. Mr. Chairman, thank you very much. I won't even
take the full 3 minutes. I just would tell the Secretary,
welcome and thanks for the job you are doing and for the job
you are going to do.
We are going to need your expertise. We need your
intervention. We need you to referee as we try to solve the
California problem. And we are going to do it, but we have got
to do it together. Sometimes we have to figure up what it is
going to take, raise that amount, and go on to the next
problem, because that is the major issue facing this country
right today, I think is how to solve the California dilemma.
And I think we need not to dwell on how we get there, either
side of what it takes to get there, and get out of there and
get it settled is what this Congress wants to do, and I am sure
it is what this President wants to do.
I want to thank you and extend my thanks to the President
for the tax cut that we approved here early one Saturday
morning not too long ago.
And I would just tell you for my own people, I represent
the oil field there in Texas, gas patch down through Tyler,
Kilgore, and that area. And we need some things, we need--the
first thing I did when I came up here was to try to amend and
set aside Carter's Fuel Use Act. It was a bad act at the time
and it was disastrous, but we I think repealed most of it by
the mid-eighties. We still need to allow expansion of
geological and geophysical, G&G cost, and delay work on the
rental payments. We need a 5-year net operating loss carried
back for independent producers. That is--the Tax Reform Act of
1986 got that one. That is the act that President Reagan and
Rostenkowski passed, and one of them knew what was in it, and
it wasn't Reagan. Otherwise, that probably wouldn't have made
it through. And we need to eliminate the new income limitation
on percentage depletion for marginal wells, and we have a lot
of those. I think all in all, we just need to go all out for
every type of energy that is out there and drain and squeeze
the most out of it, get the quickest relief we can get, pull
our hat down over our ears, and ride it out.
I yield back my time.
Mr. Barton. Does the gentleman yield back the balance of
his time?
Mr. Hall. I can talk a little longer if you want me to.
Mr. Barton. I would want you to, but I am not sure we have
the time for that.
The gentleman from Mississippi, Mr. Pickering, is
recognized for 3 minutes.
Mr. Pickering. Mr. Chairman, thank you, and I want to
commend your leadership and that of Chairman Tauzin. I want to
thank the Secretary and the President for putting forward the
principles and a plan that I think can be a catalyst and
facilitate our work here on this committee. I believe that
there is no more important issue facing our country
economically and from a national security point of view to have
a present but also long-term plan that will address every
component.
To those who want to isolate one component over another, or
criticize one as not being enough, it has to be all parts, it
has to be conservation, it has to be efficiency, it has to be
new environmental technologies, but it also has to be new
production, new supply. And I think that your plan is common
sense and comprehensive and it addresses all components of it.
I look forward to working with you as we put together the
various working groups, and I believe in a bipartisan way that
we can begin addressing the long-term energy needs of our
country in a sound and balanced way. I look forward to working
with the chairman on this.
I yield back.
Mr. Barton. Thank you. Thank the gentleman. There is no
other member on the Minority side of the subcommittee. We have
Ms. Eshoo of the full committee. We would recognize Mr. Cox of
the subcommittee, and then go to Ms. Eshoo of the full
committee. Mr. Cox is recognized.
Mr. Cox. Thank you, Mr. Chairman. Welcome, Secretary
Abraham. Your predecessor, Energy Secretary Richardson,
famously said we have not had an energy policy for the last 8
years. You and the National Energy Policy Development Group in
less than 5 months have put together a National Energy Policy.
When you take on big challenges, particularly those that have
been left unattended for so long, you raise big issues, big
questions, and you generate big criticism. You are to be
commended for your courage in doing so, but especially for your
leadership in doing so.
This report comes to us at a time when we are more
dependent than ever on unstable sources of Mideast oil. As
Governor Davis has pointed out, in California we have built no
new facilities to produce electricity for years. For far too
long, not just in California but across the country, we have
been relying upon literally resting--or, not literally--
figuratively resting upon our laurels, relying upon an aging
electricity infrastructure and power grid, even as our new
economy makes us more dependent than ever in unprecedented ways
on electricity for every aspect of our lives.
I want to commend you, as others have here today, for
presenting a comprehensive and balanced approach that focuses
equally on the need for conservation and on the need for stable
new supplies.
We have many questions for you, Mr. Secretary, as you know,
but I think it is most important that we hear your testimony. I
thank you for appearing before us today.
Mr. Barton. I thank the gentleman from California and wish
him the very best in his recovery from his incident. No other
member of the subcommittee being present----
Mr. Cox. You are talking about my foot, right?
Mr. Barton. I was specifically--I am told it was a 3-inch
splinter went through your foot.
Mr. Cox. Eight inches.
Mr. Barton. The gentlelady from California, Ms. Eshoo, is
recognized for 3-minute opening statement. Welcome her to the
subcommittee.
Ms. Eshoo. Thank you, Mr. Chairman. I always appreciate
your hospitality and your legislative courtesy since I am not a
member of the subcommittee, but I do appreciate it. And I want
to welcome the Secretary here. I think this is your maiden
voyage here at the Congress committee, and I look forward to
working with you on a whole variety of issues.
I am just going to keep this extraordinarily brief because
I have more questions to ask than I have a statement to make. I
would like to say for the record, Mr. Secretary, as your
Department and the administration rolls out a National Energy
Policy, that as a Californian we find some shortcomings.
I know that my colleague, Mr. Waxman, has spoken about the
issue of nonwaiver for California. We still hope that we can
change that. That is a very important issue and it is something
that we can do on a bipartisan basis. This crosses party lines.
So I hope that we can change that.
The other issue they I want to raise, of course, is the
issue of energy and the energy crisis in California. I have
some very direct questions to ask you. I look forward to a
later time, because I know that all of the members of the
subcommittee have to go first.
So thank you for coming to us. I wish you well in your
position. It is important not only for Americans today but for
future generations that have yet to enjoy what God has blessed
us with, and I hope that at the end of the reshaping of this
policy that we will find that between the print, because we are
the trustees for future generations and I hope the
administration will see to that as well.
Thank you, Mr. Chairman.
Mr. Barton. Thank you, Congresswoman Eshoo. That concludes
the opening statements of all members present. The Chair would
ask unanimous consent that those members not present have the
requisite number of days to put their statement in the record
at the appropriate place. Is there objection? Hearing none, so
ordered.
[Additional statements submitted for the record follow:]
Prepared Statement of Hon. Steve Largent, a Representative in Congress
from the State of Oklahoma
Mr. Chairman, thank you for holding this morning's hearing to
examine the Administration's National Energy Policy Report. The
Subcommittee is fortunate to have with us today Secretary Abraham--Mr.
Secretary welcome.
I've carefully read the Administration's comprehensive energy plan
and I want to commend Vice President Cheney and the other members of
the National Policy Energy Development Group for their fine work.
Let's face it, we're in a serious energy crunch. Electricity prices
are sky high in California and the West. Gasoline prices in some parts
of the country are nearing $2 a gallon. And we're more dependent now on
foreign oil than ever before. Who does this impact? Everybody. Why?
Because to my knowledge energy, be it oil, gas, coal, nuclear, hydro,
solar, wind, biomass, or geothermal has no racial, religious, gender or
political bias.
As I stated earlier, I've read this plan and from my perspective it
appears to offer a thoughtful and well-balanced approach to meeting our
nation's energy needs.
It spells out in careful detail what most of us who took econ one
in college should already know. When you have an increase in demand
coupled with a shortage of supply--the result is scarcity with a
corresponding rise in prices.
The President's plan provides a blueprint on how to increase
supplies from a variety of domestic energy sources. Since 65% of our
nation's energy resources will continue to come from oil and natural
gas, it's only logical that the plan would seek to maximize those
energy sources.
However, contrary to the critics claim that this proposal does
little to promote renewable and alternative energy, take a closer look.
There are thirteen separate recommendations promoting cleaner burning
fuels. By contrast, the House Democratic Caucus Energy plan has four.
The plan takes into careful consideration American's environmental
concerns while also promoting energy efficiency and conservation. It
addresses America's energy infrastructure and delivery system and lays
out a global strategy to enhance our national security and improve
international relationships.
The National Energy Policy Report is approximately 140 pages long.
In that 140 pages there is nothing that could be interpreted or
construed as politically partisan.
The same cannot be said for the House Democratic Caucus Energy Task
Force's ``Principles for Energy Prosperity.'' As a matter of fact, the
first sentence of the document reads as follows: ``Democrats reject
President Bush's misguided notion that America must sacrifice the
environment in order to maximize energy production.''
After I finished reading ``Principles for Energy Prosperity'' I
began to wonder if the House Democratic Caucus Energy Task Force and
the Democratic Congressional Campaign Committee were one in the same.
Mr. Chairman, I look forward to hearing Secretary Abraham's
thoughts and ideas as to what role this Subcommittee can play in
developing a comprehensive long-term energy strategy.
______
Prepared Statement of Hon. Ed Bryant, a Representative in Congress from
the State of Tennessee
Mr. Chairman, I would like to thank you for holding today's hearing
and I would also like to thank our Secretary of Energy, the Honorable
Spencer Abraham for appearing before the Subcommittee to report on the
proposals of the National Energy Policy Development Group. I look
forward to hearing Secretary Abraham's testimony and I welcome the
opportunity to learn more about the Bush Administration's long-term
energy proposals.
I believe energy is the single most important issue Congress will
deal with this year. As I have attended town hall meetings in my
district and met with constituents, it seems that the high prices they
have been paying for fuel and power has been a resounding theme. Our
nation's energy crisis has left no family or business untouched.
Whether it is homeowners, manufacturers, small businesses, or farmers,
everyone has been hit hard by rising demand for energy and decreasing
supplies.
Let's make no mistake, our nation has been without a comprehensive
national energy policy for the past eight years. President Bush had
been in office little more than 100 days when the Administration
unveiled a blueprint for our long-term energy needs. The President's
energy plan increases the supply of safe, reliable domestic energy
while promoting a clean, safe and healthy environment.
I agree with President Bush that our nation's energy problems must
be addressed through a variety of means, including increasing supplies
of traditional fossil fuels, developing alternative sources of energy,
and promoting conservation. It won't be easy, nor will it occur
quickly. But we have the technology and enough resources to meet our
energy needs for decades to come.
The recommendations of the National Energy Policy Group go a long
way toward realizing our energy goals. As a Member of this
Subcommittee, I look forward to beginning work on shaping energy policy
legislation that reflects the President's proposals. I know our
Subcommittee will work together in a bipartisan fashion to pass a
comprehensive national policy because the President's recommendations
are right and they will make our nation stronger. Again, thank you
Chairman Barton for holding this important hearing, and thank you
Secretary Abraham for your presence here today.
Mr. Barton. The Secretary needs to leave by 1 p.m., so we
are going to take a break for 4 minutes and then we are going
to be back so that we can let the Secretary testify and then
ask questions. So we are going to take a 4-minute break, then
we are going to be right back here in 4 minutes.
[Brief recess.]
Mr. Barton. Welcome to the subcommittee, Mr. Secretary.
Your statement is in the record in its entirety. We recognize
you for such time as you may consume to elaborate on it.
Welcome to the subcommittee.
STATEMENT OF HON. SPENCER ABRAHAM, SECRETARY, U.S. DEPARTMENT
OF ENERGY
Mr. Abraham. Mr. Chairman, thank you very much. I
appreciated the chance today to hear from so many members and
to get some perspective on their considerations and concerns.
And I want to thank you for having done, in my judgment, a
remarkably effective job over the last several months, as we
have gone through our transition, to work with us at the
Department. You have actually reached out to me on behalf of
your committee, on both sides of the aisle really, to set in
motion practices by which we can work together over the next
few months to not just address this issue but the other issues
as well.
And I offer the same comments and appreciation to
Congressman Tauzin, to Congressman Dingell, and other leaders
of the committee. Certainly we wish to do our best to make it a
dialog, to make it a good partnership.
Today I would like to make a brief statement. There were so
many issues raised during the comments of the various members
that I would like to do my best to be responsive when we get to
the question period on those issues.
What I would like to maybe just do is take a little bit of
time today to talk about the challenges we face and to try to
briefly summarize how the President with our National Energy
Plan proposes to address those challenges in the days ahead.
Today, America consumes 98 quadrillion British thermal
units, or quads as they are called, a year in all forms of
energy. Our domestic production is 72 quads, which means that
the imbalance between demand and supply is made up with
imports.
Between now and 2020 our energy demand is projected to rise
significantly. If the energy intensity of the United States
economy--that is, the amount of energy needed to generate a
dollar of GDP--remained constant over those 20 years, our
demand in the year 2020 would rise from 98 quads per year to
175. Fortunately, we believe that our plan, current policies,
and the combined interests of people on all forums and all
sides of the policy debate will work together to improve energy
efficiency over that period to the point that the actual energy
demand in 2020 can be lowered from 175 to 127 quads.
That means improved energy efficiency can help close much
of the gap between projected energy demand and projected energy
production. And we are committed to doing just that.
However, improved energy efficiency alone cannot do the
whole job. And for that reason, the United States will need
more energy supply. The question is, where do we get that
increased supply when over the last decade domestic supply
production has remained relatively flat?
To address those challenges both in terms of achieving the
efficiency gains we need as well as the supply gains we
require, our National Energy Plan has adopted an approach that
we believe is balanced and comprehensive. As the President
said, we are looking for a new harmony among our priorities. So
let me just briefly outline the approach for the committee.
First, our policy balances the need for increased supplies
of energy with the need to modernize our conservation efforts
by employing cutting-edge technology to gain the energy
efficiencies I have talked about. So, for example, as we call
for recommendations to enhance oil and gas recovery from
existing and new sources through new technology, we also call
for recommendations on corporate average fuel economy
standards.
Second, our plan calls for diversity in terms of our supply
sources. With electricity demand forecast to rise 45 percent
between now and the year 2020, we estimated that--that is, the
Department of Energy's Energy Information Administration
estimates the needs for an additional 1300 to 1900 new power
plants in this country. Current policy anticipates that over 90
percent of those new plants will be fired by natural gas. A
number of members of this committee already have commented on
the potential implications of placing so much reliance on a
single fuel source. We believe energy security dictates a more
balanced approach to new power generation.
In addition to natural gas, the National Energy Plan looks
to clean coal generation and nuclear power to give us the broad
mix of energy-to-energy support and energy security from
traditional sources. But our plan also balances our pressing
requirements for the aforementioned traditional source of
energy with the need for renewable and alternative sources such
as hydropower, biomass, solar, wind and geothermal sources. The
plan seeks to increase exploration of domestic sources of oil
and natural gas, and it also recommends tax incentives for the
use of certain renewables and more focused research on next-
generation sources like hydrogen and fusion.
Fourth, our energy plan harmonizes growth in domestic
energy production with environmental protection. This
commitment to conservation and environmental protection is not
an afterthought. It is a commitment woven throughout our energy
policy. Energy production without regard to the environment is
not an option. For example, in addition to recommendations
seeking to streamline the permitting process for plant sitings
as well as building new infrastructure, the National Energy
Policy also directs the Environmental Protection Agency to
propose mandatory reduction targets for the emission of three
major pollutants: sulfur dioxide, nitrogen oxides, and mercury
from electricity generation.
We support this balanced approach with 105 recommended
actions covering the full range of energy challenges
confronting this Nation, and indeed the world, from how best to
enhance renewable sources to oil and natural gas development in
the Caspian Sea.
The administration can carry out many of these
recommendations on its own, either through executive orders or
agency-directed actions. We are moving ahead to implement
proposals as quickly as possible.
Just days after the release of our National Energy Report,
the President issued two executive orders directing Federal
agencies to expedite approval of energy-related projects and
directing Federal agencies to consider the effects of proposed
regulations on energy supply distribution or use. Moreover,
where appropriate, the President is directing Federal agencies,
including my own, to take a variety of actions to improve the
way they use energy and to carry forward critical aspects of
this policy. For example, I have instructed our Office of
Energy Efficiency and Renewable Energy to carry out a strategic
review of its renewable energy research and development
programs in light of the recommendations contained our National
Energy Policy.
Hydropower, geothermal, winds, and other renewables are
highlighted in our report for the contribution they are making
and continue to make to energy security. Promising next-
generation technologies will also play a part in solving our
energy challenges. Both current and future technologies will be
a part of our strategic review.
I have asked that the study begin immediately--and it has--
and to be completed by September 1. And its finding will permit
us to recommend appropriate funding levels that are performance
based and modeled as public-private partnerships. Twenty of the
report's recommendations, however, clearly require direct
legislative action, and I think we will find more areas for
cooperation than disagreement.
This committee has a long and proud tradition of passing
bipartisan energy legislation dating back to the 1970's. I look
forward to working with the committee to develop energy policy
legislation consistent with those bipartisan traditions.
So I believe that we start with a wide base of agreement.
From what I have heard today, I would say that the agreement is
in wider consensus than I might have anticipated. We all
recognize energy is a critical challenge. We all recognize that
parts of our energy supply and delivery system need enhancement
or modernization. We all recognize that conservation and
stewardship must go hand in hand with increasing domestic
supply.
Naturally, there will not be complete agreement, and the
President is strongly committed to the adoption of his
recommendations. But I truly believe that we have the basis for
working together to meet America's serious energy crisis.
Mr. Chairman, I want to thank the members of the committee
for the very kind reception I have received here today, and I
do look forward to working with every member of the committee
as we move forward, both here at the subcommittee and the full
committee, to address many issues including the challenges
presented here today.
[The prepared statement of Hon. Spencer Abraham follows:]
Prepared Statement of Hon. Spencer Abraham, Secretary of Energy
INTRODUCTION
Thank you Mr. Chairman.
I appreciate the opportunity to come before this committee today to
discuss the President's National Energy Policy, which was developed by
the National Energy Policy Development Group under the direction of
Vice President Cheney. Before taking your questions, I would like to
make a brief opening statement.
My statement will outline the scope of the energy challenge we face
over the next two decades, summarize the approach the President has
determined will best address this challenge, and finally emphasize why
I am optimistic that we can find a consensus in this country on
policies that promote long-term energy security for our citizens.
America's Energy Challenge 2001-2020
Today, America consumes 98 quadrillion British thermal units (or
quads) a year in all forms of energy. Our domestic energy production is
72 quads. The imbalance between energy demand and domestic energy
production is made up with imports.
Between now and 2020, our energy demand is projected to rise
significantly.
If the energy intensity of the U.S. economy--the amount of energy
needed to generate a dollar of Gross Domestic Product--remained
constant, our energy demand in 2020 would be 175 quads.
However, our Plan and current policies will improve energy
efficiency to the point that energy demand in 2020 can be lowered from
175 quads to 127 quads.
That means improved energy efficiency can help close much of the
gap between projected energy demand and projected domestic energy
production.
However, improved energy efficiency cannot do the whole job. For
that reason, the United States will need more energy supply.
The question is: where do we get that increased supply when over
the past decade domestic supply production has remained relatively
flat?
Our Balanced Approach
To address these challenges, our National Energy Plan has adopted
an approach that is balanced and comprehensive. As the President said,
we are looking for a new harmony among our priorities.
Let me briefly outline this approach for the Committee.
First, our policy balances the need for increased supplies of
energy with the need to modernize our conservation efforts by employing
cutting edge technology.
And so, for example, as we call for recommendations to enhance oil
and gas recovery from existing and new sources through new technology,
we also call for recommendations for changes in Corporate Average Fuel
Economy standards.
Second, our Plan calls for a balance in terms of our supply
sources.
With electricity demand forecast to rise 45 percent by 2020, we
estimate the need for an additional 1,300 to 1,900 new power plants in
the country.
Current policy anticipates that over 90 percent of those new plants
will be fired by natural gas.
We believe energy security dictates a more balanced approach to new
power generation.
In addition to natural gas, the National Energy Plan looks to clean
coal generation, nuclear power, and hydropower to give us the broad mix
of energy needed to meet growing demand and support energy security.
Third, our plan balances our pressing requirements for traditional
sources of energy, such as oil and natural gas, with the need for
renewable and alternative sources such as biomass, solar, wind, and
geothermal.
The Plan seeks to increase exploration of domestic sources of oil
and natural gas. And it also recommends tax incentives for the use of
certain renewables and more focused research on next-generation sources
like hydrogen, and fusion.
Fourth, our energy plan harmonizes growth in domestic energy
production with environmental protection.
This commitment to conservation and environmental protection is not
an afterthought; it is a commitment woven throughout our energy policy.
Energy production without regard to the environment is simply not
an option.
For example, in addition to recommendations seeking to streamline
the permitting process for plant sitings as well as building new
infrastructure, the National Energy Policy also directs EPA to propose
mandatory reduction targets for emission of three major pollutants--
sulfur dioxide, nitrogen oxides, and mercury--from electricity
generation.
Building Consensus
We support this balanced approach with 105 recommended actions,
covering the full range of energy challenges confronting this nation--
and indeed the world--from how best to enhance renewable sources, to
oil and natural gas development in the Caspian Sea.
The Administration can carry out many of these recommendations on
its own, either through executive orders or agency directed actions. We
are moving ahead to implement proposals as quickly as possible.
Just days after release of our National Energy Report, the
President issued two executive orders directing Federal agencies to
expedite approval of energy-related projects and directing Federal
agencies to consider the effects of proposed regulations on energy
supply, distribution, or use.
Moreover, where appropriate, the President is directing Federal
agencies, including my own, to take a variety of actions to improve the
way they use energy and to carry forward critical aspects of his
policy.
For example, I've instructed our Office of Energy Efficiency and
Renewable Energy to carry out a strategic review of its renewable
energy research and development programs in light of the
recommendations in our National Energy Policy.
Hydropower, geothermal, wind, and other renewables are highlighted
in our report for the contribution they are making and can continue to
make to energy security. Promising next-generation technologies will
also play a part in solving our energy challenges. Both current and
future technologies will be a part of our strategic review. I've asked
that the study be completed by September 1st. Its findings will permit
us to recommend appropriate funding levels that are performance based
and modeled as public-private partnerships.
Twenty of the Report's recommendations require legislative action
and I think we will find more areas for cooperation than disagreement.
This Committee has a long and proud tradition of passing bipartisan
energy legislation dating back to the 1970s. I look forward to working
with the Committee to develop energy policy legislation consistent with
its bipartisan tradition.
So, I believe that we start from a wide base of agreement. We all
recognize energy as a critical challenge. We all recognize that parts
of our energy supply and delivery system need enhancement or
modernization. And we all recognize that conservation and stewardship
must go hand in hand with increasing domestic supply.
Naturally, there will not be complete agreement and the President
is strongly committed to the adoption of his recommendations. But I
truly believe we have the basis for working together to meet America's
serious energy crisis.
Thank you, Mr. Chairman. I would be glad to take your questions at
this time.
Mr. Barton. We thank you, Mr. Secretary. And again we want
to welcome you to the committee. The Chair would recognize
himself for 5 minutes. We are going to allow each member one
round of 5-minute questions. If there are additional questions,
we will submit them in writing to the Secretary.
As I said in my opening statement, Mr. Secretary, I think
you have got the toughest job in the Cabinet, and I really mean
that. But my first question is really more of a personal
nature. Have there been any pleasant surprises as Secretary of
Energy?
Mr. Abraham. Well, I have to confess, Mr. Chairman, the
most pleasant surprise has been the sort of bipartisan sympathy
with which I have been treated. Both on the Senate side and
here today, I have enjoyed both the welcome that I have
received to the job and at the same time the cautionary notes
from both sides of the aisle, from friends on both sides of the
aisle, telling me how much they sympathize with my plight. But
for the fact I was previously unemployed, I suspect I might
share that viewpoint.
But obviously the job is a very challenging one but,
fortunately, I am very happy to report that a number of the
appointees, the nominees of the President to major positions,
have now achieved confirmation and another group is moving
toward that point, and I think as we get our full complement of
office positions filled that will obviously make my job perhaps
a little easier.
Mr. Barton. Well, let me ask you a little tougher question,
then. You are a former Senator from the great State of
Michigan. You are very aware that CAFE is not a place you eat
in a restaurant, it is Corporate Average Fuel Economy, a fairly
controversial issue in your home State. The President and the
Vice President and you have come out strongly for conservation.
Your proposal as it stands would shave 48 quads of energy from
the projected increase in demand if we did nothing in terms of
conservation.
Do you have any thoughts that you would care to share with
the subcommittee on what a reasonable balanced increase in
corporate average fuel economy standards might be that this
subcommittee should consider legislatively?
Mr. Abraham. Well, our position as reflected in the plan,
is to recommend that the Secretary of Transportation, who under
statute has responsibility with respect to CAFE standards,
makes recommendations and it is in his domain to do so.
But let me just say I think--Congressman Dingell isn't
here, but he and I have worked together on this issue on behalf
of our constituents, but we have worked together on behalf of
the American citizenry more broadly, with regard to CAFE in
recent years. We effected last year a compromise in the Senate
that called upon the National Academy of Sciences to make CAFE
recommendations by this July, in time for this year's
considerations of the Appropriations Committee. It was an
appropriate step to have taken last year. We acknowledged that
in the recommendations in the President's report.
I think as you look at the actions taken, without any
governmental mandates, by the auto industry, you see a move in
the direction of hybrid vehicles designed to improve fuel
efficiency. There are two things I would pose to Members of
Congress--and now maybe I am speaking more because of previous
roles than I am of my current one. When one considers what
might be the ultimate standards to take into account, first the
issue of safety; and second, the issue of the disparity, the
potential disparity effect on American versus foreign
manufacturing of changes. I think we need to proceed ahead if
we are going to change the fuel efficiency standards consistent
with those very important considerations.
The National Highway Transportation Safety Administration
in the past has indicated that reducing the weight of vehicles
has a direct correspondence to traffic fatalities. Gannett News
Service in 1999 did a study in which they concluded that 46,000
Americans have lost their lives as a consequence of changes in
the size of vehicles that came about in efforts to meet CAFE
standards. I hope any changes would be considered against that
backdrop. I also recognize that there can be advantages that
changes in the fuel efficiency standards might provide to
nondomestic manufacturing. Any sort of change that might occur
must have an even, rather than an uneven, impact on the various
sources of manufacturing.
Mr. Barton. Okay. This last is not a question as much as it
is a comment, something to think about. The energy policy
proposal that the President and the Vice President, you and the
other Cabinet secretaries have put forward, shows in the year
2020 we expect to consume 127 quads of energy equivalent in
this country. You also show that your policies, if enacted,
would save 48 quads of energy from what the projected demand
would be if we didn't have any conservation measures. You have
a supply side to your policy but it is not quantified.
I don't think we want to become totally energy independent.
I have not heard the President or yourself or the Vice
President say we should be independent, but I would like to
work with you and the other administration officials to come up
with a quantifiable target for supply in terms of quad, how
many additional quads of oil, natural gas, electricity, coal,
nuclear. And think, as a starting point, that you want to save
48 quads. If our supply component were some--it shouldn't be 48
quads increase, but something that gives us a target to shoot
for as we go through the process. Would you be willing----
Mr. Abraham. Let me point out, first of all, the difference
that would be remaining is not 48, it would be 29 quads. Let me
also say that the gains you just alluded to are ones we believe
will happen with these policies, but also with existing
policies in place. We would like to go further than that. I
hope we can. And we will look forward to working to gaining
even further efficiencies.
At the same time, we chose not to try to specify, to make a
guess, to pick fuels of choice or sources. We know what the
current projections look like. And as I indicated, right now,
absent any changes, almost all of, for example, the electricity
generation increase we are likely to achieve over the next 20
years would be natural gas-driven increases. And a number of
people have already commented on the potential implications of
relying on a single source for most of the increase.
What we propose is the notion of balance between sources,
both traditional as well as renewable, but also between
traditional sources, so that electricity, for example--to try
and be brief here, the current Energy Office Administration
projections from our Department's independent arm is that as
natural gas would increase, would see a decline in the role of
hydropower and nuclear energy in electricity generation over
the next 20 years and a very slight increase in the role of
renewables.
We chose not to try to specifically pick between those
different sources, but our view was to try to put in place
policies that would not place total dependency on natural gas
but would allow nuclear and hydro and renewables to play more
robust roles than predicted and projected today.
Mr. Barton. Thank you. I am not trying to put you on the
spot. I know the natural gas industry says that they would like
to be around 30 TCF in natural gas by the year 2010, 2015. The
coal people have some targets in terms of their increase if we
can help them on clean coal technology.
We don't expect the oil industry to gain supply, we are
hopeful we can we can do steady state. So really looking more
at hydroelectric, renewable, and some of the others, and
nuclear, to give us some targets. You have a better chance to
hit the target if you know what the target is. I mean, every
now and then, you just shoot up in the air and you hit
something. But most of the time you have got to aim at it. So I
just need some help in aiming. I figured you are a pretty good
marksman.
With that, I would recognize Mr. Markey for 5 minutes.
Mr. Markey. Thank you, Mr. Chairman very much. I have two
posters that I would like to show the committee. The first is
from a report by the Federal Government. This is the report on
January 11, 2001--from the Report of the Commission to Assess
United States National Security Space Management, an
organization which was chaired by Secretary Donald Rumsfeld.
The figure is credited to the Headquarters Air Force Space
Command. It is captioned, ``Space Systems Will Transform the
Conduct of Future Military Operations.'' It shows various high-
technology systems anticipated being used by the United States,
much of which will be coordinated by the Department of Energy
in laboratories of Los Alamos and Livermore.
The Commission was established by Public Law 106-65, and in
the National Defense Authorization Act for Fiscal Year 2000.
The second poster that I would like to show you is an air
conditioner from the Web page of Goodman Manufacturing. As I
mentioned earlier, this already meets the standard that the
administration suspended as too onerous. Unlike national
missile defense, the technology is virtually off the shelf
today. And also, unlike NMD, we know it works because Goodman
has already tested it for us in the marketplace.
Now, this is something that Federal employees are going to
put together. Pretty complex, huh? Technologically
sophisticated. This is something the private sector is already
doing. Now, I would like to believe that the FEC employees are
capable of doing this, but I technologically believe it is
highly unlikely that we will be shooting down, in a minute and
a half, Chinese and Russian missiles heading into our country
in the middle of the night anytime soon.
On the other hand, Mr. Secretary, your administration has
decided to roll back the 30 percent improvement in air
conditioners which the Clinton Administration had promulgated.
Now, that is going to increase over the next 20 years the need
for 43 additional 300-megawatt plants that will have to be
constructed in the United States.
Now, I was the author, Mr. Secretary, of the House bill
that gave you the authority to promulgate the national apply
and efficiency standards. And one of these provisions is a no
rollback provision. The reason I built that in was that the
Reagan Administration had actually flouted earlier laws dealing
with this subject. So let me read you the language from the
statute. It says: The Secretary may not prescribe any amended
standard which increases the maximum allowable energy use or
decreases the minimum required energy efficiency of a covered
product.
Here we are talking about air-conditioners. Now, in rolling
back, Mr. Secretary, the final air-conditioning rule adopted by
the Clinton Administration, you are in clear violation of this
no rollback provision, and you are in violation of that law at
the same time that your administration is saying that there is
an energy crisis in our country, and you are also saying that
we have a national security crisis that is going to call for
the abrogation of the ABM treaty so that we can deploy this new
technology over the next 5 to 10 years in the United States
that will theoretically provide an impermeable, technological
protection for our country.
Mr. Secretary, are you willing to review your decision to
abrogate the implementation of the fuel economy standards for
air conditioners, especially on a day like today where 35
percent of all electricity in America is heading toward air
conditioners--in Texas, it is 75 percent of all electricity
heading toward air conditioners--in order to adopt a standard
which Goodman Manufacturing has already been able to put out
there on the marketplace?
Mr. Abraham. Well, as you know, Congressman, there were two
standards under consideration. In our judgment, the standard
which the Goodman Company was proposing was one that would not
allow for a competitive marketplace to exist. And I believe one
of the considerations that we are expected to take into account
as we evaluate setting these mandated standards is not only
what the payback periods would be--that is, to the consumer who
has to pay more--and I am not sure what the cost of the Goodman
product is; I suspect it is considerably greater than other
types of models, which has an impact on the pocketbooks of
average families--but also whether or not a competitive market
will ensue at the end of the process.
It was not only our judgment, but also, the conclusions
reached both by the previous as well as the current Justice
Department that there were significant issues with respect to
the competitive disadvantages in the marketplace to other
manufacturers. This is a case where, in fact, there was a
considerable difference between perspectives as to whether or
not such a competitive market would exist.
What I would say to you is this. We were asked when we came
into office to review three rules that were, in our judgment,
according to our legal counsel, not in a final stage to have
triggered the provisions you have just mentioned. We would be
glad to share with you the legal considerations that we have
followed. But two of the three we kept in place, and in this
case we have suggested that instead the rule ought to be a 12
versus a 13-sere air conditioner standard, both because it
would more effectively address this question of market
competitiveness and at the same time be a little more friendly
to the pocketbooks of average Americans.
But at the same time, I would note in response to your
point that in our National Energy Plan, in chapter 4 of the
conservation chapter, we have been asked and our agency has
been directed to seek to expand the standards in both products
in which we already have assessed and placed standards, as well
as to expand the number of products that we would consider.
Mr. Markey. I think the chairman----
Mr. Abraham. I take that seriously, and one of the
priorities for us is to review appliance standards, but to
determine if additional ones should be considered, as well as,
if we go forward into the future, whether or not air
conditioners will fall into this or not. We will see.
Mr. Barton. You can tell that the Secretary was a former
Senator. He tends to give us a lot of answer for a short
question.
Mr. Abraham. Well, it was not meant to be a patronizing----
Mr. Barton. I didn't say that.
Mr. Abraham. [continuing] or filibustering.
Mr. Markey. I will just say this, Mr. Secretary.
Mr. Barton. Briefly, because we have got a lot of members
and theoretically only an hour to go.
Mr. Markey. In my opinion, Mr. Secretary, we do have an
electricity crisis in California. It is not a national crisis,
but there is an electricity crisis in California. We need
solutions. So far your solutions have been giving us a faith-
based electricity policy. You will pray for us across the
country, but not give us specific solutions. There is no near-
term solution, you say.
But when it comes to where electricity goes, and it is
primarily at the air conditioners in the summer in most of the
States in the United States, you have decided not to, in fact,
impose a tough standard on air conditioners and have rolled
back, in my opinion illegally, a final rule promulgated by the
Clinton Administration that will make it much more difficult
for us in the long term to have our country solve this
electricity situation, and I think it is an historic mistake
which the administration has made.
Thank you, Mr. Chairman.
Mr. Barton. Before we go to Mr. Shimkus, just so we have
the complete record, could you put in the record what the
current air conditioner efficiency standard is, what the
Clinton Administration proposed, and what the Bush/Cheney
Administration has promulgated?
Mr. Abraham. Mr. Chairman, I would be glad to do it, and I
think people are seeing that we are calling for a significant
increase, approximately 20 percent, in the efficiency of air
conditioners. As was noted, if people want more efficient air
conditioners, today they can go out and purchase them, and I
think perhaps some will.
Mr. Barton. But we need the specific numbers.
Mr. Abraham. I will do that, sir.
[The following was received for the record:]
----------------------------------------------------------------------------------------------------------------
Authority NAECA\1\ January 22, 2001 Final July 2001 Proposed Rule
------------------------------------------------------------- Rule -------------------------
--------------------------
Seasonal Heating Seasonal Heating Seasonal Heating
Energy Seasonal Energy Seasonal Energy Seasonal
Product class Efficiency Performance Efficiency Performance Efficiency Performance
Ratio Factor Ratio Factor Ratio Factor
(SEER) (HSPF) (SEER) (HSPF) (SEER) (HSPF)
----------------------------------------------------------------------------------------------------------------
Split system air conditioners..... 10 n/a 13 n/a 12 n/a
Split system heat pumps........... 10 6.8 13 7.7 12 7.4
Single package air conditioners... 9.7 n/a 13 n/a 12 n/a
Single package heat pumps......... 9.7 6.6 13 7.7 12 7.4
Space constrained products other 10/9.7 \2\ 6.8/6.6 \2\ reserved \3 reserved \3 12 \4\ 7.4 \3\
than through-the-wall............ \ \
Through-the-wall air conditioners 10 \5\ 6.8 \4\ reserved \3 reserved \3 10.9 7.1
and heat pumps: split systems.... \ \
Through-the-wall air conditioners 9.7 \6\ 6.6 \5\ reserved \3 reserved \3 10.6 7.0
and heat pumps: single package... \ \
----------------------------------------------------------------------------------------------------------------
\1\ NAECA, the National Appliance Energy Conservation Act of 1987, Pub. L. 100-12.
\2\ Not considered as a separate product class in NAECA, the standards for split system and single package air
conditioners and heat pumps apply.
\3\ These were space-constrained products, defined in January 22, 2001 notice (66 FR 7196-7197), for which
minimum SEER and HSPF values had not been determined. Had the January 22, 2001 rule become effective, SEER and
HSPF values would have been determined in a supplemental final rule.
\4\ Not considered as a separate class in the July 2001 proposed rule, the standards for split system air
conditioners and split system heat pumps apply.
\5\ Not considered as a separate product class in NAECA, the standards for split system air conditioners and
split system heat pumps apply.
\6\ Not considered as a separate product class in NAECA, the standards for single package air conditioners and
single package heat pumps apply.
Mr. Barton. Because my understanding is you have supported
an increase in the efficiency.
Mr. Abraham. Right. That is correct.
Mr. Barton. But not as high a number as the outgoing
Clinton Administration proposed. Isn't that correct?
Mr. Abraham. That is right.
Mr. Barton. The gentleman from Illinois. And we are going
to try to continue so that we don't shut the hearing down. So
if you folks want to go vote and then come back, that would be
appreciated.
Mr. Shimkus for 5 minutes.
Mr. Shimkus. Thank you, Mr. Chairman, and the rules--the
numerous rules and regulations promulgated by the last
administration as they left off, this is one of those last-
minute, in the dark of the night, surprise, and you have this.
So I think it is meritorious to review those.
But what is interesting, this is really an ideological
debate, because my friend from Massachusetts--I am sorry he
left, but there are votes--is that the market has already
responded to higher efficiency standards. The market is what we
are trying to make sure works. We need to have a diversified
fuel portfolio so that the market can best choose the right
fuel for the right use. If you continue to put all your eggs in
one basket, which we have done over the past 8 years, which is
natural gas, you don't have the flexibility for the market to
choose the best fuel for the best use, and so that is why I
applaud the administration.
One of the last-minute rules that this administration did
not promulgate, which they had ample opportunity to, was the
California waiver. The Clinton Administration had a full 18
months to make a decision on the California waiver but chose to
leave office without taking a position. The last technical
submissions from the State of California concerning its
petitions were submitted in February 2000, a full 11 months
before the end of the Clinton Administration. I could only
assume that the Clinton Administration did not see--there was
no meritorious position, otherwise it would have been lumped in
with all those other last-minute rules and regulations.
But it is a great debate, because what it does is it has
supposed clean air advocates arguing against clean air, and I
know this is kind of an EPA thing, but it is timely, and it has
supposed pro-oil individuals against big oil.
So, again--but make no mistake, there is one proethanol
Member of Congress. There is many of us, but there is one right
here supporting ethanol, so I am not trying to, you know, hide
my true colors. But the reality is the whole debate is
fascinating from the aspect of those who support clean air are
talking against ethanol and the oxygen standard, and those who
should be siding with big oil actually sided against big oil.
But I do think, as in my opening comment, having internal
ability to refine and have natural resources of fuel helps
decrease our alliance on foreign oil, and I think that is very,
very important.
And I have to respond also to the other comment on the
national missile defense. Just because this is one Member of
Congress--first of all, it is not designed to shoot down every
missile that will be launched from every country at one time.
It is designed to be able to knock down a rogue nation, a
terrorist missile attack. And this is one Member of Congress
who will--I am willing to take that one shot of a bullet
hitting a bullet if it means protecting Los Angeles,
California, or Chicago, Illinois, or Washington, D.C. I am not
going to be the person who says, no, I didn't think that was
important enough. I am going to let that go.
So to my friends on the left who don't--who doesn't think
national security and the ability to defend our people is that
important, I would say it is probably the primary role of the
Federal Government is to protect its citizens.
Now I will go on two issues. I am going to continually
focus on the biofuels component of a National Energy Policy.
Although in southern Illinois, we do have marginal wells. We
have abundant coal reserves. We do have, as I said, the
reprocessing uranium facility that is in the deep south in
Metropolis, Illinois, but, of course, ethanol and biodiesel
have been projects that I have undertaken. And a couple years
ago we were able to help pass an addition to the Energy Policy
Conservation Act, which allowed the fuel addition of biodiesel
to be considered to help decrease our reliance on foreign oil.
We have another piece of legislation that has been
submitted within the last couple of weeks to affect the--and it
really is through the Transportation Committee, but for your
information, it does tie in, because any time we use biofuels
in any percentage, mixture with petroleum-based fuels, it
decreases our demand for the petroleum-based product. That is
why ethanol is helpful. That is why biodiesel is helpful.
And if it can help clean the air--I would just want to put
on record, Mr. Secretary, so you know, that we have dropped
legislation on the Congestion Mitigation Air Quality Act, which
would allow, you know, credit for fuel usage of a renewable
fuel additive so that you can get credit for the using of
biodiesel or ethanol in these highly dense transportation
corridors that are congested, and there is a clean air aspect.
There is a renewable fuel aspect and all the great things that
are involved.
The last thing that I will mention, since I am the only one
talking, and no one else is around----
Mr. Barton. We have Mr. John and Mr. Cox here.
Mr. Shimkus. How am I doing on time, Mr. Chairman?
Mr. Barton. You are 23 seconds over.
Mr. Shimkus. Well, then I yield back my time.
Mr. Barton. All right.
The gentleman from Louisiana is recognized for 5 minutes.
Mr. John. Mr. Secretary, thank you very much for coming.
Being from Louisiana, which is a producing State, I really
understand the industry as a whole and its impacts from a local
economic standpoint; and as a Member of Congress for the last 6
years, I understand energy on the national level and its
importance to our economic security, and to our national
security among other things.
I would like to put this debate into very easy-to-
understand components that all make up a comprehensive energy
policy. No. 1, I think you have to find it. No. 2, you have to
refine it. And No. 3, you have to transport it. And each one of
those components, as simple as they may seem, is a very
critical component of delivering an energy policy that I think
all of America wants.
And I would like to focus just a little bit on the
transportation part of my breakdown. Now, it is my
understanding that in California, the pipelines that lead to
the border can deliver a lot more natural gas, but once they
get to the border, they get choked out, and from that situation
other complications happen.
I would like to focus in on the transportation part of the
administration's policy and how you envision meeting our
delivery needs. Whether it is pipelines for natural gas that
fuel electric power plants or electric transmission lines,
without them, you really have a bottleneck and a problem. I
think this is a very important part of the whole energy debate.
Some people in America seem to be focused on the production
side, because it is high profile, especially on Federal lands,
and other things that seem to be a political powder keg. But I
think transportation of whether it is electricity, gas or crude
is very important. Could you elaborate on that, please?
Mr. Abraham. Well, just a broad statement, I would just say
that we have devoted an entire chapter of the energy plan to
the infrastructure challenges we confront, for a good reason,
which is that if we increase supply, or even just maintain
current supply levels, if we have lack of capacity to deliver
the supply, as you have indicated we have----
Mr. John. That is my point exactly.
Mr. Abraham. [continuing] it affects price. It obviously
affects shortage issues as well.
In the plan we are making a number of recommendations. With
regard to the pipelines, the President directs Federal agencies
on an interagency basis to try to work together for the
purposes of designing and developing recommendations to
expedite the permit process that is involved in pipeline
siting.
He also has encouraged FERC to consider improvement in the
regulatory process which governs the approval of these
interstate systems. And we also endorse Senator McCain's
legislation with regard to pipeline safety.
At the same time, on the transmission side, we have a
number of recommendations which play a fairly active role in
development, because with regard to electricity transmission,
we face a greater challenge, and that challenge comes about
because of the fact that there is no Federal authority to site
electricity transmission. We have that capacity with respect to
oil pipeline, natural gas pipeline at the Federal level. We do
not have that power with respect to electricity.
What we have in this country is an electricity transmission
system that was largely constructed at a time when a local
power plant serviced its community. It was not developed for
long-haul transmission. It was not developed for a national
energy or electricity market. As we have strived for more
competition in the marketplace of electricity, we have done so
primarily with regard to price control issues. And California
has obviously had one type of experience, Pennsylvania another.
But even as we deregulate on the price side, we still have
the challenge if there isn't a sufficient number of sellers
available or buyers or vice versa, and so what we are talking
about, and actually interestingly it was, I think, well stated
by Congressman Sawyer's remarks--in his remarks, of the notion
of moving toward a national highway system for electricity.
What we propose is several steps to get there: Step number
1, an analysis by my Department to try to determine where we
need more transmission, where we need more interconnectivity.
Second, a process that would involve encouraging the FERC
to develop a rate structure system that would encourage,
through rates, the construction of the additional transmission.
Third, for us to consider the benefits of a national grid.
That is for the Department to make a review of that and
recommendations.
Also looking at the Federal facility, such as the
Bonneville Power Administration to determine whether they
need--and somebody--I think Congressman Walden asked about
this--whether we need to expand their debt availability so they
can participate in construction.
But finally, of asking for us to develop legislation that
would provide the Federal Government with an eminent domain
power to address situations that might arise where we need
interconnectivity.
And there certainly have been many examples in recent years
where the--where we are talking about interstate situations
where somebody just won't take the action. The authority lies
at the State and local level. If a community or a State decides
it will not site transmission, it may make a problem far more
acute.
We have cities in this country that are limited in terms of
how much electricity they can import, considerably constrained
in that regard, such as New York. We have States, because of
their nature, some--for example, Florida, because of being a
peninsula--where we have similar kinds of limits in terms of
importation. And within States or within regions, we have
these. And I don't see--at least it wouldn't be my vision that
the Federal Government, once having identified these problem
areas, immediately launch through an imminent domain power,
siting program.
Rather, I would hope we could work together to develop
legislation that once we identify these, we bring them to the
attention of the appropriate regulators at the State and local
level; that we work with FERC to perhaps provide a rate
structure that encourages transmission development. But there
should be at least a last resort option available to us at the
Federal level to make sure that we don't have the kinds of
challenges that some parts of the country confront, of being in
situation where they literally can't import anymore generation
where they need it most.
Mr. John. First, let me encourage you to research and study
the national electric transmission grid. I think it is
meritorious. When you are looking at the economy today and all
these e-businesses that are popping up everywhere, you are not
sure where they are, and it really doesn't matter. And I think
that same mindset may overlap on electricity. If it can be
generated somewhere, does it matter where it comes from if it
is going to plug into a grid, into a national power grid?
Mr. Abraham. Well, if I could just say--and I know I may be
a little bit over here, but if I could just add one other
point. In addition it would help us--if we were to resolve
these bottlenecks and so on, help us deal with opening a more
competitive system, in addition to helping us address
situations where there might be an electricity shortage in one
area and a surplus in another that right now can't be used to
address the shortage.
And also I think it could open the way ultimately for us to
address the NIMBY problem, which was referred to by Congressman
Radanovich. Right now the reluctance of a community to have any
new generation can create a situation with literally--you know,
they have a problem there, but they have no option because they
can't import any more electricity. There are communities that
would like to increase the amount of generation they have,
places perhaps where they already are a source, but if there is
not enough transmission to get any additional electricity from
there to a more grid-intensive area, they don't have that
option.
Mr. John. Well, being from Louisiana, I could sure
understand that mentality, that we will drill as much as you
want down at our end. We understand the jobs that are created.
Finally, let me briefly say that I look forward to working
with you as we embark upon this issue. In my eyes, I do not
believe that there is a more important issue facing this
Congress, and it is not going to be solved this year or next
year. There is no silver bullet. There are a myriad of things
that have to be addressed in one package. I think energy
concerns are a threat to our economy. It is a threat to our
prosperity. I think it is a threat to our informational
security. And it is something that we need to work on.
Being cochairman of the Blue Dogs, we have recognized that,
and we have activated an energy task force, cochaired by our
colleague Ralph Hall on the committee and also Max Sandlin, and
we are putting together principles of an energy policy. And we
are going to invite you to one of our meetings. I think we will
play a very important role in this, because it is a very
important issue, and I look forward to working with you and
thank you for being here.
Mr. Whitfield [presiding]. Mr. Secretary, I also want to
welcome you to our panel this morning, and I was not here for
the opening statements, but we are delighted that you are here.
And I particularly am pleased that this administration is
placing emphasis on all fuel sources, particularly the emphasis
you are placing on clean coal technology, as well as expanding
the use of nuclear fuels.
I would like to ask a few questions just on a few parochial
issues as well. As you may know, I represent the Paducah
gaseous diffusion plant, and I was pleased that the
administration had requested $18 million in the supplemental
appropriations bill for environmental cleanup at the Paducah
plant. And I know that you can't speak for what will happen
here on the Hill, but it is my understanding that at least in
you all's view, that the entire $18 million was to be set aside
for the Paducah cleanup. Is that correct?
Mr. Abraham. Yes. That is my understanding.
Mr. Whitfield. And then on another issue, I really
appreciate the Department's continued efforts to move ahead
with the DUF6 conversion plants at both Paducah and Portsmouth.
Those plants and the construction are very important obviously
in trying to convert the depleted uranium hexafluoride into a
more stable product.
As you know, the bids were submitted in March, and it was
our hope that an award would be made no later than August.
However, it is my understanding that most recent estimates
indicate that DOE will not award the contract until about
October. Is that your understanding at this point?
Mr. Abraham. I would have to check to see if there is any
updated information. I honestly can't tell you a date, but I
know that our offices work with yours, and I suspect the
information you have just indicated is something that reflects
the most recent estimates on our part.
Mr. Whitfield. Okay. Good.
Also, I, along with Congressman Strickland of Portsmouth,
had written a letter to you regarding the pension benefits for
the retired employees at both Paducah and Portsmouth. Recently,
the pension benefits for the retirees at Oak Ridge had been
increased significantly, but the benefits for retirees at the
Paducah and Portsmouth facilities was not increased. I have
talked to your staff this morning, and I know that they are
going to be working on that. And I just wanted to say to you
that it is a very important issue, and we appreciate you taking
the time to look into that and get back with us.
Mr. Abraham. Well, we will, and I just would like to
acknowledge the work you have done. We have worked with
Congressman Strickland as well, as you have indicated and he
did in his opening statement, to try to address some of these
issues within our complex. Obviously some of the employees are
involved that work directly with the Department, but most
don't. And we are trying to be responsive to their concerns, as
expressed through you, and we will continue to work with you to
accomplish that.
Mr. Whitfield. Thank you.
At the time USEC was privatized, they became the exclusive
executive agent for implementing the Russian HEU agreement. The
National Security Council is reviewing that entire agreement
and I know that you will be having input into that. I would
just like to make the comment that I think that USEC has done a
very good job as the agent for that agreement, and it is my
hope that they would be able to maintain the exclusive agency
responsibility in that. I know that this is an ongoing process,
and I simply just wanted to express my views on that. I am
assuming that it is your view that we do need to always have a
domestic capability to enrich uranium in the U.S. Do you agree
with that?
Mr. Abraham. Well, Congressman, one of the things which we
are trying to evaluate in the early days of the new
administration is precisely what general policies we are going
to outline in these areas.
As you indicated, there is a national security review going
on that embraces both the specific issues that relate to the
USEC role and, more broadly, the HEU agreement as it pertains
to nonproliferation, but also as to the national security
implications both with regard to domestic production
capabilities, as well as the capacity to import on a long-term
basis. So that is all part of the review, and those are
definitely considerations that will be taken into account.
Mr. Whitfield. Okay. Well, Mr. Secretary, I know that
everyone on this committee does look forward to working with
you as we try to solve this energy crisis in America and to
utilize all fuels available to us. And I see that my time has
about expired.
I recognize Mr. Waxman of California for 5 minutes.
Mr. Waxman. Thank you very much, Mr. Chairman, and Mr.
Secretary. I am pleased to have you here before us.
We want to work together with this administration, but the
proposal that we have seen on energy just is so puzzling to me,
because you would not get a tighter standard to make motor
vehicles more cost-efficient, to get more fuel use more
effectively with cars. You wouldn't get as tight a standard on
air conditioning, which, if we had the standard that the last
administration proposed, would have resulted in 43 fewer power
plants from having to be built. We are not going to get other
areas of conservation. But instead we are being told, well, we
will just have to start drilling in the national Alaska
wilderness area, open up all Federal lands.
We are getting some kinds of sources of energy that are
being favored. We are getting a subsidy for coal. At the same
time the administration is proposing a cutback on funds for
renewables. And there is a 30 percent cut in the conservation
fund, which is a fund that can be used to make greater
efficiency use of electricity and other energy. So it is very
troubling.
On the one hand, we are being told there is a crisis, let
us drill, let's produce more energy, let us open up our natural
resources. We are in a crisis so we need more supply. And yet
we don't have the effective ways to use our energy more
efficiently and to conserve.
How do you answer that?
Mr. Abraham. Let me try to go through all of those, if we
can. First of all, let us just talk about energy efficiency and
conservation. There is a major component of this proposal, an
entire chapter devoted to recommendations in that area. It
ranges from--on the one hand, to call for the expansion of
combined heat and power program systems.
Mr. Waxman. Well, let me ask you about motor vehicles. That
is one of the major sources of use of energy. You said in
answer to a previous question that the proposal of this
administration is to study tighter fuel efficiency standards.
Yet the standards were adopted in the 1970's and implemented in
the 1980's, and we are now in the 21st century. Don't we need
tighter standards right now to put in place for future motor
vehicles, particularly those SUVs?
Mr. Abraham. I would note a couple things. First of all, we
already have legislation in place that puts the Secretary of
Transportation in charge of making these determinations, and I
believe that is really what we have now urged happen. But just
remember, of course, over the last several years, there has
been a moratorium on funding to, in fact, make any changes with
respect to----
Mr. Waxman. Well, that is a moratorium the Republicans in
the Congress supported----
Mr. Abraham. And it is also a moratorium that we do not
call for in this plan. And indeed, I believe that the House----
Mr. Waxman. Well, because your plan----
Mr. Abraham. [continuing] Appropriations subcommittee just
this week has lifted that moratorium.
Mr. Waxman. I know there is no need for a moratorium, that
the administration's proposal is to simply send it out for
further study by the National Academy of Sciences.
Mr. Abraham. No. That isn't the case, Congressman. I think
that, quite the contrary, we envision in this moving forward on
CAFE taking into account three factors that I think are
important. One, the study which was a bipartisan compromise
worked out last year to have the National Academy of Sciences--
and I believe in a few weeks they will have their study
completed--give us some recommendations that should be
incorporated into the consideration and taking into account
safety as well as potentially disparate impact on
manufacturing.
If 46,000 Americans have died as a result of mandated CAFE
standards over the last 20 years, we ought to be looking
forward in terms of changing standards to make sure that we do
so in a fashion that doesn't----
Mr. Waxman. People have died because of CAFE standards?
Mr. Abraham. That is exactly right.
Mr. Waxman. How is that happening?
Mr. Abraham. Because we----
Mr. Waxman. We have got more cars efficient now than they
used to be.
Mr. Abraham. They may be more efficient with respect to
fuel, it doesn't necessarily mean they are safer. And the
problem, I think, that the National Highway Transportation----
Mr. Waxman. You are no longer the Senator from Michigan.
You are the Secretary of Energy. That argument never stood the
test of----
Mr. Abraham. I am equally interested in the safety of
Americans in this job, and what I would say is that the
National Highway Transportation Safety Commission has, in fact,
found a direct correlation between the weight of vehicles and
traffic fatalities that have ensued. It is not my numbers. It
is the numbers of NHTSC. It is the calculation done by Gannett
News Service, taking into account the data provided.
Now, the issue isn't whether or not we should improve CAFE
standards. The question is can we do so without any resultant
increase in the unsafety of vehicles. And I----
Mr. Waxman. Well, Ford is talking about a vehicle, an SUV,
in 3 years that will get 40 miles to the gallon. Do you think
they are going to make one that is less safe than the SUVs on
the road today?
Mr. Abraham. I am confident they won't. And they didn't
need a government fuel efficiency standard to make it. The
question is whether or not--what we are calling for is for the
process to move ahead with the Secretary of Transportation, who
has responsibility under the standards and the statutes in
place today to make a decision.
Mr. Waxman. My only point is Ford says they have the
technology. They can do it. That doesn't mean they will do it.
And it seems to me if we want it done, and we want to get the
automobile industry to act, we have got to set in place the
requirements for them and push them to do it. That is how we
got them to move forward on safety, on fuel emissions from
automobiles that pollute the air, on greater efficiency. And
what I see is this administration telling the automobile
industry, don't worry about efficiency standards. We are going
to send it to the National Academy of Sciences and study it for
a couple more years.
Mr. Abraham. Actually, that is wrong, Congressman. The
Congress last year in a compromise on a bipartisan basis sent
it to the National Academy of Sciences. Their study is due in a
matter of weeks, and when it is done, it will be incorporated
in the Transportation Department's statutorily required fuel
efficiency determination process.
Mr. Barton. Okay. The gentleman's time has expired.
The gentleman from Ohio Mr. Sawyer is recognized for 5
minutes.
Mr. Sawyer. Thank you very much, Mr. Chairman.
Mr. Secretary, welcome again. I understand that in your
answer to Congressman John, that you discussed in some degree
or other the problems with transmission constraints and the
need to put a more modern ratemaking structure in place to deal
with transmission as a freestanding business enterprise, and
you mentioned Federal siting authority. I am not going to ask
you to elaborate on that at this point, but I will be
interested in looking at your response to Congressman John.
Let me ask you, though, the whole question of RTO formation
is proceeding today with large numbers of investor-owned
utilities working to comply with the FERC Order 2000. Do you
think that we should allow utilities to continue in their
current progress toward RTO formations in the free market, or
in the interest of avoiding the kinds of constraints that we
have seen, formed in some places in the country, does there
need to be a government role in mandating formation in
identified places or forcing utilities to divest of
transmission----
Mr. Abraham. One of the recommendations in the President's
plan as I pointed out to Congressman John, the whole chapter is
devoted to the serious infrastructure problems that you
identified in large measure in your opening statement. And
within there a call for trying to address the reliability
issues. The problem that I see in the brief period of time I
have been in this job is while we have a variety of, I think,
10 regional reliability associations or councils, there is no
teeth in there. There is no authority at FERC to enforce
reliability measures so that people have some, shall we say,
latitude in terms of how they behave. So we envision presenting
legislation that would move in the direction of a national
reliability council with real enforcement capabilities as one
leg of the puzzle or the stool.
Second, we don't make a specific recommendation toward a
mandatory RTO approach. However, with respect to western RTO,
in a letter to FERC, I encouraged the inclusion of the
Bonneville Power Administration because we felt there would be
a benefit from having that process in the Western States. And
we see that as a promising way to address some of these
transmission issues.
One of the most important assignments I have received as
part of the National Energy Plan is the requirement by the end
of this year for us to make a national assessment of where
bottlenecks exist, to where interconnectivity is required to
try to address the national highway system you suggested in
your comments. How we get from that completed project to the
building and constructing of that is, I think, dependent on,
one, a rate structure that incentivizes construction on the one
hand and the ability, at least as a matter of last resort, if
not otherwise, of the Federal Government to play a role in
siting where we have an unwillingness on the part of State and
local officials to do so.
My hope is once we identify problem areas, perhaps that
will bring some focus on them and cause regulators to make
those decisions. But we believe that there needs to be
ultimately a Federal role, if necessary.
Mr. Sawyer. Thank you very much.
Thank you, Mr. Chairman.
Mr. Barton. The gentlelady from Missouri is recognized for
5 minutes.
Ms. McCarthy. Thank you very much, Mr. Chairman, and thank
you, Mr. Secretary. I know in my opening statement, opening
remarks, I posed some thoughts to you, which I am happy to have
you get back to me on, budget items.
I want to pursue in this 5-minute window issues that Mr.
Whitfield and Mr. Barton both raised, and that is with regard
to the study, that strategic review, that is to be completed
September 1. And in your remarks you talk about how important
it is to maintaining energy security with regard to current and
future technologies. I couldn't agree with you more.
But I want to have you elaborate a little bit on what you
will do following that study, even though we don't necessarily
know fully what we will find in the study. But I am concerned
because in the budget process, which we are underway with here
in the Congress, there are some cuts being made, in particular
to the National Renewable Energy Lab in Colorado. It is managed
by Midwest Research Institute in my district, and I have spoken
to the director at length about this, because I believe very
much in our energy labs and what they are trying to accomplish
and that they are, in fact, key to our future energy security.
But the cuts--the lab itself is going to receive about a
million dollars increase in equipment, maintenance and repairs,
but the research activities are said to take about $195 to $199
million cut in 2001 and another $140 million in 2002.
Will your strategic review be looking at the consequences
of those cuts? And what I think personally is that they are
very untimely, given the commitment we all seem to share in a
bipartisan way here today for, you know, energy security, next-
generation technologies, you know, elaborating on what those
technologies mean.
You and I both know if you set research back for 3 years or
more, you can't just recoup when you finally find some more
money. You can't--you just can't pick them up where you left
them, and we are--at least in this lab I am familiar with--so
close to the technologies that we need--we need to use, we need
to export, we need for economic development and energy security
and national security. I really think it would be impossible to
resume in the future, and it would be a huge loss for us right
now.
So this report that is to be completed by September 1,
based on your review of it, will you then rethink some of the
budget items that have not been addressed, you know, and make
recommendations to the appropriators?
Mr. Abraham. Mr. Chairman, if I might ask, this is an issue
brought up by so many members, I would like to just kind of
give a very comprehensive response--I will do it as quickly as
I can--there were so many components with respect to the
renewable energy budget.
Our budget, if you eliminate congressionally directed
projects in the renewable energy area from last year's budget,
is about $60 million less than had been in the 2001 final level
of appropriations.
The timeframe in which we developed this budget was almost
immediate with respect to our arrival in office, and it was not
a budget that we had the ability to draw conclusions from the
National Energy Plan development, because the budget had to be
completed by February 27, and all the details by April 9, and
the energy plan wasn't finished until May 17. As a consequence,
it put us in a somewhat difficult position within a variety of
the budget categories to try to establish priorities.
What we decided to do in this area was to try to identify
programs where we saw a clear need for maintaining level
funding from previous years, and we did that with respect to
hydrogen, with respect to superconductivity, with respect to
other areas within the renewable budget, and to retain the core
competencies, although at a reduced level, of several other
areas, pending guidance from the National Energy Plan, which we
have now received.
If you will look at the National Energy Plan, it gives me
explicit authority to begin immediately working on a review of
both the renewables areas, as well as some of the other areas
in the fossil energy that are somewhat combined for the
purposes of making new budgetary recommendations.
Now, the study that I have mentioned actually has two
phases to it. The first phase has begun. In fact, our newly
installed Assistant Secretary for Energy Efficiency and
Renewable Energy, David Garman, is already on the road, having
public hearings on a regional basis. The first phase of the
study will be done on July 10, and the purpose of having phase
1 was to put us in a position to make recommendations that
would apply to the 2002 budget levels. The final project will
be completed on September 1, and I would envision that
providing us with guidance as we work into the 2003 budget that
will be forthcoming next year, although that process within the
executive branch is already under way.
I would note for the record, though, that one thing about
renewable energy that I hope we can all work together to take
into account is that a lot of the research in some of the major
areas, particularly wind, geothermal and solar, is very mature.
Our Department has spent--we have calculated almost $6 billion
in current dollar terms over the last 20 years on research in
these areas, and yet today the contribution to America's total
energy supply in those three areas is less than 1 percent. And,
in fact, when our Energy Information Administration was asked
to estimate what the contribution level would be in 20 years
down the road, it was only a little bit more than 1 percent.
Now, I don't think any of us want that to be the case.
It seems to me the challenge we have is not only on the
research side, but also on the implementation side, and one of
the things I have also asked our division, our Energy
Efficiency/Renewable Energy Division, to do is to look at and
give us recommendations which will have to assure us of steps
that ought to be taken to translate into using technologies
that have already been largely invested in.
In the budget we have some--or rather in the energy plan,
we have some recommendations with respect to tax incentives.
For example, expanding the solar energy tax credit to
residential as well as commercial applications; an expansion
also with respect to biomass; and some others, fuel cell
vehicles.
But I think there are other factors involved as well. We
have some siting problems that are regulatory in nature rather
than research-related with regard to, for example, wind energy
farms, because people may not want to have that in some
particular part of their State or community. We have, I think,
some problems with respect to the uncertainty of some of these
tax incentives that have been only put in place in the past for
a short duration, and, therefore, it has caused people to not
be certain about whether or not there is going to be that
available in the future.
We have pricing issues that I think need to be addressed.
For example, when you are using solar energy, there are periods
when, in fact, you are a net energy generator. You are
generating more in the heat of the day than you are using. If
we can incentivize or provide people who might use a solar
system the opportunity to benefit at those times through net
metering, which is available in some places, I think that can
cause an expansion of that particular renewable.
And so I think we have got to look at this both on the
research side, but also on the application side, or else that 1
percent for those three sources will be the final number, and I
don't think any of us want that to be.
Ms. McCarthy. Mr. Chairman, since he is addressing his
answer to the many members who had raised the issue, may I
pursue briefly?
Mr. Barton. You can ask one more question, and then we go
to Mr. Dingell, and we will go to Mr. Walden.
Ms. McCarthy. Thank you, Mr. Chairman.
I thank you, Mr. Secretary, and I do hope that the study
provides you with the impetus I think we all feel we need to
make these other forms of energy competitive and available. We
can look to our European friends for help there as well, since
they are ahead of the curve on these matters, having had high
energy costs far longer than we have.
I wanted to comment or ask your thoughts on revisiting the
CAFE standards issue that both the chairman and others have
brought up. I am concerned because this committee has taken a
look at SUVs and, you know, the danger in them, the design, and
perhaps the tire issue. We have taken a good look at that. Are
you suggesting there are some--that there are some data
available that shows that the deaths due to CAFE standards
somehow relate to SUVs, because it was my understanding that
SUVs were exempt from those standards?
And second, what is wrong with the Secretary of
Transportation and you collaboratively calling on the industry
to become more efficient, give them a goal of a mile per gallon
per year over the next decade and call upon them voluntarily to
meet that goal for energy security and national security, and
just send a message that this is what the administration would
like to see happen, all the while you are pursuing other
studies on just what we can accomplish. I would like your
thoughts on both, please.
Mr. Abraham. Let me say with respect to the safety issue,
as we address fuel efficiency, I think it is imperative that we
also consider safety implications. For those of us who have,
you know, looked at these previous studies, what we see is that
when fuel efficiency standards came into effect, one of the
ways that people met the higher standard--one way that
manufacturers can meet a higher standard of fuel efficiency is
to make a vehicle lighter.
Now, if a vehicle is lighter, NHTSA has concluded that
there is a correlation to more serious accident ramifications,
and so I want to make sure that if we do change CAFE standards,
that we take that into account and try to make sure the changes
aren't ones that bring about any unique consequences on a
safety front.
In terms of the industry, you know, first, I think we need
to execute the already existing statutory requirements that are
in place today, which call upon the Secretary of Transportation
to on a--I think it is on an annual basis to make
recommendations with respect to fuel efficiency. Those have
been basically stopped because of the moratorium on funding,
but from what I gather, the moratorium is not likely to be--the
ban or whatever is not going to be in this year's
appropriations. At least it doesn't seem to be at this point on
the House side.
Ms. McCarthy. Mr. Secretary, if I might speak from my
heart, since I arrived here in 1995, the auto industry has been
all over me to support legislation, to deny those CAFE standard
changes. I think that it has stopped not because of budget
issues, but because of politics, and I think that is why I
suggested that you and the Secretary of Transportation call on
the industry to be a partner in this instead of trying to
politically keep it from happening.
Mr. Abraham. Well, my point was only that the appropriation
process has prevented the Transportation Department from taking
the action that is otherwise statutorily called upon. I do
believe the point you made with respect--or perhaps it was
Congressman Waxman made with regard to industry now moving
forward to actually have on the road more fuel-efficient SUVs
even sooner than a timeframe likely would be mandated is a step
in a very positive direction, and I think we would encourage
that. And I hope that we will see the entire industry move in
that direction, but do so in a safe way, do so in a way that
doesn't have a disproportionate impact on whether it is
American workers' jobs that are also affected.
Ms. McCarthy. Well, it is probably very appropriate that
the President is in Europe this week, because he will see a
whole lot of fuel-efficient cars, and perhaps his staff can
gather some of the data on the hazards and dangers of those.
But, again, thank you, Mr. Chairman, for your indulgence in
this time, and I yield back.
Mr. Barton. Thank you.
The gentleman from Michigan is recognized for 5 minutes,
Mr.----
Mr. Dingell. Mr. Chairman, I thank you for your courtesy.
Mr. Secretary, these are friendly questions, and I think
they will be susceptible of yes or no answers, and in view of
the time limit, I hope you will be able to give me that yes or
no.
Mr. Abraham. Well, I am very hesitant to say no, I am sure.
Mr. Dingell. In response to my May 14 letter on various
waste issues, you attached a chart, indicating the program
would experience a funding shortfall in fiscal year 2002. If I
read this correctly, I would say that it tells me that you will
fall nearly $6 billion short between fiscal year 2002 and the
repository opening of 2010. Is that correct, Mr. Secretary?
Mr. Abraham. We believe--I am sorry. I can't answer that
issue yes or no. We believe that we will have a funding path
toward a 2010 completion, assuming that----
Mr. Dingell. But the chart says you will have a shortfall.
Mr. Abraham. We are committed----
Mr. Dingell. It is your chart, Mr. Secretary.
Mr. Abraham. Congressman, we are committed to moving
forward to request adequate funding to meet the construction
of----
Mr. Dingell. I want to address----
Mr. Abraham. [continuing] If we, in fact, feel we can make
the recommendation.
Mr. Barton. Will the gentleman from Michigan yield, and we
will give you additional time, because I want to back you up on
this.
Mr. Dingell. Well, I will be happy to yield to the Chair
then.
Mr. Barton. Would the Secretary be willing to work in a
bipartisan fashion with Congressman Dingell and myself and Mr.
Tauzin and others to use a nuclear waste fund for the purpose
which it was intended, which would mean that we have to remove
the budgetary cap that was imposed, I think, 6 or 7 years ago?
Mr. Abraham. Mr. Chairman and Mr. Dingell----
Mr. Barton. Because that is what Mr. Dingell is getting at.
His committee did that in our nuclear waste bill in the last
Congress.
Mr. Abraham. It would be my view that those funds which
were contributed by ratepayers through their companies should
be used for exactly those purposes.
Mr. Barton. Thank you.
Mr. Dingell. Now, if we don't do something about this, the
administration has to do something like putting it off budget,
because there are nearly $10 billion in unexpended ratepayers'
monies that are supposed to be spent for the waste repositories
Congress intended. Will you send legislation up to take this
waste fund off budget?
Mr. Abraham. We have begun discussions with the Office of
Management and Budget to try to address how this can be done.
We actually began those discussions in this year's budget
period, but we did not have sufficient time to complete them.
But I have been working with Director Daniels to try to move in
a direction that would provide some sort of methodology for us
to have access to those dollars.
Mr. Dingell. You are now being sued for failure to proceed
by the electrical utility industry, and it is my personal
judgment you will lose all of those lawsuits, Mr. Secretary.
When you lose, what are you going to do?
Mr. Abraham. First, let me just say when the chairman asked
me earlier what were the pleasant surprises of this new job, he
didn't ask what the unpleasant ones were, and one of them was
that I have been sued more----
Mr. Dingell. Your unpleasant surprises are without limit.
Mr. Barton. It was a holdover suit. It is not you
personally.
Mr. Abraham. For one, I have been sued more that I ever had
planned to be in my life; and second, I would just say that the
ranking member had warned me about virtually all of these
matters before I took the job, so I was on notice.
But obviously we believe that as the first step in the
process, we need to address the issue that pertains to a site
characterization and recommendation. Whether or not I can make
that recommendation will be based on sound science. I believe
if we begin moving forward, if the conclusions that we reach
after getting the science are that we can make a recommendation
to the President to seek license--a license to go forward with
the Nevada site, that that will have a profound influence on a
number of these issues, including the nature of lawsuits in the
future.
Mr. Dingell. Now, Mr. Secretary, I would note that EPA has
issued standards for protecting public health and the
environment at Yucca Mountain. If it proves scientifically
suitable, can you meet the environmental standards that have
been described to you or for you by EPA?
Mr. Abraham. Congressman, our--the process that I intend to
go through once the site characterization science is presented
to me will be aimed at determining not only whether or not to
make the recommendation, but whether or not, in fact, we can
meet the standards that are set. We accept these as very
stringent, tough standards. There is no question that they are.
I will certainly make the determination based on my evaluation
of those standards against the science that we receive. I
believe that it is feasible for us to meet those standards
based on at least my preliminary examination of them, but I
don't feel I should rush to judgment until I have actually
received the site characterization information.
Mr. Dingell. Statutory standards on this point?
Mr. Abraham. I am sorry?
Mr. Dingell. Will the Congress have to enact statutory
standards on this point because of the inability to meet the
standards or to--or to proceed under the standards of the
Department because of technical difficulties in doing so?
Mr. Abraham. At this point, I mean, there is no question,
Congressman, that the standards that EPA has set are ones that
go beyond either what the National Academy of Sciences or the
Nuclear Regulatory Commission had established or suggested.
They are very stringent tests, and certainly our capacity to
meet them would--I would hope--resolve any issues with respect
to safety and environmental implications of the site.
I don't at this point have a recommendation for
legislation.
Mr. Dingell. So you can't answer yes or no.
Now, Mr. Secretary, are you using your authority under
section 403 of the DOE Reorganization Act to propose a rule
which FERC would provide relief for--under which price relief
would be provided for California by FERC?
Mr. Abraham. No.
Mr. Dingell. No.
Do you plan to send up a comprehensive electric
restructuring bill?
Mr. Abraham. We have been asked as a part of the
President's energy plan to do so. The answer is yes. We have
not begun the actual development of that legislation, because
it is--one of our goals is to work with the committee and with
counterparts on the Senate side as we determine the approaches
that would be receptive here.
Mr. Dingell. The plan also recommends legislation, quote,
clarifying Federal and State regulatory jurisdictions. I would
note that consensus on this has proved impossible. Can you tell
me whether your bill would preempt State jurisdiction on
transmission matters if you send such legislation up here?
Mr. Abraham. I am not sure that it would be contained in
the same legislation that would deal with electricity
restructuring, but as I said in the answers to questions from
Congressman Sawyer and Congressman John, we believe that there
are an enormous number of bottlenecks that exist in this
country where transmission siting is desperately needed. We
have no Federal authority to do so. I would--our first step in
the process is going to be to try to evaluate where exactly the
most significant needs exist for either additional transmission
or interconnectivity. On the basis of that type of an
evaluation, we also hope to present legislation that would, in
fact, provide the Federal Government with some eminent domain
authority to try to address these problems, although, as I said
in my earlier comments, I would hope that would be only in a
last resort rather than as a first impression.
Mr. Dingell. Would you give this authority to FERC, which
has done an abominable job of implementing current law, or
would you vest that authority in someone else?
Mr. Abraham. We have not made a determination.
Mr. Dingell. The plan also advocates repealing the Public
Utility Holding Company Act of 1935. Would you support
consideration of this issue as a part of a comprehensive bill,
or do you favor PUHCA repeal on a stand-alone basis?
Mr. Abraham. We support PUHCA repeal. The President
indicated that in his campaign, and it is part of his platform.
We have not made a determination as to whether or not to
include it in--it would be certainly in the legislation we
intend to draft, but I understand that in the Banking Committee
of the Senate, it has moved forward as a freestanding vehicle,
and I guess it is our intent to try to work with Congress to
determine what the most effective way would be to accomplish
that objective.
Mr. Dingell. Now, I would note----
Mr. Barton. This is going to have to be the gentleman's
last question.
Mr. Dingell. And I thank you, Mr. Chairman. You have been
very courteous, and I appreciate your kindness.
I would note that FERC concludes that market power is being
exercised or actually abused in California's wholesale markets.
Is this a good time to have PUHCA repeal in view of that,
because PUHCA has a number of consumer protection provisions in
there which apparently need somebody other than FERC to
address?
Mr. Abraham. Well, we still support the position with
respect to PUHCA repeal. I would say that--and would note for
the record that it is only since February of this year that we
have actually addressed the issues of unjust and unreasonable
prices in California with calls for refunds that have now
totaled some $124 million to those people who have been forced
to pay these unjust and unreasonable rates.
I think that--and the administration supports FERC's taking
its responsibility seriously to, in fact, call for such
refunds, and I would urge them to continue to vigilantly pursue
that.
Mr. Dingell. Thank you, Mr. Chairman. I appreciate your
patience.
Mr. Barton. Thank you.
We are going to recognize Chairman Tauzin. The Chair is
going to announce that Mr. Walden, Mr. Doyle, Mr. Luther and
Mr. Strickland, have you asked questions yet? All of the
members who are present at 1 p.m. will be given 5 minutes of
oral questions. Any member that arrives after 1 p.m. will put
their questions into the record, because the Secretary does
have a 1 p.m. appointment. So we are probably going to end up
here until about 1:30.
With that, Mr. Tauzin, the full committee chairman, is
recognized.
Chairman Tauzin. Thank you, Mr. Chairman.
Mr. Secretary, let me first remind you something you may
not be aware of. One of the first bills I introduced upon my
entry to Congress back in the early 1980's, was to repeal PUHCA
and the reason then is still the reason now. It is an outdated
piece of legislation that inhibits some utility companies, and
only some utility companies, from making efficiency investments
that are critical to their consumers, and I include in that
energy carburetion, which is one of the carburetions that
serves the utility consumers of my district who are restricted
in their capacity to make necessary efficiency investments. We
are not living in the 1930's and 1935, 1940's when that sort of
legislation made some sense. Today it doesn't make sense in a
marketplace of competition, and I would encourage the
administration to stick with that position, and hopefully we
can get it done 1 day.
I want to talk to you a little bit about some of the plans
we have in the committee and get your thoughts on it. First of
all, we have focused on the higher-than-necessary gasoline
prices in our marketplace that consumers are having to deal
with. And as part of our plans we hope to address very early
what we consider to be an element of a marketplace that is
unnecessarily raising gasoline prices for people, and that is
the extraordinary number of blends and different blends and
seasonal blends of boutique fuels in our country. And we would
very much like to introduce and hopefully pass legislation
somewhat standardizing that process so that if SIPs clean air
requirements of the various communities do require some
boutique fuel to help in the air cleanup, that they might have
a single or several boutique fuels to choose from, rather than
as many grades and varieties. Second, that there might be some
easy way to go from winter to summer blends without emptying
the tanks 1 day and having to fill them up the next day and
having consumers face empty fuel tanks when they go to the
marketplace.
Does your Department agree with us that that is an area we
ought to address sooner than later?
Mr. Abraham. Well, I think it needs to be addressed, and I
would note that in the President's plan, the Environmental
Protection Agency Administrator has asked to address it. We
have talked before about the refinery capacity limitations that
we have as a Nation, the fact that no new refinery has been
built in 25 years, the last one down in your district.
Chairman Tauzin. You visited it----
Mr. Abraham. Which we visited the other day.
Chairman Tauzin. Thanks for going there.
Mr. Abraham. The problems of strained capacity are
obviously exacerbated to the extent that refineries have to
produce all these multiplicity of fuels. But the problem, of
course, is that if you have a problem--which we did in Michigan
last summer when a pipeline near Jackson burst. A neighbor
can't borrow from a neighbor, and a refinery doesn't have the
ability to adjust because of these kinds of challenges. So we
do support moving----
Chairman Tauzin. In fact, Daniel Yergen called it the
Balkanization of the American fuel marketplace, because when
somebody runs short, a pipeline breaks or a refinery is down or
a ship has a collision in a harbor, we automatically have
shortages and spikes like we saw in Chicago and Milwaukee last
year, and that some rationalization of that marketplace would
make a lot of sense right now. And we are going to try to do
that. We would ask your support in finding the right formula
that gets us there.
Mr. Abraham. Well, there is no question there is a market
liquidity problem.
Chairman Tauzin. The second thing is there has been a lot
of political discussion about whether or not this
administration and this Congress is going to support a very
deep and broad conservation effort as part of the energy
package. Obviously you heard the chairman of the subcommittee
announce that we intended to make it one of the very first
things we do in this committee. The secretary of natural
resources in Louisiana, when asked to comment to the
administration on our recommendations to the national policy,
led off with conservation, with the argument that every Btu of
energy conserved is one you don't have to repeat in production
over time, and that we ought to move to see as much demand
reduction as we can get in a marketplace. Do you concur with
that kind of a strategy?
Mr. Abraham. Yes, I do, and as you and I have spoken, there
is the issue of waste as a consequence of some of these
reliability issues. One of the recommendations in our--in our
plan has the Department of Energy moving immediately to
consider expansion, for instance, in research in areas like
superconductivity, where we believe that conservation
achievements are most realized.
Chairman Tauzin. In fact, we saw that in Detroit. One of
the electric companies is now deploying superconductive--so
they are here already. We know some of those advances are here.
I am going to see a demonstration later today from Sandia Labs
on a 3-year project that really facilitates net metering where
consumers can put up solar panels and actually sell electricity
back to the grid when they are not using it instead of trying
to store it in batteries. All of that makes great sense, and
our thought is that we ought to move first with a package that
literally brings together as many good ideas on demand
reduction and assistance to energy supplies through
conservation and demand reduction and alternatives as a lead
item in the package, and then follow it with what else we have
to do in all the other more difficult areas to get agreement on
nuclear and other fuel production, including hopefully a clean
coal technology bill.
Again, do you endorse that strategy? Do you feel like you
can work with us on that kind of a plan?
Mr. Abraham. It is for sure that we can, and I would
actually say that as a personal matter--I can't speak for the
White House on this, I haven't consulted with them, but I think
moving forward in the direction you have just outlined as a
first step would certainly be a wise course for the committee
to follow. There is a lot of common ground----
Mr. Barton. This will have to be the chairman's last
question.
Chairman Tauzin. I will not have another question. I simply
wanted to thank you again. I know this is your first appearance
on this side, and we deeply appreciate the time you spent with
us, Mr. Secretary. We will spend an awful lot more time
together as the months go by.
Mr. Abraham. Thank you. I will look forward to being back.
Mr. Barton. I thank the chairman.
The gentleman from Pennsylvania Mr. Doyle is recognized for
5 minutes.
Mr. Doyle. Thank you, Mr. Chairman.
Mr. Secretary, welcome. I have several questions. I think
what I would like to do is maybe just get them all asked right
up front and then give you some time so that I don't get one
question in, and you give me a 4\1/2\ minute answer, and he
bangs the gavel on me. But we do appreciate you being here.
You said before that there are wide areas of agreement on
both sides of the aisle on much of what you are trying to do,
and I want to reiterate that. I know that you and I agree that
coal is an important energy resource, and that it is going to
play a key role in our National Energy Policy, and that we both
agree we have to develop more efficient ways to use the
resource. Given the abundance we have in the country, it just
makes good sense to improve the environmental performance as
well as the efficiency of--and the cost of coal-based
technologies.
It used to be a lonely group. I think myself, Ralph Regula
and maybe Alan Mollohan were a small group of members that were
really enthused about this kind of research, and today clean
coal technology appears to be back in vogue. Maybe this year we
won't have to be fending off so many cutting amendments from
our friend from Vermont, Mr. Sanders.
But that being said, I want to raise a concern about the
lack of support that we are seeing for newer and more efficient
gas turbine generating technologies. I think there is no
question that we are going to need gas turbines as part of the
electricity--electric generating facilities, regardless of
whether we use coal or natural gas as the fuel. In other words,
for at least the next generation, the gas turbine is going to
be a critical technology in the majority of our electric
generating facilities. And I think we need to be mindful of the
relationship that exists between clean coal technology and gas
turbines. We have to move forward with the development of clean
coal technologies, such as integrated gasification combined
cycle. But as I understand, today's gas turbines are simply not
designed to burn that coal gas that would be produced in such a
technology.
So many of us view DOE's next-generation gas turbine
program as a critical element for the future use of coal, and
that being said, I know that you had made a statement that you
thought that that gas turbine program is an example of a
program that the Federal Government should not be funding. So
one of the things I would like to ask you is wouldn't we be
much worse off today if we had not funded DOE's successful
advanced turbine program, which concluded last year, and might
the Department reconsider supporting the next generation of
cleaner-burning gas turbines as part of DOE's R&D budget?
Second, fuel cells. I want to talk a little bit about this,
too, because I think this is another area where we hear some
parks and fliers language about--in the national energy report
about fuel cells, but when you look at the budget request, it
causes us some concern. I think that this--the DOE's
cooperative program with industry has resulted in enormous
improvements in efficiency, while the program's emphasis on
driving down cost is also finally beginning to bear fruit.
And I am particularly proud to have research being done in
my district at--Semens Westinghouse has a manufacturing
facility in the district, and their solid oxide fuel cell
technology, which was jointly developed with support from DOE,
is about to result in 250-kilowatt generators, which can be
sited in small office buildings or shopping centers to produce
electricity with virtually no emissions, and the efficiencies
of these fuel cells will start at 50 percent. And in
combination with a small microturbine, efficiencies are likely
to approach 70 percent. Now, you compare this to our current
fleet that is generating efficiencies around 30 or 35 percent.
But when we look at the fuel cell program, we are falling
several years behind because of shortfalls in funding, and when
you look at the administration's 2002 funding recommendations,
they are $7.5 million less than last year. So my next question
is, you know, why aren't we putting more money into fuel cell?
And we actually need an additional $20 million in that line
item, not a $7.5 million cut.
Let me just shift very quickly to one other thing, methane
hydrates. I sponsored a bill last year which would--I was the
author of the Methane Hydrates Research and Development Act,
which was signed into law last year, and we authorized $47.5
million for funding. We see that the fiscal year 2002
authorization level was $11 million. You know, if we could just
find a way to extract 1 percent of the domestic methane hydrate
resources in this country, we could double our domestic natural
gas resource base and completely eliminate our dependence on
foreign oil sources. This is another area where I think we need
to have increased funding, not reduced funding.
And finally, I want to invite you--I know you have been to
the NETL facility down in Morgantown, West Virginia. We have
one in Pittsburgh, Pennsylvania, too, Mr. Secretary, which I
would like to extend an invitation for you to visit so that we
can talk about some of the important work that is being done
down there. And I look forward to working with you and just
hearing your answer on these funding levels.
Mr. Barton. The gentleman is----
Mr. Doyle. How did I do, huh? You wouldn't cut the
Secretary off in his answer, would you?
Mr. Barton. I think the gentleman from Pennsylvania set a
record. He has literally asked over 5 minutes of pure
questions, and I lost count at about the seventh question. So
if you could give us a simple yes or no answer, I will----
Mr. Abraham. Yes. No. No. No. And yes.
Mr. Barton. If you can shortly elaborate.
Mr. Abraham. I will try. First of all, I welcome the
invitation to Pittsburgh. We actually at the facility in
Morgantown had the Pittsburgh employees on a closed-circuit TV
hookup, and we got to see each other sort of from a distance
over that, but I would like to do that.
Second, with respect to gas turbines, the issue that we
confront in the budget process this year which I asked for
further clarification about has to do with what the next
generation of turbine research would constitute. The previous
program came to an end on large turbine generation. The focus
of the second stage was to be mid-sized turbines of a variety
that I happen to believe have been already technologically
advanced, are in the marketplace. As I understand it, there is
a huge backlog that exists for these sort--the second stage of
research that at least I believe was being proposed during our
budget process.
Again, I mentioned earlier, because of the timeframe in
which the budget was developed versus the energy plan, we now
have more guidance, which would include some of these areas for
us to reconsider. But at least in terms of mid-sized turbines,
a lot of the technology already exists. There is a multiyear
backup in terms of orders from companies such as GE and
Westinghouse that provide these, and I would certainly want to
make sure that any kind of additional investment would be an
investment in which the taxpayer money is well spent and not,
in fact, substituting for money that could be spent in the
private sector by companies who seem to already be in the
market with these kinds of units.
But I will be glad to follow up on the gas turbine issue
that relates to the coal gasification question that you raised.
Third, with respect to fuel cell funding, as you noted, we
have a slight decrease in the budget, about $7 million out of
$50 plus million, but it does not reflect a lack of interest or
commitment in terms of the future in this area. I would share
your view that distributed energy fuel cell technology,
hydrogen research are areas of real promise in terms of R&D
funding. And as part of the process that I mentioned earlier
with regard to the review that is going on between now and July
10, and the subsequent review through the end of August for
2002, as well as 2003 funding, these will be areas of prime
focus as part of that process, and we look forward to getting
your input on that as well.
Mr. Doyle. We look forward to helping you plus those
numbers up.
Mr. Barton. The gentleman from Oregon is recognized for 5
minutes.
Mr. Walden. Thank you, Mr. Chairman.
Mr. Secretary, the Northwest Power Planning Council's
latest electricity analysis shows that there remains a 17
percent loss of load probability this coming winter in the
Pacific Northwest. As you know, stream flows as measured at The
Dalles Dam on the Columbia system are about 53 percent of
normal due to the drought. Accordingly, Bonneville and other
Federal operating agencies in the Columbia Basin need to ensure
reservoirs refilled by the end of summer--provided we get any
moisture--so that sufficient water will be available to
generate electricity this winter.
Do you anticipate the need to issue any secretarial orders
this summer, such as mandatory power transfers to California,
that would not allow this basin to refill its reservoirs?
Mr. Abraham. No.
Mr. Walden. Thank you.
There is also a concern, obviously, about Bonneville's
aging electrical transmission grid. They say they need about
$775 million in additional Federal Treasury borrowing
authority. Does the administration plan to support that request
or some level of increase in their borrowing authority?
Mr. Abraham. We have recommended in the task force report
in the President's plan a two-step process with respect to the
transmission needs of BPA. One is the call for an assessment of
the--as part of our broader assessment of transmission
deficiencies, for a determination to be made. We at the
Department, I would just say, based on the work we have done
with Steve Wright and others at BPA, believe that there are, in
fact, infrastructure needs there, and then based on the
conclusions as to the assessment, a reevaluation of the debt
service or debt limitation matters. But both of those are
called for--both those evaluations, we would expect to complete
them fairly expeditiously and make recommendations to OMB
accordingly.
Mr. Walden. Perfect. Thank you.
I would also like to follow up on the issue of the
4(h)(10)(c) fish credits that Bonneville is going to need to
access. As you know, by law 27 percent of the cost of fish
recovery requirements in the Federal Columbia system are the
responsibility of the U.S. taxpayer, the ratepayers picking up
the remainder.
Does the administration support Bonneville's ability to
access those fish credits, especially in this year?
Mr. Abraham. Right. And we are analyzing in a variety of
ways, as I think you know, the challenge that we face. Just for
the record, we are committed to long-term contracts, as you are
aware, that were entered into last October to supply, starting
this October, some 2,000 to 3,000 more megawatts of electricity
than we are capable of generating from within the system. We
are looking at a variety of ways to address that differential
because of the implications it has for rates that will be reset
this fall.
The fish mitigation issue is part of that set of issues we
are looking at. The issues of trying to buy down some of the
demand have already begun to be addressed, and we are pleased
with the process we are making. And so we will continue to
work, you know, through BPA to--and with them to try to come up
with a resolution.
Mr. Walden. Let's go to the RTO West issue. I understand
you sent a letter in April to Chairman Abair expressing your
support for an RTO West proposal that would include the Pacific
Northwest States of Oregon, Washington, Idaho and Montana, and
also include Nevada and Utah. In that correspondence you argue
for a separate regional RTO for these States, RTO West that is
separate, but at the same time coordinated with an RTO that
might include California.
I guess my question really involves how all that comes
together. For example, has BPA been instructed to ensure that
an RTO has the ability to relieve not only constraints between
flow paths, but also the flow paths themselves?
Mr. Abraham. Well, we haven't actually engaged in that
level of--at least in my office, between the Acting
Administrator and I and so on, as to instructions with respect
to the role it would play as a participant in a regional RTO.
We did feel that there was a benefit to having that
participation, which was the basis for the recommendation that
I sent to FERC. But as I said in an answer to an earlier
question--I think it might have been Mr. Sawyer's--you know, we
view RTO as being a source of promise with respect to
addressing some of the reliability issues and transmission
constraint problems. I can't say today that mandating people's
participation is called for, as I mentioned earlier, but we
haven't--and it is to my knowledge--made any specific
instructions as to positions on the issues.
Mr. Walden. I think there are some issues beginning to
surface about how the ability to transfer--emit power over
these systems is sold, managed, and whether there is created
economic bottlenecks that can result in congestion pricing that
maybe isn't necessarily a reflection of actual market forces,
perhaps lending itself to manipulation that I know you and your
agency will be keeping a close eye on.
Let me switch to one other topic, and that is open-loop
biomass projects. There is a facility out in Oregon that
generates power by combusting the methane in a garbage--in a
solid waste facility, storage facility I guess. Given the
administration's new focus on tax credits to spur energy
production, would it make sense to extend renewable energy tax
credits to open-loop biomass facilities?
Mr. Abraham. That is a very technical question,
Congressman.
Mr. Walden. It sure is. I was hoping you would have the
answer to it.
Mr. Abraham. This administration is already on record as
supporting both closed as well as open-loop tax incentives.
Mr. Walden. Okay. Very good.
Mr. Chairman, my time has expired. Thank you.
Thank you, Mr. Secretary.
Mr. Abraham. Thank you.
Mr. Barton. The gentleman from Minnesota, Mr. Luther, is
recognized for 5 minutes.
Mr. Luther. Thank you, Mr. Chairman, and welcome, Mr.
Secretary.
As you know, there has been considerable discussion about
the prospects of oil and gas drilling in the Great Lakes, and
it is my understanding that you have stated your opposition to
offshore vertical drilling in the past. Is this also the
official administration position with regard to onshore slant
drilling?
Mr. Abraham. Congressman, the comments I made were related
to my personal views at the confirmation hearing that was
conducted on the Senate side as to Great Lakes drilling.
Without any specificity as to the methodology that would be
employed, it reflects my view. It was not at the direction of
any previous administration policy. In fact, since the hearing
happened before we took office, I guess there couldn't have
been. But the position that I took that day reflects my
opinion.
I would note that we put no recommendations with respect to
drilling in the Great Lakes into the energy report, and so to--
since this would be under the Interior Department's portfolio,
I am not sure if they have taken a position or not.
Mr. Luther. Does your personal position also include
onshore slant drilling, that you oppose that personally?
Mr. Abraham. I have personally taken a position that I
don't support Great Lakes drilling in a broad way. I have not--
I have honestly not investigated the science or the
characterizations of the various forms of drilling, and I don't
want to take your time, so I will just say that as a general
matter or principle, I don't know much about some of research
that has been recently conducted.
Mr. Luther. Do you know if the administration has a
position on either vertical or slant drilling?
Mr. Abraham. I don't know that they do. It was not one of
the recommendations in the report, but I would be happy to
forward an inquiry to the Interior Department.
Mr. Luther. That would be great. I know that during the
fall Presidential campaign, Vice President Cheney indicated
that technological improvements were making it easier to drill
in sensitive areas without damaging the environment. Do you
believe that he was including--he was making any reference to
areas like the Great Lakes in making those kinds of comments?
Mr. Abraham. I don't know the context in which he made the
statement. I mean, it is clearly the case that our Department
has invested a fair amount of money in research over a long
period of time, although I would say that we have actually
reduced the proposal in that area for some of these technology
investments, because we think the private sector could be doing
this rather than the taxpayers. But I don't know at the same
time--I don't know what he referenced. It might have been--I
don't know of any statement on the Great Lakes that he has
made. It might have been in the context of ANWR or some of the
other areas which have been more Federal-focused areas of
discussion.
Mr. Luther. To then follow up on what your personal
position is on this kind of drilling, will you be making a
recommendation to the--to the administration, to the President
or the Vice President, with respect to drilling?
Mr. Abraham. It is my understanding that there is
legislation that has been introduced--you may well be a sponsor
of it. I am not sure. As to what the administration might do
with respect to commenting on the legislation, I can't say. I
have not been part of any discussions so far, although I guess
the legislation is fairly recently introduced, at least in the
Senate, I think. But I don't know. It would typically not be in
our portfolio, although we might be asked to comment.
Mr. Luther. You may know that Canada does allow offshore
drilling. Is there anything that you could do with respect to
Canada in terms of encouraging them not to expand or to
outright ban Great Lakes drilling?
Mr. Abraham. I have no idea what the relevant interaction
is there. It would seem to me the International Joint
Commission has responsibility over these kinds of matters, not
this Department. And, again, in the absence of clarity in terms
of where the administration's portfolio on this is, I can't
say, but I do think it is probably the International Joint
Commission that has the jurisdiction.
Mr. Luther. Okay. Thank you, Mr. Chairman.
Mr. Barton. Thank you, Congressman.
Last but not least, we go to Mr. Strickland of Ohio for 5
minutes, and would by unanimous consent ask that he restrict
his questions only to the Portsmouth plant. Actually, you can
ask anything you want.
Mr. Strickland. Thank you. And, Mr. Chairman, do I
understand that we have the privilege of submitting questions
which we don't----
Mr. Barton. Yes.
Mr. Strickland. [continuing] have time to----
Mr. Barton. You and all the members that are present.
Mr. Strickland. Thank you, Mr. Chairman.
Thank you, Mr. Secretary. You have been kind and patient
with all of us, and I certainly appreciate that.
I have here, Mr. Secretary, hundreds of signatures of
employees from the Portsmouth gaseous diffusion plant, Mr.
Chairman.
Mr. Barton. Just out of the blue, I could have guessed
that.
Mr. Strickland. Mr. Secretary, you came to Ohio on March 1
to announce the DOE's $125.7 million 2-year package for cold
standby at the facility, and at that time you made a commitment
for $20 million to be used for worker and community transition.
The press also reported that $20 million figure. These
petitions have been sent to me because there are workers there
who have been terminated who feel that they are not getting
what was promised and what they have a right to expect. I might
say that as a first step, the committee should approve the
DOE's request to reprogram and reprioritize $59 million in
fiscal year 2001 funds for cold standby winterization worker
transition.
Then on October 4, a month later, only $8.4 million was
reprogrammed for worker transition, and $2.6 million was
allocated for community transition. According to my
calculations, that is about $9 million short of the promised
$20 million, and I was wondering if you could tell me if or
when we would receive the additional $9 million of that
resource?
Mr. Abraham. Well, as a first matter, I don't know that any
of the monies have been worked out because of the ongoing
negotiations that are taking place between USEC and the--and
the union. We have been trying to be helpful to that process
and obviously have worked with your office, Senator DeWine's
and Senator Voinovich's.
In terms of the dollar amounts, I am aware that in this
fiscal year, we have approximately $11 to $12 million that are
available. I am not sure that I can comment as to whether there
would be an additional $8 million. I guess there must be--there
may be some discrepancy as to the terminology used with regard
to what budget item that comes from.
Mr. Strickland. I guess what puzzles me is the--what I
think was widely perceived to be a promise of $20 million for
this purpose, and what I would like to ask you is, can the
community and the workers expect that, or has there been some
change in the thinking of----
Mr. Abraham. Well, I am not sure. I would have to review
for you what the numbers are. What I do recall was making the
commitment that--on February 27, I believe you and I met, along
with Senators DeWine and Voinovich. I believe Governor Taft was
there.
Mr. Strickland. Yes.
Mr. Abraham. And you all asked us to act as quickly as we
could to try to free up money to make it possible for us to
both move the facility to cold standby and to winterize it, as
well as to try to act to get more money into the system for
purposes of community transition matters and other things. The
number we talked about was around $125 million in the short
run, and we were able to do that. In fact, we will be able to
announce it within about 48 hours, working very hard to get OMB
to do so.
As to the allocation of that money, I guess I would have to
reexamine what our records show, because the numbers I am
familiar with are the 8.4 and the 2.9, I believe. But I would
be happy to get back to you.
Mr. Strickland. Mr. Secretary, I am going to be very
tenacious on this point, because there are lots of men and
women who feel like this government has an obligation to them,
and I respectfully request that you take a close look at the
promises that were made, the money that has been allocated.
I was also concerned that Federal dollars through the DOE
was basically turned over to USEC to develop a plan, and part
of what was being required of the workers in order to receive
the benefits, these Federal benefits, was to sign a waiver
relieving this private for-profit company of any liability. And
it seems to me grossly unfair to allow public resources to be
used by a private company to leverage a commitment from
employees that they will not bring suit against them, which is
their legal right. Would you comment on that?
Mr. Abraham. We are in an unusual situation, as you know,
in that we are not directly involved in the negotiations
between USEC and the union. We have been asked for a variety of
ways to help work through the transition period here in terms
of the use of Federal dollars. There are some constraints on
how those dollars can be used, but to the extent we can be
flexible, we have tried to be. But when we work with USEC to
provide a proposal to the union, that is what we do, trying
to--based on what we consider to be the--you know, the
objective.
We haven't had the benefit of working directly with the
union to figure out what their specific--to negotiate with them
directly, and so we are kind of in an unusual--almost
multicushion chrome shop type of relationship, which means that
we work with USEC to make money available to them. They then
put together proposals to offer the union. The union, as you
know, rejected the most recent proposal. I have told our people
to go back and come up with a hopefully more appropriate and
effective way to address it, and I think we have tried to keep
your office up to date on that.
I am hopeful that USEC will--once we have made that
presentation--that may even happen today--be comfortable with
it and move forward, and I hope at that point that the union
will feel it is an acceptable arrangement. If it is not, I
don't rule out looking for another avenue, but, again, it is a
little difficult because of the role we have, which does not
allow us to be a part of the direct bargaining between USEC and
the union, and it is obviously a result of the sort of unique
relationship USEC now has or its independent status as a----
Mr. Strickland. Mr. Chairman, can I make one further
concluding comment?
Mr. Barton. Yes.
Mr. Strickland. And you have been very gracious, as you
always are.
Mr. Barton. No. No. You defend your constituency very ably,
and I kid about it, but I want you to know you are to be
commended for it. And what I jest is purely in good-natured
fun. You are doing an excellent job for your constituents.
Mr. Strickland. Thank you. I just would like to say to the
Secretary, I do appreciate what he is trying to do. You know, I
am critical, but I don't want my criticism to be perceived as a
personal criticism. I was critical of the last administration,
certainly, but it seems to me woefully wrong for public
resources to ever be used to allow a private for-profit company
to use those resources as a leverage against their employees.
Mr. Abraham. Well, our intent is not to try to, you know,
play as a participant in any kind of inappropriate behavior.
And I don't know the nature of the waiver that you have
referenced. It may be standard in collective bargaining to seek
waivers of the right to sue as part of a final agreement. I
really don't know enough about labor-management contracts to
answer that. But----
Mr. Strickland. And it may be, but I don't want it to be
done with public resources, public dollars.
Mr. Abraham. Well, then, we need to obviously get more
information about it. It is--again, though, Mr. Chairman, kind
of a little difficult situation because of the sort of unique
status USEC now has as----
Mr. Barton. Oh, I am very aware of this. The fact that I am
not a participant doesn't mean I don't understand the dialog,
because----
Mr. Abraham. No. It is a unique status that puts us in a
difficult position in terms of the fact that we are directly
into these negotiations.
But we want to work with you, Congressman, and with respect
to the total dollar amount, what I want to check is I believe
there were multiple installment periods. I think that what we
have talked about so far constitutes a first stage, but that is
just sort of a shot at it today. I will reexamine to see if
that is----
Mr. Strickland. Thank you, sir. Thank you, Mr. Chairman.
Mr. Barton. Thank you, Congressman Strickland. We want to
thank you, Mr. Secretary, for your courtesy in coming before
this subcommittee. We look forward to a series of meetings,
both in the hearing process and in a working relationship, to
craft this legislation.
Mr. Abraham. Thank you, Mr. Chairman.
Mr. Barton. This hearing is adjourned.
[Whereupon, at 1:30 p.m., the subcommittee was adjourned.]