i want to thank the witnesses for being promptly on time and we're scheduled to start this hearing at three and as soon as one of our friends from the other side of the aisle arrives we'll we'll get the hearing started so thank you for your patience and in the meantime we can sit here and we'll look at each other for a while is here so as i said i'll call this hearing to order entitled the american energy initiative and i would say that this is the second hearing that we've actually had on this topic of the american energy initiative and it's going to be a wide ranging discussion of the domestic energy needs of our country and the impact that decisions in other parts of the world have on what we are proposing to do here the dominant area of focus in today's discussion is the rising role of china for the past thirty years china has experienced a remarkable economic boom in an effort to modernize and assert its position in the global economy in fact the international energy agency recently projected that the world will require forty percent more energy in the next twenty five years now that's quite an increase in demand for energy and i might also say that the international energy agency has called china china a a cold fueled economic miracle last year china became the largest energy consumer in the world the economic progress in china has been made possible through the availability of affordable secure and abundant sources of energy china understands the importance of acquiring the resources necessary to power a new manufacturing consumers fuel millions of new automobiles and electrified the homes and businesses of the world's largest population becoming the largest energy consumer in the world has helped china become the u s chief economic competitor as a result of the tremendous surge in demand world energy markets have taken notice and are adjusting china's increased all demand over the past ten years has had a major impact on global oil prices coal consumption in china has risen at a tremendous rate and is projected to continue on the same path for the foreseeable future nuclear renewable and alternative energy technologies have also taken significant steps forward this decade as well china is playing for keeps and its quest to modernize its economy become globally competitive and improve the standard of living for one point three billion citizens to do so it realizes the value in pursuing energy in all its forms rather than abandoning fossil fuels in exchange for a nubile energy china continues to burn coal an astonishing rate using three point five times more coal than the us and building last year one new coal fired plant every two weeks with technology that exceeds our own it is reported they are undergoing a safety review as a result of the situation in japan but china minder standing is continuing to bill twenty five nuclear plants twenty five times more than the u s is building china leads the world in hydro electricity usage china is the second largest consumer of oil behind the united states but the difference is quickly shrinking during the recession instead of billions of dollars of wasteful stimulus spending the chinese put their billions toward ensuring all resources around the globe some with our allies but some with countries who are not with this sharing we hope to explore these issues and many more if we are to win the future as our president says we must understand the role china plays in energy markets and the various sectors affected by it part of this strategy must be to prevent the e p a from increasing u s energy prices by regulating greenhouse gases through the clean air act and allow for the environmentally friendly use of our domestic resources such as natural gas and all greenhouse gas regulation and policies to stop the use of domestic sources of fuel make the us less competitive with china not more and said we must and least the an ovation and efficient allocation of resources made possible only through a free enterprise system in the absence of burdensome federal regulations and mandates on the subject of oil as you know there's about eighty five million barrels of oil being produced each day throughout the world they're projecting by the year two thousand and thirty that china alone may be consuming fifty million barrels of oil that's a lot of all so we look forward to the testimony of our witnesses today mr rush we're delighted to see you we appreciate your coming back from illinois i know that you had some issues you were dealing with there and if you are prepared at this t rush and this time misspelled right now recognize you for five minutes thank you mr chairman a chairman i appreciate your holiness hereon and especially the emphasis on what is going on in china because you know you hear a lot of people saying let's let's invest in this let's do that let me tell you something if you look at statistics of china it sure looks a lot like the let's do it all proposal short of the fact that they they tend to have no commitment to expansion of solar the fact is the chinese are finding reasons to do things rather than finding excuses not to do things just in their nuclear involvement commitment themselves we're looking at a three fold increase in fact the latest that is that we've seen as they are looking at twenty new units going in and nuclear power plants we have what two maybe three possibly we're talking about a condom a that's one can't our size that's almost a hundred times more commitment to nuclear than what we're talking about in this country and let me point out that there are opportunities for us some may say but what about the safety issue the fact is next generation technology light such as gas cool reactors totally avoid the the problem that we've seen in japan and some of the concerns there at the same time addressing one of the the big bugaboo that we've talked about with nuclear nucular and that is the disposal issue the fact is gas cool reactors have the potential to be developed very quickly to be able to not only use your rainy but also to be able to use plutonium and burn up not only weapons grade material but also waste waste from other power plants these are all technologies that we ought to be pushing for now continue to push forward rather than retreating obviously from the data we see here mr chairman china is not retreating they are not stalling they are not putting moratoriums they are going full steam ahead into a future that provides their citizens with cost effective energy and we darn well ought to be leading them not following them down this road and i yield back to mr g that we've heard from special interest groups for years it has become almost an article of faith among those who oppose any efforts to cut domestic carbon pollution that china will never take meaningful action to cut their pollution for years they have argued why should we take steps if china refuses to today will hear that this is a myth and china is taking action in its new five year plan china set a target of reducing carbon dioxide emissions per unit of g d p by seventeen percent by two thousand and fifteen that means fewer carbon emissions for each dollar of economic growth the chinese have set a goal of getting over eleven percent of china's energy from non fossil fuels by twenty fifteen that targeting kluges seventy gigawatts of new win capacity which is equivalent to over one hundred coal powered plants china's current wind capacity is forty one gigawatt so that's already the highest wind capacity in the world the five year plan also calls for china's successful industrial energy efficiency program to be expanded these targets are consistent with meeting china's commitment under the copenhagen accord to reduce its carbon intensity by forty to forty five percent from two thousand and five levels by twenty twenty chinese officials are even talking about pilot cap and trade programs and a carbon tax to reduce pollution china has also shut down seventy gigawatts of its most inefficient coal fired power plants last year investment in china's clean energy sector rose to over fifty four billion dollars that made them the world's leader in attracting clean energy investment the united akes ranks just third in the world with thirty four billion dollars in clean energy investments we're now behind china and germany the chinese are now the world's largest manufacturer of wind turbines and they're the world's largest manufacturer of solar panels over the next decade the global clean energy market is going to be worth two point three trillion dollars the chinese know this and are pursuing policies that will help them compete china's number one priority is jobs and economic growth they know that clean energy and climate policies create jobs and economic opportunities while china is moving forward we're headed in reverse the republican budget cuts investments in renewable energy and energy excuse me the republican budget cuts investments in renewable energy and energy efficiency by thirty five percent so we're going in the wrong direction this week the house will take up legislation to block any p a s modest carbon pollution requirements for the nation's largest polluting facilities the policy being pursued in the committee is based on science denial and it will be an economic debacle for our nation money investments and jobs will flow to china and other nations that are investing for the future we need to stop the partisan fear mongering we should embrace setting commonsense cost effective rules of road for carbon pollution ensuring that our largest facilities are energy in the energy efficient is going to boost their competitiveness and spur innovation and bishes clean energy policies are going to produce clean energy jobs china has figured it out we need to start getting serious about winning these global clean energy markets i look forward to hearing the testimony of our witnesses especially debbie's felix in from the world resources institute she is an expert based in china and can tell us what's really happening on the ground there then she's probably she's here with us today yield back the balance of my time thank you very much and at this time we will go to our panel of witnesses we have with us this morning mr stephen koepp it's who's managing director for douglas westwood we have mr fred palmer who's chairman of the world association we have deborah single san who's principal adviser china climate and energy program with the world resources institute and we have ms mary had star distinguished senior fellow and satou for energy research once again i welcome you to the hearing we appreciate your being here we look forward to your testimony and mr hope it's our recognize you for five minutes of your opening statement be sure and turn your microphone button is it all right mr chairman and members of the committee i'm deeply honored for the opportunity to appear here before you today to discuss china's oil and gas markets our firm douglas westwood is a leading consultancy and market research covering oilfield services offshore and in difficult to access markets like china and russia among others i manage our new york offices and i am solely responsible for any opinions expressed here and let's begin with china's oil demand and china consumes ten million barrels of oil per day on global consumption of about eighty eight million barrels china is already the second biggest consumer of oil in the world as the chairman has noted how will china's demand develop the historical record suggests that oil demand evolves quite similarly so range of countries with the man descending an s curve as a country motorised is trying to enter this s curve around two thousand and five and we forecast china to rea steady state consumption in the twenty twenty five to twenty thirty period at that time we would anticipate china might have per capita oil consumption around that of south korea implying demand in excess of fifty million barrels a day that contrast to the us with one thousand million barrels of consumption today further we see china surpassing u s consumption levels around two thousand and eighteen as we're trying to oil supply china's conventional oil fields are mature the country currently produces around four and a half million barrels a day and this level isn't dissipated to remain broadly stable for the rest of the decade like the us china currently meets about half its needs through imports and this is new as late as the hundred ninety s china was self reliant in oil today today it must be active in global markets to secure domestic needs indeed it has to pay in about an additional one million barrels per day each year just to keep up with and the situation will deteriorate markedly in the coming decade by two thousand and twenty china's dependence on foreign oil may be as much as eighty percent versus an anticipated forty percent for the u s china's vulnerability is a cause for concern for that countr policy makers turning to natural gas china consumed three point nine trillion cubic feet of natural gas in two thousand and ten the us consumes six times as much china's per capita consumption is even lower about one twenty sixth of us as a consequence there is considerable scope for rapid consumption growth of natural gas in china well past twenty thirty china's natural gas demand surged twenty two percent last year and growth has averaged nearly fifteen percent over the last decade annually we anticipate this pace to new this would imply demand doubling to two thousand and fifteen and nearly quadrupling from current levels to twenty twenty china's natural gas production has tripled in the last decade from one trillion cubic feet in two thousand to three point three trillion cubic feet in two thousand and ten a growth rate over thirteen percent per annum we project this to double to six trillion cubic feet in two thousand and fifteen and nearly tripled to eight point six trillion eight point six trillion cubic feet in twenty twenty implying a temperate ten percent annual growth rate for the balance of the decade coal bed methane and shale gas are hoped each chicken to contribute five to ten percent of the natural gas supply in ten years time as late as two thousand and six china was self sufficient in natural gas however the country has been a net importer since then with imports soaring to five hundred fifty billion cubic feet in two thousand and ten our forecast calls for imports of one point five trillion cubic feet by two thousand and fifteen and rising to four trillion cubic feet by twenty twenty representing an import dependence of more than thirty percent by that time indeed by the end of the decade china may import more than total consumption today china has three leading options for the import of natural gas central asia russia and l and g shipments overall china's natural gas import prospects look promising from a diversity of sources each with substantial supply capacity the chinese oil and gas sector comprises essentially three companies sinopec petro china and sina sinopec and petr china operate primarily an onshore fields and have refining and distribution operations scenic specializes in offshore oil and gas exploration and production although it has diversified recently all three chinese majors are medium to large sized oil companies and have a combined market capitalization of about four hundred fifty billion dollars that's about the market cap of exxon petro china the largest of the three has about the same capitalization as general electric the shares of all three companies are listed on the new york stock exchange and the companies provide standard disclosures in english as required by the f c c our analysis suggests the chinese oil majors act much like other companies to maximize revenues and profits to gain exposure to growth places like shale gas to partner with other oil companies to obtain capital and tech and technical knowledge and to diversify their portfolios to manage risk we believe they do not represent a material risk on the supply side china's oil demand will likely keep pressures on oil prices for the indefinite future and i thank you for your attention and will try to answer any question thank you mr covetousness palmer you recognize fine then mr chairman thank you very much it's a delight for me to be here it's a high honor and the privilege i'm here to talk to you today about the growing use of coal around the world to fuel the second industrial revolution now underway in the developing world particularly in asia and led by china i am chairman of the world coal association the global voice of coal for international producers from the united states australia south africa india china europe and indonesia schenn was a state owned enterprise in the people's republic of china and the largest coal producer in the world recently joined world coal association coal india is also a member well coal association regularly collaborate with trade association world including the china national cola so she asian and i'm happy to say we will have our first board meeting ever in beijing this june i present this testimony today in my role as chairman of the world coal association i am also senior vice president of government relations at peabody energy the world's largest private sector coal company and a global leader and clean coal solutions as an international coal producer in the united states and australia american other material economies have a unique opportunity to create a twenty first century energy policy through twenty first century coal technology following the lead of china led asia through the installation of state of the art low carbon coal technologies and what we call green coal energy is essential as food shelter and clothing the united states has linked life expectancy and income with per capita energy use the world resources institute found that with every tenfold increase in energy use individuals live ten years longer have to world population three point six billion people lack adequate access to modern power as many of you know energy disparities are growing in your own districts studies show that today today's middle class  disproportionate amount of their after tax income on energy and it is due with respect to what we believe is a flawed energy policy in the united states this energy inequality will only escalate as populations multiply and  electricity use increases the world is in the early stages of global hyper growth in energy demand as nascent such as china india and indonesia industrialised and urbanize in the international energy agency projects that nations where we cry require forty percent more energy in the next quarter such really century we believe coal is the only fuel with a low cost and large scale to satisfy those long term need alternatives to coal are limited strained or centered in political flashpoints coal is widely dispersed broadly available easily transported energy dense and very affordable in the u s of the labor cost of coal is after just average just want to have to one six that more volatile natural gas oil hovers around one hundred dollars a barrel and new nuclear construction brings unique grist both physical financial by contrast the world has trillions of tons of coal resources that is why coal has been the fastest growing fuel in the world for the last decade reaching about six point five billion tons of coal consumption per year in two thousand and ten coal is the catalyst for economic growth in the last twenty years has almost doubled with an increase of about three billion tonnes of coal per year we know it can and will be a low cost low carbon path for our environmental objective objectives of course we have choices in the united states we can come we can pursue complex and punitive regulations through the e p a with unintended consequences or we can build advanced coal technologies that are available affordable and deployable today coal technologies in our country have always met environmental objectives in the typically fifteen percent better than the existing fleet and as much as forty percent better than the older plants the world's leading economies have taken notice and china models itself on patterns and sell them their infrastructure and energy development after the united states there are some four hundred thirty gigawatts of supercritical and ultra supercritical power plants in operation are under construction worldwide china's coal consumption in the last ten years has more than doubled to three point five billion tons in two thousand and eleven as the chairman noted china middle china alone is home to thirty six percent of the world's most advanced colt's fleet and the growth of coal use will approach four point five billion tons per year by two thousand and fifteen that's up from about a billion a billion tons from here in five years or one us china is investing in clean energy technologies on and on for president it's as you will hear and peabody is part of this revolution advancing the next generation of clean co technologies chief among these is the green gen project near tianjin china one of the world's largest near zero emission unissued of sand peabody is a partner in that peabody in fact is the only non state owned enterprise partner in green we also are advancing green coal projects and partnerships on three continents while the developing world is investing in energy innovation the u s is still debating options my question to the subcommittee is simple and respectful what are we waiting for advance coal in the us will combat energy poverty and fuel and industrial rebirth the us should set a national goal to ensure at least half of all new generation is fueled by coal and next generation clean coal technologies or demonstrated and commercial and the rocky mountain west that will says we can do two and a half million barrels per day this is the path for the people's republic of china it should be our path as well mr chairman we appreciate the opportunity to appear in front of you today believe strongly that you chairman whitfield and members of the committee for inviting me to testify here today my name is deborah seligson i'm senior advisor to the world resources institute climate and energy program based in beijing we have an active program with chinese partners working on chinese energy policy and transformation i joined three and a half years ago coming from the u s department of state where i was the foreign service for twenty one years with over a decade at the u s mission in china completing my work there as the u s ambassador's science counselor in beijing in my time in china which began actually in one thousand nine hundred four i've seen an incredible transformation in chinese life in chinese society riding my bicycle through the streets of beijing in one thousand nine hundred four i was often showered and cold and the city was dark the sidewalks basically rolled up by eight o'clock at night i think you all know either from seeing china first from reports on television that china and beijing are very different today with world class subway the largest interested he rapid rail transport in the world booming industrialization and urban on this has really changed the perspective in china and what people want from their country from their community and from their energy policy i want to present to you today three ideas that perhaps challenge some of the conventional wisdom about chinese energy policy the first is that the chinese are doing what they're doing on energy transformation because they're concerned about energy security and about their economic future secondly china's energy policy will have the result of curbing fossil fuel use over time and expanding the use of multiple alternative sources and finally china is doing this because they see it as a real opportunity to dominate the new industrial area so turning to my first point energy security has always been very important to china as a number of people have already noted china is very dependent on imported oil it's also dependent on trying to move coal around the country which can be difficult especially in snowstorms and dealing with rail capacity as a rule china today is less than ten percent of the global oil market and they're already concerned about back to on relations with other countries and on that economic impact but going beyond this traditional energy security concern china is now concerned about what its future economy will look like and in season energy policy as part of the way to drive the economy niche in a  transformation from heavy industry to higher value added more knowledge base more service oriented economy it's looking at these things by working on energy efficiency through its energy intensity targets trying to reduce the amount of energy use per unit g d p and by developing its non fossil energy sources of all kinds if you walk around in china no one thinks there's room for us levels of consumption in the country is simply too dense and crowded and there's no room for all that energy all those cars are roads and that's why they're really looking at trying to create a much more efficient country for addressing some of these issues secondly the way they're doing that is by really trying to curb fossil fuel growth and expand alternatives they're promoting this transformation through policy mandates at the national and local level now i'm not trying to present you with a naive idea that china is trying to abandon coal overnight while it's true that china is building coal plants now every two weeks remember that four years ago it was two plants a week so that's a rather rapid change efficiency is improving they have the largest wind capacity in the world and they're looking to have the largest nuclear capacity by twenty twenty finally they're doing this because they see it as an opportunity china missed the industrial revolution it was late to the i t revolution and they see this new clean energy revolution as one where they can be first and they can do very very well if you think about an area like electric vehicles china sees this as a solution to its imported oil dependence and a way to domesticate its vehicle f also sees other countries as fairly late to the table in this area and a real opportunity we've talked about it's leading wind and solar industries they're looking now at whether they should perhaps be doubling their solar goal again in this five year plan they're leading in carbon capture and storage for a time when they may need to control the carbon emissions from coal so they're looking across the board but in conclusion let me suggest that while china sees energy policy as critical to its economic future and it wants to dominate this global industry this is not a game where the u s can be is going to be left out unless we choose to this is a game where we can when we are world technology leader we have the skills and the innovation hub to do it the question is do we have the mr chairman and members of the committee thank you for the opportunity to appear before you to discuss china's energy portfolio i'm a senior fellow with the institute for energy research a nonprofit organization that conducts historical research and evaluates public policies in energy markets secretary chu and other officials tell us the u s is losing the race with china regarding clean energy that is a very narrow picture of the energy situation in china china is not leading a clean energy revolution but instead is leading a global race for all fuels to fuel an economy growing seven to nine percent per year and to provide a better life for its people china has a goal of producing fifteen percent of its prim energy consumption from carbon free energy by two thousand and twenty it expects to meet that goal primarily with hydro electric and nuclear technologies because non hydro renewables mainly wind and solar supply only a small amount of energy on  rry consumption basis china is planning on hydroelectric power to supply ninety ten percentage points of its fifteen percent goal by reaching a capacity level of three hundred gigawatts about fifty percent more than it has today at the pace china is adding hydroelectric capacity it will have no trouble exceeding that goal by two thousand and twenty it currently has twice the amount of hydroelectric capacity that the u s has and will have almost four times as much once it reaches  china is expecting nuclear power to contribute up to six percentage points towards its fifteen percent goal in two thousand and twenty china has thirteen nuclear reactors operating and at least twenty five reactors under construction half of the units in the world construction pipeline official china nuclear capacity projections are seventy to eighty gigawatts by two thousand and twenty and four hundred to five hundred gigawatts of nuclear by two thousand and fifty if china meets its twenty thirty target of two hundred waxman has noted china now has more installed wing power than any country in the world but the u s is a close second and because china's when capacity is not all connected to the grid the u s has thirty percent more units usable when capacity than china china has one fourth the solar capacity of the u s and generates a mere one one hundredth of a percent of its electricity from solar though china does not have much sol capacity it leads the world in solar cell manufacturing exporting ninety five percent of its production because manufacturing costs are lower in china some u s solar manufacturers are moving their part of china goal is to be self to stay in ng in energy technology and it is learning from us experts in solar energy nuclear power and other technologies for example china has a goal to enter the global nuclear marketplace by two thousand and thirteen just a few years from now china relies on coal for over seventy percent of the general you know over eighty percent of its electricity the u s relies on coal for twenty one percent of its energy and forty five percent of its electricity according to the energy information administration china will be heavily reliant on coal twenty five years from now generating seventy four percent of its electricity from it with its massive coal use china will be emitting more carbon dioxide emissions than any country in the world over thirty percent of the world's total in twenty thirty five and twice the amount the us is expected to admit china passed the us in c o two emissions years ago and recently in energy use in summary the chinese are not fixated so only on green technology china is on a fast track to bring online new generating units of all types because china is in dallas with a sizeable amount of coal resources and because coal is the cheapest energy source in china coal fired generating additions will far outpace those of other world energy demands will increase by forty percent what year twenty thirty twenty twenty thirty now in my view it's impossible for the world have any chance of meeting its electricity demands without using coal anytime in the near future would you agree with that mr copas mr palmer certain as the lights in this room say lexan there are technical demand we all we are going to have to have energy from all sources but i genuinely believe that this administration is adopting a policy to penalize fossil fuels that's my belief just from the action being taken at e p a particularly when you consider how clean our air already is compared the rest of the world it looks like we are adopting a policy to penalize fossil fuel and i'm concerned about that because of the increased cost of producing electricity and for us to remain competitive in the global marketplace as we try to see jobs and to grow our economy  heisler we've heard a lot about china is moving forward making great strides in wind power and solar power and but even so my understanding is that the u s over the last few years has actually produced more wind power and solar power than china particularly if it's connected to the grid would you agree with that ok certainly in terms of grid connected path and have all the wind power that they're building how much of it is my understand like thirty percent of that's not connected to the red that's my understanding also they sickly china doubles its wind capacity every year and so it's always running behind on connecting it to the grid so they were six months behind a couple of years ago they're now about four months behind so they catching up it gets connected to the grid it just runs late ok thanks now the thing that really do service me about their development of wind power and i may be wrong on this but it's my understanding that under the kyoto protocol there was a clean development mechanism established so that countries from around the world like the u s and other countries their taxpayers would pay into this fund and that other countries would be able to utilize that fund to develop when power solar power that would not be built without that fund and so china who has one of the strongest economic engines out there in the world is taking taxpayer dollars from americans to build wind power and solar power in china through when that many people in this country are applauding china for doing is that correct that's correct in terms of them getting off the shelf in terms of building wind wind power yes but my understanding the u n has recognized that they were lowering their subsidies and that was why they were qualifying for the program and that has stopped at this point and then i read an article i guess just in the last few days that the world bank is going to limit funding for coal fired power stations and it says primarily bowing to pressure from green campaigners to radically revise its rules that the world bank is planning to restrict money for coal fired power stations now i'd like for somebody to explain how are we going to meet our electricity demands worldwide if we're going to stop funding coal power plants mr chairman if i might yes i think the world bank ought to be careful what it asked for because there is a bank called the asian development bank and like everything else in asia with the growth of we there the world bank over time will become irrelevant if it gets out of the business of funding developing nation possible projects because there will be asian banks that will absolutely do that so it is absolutely in our interest the world bank's interest to continue as a world bank to be to be funding these projects projects will absolutely absolutely go ahead because the demand is there and the resources are there and these international so no u s money goes through the clean development mechanism and the money basically comes from private investors in kyoto party nations like in europe who choose to get some of their emissions credits  through this clean development mechanism by investing in countries like china or india or african countries developing countries around the world on the other thing i wanted to clarify is the world bank isn't really needed for investing in called fire power plants in china there's plenty of commercial money for investing in new power plants in countries like china both the world bank and the asian development bank are quite interested in working with the chinese to invest in carbon capture and storage technology and in those next generation call fire power plants that would enable the chinese to produce low emissions or zero emissions coal fired power plants so there is a lot of interest in in that area among the international banks but the idea of those banks is to promote the kinds of things that private sector banks don't promote already i understand you  on investment on new message investment well mosul and clean engine technology in china yes there i think one thing that all of us would agree on is that building a new power plant or a refinery or any other kind of energy infrastructure take number of years and so the chinese have a five year planning process that sets out clear goals for the next five years in terms of percentages of different fuel sources and what kinds of new policies they might be introducing everything from energy service companies to new energy efficiency guidelines they also have a medium and long term goals they have a medium and long term science research and science plan they have energy plans they also have a renewable energy law that provides clear guidelines as well as targets so the net result of all of this is that yes companies both domestic and foreign know what the policy picture is no which kinds of energy projects are going to be supported over a number of years of course there's also a certain amount of change from year to year one of the changes that's happened is for example in the wind area wind has grown much more quickly than policy meant makers imagined even four or five years ago and so they've actually increased the goals a number of times but there are a number of supportive policies and they tend to stay for a number of years where as you know in the united states new energy developers have where read about tax breaks coming  going in that kind of thing and it's worth noting that in the united states seventy percent of all energy subsidies are to fossil fuels the chinese almost met the goal for energy intensity they got nineteen point one percent the goal was twenty percent it's a good sign that they were so clear about being just shy of the goal rather than trying to sort of meet it they actually exceeded both the sulfur dioxide in the c o d goals in the last five year plan ten percent goals were exceeded by both and that was an extraordinary victory for the ministry of environmental protection which is china's newest minister it was only reached ministry status in two thousand and seven in earlier years they'd had much more trouble in forcing their environmental targets and this really reflects a change in chinese society and in chinese government and just the last five years in focusing much more closely on these types of environmental goals i'm impressed with china's measures i'm impressed with the amount of electrical generation that they've been able to bring on rather quickly since pollution is a global issue i'm pleased that they're taking measures to reduce it i just want to make sure as we discuss and we put china on a pedestal that we're looking at comparing apples to apples here and so side of what china's particular regulations are to the united states because i want to see how they compare and you know we would i have to get that i would appreciate it's worth  comes in as a goal in this next five you all all of all the particulars right particularly running electrical you know my point is it's a work in progress they're down my point is we're not dealing with apples to apples and i'd i'd like to know because i think it's unfair to have this discussion in generalities instead of specifics the other question is i'm impressed with china's portfolio in fact that's part of the battles that we've had on this committee with the past i'm embarrassed that we don't have a long term energy policy but then we haven't been able to use hydro and china has a twenty two gigawatts and yangs the river that's press but we can't do that in the united states because of environmental policies we want to do coal and clean coal technologies but any use of coal or mention of coal my gosh you think that you are pillaging and so we can't use coal or  i want to do that too but we can't seem to get it off the ground here the obama administration this administration there's been a next gen sitting on the books for years but bush didn't go for what that because  environmental and now our current president isn't going forward with it so what's china doing that we can't do here and then well let's go at that question real quick how can they build it so quickly over there in and we can't even get a pilot project off of the ground there definitely is more of a policy consensus and sign on the importance developing new call technologies for their portfolio i think their arguments on both sides here in the united states there are people who really believe that it is going to be part of it and there are people who recognize the enormous renewable resources we have we do have more renewable resources than china does in terms of if they were allowed to wind and solar in regard to building plants how does china compare with environmental impact studies permitting process so they're they're more streamlined i mean china has any i a process that has a permanent process but it's definitely more rapid do they also have a right of citizen lawsuits for example when i'm when project is designed in the sand hills of activities and whether u s taxpayers are contributing to it she said that we're not because we never ratified the kyoto protocol do you do you agree with her yes i do agree with what she said but it is true that developed nations get credits for the clean development program and that's how china started with their wind program but the united states is not one of those developments correct so your answer t we chairman said something that that the government has policies that penalize coal what policies does the u s government have that penalizes coal mr palmer there is a great controversy right now congressman over over the environmental protection agency's proposed rules for a particular mission was from coal plants and also greenhouse greenhouse gas and do you think those were set in place to penalize coal or to protect the public health from particulates which can be a danger to mike morris is the chairman of a a p analogized it this way said if you took if you took the convention center in washington d c and filled it with paint pong balls what  is the p a not going against others sources of particulate matter the the and only going after one i gather the ping pong they're going after is that coal ping pong the studies that it's not a fair second with the coal plants would result in a fifteen to twenty percent increase  electricity rates in the heartland of the united states damaging manufacturing lost employment and hurting people in there or is there another way we can reduce the particulate matter well or should we ignore the harm it does to public health well first of  congressman the issue of harm to public health is contradicted by a recent figures that came out last week that killed more people living better living longer in the united states even as call you says called consumption and you're really not an expert on public health you are representing the coal industry i would submit to you and to anybody watching this that the us has an obligation to deal with particulate matters which get into the lungs and can cause disease whatever the source may be so i don't think it's particularly singling out the coal industry when the p a says that they want some some technology that's already available the best control technology to be used but it's interesting i haven't heard in these discussions the idea that the china's not doing anything that's what we usually hear china's doing anything so why should we  testify china has a five year plan actually calls for a number of significant actions to address carbon emissions if this plan is implemented with china be on track to meet its commitments under the copenhagen accord yeah actually h it'll be ahead of the curve and it'll be more than two thirds of the way to the commitments they made for twenty twenty now how should why should we believe them they met their targets they said in their previous five year plan they came quite close on some and they exceeded on others some of the energy policies appear to be quite aggressive is it true that china has shut down over seventy thousand megawatts of old inefficient coal plants during the last five years and replace those plan with newer more efficient coal plants yes and now china's planning pilot programs involving cap and trade and carbon taxes they're actively talking about it and both were listed in the party's document about the five year plan so it seems likely that we'll see them in the next five years i was china and interested in jobs and economic growth is it safe to conclude that they would be adopting all of these climate and energy policies if they were killing jobs and slowing china's economic growth i think it's safe to say that they don't think so that the wealthiest areas of china are the areas that face the highest energy prices not the lowest energy prices and that they think that transforming to a much higher value added society and not depending on heavy dirty industry is part of their future i want to add my voice to all the members of the panel i think we're going to continue to use coal for the forseeable future but we shouldn't use co that if we can get it to pollute less if we can get cleaner coal that would be great for this country and for the world and we shouldn't put all of our baskets in coal because if we can develop alternatives in supplementing where you're trying to say when you were talking about the citizen litigation against that it hasn't happen but it could pot theoretically in the future i would need to actually go check with an environmental lawyer there are areas where there's actually limited citizen law again it's a very different system than ours and so but there but it isn't simply the india c n n e a there's permitting from the lands ministry the environmental protect right minute a big actually grassroots but it was not for him but he's suing and basically taken an action and then actually being able to make a living off of these you know you don't have lawyers making you know you'll have large corporate firms that specialize in blocking these projects that fair to say it's fair to say the chinese legal profession i'm in last i'm very impressed with the five year plan concept i'll just tell you for a fact you could not do you know i've i've done methane recovery systems on landfills you can even get the environmental impact reports done in this country in five years so it is just really exciting to hear about a country that actually can have implementation plans in five years and how long did it take does it take to hook to the grid or to get the lines from the grid over to these these when wind generators well they generally run about four months behind so they may be completed in main take another four months to connect they had a problem with connections in remote rural areas and they put in it in additional funds last year to build more room and how long which would they take the time that the somebody asked for it to the time that it or that the time that somebody decides in government to build it and it actually ends up hooking up with it's pretty quick how fast i would have to check to get you a number and when i can say is the average good connection is four months after completion ok i appreciate that i mean san diego county with three million people have been trying for twenty years to get another great connection so that we can we could hook up to the outlying areas we you know we're trying to hook up to solar now in the deserts the trouble is getting the permits so i think we're really on a big issue that the fact is china does not have gauntlet that we have in this where the huge gap between the concept of implementation and the completion or just getting a permit you know there is a totally different world here that we need to talk about let me say would you agree that if we're going to be as aggressive with this broad portfolio as china those of us in government have to take a look at how we're managing our procedures to be able to make that possible and timely manner yes but there are number of other countries like germany denmark that we can look at for ideas it's not that china with all of its other governance per problems is going to be the model for how to address all of these this but then again th en again germany doesn't have new but it buys it's new it's energy from the nuclear power plants in france right i'm not actually sure about that but i'm just saying there are a number of european countries including france that deal with these questions within and i know i said including france has proven that we can recycle into a lot of things but china is the one we're really focusing on here and that is where i just want to want to point out that we have some major major differences between the regulatory structure in the united states and the regulatory structure in china that's fair to say that's absolutely fair to say do you think that there streamline regulatory structure has been a major contributor to their ability to be so aggressive in developing a broad spectrum of nuclear i mean of energy technologies i mean it's been one way but if you look at the danes and wind in other countries there are ways to do it with more protests but the danger you know but what i'm saying is you're talking one over here one over here we're talking about we keep talking about that broad portfolio where you don't just pick one technology you're drawing it all and that that seems to go into mr palmer you were do you know if we have any  nuclear i mean any coal plants left in california california buys coal i think there may be a couple of very small units but coal based electricity operating but i do you think you're so right correct in terms of identifying the regulatory morass in the united states and getting something built certainly certainly you can't do it in california i think richmond was our last coal fired plant well in all fairness i think you go to jail if you burn coal in california you have to meet a natural gas standard well is to say you have to have carbon capture and storage and that's i really look forward to that i mean i'll tell you with our state we actually developed the technology in the genetic research that allowed us to develop alternative fuels like algae but our scientists at scripps institution of oceanography at the university of california san diego had to leave the state to go into production because you couldn't get a permit not in five years you couldn't get a permit in california ten years well ok let's go of questioning i guess because i'm amazed that we're talking about how great china is in trying to compare to our system do they have trial by jury in china no freedom of speech no you know freedom is expensive and we may not have the lawsuit they may not have the lawsuits we have but at least we go to court it said having a protest down at the local diameter threatening overthrow or kill the local province officials for building that dam what typically happens is that the way the chinese can protest a particular plant being built or the expropriation or their land they've lived on for generations actually owned by the government is that how it works there their protests night they don't usually involve threatening to kill anybody well i've heard other things but but that's their avenue to get the attention of their government they can't go to the courthouse and sue their government and as i said there are areas where they can and there are certain environ and there's actually been some quite successful environmental lawsuits there's also a growing effort to to  use public hearings in china there's also a system of petitions but it's a work in progress and the chinese would be the first to say that they're trying to improve their governance in this area is not that they have a perfect system well and i'm not but obviously we don't have a perfect system but i think if you have a command economy you lose a lot of freedoms that i think both sides we would enjoy and we enjoy in our country so i think comparing how chinese make a decision that may work in china but it really doesn't work with the history we have in our country since seventy seventy six and so i think holding us up to their a command economy if the leadership in china is sold on a certain idea that's what they do is that correct it's more complicated than that because it's it's there are lots of different interests and companies are separate from government there's a lot of negotiation well i know some of the good do have state owned enterprises are separate from government ministries and they do rival with each other quite a lot actually well i guess it's you know a free enterprise economy which is truly free enterprise and not controlled free enterprise and i guess that's what bothers me i missed this chart that you put out from the energy and ministration institute ministration in i was a business major and went to law school so i have to admit numbers kind of sometimes get in the way but i don't see how in two thousand and seven they produced over three thousand bill a kilowatt hours in two thousand and thirty five they plan to over triple their kilowatt hours with reducing their coal by only six percent and going from two to six percent nucular they're actually going to reduce their natural gas reduce their coal reduce their hydro go from turn on the lights in this room with wind solar and bomb ass so i don't know i'm i'm going to find out where these numbers come from because i think some of them are questionable because it just doesn't seem like it adds up that they can over triple their kilowatt hours by reducing from the traditional sources whether it's coal or natural gas and even only tripling their nuclear power because al they only have two percent nuclear power and they're going to six percent of our our country produces we haven't built a plant since the china they have some natural gas from around the c i an area because i was there a number of years ago but they were pretty inefficient i don't know if they've discovered additional natural gas it's a message i know they're buying a lot in fact they're beating up the price around the world also know they're buying coal can china produce enough domestic coal to generate you know they have the they are now a major coal importer and that is that is that is new they there was a time about seven or eight years ago when the fear in the seaborne market was that china exports would swamp but they're very opportunistic and i'm almost out of time let me ask something those plants that china is building that are new coal plants we know we build coal plants today much cleaner and better than we did thirty years ago what are they doing are we just not replacing our coal plants yes that's correct they're building supercritical plants at a very fast pace but we're building coal plants at a very slow pace build a coal plant in my area and not have to go through any of the local regulations or anything like that even take the land that i own to do it which sometimes you can't but again they're very command economy as compared to a told this much is a factor ten to fifteen times i would believe so just give us a sense of how many families are dependent either directly or indirectly on coal production in america no i don't have that number but i can get it for you are you have you seen that report that was produced apparently by the e p a that said that of all the greenhouse gases were fully implemented under the clean air act that the global temperature would drop would only drop less than a tenth of one degree yes and so do you think from your viewpoint is is it worth all the expenditure  distraction from our manufacturing and our base to spend that kind of money for a temp the less than a tenth of a degree from my viewpoint you know it's not if you maybe maybe the question was asked but if i could try again because i didn't hear all the questions on do you have a record or someone published anything about the number of coal fired the super critical facilities in china say over the last five years we have a sense i've heard as much as one  week i've heard for a month or two a month is there some is a reliable source of information on that the source i use is the national energy technology laboratory and they're saying it's probably for bringing that subject up you're aware that the president's budget slashes their their their research by over eight hundred million dollars on coal technology you know i wasn't for someone that we want to out innovate out produce we're going to slash the very thing that could create cheap i'm just curious and in that little bit of time it just seems to me kind of self evident with the chinese energy production they have little environmental constraints on their water discharge their greenhouse gases their particular matter their fly ash their wages are fraction like you just pointed out their health care is poor or their retirement pension plans are almost nonexistent of the government run their monetary system vs subsidize why do we why do you think we keep using china as a poster child for energy well probably because people would like to look at them and leading the clean energy race but as i tried to point out they're leading the race in all fields and they're doing that to make a better life for their citizens and to keep their economy growing at the fast pace that it's growing now it's a detriment of their their people no i think you need all fuel real for certainly you can you share with it because one of the issues we're facing here in america obviously is the issue of fly the d p a is a knee jerk reaction to a dam collapsing in tennessee and they want to make it a hazardous material tree as a hazardous material how does china treat its  i'm not an expert on that maybe mr palmer might know since you spent seventeen your last twenty seven years what are they doing with fly ash in china i know i'd have to check i can get back to you ok and if if if we if if the production of power if we're if we don't have the ability to recycle fly is what do you think would happen to the price of power in america it would increase dramatically thank you you're back my typing tremendous gains in wind power in the united states twenty seven thousand new megawatts were installed in the last four years and that's that's quite a number do you expect to see that growing dramatically in the years ahead yes solar how do you see solar go there was a thousand new megawatts this year the solar industry says it should be fifteen hundred this year last year was one thousand new megawatts fifteen hundred new megawatts this year will be installed and they're predicting two thousand megawatts next year you see that slowing down to after next year no actually i sold or they have increasing more but that's because we have very little today we only have about one gigawatt today don't you think we can have well there was one gigawatt installed  next ten years with the global investment in china and other countries you see it saying the same it will come down but it's going to come down as a basis of what's being built and even the chinese feel that solar is more expensive than other technology they're actually going to want to bloomberg story here china the world's biggest energy consumer will cut its two thousand and twenty target for nuclear power this is a story from two days ago nuclear power capacity and build more seoul of phones following japan's atomic price of solar make it more competitive and not have it just be a grand total of one thousand per year every year from now on but maybe two thousand or three thousand you don't think that's going to happen it has a long way to go it's about three times as much as other t cut in half you still don't if the price is cut in half you do you see any increase by one thousand per year projection there might be a slight increase but it's going to be very difficult to get it down to that you're a very pessimistic person technologically you know it really is like talking to maybe the owner of a typewriter company in one thousand nine hundred seeing no threats from computers over the next twenty years so we're going to double our investment in typewriters because how can we have about that all people using computers only in twenty years because the price is just not competitive with underwood typewriter so i'm investing all my money and right now and you can go through other industries but you can have these revolutions very quickly as you know and and i just think that you are displaying an amazing amount of just don't believe in the market system and certainly do you know you don't you know you're projecting today ten years from now even though there's a global investment that's being made in wind and solar that's going to drop the price and make it much more likely that there's going to be an investment even as the market has been moving away from coal moving towards towards renewables and natural gas and the natural gas and when to have been the largest single additions to our grid in the last four years you know about the same name so so you see you see when kind of slowing down to the pace at which new coal is being installed in the country and i kind of disagree with you on that  we still are as somebody who just made a purchase of solar panels myself for still using model crystal which is the same technology we've had for thirty years the price is modified and that's great and the thin film has major a lot more technical problems than what people talk about and still model crystal is the build a cutting edge the same thing that was when we were in school and we started making those little kids so hopefully we'll we'll see the balance where where it's where it's appropriate where it's down i the price is german the price has dropped precipitously from the time we were kids were kids the price was ten dollars and they had our act it is now down into the twenty's absolutely and they can and it and assembled in san diego for the market that is basically being created by our government regs and subsidies so hopefully the gentleman from colorado colorado to the gentleman from colorado thank you mr chairman into the witnesses thank you for your time and testimony today just a couple of points i was reading an article recently in the denver post is cited a author of a publication called power hungry robert bryce the author reminded the audience that americans get one hundred forty times as much energy from coal oil and natural gas as they do from a clean energy sources such as wind and solar is that is that an accurate statement ye you see that changing dramatically in twenty years will it be one hundred forty will be one hundred will be five it's it'll change but very little so so in in twenty years from now you're still saying that we will get about one hundred forty times more energy from traditional sources than some of the new sources that have been talked about today yes thank you and ms hustle just continue with our conversation what lessons can the united states learn from china's experience in constructing wind farms and to further a little bit specific question under what geographic and engineering conditions is one generation appropriate beneficial well i certainly believe that we need all technologies the trouble with wind is that you have better sites there are good resources versus more difficult resources and so as you add on when capacity you eventually get to the point where it's going to cost you more because you've got sites that aren't as conducive in terms of constructing the wind unit and you see land use problems the united states affecting our ability to access good when sites more than likely i mean certainly with so there we have people complaining about the massive land use issues there so i imagine that technology it's the where are we going with greenhouse gas regulations is it legal the lawsuits that are going on the efforts going on in the congress to change that regime and the the need to put  ialize and it's more efficient from a carbon standpoint near zero criteria pollutants carbon capture ready as we develop c c s technologies in a regulatory regime and put the industrial heartland back to work make the front why the beltway people understand the need for coal you come in i think if i could just go down and get a yes or no answer from every single one we do do increasing energy prices pose a threat to our economy mr copus well we haven't we haven't spoke about oil they have been without proper policies they can be a problem but there are ways to plan so the answer is i don't write rising into well you know it was a directory kind of coal prices above the world average and it's doing ok right now so i think there are indications that it did not include beacon hill institute at suffolk university in boston concluded that by twenty fifteen consumers in colorado will be paying about one point four billion dollars in higher energy costs as a result of the renewable interest standard do we see energy costs increasing as a result of thing go back to the ages and the typewriter still around that is the energies we've been using for a long time are still around and everything that i see from everyone on this panel suggests they're going to be around for an awfully long time so you're you're doing your duly noted that your p yet and that's not a similar phenomena has not taken place in the united states by government mandate yes and so it what is it that's prevented us from doing that the united states it's what has stopped the united states from taking older coal plants off a lot of putting newer coal plants online that's not the way our laws are written right so it's regulatory burden well no i mean this would be an additional regulation if you did this it's the you're suggesting mandated today we're doing just the opposite we're penalize in companies that want to take off all the power plants and want to put a newer more efficient plants correct i mean let me give an example mr palmer maybe you can you can help me with this today is a plan kansas called holcomb plant we've been trying to get holcomb on line again for a long time our former governor now creating havoc in health and human services stop that we're now now started with forty p s stuck their ugly hand in the cookie jar again  you'd had a great relationship to love western kansas and i won't go into that but it's near and dear to me secondly it's all about carbon full stop we have the super critical pulverized call today are all three super critical gives you near zero criteria pollutants socks knobs and mercury there's no argument over that it's state of the art stuff it's more efficient on carbon but it's a carbon agenda it has been since it started it is right now it will continue and that is what is holding up the next generation of generation the united states of america of coal generation is this fixation on a mission carbon emissions above everything else was the driving policy here not in china in the united states and that that is what is preventing western kansas from have an additional unit for holcomb and that electricity would go to the front range and tri state who is a part of my past as well was going to build that transmission line and they've been and they've been in the carbon wars on these plants since since governor sebelius stepped into it and now she skipped town and she's here but but it's a bad day for western kansas and it's a bad day for the us one carbon emissions govern our lives every day and that let's go thank you i appreciate that let me just ask you a different question is there anything equivalent to the new utility mackerels in china yeah there's reviews were all it was so well i mean equivalent to it independently by close the old ones and then they have requirements on the new ones including new technology to move forward at least in kansas i've been to the chinese oil fields most most all of them spent a significant amount of time there are there any regulations whether their local provincial regulations or national regulations fracking i don't believe there are yet it's one of the things they're looking at and they have a cooperative agreement with d o a that they signed during president obama's visit to china two years ago do you think they'll be better compliance with those new fracking regulations than say with ip rules today china's compliance in most areas of environmental governance has improved considerably in the last five years as they say their ministry is new this is a new area and the rate of increase is quite impressive but how fracking will work i think it would be a little too early to tell i would also know that the chinese don't see climate change goals as in any way contradictory with all of their other energy and environment goals climate changes the china up is the example i think the point was was that so many of our colleagues were asking questions about china doesn't do this and china doesn't do that and then they were being sarcastic when they said we don't think it's a great if we did that because i think that everybody understands that the chinese have a completely different governmental system than we do but we're getting a little tired of having the administration current ministration and its allies come in here and say well china is great you know to be like china because we're not going to move twenty two million people out of their ancestral home areas in order to have a more efficient a trick system and we're not going to do some of the things that china has done all we're asking for believe speaking for myself is that we have some reasonable regulations and not unreasonable regulations and i don't believe the chinese are anywhere near our regulatory scheme and in that regard mr palmer can you tell me are the chinese anywhere near a regulatory scheme when it comes to coles and coal and i want to put in context my  did go to china and i have high admiration for what they have done there i'm not in here talking about political systems or idiology or any of that but i see a society that believes in energy supply for people to raise people up and out of poverty and i think that's what we have to do here in terms of the specific question the regulatory regime they have a you know they they have decided as a matter of national policy they have an ability to do it directly they have the money in the bank that we're in and that's what they're doing from that standpoint from the standpoint of getting our regulations right so we can we can use our own technology we have state of the art in terms of technology we don't want to do these things that's our point is  that the value the people that you associated with low cost abundant always of a reliable electricity as opposed to high prices and scarcity are values we ought to adopt they've adopted and we had it before we're there it's designed to do that and when you look at the ideology the idea environmental community and you go back ten or twenty years it's absolutely designed to do that and when we do that we not only drive businesses offshore and i correct yes you do but we also raise the cost of the average citizen of the united states to have the power to heat and absolutely make sure that their homes are and every month every metric says that low cost electricity is a requirement for more people to live longer and live better and if you take up the cost of energy you drive down human health and welfare so e p a has it exactly wrong in terms of how they come that that's not to argue with the values on emissions but there is no one that no attention paid to the underlying value of the activity that creates the emissions in other words what are we making with this fuel that creates emissions and what are the benefits of that they don't consider that they don't look at it and it's not relevant and we are on a path to high prices in the united states absolutely we are and would you agree with me that if that if you represented a district where the median household income of some around thirty five thousand dollars a year that on the trajectory we're on energy costs that i'm going to have some people are going to be cold in the wintertime and that correct and i would totally agree with you and i would expect to be pounding the table in the mornings when you're having coffee what i'm saying go back to there that city and tell him what's going on here and in fact we're already seeing isn't that great and are you aware that appalachian heritage just as the commonwealth of virginia for one thing and that point six percent increase i may be off a little bit i wasn't aware of that specifically but for sure the capital investment associated with this what i call people call a train wreck we have friends in the railroad industry don't like that i call it to saddam is just a myth when you get my price for it and the end result is you don't have to be an expert in health to understand this is going to have a negative impact on the health of the citizens particularly those who have less economic means than i would agree it's commonsense thank you my seventeen seconds thank you very much i appreciate the discussion especially back in the seniors warms california it was always interesting that this town talks a lot about helping to keep the seniors get enough fuel so they can stay warm but they don't talk about those of us in california that are seniors need enough gas to get to the shopping center to buy food but it's a different world all around this country mr shimkus you are recognized thank you mr chairman and i appreciate the panel for for being here today and sorry about running back and forth as we all do fly and then pulled out for another meeting obviously would like to go in numerous united states ok on environmental issues right if let's say a an agency wants to settle on the grounds that the environmental group is willing to settle it they get their attorney fees so that taxpayers are funding these lawsuits against the private sector i wouldn't characterize let you characterize it i'm just asking questions like oh i mean or for sure it's taxpayer money that is this is a i kind of like this we do you know we've been preaching all the above energy strategy i think you mentioned in some the question answers that what china is doing is trying to have more energy across the board where there is for a new level whether it's nuclear whether skoal and i think it's important to put in perspective that this is twenty thirty five ten thousand billion kilowatt hours seventy four percent still being produced by coal but that seventy four percent even though it's eighty percent has to be much more coal use is that correct yes exactly do you have a percentage of the increase in electricity generation by coal for china in twenty thirty five no thank you get that for you but it's it's pretty massive yes and that's based upon the other question you had about a gigawatt coal fired power plant every week correct yes and those are the stats we've used here for the last couple years so i find those  uncertainty of future regulation what does that do to the capital markets to build new facilities and want to take a stab at that i think in our space congressman and in the context of utilities and you can talk to co ops you can talk to am around in st louis you can talk to a talk to southern company but they they look at the framework and they say i've got to put in three or four hundred million dollars on a two hundred fifty or three hundred or four hundred megawatt power plant and i've still got that are inefficient no you can't upgrade it because you've got to go through when i it's interesting because we talked a lot about super critical power plants and we're working with one now that is state of the art high tech and they're being frozen because of transport real new reg new power plant state of the art and share whether they can start because john let me in a shop mr i'm sorry mr copus because you've been pretty quiet since i've been up here i was real interested in this because it really kind of addresses the same issue of the percentage increase you project china's oil demand exceeding fifty million barrels per day in that twenty twenty five twenty thirty we can do china's about half of global demand growth so if you take that you just can't make the numbers work so that supertanker coming from somewhere china is going to bid against us if we don't do energy security here in this country they're going to buy up the world again and they already have always seen i mean the world's supply i should say the o e c d consumption since we're going to there of the recession is down five million barrels and not always easy consumption is up six million barrels great thank you energy needs and how they're planning to meet it i know many of us on this side are strong proponents of of an all of the above energy strategy for the united states i've been very disappointed by this administration's failure to to embrace that same kind of approach in fact frankly i know or more right now about to based on your testimony about the things that china's planning over the next twenty or so years than i do about how this country is going to meet the energy needs based on mixed messages we've gotten from the president especially just over the last few weeks of course i represent an area south louisiana where we're still reeling from the impact of the president's permits oreo his his refusal to let our people go back to work drilling safely in the gulf of mexico gas prices have nearly doubled since president obama took the oath of office in i think the fact that they're still holding so many vast reserves away from production in america you know the president said last week he wants to reduce imports by a third  and yet the week before that he said he wants to drill in brazil in the we the weeks and weeks before that he refuses to let our people go back to work drilling safely in these are companies that had nothing to do with the b disaster companies that were drilling in exploring for energy in a very safe way that are not going back to work in fact of twelve thousand jobs have been lost because of the president's refusal to let them go back to work drill and safely for domestic energy so  if you can talk about what you see in terms of the impact of especially the president's actions here in america and specifically as it relates to the gulf of mexico with the refusal to have a real consistent policy that lets people go back to work who never had any safety issues in the jobs that we've lost from it in the energy security we lost last moment the forecasts production in the gulf of mexico drop six hundred thousand barrels a day from a two thousand and ten steps immediately following macondo to may two thousand and twelve that's eleven percent of u s crude production so that's a very very material number and i would describe that drop as catastrophic the drop in the drop in exploration which specifically would you categorize in production so we anticipate for the this is government numbers the i anticipate us crude oil production in the gulf of mexico to drop about six hundred thousand barrels a day from the day after macondo to may two thousand and twelve that's eleven percent of u s crude oil production and i know the get it back to the likes of messages you have is about thirty billion dollars i think from memory it's thirty billion dollars of  activity it's about eight billion dollars in taxes and i calculated about sixty five thousand man man years those are massive numbers in clearly if the the president wants to talk publicly about a strategy to to reduce imports by a third which which frankly i think if we were we were actually utilizing an all of the above strategy that on your chairman that many of us here would like to see us use we could absolutely eliminate our dependence on middle eastern oil and of course we've seen the  that's only increasing but you don't get there by shutting off american resources in literally running these resources to other countries we know to we've been tracking the deepwater rigs that have left america because of the president's policies two of those rigs went to egypt egypt and so you've got employers saying i'd rather do business in egypt than in the united states of america exploring for energy and and so last last few months you talked about and i know you've done some studying on this but when we talk about  e looking long range and production in the president is bragging today about how high production is of course production today is is really a in accumulation of efforts and exploration over years and years in many cases long before the president came into office if you look at the drop in production we would see especially because of his policies have you all looked at how those policies the lack of clear clarity on issuing permits how that affects  to produce in america to meet those growing demands i don't have the forecast on that but certainly i agree with mr cope it's that the energy information administration has shown that offshore production the gulf of mexico has gone down dramatically because we're not drilling there in you know again i reiterate we've lost over twelve thousand jobs another company just went bankrupt a few weeks ago and with gas as high as it is you would think we know if we have reserves these companies would be out there working twenty four seven and in fact because of the president's own policies they can't even go back to work drilling safely and i'll just reiterate companies that had absolutely nothing to do with the b p horizon these are companies who have great safety records who are shut down today because of this president's policies and then you know he gives these mixed messages but we don't see a clear policy and so i appreciate your comments and  policies in china as a relates to energy that has a direct impact on what we're doing in america as well as the rest of the world in your testimony has been quite helpful we will keep the record open for ten days for any additional material and with that this concludes today's hearing and we look forward to working with all of you as we move forward deputy chief engineer