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LABORATORIES OF DEMOCRACY: THE ECONOMIC 

IMPACT OF STATE ENERGY POLICIES 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND POWER 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

JULY 24, 2014 

Serial No. 113–165 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

RALPH M. HALL, Texas 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

BEN RAY LUJAN, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

SUBCOMMITTEE ON ENERGY AND POWER

ED WHITFIELD, Kentucky 

Chairman 

STEVE SCALISE, Louisiana 

Vice Chairman 

RALPH M. HALL, Texas 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

LEE TERRY, Nebraska 

MICHAEL C. BURGESS, Texas 

ROBERT E. LATTA, Ohio 

BILL CASSIDY, Louisiana 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

BOBBY L. RUSH, Illinois 

Ranking Member 

JERRY MCNERNEY, California 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN D. DINGELL, Michigan (ex officio) 

HENRY A. WAXMAN, California (ex officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Ed Whitfield, a Representative in Congress from the Commonwealth 

of Kentucky, opening statement ......................................................................... 1 

Prepared statement .......................................................................................... 3 

Hon. Bobby L. Rush, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 4 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 5 

WITNESSES

Tom Tanton, Director of Science and Technology Assessment, Energy and 

Environment Legal Institute ............................................................................... 7 

Prepared statement .......................................................................................... 9 

Fred Siegel, Senior Fellow, Manhattant Institute, and Scholar in Residence, 

Saint Francis College ........................................................................................... 22 

Prepared statement .......................................................................................... 24 

Steve Clemmer, Director of Energy Research and Analysis, Climate and Energy Program, Union of Concerned Scientists ................................................... 28 

Prepared statement .......................................................................................... 31 

Steven Nadel, Executive Director, American Council for an Energy-Efficient 

Economy ................................................................................................................ 48 

Prepared statement .......................................................................................... 50 

Paul E. Polzin, Director Emeritus, Bureau of Business and Economic Research, University of Montana ............................................................................ 63 

Prepared statement .......................................................................................... 65 

Bernard L. Weinstein, Associate Director, Maguire Energy Institute, Cox 

School of Business, Southern Methodist University ......................................... 71 

Prepared statement .......................................................................................... 73 

SUBMITTED MATERIAL

Article, ‘‘Top Ten Myths About Wind Power and Birds,’’ by Michael Hutchins, 

American Bird Conservancy, submitted by Mr. Griffith ................................... 96 

(1) 

LABORATORIES OF DEMOCRACY: THE ECONOMIC IMPACT OF STATE ENERGY POLICIES 

THURSDAY, JULY 24, 2014 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ENERGY AND POWER, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:01 a.m., in room 

2123 of the Rayburn House Office Building, Hon. Ed Whitfield 

(chairman of the subcommittee) presiding. 

Members present: Representatives Whitfield, Hall, Shimkus, 

Pitts, Terry, Latta, Cassidy, Olson, McKinley, Gardner, Kinzinger, 

Griffith, Barton, Rush, McNerney, Tonko, Engel, Green, Capps, 

Barrow, Castor, and Waxman (ex officio). 

Staff present: Nick Abraham, Legislative Clerk; Gary Andres, 

Staff Director; Charlotte Baker, Deputy Communications Director; 

Leighton Brown, Press Assistant; Allison Busbee, Policy Coordinator, Energy and Power; Tom Hassenboehler, Chief Counsel, Energy and Power; Jason Knox, Counsel, Energy and Power; Ben 

Lieberman, Counsel, Energy and Power; Chris Sarley, Policy Coordinator, Environment and the Economy; Jean Woodrow, Director of 

Information Technology; Jeff Baran, Democratic Staff Director, Energy and the Environment; Alison Cassady, Democratic Senior Professional Staff Member; Caitlin Haberman, Democratic Policy Analyst; and Alexandra Teitz, Democratic Chief Counsel, Energy and 

the Environment. 

Mr. WHITFIELD. I would like to call the hearing to order this 

morning, and the title of today’s hearing, ‘‘Laboratories of Democracy: The Economic Impact of State Energy Policies.’’ 

And at this time, I would like to recognize myself for a 5-minute 

opening statement. 

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

This is going to be an informative hearing, I believe, because we 

have such great witnesses that have really studied different policies being adopted by different States in a lot of different areas, 

and the decisions being made at the State level today about public 

policy, particularly as it relates to energy development, goes a long 

way in giving us an insight at the Federal level, because we are 

2 

having the same debates at the Federal level in the direction that 

we should go. 

Now, President Obama has made it very clear that he believes 

the number 1 problem facing mankind today is climate change, and 

a lot of his policy decisions by his administration are being made 

based on his concern about climate change. Many of us on the 

other side of the aisle, and a lot of Democrats as well, believe that 

economic growth is one of the most important issues facing us 

today. 

Now, let me just say that I read an article in Barron’s 3 days 

ago that said before the most recent recession, there were 122 million full-time jobs in America. Four and a half years later, there 

are 118 million full-time jobs in America. Despite a workforce that 

is 1.6 million larger, and a working-age population that is 14 million larger, so full-time employment is much less today; almost 4 

million less today than it was 4 1⁄2 years ago. And then in the 2014 

long-term budget outlook of CBO, which just was released, they 

talk about our debt held by the public today as 74 percent of GDP, 

and they anticipate by 2030 it is going to be 180 percent of GDP. 

So the economic forecasters are saying we are genuinely concerned 

about the impact that this is going to have on economic growth in 

America, and the availability of capital for economic expansion. 

Supreme Court Justice Louis Brandeis described States as laboratories of democracy, and we can take some hard-known facts 

from decisions being made in States today, and the impact of those 

decisions on jobs available in those States and on economic growth. 

And then we are going to have the opportunity to ask our witnesses questions about it after they give their opening statements 

on their views, but if you do view that climate change is the most 

important issue facing mankind, or facing America, then you are 

going to go in one direction on energy policy, but if you believe economic growth is the most important, and jobs and providing income 

for families, then your approach is going to be a little bit different. 

And we know that those approaches make a big difference. For example, in North Dakota, GDP growth last year was 9.7 percent, the 

highest in America. And North Dakota has been the fastest-growing State in the Nation every year since 2010. And in 2012, the 

GDP growth in North Dakota was 20 percent. Now that is because 

of the State’s oil boom driven by hydraulic fracking in the Bakken 

shale formation has been responsible for much of this growth. On 

the other hand, let us take a State like California. Public policy decisions being made in California are about climate change. And we 

hear a lot about, well, there are so many jobs being created in the 

wind industry and solar, and so forth, but what about the jobs 

being lost? But here we have at the opposite end of the spectrum 

from North Dakota is California, 7.4 percent unemployment rate, 

the highest among the 10 most populous States, a stagnating economy, some of the most expensive energy in the Nation. It has been 

rated the worst State for doing business 10 years in a row by Chief 

Executive magazine. Now, I would be the first to say it is a beautiful State and we all love to go there, but businesses are leaving 

that State. So what we want to look at today is the impact of these 

decisions and setting the priorities, because we can learn a lot from 

the States as we continue our debate at the Federal level on what 

3 

direction we should go. President Obama wants to go down the 

pathway of California, which has proved not to be successful. 

[The prepared statement of Mr. Whitfield follows:] 

PREPARED STATEMENT OF HON. ED WHITFIELD

Supreme Court Justice Louis Brandeis famously described States as laboratories 

of democracy, and in today’s hearing we will explore this concept in the context of 

energy policy. We are pleased to have a panel of witnesses who can share insight 

about these State-level experiences. 

Under our federalist system, States have considerable latitude to try out different 

ideas. Those State-level policy experiments that are successful can be copied by 

other States, as well as by the Federal Government. And those that fail can serve 

as a cautionary tale and prevent others from making the same mistake. 

We see many differences between States on energy policy, and widely varying results. Some States have low electricity rates and others do not. Some have gasoline 

prices close to $3.25 a gallon and others above $4.00 a gallon. And since a State’s 

energy policy can affect its overall economic prospects, it is no surprise that some 

States enjoy very low unemployment and fast-growing economies, while others 

struggle with high unemployment and economic stagnation. 

Today, we will hear more about these State differences as they relate to energy. 

And there is much tolearn. According to the Department of Commerce’s Bureau of 

Economic Analysis, many of the fastest-growing State economies did so due to oil, 

natural gas and coal production. For example, North Dakota’s responsible development of its energy resources is a big part of the reason it has the Nation’s lowest 

unemployment rate and fastest-growing economy. Additional States making the top 

ten—Texas, Colorado, Oklahoma, West Virginia, and Wyoming—are also making 

good use of their in-state energy supplies and support technologies like hydraulic 

fracturing as well as energy infrastructure projects like the southern leg of the Keystone XL pipeline. Other States were able to weather the recent recession because 

of their energy policies, such as Pennsylvania where 90 percent of new job growth 

between 2005 and 2012 came from the oil and gas sector. In the neighboring State 

of New York, which has the same shale potential but has prohibited modern oil and 

gas extraction techniques, economic growth has languished. 

I might add that these pro-fossil-energy States are not just helping the wealthy— 

quite the contrary, they are benefitting lower-income households the most. For one 

thing, energy production and energyinfrastructure projects create many high wage 

blue-collar jobs that provide badly needed opportunities forupward mobility. For another, the resultant lower energy costs disproportionately help the least 

fortunatewho would otherwise struggle to pay their bills. In contrast, the anti-drilling, anti-fracking, anti-Keystone,keep-it-in-the-ground philosophy toward fossil fuels 

that we see in other States is an energy policy that only the 1 percent can afford. 

Mr. Fred Siegel wonderfully illustrates this issue in his testimony when he talks 

about the ‘‘gentry liberals’’ driving an environmental policy that satisfies their desires at the expense of the general population. 

Washington should be learning from these State successes and applying the same 

pro-energy policies to federally controlled lands and offshore areas. But unfortunately we are not doing so. In fact, recentreports from the Congressional Research 

Service and Energy Information Administration show overall declines in energy production from Federal lands. North Dakota and others have set a good example for 

the Nation, but that example is being ignored here in Washington. It is time for 

that to change. 

At the opposite end of the spectrum, California has one of the Nation’s highest 

unemployment rates, a stagnating economy, and some of the most expensive energy 

in the Nation. It has been rated the worst State for doing business 10 years in a 

row by Chief Executive magazine. This is due in part to costly energy regulations 

such as the global warming measures that are sapping the State of its vitality and 

chasing away businesses. Yet we see the Obama administration imposing these 

same failing policies on the Nation as a whole. 

Indeed, it often seems like the administration has it backwards—instead of copying the good State energy ideas and avoiding the bad ones, it is doing precisely the 

opposite. 

We can and should have a reasonable debate over which States have the best 

ideas on energy, but I hope we can all agree that this kind of State-level experimentation should be allowed to continue. Unfortunately, it is under threat by one-sizefits-all Federal regulations that preempt State choice and impose cookie-cutter Federal approaches. We see this most clearly in the agency’s regulatory war on coal 

4 

which leaves States no option but to forbid new coal-fired capacity and impose harsh 

provisions on existing coal plants. I believe States that want to continue using coal 

as an affordable and reliable component of its electricity mix should be given the 

opportunity to do so without Federal interference. 

In any event, I hope we can all gain from learning more about what is going on 

at the State level on the energy issues that matter to this subcommittee. Thank you. 

Mr. WHITFIELD. So with that, at this point in time, I would like 

to recognize the ranking member of the committee, Mr. Rush, for 

5 minutes for his opening statement. 

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

Mr. RUSH. Well, thank you, Mr. Chairman. I want to thank you 

for holding today’s hearing on the economic impacts of State energy 

policies. 

Mr. Chairman, currently, 29 States and the District of Columbia 

have already adopted renewal—renewable energy standards, or renewable portfolio standards, while an additional 8 States have nonbinding renewable energy standards. And we know that these policies have helped to grow the renewable energy industry in our Nation with fully 67 percent of the all non-hydro renewable capacity 

growth occurring in States with RPS policies between 1998 and 

2012. 

Mr. Chairman, this investment in renewables as—has helped not 

only make us less dependent on carbon-intensive energy sources, 

but has also created tens of thousands of good-paying jobs all 

across the country in construction, in manufacturing, in retrofitting 

and in other sectors. For instance, Mr. Chairman, the U.S. solar industry now employs more than 142,000 workers, at more than 

6,000 businesses located in all 50 States. Additionally, the development of the wind industry has also generated tremendous economic 

benefits, so that by the end of 2013, the wind sector alone was employing more than 50,000 jobs all across this Nation. In fact, Mr. 

Chairman, my home State, the State of Illinois, has been at the 

heart of the wind industry in this Nation, leading the way in both 

turbine manufacturing and also electricity production. Illinois wind 

powered the equivalent of 880,000 homes in 2013, supplying nearly 

5 percent of the State’s electricity, while hosting 2,195 wind turbines and at least 36,000 manufacturing facilities that build wind 

turbine components. Aside from its forward-thinking renewable energy policies, my State, the great State of Illinois, is among the top 

10 of the American Council for Energy Efficient Economy, or 

ACEEE, State efficiency scoreboard, as Mr. Nadel, as the executive 

director, notes in his written testimony before this subcommittee 

today. 

In Illinois, policymakers have implemented an energy efficient 

resource standard that has helped to decrease the Nation’s overall 

electricity usage, while also working with utilities to deliver savings to Government agencies and to low-income consumers. As Mr. 

Nadel points out, the Illinois Department of Commerce and Economic Opportunity, the agency responsible for implementing the 

State’s energy efficiency program, was named the ACEEE’s star 

partner of the year just this very year of 2014. Additionally, Mr. 

Chairman, members of the subcommittee, my State, the great 

5 

State of Illinois, was also the first State in the Midwest to adopt 

the 2012 International Energy and Conservation Code, a national 

model building code prepared by the International Code Council. 

So, Mr. Chairman, we are not California, we are not Kentucky, 

we are Illinois, and it is my sincere hope that today’s hearing will 

serve as a platform not just to bash California or bash the Obama 

administration over its much-needed climate change policies, but 

rather to hear about my State and other States; States that constructively are enacting smart and resourceful strategies that propel our country forward by creating jobs and investment, business 

more independent, more secure, while also reducing the cost of energy both in our pocketbooks as well as in our impact on our environment. 

Mr. Chairman, thank you, and I agree with you, we have a marvelous panel of witnesses today, experts in their field, and I look 

forward to hearing every word that they have to say to us. Thank 

you. 

Mr. WHITFIELD. Thank you, Mr. Rush. And Mr. Upton is not 

going to make an opening statement, so is there anyone on our side 

of the aisle that would like to make a statement about the hearing 

this morning? 

OK. Well, at this time, I would like to recognize the gentlemen 

from California, Mr. Waxman, for a 5-minute opening statement. 

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

Mr. WAXMAN. Thank you, Mr. Chairman. 

Today’s hearing focuses on the economic impacts of State energy 

policies. It is an opportunity to examine the growth of the clean energy sector, and the positive economic benefits of renewable energy 

and energy efficiency. 

States have taken a leadership role in harnessing the power of 

renewable energy. Twenty-nine States and the District of Columbia 

have enacted renewable portfolio standards to generate more electricity from clean energy sources. As a result of these State programs and Federal incentives, we have doubled our capacity to generate renewable electricity from wind and solar in just 5 years. 

This is important because renewable and low carbon energy 

sources are a fundamental part of any serious plan to address climate change. 

In May, the International Energy Agency warned that the world 

needs to invest trillions of dollars in renewable and other clean energy technologies over the coming decades in order to avoid the 

worst impacts of climate change. That is a potentially huge economic opportunity for the United States. Investing in renewable 

energy is not only good for the climate; it is also a boon for U.S. 

manufacturing, jobs and competitiveness. 

Both blue States and red States have the success stories to prove 

it. Texas ranks first in the country for wind power installations and 

wind industry jobs. California ranks second. The wind industry has 

injected more than $11 billion into California’s economy, and $23 

billion into the Texas economy. This investment translates into jobs 

and a stronger, more diverse tax base. 

6 

Energy efficiency also will help play a key role as the world grapples with the challenge of reducing carbon pollution and slowing 

dangerous climate change. The International Energy Agency has 

concluded if the world does not take action to reduce carbon pollution by 2017, then the energy infrastructure existing at that time 

will lock us into a path toward devastating climate change. But if 

we invest now in energy efficiency, we can give ourselves more 

time. According to the IEA, the rapid deployment of energy efficiency measures would give the world at least 5 additional years 

to develop long-term solutions. 

States have taken action to make our industry, our buildings and 

our transportation system more energy efficient. This is a commonsense policy that saves businesses and families money on their energy bills while cutting pollution 

But we need to do more. We need a national commitment to 

clean energy and energy efficiency in order to tackle the urgent 

threat of climate change. The Clean Power Plan proposed by EPA 

would make that commitment. 

The plan lays out key building blocks for how States can cut 

emissions from the Nation’s largest source of uncontrolled carbon 

pollution: power plants. One building block is using electricity more 

efficiently. EPA based its proposal on what States are already 

doing to make homes and businesses more efficient. 

Another building block is generating more power from zero and 

low-carbon energy sources. EPA looked at the renewable energy potential in each region of the country to determine the scope of the 

opportunities here for States. EPA found that all States can do 

more, even Kentucky, to tap their clean energy potential. 

The Clean Power Plan is an eminently reasonable and achievable 

proposal. It gives States the flexibility to choose how to achieve 

critical reductions in power plant carbon pollution. And it sets us 

on a path toward cleaner air, better health, a safer climate, and a 

stronger 21st century economy. States will play a critical role in 

the success of the Clean Power Plan. 

So I thank the witnesses for being here. And I would be happy 

to yield the half a minute to anybody who wants to say anything. 

If not, I yield it back, and look forward to the witnesses. 

Mr. WHITFIELD. Thank you very much, Mr. Waxman. 

And that concludes the opening statements. And so I want to 

welcome the panel of witnesses. As I said in the beginning, we understand and know that all of you have looked into this very much, 

and that you are dedicated and committed to it, and we look forward to your testimony and then the opportunity to ask questions. 

On the panel today, we have Mr. Tom Tanton, who is the Director of Science and Technology Assessment of the Energy and Environment Legal Institute. And what I am going to do, I am just 

going to introduce you individually right before you give your remarks. So, Mr. Tanton, you are recognized for 5 minutes for your 

opening statement. And be sure and turn your microphone on and 

get it close as possible. 

7 

STATEMENTS OF TOM TANTON, DIRECTOR OF SCIENCE AND 

TECHNOLOGY ASSESSMENT, ENERGY AND ENVIRONMENT 

LEGAL INSTITUTE; FRED SIEGEL, SENIOR FELLOW, MANHATTAN INSTITUTE, AND SCHOLAR IN RESIDENCE, SAINT 

FRANCIS COLLEGE; STEVE CLEMMER, DIRECTOR OF ENERGY RESEARCH AND ANALYSIS, CLIMATE AND ENERGY 

PROGRAM, UNION OF CONCERNED SCIENTISTS; STEVEN 

NADEL, EXECUTIVE DIRECTOR, AMERICAN COUNCIL FOR AN 

ENERGY–EFFICIENT ECONOMY; PAUL E. POLZIN, DIRECTOR 

EMERITUS, BUREAU OF BUSINESS AND ECONOMIC RESEARCH, UNIVERSITY OF MONTANA; AND BERNARD L. 

WEINSTEIN, ASSOCIATE DIRECTOR, MAGUIRE ENERGY INSTITUTE, COX SCHOOL OF BUSINESS, SOUTHERN METHODIST UNIVERSITY 

STATEMENT OF TOM TANTON 

Mr. TANTON. Thank you, Mr. Chairman, members of the committee. 

I intend the testimony to inform the committee of essentially how 

to look at State energy policies in 2 regards. We have heard about 

climate change being an important goal. Whether you believe that 

or not, one also needs to undertake measures in the most cost-efficient manner to reduce carbon emissions. Many of the State energy 

policies, and I will focus primarily on California, do not do that. 

They actually take the most expensive, the least efficient way, 

which leads to unintended consequences like emissions leakage. We 

are driving businesses to States and countries that are less carbon 

efficient than California already is, thereby increasing total global 

emissions; counterproductive to the goal. 

In summary, the economic impacts of State energy policies, including the RPS, as well as others, are huge. Generally speaking, 

the costs exceed the benefits, even when indirect and externality 

costs are included, but the economic impacts cannot be attributable 

solely to laboratories of democracy simply because many of the policies and regulations, and implementation thereof, take place outside the democratic process. They take place administratively or 

evolve outside, either through mission creep, or lack of legislative 

oversight. Costs and burdens are often imposed on residents in 

neighboring States creating extraterritoriality and unconstitutionality. 

What I do in, say, Minnesota affects generators and residents 

and taxpayers in North Dakota, as the Tenth Circuit found last 

May. Costs are often hidden or transferred to some other party. An 

example of that is wind generation requires both balancing and 

backup; backup for when the wind is not blowing, balancing for 

when the wind is blowing, and that imposes inefficiencies on the— 

on those balancing plants. Similarly, the taxes that are imposed by 

California’s A.B.32 Cap and Trade provisions affect residents in 

other States. 

Finally, there is misinformation. A good democracy relies on informed citizens, and informed committee members, for that matter, 

and there is often misinformation that is taken at face value that 

is spread by either rent-seekers and bureaucratic advocates such as 

the cost of certain technologies. The other thing, and this is crucial 

8 

to keep in mind, the cost of certain technologies; wind, natural gas 

fired combined cycles, et cetera, are often inappropriately characterized as being cost competitive, but when one considers the fact 

that wind provides only energy, while natural gas fired combined 

cycles provide energy and capacity, the value proposition is different, so it is irrelevant that the costs are the same. 

Using States to test policy approaches and mechanisms results 

in smaller negative impacts overall, and easier-to-correct mechanisms. With all due respect, Congress moves slower than most 

States. Each State has different needs and opportunities. What 

works in Georgia does not work in California, doesn’t work in Florida, et cetera. Now, opportunities and challenges vary tremendously. The more centralized a policy is, the harder it is to correct 

and the more subject it is to cronyism and nefarious activities. 

Ideally, the policy should be at the individual level. I should get 

to choose what I buy. Increasing intervention is seldom the solution 

to programs that have been put in place through intervention. The 

solution to intervention problems is less intervention. 

Various Federal programs have also impeded efficient achievement of State policy goals. The production tax credit has led to too 

much intermittent, volatile wind generation, which threatens the 

reliability of the grid in a number of States. The renewable fuel 

standard also impedes achievement of other important State goals, 

like providing reasonably priced food and fiber. 

There are a number of economically sound policies in the various 

States. There was mention of North Dakota earlier. California also 

has some bright lights, or shining lights. The economically sound 

policies are invariably the result of democratic activities, not administrative or bureaucratic activities. 

And with that, I will be happy to answer any questions as—at 

the time. 

[The prepared statement of Mr. Tanton follows:] 

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Mr. WHITFIELD. Thank you very much, Mr. Tanton. We appreciate that, and there are those lights on the front that—on red to 

indicate your time is up, but we won’t cut you off immediately, but 

I—we really appreciate your testimony. 

Our next witness is Mr. Fred Siegel, who is Senior Fellow at the 

Manhattan Institute, and scholar and resident at Saint Francis 

College. 

Mr. Siegel, thanks for joining us, and you are recognized for 5 

minutes. And be sure to turn your microphone on and get it close. 

I think you might need to just push that button to turn it on. 

STATEMENT OF FRED SIEGEL 

Mr. SIEGEL. This one. Is this working now? Yes, OK. 

Thank you for having me. Unlike the other members of this 

panel, I am not an energy expert. I am an historian. I have written 

about laboratories of democracy in a book I wrote about Los Angeles, New York and Washington, DC, and more recently, in a book 

I wrote about American liberalism, why it is misunderstood, in a 

book entitled, Revolt Against the Masses, which received positive 

reviews in every single magazine and newspaper except the New 

York Times. 

The transformation of American liberalism over the last half century is outlined and disputes rolling and out-of-the-way place in 

upstate New York. The southern tier of New York is little-known. 

Tioga, Chemung, Broome Counties are not household names, but 

they are areas which are gone—have gone terribly. The total employment in the Binghamton metro area is less than it was in 

2001. The other nearby city of sorts is Elmira. It too has a smaller 

workforce than it had in 2001. And if you were to drive through 

there, you would find it looks like Appalachia, and indeed it was. 

When the Appalachian Commission was created by the Great Society, an earlier failed program of liberal policy, these southern tier 

counties were included, and they still are. There are several Appalachian Commission offices scattered across the southern tier. New 

York is not good at economic growth; it is very good at creating 

commissions and authorities. 

In 2008, it looked like something might be done. It looked like 

the broken-down barn houses and people selling their land for 

taxes, because New York taxes—property taxes are among the 

highest in the country, might be coming to an end because it looked 

as if the fracking boom, which had hit Pennsylvania, right across 

the border, in Pennsylvania it is called the northern tier, in New 

York it is called the southern tier, of counties were bringing jobs 

to Pennsylvania. 

And let me just read from Ed Rendell, former Democratic Governor of Pennsylvania. Thousands of solid jobs with good salaries 

were created in Pennsylvania. Communities came back to life, and 

investment in the State soared. The steel, lumber, concrete, and 

construction industries, as well as manufacturing, purchasing, and 

retail spending, all boomed because of fracking on the Pennsylvania side. 

Now, part of the difference is Pennsylvania has a long history of 

energy extraction, New York does not, but there are others. Thirtytwo States now accept fracking. New York is still studying the 

23 

issue. The only State that has banned fracking is Vermont, which 

has no shale beneath its surface. So it is—as with so many other 

things in Vermont, it is meaningless. 

In 2010, a new Governor came into office, Mario—excuse me, Andrew Cuomo. I am old enough to remember Mario. Andrew Cuomo 

came into office and he proposed—he floated what seemed like a 

genuinely intelligent compromise. In places where gentry liberals 

live, like Ithaca, home or Cornell, or Cooperstown, where many 

well-to-do retirees reside, there would be no fracking. In areas 

where there was a watershed for either New York or Syracuse, 

there would be no fracking. Fracking would be confined to the 

southern tier of the southern tier, to the most adversely affected 

counties in New York, and that is all. It seemed like a reasonable 

compromise. However, opposition to fracking had become 

totemized. The support of fracking was to be—was to align yourself 

with the spawn of the devil. If that sounds excessive, no, I am describing conversations I have had with anti-frackers in New York 

City at rallies. Fracking is inherently evil. I am told by antifrackers that it is fracking that creates poverty in Pennsylvania, 

which is a fascinating idea. It is a bit like saying Israeli rockets 

are what is creating the rockets coming out of Gaza. It gets everything exactly backwards. 

That compromise proposal we have only applied to the counties 

in New York State, like Chenango, Steuben, and Tioga, the southern tier of the southern tier, where there were no aquifers, where 

the soil is poor, and where there is desperate poverty. 

What is going on—and this is when I got interested in this. I am 

not a person who studies energy. I was fascinated at the rejection, 

the flat-out, aggressive rejection of a reasonable compromise. And 

what I discovered was, in part, it was a matter of practical interest. 

People like Yoko Ono, I don’t know how you would describe—— 

Mr. WHITFIELD. Mr. Siegel, excuse me for interrupting—— 

Mr. SIEGEL. Sure. 

Mr. WHITFIELD [continuing]. But I just wanted to say that you 

are about 30 seconds over your 5 minutes, so—— 

Mr. SIEGEL. In that case—— 

Mr. WHITFIELD [continuing]. If you—— 

Mr. SIEGEL [continuing]. I will conclude in 30 seconds. 

Mr. WHITFIELD. OK. 

Mr. SIEGEL. Sorry, I didn’t realize I was—it was taking so long. 

The issue of fracking turns out to be a class issue. Upper middleclass liberals are vehemently opposed in the name of preserving 

New York as something like a Currier and Ives photo; wonderful, 

beautiful place to retire, but not a place to grow—and the antifrackers insist that they want to maintain New York as this kind 

of museum preserve. The pro-frackers are mostly practical people 

who want to get out of debt. 

Mr. WHITFIELD. Yes. 

Mr. SIEGEL. That class divide explains fracking in New York. 

[The prepared statement of Mr. Siegel follows:] 

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Mr. WHITFIELD. Thank you, Mr. Siegel. 

At this time, our next witness is Mr. Steve Clemmer, who is the 

Director of Energy Research and Analysis for Climate and Energy 

Program at the Union of Concerned Scientists. 

Mr. Clemmer, welcome, and we look forward to your testimony. 

And you are recognized for 5 minutes. 

STATEMENT OF STEVE CLEMMER 

Mr. CLEMMER. Good morning. On behalf of UCS and our 450,000 

members and supporters, I would like to thank Chairman Whitfield 

and the other distinguished members of the subcommittee for the 

opportunity to testify today. 

My comments are—will focus on how State renewable electricity 

standards have been a key driver for the recent growth in the U.S. 

wind and solar industries, spurring innovation and creating new 

jobs and income for State and local economies. I will also show how 

utilities in most States are meeting or exceeding their targets at 

little to no cost to consumers. Finally, I will highlight how stronger 

Federal policies are needed to complement State renewable policies. 

I am going to try not to repeat some of the excellent comments 

that both Mr. Rush and Mr. Waxman already made about these 

policies that are included in here in my testimony. 

So a renewable electricity standard requires electricity—electric 

utilities to gradually increase the amount of renewable energy in 

their power supplies over time. As we heard, there are 29 States 

and the District of Columbia that have standards. Seventeen 

States and DC have renewable standards of 20 percent or more, 

and 18 States have increased or accelerated their targets since they 

originally adopted them. Lawrence Berkeley National Lab estimates that 46,000 megawatts, or more than 2⁄3 of all the renewable 

capacity installed since 1998, occurred in the States with renewable standards. They project this amount to more than double to 

94,000 megawatts by 2035 as the States continue to ramp up their 

standards. California’s 33 percent by 2020 standard creates the Nation’s largest market for renewable energy, followed by Illinois, 

New Jersey, Texas and Minnesota. 

State renewable standards, combined with the Federal tax credits, have played a key role in the rapid growth of the U.S. wind 

and solar industries, as we have heard. Wind power accounted for 

nearly 1⁄3 of all new electric generating capacity in the U.S. over 

the last 5 years, second only to natural gas, and 9 of the top 10 

States in total installed wind capacity have renewable standards. 

Meanwhile, the solar capacity has increased by a factor of 10 since 

2009, and a record 5,000 megawatts of solar was installed in the 

U.S. last year. All of the top 10 States with the highest installed 

solar PV capacity have renewable standards. 

So we heard earlier some of the economic benefits that this is delivering in terms of 50,000 jobs in the wind industry, $100 billion 

of investment in the U.S. economy since 2007, just in wind alone. 

Texas is the leader with both installed wind capacity, but also the 

most amount of wind jobs, followed by Iowa, California, Illinois, 

Colorado, Kansas, Michigan, North Dakota, Oregon and New York. 

All of these States but one have renewable standards. You heard 

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about the domestic manufacturing of wind turbine components that 

has also increased dramatically over the last 5 years as the renewable standards have ramped up. The domestically sourced content 

of U.S. wind projects has—installed today is over 70 percent, up 

from less than 25 percent in 2005. Wind power is also providing 

significant income and tax revenues for rural communities. For example, in Iowa, which now generates 27 percent of its electricity 

with wind, wind projects provided $16 million in annual lease payments to landowners, and nearly $20 million in annual property 

tax payments. The solar industry has invested about $34 billion in the U.S. 

economy over the past 3 years, and as we heard earlier, there is 

about 142,000 people that work in the U.S. solar industry at 6,100 

businesses. While California leads the Nation with about 1⁄3 of 

those jobs, States in the Midwest, northeast, southeast and southwest are also in the top 10. 

The other positive news has been that renewable standards have 

been a key driver for technology innovation and cost reductions. 

Since 2009, the cost of generating electricity from wind has fallen 

43 percent. The average price of a solar PV panel has declined 60 

percent. 

Renewable standards are also a good deal for consumers. The 

falling cost of wind and solar have allowed most utilities to fully 

comply with their standards at little to no cost to consumers. In 

May, NREL and LBNL released a comprehensive of State RPS 

costs and benefits based primarily on data from utilities and State 

regulators. The study found that between 2010 and 2012, the cost 

of complying with the renewable standards in 25 States ranged 

from a net savings of .2 percent of retail rates, to a net cost of 3.8 

percent. This is considerably lower than the Beacon Hill Institute’s 

studies that Mr. Tanton mentions in his testimony. UCS and several other groups have identified serious flaws in these studies 

funded by the fossil fuel industry that lead to highly exaggerated 

costs. And I would be happy to talk about that in the Q and A if 

you want me to. 

I can wrap up with about 30 seconds on the Federal policy angle. 

So while Federal tax credits have been an important compliment 

to State renewable standards, the inconsistent support from Congress has created significant market uncertainty. To eliminate the 

uncertainty, UCS recommends that Congress extend the PTC by at 

least 4 years, and transition to more stable long-term policies. We 

also recommend allowing renewable energy technologies to be eligible for master limited partnerships and other innovated financing 

mechanisms to provide parody in the tax code with fossil fuels. 

Finally, let me say that, as Mr. Waxman mentioned with EPA’s 

proposed carbon standards, this provides a really important opportunity to increase renewable energy use and reduce carbon emissions. We believe that EPA’s proposed building blocks for existing 

plants is a flexible and cost-effective framework to help States meet 

their proposal. OK. 

Mr. WHITFIELD. So if you will conclude. 

Mr. CLEMMER. Yes, so my last statement is just that UCS believes that EPA can go much further. We did an analysis that 

shows they can achieve twice the level of emission reductions—— 

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Mr. WHITFIELD. Yes. 

Mr. CLEMMER [continuing]. And twice the level of—— 

Mr. WHITFIELD. All right. 

Mr. CLEMMER [continuing]. Renewables at a net savings to consumers. 

So I will conclude there. 

[The prepared statement of Mr. Clemmer follows:] 

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Mr. WHITFIELD. Thank you. Our next witness is Mr. Steve Nadel, 

who is the Executive Director, American Council for an Energy-Efficient Economy. 

Thank you for joining us, and you are recognized for 5 minutes. 

STATEMENT OF STEVEN NADEL 

Mr. NADEL. OK, thank you, Mr. Chairman. 

Mr. WHITFIELD. And be sure and turn your microphone on, get 

it close, and—— 

Mr. NADEL. Thank you, Mr. Chairman, and good morning to all 

of the committee. 

I am the executive director of the American Council for an Energy-Efficient Economy, also known as ACEEE. We are a nonprofit 

energy efficiency research organization that, since 1980, has acted 

as a catalyst for energy efficiency policies, programs, technologies 

and investments. I appreciate the opportunity to testify this morning. 

There has been much talk on both sides of the aisle about an allof-the-above energy policy. ACEEE believes that energy efficiency 

should be one of the cornerstones of an all-of-the-above energy policy. Energy efficiency is generally our least expensive energy resource, meaning that it often costs less to save a unit of energy, 

than it costs to produce that same unit of energy. Large cost-effective savings are available in all 50 States. All States are promoting 

energy efficiency to at least some extent, but some States much 

more than others. These efforts are helping to create jobs, grow 

State economies, and produce environmental benefits. Many States 

are increasing their energy efficiency efforts, but much more is 

both possible and advantageous. 

In my written comments, I first discussed the favorable economics of energy efficiency investments; 2, provide some specific examples of how States are encouraging energy efficiency, particularly 

some examples of some of the most improved States in our annual 

energy efficiency scorecard; 3, I discussed the link between energy 

efficiency and economic development, with examples from specific 

studies on California, Ohio and the northeast, and, 4, I summarized opportunities to use energy efficiency to create jobs and economic development in all 50 States. In these oral comments, I 

wanted to concentrate just on economic development; the last 2 

issues in my written testimony. 

The energy efficiency efforts States make contribute to jobs and 

economic development in several ways. When money is spent to 

purchase and install energy efficiency measures, direct, indirect 

and induced jobs are created. Direct jobs are the jobs to manufacture and install the energy efficiency measures, such as producing 

and installing insulation. Indirect jobs are generated in the supply 

chain and supporting industries that are directly impacted by an 

expenditure or effort. For example, as insulation sales increase, 

jobs might increase at home improvement stores and trucking 

firms. Induced jobs are produced as the direct and indirect workers 

spend their paychecks, such as for eating out or attending a baseball game. 

Oil and gas development also spur direct, indirect, and induced 

jobs, however, energy efficiency investments have 2 other benefits. 

49 

First, as consumers and businesses reduce their energy use, they 

have more income to spend on other goods and services, creating 

additional jobs. Second, energy efficiency jobs tend to be in construction and services industries, which are both very labor-intensive sectors of the economy. Spending a dollar in construction and 

services generally provides more jobs than spending a dollar in 

other sectors of the economy. This is illustrated in Figure 4 of my 

written testimony. 

Several studies have documented these effects at the State level. 

For example, a 2008 study by an economist at the University of 

California found that energy efficiency measures have enabled 

California households to redirect their expenditures towards other 

goods and services, creating about 1.5 million full-time-equivalent 

jobs with a total payroll of $45 billion, driven by well-documented 

energy savings of $56 billion from 1972 to 2006. Another example 

is Ohio. A 2004 analysis that we did with the Ohio Manufacturers 

Association found that implementing Ohio’s energy efficiency savings targets would save consumers nearly $5.6 billion through 

2020, including about $3.4 billion from reduced customer expenditures on electricity, $0.9 billion from the impacts of efficiency on 

wholesale energy prices, and $1.3 billion from the impact on wholesale capacity markets. Ohio participates in the wholesale energy 

market of PJM, and under the laws of supply and demand, reduced 

energy use and peak demand reduces the price of energy and capacity as determined in these markets. 

The economic development and other benefits of energy efficiency 

achieved in these States can all be achieved in other States. This 

April, we published a State-by-State analysis on how much energy 

efficiency savings that can be achieved in each State, and the costs 

and benefits of such investments, as well as the impact on employment and gross State product. The study looked at where each 

State was, and how much more they could do, with 4 different policies, as discussed in my testimony. Overall, we found that such 

State efforts could reduce national electricity use by 25 percent by 

2030, relative to business-as-usual projections; providing discounted net benefits of about $48 billion by 2030; increasing GDP 

by about $17 billion in 2030; and supporting more than 600,000 net 

jobs nationally in 2030. State-specific estimates of jobs are provided 

in Table 2 of my testimony. 

In conclusion, States are stepping out and leading energy efficiency efforts. They are creating jobs. Much more is possible in all 

of the other States, learning from some of the examples featured 

in my written testimony, such as Mississippi, Oklahoma and Arkansas. 

With that, I conclude my testimony. 

[The prepared statement of Mr. Nadel follows:] 

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Mr. WHITFIELD. Thank you very much, Mr. Nadel. 

At this time, I recognize Dr. Paul Polzin, who is the director 

emeritus of the Bureau of Business and Economic Research at the 

University of Montana. Thanks very much for being with us, and 

Dr. Polzin, you are recognized for 5 minutes. Be sure and—— 

STATEMENT OF PAUL E. POLZIN 

Mr. POLZIN. Thank you, Mr. Chairman, and members of the committee. My name is Paul Polzin, and you heard that my title was 

director emeritus. That just simply means I flunked retirement, 

and I still go into the office there almost every day. 

Now, I have spent the last 45 years of my life studying the Montana economy, and also studying the economies of rural communities in the west. The purpose of my testimony today is to document the economic impact of the new American energy revolution. 

I am going to be looking at the specific impacts on 2 rural communities, and rural communities are really an ideal laboratory to look 

at economic impact, because you can easily differentiate between 

causes and effects. 

Now, when we mention economic impact, the first thing that 

comes to mind are taxes. Well, there are plenty of taxes associated 

with the new American energy revolution. In my part of the world, 

the oil and gas industry alone paid the Federal Government and 

the State of Montana about $285 million in taxes, loyalties and 

other payments, but the real economic impact is on people, and 

how the energy boom affects their employment opportunities and 

their wages. I looked at 2 specific communities; Sidney, Montana, 

and Williston, North Dakota. They sit right on the Montana-North 

Dakota border, and that is at the western edge of the Bakken oilfield, which is the new field that is being developed using new technologies, and has seen dramatic increases in production. 

Now, I analyzed counties rather than cities because that is just 

the way the data are published. Sidney, Montana, is in Richland 

County, and Williston, North Dakota, is in Williams County. Now, 

for most of the last 35 years, both economies have been stagnant. 

The number of jobs in Richland County and Williams County in the 

early 2000’s was just at about the same level that it was in the 

mid-1980’s, but the trend turned upward in 2004, and accelerated 

in 2010. This mirrors precisely the drilling and other energy-related activity, and the most recent data showed double-digit increases. 

Now, there are boomtown atmospheres in places like Richland 

County and Williams County. The streets are full of petroleum engineers, drilling managers, and environmental specialists, and 

there are well-paid workers. Nationwide, the average annual wage 

in the oil and gas industry was about $108,000 a year in 2013; 

roughly double the average of $49,000 for all American workers. 

But it is not just these oil and gas industry workers who are benefiting. I looked at 3 specific industries in each of these counties. I 

found that employment opportunities and wages in all 3 increased 

faster than expected. I looked at the construction industry, which 

includes skilled, blue-collar workers; I looked at professional services, and this includes lawyers, architects and accountants; and 

also I looked at the accommodations industry, which is traditionVerDate Mar 15 2010 14:09 Mar 02, 2015 Jkt 037690 PO 00000 Frm 00067 Fmt 6633 Sfmt 6633 F:\113-165 LABS DEMOCRACY HAVE BLBK EDITS\113-165 LABS DEMOCRACY PENDING
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ally a low-paying industry, and provides employment opportunities 

for entry-level workers. The findings in all 3 of these industries in 

both communities are the same. For the 10-year period from 2003 

to 2013, employment and wages in all of these industries increased 

much faster than otherwise would have been the case. In other 

words, there are more jobs and the wages are higher than would 

have occurred without energy development. In all 3 of these industries, in both counties, average wages in 2013 were higher than 

their respective statewide average. Now, as an experienced rural 

researcher, I know how unusual it is to have rural wages higher 

than the statewide average. In most cases, the statewide averages 

are dominated by higher wages in urban areas. 

In summary, higher wages and a stronger rural economy, when 

they are combined with good policies on energy royalties and tax 

distribution can enable communities, counties and States better adjust to energy projects that may have periodic peaks before they 

stabilize in the long run. 

Thank you very much. 

[The prepared statement of Mr. Polzin follows:] 

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Mr. WHITFIELD. Thank you, Dr. Polzin, very much. 

And our next witness is Dr. Bernard Weinstein, who is the Associate Director of the Maguire Energy Institute of the Cox School of 

Business at Southern Methodist University. 

So, Dr. Weinstein, thanks for being with us. You are recognized 

for 5 minutes for your opening statement. 

STATEMENT OF BERNARD L. WEINSTEIN 

Mr. WEINSTEIN. Thank you very much, Mr. Chairman, and members of the committee, for the invitation to speak today. 

I want to talk briefly about 2 topics; number 1, the future of coal, 

and, 2, State energy policies. 

There may or may not be a war on coal. That may be hyperbolae, 

but in any case, coal is being challenged as a power source as never 

before. Number 1, you have competition from abundant and cheap 

natural gas, as well as renewables. We now have EPA greenhouse 

emission standards being proposed for both existing and new power 

plants. It is highly unlikely that a new coal plant will be constructed in the foreseeable future. We also have regulatory and 

legal barriers to exports. So I think it is fair to say, and you can 

see on this graph, that coal is slowly going away. In fact, we have 

lost about 15 percent, or we will lose about 15 percent of our coalfire-generating capacity between 2010 and 2016. But a couple of caveats. Some people are very pleased about the fact that coal is 

going away, but we need to keep in mind that we get almost 40 

percent of our electricity from coal. It can’t be quickly replaced by 

alternatives. Renewables, as we have heard, are intermittent. We 

need base load capacity. There are serious issues of grid reliability 

when demand peaks. Texas has got more installed wind capacity 

than any other State, but I guarantee you, at 3 o’clock this afternoon, 95 percent of those wind turbines in west won’t be turning, 

and that is when demand is going to be at its peak. 

Then there are issues related to distributor generation. That is 

posing challenges for grid reliability, as well as the finances of investor-owned utilities. You know, who is going to pay for that 

backup capacity? So we need to keep in mind that coal is still the 

cheapest way to generate electricity, and that, as coal goes away, 

power costs to consumers and businesses are likely to increase. 

And I make those comments because I think EPA needs to take 

cognizance of these and other issues as it finalizes the greenhouse 

gas rules for both coal and gas-fired plants. 

Now, getting back to the main topic today: energy and economic 

development. We have seen an incredible increase in oil production 

just in the last 3 or 4 years; about a 50, 60 percent increase. We 

didn’t see this coming. It has been great for the economy, and it 

is not just in a couple of States. I mean there is shale all over the 

United States, as you can see in this graph. Some States have embraced energy development, while some energy-rich States have opposed energy development. So I am going to make, you know, a 

couple of comments about Texas, California, North Dakota and 

New York. 

First, let us contrast Texas with California. It is a little hard to 

see, but the red line is—the red lines are Texas and the blue lines 

are California. The red line going up is increased oil production in 

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Texas; the blue line going down is declining oil production in California, and then the dotted lines are the unemployment rates. 

Guess which State has the lower unemployment rate. Texas has 

added 548,000 jobs in the past 18 months. California, which is half, 

again, as large as Texas, has added only 322,000 jobs in the past 

6 years. California is home to the Monterey shale which is estimated to hold up to 2⁄3 of America’s shore oil—shale oil reserves, 

and yet, because of environmental pushback, regulations and the 

like, it is not being developed. 

Now, real quickly, if we put the next one up, I don’t want to talk 

too much about North Dakota and New York because we have already heard a lot about North Dakota and New York. This is employment growth in the U.S. on the left, employment growth in 

North Dakota on the right. 

Four years ago, North Dakota was producing 10,000 barrels of oil 

per day. Today, it is 1 million barrels of oil per day. Booming economy, lowest unemployment rate in the United States. We have already—Mr. Siegel talked about New York State. This study was actually done by his institute, maybe it was done by Mr. Siegel, looking at the potential job growth that could occur along that southern 

tier of New York State if the current moratorium on hydraulic fracturing were lifted. So we will just have to see how that plays out, 

but this part of the State has been losing people and jobs for decades. 

Just kind of to summarize. Here are some selected energy States. 

The blue bar represents the increase in oil and gas jobs, the red 

line represents the increase in GDP growth, and you can see that 

in all of these energy-producing States, we have seen a tremendous 

increase in the economic growth. And look at Pennsylvania. We 

heard about Pennsylvania earlier. Look at the tremendous increase 

in oil and gas employment. If it hadn’t been for that increase, 

Pennsylvania would have had a very serious recession like the rest 

of the country. It helped Pennsylvania avoid the worst of the great 

recession. And New York State, right across the border, as we have 

heard, does not allow the use of hydraulic fracturing. 

So I think it is incontrovertible that States embracing energy development have healthier and more robust economies than those 

fighting energy development. 

Do keep in mind 2 other points that have not been mentioned, 

is that greenhouse gas emissions in the United States are at a 20- 

year low, even though our economy is 70 percent larger. 

A final point I would make: We have heard a lot about all the 

jobs that have been created in renewables. The administration says 

that their policies have created 75,000 jobs in renewable energy. I 

might add, at a cost of $50 billion in Federal subsidies. The oil and 

gas industry has created 700,000 new jobs in the last 4 or 5 years 

without any new subsidies. 

So I will be happy to answer any questions at the appropriate 

time. 

[The prepared statement of Mr. Weinstein follows:] 

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Mr. WHITFIELD. Dr. Weinstein, thank you very much. And thank 

you all of you for your testimony. And I think the testimony 

crystalizes exactly what we are trying to look at here. Those people 

who are most concerned about global warming are strong advocates 

for renewable, and I think all of us recognize we need renewables, 

but I don’t think, Dr. Weinstein, we want to be like Europe, which 

is recognized as the leader of renewables in the world, and yet they 

are mothballing natural gas plants because the gas prices coming 

out of Russia are so expensive that they are building new coal 

plants to meet their needs. And yet in American, no one expects 

a new coal plant to be built right now because natural gas prices 

are so high, but shouldn’t we have the flexibility, if gas prices go 

up, to build a new coal-fired plant? We don’t have that ability to 

do it today. And would you like to make a comment on that, or—— 

Mr. WEINSTEIN. Well, I would generally agree with you. I do 

think we need standards. We need pollution standards to apply to 

all power-generating facilities, but what concerns me is what we 

hear from the administration is a policy that seems to suggest that 

we can get all—we can meet all of our future energy needs through 

a combination of conservation, efficiency and renewables. I am in 

favor all of those things, but that is not going to get us there. If 

we want to grow our economy, we are still going to need base-load 

power plants. 

Mr. WHITFIELD. Right. 

Mr. WEINSTEIN. We have to recognize that fact. 

Mr. WHITFIELD. Absolutely, and I agree with you, we need standards, and we have a lot of standards, and the standards are so explicit on new coal-fired plants that the technology is not available 

to meet it on a large-scale basis. 

Mr. WEINSTEIN. Just as an aside, I had the chief power engineer 

from Luminant Energy speak to my class a couple of months ago. 

He runs the newest, most efficient coal-fired generating plant in 

the country, and he said that this plant that just went online 3 

years ago would not be able to meet the proposed GHG standards 

for new power plants that have been—— 

Mr. WHITFIELD. Absolutely. 

Mr. WEINSTEIN [continuing]. Proposed by EPA. 

Mr. WHITFIELD. That is absolutely—there is not any plant that 

would meet that standard. 

Well, thank you. You know, a few years ago when President 

Obama was first elected, with the stimulus package, he talked 

about shovel-ready projects, and, of course, large sums of money 

went for renewable projects, which is fine, and we hear a lot about 

growth in the renewable sector, new jobs, but you all heard me in 

my opening statement say that today, full-time jobs are 4 million 

people less today than it was 4 1⁄2 years ago. 

And the question I would ask you, Dr. Weinstein, what would be 

our economy today if it weren’t for the huge increase in oil and natural gas production from hydraulic fracturing and horizontal drilling, recognizing there has been a lot of growth in renewables, but 

what would our economy look like today without what is happening? 

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Mr. WEINSTEIN. I don’t think there is any question that levels of 

employment would be lower, and the unemployment rate would be 

higher. 

Let me just give you one statistic. Five years ago, the oil and gas 

sector contributed about 5 percent—no, excuse me, contributed 

about 2 percent to the Nation’s economic growth. Today, the oil and 

gas industry alone is contributing 10 percent to the Nation’s economic growth, so that is a fivefold increase. 

Mr. WHITFIELD. Well, I think it is something that is quite startling; 4 million less full employed today, despite this energy boom 

and despite the growth in renewables, we are still 4 million less 

full employed. 

Recently, I was talking to a CEO for a major utility in California, 

who was talking about the 30 percent renewable mandate in California, which is the most stringent, and he was talking about reliability and getting the electricity from where the renewables are located into the urban areas, they are having to build a new grid system, and he talked about the most recent mileage for their new 

grid system, the lines that they were building, was costing them 

$100 million per mile, which is an astounding and astonishing figure. 

Now, you mentioned, Dr.—Mr. Tanton, that you felt like the 

RPS, that the cost far exceeded the benefits. Would you elaborate 

on that just a little bit for me? 

Mr. TANTON. I would be happy to, Mr. Chairman. 

There are a number of unaccounted-for costs, but let me first 

mention that some technologies that are eligible for the RPS, their 

benefits are not proportional. The first wind turbine provided some 

level of benefits, and the last wind turbine significantly, significantly less per turbine. 

So as we look at things like RPS, we need to keep in mind that 

just because something has done good so far, doesn’t mean it is 

going to do good forever. It is a typical and traditional fallacy of 

composition. 

There are a number of costs that are offloaded from the developer; things like transmission, significant cost; costs imposed for 

backup and balancing, significant cost. Our estimates are that 

those additional costs that have been offloaded to other nonparticipants effectively double the cost of wind generation, from being 

competitive to being essentially noncompetitive. But those—and 

more recently, we have been hearing about environmental 

externalities from some of the concentrating solar facilities in California, basically frying the birds and bats that fly around, and 

blinding pilots. 

So there are—traditionally externalities in those costs have been 

focused on air emissions, either criteria pollutants or perhaps 

greenhouse gas emissions. 

Mr. WHITFIELD. Thank you, Mr. Tanton. And my time has now 

expired, so maybe some of the other witnesses will get to you, but 

at this time, I would like to recognize Mr. Rush for 5 minutes of 

questions. 

Mr. RUSH. Mr. Chairman, thank you so very much. Mr. Chairman, I might want to—I might remind all the members of the subcommittee that—and those who are in the audience here that, on 

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Tuesday, we will hear from folk where we will also have a more 

in-depth debate on the President’s power plant plan and his common regulation, and I believe, Mr. Chairman, we are moving toward mission creep here in terms of the—today’s testimony. 

Today, we want to hear about innovative State strategies in incorporating renewables and energy efficiency measures. 

And so, Mr. Chairman, I—with that in mind, I want to address 

my questions to Mr. Nadel. Mr. Nadel, what are the biggest benefits to State and Federal Governments that exists in making the 

country’s energy network more efficient in regards to job creations, 

savings, environmental impact and other benefits, and at the same 

time you ask, what are the biggest benefits, including what are the 

disadvantages to investing in energy efficiency? 

Mr. NADEL. OK. Yes, Congressman, yes, as you point out, energy 

efficiency does have enormous benefits. It reduces energy use so 

that energy bills go down, consumers and businesses have more 

money to spend on other goods and services in their businesses, et 

cetera. That helps create economic growth, it helps displace some 

demand for power. It is not going to eliminate the demand for 

power, but it helps reduce the demand for power, saving money, 

but also providing environmental benefits. So there really is an 

enormous multiplier from investing in energy efficiency, as many 

States have shown, and I think it is particularly gratifying that 

many of the States are actually increasing their energy efficiency 

activities. They are recognizing this. 

You are saying what are the disadvantages? You know, a—for 

the consumer, not really a disadvantage. You have to spend a little 

time familiarizing yourself with what the opportunities are. That 

does take some time. Clearly, those who like to sell more energy 

and don’t want to see efficiency, they may not be happy, but for 

most consumers and businesses, the benefits are quite large. 

Mr. RUSH. Mr. Nadel, Dr. Weinstein was pretty persuasive in 

summarizing, kind of stimulating in terms of his rationing some of 

his conclusions. How would you address his—some of his conclusions that—particularly as it relates to economic development, job 

creation, and how that should impact his—America’s future? If 

you—if we were to concentrate solely on his outlook and his conclusion without really entertaining or even discussing efficiencies—— 

Mr. NADEL. Can—— 

Mr. RUSH [continuing]. Where do you think we are going to wind 

up at? 

Mr. NADEL. Right. I mean I think Dr. Weinstein points out that 

there are jobs with oil and gas development. I would agree with 

that. I suspect he would agree that there are jobs with energy efficiency and renewable energy. Maybe that is something we could all 

agree on. So that is good. 

I think where we might differ is I would emphasize efficiency 

and renewables a bit more, particularly the efficiency because it 

has more jobs per million dollars’ investment than just about anything else, but I would say that we do not see that, at least for the 

foreseeable future, we will 100 percent rely on efficiency and renewables. We definitely will need natural gas. There will be a 

bunch of coal plants that will continue to operate. We do see a balVerDate Mar 15 2010 14:09 Mar 02, 2015 Jkt 037690 PO 00000 Frm 00090 Fmt 6633 Sfmt 6633 F:\113-165 LABS DEMOCRACY HAVE BLBK EDITS\113-165 LABS DEMOCRACY PENDING
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anced energy system, although he would probably want to promote 

a lot more construction, particularly of new coal, than we would. 

Mr. RUSH. So are we headed down this—excuse me, this path 

or—of either or? Any—does that make sense, or shouldn’t it be both 

and? 

Mr. NADEL. Right. I mean my hope is there is a middle ground. 

We can all agree that energy efficiency and renewable energy 

makes sense. We can all agree that we do need some oil and gas 

development. There may be some differences about what the appropriate rules are, but I think just about everybody would agree that, 

yes, we do need some oil and natural gas. There may be some differences on coal, but I think most people would agree that we will 

continue to use coal, it is just a question of how much. So I am in 

favor of trying to find that middle ground and saying it is not total, 

you know, left versus right, but there is something more toward 

the center. 

Mr. RUSH. Thank you, Mr. Chairman. 

Mr. WHITFIELD. Thank you, Mr. Rush. 

At this time, recognize the gentleman from Illinois, Mr. Shimkus, 

for 5 minutes. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

First of all, I want to welcome my SSA young man in the front, 

who just showed up. I am going to meet with him after I get 

through these questions, and they get to observe a little bit of a 

congressional hearing. So—— 

Mr. WHITFIELD. Welcome. Welcome. 

Mr. SHIMKUS. First of all, just a statement. Dr. Weinstein, you 

know, the President of the United States is from my home State, 

I am a coal-producing State of Illinois, and you shouldn’t be confused; there is a definite war on coal. It has been planned by this 

administration, and the real proof is his—if you have never seen 

his response to the Editorial Board of the San Francisco Chronicle 

in 2008, he basically said, and on record, it is—you can check it, 

that his goal was to make the cost of generating electricity so high 

that it would bankrupt the industry. 

So having said that, I understand other competitive pressures, 

but make no mistake, this is a designed application of Executive 

Branch force to destroy low-cost power and coal mining jobs in this 

country. And I just want to put that on the record. 

Don’t—now I would like to go to—I also want to raise the issue 

of, you know, Germany and Europe is a great example of this debate. So there is a Reuters article, April 15, that says Germany 

subsidizes cheap electricity for its neighbors. And in the first paragraph it just says Germany’s neighbors enjoy cheap imported power 

subsidized by Berlin’s green energy policy, and paid for by German 

households, analysts say. And it just goes through the debate that, 

obviously, we believe in all-the-above energy, and we believe that 

renewables can be part, but it has to be a specific portion of portfolio, and that you cannot escape the need for base-load energy, 

even if you are a green energy supporter, because base-load helps 

us with the ability for the intermittent operability of solar and 

wind to be applied. 

I want to go to Mr. Clemmer for a first question. Has the Union 

of Concerned Scientists ever studied decibel output of wind generaVerDate Mar 15 2010 14:09 Mar 02, 2015 Jkt 037690 PO 00000 Frm 00091 Fmt 6633 Sfmt 6633 F:\113-165 LABS DEMOCRACY HAVE BLBK EDITS\113-165 LABS DEMOCRACY PENDING
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tion and its effect on people in and around the area, and what a 

setback might be? 

Mr. CLEMMER. We haven’t specifically studied that issue, but 

there have been other studies out there. 

Mr. SHIMKUS. I would ask, just for my sake, that you do that. 

I do have a constituent, he has been to me numerous times, he has 

a beautiful home. He actually was involved in the siting of these 

things. He was pro-wind. He has been driven out of his house. 

Every time I talk to this family and the in-laws, which I just did 

recently about 3 weeks ago in my office in Danville, they break 

down crying. 

So I would ask that you would do that to help us bring some 

sense to the fact is this really an issue, and it also is an issue on 

the setback ratio. In the State of Illinois, we are having this debate 

right now that siting is approved by the counties, which I like at 

the local level. There is also a movement to take away the counties’ 

ability to do this, which I would not support, but in local zoning— 

and the setback thing. So I would ask you to do that and consider 

that as your respective organization, and if you would do that, I 

would appreciate it. 

My final questions really go to Mr. Polzin and Mr. Siegel. Deep 

southern Illinois also is prime for the fracking revolution. We have 

been a marginal oil well producer. We were one of the major oilproducing States during World War II. Of course, now there are 

marginal wells. We have a very aggressive State piece of legislation. Bipartisan, environmental community, and the energy community. The problem is, is that the government—the State government has delayed rollout of the rules, so the poor communities in 

southern Illinois aren’t receiving the economic benefits that have 

been planned. Mr. Polzin, Mr. Siegel, what should my constituents 

expect once the final rules are laid out? 

Mr. POLZIN. I have been looking at reasonable economies for a 

long time, and one thing I have learned is don’t generalize. One 

can—different communities have different impacts. But one thing 

I am sure about, if you add a number of jobs paying $100,000 a 

year, oil and gas jobs, it will have a significant impact on almost 

any community, except something that is very large where it would 

be diluted. Exactly how that plays out I think depends on the community. Is it a rural community, is it an isolated community, is it 

next to an urban area, these are all the kinds of things which determine the exact impact of that increase in new jobs. But will 

there be an impact? Absolutely. Whenever you add any number of $100,000 jobs to an area, it 

will have an impact. 

Mr. SIEGEL. I would agree. There is a considerable impact. I 

think New York State is peculiar. In New York State, the desirability of $100,000 job is contested by people who are considerably 

wealthier. And so I think that is a peculiar situation which is a 

function of what you in—you here in Congress have done with the 

Federal Reserve, in part, pouring money into the money center 

banks in New York, driving the stock market up, allowing people 

to invest in real estate, in buying summer homes all over upstate 

New York. So this is not something that is a national problem, but 

it is a New York problem. 

89 

In New York, we have the peculiarity of the—of people who see 

creating new jobs and new wealth as the problem. They want it 

just—things just as they are. There is a kind of reactionary quality 

to the liberalism in New York State. 

Mr. WHITFIELD. Gentleman’s time has expired. 

At this time, recognize the gentleman from California, Mr. 

McNerney, for 5 minutes. 

Mr. MCNERNEY. Mr. Chairman, my ears are burning from all the 

bashing of California we have heard this morning. 

Mr. WHITFIELD. Don’t take that personal. 

VOICE. And New York. 

Mr. MCNERNEY. And New York too, I hear. 

But, you know, California is a big State. Some regions are suffering from a poor economy. My region, for example, has a poor 

economy, but I think that can be attributed largely to the unregulated financial market that caused the housing crash in 2008. But 

if you go to Silicon Valley, if you go to Los Angeles, the economy 

is booming, there are a lot of people that are coming in there with 

innovation to create jobs. And I can tell you high-end companies 

like to go where the environment is nice, and you will find that in 

California. So to say that the regulation is causing a job exodus, 

there are jobs that are coming and going in any State, so I will contest that. 

Now, I also want to push back on something that Mr. Weinstein 

said that the Monterey shale hasn’t been developed because of regulatory environment in California. The Monterey shale is a very 

complicated geographic feature. It is not economic to frack there 

yet. I mean you can put a well in, you will get some oil out, but 

it expires quickly because of all the stratification there. So there 

are some misapprehensions about what is going on in California. 

I would like to follow up, Mr. Nadel, on energy efficiency. Do you 

have a way to estimate the return of—on investment on energy efficiency? In other words, for every dollar you invest in energy efficiency, within a 5-year period, say, what would your return on investment be? 

Mr. NADEL. OK. Thank you. Yes, Figure 1 in my written testimony provides an average figure. There is a great variation. Sometimes you can get 100 percent return on investment, sometimes it 

is only 1 or 2 percent, but on average, we find it is typically about 

a 25 percent return on investment. So that is better than most 

other alternative investments. 

Mr. MCNERNEY. So that is year and year—— 

Mr. NADEL. Yes. 

Mr. MCNERNEY [continuing]. 25 percent. 

Mr. NADEL. That would be about the average. 

Mr. MCNERNEY. That would be considered a pretty good ROI. 

Mr. NADEL. Yes. 

Mr. MCNERNEY. And then would you please also reiterate about 

the kinds of jobs that are created with investments and energy efficiency. 

Mr. NADEL. Yes. There are a lot of jobs, more engineering, specifying, figure-adding—out exactly what needs to get installed in a 

particular home or business, a lot of jobs installing energy efficiency measures. There are also jobs manufacturing more efficient 

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equipment, whether it is a light bulb, an air conditioner, insulation, 

et cetera, and then each of those jobs, they spend the money, that 

creates other jobs elsewhere in the economy. And then perhaps the 

biggest effect is that consumers and businesses save on their energy bills. They have more money to, say, to spend, to go out for 

dinner or whatever it is, and that helps—— 

Mr. MCNERNEY. And what State—— 

Mr. NADEL. And—— 

Mr. MCNERNEY [continuing]. Has the highest energy efficiency 

standards? 

Mr. NADEL. Say that again. 

Mr. MCNERNEY. What State would have the highest energy efficiency standards? 

Mr. NADEL. Depends on how you look at it. In our scorecard, 

Massachusetts has been ranked number 1 overall. If you are you 

looking at savings as a percent of, say, electricity sales, Vermont 

has typically been the leader, although Arizona is getting very close 

to them. They are probably number 2 now. It—like many things, 

it depends on what your yardstick is. 

Mr. MCNERNEY. And so are these citizens complaining about the 

utility bills in those States? 

Mr. NADEL. Any State, you have a diversity of citizens, but no, 

by and large, my understanding is they don’t complain. 

There was actually a very interesting study that came out about 

a week ago that looked at energy bills around the country, and energy bills depends on both the rates as well as the consumption. 

And some of the States with the highest energy bills were actually 

States with pretty low rates, but because they often use energy inefficiently, they actually had some of the highest energy bills. 

Mr. MCNERNEY. Thank you. 

In California, the renewable portfolio standards initially were 

about 18 percent. The large public utilities easily met those standards within a few years before the deadlines and the legislature increased those standards. And it looks like they will meet those 33 

percent standards easily by 2020, so the RPS hasn’t been too much 

of a burden on the California utility systems. 

Mr. Clemmer, would you please discuss the job creation effect of 

renewable energy in some of these States? 

Mr. CLEMMER. Sure, yes. You know, as I said in my testimony, 

the—I mean the growth of the wind and solar industries has been 

tremendous over the past few years, and the jobs have followed 

that and, you know, frankly, the industry is growing dramatically 

globally and that really positions the U.S. to be able to, you know, 

provide—create jobs and export equipment to other countries. The 

fact that we are now manufacturing 70 percent or more of the wind 

turbine components in the United States, that is amazing. That 

has happened over a 5-year period. Companies have moved to the 

United States to do that. You know, the manufacturing jobs really 

have been spread out too all over the country. There is a high concentration in the Rust Belt States, in the Midwest, where there is 

great manufacturing capacity, but California, Texas, Colorado, 

Iowa, New York, I mean they are—all of these places are experiencing incredible job growth. And I would just—— 

Mr. MCNERNEY. Thank you—— 

91 

Mr. CLEMMER [continuing]. You know—— 

Mr. MCNERNEY [continuing]. My time is just about over. 

Mr. Chairman, we don’t really need to bash renewables and fossil 

fuels, no need to bash each other, we can work together for—— 

Mr. WHITFIELD. Absolutely. Yes, we are—that is what this is all 

about; working together. 

Mr. Olson of Texas, I recognize him now for 5 minutes. 

Mr. OLSON. I thank the Chair, and welcome to our witnesses. 

Last month, my local paper, the Fort Bend Herald in Rosenberg, 

Texas, had a story on our economy in Texas. It was another good 

story. It said we added over 380,000 jobs last year. That is the largest increase we have had in almost 2 decades. Most of those jobs 

came in the energy sector. In fact, if we were a country again, we 

would be the eighth largest oil-producing nation in the whole 

world. But as you all have mentioned, we are not just oil and gas, 

we are number 1 in wind production in America, and there are 

many reasons for that. One is our guys in Austin do a better job 

than people here in DC in terms of regulation. Our railroad commission, which oversees oil and gas operations in Texas, acts with 

commonsense and certainty to get permits approved. Our Public 

Utilities Commission gets power lines approved in a timely manner. They understand that protecting the public and growing our 

economy are not mutually exclusive. 

When States or the Federal Government put up barriers to energy, they put up barriers to jobs and our quality of life. And beyond jobs, our State and local governments have seen billions in 

new revenues. That money has made things many—many things 

possible that weren’t possible before. In Dimmit County, right on 

the border with the Eagle Ford shale play, a poor, rural school district has used revenue from the Eagle Ford to rocket them into the 

21st century. Their kids can compete now in the global economy. 

My first question is for Dr. Weinstein, Dr. Polzin and Mr. Siegel. 

When States turn their backs on energy production, what do they 

miss out on in terms of funding other priorities like schools, like 

roads? Dr. Weinstein, you are up first, my friend. And, Dr. 

Weinstein, speak Texan, and I can translate for everybody here if 

you want to. 

Mr. WEINSTEIN. You know, I actually grew up here in Washington, DC, but I escaped 40 years ago. 

Well, there is no question that energy development creates all 

kinds of benefits for the States in which they are located, for local 

communities, for school districts in Texas. I can remember when I 

first moved to Texas in ’75 during the last boom, energy accounted 

for about 25 percent of the State’s economy. Then after the bust, 

it was down to about 10 percent of the State’s economy. Well, now, 

it is back up to about 15 percent of the economy, but, of course, 

we are a much bigger State overall. We are not just about energy, 

we are about high-tech and we are about healthcare and, I mean, 

you know, we have 26 million people. 

Mr. OLSON. Yes, aerospace, you have—yes. 

Mr. WEINSTEIN. And aerospace in your community. So, you know, 

you are talking about the Eagle Ford in south Texas, there is no 

question that the shale boom has done more to uplift the quality 

of life and the standard of living and employment opportunities in 

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those low-income south Texas counties than any Federal or State 

programs in the past. So it has been, you know, a tremendous boon 

to those communities. 

There is an important point that I didn’t have—that is kind of 

related to this and we need to keep in mind, is this shale boom, 

all of this new oil and gas production, 90 percent of it has occurred 

on privately owned land. Even though there is lots and lots of Federal land with shale reserves, not to mention the offshore, 90 percent of this increase is coming from private land, and that makes 

us different really from any other country in the world, and is, I 

think, largely responsible for the fact that the shale boom occurred 

first in the United States and not somewhere else. 

Mr. OLSON. Dr. Polzin, any comments, sir? 

Mr. POLZIN. I would just like to build on what Professor 

Weinstein said. I have here a recent release from the U.S. Energy 

Information Administration, and the headline is Production of Fossil Fuel from Federal and Indian Land Sale in 2013. So we are seeing a very different mix of energy production. More and more of it 

is coming from private land, and less and less of it is coming from 

Government land in one form or another. 

Mr. OLSON. Yes, sir, all production in Texas comes from private 

land, every drop comes from private land. 

Mr. POLZIN. And I would say the same thing for Montana and 

North Dakota. That is entirely—all of the shale oil production 

comes from private land. 

Mr. OLSON. I am out of time. I will submit questions to the 

record. Thank you, Mr. Chairman. 

Mr. WHITFIELD. Gentleman’s time has expired. 

At this time recognize the gentleman from California, Mr. Waxman, for 5 minutes. 

Mr. WAXMAN. Thank you, Mr. Chairman. 

In identifying the best system of emission reductions, we certainly have renewable energy and energy efficiency success stories 

in every region of the country. Some States are years ahead in developing a renewable energy industry, and implementing energy efficiency programs, others are just getting started. When identifying 

the best system of reduction under the Clean Power Plan, EPA estimated a reasonable amount of renewable energy and energy efficiency that each State could achieve. 

Mr. Nadel, was EPA conservative in its estimate of how much 

low-cost energy efficiency is available to States? 

Mr. NADEL. Yes, we do believe that EPA was conservative with 

its energy efficiency estimates. They assumed that every State 

could gradually, over many years, ramp up to 1 1⁄2 percent energy 

savings per year, but there are several States that are already 

achieving over 2 percent, and quite a few others are already aiming 

for that. And that is just from utilities sector programs. They did 

not include private sector efficiency investments, such as with energy service companies, they did not include building codes, they 

did not include combined heat and power plants, so we believe 

there is quite a bit more savings available. 

Mr. WAXMAN. As States look for ways to improve their energy efficiency, where should they look first? Where can they get the biggest bang for their buck? 

93 

Mr. NADEL. It is going to vary to some extent from State to 

State. It will often be electricity because electricity is a premiumpriced energy source that is very good for highly exacting applications, but it is a little bit more expensive. Obviously, if it is a cold 

State, they should be looking at heating. If it is a warm State, they 

should be looking at cooling. There are lots of opportunities in industry, in—throughout the country, so lots of different opportunities everywhere. 

Mr. WAXMAN. Mr. Clemmer, for renewables, EPA looked at what 

States were achieving in each region of the country, and then applied the regional estimate to each of the States in the region. 

Again, was this a conservative approach? Could many or most 

States do more at a reasonable cost, and would they benefit from 

doing that? 

Mr. CLEMMER. Yes. EPA’s approach is very conservative. It basically was—is a business-as-usual approach that says States are 

going to meet their RPS requirements. For some States, they had 

higher levels, but for the most part, at the national level, the 

amount of renewable energy was essentially business as usual, if 

States just implement their RPS’s. 

We did an analysis that showed that they could go twice as far 

as that and achieve 25 percent nationally, and achieve deeper 

emission reductions overall for the—for their proposals for the 

States. As with ACEEE, we also included higher levels of efficiency 

in that analysis based on what the States are already achieving. 

So we think it is conservative, and there are some issues in their 

methodology with renewables too where some States are actually 

producing less renewable energy in 2030 than they are today because of the methodology they applied, and so we are hoping that 

that gets fixed. 

Mr. WAXMAN. Um-hum. Many of my Republican colleagues claim 

that the Clean Power Plan will hurt consumers and put a drag on 

the economy. I think you have heard some of them this morning. 

I disagree. EPA’s Clean Power Plan will help drive technological innovation in clean energy and efficiency technologies. I think that 

will be a huge benefit to the U.S. economy, boosting manufacturing 

and competitiveness. And above all it will take a critical step toward cutting dangerous carbon pollution and mitigating climate 

change. 

Do you agree with that? 

Mr. CLEMMER. I strongly agree with that. In fact, our analysis, 

which we used the EIA’s national energy modeling system to do 

this analysis, it was a modified version of that, we found that the 

benefits in 2020 were 3 times the cost, and they were even higher 

in 2030, and part of that has to do with implementing efficiency, 

which is very cheap, and cost-effective renewable technologies, but 

the other part of it is the public health and emission benefits both 

from reducing carbon, but also from reducing criteria pollutants, 

has a—there is a huge economic benefit to that. 

Mr. WAXMAN. So do you think that some of these Republicans 

are just engaging in scare tactics to attack the proposal? 

Mr. CLEMMER. I think there is a lot of rhetoric being thrown 

around, yes, and I think it would be good to have some, you know, 

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actual data out there to look at different alternatives to see what 

is the best approach for achieving the—— 

Mr. WAXMAN. Is looking at data the same thing as looking at evidence? Is that sort of like science? 

Mr. CLEMMER. Science and economics, yes, and engineering, yes, 

all of that. 

Mr. WAXMAN. All of that. OK, thank you. 

Mr. WHITFIELD. Thank you, Mr. Waxman. 

And at this time, we recognize the gentleman from Virginia, Mr. 

Griffith, for 5 minutes. 

Mr. GRIFFITH. Thank you, Mr. Chairman. 

You know, it is very interesting, it may be rhetoric to some, but 

I represent the coalfields in Appalachia and southwest Virginia. We 

lose jobs on a regular basis over the last couple of years, another 

135 this week. Jobs that paid between $75,000 and $100,000. They 

are good-paying jobs in a region that doesn’t have other jobs. As 

Mr. Siegel pointed out, Appalachia has long suffered from not having good-paying jobs, and energy extraction is one of the ways that 

we can offset that. 

When you look at businesses closing, and you realize that these 

are real people and real families whose roots go back in the community for generations, it is just really hard to sit here and hear 

people say that there is just a lot of rhetoric out there. These are 

real people; people that I know, people that I care for, people that 

want to work and want to live in the communities in which their 

parents, their grandparents, their great-grandparents, and their 

great-great-grandparents have lived in. And everybody always 

wants to say, well, we can shift or we can alternate to something 

else, but, you know, my region also heard those same arguments 

on furniture manufacturing and textiles and tobacco. Those were 

our big industries in the region, along with general agriculture and 

some other things thrown in. And now, as Dr. Weinstein said earlier, he is not sure whether there is a war on coal. I can assure 

you there is. Living in the middle of the fields out there and seeing 

the people who are affected, there is a war on coal. 

But I would have to ask you, Dr. Weinstein, when you are losing 

these jobs, that clearly affects the economy of my region, but you 

indicated, and I think you are correct, that when you put the pressures on coal that have been placed on coal over the last few years, 

you are going to drive energy costs up. Is that not correct? 

Mr. WEINSTEIN. I would say that, you know, other things being 

equal, if coal is going to contribute less to the power grid, and other 

forms of energy are more expensive, then obviously that is going 

to be passed on to businesses and consumers. So that is why I 

argue that we—that EPA and other regulatory agencies need to 

proceed with caution, with a rule of reason when promulgating 

these, you know, the final rules—— 

Mr. GRIFFITH. And I would agree. 

Mr. WEINSTEIN [continuing]. Of the greenhouse gas emissions. 

Mr. GRIFFITH. And I would agree. We have to proceed with reason and with caution, and to make sure that we let the science get 

in front of the regulations, and not have the regulations in front 

of the science. And I couldn’t agree with you more, which is why 

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nology, because we have to continue to do the research, but we cannot eliminate coal, which seems to be the goal of this administration, without having that passed on to the consumers. And interestingly, the President said so in his 2008 interview with the San 

Francisco Chronicle. He said these costs will necessarily be passed 

on to the consumers. What people often forget is they are the consumers. And when those consumers happen to be large manufacturing facilities, and their facilities start to age, wouldn’t you agree 

that some people, depending on the product being manufactured, 

would have to look at areas of the world where they can compete 

better because we have driven our energy costs up. Wouldn’t you 

agree with that, Dr. Weinstein? 

Mr. WEINSTEIN. No, that is absolutely true, and one of the reasons we are seeing a revival in this Nation’s manufacturing base 

is because our power costs, our energy costs in general are lower 

than in most other countries. That is one of the reasons that we 

find companies from Germany, where power costs are so high, moving their operations or expanding in places like Texas and Louisiana. So in a perverse way, that is kind of good for the U.S. 

Mr. GRIFFITH. Yes. 

Mr. WEINSTEIN. Something important hasn’t been mentioned 

today, and that is the—you would think that the United States is 

an energy wastrel, but we are not. We have improved energy efficiency more in the United States than in any other country over 

the last 30 years. Today, we get $1 of economic output with half 

of the energy input that was required 30 years ago, and we need 

to keep that in mind. We have made tremendous progress in terms 

of energy efficiency. 

Mr. GRIFFITH. And we have, and we can do that and continue to 

use coal as well, and we should improve on all aspects of our energy, and we should always be looking for ways that we can make 

it more environmentally friendly. 

With that, Mr. Clemmer, I would ask, have—has your group 

studied the impact of wind on birds? And Mr. Shimkus mentioned 

earlier the impact with the sound, have you all studied that impact, the loss of life to numerous species of birds? 

Mr. CLEMMER. We are part of the National Wind Coordinating 

Collaborative that thoroughly researched that issue and found that 

the impacts on avians from wind turbines are relatively small compared to other things, including—— 

Mr. GRIFFITH. And it may be—— 

Mr. CLEMMER [continuing]. Fossil fuel development, and coal and 

nuclear plants. 

Mr. GRIFFITH. And it may be relatively small compared to some 

other things in your opinions, but I would have to say there are 

some opinions that, while agreeing that some fossil fuels have 

issues as well, wind needs to do better siting, et cetera, and I 

would ask that we include into the record, Mr. Chairman, if we 

could, the spring edition of the magazine of American Bird Conservancy—yes, I know it probably shocks my colleagues I read this on 

a regular basis—in which it includes an article on the top 10 myths 

about wind power and birds. 

Mr. WHITFIELD. Without objection, we will enter this into the 

record. 

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Mr. WHITFIELD. The gentleman’s time has expired. 

At this time, we recognize the gentleman from Texas, Mr. Green, 

for 5 minutes. 

Mr. GREEN. Thank you, Mr. Chairman, and the ranking member 

for holding the hearing today. 

The recently finalized EPA carbon rule has raised some questions, and hopefully, through a series of hearings, we can get answers. 

Before the 4 blocks of the rule for existing power plants were 

proposed and finalized, Texas is doing its part to reduce carbon 

emissions. Thanks to the rapid increase and production of natural 

gas from the Permian Basin and the Eagle Ford shale, we have 

been a leader in fuel switching. Thanks to an abundant wind resource, Texas now has more than 14,000 megawatts of wind power. 

Both of these resources are supplanting coal as our base-load fuel. 

On the energy efficiency front, Texas has been a leader as well. For 

older buildings, Texas has passed laws to encourage retrofits and 

increase access to financing. For the new buildings, Texas put the 

2009 Energy Conservation Code into effect that requires 15 percent 

more efficiency. Our city of Houston is the leader in Texas by requiring an additional 10 percent above that 2009 code. However, in 

the utilities section, there is—may be some room for improvement, 

and that is how we improve that interests me. 

I support the EPA’s mandated duty to regulate carbon. The recent rule has raised some eyebrows, not just amongst the regulated 

entities, but across the board. I have particular interest in block 4 

in the energy efficiency block, and we have reviewed the rule and 

the EPA calculations. There are some questions I would like to 

have answered. 

I am happy the panel is before us, and I believe we can answer 

some of the questions that relate to the States. 

Mr. Nadel, energy efficiency is often called the silent fuel. You 

state in your testimony that energy efficiency should be the cornerstone of all-of-the-above energy policy. The ACEEE has created a 

State efficiency standard scoreboard which examines 29 variables 

in 6 categories. Does the ACEEE scorecard offer a statewide annual electric savings rate? 

Mr. NADEL. No, we haven’t—wait, yes, it does. We do provide 

that figure for each of the individual States. It is on Table 14 of 

our most recent one. 

Mr. GREEN. OK. 

Mr. NADEL. If you have a question about a particular State, I 

would be happy to answer it. 

Mr. GREEN. The ACEEE rates California as number 2, is that 

correct? 

Mr. NADEL. Overall, yes. 

Mr. GREEN. OK. 

Mr. NADEL. California was number 2. 

Mr. GREEN. Do you have a sense of California’s annual savings 

rate? 

Mr. NADEL. California, for electricity in 2011, which is the numbers I have in front of me, saved 1.35 percent of their electricity 

through energy efficiency. 

Mr. GREEN. OK. 

104 

Mr. NADEL. They were fourth in that category. 

Mr. GREEN. EPA believes that, ultimately, States can reasonably 

achieve a 1.5 percent savings rate per year. Is that generally correct? 

Mr. NADEL. Yes, they do. 

Mr. GREEN. If California ranks number 2 with approximately 1.3 

annual savings, how do the bottom third of the States reasonably 

achieve 1.5? 

Mr. NADEL. California’s overall number too, they are not as high 

as in the electricity savings. In terms of States that are already 

doing the 1.5, that includes Arizona, Massachusetts, Rhode Island, 

Vermont, are all achieving those already, and there are several 

other States that plan to do it in the next year or 2. 

Mr. GREEN. In your testimony, you state the Federal Government can help and encourage States through guides and assistance. What types of the policy or guides are necessary to achieve 

that 1.5 percent? 

Mr. NADEL. Mainly, it will have to come at the State level. They 

will have to work typically with the utilities to offer energy efficiency programs for consumers and businesses. Federal Government can provide technical assistance, information on best practices, those types of things I think would aid the States to do what 

they can do. 

Mr. GREEN. The EPA’s technical support documents show that 

engineering-based studies state that the maximum achievable energy efficiency goal is .5—0.5 percent annual savings rate. How 

does EPA achieve the 1.5 percent when various engineering and— 

based studies state that the—that level is not possible? 

Mr. NADEL. Many of the engineering studies that I am familiar 

with show that 1.5 or even 2 percent or higher are possible, as witnessed by the fact that a number of States are actually achieving 

that. 

Mr. GREEN. OK. Do pollution controls affect the power plants’ energy efficiency? 

Mr. NADEL. Yes, they do a little. 

Mr. GREEN. OK, do pollution controls actually lower the efficiency of the power plants? 

Mr. NADEL. Commonly, yes. It varies from plant to plant. 

Mr. GREEN. OK. Can residents or customers achieve enough energy savings through appliances and thermostats to offset loss of 

the power plants? 

Mr. NADEL. I haven’t done those calculations. I would want to 

enter—— 

Mr. GREEN. Mr. Chairman, I know I only have 9 seconds left, but 

I would like to ask Mr. Tanton, in your statement, the—you say 

that production tax credit has led buildings and enormous amounts 

of variable and volatile electric—electrical generation, threatening 

State reliability to the electrical grid. How does enormous amounts 

of volatile production lead to problems with the State grid? It 

seems like if we are producing more, it would give more certainty 

to the grids. 

Mr. TANTON. Well, you need to keep supply and demand in perfect harmony. So as more volatile generation comes online, less 

105 

volatile or more stable generation has to go offline, but they have 

to be standing-by. They have to be idling, as it were. 

Mr. GREEN. Yes. 

Mr. TANTON. And in that operation, it threatens the grid because 

they can’t respond fast enough. They can respond fast enough if 

you have a little bit of wind or solar on the system, because the 

typical marginal unit is a fast-responding combustion turbine or 

something like that. If you have a lot of variability from the wind, 

then you start dispatching your base-load units, which can’t respond fast enough. If you can’t respond fast enough, the grid suffers a shortage, i.e., a blackout or brownout. 

Mr. GREEN. Well—— 

Mr. WHITFIELD. The gentleman’s time has expired. 

Mr. GREEN. Thank you, Mr. Chairman. Obviously, it is a great 

panel. 

Mr. WHITFIELD. At this time, we recognize the gentleman from 

West Virginia, Mr. McKinley, 5 minutes. 

Mr. MCKINLEY. Thank you, Mr. Chairman. 

Dr. Weinstein, with all due respect, you had said—you used the 

word hyperbolae about the war on coal, and I really want to reinforce what has been mentioned by a few of the people that preceded me, that there is a war on coal, and anyone needs to come 

to the coal producing areas around this country and understand 

what is going on for this war on coal. The uncertainty that is swirling about the industry, even the gas industry is now becoming 

more concerned that once they—once the EPA’s successful battle on 

coal, it is going to switch over to them next. And—because my— 

the—I think the general understanding is, for those of us in the energy fields, that the—this administration believes that we can have 

higher utility bills. We should be able to—I have heard them refer 

to Europe, the European bills are higher so, therefore, we can afford it. I just want to get past that it is not hyperbolae, it is real, 

and it—— 

Mr. WEINSTEIN. Well, you understand that I am a dispassionate 

academic, so, you know—— 

Mr. MCKINLEY. Well—— 

Mr. WEINSTEIN [continuing]. I have to base my comments on 

facts. 

Mr. MCKINLEY. I am engineer, and I base my facts—on facts and 

real life, not academic. I am facing those families that are struggling, that are unemployed, that are—they are worried about what 

is going to happen next to them. I have—in eastern Ohio where we 

have an aluminum plant with approximately 1,000 employees gone 

because the cost of electricity, they can’t product it, they can’t 

produce aluminum, because aluminum—about 60 percent of the 

cost of producing aluminum is electricity, and when that rate continues to hike because of what policies we are setting here at the 

Federal Government level, we are putting them out. Ravenswood, 

the same thing; 1,000 employees down there. It is just having a 

startling effect, so I just wanted to build off this, these Federal 

policies, how Federal policies are affecting States. They are affecting States. And the coal industry, for all of you to understand, my 

grandfather was a coalminer and so I can relate very comfortably 

to what this is doing. When you shut down a coalmine because of 

106 

the structure that we are doing here in Washington, you are affecting not only the coalminer, but you are affecting all those related 

industries that are involved with—the timber industry, the concrete industry, the machinists, the building, the machinists, all the 

people that are involved in, let alone the jobs that are on the outside industry. So we have to be very careful of the policies that we 

set. 

But let me return back, if I could, to the—what I understand is 

the headline of this meeting, is the economic impact of State energy policies. And each of you have presented some very interesting 

scenarios about your research into the—what the States are doing, 

as laboratories of democracy with this. So if I could go down a list 

with each of the 6 of you, would you give us, in a short time frame, 

what would be the number 1 thing that we should learn from your 

research? One thing, and I will start with you, Mr. Tanton, what 

would be the number 1 action statement that we should be listening to in Washington to what you have learned, and what is your 

opinion? Just 1 thing. 

Mr. TANTON. There are so many things, but if you—— 

Mr. MCKINLEY. All right, I—— 

Mr. TANTON. If you ask for 1—— 

Mr. MCKINLEY. Try and limit to 1. 

Mr. TANTON [continuing]. I will give you 1. Separate the end goal 

from the mechanism of achieving it. Keep in mind as you do that 

that economic forecasts are forecasts, they are not answers, they 

raise questions. You have heard a lot of estimates of forecast this 

morning. I would argue they should be used to raise questions, and 

build in contingencies in your policies and automatic off-ramps. 

Mr. MCKINLEY. Thank you. Mr. Siegel? 

Mr. SIEGEL. I would suggest that—— 

VOICE. Microphone. 

Mr. MCKINLEY. I can’t—I am sorry. 

Mr. SIEGEL [continuing]. And that energy—thank you—energy is 

important for reducing inequality, and that the places that produce 

high costs of energy like California have enormous—or New York, 

have enormous, enormous inequality, and they are ill suited to lecture the rest of the country—— 

Mr. MCKINLEY. All right. 

Mr. SIEGEL [continuing]. On how we should proceed. 

Mr. MCKINLEY. Thank you. Mr. Clemmer? 

Mr. CLEMMER. The most important thing from my perspective is 

that we need to transition even further than we have gone to low 

carbon energy, whether that be using carbon caption storage with 

coal or natural gas, producing low-carbon energy from renewables, 

nuclear power, we need—the costs of climate change are just too 

tremendous, and we are already seeing that with the cost of extreme weather on the increase and the frequency happening, and 

so we need to move in that direction. 

Mr. MCKINLEY. Steve? 

Mr. NADEL. Yes, I would note that energy efficiency typically provides about a 25 percent return on investment, and is very laborintensive and is particularly good at generating jobs. 

Mr. MCKINLEY. OK. 

107 

Mr. MR. POLZIN. The local economic impacts of energy development are real and they are significant. There are some supposedly—there are some negative aspects. For example, housing in 

rural areas, but the benefits, the increased wages and employment, 

provide resources that we can address these other effects. 

Mr. MCKINLEY. OK. Dr. Weinstein? 

Mr. WEINSTEIN. I would argue that when it comes to energy development, if there is no evidence the States are doing a poor job, 

the Feds ought to stay out of the way. 

Mr. MCKINLEY. Thank you. 

Mr. WEINSTEIN. And secondly, it is time to remove all restrictions 

from the export of natural gas and oil. 

Mr. MCKINLEY. OK. 

Mr. WEINSTEIN. And coal. 

Mr. MCKINLEY. Thank you very much. 

Mr. WHITFIELD. Gentleman’s time has expired. 

At this time, recognize the gentlelady from California, Mrs. 

Capps, for 5 minutes. 

Mrs. CAPPS. Thank you, Mr. Chairman, for holding this hearing 

and for collecting together such an interesting panel. I want to 

thank each of you panelists for your testimony. 

I think we would all agree that fossil fuels are a finite resource, 

which means that sooner or later we will have no choice but to find 

alternative energy sources. Knowing this, I believe we owe it to our 

children and grandchildren to begin moving in that direction now, 

rather than waiting years down the road when it may be too late. 

My home State, which has gotten some attention this morning, 

California, understands this and has been a leader in implementing clean and sustainable energy policies. Setting renewable 

production standards and increasing investments in energy efficiency are 2 of the more critical elements of these policies. These 

policies have paid significant dividends for my State and for my 

district, which is on California’s central coast. For example, my district is home to 2 of the largest operating solar farms in the world, 

and more are on the way. Together, the California Valley Solar 

Ranch and the Topaz Solar Farms in eastern San Luis Obispo 

County are already generating well over 550 megawatts of electricity, and powering hundreds of thousands of California homes. 

These projects created hundreds of local jobs as they were being 

built, and still do, and injected hundreds of millions of dollars into 

our local economy. One of these projects used Federal loan assistance, and the other was financed entirely with private capital. 

It seems to me that at least in my district, California’s policies 

were key drivers of economic growth and private investment. 

And my question, Mr. Clemmer, I am hoping you would agree, 

I am assuming you would, but I wanted you to talk briefly about 

the ways that Government policies can support renewables and impact private investments in renewable energy projects. How is this 

partnership going to work? 

Mr. CLEMMER. Thanks. Yes, good question. So, yes, I mean I 

would agree, as my testimony alluded to, that projects like that in 

California and other States around the country are being driven in 

large part by State renewable electricity standards, which have 

been beneficial in not only deploying the technologies, but driving 

108 

down the cost. And we have seen that dramatically with wind and 

solar PV in particular that that is happening. 

The Federal policies, I think, to learn from the States, is we need 

long-term, stable, predictable policies to facilitate that investment, 

to continue to invest in manufacturing. The production tax credit 

has been a good policy, but the short-term extensions of it has created a boom-bust cycle that has not been good for the industry. 

Mrs. CAPPS. Yes. 

Mr. CLEMMER. We need something that is longer term, whether 

that be a longer-term tax credit, whether that be a national renewable standard is something we have been advocating for for years, 

where UCS and EIA have done many analyses over the last 15 

years showing large national benefits to adopting a national renewable standard. 

Mrs. CAPPS. I agree with you. And I have a question now for you, 

Mr. Nadel. My district has also seen significant economic benefits 

from California’s strong energy efficiency standards. These standards have driven researchers and entrepreneurs to innovate and 

develop new products to meet these standards. We have at my 

home institution at UC Santa Barbara, the Institute for Energy Efficiency, which is dedicated entirely to developing cutting-edge energy efficiency technologies. And we also have private companies, 

for example, like Transphorm, which is a global leader in energyefficient power conversion technologies. 

I believe there is a clear link between strong energy efficiency 

standards and innovation. 

So could you elaborate on this? I have a little bit of time left. 

How do innovators benefit from strong energy efficiency standards? 

Is this the winning path for the future? 

Mr. NADEL. Yes, we do believe there is. Lots of new technologies 

keep being developed all the time. You have pointed out some. Just 

to mention 2 technologies that were developed first in California, 

electronic ballasts which now power all the fluorescent lamps, as 

well as low emissivity coatings on windows that help keep some of 

the heat out. Those are examples. 

Another area where California has really been leading is what 

we call intelligent efficiency. It is that marriage between energy efficiency and Silicon Valley, if you will. How do we use information 

and communication technologies to understand where the energy is 

being used in real time and immediately correct it, either automatically or by giving information to the operator. 

So sometimes people talk about energy efficiency being the lowhanging fruit. Fortunately, the fruit keeps growing back on the 

trees as, through research, as you pointed out, we keep developing 

new ways to save energy. 

Mrs. CAPPS. Thank you. Yield back. 

Mr. WHITFIELD. Gentlelady yields back. 

At this time, recognize the gentleman from Texas, Mr. Barton, 

for 5 minutes. 

Mr. BARTON. Mr. Chairman, I—Mr. Terry got here before me. I 

would—— 

Mr. WHITFIELD. Well, they tell me that you had been here earlier, so if you are going to yield—— 

Mr. BARTON. No, I am—— 

109 

Mr. WHITFIELD [continuing]. To Mr. Terry—— 

Mr. BARTON. I am happy to let Lee go and then—— 

Mr. WHITFIELD. All right. 

Mr. BARTON [continuing]. I will be the cleanup—— 

Mr. WHITFIELD. Recognize Mr. Terry from Nebraska for 5 minutes. 

Mr. TERRY. Be the closer. 

Mr. BARTON. That is right, baby. 

Mr. TERRY. That is awesome. So a little over a year ago, our 

chairman led a group of us on this side of the aisle, not on tax dollars, to go to western North Dakota, and it was educational in the 

sense that we went from the very beginnings of a project, all the 

way to when it is just pumping and it is—all the construction has 

finished. And it was extremely interesting to see what little footprint there is after the construction has finished and it is just 

pumping and pumping and pumping. But one of the things that 

really stood out to me, especially when we were talking to the 

workers there, is how highly paid they are. And I think that is a 

product, probably, or market, free market, you know, when someone is in demand, they can garner higher wages. But as Ed can testify to, we were being told that just a lumper that unloads and 

loads trucks for a warehouse in that area of North Dakota earns 

$60,000 to start. 

Now, we talked to some of the folks that were putting together 

the drilling rig, and they were in the 6 figures. So it is incredible 

to me the high wages, and the number and volume of young people, 

men and women, that are there for the good wages. And I think 

that is one of the things that we don’t think about when we talk 

about the gas and oil production in the United States, is it is a way 

of elevating lower income workers to higher wages. And, frankly, 

it is interesting that a machine operator is making virtually—not 

virtually, is making 80 percent of what a United States Congress 

is making. That is awesome. 

So, Mr. Polzin, your area of expertise is in the economics that 

this brings. What is the—looking at something like Pennsylvania 

and North Dakota, and the economic driver of the oil boom and gas 

boom, can you tell us what impacts that really has, not only on the 

local economy, the State economy, but the national economy, that 

one—that guy that was running the machinery, making $130,000, 

$140,000 a year, what is the multiplier effect of that? Mr. Polzin— 

Dr. Polzin. 

Mr. POLZIN. When you look at a local economy—— 

Mr. TERRY. Microphone. 

Mr. POLZIN. When you look at a local economy, it—the actual impact will vary depending on a number of factors, but if you—the 

real specific question is what is the multiplier for an oil and gas 

job, I would have to go back and look it up, but I think it is somewhere around 2.5 or 2.8. That sounds lower than, you know, a 

turnover ratio of 7 or something like that, which really has no 

exact meaning, but that 2.5, 2.7 comes out of a number of economic 

models, one called implant, and I think that is a pretty solid figure. 

So you are looking at an additional 1.8 jobs for every oil and gas 

job. 

110 

Mr. TERRY. That is interesting, and so—and the other part about 

this is when a pump is just there and it is on such a very small 

pad, less than the size of half of this room, the landowners were 

telling us how pleased they were. 

Mr. POLZIN. They were very pleased. 

Mr. TERRY. They were making royalties off of that. And it is interesting to me that States like New York are fighting oil and gas 

production in their States when I—it—Mr. Siegel, in the last 27 

seconds, why would States not want to use their natural resources 

to elevate especially lower income people in their State? 

Mr. SIEGEL. Wealthy people want a pristine environment. If you 

are a wealthy person living in New York City and you have a summer home upstate, you don’t want economic growth. But besides 

that, there is something that has come out of the universities, that 

is the idea that progress as was traditionally understood was industrialization, but industrialization in much of academia is seen 

negatively. It is seen as producing the effluvients of modern economic society, and there is a desire to avoid that. 

So on a local level, you ask people why don’t you want fracking, 

they will say too many roughnecks, too many crowded roads, too 

many prostitutes. And then you push them a little and you ask and 

you say, well, but doesn’t this reduce economic inequality? Won’t 

this pass? And then pumping—you will talk about—is there. That 

is what they are opposed to. They don’t want industrialization. 

They don’t want manufacturing to revive. What gentry liberals 

want is the status quo for themselves, and that is very difficult to 

deal with, and that is a function of extreme wealth. We have considerable wealth in New York concentrated in the New York metro 

area, coming out of the financial services, and as upstate declines 

and declines further, it is easier to buy properties up there and 

that is fine for some people. 

Mr. WHITFIELD. Gentleman’s time has expired. 

At this time, recognize the gentleman from New York, Mr. 

Tonko, for 5 minutes. 

Mr. TONKO. Thank you, Mr. Chair. 

Dr. Weinstein, just a clarification on the end portion of your 

statement about contrasting the renewables with oil and gas and 

subsidies. Did you state that there are no subsidies on oil and gas? 

Mr. WEINSTEIN. No, I didn’t say that. 

Mr. TONKO. What did you say? 

Mr. WEINSTEIN. I said that in the last 5 years—5 or 6 years, according to the Obama administration, 75,000 new jobs had been 

created in renewable energy, and then I added that Federal subsidies for renewables have been about $50 billion over that period. 

I then said that the oil and gas industry has added more than 

700,000 jobs over that period with no new subsidies. 

Mr. TONKO. What are the subsidies on oil and gas? 

Mr. WEINSTEIN. This can take us very far afield of the hearing 

today—— 

Mr. TONKO. No, but just—— 

Mr. WEINSTEIN [continuing]. Because I would argue that the oil 

and gas industry does not receive subsidies. What the oil and gas 

industry receives are tax benefits that are available to just about 

every manufacturing and mining—— 

111 

Mr. TONKO. Isn’t that semantics? 

Mr. WEINSTEIN. No, it is not—well, we could turn it into a semantic argument. We can look at all of the tax preferences that are 

available to all industries, but no matter how you want to define 

them, relative to output, the subsidies to renewables are way ahead 

of any—— 

Mr. TONKO. And—— 

Mr. WEINSTEIN [continuing]. Of any definition of subsidies—— 

Mr. TONKO. OK, so are—— 

Mr. WEINSTEIN [continuing]. Through fossil fuel. 

Mr. TONKO [continuing]. Are your tax benefits permanent? 

Mr. WEINSTEIN. Excuse me? 

Mr. TONKO. Are your tax benefits for oil and gas permanent? 

Mr. WEINSTEIN. Well, they are—what is in the code is in the code 

until they are—— 

Mr. TONKO. No, no, no, that is what I am asking, is it permanent? 

Mr. WEINSTEIN. Well, nothing in the tax code is permanent. 

Mr. TONKO. Well, I think it is a lot more permanent than some 

of the benefits given in subsidy format to renewables. 

Let me just state, the renewable energy and energy efficiency 

programs are a win-win for the environment and the economy. 

They create jobs, save consumers money on their electric bills, and 

do cut dangerous carbon pollution, which is an important element 

of concern. Despite these benefits, or perhaps because of them, conservative activists organizations have been pushing bills and State 

legislative bodies to weaken or repeal State clean energy and energy efficiency programs. I find it troubling that anyone would fight 

efforts to make our economy more energy efficient or more energy 

secure by diversifying our energy options by adding renewable 

sources. 

Mr. Clemmer, can you briefly describe what has been happening 

in some statehouses? Who is behind an effort to weaken or repeal 

clean energy and energy efficiency programs? 

Mr. CLEMMER. Sure, I would be happy to. Yes, they have been 

under attack the last few years. The American Legislative Exchange Council, some of the groups that Mr. Tanton is associated 

with, the Beacon Hill Institute, the Koch brothers have been on the 

attack, and actually, with respect to renewable standards, I can say 

that they have failed miserably, with the exception of this year 

there was a freeze in Ohio, but in every other case, they have not 

gone through. And I would like to highlight an example of Kansas, 

for example, which has been kind of front and center for some of 

these attacks, and I—my feeling is the big reason why that they 

are failing is because they are seeing the economic development 

benefits of wind development in their State, and on top of that, 

they know from their Public Utility Commission, the Kansas Corporation Commission, that the cost of meeting these standards 

have been on the order of 1 to 2 percent. But the studies that are 

coming out from the Beacon Hill Institute, that Mr. Tanton references in his testimony, put the cost in Kansas at 45 percent increase in electricity rates. It is just, in my opinion, disingenuous 

and seriously flawed. I would be happy to talk about what those 

problems are if you would like me to. 

112 

Mr. TONKO. Thank you. In June, the Ohio Governor signed a Bill 

freezing the State’s renewable energy standard for 2 years. He did 

this over the objections of not only the wind industry and environmental organizations, but also numerous companies including Ingersoll-Rand, Honeywell, Honda, Owens Corning and Whirlpool. 

Mr. Nadel, your organization worked with the Ohio Manufacturing Association to document the potential costs associated with 

delaying implementation of the State’s clean energy and energy efficiency standards. What did you find? 

Mr. NADEL. We found that these energy efficiency standards 

would save Ohio ratepayers, businesses and consumers, more than 

$5 billion by 2020. That was the mixture of lower electricity bills 

as well as the impact of the energy efficiency on the wholesale markets, and under supply and demand, if demand goes down, prices 

go down. Now that they will be saving less energy, the prices will 

be higher. 

Mr. TONKO. Thank you, sir. And I note my time has expired, 

so—— 

Mr. WHITFIELD. Thank you very much. 

At this time, recognize the gentleman from Texas, Mr. Barton, 

for 5 minutes. 

Mr. BARTON. Thank you, Mr. Chairman. 

I am—have to do a few disclosure requirements. We have an expert from Texas, Dr. Bernard Weinstein, here. He is with the 

Maguire Energy Institute. I know Cary Maguire very well, and it 

is at the Cox School of Business, I know the Cox family very well. 

So I am biased in that I know one of the witnesses that are here 

today, and I know the institution that he represents. 

The title of our hearing, Mr. Chairman, is ‘‘Laboratories of Democracy: The Economic Impact of State Energy Policies,’’ and I 

think it is important, as the Republican side, to emphasize that we 

support the rights of States to have energy policies, and, if you support that right, then you support the rights of States to have different energy policies. And that is certainly the case, if you compare my home State of Texas with the Golden Gate State of California, or the Empire State of New York. 

So I am going to ask Dr. Weinstein, in terms of environmental 

issues in Texas, is there any evidence that, because of our energy 

policy, our environment is worse than New York or California? 

Mr. WEINSTEIN. Well, understand that we do have a lot of intensive manufacturing industries, including refining and 

petrochemcials. You don’t find industries of that nature prevalent 

in New York State, at least not to the degree we have in Texas. 

So, in that sense, yes, you know, we have more challenges—— 

Mr. BARTON. But we are in attainment in Texas on all air quality 

standards. The DFW area and the Houston area have been in nonattainment, but under current law, current standards, we are in attainment. If they tighten them up even tighter for ozone, we might 

go back into nonattainment, but certainly, we are nowhere near 

nonattainment status of, say, the Los Angeles basin, which has got 

the worse air quality in the country for 30 years in a row, and 

looks like they are going to keep that for another 10 or 15 years. 

So I am not aware of any outstanding environment issues that it 

put us, us being Texas, lower in the pecking order than the other 

113 

urbanized States like California, New York, Florida, that are, you 

know, highly populated. 

Mr. WEINSTEIN. Well, no, I agree, but the point I was trying to 

make is that despite the fact that we do have a lot of heavy industry, you know, we have been able to maintain compliance, you 

know, with EPA standards across the State—— 

Mr. BARTON. Yes. 

Mr. WEINSTEIN [continuing]. And by just about any measure you 

want to use, whether we are talking about air quality, water quality, any other measure of environmental quality, it is improving in 

Texas even as energy production increases. 

Mr. BARTON. Well, we say in Texas that we have created more 

jobs in the last 10 years than the rest of the country combined. Is 

that a true statement? 

Mr. WEINSTEIN. Well, not quite. 

Mr. BARTON. Most of—— 

Mr. WEINSTEIN. Let me—I will put it this way. 

Mr. BARTON. Well, compare us to California. Job—you know, 

California is the most populous State, Texas is number 2. 

Mr. WEINSTEIN. Yes, I think—let me check my notes. I said earlier that in the last 18 months, Texas has added 548,000 jobs—— 

Mr. BARTON. Do you know what—— 

Mr. WEINSTEIN [continuing]. In 18 months. OK? 

Mr. BARTON. Do you know what California has added? 

Mr. WEINSTEIN. California, which is half again as large as Texas, 

has only added 322,000 jobs over the last 6 years. So there is really 

no comparison in terms of job growth. 

Mr. BARTON. As a general statement, it is fair to say that Texas 

has created more jobs than California. 

Mr. WEINSTEIN. Yes, by far. 

Mr. BARTON. Unless you go back 100 years or something, or go 

back to 1849, I mean it is—— 

Mr. WEINSTEIN. About 40 percent of all the jobs created in the 

U.S. since 2001 have been in the State of Texas. 

Mr. BARTON. OK. What is—do you know what the average electricity price in California is compared to the average electricity 

price in Texas? 

Mr. WEINSTEIN. I don’t know what specifically—— 

Mr. BARTON. Well, do you know what the—— 

Mr. WEINSTEIN [continuing]. But I know it is a lot higher in California. 

Mr. BARTON. Do you know what your electricity price is at your 

home in Dallas? 

Mr. WEINSTEIN. Well, I know that my electric bills have been 

falling for the last couple of years, even though the temperature 

has been rising, and that is because we get about 60 percent of our 

electricity from natural gas—— 

Mr. BARTON. Well, if your—— 

Mr. WEINSTEIN [continuing]. In the State of Texas. 

Mr. BARTON. You know, interestingly, Boone Pickens didn’t know 

what he was paying for electricity either, but if you are as smart 

as I think you are, you have a wife that pays the bill, you are probably paying about 9 to 10 cents retail for electricity per kilowatt. 

If you—— 

114 

Mr. WEINSTEIN. No, actually, I think I am paying 8 1/2 cents, but 

remember, we have a deregulated market in Texas. 

Mr. BARTON. Well, if you are in California, you couldn’t find an 

8 1/2 cent rate, it would be at least 20 cents, and you are lucky 

if you can find that. 

Mr. WEINSTEIN. You are probably right. 

Mr. BARTON. Yes, I am right. I am not probably right, I am right. 

Well, Mr. Chairman, let me simply say that, again, I support the 

rights of States to have energy policies, but if you look at my home 

State of Texas, we have the highest economic growth in the country, we have as good air quality and water quality as any other 

State in the country, and we have a private-sector-based energy 

policy that has created more energy over the last 100 years than 

any other State in the country—— 

Mr. WEINSTEIN. Yes. 

Mr. BARTON [continuing]. And I think that is a pretty good 

record. 

Mr. WEINSTEIN. Yes, but the energy boom in Texas, North Dakota, Pennsylvania, Ohio, and other States is benefitting the entire 

country by reducing our dependence on imports, by providing cheap 

natural gas, it is holding down power bills and heating bills for 

consumers and businesses across the U.S. So it is not just us energy producers who are benefitting, the whole country is benefitting. 

Mr. WHITFIELD. Thank you very much. 

At this time, I would like to recognize the gentlelady from Florida, Ms. Castor, for 5 minutes. 

Ms. CASTOR. Thank you very much, Mr. Chairman. 

This is very timely because, in the State of Florida, our Public 

Service Commission is considering just this week about reducing 

our very modest energy efficiency goals. 

So I want to focus on, Mr. Nadel, your important point that it 

costs less to save energy than to produce energy, but there is a tension in the way States are—have organized their utility regulation. 

Consumers, homeowners, businesses save money when they conserve energy, but the business model for our investor-owned electric utilities that have monopolies in their service areas, they profit 

off of the kilowatt hour used and the large operating plants that 

are constructed. 

Mr. Nadel, do you agree that many States have significant financial incentives to construct expensive power plants? 

Mr. NADEL. Yes, I would agree with that. I would point out that 

a majority of States, but I don’t believe this includes Florida, have 

revised their regulations so if sales go down, the utilities are made 

whole, and if they achieve energy efficiency goals, the shareholders 

get a little extra incentive. So those policies have worked very well, 

but I don’t believe you have them in Florida. 

Ms. CASTOR. No, in fact, we are moving backwards. We are very 

sensitive to this, the—and I think no matter where you are from, 

what your view is, you would be concerned to learn that Florida 

ratepayers on the west coast of Florida are on the hook for $3 billion in costs for nuclear power plants that were damaged and not 

constructed. So not one kilowatt hour produced, but the ratepayers 

are still on the hook for $3 billion because the State of Florida had 

115 

the utilities advocated for an advanced recovery fee so that ratepayers would pay in advance to construct these very expensive 

plants, but didn’t protect the consumer when it come to the fact if 

the business—if the utility made a bad business decision, or, in effect, broke their nuclear power plant. So, Mr. Nadel, what could Floridians have done with $3 billion 

in the energy efficiency realm if we had those monies to devote to 

the investments under energy efficiency? 

Mr. NADEL. You could have made some very large and cost-effective investments in energy efficiency. I don’t know the exact 

amount, but you could have reduced—— 

Ms. CASTOR. Give us some examples. Just what could you spend 

$3 billion on that would help—— 

Mr. NADEL. Right. 

Ms. CASTOR [continuing]. Those things—— 

Mr. NADEL. New, more efficient air conditioners. You have quite 

a demand for air conditioning. 

Ms. CASTOR. So we could have purchased air conditioners for 

more cost-efficient air—I guess energy—more energy efficiency appliances. 

Mr. NADEL. Right. There is a new generation of air conditioners 

that uses variable speed drives, advanced controls to save 30 percent or more compared to the air conditioners that—— 

Ms. CASTOR. And air conditioning in Florida—— 

Mr. NADEL [continuing]. Were common a few years ago. 

Ms. CASTOR [continuing]. Is very important, so I bet we could 

have purchased a lot of other insulation for—— 

Mr. NADEL. Right, absolutely. 

Ms. CASTOR [continuing]. Weatherized homes. 

Mr. NADEL. Yes. You could have helped your industry. You do 

have quite a bit of industry, as one of the other witnesses pointed 

out, and helped them to be more efficient and more competitive 

there. 

Ms. CASTOR. Well, that sounds like a huge job creator. If I could 

get a lot of folks working at home and construction, and 

weatherizing homes and installing installation and all of these appliances. 

Mr. NADEL. Right. 

Ms. CASTOR. Do you agree? 

Mr. NADEL. Yes. No, I agree. No, energy efficiency does tend to 

be the low-cost resource. I would say the majority of utilities 

around the country have been very supportive of energy efficiency. 

I wouldn’t count the Florida utilities among them. 

Ms. CASTOR. Yes, so why—what do we do with this outdated 

business model if all of the incentives are on kilowatt hours produced and building large, expensive power plants, it would seem 

like, you know, especially with the challenges of the changing climate, we have to begin to look at a more modern business model 

for our utilities, so maybe they—maybe there is an incentive to 

make a little money on promoting conservation. 

Mr. NADEL. Yes. No, I agree. As I mentioned briefly, the majority 

of States now have adjustments to rates, so if sales go down, utilities can recover their fixed cost, they don’t have to eat them, and 

also that they give the shareholders incentives if they meet their 

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energy saving goals. So these are very modest cost adjustments, 

but they make it in the business interest of the utility to do what 

is in their interest. 

Ms. CASTOR. Thank you very much. 

Mr. WHITFIELD. The gentlelady yields back. 

At this time, recognize the gentleman from Illinois, Mr. 

Kinzinger, for 5 minutes. 

Mr. KINZINGER. Well, thank you, Mr. Chairman, and thank you 

all for being here and providing us with some great testimony. 

We have been discussing, obviously, and I am going to ask this 

of Mr. Tanton, Mr. Clemmer suggested the Federal Government 

should establish a Federal mandate that requires electric utilities 

to procure at least 25 percent of their power for renewable resources by 2025. 

A very similar mandate was instituted in my home State of Illinois in 2007 that demanded almost the exact same thing through 

a program called the Renewable Portfolio Standard. This program 

specifically mandated that 25 percent of the electricity sales in Illinois come from renewable resources by 2026, but it has since faltered dramatically with the Illinois legislature, which, by the way, 

is overwhelmingly Democrat, coming to the conclusion this past 

ring—this past spring that they should look at reversing this detrimental program. 

In addition to this, just last month, the Beacon Hill Institute at 

Suffolk University released a study on the potential impacts of the 

RFS in Illinois, and here are just a few of the negative impacts— 

or RPS, I am sorry, the negative impacts that this mandate will 

have on Illinois families going forward. The RPS mandate will cost 

Illinois electricity customers an additional $4.5 billion over current 

prices from 2014 to 2026. Disposable income will drop by an expected $793 million. The Illinois economy, already suffering very 

drastically by our government in Springfield, will shed some 8,000 

jobs. And some industrial businesses will see costs rise by nearly 

$300,000. 

Mr. Tanton, I see you have done some of your own work in analysis of California’s policies on the topics. What do you think the impact of a Federal mandate on this issue would be to the average 

American, should a Federal mandate such as this be put in place? 

Mr. TANTON. It would be devastating. Anybody that argues that 

prices go down or stability increases as a result of renewable portfolio standards is being disingenuous. If the renewables were more 

cost-effective, they would be adopted by the market, period. There 

are not a lot of irrational business leaders. The renewable portfolio 

standard tries to force-fit something in where it doesn’t. It recognizes the energy but not the capacity needs of a grid. I have studied California, I have studied many other States, I have worked 

internationally. We see, in fact, FERC’s own data shows that the 

States with the renewable portfolio standards have seen more 

rampant increase in electricity prices than States without them. 

That is a fact. 

Now, I would argue, however, looking at the forecast going forward, we need to keep in mind that those forecasts should be 

viewed probabilistically, not deterministically. It is not dueling 

banjos, it is not dueling forecasts. I am the first to admit that foreVerDate Mar 15 2010 14:09 Mar 02, 2015 Jkt 037690 PO 00000 Frm 00120 Fmt 6633 Sfmt 6633 F:\113-165 LABS DEMOCRACY HAVE BLBK EDITS\113-165 LABS DEMOCRACY PENDING
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casts are wrong, but the fact that forecasts are wrong should give 

us information of use. And I will use the debacle in 2000 in California as an example. The bidding protocol was predicated on having a surplus supply. We put in place, basically, reverse Dutch auction which only works, as it turns out, in surplus supply situations. 

Well, we found ourselves in a supply deficit situation, which was 

not what the forecast had said. I know because I was responsible 

for the forecast. 

As it turned out, had we put in place a biding protocol and a 

market clearing protocol of bid as paid, rather than the reverse 

Dutch auction, during those periods of supply shortage, we would 

have turned a—what ended up as a $30 billion hit to the California 

economy, into maybe a $3 billion hit. Still bad, but nowhere near 

as bad. 

Mr. KINZINGER. Right. And just the 55 seconds I have left, what 

can the Federal Government do or do better to help States in designing and implementing their own energy policies? 

Mr. TANTON. I think today’s hearing is a good example of what 

the Federal Government, broadly speaking, should do, and that is 

to provide more competent information, comprehensive information, and reduce the advocacy information. Recognize that we are 

a country of 300 million people, and 300 million people are 300 million more brains, with all due respect, than 435 members of Congress or the various State legislatures. The more brains that are 

put on making choices, the better the choice ends up. We will have 

a more diverse situation if we have more of a free market environment within which to work. 

Mr. KINZINGER. Well, thank you, sir. 

And time flies. Mr. Chairman, I will yield back. 

Mr. WHITFIELD. The gentleman’s time has expired. 

And at this time, recognize another gentleman from New York, 

Mr. Engel, for 5 minutes. 

Mr. ENGEL. Thank you. Thanks very much. Thanks very much, 

Mr. Chairman. 

You know, when it comes to this—these policies, I am about as 

open-minded as you can get. I am for renewables, but I understand 

that we cannot go from step 1 to step 10 overnight, and that fossil 

fuels are going to have to be used at least for a while, and so it 

would seem to me that we should all be working for ways to get 

the cost down, but at the same time, we don’t want to pollute the 

environment, and I think that it is a very delicate balance that we 

have to look at. 

The United States, obviously, needs to have a national energy 

policy. We want to reduce dependence on foreign oil, we want to 

keep our districts clean, and we want to lower Americans’ energy 

bills, and we try to somehow throw everything into the mix. But 

in my State of New York, we do have a model for a policy that I 

think could be implemented at the national level. Governor Cuomo 

announced the Reforming Energy Vision Initiative, which is a proposal to reform New York’s energy grid by shifting away from centralized plants, and instead having utility companies purchase energy from a multitude of small producers. This change would allow 

for greater reliance on smaller, cleaner sources, and reduce our deVerDate Mar 15 2010 14:09 Mar 02, 2015 Jkt 037690 PO 00000 Frm 00121 Fmt 6633 Sfmt 6633 F:\113-165 LABS DEMOCRACY HAVE BLBK EDITS\113-165 LABS DEMOCRACY PENDING
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pendence on a small number of plants like Indian Point, which has 

its troubles, very few miles from my district. 

So let me ask Mr. Clemmer, because in addition to the environmental and safety advantages of the Governor’s initiative, I believe 

his proposal would also produce economic benefits. Wind and solar 

power create jobs. So, Mr. Clemmer, could you discuss what kinds 

of benefits these initiatives like Governor Cuomo’s proposal might 

yield, and might this be an approach that other States can use as 

well? 

Mr. CLEMMER. Sure. The—good question. The—we put out a report in April that looked at the impacts of climate change on the 

electricity grid, and there are several different climate impacts that 

pose vulnerability. And we have seen an increase in frequency and 

severity of impacts that have caused power outages that have cost 

lots of money. And the initiative that New York is pursuing is 

probably more comprehensive than I have seen anybody else do, 

but there are other examples of States that are trying to implement similar types of programs in which—obviously, it is spending 

money to harden the electricity grid is important, but we also need 

to reduce carbon emissions as well so that we can reduce the cost 

that climate change is having on the grid. And so things like energy efficiency, distributed generation, solar PV, other renewables 

that are smaller, when an extreme weather event knocks out some 

facility like that, it has less impact on the grid than it does if it 

is a large nuclear plant or a large coal plant. And some of the recent extreme weather events that we have seen, both with the 

polar vortex, but also with actually heat waves, have caused lots 

of problems with large nuclear and coal plants in particular. 

One of the impacts from heat and drought, which is directly related to climate change, is that those plants use a tremendous 

amount of water, and renewables like wind and solar don’t use any 

water. Efficiency, obviously, reduces the need for water as well, so 

it helps reduce the vulnerability of the electricity grid to those 

types of impacts. 

Mr. ENGEL. Mr. Nadel, would you essentially agree with that? 

Mr. NADEL. Yes, I would. New York is to be commended for really taking a lead at looking at the future of the utility industry. A 

lot of people in the industry are starting to think about it, but New 

York is really taking the lead. 

The industry is changing in dramatic ways, as just about everybody in the industry will agree, and it is time to reform regulation 

to address the 21st century industry, not the 19th century industry. 

Mr. ENGEL. Thank you. 

Mr. Clemmer, the Beacon Hill study has been referenced a couple of times, and I know you have some serious concerns about it. 

I would like to give you a chance to elaborate on that. 

Mr. CLEMMER. Sure. I mentioned a couple of times some of the 

flaws in these studies, so let me just outline a few of them quickly. 

One is that they, first of all, assume it is going to pretty much 

all be wind that meets the RPS, which, obviously, there are other 

choices, but for the most part wind has been a large contributor to 

the State RPS’s, but they have assumed that wind costs are 2 to 

4 times what the actual wind contract prices have been in the 

119 

United States, documented actual real projects. They are also assuming transmission costs that are ridiculously high, 3 times as 

high as what projects have cost. There is a recent project that just 

went in in Texas that is facilitating wind projects there. 

The assumptions that they make around the impact of integrating wind, which Mr. Tanton has referred to several times, are 

way overblown. Wind does not need one-to-one backup for all of its 

generation. It does provide mostly energy to the system as he said, 

but there have been studies by regional grid operators, utilities all 

over the country looking at 20 to 30 percent renewables from variable sources that have shown very small costs for doing that, because we—utility grid operators have been doing this for decades. 

They have to manage the variability that comes from demand, from 

other power sources going off-line, and their systems are built to 

accommodate that. And so as we move towards more natural gas, 

that actually increases the flexibility on the grid to accommodate 

more renewables. And so those are just some of the assumptions 

that lead to really, really high cost estimates from their studies. 

Mr. ENGEL. Thank you. Thank you—— 

Mr. TANTON. Can I respond a little bit? 

Mr. ENGEL. Yes. 

Mr. TANTON. I think too often, people equate price with cost. Yes, 

the prices paid to wind developers are low, but that doesn’t mean 

that the costs are low because other people are paying the cost. We 

refer to transmission costs, but keep in mind, when the capacity 

factor for wind is only 30 percent, the capacity factor for that associated transmission is also only 30 percent. That will easily triple 

to you per kilowatt hour transmitted cost. 

Mr. WHITFIELD. The gentleman’s time has expired. 

And at this time, recognize the gentleman from Louisiana, Dr. 

Cassidy, for 5 minutes. 

Mr. CASSIDY. Thank you. 

Mr. Nadel, we all agree in conservation, absolutely, and I like 

your graph about the cost benefit ratio of conservation versus other 

things. 

Looking at your graph though on summary of State scores on 

conservation, and then looking at something on the Web as the 

kind of ranking of utility costs, there is an inverse relationship, if 

you will. The higher the State scored, typically the higher their 

utility cost. So that makes sense; you are going to have more savings, therefore, more inducing—inducement, if you will, to invest in 

conservation if you are a high-cost utility State, but there also is, 

I think, somewhat of a relationship between low-cost energy and 

economic growth. So the States with the lower cost energy are 

more vibrant, and the States with the higher cost energy are either 

losing members of Congress, or staying flat. I say that because 

members of Congress reflect population. So New York has lost several members of Congress, Massachusetts has lost members of Congress, et cetera. 

Now, that begs the question, in States with high utility costs, is 

there an inverse relationship with prosperity? I think we have 

made a good case in Texas, which picked up 4 members of Congress, has a pretty vibrant economy, and Massachusetts losing a 

120 

member of Congress, or New York losing members of Congress, 

maybe not as much. 

Any thoughts on that? 

Mr. NADEL. OK. A couple of comments. First, I would note, regardless whether you are a high-cost State or a low-cost State, 

there is a lot of energy efficiency that is cost-effective as shown by 

Louisiana, for example, which has just decided to have their utilities do energy efficiency programs. All the major utilities have just 

proposed that. 

Yes, if your costs are lower, that will help attract businesses, absolutely. I point out that there is a tendency for the rural States 

to have lower costs than some of the urban States. Transmission 

and distribution systems tend to be much more expensive in urban 

areas. 

The other thing I would point out is that rates are one thing, but 

bills are also very important. It is that combination of rates plus 

the consumption. There was just this week something published by 

WalletHub on average energy bills, and many of the least efficient 

States actually had the highest average bills. 

Mr. CASSIDY. Well, the least efficient States are often, if you will, 

hot States, and so they are going to have a higher—Louisiana is 

going to have a higher utility bill than a very moderate northern 

California clime, so I will accept that. 

Now, I am also interested, there is in these States—somebody 

spoke of the prosperity in California. California has a little bit of 

an hourglass economy, as does New York, with some really wealthy 

people and lots of poverty, but a middle class getting squeezed, Dr. 

Weinstein, do you have a sense of blue-collar job growth in Texas, 

Louisiana, et cetera, versus other States, because I think of oil and 

gas giving us upstream and downstream, blue-collar, middle class 

job growth. Is that a fair statement? 

Mr. WEINSTEIN. What we are seeing is a fairly mass exodus of 

small and medium-sized manufacturers and other businesses from 

California, New York and some other States to places like Texas. 

Mr. CASSIDY. Now, that is associated with high utility costs. Can 

you trace it back to high utility costs? 

Mr. WEINSTEIN. I would say that if you are a—— 

Mr. CASSIDY. Is it causal? 

Mr. WEINSTEIN. If you are a manufacturer that uses a lot of electricity, clearly, that is going to be a factor, and—— 

Mr. CASSIDY. So if your input cost is that much higher for a 

major thing, a major input, which is electricity, you are going to 

move to a low-electricity State. 

Mr. WEINSTEIN. Yes, of course. 

Mr. CASSIDY. Of course. Makes sense. 

Mr. WEINSTEIN. If there are other factors that make it worth the 

move, but—— 

Mr. CASSIDY. Mr. Siegel—actually, no, I am just out of time. Mr. 

Siegel, I am going to read your book, ‘‘Revolt Against the Masses.’’ 

I love that title. 

Mr. SIEGEL. Thank you. 

Mr. CASSIDY. But I do get a sense, in New York, you speak of 

the elites basically squashing the economic prospects of the middle 

121 

class and denying property owners the highest value of their property. Would you comment a little bit more on that, please? 

Mr. SIEGEL. You talk about an hourglass economy, New York 

City in particular has an hourglass economy in the extreme. Wall 

Street is doing extremely well, real estate is doing extremely well, 

the middle class has been heading for the exits for a long time. 

What that produces politically is a framework in which things 

like energy costs just aren’t that important. The legislature, of 

which Mr. Tonko—I wish he had asked me a question—was once 

a member, the legislature—in New York State legislature, you are 

more likely to be removed by a Federal prosecutor or a State prosecutor than you are to be defeated for reelection. 

Mr. CASSIDY. But let me—then, Mr. Siegel, it seems to me, 

though, if we are going to relate high utility costs with low economic growth, and migration of blue-collared jobs to States with 

low energy costs, these high energy costs, if you will, are a war on 

the middle class. They are destroying their economic opportunity. 

Mr. SIEGEL. I think what you are describing is more true of upstate. Upstate New York, which was once the center of manufacturing, well, more recently was the center of manufacturing than 

downstate, there is no question. When—and now I am just— 

anecdotally, you will talk to people who are considering to moving 

to New York State because of the water. There is tremendous 

water available to New York, and Symantec, and so the chip industry is—to have this inexpensive water is enormously useful. However, energy costs in New York are, on average, twice the national 

average. That simply drives people out. 

In the city, this is not a problem. In the city, it is really—it is 

the cost of living more generally that drives the middle class. What 

is fascinating to me is why it is that so many people from New 

York have no interest in the loss of the middle class. 

Mr. CASSIDY. Because they are unaffected. 

I will finish by saying blue-collar workers traditionally employed 

in mining, manufacturing, and construction, and I will say that energy obviously creates lots of mining jobs which I just learned 

tends to—I have already known but I affirmed—it tends to create 

manufacture. Mining begets manufacturing, because low energy 

costs create that, and more manufacturing begets more construction. 

It seems we have a jobs program, Mr. Whitfield, and that is more 

use of America’s natural resources. Thank you. 

Mr. WHITFIELD. Dr. Cassidy, thank you very much. 

And that concludes today’s hearing. I want to thank all of you 

who participated in our panel, and I know many of you came from 

long distances, and it is a very important issue and we appreciate 

your taking time to be with us, and giving us your views and responding to our questions. 

And with that, we will conclude today’s hearing. The record will 

remain open for 10 days for any additional materials. 

122 

And I want to thank you all once again, and we look forward to 

working with you as we move forward to address these issues. 

Thank you very much. 

Today’s hearing is concluded. 

[Whereupon, at 12:35 p.m., the subcommittee was adjourned.] 

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