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ASIA’S GROWING HUNGER FOR ENERGY:

U.S. POLICY AND SUPPLY OPPORTUNITIES

HEARING

BEFORE THE

SUBCOMMITTEE ON ASIA AND THE PACIFIC

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTEENTH CONGRESS

SECOND SESSION

SEPTEMBER 8, 2016

Serial No. 114–231

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

MATT SALMON, Arizona 

DARRELL E. ISSA, California 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

MO BROOKS, Alabama 

PAUL COOK, California 

RANDY K. WEBER SR., Texas 

SCOTT PERRY, Pennsylvania 

RON DESANTIS, Florida 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

CURT CLAWSON, Florida 

SCOTT DESJARLAIS, Tennessee 

REID J. RIBBLE, Wisconsin 

DAVID A. TROTT, Michigan 

LEE M. ZELDIN, New York 

DANIEL DONOVAN, New York 

ELIOT L. ENGEL, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

BRIAN HIGGINS, New York 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

ALAN GRAYSON, Florida 

AMI BERA, California 

ALAN S. LOWENTHAL, California 

GRACE MENG, New York 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas 

ROBIN L. KELLY, Illinois 

BRENDAN F. BOYLE, Pennsylvania

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

SUBCOMMITTEE ON ASIA AND THE PACIFIC

MATT SALMON, Arizona Chairman 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

MO BROOKS, Alabama 

SCOTT PERRY, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

BRAD SHERMAN, California 

AMI BERA, California 

TULSI GABBARD, Hawaii 

ALAN S. LOWENTHAL, California 

GERALD E. CONNOLLY, Virginia 

GRACE MENG, New York 

(III)

C O N T E N T S 

Page

WITNESSES 

Mr. Mikkal E. Herberg, Senior Advisor, director, Energy Security Program, 

The National Bureau of Asian Research ............................................................ 5

David W. Kreutzer, Ph.D., senior research fellow for energy economics and 

climate change, Center for Data Analysis, Institute for Economic Freedom 

and Opportunity, The Heritage Foundation ...................................................... 15

Mr. Jake Schmidt, director, International Program, Natural Resources Defense Council ........................................................................................................ 22

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Mr. Mikkal E. Herberg: Prepared statement ........................................................ 8

David W. Kreutzer, Ph.D.: Prepared statement .................................................... 17

Mr. Jake Schmidt: Prepared statement ................................................................. 24

APPENDIX 

Hearing notice .......................................................................................................... 50

Hearing minutes ...................................................................................................... 51

(1)

ASIA’S GROWING HUNGER FOR ENERGY:

U.S. POLICY AND SUPPLY OPPORTUNITIES 

THURSDAY, SEPTEMBER 8, 2016

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON ASIA AND THE PACIFIC,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The subcommittee met, pursuant to notice, at 3:01 p.m., in room 

2255, Rayburn House Office Building, Hon. Matt Salmon (chairman of the subcommittee) presiding. 

Mr. SALMON. The subcommittee will come to order. 

Members present will be permitted to submit written statements 

to be included in the official hearing record, without objection. The 

hearing record will remain open for 5 calendar days to allow statements, questions, and extraneous materials for the record, subject 

to the length limitation in the rules. 

Asia Pacific nations are predicted to consume more than half the 

world’s energy by the year 2035, bringing both enormous opportunities and significant challenges as the global energy sector seeks 

to meet the demand. As Asia continues to diversify from traditional 

energy to nuclear, liquefied natural gas, and solar power, innovative U.S. suppliers of energy and energy-based technology stand to 

play a pivotal role. 

Today, we will discuss U.S. policy toward the ever developing 

Asia Pacific region as it hungers to fulfill its energy needs. This 

hearing will focus on energy demand, production, consumption, security, and policy in the Asia Pacific region. 

As we assess the challenges and the opportunities, it is important to note that over 700 million people in the Asia and the Pacific 

region lack access to electricity, and nearly 2 billion burn wood, 

dung, and waste for cooking and heating needs. As Asia continues 

to modernize and develop a substantial middle class, demand for 

energy will increase exponentially, requiring vast investments in 

infrastructure. 

Energy demand in Asia is largely fueled by enormous populations, urbanization, and the transportation industry. Newly mobilized and politically active populations are driven first and foremost 

by whether governments are able to provide for a better standard 

of living, a factor driven almost entirely by access to dependable 

and affordable energy. Demand will continue to rise by an estimated 21⁄5 percent annually, with oil and gas to remain the prevailing energy source. 

2

East Asia has become a net oil importer, causing a close association of energy needs with national security concerns. Much of 

Asia’s energy is imported from volatile regions and is transported 

through vulnerable transit corridors, most notably including the 

highly disputed South China Sea. This subcommittee has closely 

followed the issues of the South China Sea and the insecurities of 

the nations who rely on energy transit through these narrow 

straits, and we believe those concerns are well founded. Add to that 

the estimates of oil and natural gas reserves in the South China 

Sea, with their own highly disputed sovereignty rights, and as we 

are all aware, these territorial disputes are very complicated and 

will take time to resolve. 

We continue to urge China and others to respect the rule of 

international law and agreed-upon frameworks for dispute resolution rather than resorting to manipulation and bullying tactics. 

As diverse cultures and national boundaries affect much of the 

energy infrastructure, regional energy cooperation is paramount, 

but many Asian nations appear to be more interested in a go-italone approach. 

Attempts have been made to collaborate on energy issues within 

Asia for some time now, including cooperation initiatives through 

ASEAN and the East Asia Summit. These dialogues are just that: 

Talks. Region-wide hesitance to pursue multilateral development 

projects and persistent territorial disputes that hinder the efficient 

use of resources have prevented Asian states from working together to resolve energy conundrums. Energy options are limited 

throughout much of Asia, and the fact remains that regional cooperation will be necessary to overcome the challenge of energy 

shortages. 

Currently, coal is the region’s leading energy source, but market 

demand for nuclear energy and liquefied natural gas continues to 

rise. Skepticism of nuclear energy following Japan’s Fukushima 

disaster remains a concern, but a thirst for nuclear power thrives 

in many of the Asian nations. The U.S. has various degrees of civil 

nuclear cooperation in the region with China, South Korea, India, 

Vietnam, Taiwan, Malaysia, Australia, Indonesia, Japan, and Thailand. Many in the United States have concerns with some of these 

projects, in particular with regard to nuclear proliferation and 

dual-use repurposing. 

For our part, the United States began shale gas exports by sea 

this year and is projected to become the third largest world supplier of LNG within 5 years. Asian buyers have already contracted 

to purchase more than half of U.S. energy’s supply of LNG and will 

continue to affect global energy policy on a massive scale. 

The Asia Pacific needs American leadership to assist with the security concerns of our partners and allies, to maintain the rule of 

law and Freedom of Navigation crucial for energy security, and to 

provide critical energy supplies and access to new energy technologies. 

We should advocate for policies that encourage a market-driven 

approach to fill the demand, and I look forward to hearing from our 

witnesses today on how best to facilitate that outcome. 

And, I would like to turn the time over to Ranking Member Sherman for any comments he might have. 

3

Mr. SHERMAN. The gentlelady from New York will give her opening statement. 

Mr. SALMON. Thank you. 

Ms. MENG. Thank you, Chairman Salmon and Ranking Member 

Sherman for calling this timely hearing. Asia as a whole is the 

largest energy consuming region in the world. China is the single 

largest energy consumer, followed by the U.S. and then India. In 

a world where our energy needs only increase with each passing 

year, we must take stock of our resources and assess our ability to 

fulfill those needs, while ensuring our security and minimizing the 

environmental consequences. 

Asia’s growing energy needs leave many open questions, including how well-positioned these countries are to fulfil their commitments to reducing greenhouse gas emissions, and what the geopolitical implications are for Asia’s current energy reliance on coal 

and the Middle East oil. 

I welcome our distinguished panelists today and look forward to 

hearing your thoughts. 

Thank you, and I yield back. 

Mr. SALMON. Thank you. Mr. Sherman. 

Mr. SHERMAN. When we look at energy and Asia, we see a number of foreign policy and national security concerns. The first of 

these is the price of oil. For reasons that God may explain to us 

at some point in the future, he has put oil in so many of the wrong 

places. And, anything that drives down the price of oil is not just 

good for motorists in my district, it is good for American foreign 

policy. 

Second, global warming. China emits twice as much greenhouse 

gases as the United States. We are in second place, but we are a 

distant second. China has made this great announcement with 

much pageantry that they will keep increasing their greenhouse 

gases right up until 2030, and then maybe without any enforcement, they will turn the corner, although we have no idea how high 

up they will go before they turn the corner, and we do not know 

whether they will turn the corner very sharply at all. 

If you look at the current situation, China is deploying and building many coal-fired electric plants. Those plants will serve their 

full useful life. And, coal produces twice the greenhouse gases per 

kilowatt as any other fuel, and so one would expect that these 

plants will be turning out an awful lot of greenhouse gases for a 

long time. 

In addition, China is going all over the world building coal-fired 

electric plants. And, while technically this is not Chinese global 

warming, because the burning of the coal will take place elsewhere, 

it would not occur but for these plants. 

The next national security issue is the transport of oil to our allies in Asia. And here, I think, there is an exaggeration of the risk 

and the problem. Where both in Beijing and in Washington, we are 

firing up nationalist concerns about, oh, my God, can we figure out 

a way that both countries can justify a larger military by fighting 

over these islands, uninhabited islands. And, we are told that trillions of dollars worth of trade passes close to these disputed islands. Keep in mind almost all of that trade is going in or out of 

a Chinese port, and if China were able to establish naval bases on 

4

these islands, they would be able to blockade their own ports, 

something that is not particularly of concern to the United States. 

But, in addition, there are oil tankers from the Middle East 

going to Japan and South Korea. Those tankers may choose to go 

close to these islands, but they—in a worst case scenario, and they 

should never have to do this, but in a worst case scenario, they 

could take a slightly different route and go far away from these islands. These islands, therefore, have a massively exaggerated strategic importance since virtually no trade that doesn’t go in or out 

of Chinese ports goes close to them. 

And, then there is the economic issue. Much of the reason for 

this hearing is to discuss the export of American natural gas. Keep 

in mind that there are two ways to look at this from an economic 

standpoint. One is to say, hey, if you export some natural gas, that 

creates jobs in the natural gas industry. The other approach is to 

say if you refuse to export natural gas, you drive down the price 

of natural gas in this country, you give American manufacturers a 

big leg up on their Asian competition, and then you get a lot of 

manufacturing jobs. There are more jobs involved in using natural 

gas than in producing natural gas. 

Finally, as I think is illustrated by this hearing, there is the discussion that by exporting natural gas, we could have an effect on 

Europe and Ukraine’s, in particular, dependence on Russia. Russia 

is charging far less for natural gas than Asia is willing to pay. So, 

if we are going to export natural gas and we are going to remain 

a free market country, we are going to export natural gas to Asia, 

where it will have the economic effects I have described, both good 

and perhaps undercutting our manufacturers. 

But, we are not going to be exporting natural gas to Europe, 

where they are used to paying far less to Russia for it than the 

Japanese and the South Koreans are willing to pay. 

And with that, I yield back. 

Mr. SALMON. Thank you. Mr. Duncan. 

Mr. DUNCAN. Thank you, Mr. Chairman. Thank you for holding 

this hearing. 

Energy is a passion of mine, and American energy independence, 

the energy renaissance that we have experienced is something that 

I have advocated for. I was glad to hear Mr. Sherman mention natural gas, and it is a fossil fuel that we have an abundance of here 

in this country. And, the export of natural gas is critical to the 

American energy sector. And, when you have an abundance of 

something, then you can put it out on the market, and the companies can realize a profit, which will, I think, help keep jobs here 

in this country. 

Asia is definitely a growing area that needs energy to provide 

that 24/7 baseload power needed to manufacture and help with the 

quality of life issues. It is really a global phenomenon when you 

talk about quality of life issues. If you want to improve the quality 

of life of people all over the globe, you do it with energy. 

Mosquitos, we talk a lot about Zika. If you want to cut down the 

threat of Zika, then help provide electricity so they can have air 

conditioning in their house, they don’t have to have the windows 

open at night, because mosquitos are prone to come in. We can do 

that in sub-Sahara Africa, we can do that in Latin America, and 

5

a lot of other places that don’t experience the same sort of energy 

abundance that we have. 

Twenty-four-seven baseload power provided by fossil fuels, provided by nuclear power, hydroelectric, but one thing that, going 

back to the natural gas, is that abundant supply here that can provide natural gas-powered electricity generation in third world countries and in Asia, and not necessarily in third world, but definitely 

improve the quality of life. Too many people around the world are 

using wood and charcoal to heat their homes and cook their food, 

and they can’t keep food for a long period of time fresh, they can’t 

have air conditioning, we talked about. There are just so many different things that we can use American energy to help improve the 

lives of other people around the world. 

You know, we push wind and solar. I think it is groovy technology, I really do like it, but it is intermittent, and doesn’t provide 

the 24/7 baseload power that helps to keep incubators running that 

help with the neonatal intensive care. And, we have an infant mortality rate that is too high around the world. When we have the 

ability to provide energy sources, such as natural gas, to help those 

countries keep those incubators running, keep those neonatal intensive care units operating that you are not going to get with 

intermittent power. 

So, I am glad that we are having a discussion about energy and 

improving the quality of life of people around the globe, focusing 

on Asia right now, and I am glad of that. So I look forward to a 

robust discussion as we move forward in this Congress and the 

next Congress to provide energy through American energy resources as we hopefully will reboot our energy renaissance in this 

country. 

And with that, Mr. Chairman, I yield back. 

Mr. SALMON. Thank you. We are joined today by Mr. Mikkal 

Herberg, senior advisor and director of Energy Security Program at 

the National Bureau of Asian Research. Thanks for coming today, 

Mikkal. And, he happens to come from a wonderful place, Arizona. 

So glad to have you here. The rest of the country is great too, it 

is just Arizona is better, right? 

Mr. HERBERG. I like it, I like it. 

Mr. SALMON. All right. Dr. David Kreutzer, senior research fellow for energy economics and climate change at Heritage Foundation Institute For Economic Freedom and Opportunity. Thank you 

for being here. 

And, Mr. Jake Schmidt, director of international program at the 

Natural Resources Defense Council. 

We are thrilled to have you all here today, and Mikkal, we will 

start with you. 

STATEMENT OF MR. MIKKAL E. HERBERG, SENIOR ADVISOR, 

DIRECTOR, ENERGY SECURITY PROGRAM, THE NATIONAL 

BUREAU OF ASIAN RESEARCH 

Mr. HERBERG. Okay. Thank you, Chairman Salmon, Ranking 

Member Sherman, committee members. I appreciate the opportunity to speak with you today about Asia’s growing energy consumption, some of the implications of U.S. policy, U.S. supply, and 

what role it can play. 

6

I think it is worthwhile to keep in mind there is a fundamental 

dilemma that Asia faces in energy. It is kind of a dual challenge. 

On the one hand, developing Asia, energy demand is growing at extraordinarily high rates. You talked about that. It will account for 

two-thirds of global energy consumption growth. So, clearly they 

are scrambling to mobilize the energy supplies they need and to 

prevent energy from becoming a bottleneck to economic growth and 

job creation. Developing countries need the jobs and are pushing 

for development. At the same time, they are looking for affordable 

energy, because remember, these are developing countries and they 

are looking to find affordable energy, and I think here is a key to 

understanding that coal dilemma for Asia. 

And third, at the same time they made all this booming demand, 

they have to shift from a very carbon-coal-intensive energy mix in 

the region, to a much cleaner energy mix, if they are going to meet 

their climate goals, and then probably more importantly, meet 

their air pollution goals, which in China, India, Southeast Asia, air 

pollution is a deadly, quite truly deadly problem, obviously for 

China. 

But, the challenge is how to meet that growing energy demand 

that they need now, but shift to this cleaner energy mix when they 

need the energy now, and so what happens is there is a chronic 

temptation to default to what is an abundant, cheap, available energy supply all across Asia, and that is coal, to meet that growing 

electricity demand. So, the pressure to clean up the energy mix, 

but the pressure to have affordable energy leads to this problem of 

constant defaulting to coal, and that gets in the way of all these 

environmental and climate goals that we have. 

U.S. energy policy and supplies can make a big difference in both 

energy security in Asia, it already has in a big way, but it can also 

play a big role in Asia’s transition out of this dominant role for coal 

and toward a cleaner energy mix. And, in my mind, there is no contradiction between using natural gas and making progress on moving toward your climate goal. 

Just a few metrics. If you look at how much energy demand is 

going to grow in just developing Asia, it is the equivalent of adding 

another China energy consumption to the global energy mix just in 

the next 20 years. Remember, China is the largest energy consumer in the world. Just the increase is equivalent, at least the latest International Energy Agency forecast, just the increase is equal 

almost to the entire China energy consumption. So, these are big, 

big, big numbers. Two-thirds of CO2 emissions, most of the world’s 

nuclear capacity growth, most of the natural gas growth, and all 

of the coal consumption growth. So, this is a truly staggering scale 

to this. 

Now, to switch to energy security. Energy security in Asia is national security. It is not like here. I mean, this is at the top or near 

the top of the strategic agenda. The region imports two-thirds of its 

coal, China imports 60 percent of its oil supplies—or the region imports two-thirds of its oil; China, 60 percent, and that continues to 

rise; 100 percent for Japan, South Korea. So, this is really a serious 

strategic concern for the region. 

And the other dimension of that is the growing and heavy dependence on Middle East supplies, and this is where the sea lanes 

7

come in. China gets half of their imports from the Middle East. 

Japan and South Korea get 85 percent of their imported oil from 

the Middle East. So, these sea lanes between the Persian Gulf and 

Asia are critical sea lanes; and not only the South China Sea today, 

but also increasingly the Indian Ocean. As China’s blue water capacity begins to be able to project into the Indian Ocean, they are 

building, I don’t want to be an alarmist about this, because, you 

know, I am not, but China is building a Navy base at Djibouti now, 

which is part of their concern about the security of those sea lanes, 

particularly for their oil supplies. 

What role can the U.S. play in this? Obviously the sea lanes 

issue, we are the most important player. We can have a dialogue 

about the South China Sea, how important they are. I agree with 

Ranking Member Sherman that China is not going to block their 

own sea lanes. That makes no sense whatsoever. But, here is the 

issue. If you go to Tokyo, the notion of turning over the security 

of their oil and LNG supply lines to the Chinese Navy, the tender 

mercies of the Chinese Navy, makes them very nervous. Now, we 

can argue about whether that is a reasonable concern or not, but 

I can tell you it is a very worrying notion for planners in Tokyo. 

U.S. unconventional oil supplies are critical for Asia, because 

they are bringing down prices, giving them an alternative supply, 

so anything we can do to continue to grow our conventional oil production will be good for Asia’s energy security. Similarly with natural gas, LNG supplies to Asia allow them to diversify their supplies away from Southeast Asia and the Middle East. So, all of 

these things are going to be very important to the metrics of energy 

security for Asia, things we can do, continue to work with China 

on energy cooperation. India will be the largest increase, absolute 

increase in energy consumption. We need to do more with India in 

the future. 

So, let me just stop with those brief remarks and let the others 

go ahead. 

[The prepared statement of Mr. Herberg follows:]

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Mr. SALMON. Thank you. We are going to probably be called to 

vote in the next 15 minutes or so, and we would like to get through 

all the witnesses, at least get a stab at some questions, and it is 

the last votes of the day, so we probably won’t reconvene afterwards. The little box in front of you usually tells you the timeframes. 

Mr. KREUTZER. I got it. I am good with time. 

Mr. SALMON. Okay. When it goes amber, that means, just like we 

drive, drive faster. 

Mr. KREUTZER. No, no. When it goes to the amber, I say the end. 

Mr. SALMON. The red means stop. All right. Thanks. 

STATEMENT OF DAVID W. KREUTZER, PH.D., SENIOR RESEARCH FELLOW FOR ENERGY ECONOMICS AND CLIMATE 

CHANGE, CENTER FOR DATA ANALYSIS, INSTITUTE FOR 

ECONOMIC FREEDOM AND OPPORTUNITY, THE HERITAGE 

FOUNDATION 

Mr. KREUTZER. Okay. Chairman Salmon and Ranking Member 

Sherman, I want to thank you and the other members of the committee for giving me an opportunity to address you today about the 

opportunities for American energy. 

My name is David Kreutzer. I am senior research fellow in energy economics and climate change at The Heritage Foundation. 

However, what I say today should not be construed as an official 

position of The Heritage Foundation; they are my own views. 

America is an energy powerhouse. The last decade has seen a 

phenomenal transformation. As recently as 2008, petroleum was 

trading at over $140 per barrel, natural gas was over $10 per million BTU. As oil and gas production was waning a decade ago, the 

peak oilers were in ascendance. The President, Obama, joined them 

in their pessimism. He loudly proclaimed that because we only had 

2 percent of the world’s resources, we could not continue to sustain 

our energy consumption. Further, he said we cannot drill our way 

to lower gasoline prices. And, on a more personal note, I was all 

but called a liar at a House budget hearing in September 2008 for 

proposing that we have a target for increasing petroleum production by 2 million barrels a day. One of the members held a letter 

from the head of the Energy Information Administration saying 

that even if we could do that, we wouldn’t get more than a couple 

of dollars or a few dollars gain in price. Well, we were all wrong. 

From 2008 to 2015, America doubled its petroleum production. 

Natural gas production went up by about 60 percent. Not only did 

prices fall more than the $20 I was hoping for, they are $100 below 

the peak level in 2008 right now. 

Today, the U.S. is the world’s top producer of petroleum and natural gas. However, this energy revolution took place in the face of 

a hostile environment. The Obama administration within weeks of 

taking office cancelled already completed oil and gas leases in the 

southwest. They essentially within a year put a moratorium on not 

only deep water drilling, but shallow water drilling as well offshore. They started the clock. They tore up the 5-year energy plan, 

which further delayed access to resources on the Federal estate. 

Perhaps most telling was the attitude of an EPA administrator 

in Texas who, taking his version of ancient history, claimed that 

16

when the Romans went into a town, they would crucify the first 

two people they found so as to get everybody else to fall in line, 

and he used that analogy for his strategy in regulation. 

Mr. SHERMAN. That is not true. 

Mr. KREUTZER. It is on tape. 

It shouldn’t be surprising in the face of this sort of attitude toward energy production that the energy revolution we have seen 

has taken place almost exclusively on State and private land. 

Asia’s growing hunger for energy and U.S. supply opportunities 

depend on us being able to produce more. And, if we had positive, 

pro energy policies, it would be interesting to see what sort of results we could get from that. Whether for domestic consumption or 

for strategic reasons, moving forward with energy policy requires 

that we open up more of the Federal estate than we have to get 

better access to the resources that we own. To get an idea of what 

would happen if we did that, we at The Heritage Foundation, we 

have a clone of the Energy Information Administration’s national 

energy modeling system, we ran their high resource case through 

the macro model and compared it to the reference case. And, I 

should note that the high resource case in 2008, its projections for 

last year were more accurate than the reference case was. What we 

find—the high resource case essentially assumes there is a 50 percent greater access to energy, the resources are 50 percent greater. 

When we ran that model, we found that between now and 2035, 

aggregate GDP in the U.S. would go up by $3.7 trillion. 

A nominal family of four over that same period would see 

$40,000 additional income. That is roughly $2,000 per year. On average, the difference in employment is 700,000 jobs to the good if 

we have 50 percent greater access to energy. Households would 

spend 10 percent less on electricity. And, all of this without increasing Federal expenditure or taxation. 

So, I would make a plea to the committee to consider proposing 

policies that would give greater access to our energy resources 

owned by the Federal Government. Thank you. 

[The prepared statement of Mr. Kreutzer follows:]

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Mr. SALMON. Thank you. Mr. Schmidt. 

STATEMENT OF MR. JAKE SCHMIDT, DIRECTOR, INTERNATIONAL PROGRAM, NATURAL RESOURCES DEFENSE 

COUNCIL 

Mr. SCHMIDT. Thank you. Thank you, Chairman Salmon and 

Ranking Member Sherman, and distinguished members of the committee. Thank you for inviting me on behalf of the Natural Resource Defense Council to present my views on the energy opportunities and challenges for the Asia region. 

This region, as was mentioned, is one of the fastest growing energy markets in the coming decades, so the actions that this region 

takes on clean energy and climate change will be critical in helping 

the world move to a climate-safe trajectory. This region has a huge 

opportunity to expand renewable energy and energy efficiency, and 

the United States has an important role to play in helping this region develop its energy future in a responsible and environmentally 

sound manner. I will hit on three points from my full written testimony to summarize. 

First, there is a new dynamic emerging in the Asia region, as reflected in the historic Paris Agreement. This agreement includes 

new climate commitments from all of the major countries in the 

world, including the countries in the Asia region. The countries in 

the Asia region are already showing that they are prepared to help 

this agreement deliver over time. There is, I would say, a very high 

likelihood that we will reach the threshold for this agreement to 

enter into force this year. We have now 59 countries that account 

for more than 60 percent of the world’s emissions that have formally said that they will join this agreement this year. Just last 

week, China and the United States both formally took that step to 

join this agreement, and we expect that more countries in the Asia 

region will take that step this year as well. 

So, key countries as a part of this have put forward robust climate and clean energy targets as a part of the Paris Agreement. 

One hudred eighty-seven countries responsible for more than 97 

percent of the world’s emissions put forward climate pollution targets as a part of this Paris Agreement, including all major countries in the Asia region. 

Second, this region is a major market for clean energy, and this 

opportunity is poised for significant expansion. The Asia region has 

witnessed a huge uptick in clean energy deployment in the past 

few years. According to Bloomberg New Energy Finance, clean energy investment in the Asia Pacific region totaled $161 billion in 

2015, an increase of almost 700 percent since 2005. 

The current climate targets, including those contained in the 

Paris Agreement, mean that Asia’s largest economies are committing themselves to clean energy goals and implementing the necessary domestic actions to meet these goals. Significant renewable 

energy expansion is expected in China, India, and other countries 

in the region as a result. As a result, the deployment of clean energy in the Asia region is projected to continue to surge in the coming years. Again, according to Bloomberg New Energy Finance, renewable energy will make up nearly two-thirds, or $3.6 trillion, of 

23

the electricity capacity added over the next 25 years in the Asia 

Pacific region. 

Lastly, what can the United States do to help with this clean energy revolution in the Asia region? The U.S. can embark, I think, 

on three key actions, many of which are building blocks that the 

U.S. has already been delivering over time. First, the U.S. has active climate and clean energy bilateral agreements with a number 

of countries in the region, including China and India. The U.S. 

should strengthen the bilateral clean energy efforts with these 

countries. At the same time, the U.S. should further develop bilateral clean energy efforts with others in the region, such as Indonesia and Vietnam, since both countries have large untapped renewable energy potential. 

Second, it is important to ensure that countries create both the 

right policy framework and the right finance dynamics to track the 

needed private sector investments in clean energy space. For example, my organization, NRDC, has found that new innovative finance 

models like green banks and green bonds can help unleash even 

larger amounts of private capital over time. The U.S. should play 

a key role in helping countries in the Asia region put in place better policy and finance frameworks for clean energy. 

Third, by mobilizing U.S. investments for clean energy, the U.S. 

helps create growing clean energy markets in the Asia region. The 

U.S. should continue to fund contributions to the GCF. At the same 

time, the U.S. can help to mobilize additional investments through 

such mechanisms as the Overseas Private Investment Corporation, 

trade missions, and other venues where the U.S. helps to catalyze 

these private sector investments. 

So, to conclude, in our opinion, the U.S. can help the Asian countries meet their growing energy needs in a low carbon and environmentally responsible manner. This effort can create new markets 

for renewable energy and energy efficiency companies and workers, 

help secure a more stable region, and protect all Americans from 

the devastating impacts that will occur if we don’t act aggressively 

on climate change. Thank you. 

[The prepared statement of Mr. Schmidt follows:]

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Mr. SALMON. Thank you. Given the fact that we are on kind of 

a truncated timeframe here, I am going to limit members’ questions to 2 minutes. I apologize for doing so, normally we are pretty 

liberal with that, but I think we will just need to do that so everybody gets an opportunity. 

With the opening of the U.S. shale revolution, America has become a global supplier of LNG. Adding American natural gas to the 

global market has helped diversify supplies and reduce the price of 

natural gas both home and abroad, especially in Asia, which was 

once the most expensive market in the world. The expansion of the 

Panama canal should also add to the ease of LNG shipments 

abroad. 

Are the regulations on shale gas production and exports sufficiently open to facilitate free market flow of LNG? If not, what hindrances still remain for the industry, and aside from regulations, 

what is the state of infrastructure to facilitate these exports? Anybody want to try and stab at that? Dr. Kreutzer, go ahead. 

Mr. HERBERG. You know, I think the bulk of the heavy lifting 

has been done on that. I would recommend we move—you know, 

simplify the process of getting these LNG terminals approved. It is 

very—you know, takes much too long, so I think we should simplify 

that process. 

There are some shipping regulations, I am not familiar with all 

the details of it, that would make shipping a little bit easier, but 

I think the heavy lifting is getting these things approved. We have 

made a lot of progress, but we need to speed that up. The canal 

makes that a lot easier to ship that stuff. Europe will be able to 

use some of that LNG. And, I think, as they build their re-gas terminals in Europe, they will also be able to use it. So, I don’t see 

any huge barriers. 

Mr. SALMON. Typically, how long does it take to approve one of 

these permits? 

Mr. HERBERG. Well, it has gone on for about 5 years. Some of 

them have taken—the early ones took up to 2 years to get approvals before the DOE approved this as in the national interests to export these supplies of gas. They have begun to speed that process 

up administratively, and they had tried to reverse, let FERC do the 

work first and then the DOE, but I think that process could be 

speeded up a great deal more. 

Mr. SALMON. Okay. Dr. Kreutzer. 

Mr. KREUTZER. Yeah. No. I was just thinking the regulatory 

problem is more on the production of gas than, I think, on the export terminals at this point. And, there seems to be creeping additional regulations on methane and other things, and that is worth 

watching. 

Mr. SALMON. Okay. Thank you. Mr. Sherman. 

Mr. SHERMAN. Dr. Kreutzer pointed out that we have had a decline in energy prices in the entire world, but I don’t think we can 

attribute that just to U.S. production. We have had a recession in 

the world. We have conservation in other countries, but, obviously, 

it has helped the world price to increase production in the United 

States. 

And, one thing I think the environmental community loses track 

of, they may focus on an individual production in the United States 

41

or project and say, ‘‘Look at the local environmental effect,’’ but 

also look at the world price effect. If we can drive down the price 

of oil and diminish the world’s dependence upon the Middle East, 

we might avoid the next Iraq war and the environmental degradation that that involves. 

I do also want to comment that we haven’t talked much about 

nuclear, but we are seeing Japan, South Korea, and China looking 

to reprocess spent fuel. That makes no economic sense. The only 

reason that South Korea or Japan would do it is to open the door 

to becoming nuclear powers—nuclear weapon states at some point 

in the future if they wanted to go down that road. 

I want to talk about solar panels. China is subsidizing and taking market share. That puts some of our companies at a disadvantage. On the other hand, it drives down the price of solar panels 

and increases their utilization. 

Mr. Schmidt, should we be upset that China is selling its solar 

panels for too little, or rejoice in the fact that more solar panels are 

being deployed in more places? 

Mr. SCHMIDT. That is a good question. I may not give you the yes 

and no answer that you are looking for. 

I think fundamentally there has been some shifts occurring within the Chinese market on this dynamic. And, I think that the world 

of a year or 2 years ago is not exactly the world of today in terms 

of low cost solar being dumped by the Chinese for one particular 

reason. Part of that dynamic was being driven at a time when the 

Chinese were at a very early stage in terms of their domestic deployment of their solar panels. 

So, you know, about 4 years ago, the vast majority of China’s 

panel production, which was a massive amount at the time and has 

grown since, was actually being used in export markets in Europe 

and elsewhere. And that caused a lot of these trade tensions and 

so forth. That dynamic has shifted quite a bit. China now is installing about 20 gigawatts of solar a year, which is clearly head and 

shoulders above everybody else in terms of their own domestic deployment, and so much more of the Chinese domestic sort of production is actually being used within their own domestic context. 

We think it is obviously really critical that we get this right. I 

am not sure that sort of trade disputes over this is necessarily the 

best way to solve it. I know that the Obama administration has 

sought sort of some recourse through, you know, some of the routes 

with India and elsewhere, but what we are finding is that it is really critical that we actually get these prices, you know, to a low 

point. 

Mr. SHERMAN. I yield back. 

Mr. SALMON. Thank you. The Chair recognizes Mr. Duncan. 

Mr. DUNCAN. Thank you, Mr. Chairman. There are two factors, 

economic factors that affect this, the price of energy: Supply and 

demand. What we saw in the United States was an increase of supply based on the Bakken and Eagleford, and Barnett, and all these 

other energy-producing areas. And, even Pennsylvania and New 

York and Ohio increased production. 

And, so you have supply go up locally in the United States, but 

also global supply goes up, because the Saudis saw the Bakken eating into their market share, so they increased production in defiVerDate 0ct 09 2002 16:54 Nov 15, 2016 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 F:\WORK\_AP\090816\21462 SHIRL
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ance of OPEC, and so you had this, and you still see it today, an 

increase of supply, global supply of oil and natural gas. 

Then, the other factor is demand. Global demand is down because the economy globally is soft. In the United States we just 

saw GDP growth is, what, 1.1, adjusted in the first quarter down 

below 1 to .08. So, the economy is soft, nothing has rebounded, so 

demand is down as well. So, you have got increased supply and less 

demand, you are going to have low oil prices and low energy prices 

altogether. 

The question I have is TPP. So, we are exporting and trying to 

increase LNG exports, but you also have signatories of TPP that 

are LNG exporters as well. I wonder how TPP is going to factor in, 

assuming it passes, in the United States’ ability to compete with 

the Asian countries that are LNG exporters currently? So, if anybody can speak to that, because that is the question I don’t have 

an answer for. 

Mr. KREUTZER. I don’t have an answer. 

Mr. HERBERG. I don’t have an answer to that. 

Mr. SCHMIDT. I mean, I can. As a fact of how the TPP and all 

trade agreements, once a trade agreement like the TPP goes into 

effect, the ability for the United States—all these countries become 

sort of effectively de facto within the free trade, and so the Department of Energy’s national interest determination is taken off the 

table. And any of these countries will now be sort of subject to this, 

obviously Japan and South Korea, well, you know, are big sort of 

potential demanders of LNG, and so they are a part of it. Vietnam, 

I don’t think, is a major sort of potential hub for exports of LNG. 

So, it probably could in theory have a larger impact. 

I suspect, having spent a lot of time working in these countries, 

that the actual amount of demand for LNG is much lower than 

many people would expect, as, you know, countries aren’t necessarily looking to sort of flip out their dependence on the Middle 

East for dependence on some other, you know, form of energy. 

There is obviously a sort of large interest in a lot of these countries 

to get a lot more homegrown energy and sort of become a bit more 

energy independent to some extent, which is you see in China and 

India as they sort of look to coal imports versus coal domestically, 

versus oil imports, versus oil domestically. 

Mr. HERBERG. Can I just add one little bit? I missed the point 

of your question, but to the extent that TPP is a free trade agreement, the whole DOE approval process was about permitting exports to nonfree trade agreement countries. So, once the TPP were 

to pass, then that opens the door to exporting wherever you want. 

You don’t have to go through that DOE——

Mr. DUNCAN. Just a side comment. OPEC is a determining factor 

over the price of energy. So, whether you have a free trade agreement or not, the price of energy is going to be set by somebody that 

is not a signatory to the TPP. 

And, Mr. Chairman, I yield back. 

Mr. SALMON. Okay. Ms. Meng. 

Ms. MENG. Thank you. Chairman Salmon is one of the few people who pronounce my name according to Chinese tradition, and it 

always throws me off. Thank you. 

43

Mr. SALMON. You know, I realized even after I said it, you know, 

I speak Mandarin, I lived over in Taiwan, and so I have a really 

hard time, you know, like, saying Wang instead of Wong or Chen 

instead of Chun, and so I am kind of stuck with the, you know, 

Chinese pronunciation. So I apologize. 

Ms. MENG. It is great. It is impressive. 

Mr. SALMON. But, anyway, the Chair recognizes you anyway. 

Ms. MENG. Thank you so much. 

Mr. CONNOLLY. I am Connolly over here. 

Ms. MENG. Connolly. 

Asian countries will need more—may need more types of equipment and technology in order to reduce greenhouse gas emissions. 

How can the United States capitalize on some of these needs 

maybe to produce more jobs and exports in the United States? 

Mr. KREUTZER. I think our goal is going to be to provide them—

you know, we have developed technology in a lot of areas that they 

have been able to adopt, you know, for telephones and everything 

else. I don’t think it is going to be—we are going to have to push 

it too hard. When we develop the technology, they will use it. 

I think the critical question is we need to also develop the energy 

so that it is not coming from places that are politically unstable 

and antagonistic. 

Mr. SCHMIDT. Yeah. And, just to add a bit more, I think—maybe 

I am an American optimist, but I think that many of the technologies that these countries are going to be seeking to deploy 

when you look across energy efficiency, renewables are places 

where the Americans do quite well. For example, in India, some of 

the very first solar projects that really started to boom were produced by First Solar, based in Arizona, and so that is, you know, 

obviously a huge opportunity. 

The fastest growing place for job creation in the United States 

is within the clean energy space. And, you know, I guess we feel 

that the U.S. has a huge opportunity to play a role in helping these 

countries, you know, meet their energy needs through renewables 

and energy efficiency. And, that will create the sort of downstream 

supply jobs and so forth that creates, you know, huge benefits for 

Americans across the board. And, you know, as an anecdote, often 

the perception is that, you know, countries—even in China where 

they produce a lot of their own things, American technologies are 

always viewed as kind of the best, the gold standard, and so they 

tend to want to get the best and the gold standard in places. And, 

you know, I think that the Americans can compete pretty well. 

Ms. MENG. Thank you. I yield back. 

Mr. SALMON. Thank you. Mr. Connolly, if you want to be a Republican today, I will recognize you next, otherwise I have to——

Mr. SHERMAN. Never. 

Mr. SALMON [continuing]. Otherwise I have to recognize Ms. 

Gabbard. 

Mr. CONNOLLY. You know, there is an old line of a song, you 

know, kind of goes like that, you know, are you a Republican? I am 

right now. 

Mr. SALMON. Well, then I recognize you. 

Mr. CONNOLLY. No. I will wait my fair turn, but thank you, Mr. 

Chairman. 

44

Mr. SALMON. Ms. Gabbard. 

Ms. GABBARD. Thank you. And, thank you for your kindness. 

I am wondering if you can speak to some of the strategic implications of the energy mix right now occurring in Asia, and how that 

may be driving or influencing some of the maritime disputes that 

are occurring there. 

Mr. HERBERG. You know, I think that the role of energy in some 

of these maritime disputes is a little bit overestimated sometimes 

and overdramatized. Take the South China Sea, the likely resources there, we don’t know a lot about them, but estimates for 

the U.S. side are relatively modest in terms of the resources there, 

certainly not worth fighting over. Now, Chinese estimates are 

three, four times ours, so you wonder maybe they really believe 

there is more there than there is. 

I think the bigger dimension of that is the sea lanes issue, because so much of Asia’s, northeast Asia in particular, oil and LNG 

flows through those sea lanes. That is the bigger game and the bigger concern, as I mentioned, for northeast Asia about who controls 

those sea lanes, even though I think it is kind of a doomsday scenario to just think they would start getting in the way of those 

shipments, but I can tell you from being out there a lot, this worries a lot of the folks in northeast Asia as a strategic concern. You 

know, they want the U.S. Navy to still be a big force in those sea 

lanes for the security of their oil supply. 

Ms. GABBARD. Okay. 

Mr. KREUTZER. I would hope their energy policy would be more 

focused on allowing the energy producers to produce energy, and 

they can produce it at a cost less than the price at which they sell 

it. When we start forcing strategic concerns on energy producers, 

then we—at Heritage, we think we have got a pretty slippery slope 

to where should we be subsidizing this, should we be? We wouldn’t 

propose that. 

Ms. GABBARD. Thank you. Thank you. 

Mr. SHERMAN. Can I say something? 

Mr. SALMON. Sure. 

Mr. SHERMAN. I would just comment that now the oil tankers to 

Japan and South Korea would tend to go west of the Philippines. 

If they rerouted themselves and went east of the Philippines, that 

might add, I have heard estimates of $0.01 per gallon to what consumers in Japan and South Korea have to pay. So, the doomsday 

scenario is $0.01 a gallon. 

I yield back. 

Mr. SALMON. Thank you. Mr. Lowenthal. 

Mr. LOWENTHAL. Thank you, Mr. Chair. And, you pronounced my 

name right. I am very pleased. 

Mr. SALMON. I couldn’t really think of another pronunciation for 

yours, but——

Mr. LOWENTHAL. Chinese pronunciation? Thank you, Mr. Chair. 

I am going to continue this discussion on renewables in the region. And, first I want to know, you know, with the recent signing 

United States and China, the joining of the Paris climate, do you 

feel that the Chinese are going to be able to transition their energy 

mix away from coal toward renewable sources and able to meet its 

45

ambitious goals? Will they be actually able to do this, or are they 

going to really—is this a doable thing, Mr. Schmidt? 

Mr. SCHMIDT. I guess we believe that it is. It won’t be an easy 

challenge for them, but to give you, I guess, a couple of anecdotes, 

if anyone that has been in China, air pollution is really bad. 

Mr. LOWENTHAL. We were there, and——

Mr. SCHMIDT. Yep. 

Mr. LOWENTHAL [continuing]. We couldn’t breathe in Beijing; 

could not breathe, actually. 

Mr. SCHMIDT. So you feel the exact same thing that Chinese 

Communist Party officials feel and that everyday citizens feel, and 

so the number one social unrest issue right now in China is local 

air pollution challenges, and that has risen quite a bit. So, I think 

we have seen a huge——

Mr. LOWENTHAL. We know that there is that, right. I think you 

have pointed out rightfully so that the Chinese are very much 

aware. I am just saying is it really possible, though, given the existing state and reliance on coal, to really do that transition in the 

time? 

Mr. SCHMIDT. Yes. And, to give you a couple of facts from the region, so the last 2 years, China has actually had a declining coal 

consumption year on year. This is the first time that that has happened in 10 years. That is a huge trend from a growing 7 percent 

per year to an actual declining amount of coal. The expectations 

are that this year will continue that trend. The first quarter of this 

year saw a declining coal consumption, and we have seen huge 

shifts. 

Yes, China is still building a number of coal plants. They don’t 

have a market economy as everyone knows, but what you are finding is that the vast majority of these coal plants are actually sitting 

idle, so they are running at about 40 to 50 percent capacity factors, 

which for anyone that knows coal, is a very bad economic investment to invest a lot in a very heavy capital investment and then 

to only run it less than half the time. And, so I think we are seeing 

huge decline in China’s coal consumption, which is very tied to 

their carbon pollution, and so we are quite confident that China’s 

CO2 emissions will peak well before 2030. There is some debate 

within sort of energy modelers about whether or not China’s emissions have actually already peaked, and, you know, obviously they 

need a set of policies and continued sort of efforts over time to 

make sure to deliver. 

Mr. HERBERG. Can I just——

Mr. SALMON. Thank you. Mr. Connolly. 

Mr. HERBERG. I will just add one point. The forcing issue for 

China is not so much climate, it is air pollution in the cities and 

the east coast. And this is an existential issue for the Communist 

Party. They can’t hide this. They can put people in jail and other 

stuff. They can’t hide the bad air. And, so that is forcing a pace 

of change by the Communist leadership and the contributors to the 

air pollution, particularly coal, that is much faster than, I think, 

many people actually anticipated, and I think you can underestimate it. 

Mr. SALMON. It really got under their skin, I know, when the 

State Department started publishing on a daily basis——

46

Mr. HERBERG. Yeah. 

Mr. SALMON [continuing]. Those——

Mr. SCHMIDT. Air quality. 

Mr. SALMON [continuing]. Those numbers, and it really got under 

their skin. I know. I was there at one of those times. 

The other thing, first time I went to Beijing, had a white shirt 

on. By the end of the day, the color was completely black. It is pretty—pretty bad. 

Mr. Connolly. 

Mr. CONNOLLY. Well, first the time I went to Beijing was in 

1986, and there were a lot of bicycles in Beijing. And then I went 

there in March this year, and there were a lot of BMWs and Toyotas and whatever. And, part of the problem too was in the Maoist 

period, they built a lot of, like, steel plants, I think, outside of Beijing to showcase the industrial might of Communist China. And, of 

course, sitting in a basin, it created huge pollution that now they 

would never do, but they are stuck with it, plus normal urban pollution. 

Mr. Schmidt, and, gentlemen, if you could comment to, but when 

I was there in March, one of the bright sides of the bilateral relationship that I frankly did not realize the extent of was enormous 

cooperation apparently going on between our two governments on 

environmental and technological breakthroughs to try to address 

pollution, to try to curb both air pollution, water pollution, ground 

pollution, to look at new techniques that are environmentally neutral or friendly, and that the—apparently—I mean, the Chinese 

Government is quite aggressive about this. They are not being 

dragged into it. And, the collaboration is quite real and has a lot 

of promise. And, I was glad to hear that, given so many other aspects of the bilateral relationship. 

Do you want to comment just a little bit about that before we all 

have to go and vote? 

Mr. SCHMIDT. Yeah. I think one of the bright spots of the U.S.-

China relationship over the past couple of years has been clearly 

on climate. And, that is not just for me. If you ask sort of general 

Asian hands, they clearly view that that relationship is quite well, 

and is quite well established. And, it was, I think, a very critical 

component of getting the Paris Agreement delivered, was the sort 

of relationship between those two. And, that is both at, I think, a 

political level, which is around negotiating agreements and so 

forth, but also on the sort of practical, how do we actually do this 

stuff. And, so the U.S. has a very active working group working 

with the Chinese on helping them deliver on, you know, grid integration, high voltage transmission, electric vehicles, and the set of 

things that gets back to the other speaker’s question about how can 

American companies kind of play in that. 

And, I think there is, you know, just an ongoing great relationship between the two. It is always fraught with tensions, but within the clean energy space, I think it is a very positive engagement 

that can kind of continue to build and go to the next level. 

Mr. CONNOLLY. So, I would add drinkable water is a problem too, 

because even in the very finest hotels, you need filtered water. 

Mr. KREUTZER. I would say that one of the surprising things is 

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late emissions from coal plants by over 99 percent. My understanding is that in some places in China, they have the pollution 

control turned off because there is a slight parasitism of the energy. So, I am unfortunately a little pessimistic that they are going 

to push forward with other technologies that would be more costly, 

and I am really surprised that they haven’t already used the onthe-shelf technology that has already been developed that could 

dramatically reduce the pollution from even the coal that they are 

using. 

Mr. SALMON. Thanks. We have got to get over for votes, but I am 

going to allow one last follow-up question of Mr. Sherman. 

Mr. SHERMAN. Mr. Herberg, obviously they care about air pollution in their major cities. Can they build coal-fired plants either a 

few hundred miles west of their major cities and the less urbanized, or can they put them right on the beach in some windy area 

where it is all—can they solve their air pollution problem without 

helping the world solve its coal slash global warming problem? 

Mr. HERBERG. They are moving plants to the west, you know, 

and that is one of the—one of the two steps forward, one step back 

parts of China’s policy, you know, allowing building in the west but 

stopping it in the east. But, even so, I think in the east, tailpipe 

emissions are replacing, you know, coal emissions in the power 

plants. 

So, I don’t underestimate the scale of this thing, but in all the 

major cities, even as you head west, the pollution problem has become a political, social problem for them, and that is the forcing dynamic. 

Mr. SHERMAN. My hope is they can’t solve their problem without 

also helping the world solve its problem——

Mr. HERBERG. Well, you kind of get a one-for-one CO2 benefit 

from the air pollution effort. That is what I am assuming. 

Mr. SALMON. I thank the panelists very much for being here 

today. It has been very edifying and very informative. 

Mr. KREUTZER. Thank you. 

Mr. SALMON. The committee is adjourned. 

[Whereupon, at 3:55 p.m., the subcommittee was adjourned.] 

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