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58–149 2010

THE FUTURE OF COAL UNDER CARBON CAP 

AND TRADE 

HEARING 

BEFORE THE

SELECT COMMITTEE ON 

ENERGY INDEPENDENCE 

AND GLOBAL WARMING 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 6, 2007 

Serial No. 110–11 

( 

Printed for the use of the Select Committee on 

Energy Independence and Global Warming 

globalwarming.house.gov 


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SELECT COMMITTEE ON ENERGY INDEPENDENCE 

AND GLOBAL WARMING 

EDWARD J. MARKEY, Massachusetts, Chairman 

EARL BLUMENAUER, Oregon 

JAY INSLEE, Washington 

JOHN B. LARSON, Connecticut 

HILDA L. SOLIS, California 

STEPHANIE HERSETH SANDLIN, 

South Dakota 

EMANUEL CLEAVER, Missouri 

JOHN J. HALL, New York 

JERRY MCNERNEY, California 

F. JERRY SENSENBRENNER, JR., 

Wisconsin, Ranking Member 

JOHN B. SHADEGG, Arizona 

GREG WALDEN, Oregon 

CANDICE S. MILLER, Michigan 

JOHN SULLIVAN, Oklahoma 

MARSHA BLACKBURN, Tennessee 

PROFESSIONAL STAFF

DAVID MOULTON, Staff Director 

ALIYA BRODSKY, Chief Clerk 

THOMAS WEIMER, Minority Staff Director 


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C O N T E N T S 

Page 

Hon. Edward J. Markey, a Representative in Congress from the Commonwealth of Massachusetts, opening statement .................................................... 1 

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

Hon. F. James Sensenbrenner, Jr. a Representative in Congress from the 

State of Wisconsin, opening statement .............................................................. 5 

Hon. Earl Blumenauer, a Representative in Congress from the State of Oregon, opening statement ...................................................................................... 6 

Hon. John Shadegg, a Representative in Congress from the State of Arizona, 

opening statement ................................................................................................ 6 

Hon. Jay R. Inslee, a Representative in Congress from the State of Washington, opening statement ................................................................................... 7 

Hon. Candice Miller, a Representative in Congress from the State of Michigan, opening statement ....................................................................................... 8 

Hon. John Larson, a Representative in Congress from the State of Connecticut, opening statement ................................................................................ 8 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

opening statement ................................................................................................ 8 

Hon. Hilda Solis, a Representative in Congress from the State of California, 

opening statement ................................................................................................ 9 

Hon. Marsha Blackburn, a Representative in Congress from the State of 

Tennessee, opening statement ............................................................................ 10 

Hon. Stephanie Herseth Sandlin, a Representative in Congress from the 

State of South Dakota, opening statement ........................................................ 11 

Hon. Emanuel Cleaver II, a Representative in Congress from the State of 

Missouri, opening statement ............................................................................... 12 

Prepared statement .......................................................................................... 13 

Hon. Jerry McNerney, a Representative in Congress from the State of California, opening statement .................................................................................... 14 

Hon. John Hall, a Representative in Congress from the State of New York, 

opening statement ................................................................................................ 14 

WITNESSES

Mr. Dave Freudenthal, Governor, Wyoming ......................................................... 15 

Prepared statement .......................................................................................... 18 

Answers to submitted questions ...................................................................... 168 

Mr. Michael Morris, Chairman and CEO, American Electric Power .................. 26 

Prepared statement .......................................................................................... 29 

Answers to submitted questions ...................................................................... 174 

Mr. Carl Bauer, Director, Department of Energy’s National Energy Technology Laboratory ................................................................................................ 60 

Prepared statement .......................................................................................... 63 

Answers to submitted questions ...................................................................... 182 

Mr. David Hawkins, Director, Natural Resources Defense Council’s Climate 

Center .................................................................................................................... 74 

Prepared statement .......................................................................................... 76 

Answers to submitted questions ...................................................................... 227 

Mr. Robert Sussman, Partner, Latham & Watkins, LLP .................................... 102 

Prepared statement .......................................................................................... 104 

Answers to submitted questions ...................................................................... 221 

Mr. Stuart Dalton, Director, Generation Sector, Electric Power Research Institute .................................................................................................................... 122 

Prepared statement .......................................................................................... 124 


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IV 

SUBMITTED MATERIALS

Report from the Center for American Progress: Global Warming and the 

Future of Coal: The Path to Carbon Capture and Storage, Ken Berlin 

and Robert M. Sussman, May 2007 .................................................................... 234 

Report from the Center for American Progress: The Path to Cleaner Coal: 

Performance Standard More Effective Than Bonus Allowances, Ken Berlin 

and Robert M. Sussman, August 2007 ............................................................... 297 


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THE FUTURE OF COAL UNDER CARBON CAP 

AND TRADE 

THURSDAY, SEPTEMBER 6, 2007 

HOUSE OF REPRESENTATIVES, SELECT COMMITTEE ON ENERGY INDEPENDENCE

AND GLOBAL WARMING, Washington, DC. 

The Committee met, pursuant to call, at 9:30 a.m., in room 2172, 

Rayburn House Office Building, Hon. Edward Markey (chairman of 

the Committee) presiding. 

Present: Representatives Markey, Blumenauer, Inslee, Larson, 

Solis, Herseth Sandlin, Cleaver, Hall, McNerney, Sensenbrenner, 

Shadegg, Walden, Sullivan, Blackburn, and Miller. 

The CHAIRMAN. Good morning. In the fight against global warming the single greatest challenge we now face is how to reconcile 

our reliance on coal with the urgent need to reduce carbon dioxide 

emissions. Coal-fired plants supply half of all our electricity in the 

United States, and we have the largest coal reserves in the world. 

China and India, two of the largest and fastest-growing economies 

in the world, also have abundant reserves and are even more dependent on coal for electricity generation. 

But while coal is plentiful, and ostensibly cheap, it is also the 

leading source of global warming pollution. Coal-fired powerplants 

emit twice as much carbon dioxide per unit of electricity as gasfired plants, and are responsible for over a quarter of all greenhouse gas emissions, both in the United States and globally. 

We are at a watershed moment in the history of electricity production, and the future of the planet hangs in the balance. By 

2030, U.S. electricity demand is expected to increase by over 40 

percent, and global demand is expected to double. As a result, the 

next two decades will bring the largest and fastest expansion in 

electricity generation in the history of the world. 

We must act now to level the playing field by requiring coal-fired 

plants to internalize the costs of their global warming pollution. If 

we fail to do so, all our efforts at expanding renewables and improving efficiency are likely to be drowned by a tidal wave of coal. 

There are over 150 new coal-fired powerplants on the boards in 

the United States, and, globally, it is predicted that something on 

the order of 3,000 such plants will be built by 2030. These new 

plants alone would increase U.S. greenhouse emissions by 10 percent and global emissions by 30 percent. That would spell disaster 

for the planet. 

There is a growing consensus that to avoid dangerous global 

warming we need to reduce global greenhouse gas emissions by 50 


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percent or more by 2050. The United States will need to reduce 

emissions by as much as 80 percent by 2050. These objectives, 

quite simply, will be impossible to achieve if we fail to move quickly to control carbon dioxide emissions from coal-fired powerplants. 

Fortunately, carbon capture and storage, or CCS, offers a path 

forward for coal and a bridge to a low-carbon future powered mainly by renewables. CCS involves capturing carbon dioxide emissions 

at the source and injecting those emissions into deep geological formations to isolate them from the atmosphere. All indications are 

that CCS is a viable interim solution to the coal problem, but current DOE projections suggest that CCS will not be commercially 

available until 2020 or later, after most of the new coal-fired plants 

now on the boards, both here and in China, will already have been 

built. 

We must pick up the pace. This Congress is already taking steps 

to do so. The House and Senate energy bills each provide nearly 

$1.5 billion in funding over the next several years for CCS research, development, and deployment. But subsidies alone will not 

be enough. To unleash the private sector’s vast resources and ingenuity, we need a regulatory driver. We must enact limits on carbon 

emissions now. 

The country is ready for action. While wind and other renewables 

are booming, public concern about global warming has virtually 

halted construction of new coal-fired powerplants in the United 

States. It is in everyone’s best interest that Congress act now to 

require rapid deployment of CCS to provide a path forward for coal 

and to give utilities the certainty they need to make sound investment decisions. 

The policies we adopt will have global impacts. If we fail to bring 

CCS online in the near future, the fleet of coal-fired plants already 

being built in China and India will swamp whatever emissions reductions we achieve here or in Europe. But, instead, we now have 

a chance to blaze this new trail. The world will follow if we give 

the leadership, and we will reap the environmental and economic 

rewards of that leadership. 

The time for opening statement by the Chair has expired. I turn 

to recognize the Ranking Member, the gentleman from Wisconsin, 

Mr. Sensenbrenner. 

[The statement of Mr. Markey follows:] 


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Mr. SENSENBRENNER. Thank you very much, Mr. Chairman. 

Crisis. Catastrophe. Danger. These are the terms you often hear 

to describe global warming. In fact, former Vice President Al Gore 

once used all three of these terms in just one sentence. 

I prefer the terms ‘‘opportunity’’ and ‘‘possibility.’’ Perhaps nowhere is there greater opportunity for the United States than on 

the topic of today’s hearing: the development of carbon capture and 

storage technology. Advancing technologies must be a key element 

to any global warming policy, and carbon capture and storage may 

be the most important and promising technology under development. 

Why? Effective and affordable carbon capture technologies give 

the United States an opportunity to fully use our most plentiful energy source—coal—while helping reduce carbon dioxide emissions 

at the same time. Coal powers nearly half of the electricity production in the United States, and it is estimated that we have a 250- 

year supply. No state produces more coal than Wyoming, and I am 

pleased that Governor Freudenthal is here to tell us more about 

this vital energy source. And I welcome him, even though he is on 

the other side of the aisle. 

It is estimated that electricity demand in the U.S. alone will 

grow by over 40 percent by 2030, just 23 years. And where will we 

get this energy? Coal is one of the most readily available energy 

sources we have, and it simply has to be a part of our energy future. 

Already we know that technology exists that can remove up to 

90 percent of carbon emissions from coal. These kinds of results 

will produce tangible benefits for the environment, which must be 

another essential element of any global warming policy. I am encouraged that there are a variety of carbon capture technologies in 

development. The government should foster this competition, but 

under no circumstances should we let government decision who 

wins and who loses. That is what markets are for. 

One competitor in this race is located in my home State of Wisconsin. We Energies is conducting a first-of-its-kind carbon capture 

test at its Kenosha facility. We Energies is working with the Electric Power Research Institute on this project, and I welcome EPRI’s 

Director of Generation, Stuart Dalton. 

American Electric Power is also in this race, and I am happy 

that Michael Morris, the company’s Chairman, President, and 

CEO, is here to tell us more about the research his company is conducting. 

Global warming is not just a worldwide problem. It also provides 

worldwide opportunities for innovative companies like We Energies 

and American Electric Power. Coal provides for 79 percent of China’s electricity production and 68 percent of India’s. China has already overtaken the United States in carbon emissions, and India’s 

emissions growth continues to soar. If worldwide emissions are to 

be lowered, then China and India must be part of the solution. 

It appears that American researchers are well on their way to 

developing the technology to make carbon capture and storage an 

affordable reality for the entire world. Imagine a giant ‘‘Made in 

the USA’’ sticker on future Chinese powerplants. What goes around 

comes back. And that is turning a crisis into an opportunity. 


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Let me apologize for not being able to stay for most of this hearing today, because I do have another obligation that I had committed to before this hearing was set. But I will read the testimony, and I am certain this will be a constructive input into what 

the United States ought to do relative to solving this problem. 

I thank the Chair. 

The CHAIRMAN. I thank the gentleman. 

The Chair recognizes the gentleman from Oregon, Mr. 

Blumenauer. 

Mr. BLUMENAUER. Thank you, Mr. Chairman. And I appreciate 

this opportunity the hearing affords. As both you and the Ranking 

Member have made clear, this is perhaps the central environmental challenge we face. Coal is a reality, coal is an opportunity, 

coal is both a threat and a solution, and I look forward to the 

panel. 

I apologize in advance. We have a Ways and Means panel that 

is going on that our Chairman has labeled the ‘‘Mother of All Hearings,’’ which is a hint that I need to spend a little time there, and 

I will try and come back and forth. But I am keenly interested in 

the record that is being built and the offers that are coming forward. It is central to global warming, it is central to pollution, it 

is central to energy, not just for the United States, but, as has been 

referenced, China and India, which are even more dependent and 

greater users. 

The big questions about how to properly price carbon, how we 

can encourage and incent the technological developments, what is 

the appropriate regulatory framework—there will be some, there is 

some already, what adjustments need to be made—are part of the 

important work of this Committee, and part that each of our witnesses can help us understand. 

And I do appreciate this, and I look forward to the results of the 

hearing. And I anticipate, Mr. Chairman, an opportunity for us to 

roll up our sleeves and spend much more time on this in the future. 

Thank you very much. 

The CHAIRMAN. I thank the gentleman. 

The Chair recognizes the gentleman from Arizona, Mr. Shadegg. 

Mr. SHADEGG. Thank you, Mr. Chairman, and I want to thank 

you for holding today’s hearing on the future of coal under a mandatory cap and trade program, and the possible technologies for 

carbon capture and sequestration. 

I want to welcome our witnesses and tell you each that I look forward anxiously to your testimony. I have reviewed your written 

testimony. 

I think everyone on this Committee understands the importance 

of this issue. Many of my colleagues who are from coal-producing 

states like to point out that we have vast resources of coal, and 

that coal has to play a part in our energy future. At the same time, 

there is a clear need to deal with what I will call the ultimate goal, 

and that is reducing carbon emissions and using energy more efficiently and productively. 

I think that with regard to a cap and trade system many have 

already rushed to embrace it as the right solution to this problem. 

I personally am not convinced of that. I am not convinced that a 

more transparent solution and a solution that might be able to be 


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implemented on a global basis wouldn’t be, at least to start with, 

a carbon tax. 

But put aside the mechanism. The more important thing is to 

focus on the goal, and that goal is to be able to use the energy we 

have, including the energy produced by coal, and at the same time 

reduce carbon emissions. Therefore, I am extremely interested in 

the testimony of these witnesses regarding the current technology 

surrounding carbon capture and sequestration regarding its economic viability, regarding what it will cost to our energy, and regarding how soon it can be implemented. I think those are serious 

questions. 

Over the August break, I went to Japan to look at nuclear power 

being developed there, and I also went to China to look at the energy situation there. China brings on, as you know, a new coalfired powerplant every week—roughly a 250 megawatt plant—and, 

unfortunately, they are largely without any emissions controls at 

all, or at least not emissions controls that are currently being used. 

And they are clearly without any mechanism to capture the carbon 

which is emitted by those plants. 

The technical solutions that we are going to discuss here are vitally important to our future, and I again thank the witnesses for 

their testimony and thank you, Mr. Chairman, for the hearing. 

The CHAIRMAN. I thank the gentleman. 

The Chair recognizes the gentleman from Washington State, Mr. 

Inslee. 

Mr. INSLEE. Thank you. First, I want to comment that I am 

heartened by Congressman Sensenbrenner’s comments of seeing 

this issue we are talking about today as an economic opportunity. 

And I think this is one for us in the United States, and I am encouraged by prospects of it, and I look forward to testimony. 

There are a couple of things I hope the witnesses will address. 

One, I hope you will address what needs to occur short term to assure that we don’t make a mistake of constructing what we will 

just call dirty coal plants now in the next decade and lock ourselves 

into really, really bad investments. 

What needs to happen short-term, namely in this Congress, to 

prevent those unwise investments from being made that we will 

rue in the future? So far there is some good news that they are not 

being made, because of some good, common-sense visionary decisions being made not to build those plants in local communities, 

but I would like to know your thoughts on that. 

Second, I hope you will give me—give us your view of what a regulatory structure should look like to regulate all issues regarding 

CO2 sequestration, including liability, including ownership, including the permitting process. I very much appreciate your advice 

about that and how do we think about that, and I will look forward 

to it. 

I learned about clean coal writing this book called Apollo’s Fire 

with another fellow here this last year, and I just want to say that 

it was eye-opener, because before I wrote the book I really didn’t 

see a lot of prospects for coal. But now, seeing the new technology 

coming on, it is something we have got to be aware of. 

I look forward to your testimony. Thank you. 

The CHAIRMAN. Thank you. 


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The Chair recognizes the gentlelady from Michigan, Mrs. Miller. 

Mrs. MILLER. Thank you, Mr. Chairman. Really, I have no opening statement. But coming from the State of Michigan, you mentioned that the average—national average is about 50 percent of 

our electricity is produced by coal. Actually, in my State of Michigan, it is 68 percent, so I have a very big interest in the testimony 

of the witnesses today. I certainly want to thank the Chairman for 

having the hearing, and I look forward to the testimony. 

Thank you. 

The CHAIRMAN. Okay. The Chair recognizes the gentleman from 

Connecticut, Mr. Larson. 

Mr. LARSON. Thank you, Mr. Chairman, and thank you again for 

holding this hearing. I, along with Congressman Blumenauer, have 

to leave to attend a Ways and Means hearing and what Mr. 

Blumenauer aptly pointed out our Chairman has called the ‘‘Mother of All Hearings.’’ 

But this certainly is a great hearing this morning and a great opportunity I think, as Mr. Sensenbrenner has pointed out. I am especially glad to see an old friend, Mike Morris, here who headed 

up Northeast Utilities for so many years, and an outstanding CEO. 

And I truly, you know, am interested in what a number of you 

have to say about a system of cap and trade. 

And, Governor, I understand that China’s Foreign Minister was 

recently in Wyoming as well talking about coal, and echo the sentiments of Mr. Inslee, but I am equally interested in what you might 

think about a carbon tax specifically put in a trust fund that has 

an opportunity to focus on payroll deduction and shifting monies 

ultimately to the consumers where costs ultimately will be shifted 

to, and focused research and development that could come from 

that, and especially as we look down the path to dealing with juggernauts like India and China. 

My concern is one of transparency with the program and the 

need to have funding as we look down the path of dealing with 

major countries. I believe China is building a coal plant a day, and 

that raises some grave concerns in the urgency both for clean coal 

technology but also a system in which we can have the wherewithal to hopefully steer them towards alternatives that will do 

less harm to the environment. 

And I thank the Chairman for this opportunity. 

The CHAIRMAN. Great. The gentleman’s time has expired. 

The Chair recognizes the gentleman from Oregon, Mr. Walden. 

Mr. WALDEN. Thank you very much, Mr. Chairman. I, too, am 

looking forward to hearing from the witnesses, especially with regard to this notion of a carbon tax—how high it might be to achieve 

the kind of results some people seek, the effect that might have on 

your industries or the consumers, because it seems to me that the 

consumers are the ones that are going to end up paying it. Even 

if it goes into a trust fund and comes back to them somewhere, my 

guess is the government is going to take its share out of that. 

The second is where we are in terms of carbon sequestration. 

This Select Committee made a trip to Europe. We looked around 

at various facilities, some of which are trying to make gains in this 

area. How far out are we on getting affordable and effective carbon 


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sequestration available for coal-fired plants? And at what cost? If 

there is a cost per kilowatt hour, I would sure like to know that. 

And, certainly, this notion of cap and trade. It is one thing to 

apply to SO2 where we had an identified number of facilities with 

an identified and effective technology available to do the scrubbing. 

I am curious what you do when you apply it to carbon and how effective that will be, and, again, at what cost. 

There was sort of an I guess humorous report that came out 

while we were on Congressional District work period, I am told, 

that four moose belch as much carbon as one car per year. And so 

this is a pervasive problem across the entire globe, and we have got 

to do our part, certainly, but I think we have to be thoughtful 

about it and understand the potential impacts of the decisions we 

may make here, especially relative to their cost, costs on the economy, costs to the consumers, and whether or not the technology is 

actually available and whether it will work. 

And, finally, I would say that this has been another reckless 

summer in America’s forests and grasslands, with unprecedented 

fires that release enormous amounts of greenhouse gases into the 

atmosphere. Catastrophically burned forests releases 100 tons per 

acre of greenhouse gases and emissions. A healthy green forest sequesters five to six tons per acre. I would sure like to see this Congress do something about better managing our forests and dealing 

with the whole issue of deforestation internationally as we let ours 

burn up here. 

I have got people that have lost their jobs this summer because 

the mills have closed, because we are at a record low level of harvest of federal forests. Meanwhile, they burn up in their backyards, 

and sometimes they burn up their backyards. Enough is enough. 

This Congress needs to step up and do something about better 

managing our forests, if you are serious at all about dealing with 

global climate change and greenhouse gas emissions. 

Thank you, Mr. Chairman. 

The CHAIRMAN. I thank the gentleman very much, and we will 

be looking at the forest issue. And I think on your recommendation 

we might be looking at moose-belching offset legislation as well. 

[Laughter.] 

And so those are two good suggestions. 

Let me turn and recognize the gentlelady from California, Ms. 

Solis. 

Ms. SOLIS. Thank you, Mr. Chairman, and I want to applaud you 

also for holding this hearing this morning. Yesterday, George 

Shultz, the former Secretary of State under President Reagan, 

wrote in The Washington Post that our nation and globe is at a 

golden moment, where if we choose wisely we can improve security 

and the environment while at the same time continuing economic 

growth. 

But we have to address two issues in my opinion. First, we have 

to address the use of energy without producing excess greenhouse 

gases. And then, second, we need to address the reduction and 

threat of national security because of our excessive dependence on 

oil. Today’s hearing I think will be a good opportunity to discuss 

the future of coal in that context and how coal fits in an energy 

portfolio without producing greenhouse gases. 


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This is going to be a challenge for us. Coal has a high carbon 

content, and coal-powered fire plants emit twice as much carbon 

per unit of electricity as natural gas-fired plants. In addition, coalfired powerplants are responsible for a number of co-pollutants 

which are harmful to the health and well being of many of our constituents. 

In a district like mine, and other communities of color, 5.5 million Latinos live within 15—within 10 miles of a coal-fired powerplant, significantly affecting their health outcomes, developing 

asthma and other respiratory diseases. The potential for as many 

as 150 new coal-fired powerplants in the country is troublesome, 

especially in vulnerable communities—communities of color—who 

can’t defend themselves. 

So I am looking at how we can try to address that issue, looking 

at communities that have been disadvantaged in the past, and 

might be the easiest location to put these powerplants, and yet trying to have the government treat these communities with a fair 

and balanced approach. So I am looking forward to hearing from 

the witnesses today. 

And also, as you know, I represent a State that has been very 

progressive on this issue. In fact, with the passage of AB 32, one 

of the major legislations that was supported by Governor Arnold 

Schwarzenegger, is having a tough time making its way through 

implementation. But I think we can learn a lot from that, and I 

hope that some of you will address that. 

I know some of our environmental groups have also challenged 

individual corporations who want to continue with building out 

these different types of powerplants, because they will be harmful 

to many communities of color that are going to be most vulnerable 

on the so-called food chain. So if you can help address that, that 

would be very important to me. Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Great. The gentlelady’s time has expired. 

The Chair recognizes the gentlelady from Tennessee, Mrs. 

Blackburn. 

Mrs. BLACKBURN. Thank you, Mr. Chairman, and thank you to 

our witnesses. As you have heard from everyone, we all are so interested in the carbon emissions, the sequestration storage capture 

technologies, and also the cap and trade system. I do have a couple 

of points that I am looking forward to hearing from you on. 

First of all, in my list of concerns is implementing a mandatory 

cap on carbon emissions and the burden that that would place on 

the American economy. And some estimates that I have read are 

that the cost of the cap would increase the cost of electricity to the 

consumer by as much as 45 percent. That is of tremendous concern 

to us, that we would see this type increase. And I can assure you 

to my constituents in Tennessee, and all throughout the Tennessee 

Valley, this is a point that has not been lost on them. 

And what we have read is that possibly Americans are not will- ing to spend that extra $40 a month when you look at trying to 

stop the release of carbon dioxide into the atmosphere. Second is 

that carbon capture technology may not be the most effective method to reduce and harness CO2 emissions. Current technology already exists after all in an efficient form that enabled the indusVerDate Mar 15 2010 01:07 Sep 30, 2010 Jkt 058149 PO 00000 Frm 00014 Fmt 6633 Sfmt 6602 E:\HR\OC\A149.XXX A149

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tries to harness CO2 for other applications, and some of the reading 

we have had presented to us on that is really quite interesting and 

definitely innovative. 

Some use the technology to recover more oil from wells, and some 

are using it to capture CO2 from powerplants and car fumes, to 

grow algae, which in turn is used to produce biofuels. So I think 

we are looking forward to hearing your take on that. 

A couple of the members have referenced the trip we made to 

Europe to hold some meetings this year and to look at the cap and 

trade system. And I do have some serious concerns about the system. I have also had several concerns regarding the use of the carbon capture technology. Many are advocating that the Federal Government buy into the new technology despite what is a tenuous 

record at best. 

And I would say that one of the things we learned in Europe during our meetings that is very instructive is that we should look 

carefully and evaluate very carefully, both on the technologies and 

on the cap and trade system, before we leap into this. So we welcome you, and we look forward to hearing from you today. 

Thank you, and I yield back. 

The CHAIRMAN. Great. The gentlelady’s time has expired. 

The Chair recognizes the gentlelady from South Dakota, Ms. 

Herseth Sandlin. 

Ms. HERSETH SANDLIN. Thank you, Mr. Chairman. I thank you 

and the Ranking Member for this very important hearing. I am 

looking forward to the testimony of the witnesses today. 

As has already been stated, more than 50 percent of our nation’s 

electricity comes from coal-fired powerplants today, and demand for 

energy continues to rise. So we must find ways to use this abundant domestically-produced resource in a way that is economically 

viable and environmentally sustainable. 

One way to do that is, as has already been mentioned in other 

opening statements of my colleagues, through capture and sequestration of greenhouse gases that are emitted as coal is burned, 

most specifically CO2. As I have indicated to the Committee before, 

the Dakotas, neighbors to the great State of Wyoming, have an impressive story to tell in this regard. Basin Electric is a large electricity generating cooperative headquartered in Bismarck, North 

Dakota, that serves much of the northern plains, including much 

of South Dakota. The vast majority of their power comes from 

burning locally-mined coal. 

It also owns a subsidiary, Great Plains Sinfuels, that turns coal 

into natural gas. In 1997, another of Basin Electric’s subsidiaries, 

Dakota Gasification Company, agreed to send at least 95 million 

standard cubic feet of 96 percent carbon dioxide from its Great 

Plains Sinfuels plant through a 205-mile wide pipeline to an oil 

field near Wayburn, Saskatchewan, Canada. 

Dakota Gas has been successfully capturing a portion of its CO2

emissions and transporting the gas to Canada since September of 

2000. Today, Dakota Gas operates the largest carbon sequestration 

project in the world. Each day Dakota Gas ships approximately 115 

million standard cubic feet or 6,000 metric tons of CO2 to Canada. 

With the addition of another CO2 compressor in 2006, the capacity 


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has been increased to 160 million standard cubic feet, or 8,000 metric tons daily. 

All told, approximately six million metric tons of CO2 have been 

sequestered since the project began in October of 2000. The CO2 is 

expected to be permanently sequestered in the oil reservoir, which 

is monitored by the International Energy Agency. This successful 

project indicates that such technology is available, and we can 

make it feasible and economically viable. 

So I look forward to any thoughts that the witnesses have on 

that technology and familiarity with that project, and other issues 

related to geologic sequestration or other beneficial industrial uses 

of these gases, and also looking forward to continuing to share the 

opportunities that the Dakotas have seized as we deal with the 

issue of promoting energy independence and fighting global warming. 

And, Mr. Chairman, before I yield back, I am pleased to hear 

that we will be addressing in more detail the issue of forest management. Mr. Walden and I have worked on that issue in the past 

on the Natural Resources Committee, and think it is another area, 

particularly in rural parts of the country, where we can help find 

solutions to the issue of greenhouse gases. 

Thank you, and I yield back. 

The CHAIRMAN. I appreciate that. Thank you. 

The Chair recognizes the gentleman from Missouri, Mr. Cleaver. 

Mr. CLEAVER. Thank you, Mr. Chairman. 

I am pretty much convinced that the legitimate epicenter for the 

War on Terror is in coal mines, that if we are serious about reducing our dependence on foreign oil we must hasten the development 

of the technology to produce clean coal. 

I was somewhat alarmed to discover that the capital powerplant 

burned 17,000 tons of coal each year, which produces about 60,000 

tons of CO2. And I think following the leadership of our speaker, 

and the vision of our Chairman, Mr. Markey, we did pass H.R. 

3221, which I think is revolutionary in that we are beginning to install technologies for the capture and storage of CO2. I am also, in connecting this with your testimony, concerned 

about something the President quite often mentions, which is this 

future gen powerplant. I am interested in how real it is, and if, in 

fact, it is real, what do those of you who I consider to be members 

of the coal intelligencia believe we can expect from this future gen 

powerplant. 

Thank you, Mr. Chairman. 

[The statement of Mr. Cleaver follows:] 


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The CHAIRMAN. Great. The gentleman’s time has expired. 

The Chair recognizes the gentleman from California, Mr. 

McNerney. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

This is a very difficult and interesting subject, and, as I said yesterday in our hearing on coal to liquid, that we need to keep an 

open mind on this. And I have to find myself in agreement with 

the Ranking Member in looking at this as a tremendous opportunity for our country and for many sectors of the economy that 

can take advantage of coal and use it in a way that does not impact 

the global warming issue. 

For example, I heard recently of an interesting study that took 

place in Canada that affects states like Wyoming that have a lot 

of wind and a lot of coal. If you put in a large wind powerplant, 

about 20 percent of that wind power can be considered to be base 

load, whereas the other 80 percent is intermittent and can be used 

to process coal to produce energy products and to produce construction materials. 

And so the coal and wind make a good partnership, which was 

quite surprising to me, because I am a wind power advocate and 

I spent my career in wind energy, so it was interesting to see that 

development. You would have expected coal and gas to make a 

good partner, but it doesn’t because gas-powered plants require 

high operating performance. And when you turn them back, when 

wind comes up, they operate poorly. 

So coal and wind is the natural partnership. So I would like to 

see that kind of advancement, that kind of research, open up new 

opportunities for both renewable and the old fossil fuel types of 

power. So I am looking forward to your testimony. Thank you for 

coming in today, and I will reserve the balance of my time for questions. 

Thank you. 

The CHAIRMAN. Great. The gentleman’s time has expired. 

The Chair recognizes the gentleman from New York, Mr. Hall. 

Mr. HALL. Thank you, Mr. Chairman, and welcome. I was going 

to call you the co-elite, but thanks to Mr. Cleaver I have changed 

that to co-intelligencia. 

Obviously, this is a question that we are considering today of 

great importance, because of the abundance of coal in our country 

and the need for our energy policy to change away from oil, but at 

the same time, as many have mentioned and as you all know, that 

getting the carbon emissions under control is critical to our dealing 

with global warming, which is the other mandate of this Committee. 

And so I am just hoping to hear from the panel, in addition to 

the expert testimony which is about to be given, about our ability 

to incorporate sequestration technology into new plants; whether 

we could be doing more to retrofit existing plants with post-combustion methods; the balance between or the choice between cap 

and trade and carbon tax, which is—they are talked about sometimes as alternatives and sometimes as complementary approaches; 

about the developing world and how the U.S. can be more of a leader than we are, and how we can take a more cooperative approach 

from the outset; whether any of our experts are aware of an interVerDate Mar 15 2010 01:07 Sep 30, 2010 Jkt 058149 PO 00000 Frm 00018 Fmt 6633 Sfmt 6602 E:\HR\OC\A149.XXX A149

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governmental or international scientific efforts to develop sequestration in cooperation with these other countries to help them deploy them faster; and the potential for direct technology transfer, 

once we develop better sequestration methods. 

I am also interested and hoping to hear ideas about incorporating carbon offsets into our trade agreements, and was wondering if Mr. Morris in particular could elaborate a little bit more 

on that possibility. Your testimony, sir, makes reference to administering a border tax. I am wondering if there is a possible way 

that this idea could be used to create a carbon tariff to use the 

market in driving countries like China to deal with emissions, and 

can we start incorporating these ideas now into our bilateral trade 

agreements without waiting for a new Kyoto. 

So there is plenty to discuss, and, Mr. Chairman, I thank you for 

holding this hearing. I yield back the balance of my time. 

The CHAIRMAN. Great. The gentleman’s time has expired, and 

time for all opening statements from members has expired. 

We will now turn to our very distinguished panel, and we will 

welcome our very first witness, who is Wyoming Governor Dave 

Freudenthal. Wyoming is the largest coal-producing state in the 

United States, and it is also the largest energy exporting state 

overall in the United States. Governor Freudenthal has a very long 

and distinguished career in public service and in the private sector. 

And there is probably no one in elected office in the United States 

that knows more about coal than Governor Freudenthal, and we 

are very honored to have you with us here today, sir. Whenever 

you are ready, please begin. 

STATEMENTS OF DAVE FREUDENTHAL, GOVERNOR, WYOMING; MICHAEL MORRIS, CEO, AMERICAN ELECTRIC 

POWER; CARL BAUER, DIRECTOR, NATIONAL ENERGY TECH 

LABORATORY; DAVID HAWKINS, DIRECTOR, CLIMATE CENTER, NATIONAL RESOURCES DEFENSE COUNCIL; ROBERT 

SUSSMAN, PARTNER, LATHAM & WATKINS, LLP; AND STUART 

DALTON, DIRECTOR, GENERATION, ELECTRIC POWER RESEARCH INSTITUTE 

STATEMENT OF DAVE FREUDENTHAL 

Governor FREUDENTHAL. Mr. Chairman, members of the Committee, thank you. First of all, Mr. Chairman, it is clear that neither you nor I are under oath when you refer to me as having any 

expertise, so I guess you can get away with that. I do not know as 

much as I would like to know about this. 

I am just going to fire through to try to deal with some of the 

questions. I think one of the things to understand about Wyoming 

in context was alluded to by the Chairman, which is that while we 

are the leading coal producer, natural gas production has actually 

eclipsed coal production in our State in terms of value to the economy. We are also—we produce half of the uranium that is in this 

country. We have an immense number of wind reserves, which are 

generally being tapped, but will be tapped more seriously as you 

get some powerlines. 

So from the point of view of Wyoming, whichever option you decide to pursue, we have an economic viability. What I am conVerDate Mar 15 2010 01:07 Sep 30, 2010 Jkt 058149 PO 00000 Frm 00019 Fmt 6633 Sfmt 6602 E:\HR\OC\A149.XXX A149

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cerned about is that we are approaching coal, frankly, failing to understand its role in the energy mix. And I am pleased to hear the 

Committee acknowledge that no matter what we do we are going 

to be dealing with coal going forward. 

And it is an important element for us to focus on, and in that 

context I was perplexed that while the bills that were passed by 

the respective Senate and House talked about incentives and studies with regard to carbon capture and sequestration, they didn’t 

talk about incentives for the coal technologies that are essential to 

have some carbon to capture. 

I mean, if you are going to capture it, transport it, and place it 

in the ground, you are going to have to be incenting coal plants 

that have the capacity for that stream of carbon to be captured, either through retrofit of the existing fleet or through underwriting 

some development of technologies and I think commercial demonstration of some of the new technologies that people are talking 

about, because we have bifurcated the issue. 

We have said, ‘‘Let us talk about carbon capture and sequestration,’’ but carbon capture is really tied to the technologies that we 

are going to encourage to develop, so that there is some carbon to 

capture, that you have the capacity to capture it, and then the capacity to move it and the capacity to inject it. 

The second point that I would make is you need to distinguish 

between carbon capture and sequestration and the utilization of 

carbon for enhanced oil recovery. Enhanced oil recovery is—it is a 

process by which you infuse the CO2 into the ground, that breaks 

up the molecules, moves faster. That is not the same as carbon sequestration. That field that is amenable to that—and I think it is 

some of the low-hanging fruit for us as a country to get carbon sequestered, but that is—you are not sure it is going to stay there. 

And so until you have made some significant study or effort to 

assure yourself that that carbon is going to stay there, that you can 

cap all of those holes in that field, I would urge you to be careful 

about equating enhanced oil recovery with carbon sequestration, 

because they are not the same. Now, they may be able to be the 

same in the sense that the fields may be amenable. 

The other thing is that, be careful about thinking of natural gas 

as the automatic answer. In our State, we have an immense 

amount of gas produced. We also have processing plants which for 

every MCF of gas that is produced and shipped to California, two 

MCF of CO2 are thrown off either into the atmosphere or into enhanced oil recovery. So when you are talking about how blessed gas 

is—and I love natural gas, it is great for my State—but I will tell 

you, in the context of your environmental calculations, it is an answer, but it is not a perfect answer, and you need to be careful 

about going forward with that. 

With regard to sequestration, we have a lot of experience on enhanced oil recovery. We have found a number of formations which 

may be amenable to long-term sequestration, but the government, 

the Federal Government, needs to step up, fund those experiments, 

and make sure that it works. Don’t mandate something without 

putting in place a pathway for us to get there, a pathway both for 

the states, the Federal Government, and, more importantly, for the 

private sector. 


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One of the things that I was asked to comment on is the role of 

the states. I have made my career beating up on the Federal Government, and it pains me greatly to be here and suggest that we 

need a federal mandate and a federal road map to deal with this, 

because I don’t believe that while Oliver Wendall Holmes was 

right, that states are the laboratories, ultimately the ground rules 

are going to have to be set by the Federal Government. And you 

see the individual state efforts and the individual accumulation of 

states in the northeast, in the west. All we are really doing is vulcanizing this economy. 

And if we don’t come up with a serious set of ground rules that 

recognize that this is an interrelated economy throughout the 

United States, all you are going to do is leave individual states to 

make decisions and to give signals to the private sector which are 

contrary to the fact that these are all interrelated transmission 

grids, these are all interrelated systems, and I would encourage 

you that the Federal Government—none of the private money is 

going to move, none of the states are going to know realistically 

what to do until the Federal Government drops the other shoe, 

which is to say, ‘‘How are we going to monetize carbon in some 

form?’’ Be it a tax or a cap and trade. 

Mr. Chairman, I note that my time is up. I appreciate the opportunity to be here. A little more than you wanted to hear, but—— 

[The prepared statement of Governor Freudenthal follows:] 


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The CHAIRMAN. No, no. Again, you know, Mark Twain used to 

say that an expert is anyone who lives more than 500 miles away 

from a problem. And you, of course, live in Wyoming, so it is a Congressional expert that is the oxymoron, like jumbo shrimp or Salt 

Lake City nightlife. I mean, there is no such thing. [Laughter.] 

So we need people like you, Governor, who come into town who 

actually are the experts to help us to understand these issues. 

I am pleased to introduce our second witness, Mr. Michael Morris. He is the Chairman and CEO of American Electric Power. AEP 

is the largest electric utility in the United States, serving over five 

million consumers in 11 states, and it is also the largest consumer 

of coal in the United States. Under Mr. Morris’ leadership, AEP 

has been an industry leader in the development of carbon capture 

and storage technology. 

We welcome you, sir. Whenever you are ready, please begin. 

STATEMENT OF MICHAEL MORRIS 

Mr. MORRIS. Thank you very much, Mr. Chairman, and thanks 

for the opportunity to be here. I am intrigued by the questions that 

you have all racked up for us in your various introductory statements, and I know that, given the time that we will have to give 

comments and thoughts back and forth, this will be an extremely 

meaningful session. 

I surely want to say hi to the Congresswoman from Michigan, 

who, while I was at Consumers Power for 12 years, had a lot of 

fun working with over the years, and you as well when I was at 

Northeast Utilities, Mr. Chairman. 

I see this challenge not unlike the Ranking Member. It is, in fact, 

an opportunity. In your introductory comments of me, you mentioned 5.1 million customers. I have an obligation to make certain 

that there is adequate energy supply for those men and women in 

those industries, in those commercial operations, 24 hours a day, 

seven days a week, every day of the year. And for the most part, 

we do that. When weather intervenes, sometimes we aren’t there 

when they want us, and that is very disturbing to them and understandably so. 

Coal, as the Governor said, is an essential part, as many of you 

said in your opening comments, to the overall equation of how we 

will satisfy that demand across this entire country. Doing that with 

the respect for the environment is essential as well. To that end, 

we filed testimony to touch on many of those points, but let me 

subset on a couple of the specific questions that were sent to me 

by the Committee and by you. 

The fact questions 3 and 4, ‘‘What is my company doing about 

this challenge?’’—and our testimony is full of those kinds of issues, 

but, secondarily, question number 4, ‘‘When is a practical carbon 

capture and storage technology deployment going to be available 

for this country?’’ 

We would believe that in the timeline in the latter half of the 

next decade we will have validated concepts that are already out 

in the marketplace, yet not out of the laboratory in the marketplace, to show that in fact, just as other flu gas issues or prior burn 

issues can be removed from the stream of carbon—of the coal fuel, 

we will have a chance to do that. 


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We intend, by 2009, at Appalachian Power in—that serves the 

states of West Virginia and Virginia—to do a 30-megawatt validation project on capture and storage there. We have worked with 

Battelle. We have subsurface storage actually at our Mountaineer 

site, and that would be our plan by 2009. 

By 2011/2012, we will move that validation project out to Rogers 

County, Oklahoma, where at one of our major northeastern Public 

Service of Oklahoma stations we will capture up to 200 megawatts 

of carbon. There we will use it, as the Governor suggested, in enhanced oil recovery for the gas and oil fields in Oklahoma. We 

think that is an excellent way to go about doing that. 

For the new plants—and those are both retrofit opportunities, 

which is essential for us to continue to keep the fleet out there for 

all of us in this country. For new plants, integrated gas combined 

cycle technology, ultra-supercritical technology, which we would 

hope to build also in Oklahoma with other partners, are part of the 

answer to use coal logically as we go forward. 

So to the validation projects and the integrated gas combined 

cycle, we believe by the middle of next decade to the beginning of 

2020 that technology will be there for us, and we as an industry, 

we surely as a company, will begin to deploy that as fast as we can. 

I think it is important to the notion of 150 coal plants to be built 

in some very short period of time. 

The EIA unfortunately is always wrong in their forecast, and 

there is no way in the world we are going to build 30 or 40 nuclear 

stations, no way in the world we are going to build 150 coal-based 

generation stations in this country. Remember, in each and every 

of your states, we can’t simply build whatever we would like. We 

can only build what the Public Utility Commission, Public Service 

Commission, or regulatory body will allow us to build. 

The coal plants need to be built, and they, in fact, will be built 

between now and then. As to the notion of putting technology out 

there, what everyone will build at least will be coal capture-ready 

stations, if not coal capture deployed technology, because it isn’t 

there yet. This is a very different timeline than the one that we 

shared a few decades ago when my company and my industry were 

very strong in the notion of ‘‘not now, not ever.’’ 

This is a willing industry, a willing company, a willing people, 

who simply want to have the timeline to allow the technology to 

develop, so that in fact we just don’t get a political soundbyte but 

we get something that works. 

To the gentlewoman from the Dakotas, I was part of the environmental study that—at American Electric Power Company—or, excuse me, at American Natural Resources when the gasification 

project was built. It has turned out to be an excellent idea. The day 

it came online it made gas for $8 a million BTUs into a $2 market, 

and everyone thought it was a terrible idea. Today, it does exactly 

as you suggest. 

In the ’60s, ’70s, ’80s, and ’90s, we have used more electricity in 

this country than ever before every decade. The air and the water 

have gotten cleaner in each of those decades. If we are logical about 

how we do this, we can find an answer. 

As to the global nature, it isn’t U.S. warming, it is called global 

warming. We need to make certain that China, India, and other 


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countries join us in this endeavor. What the unions and American 

Electric Power have put forward, and is being embraced at least at 

the principal committee in the House, and being embraced in writing in the Senate, is a concept that is WTO-compliant that ought 

to address that issue and cause them economically to want to do 

something. 

Mr. Markey, in your opening comments you mentioned a number 

of plants being built here. They will be carbon capture-ready. The 

plants that are being built in China are not. That is a huge difference. This is a global issue, and there is no sense saddling the 

U.S. economy without addressing that global nature. 

Thanks for the opportunity to be here. I look forward to the questions and answers. 

[The prepared statement of Mr. Morris follows:] 


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The CHAIRMAN. Thank you very much. 

Our next witness is Mr. Carl Bauer. He is the Director of the Department of Energy’s National Energy Technology Laboratory. A 

nuclear engineer by training, Mr. Bauer oversees much of the Federal Government’s research and development efforts on coal-fired 

generation technologies and carbon capture and storage. He is recognized as one of the leading experts in this field. We welcome you 

today, Mr. Bauer. 

STATEMENT OF CARL BAUER 

Mr. BAUER. Thank you very much, Mr. Chairman, and members 

of the Committee. I appreciate the importance that this Committee 

has in addressing the future of the United States and the world 

from energy and the environmental impacts of its use and production. 

The economic prosperity of the United States over the past century has benefitted from the abundance of fossil fuels found in 

North America. These fuels are important to our energy security 

and the global economic competitiveness we experience. However, 

these concerns of climate change and air pollution challenge our 

ability to continue to take full advantage of these resources. 

Recently, countries like China have seen dramatic growth, as we 

have mentioned earlier and the Committee members have all recognized. But a point that you might not have seen just recently 

came forward. In the last quarter, China put online 30 gigawatts 

of coal-fired power generation. 

That is four to five times more than we have built in this country 

in the last five years. That is a very important point. India is also 

putting things online, and we believe that the eastern European 

countries will also continue to depend on coal power generation as 

one of their mainstays. So this global climate change issue in CO2

from coal-fired and fossil-fired plants is extremely important. 

In 2004, the global anthropogenic CO2 emission amounted to 27 

billion metric tons. By 2030, global CO2 emissions are projected at 

43 billion metric tons per year. China and India and the other nonOECD Asian countries will contribute 57 percent of that. In comparison, the United States will—from coal-fired generation will contribute to 6.8 percent of that. 

Nevertheless, because of these concerns of global climate change 

and the need to stabilize greenhouse gas emissions, the U.S. must 

consider rolling back CO2 emissions to a level substantially below 

today’s. Carbon capture and storage technologies offer a great opportunity to pursue these reductions, as the Committee has recognized in their opening statements. 

Fortunately, the U.S. and Canada are blessed with an abundance 

of geologic storage capacity. At the current rate of energy production use, we could potentially store all of the associated CO2 emissions in North America for a period of over several hundred years. 

One scenario that DOE has looked at in terms of accelerating 

commercial application of carbon capture technology is to couple 

CO2 capture from powerplants with enhanced oil recovery, as the 

Committee has recognized. This may represent the earliest and 

most economic—and I emphasize economic—project opportunities 


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for a power company to address the technical and economic risks 

of investing in carbon capture technology. 

In today’s world of global commerce, there is presently no significant business incentive to deploy carbon capture technology. In 

order for the marketplace to more aggressively address our nation’s 

need for effective, safe, permanent, and economic carbon mitigation 

options, we must move forward towards the following, I would suggest—an established regulatory framework for industry and its financial partners in order that they may do an assessment of the 

risk and the financial investments required; the development of accurate methods to calculate the allocation of risk and potential financial consequences associated with long-term liability, not decades but hundreds of years; an international agreement on patent 

and intellectual property protections, so those who can come up 

with the best ideas feel they have a chance to realize a financial 

return on their investments of their intellectual and financial capital; and the development of advanced technologies needed to deliver an economic option. 

DOE’s R&D program is aimed at providing the scientific and 

technological foundation for carbon capture and storage for both 

new and existing fossil fuel powerplants. And I say ‘‘fossil fuel’’— 

as we move to more natural gas and more LNG, there is a recent 

study that just was released in Environmental and Energy Weekly 

that Carnegie Mellon has put forward. 

The study on LNG suggests that the CO2 related from the full 

production—and this is somewhat akin to what the Governor had 

mentioned about the production of natural gas even domestically— 

the release of CO2 into the production of natural gas conversion to 

LNG, shipping, and then turning it back into gas in a pipeline, 

may wind up being just as much when you bring in the powerplant 

and transport as a coal-fired plant does in a CO2 release. 

Now, that is one study. There has been a few other studies similarly, but that again puts us in an awkward spot as fuel shifting 

being the only solution. We have got to find a portfolio of opportunities. 

The program we are heading up with DOE is an opportunity that 

recently presented itself using coal and biomass and capturing and 

sequestering that. Recognizing that biomass is often considered as 

CO2 neutral, because of the short cycle of plant life and the ability 

to withdraw through photosynthesis CO2 from the atmosphere. 

However, if biomass and coal are used together, and the biomass 

and coal resulting CO2 are all captured and sequestered, you actually wind up with not only avoidance of release of CO2 from coal, 

but an actual effective withdrawal of CO2 from the inventory associated with the biological plant growth cycle. 

NETL systems engineers have modeled this, and we believe that 

by co-feeding 11 percent biomass by energy value, with coal, 

through integrated gasification combined cycle plant, which would 

employ 90 percent capture and sequestration—you might call this 

coal biomass and IGCC—the net greenhouse gas emissions would 

be zero or possibly even negative. A similar theory applies for coal 

biomass liquids production, with CO2 capture and sequestration. 

To put it as an example, a nominal 500 megawatt plant consuming 900 tons per day of switchgrass and 5,000 tons per day of 


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coal, and capturing 12,000 tons per day of CO2, would yield a net 

zero life cycle carbon footprint, including not only the power generation but the upstream coal and biomass preparation and transport. 

DOE’s carbon sequestration is addressing these challenges 

through applied research, proof of concept technology evaluation 

and pilot scale testing, large-scale deployments, stakeholder involvement, and public outreach. And those last two are also important as a technological—because it is going to be done locally. 

I realize I have taken my time, and I thank you for the opportunity, Mr. Chairman, and your patience with me. 

[The prepared statement of Mr. Bauer follows:] 


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The CHAIRMAN. Thank you. I appreciate it, Mr. Bauer, very 

much. 

Now I am pleased to welcome Mr. David Hawkins, who is the Director of the Natural Resources Defense Council’s Climate Center. 

Mr. Hawkins is a former Assistant Administrator of the EPA and 

has over 30 years of experience on air quality, climate change, and 

energy policy issues. 

I have been a Congressman for 30 years. David Hawkins has 

been testifying on these issues for all 30 years up here. So there 

is nobody that knows more about this issue than you do. 

David, whenever you are ready, please begin. 

STATEMENT OF DAVID HAWKINS 

Mr. HAWKINS. Thank you very much, Mr. Chairman. I have 12 

points to make and 5 minutes to make them, so let me get started. 

The first is that coal use trends in the United States and globally, 

if continued, will make protecting the climate impossible. But coal 

is abundant and relatively low cost. So trying to convince world 

leaders to give up coal would take a long time, time that we do not 

have. 

So a critical need is to keep new coal plants from being built unless they actually capture their CO2. That is the only way we can 

reconcile these two imperatives. About 3,000 coal plants are now on 

the drawing board, new coal plants, globally around the world between now and 2030. That is less than a 25-year investment period. 

Two-thirds of those are in plan for the developing world, and 40 

percent of them are in China. Now, if these plants operate for 60 

years, and they release all of their carbon dioxide to the atmosphere, the total cumulative emissions during that 60-year period 

would be 750 billion tons of carbon dioxide. 

How do we put that number in perspective? Well, it is 30 percent 

more than all of the carbon dioxide released from coal use in 

human history, and that is from a 25-year period of investment 

from one technology. So we clearly have a problem that we need 

to address immediately. 

Fortunately, carbon capture and geologic disposal technologies 

are ready for use today. Unfortunately, they are not being used in 

the power sector. What we need, as has been observed, is a policy 

framework that assures that carbon capture and disposal systems 

are used for new coal plants and gradually get used on all coal 

plants. 

To do this we recommend a three-part policy package to assure 

that carbon capture and disposal gets deployed without additional 

delay. First, enactment of a comprehensive cap and trade system 

in the United States. We need a comprehensive system in order to 

get the cuts in greenhouse gas reductions that we need, and to provide the flexibility that will keep costs low. 

Second, enactment of a low carbon generation obligation that applies to coal plant operators. This provision would assure that an 

increasing fraction of America’s coal-fired electricity uses carbon 

capture and disposal, and that fraction would increase over time. 

Now, by making this obligation tradeable, the provision would 

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posal plants over the entire customer base of the United States 

rather than the single customer base of the company that happens 

to build the first one or two plants. We think that is an important 

way of keeping costs low as this technology is deployed. 

Third, we recommend enactment of a new source performance 

standard for new coal plants. This will assure that we don’t build 

any more new coal plants that release their carbon into the atmosphere. The first rule of holes is that when you are in one, stop 

digging. Well, building new coal plants that release their carbon 

into the atmosphere would just dig us deeper, and we can’t afford 

that. 

So by combining the new source standard with a low carbon generation obligation, we think we can assure a smooth transition 

away from coal plants that each today emit millions of tons to the 

atmosphere every single year. 

We believe that Congress can and should act this year to pass 

legislation with features—with these features. And if you do this, 

we think that the world will take notice and that the opportunities 

that the Ranking Member Sensenbrenner spoke about will emerge, 

that we indeed can be a marketer of ideas and technology to the 

rest of the world. The world will follow. We have the power to 

change international practice in designing coal-fired powerplants. 

We don’t have the time to wait. 

Thank you very much for your attention. 

[The prepared statement of Mr. Hawkins follows:] 


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The CHAIRMAN. I just want to note it is an unusual moment 

where a witness has given back 30 seconds. Just doesn’t happen 

that often. I just wanted to take note of it. 

Let me recognize the next witness, Mr. Robert Sussman, who is 

a partner at the law firm of Latham & Watkins. Mr. Sussman is 

a former Deputy Administrator of the EPA during the Clinton administration, and is recognized as one of the leading environmental 

lawyers in the country. 

We welcome you, sir. Whenever you are ready, please begin. 

STATEMENT OF ROBERT SUSSMAN 

Mr. SUSSMAN. Thank you, Mr. Chairman. It is a pleasure to be 

here today. I am presenting my testimony on behalf of the Center 

for American Progress, a non-partisan research and educational institute dedicated to promoting a strong, just, and free America. The 

Center has recently published two reports on carbon capture and 

sequestration, which I wrote, along with Ken Berlin, one of my colleagues. And what I would like to do today is to highlight the conclusions to these reports, which are attached to my written testimony and hopefully will be in the record for this hearing. 

What we have heard from several witnesses is that the challenge 

posed by a dramatic increase in greenhouse gas emissions as a result of new coal plants is serious and urgent. If these plants do not 

control their emissions, the consequence will be to add many millions of tons of carbon dioxide to the atmosphere. And this growth 

in emissions will make it very, very difficult to move in the direction that many of us recognize is imperative, which is to reduce 

emissions, ultimately on the order of 70 to 80 percent by 2050. 

The most promising, and as best I can tell the only, path to control CO2 emissions from new coal plants is carbon capture and storage. The task facing Congress is to maximize the likelihood that 

CCS is widely deployed on an expeditious but realistic timetable 

and at a reasonable cost. The stakes are very high. If we succeed 

at this task, we will assure coal a secure place in the future U.S. 

energy mix. If we fail, coal’s historic role as a vital energy resource 

in this country will be at risk. 

And I want to underscore that point, because there is I think 

growing evidence that coal faces a very uncertain future in the 

United States without carbon capture and storage. Two years ago, 

there were rosy predictions of a resurgence of coal, but today there 

is growing public opposition to new coal plants all around the country. Legal and political challenges to these plants are routine. 

In a remarkable development, we saw private equity investors 

taking over TXU, a large Texas utility, announce that they would 

cancel 8 out of 11 proposed coal plants if their buyout was consummated. Recently, in California and Florida, we have seen some 

significant barriers erected to the construction of new coal plants. 

And recognizing these trends, it is interesting that in July 

Citigroup downgraded the stocks of coal companies across the 

board, maintaining, and I quote, that ‘‘prophecies of a new wave of 

coal-fired generation have vaporized while clean coal technologies 

remain a decade away or more.’’ These trends I think underscore 

the urgency of this challenge, and also the very important solution 

that timely CCS deployment can provide. 


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Let me turn to cap and trade programs and to the very important question of whether the cap and trade proposals that are now 

on the table in Congress will lead to timely deployment of CCS. 

Unfortunately, our analysis indicates that the initial stages of cap 

and trade programs are not likely to create carbon prices high 

enough to eliminate the cost differential between new coal plants 

with CCS and those without it. 

This would mean that new coal plant owners are unlikely to install CCS systems until the emission camps for these programs become sufficiently stringent to increase the price of CO2—— The CHAIRMAN. Mr. Sussman. 

Mr. SUSSMAN [continuing]. Allowances to at least $30 per ton. 

This will probably not occur until 2030, and maybe even later. 

The CHAIRMAN. Mr. Sussman, I apologize, sir, but your time has 

expired. 

Mr. SUSSMAN. Okay. 

The CHAIRMAN. So you will have plenty of time in the question 

and answer period, I am sure. 

Mr. SUSSMAN. Okay. Thank you. 

The CHAIRMAN. Okay. Great. Thank you. 

[The prepared statement of Mr. Sussman follows:] 


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The CHAIRMAN. And our final witness is Mr. Stuart Dalton, who 

is Director for the Generation sector of the Electric Power Research 

Institute. Mr. Dalton is a leading expert on coal-fired generation 

and carbon capture and storage. Among other efforts in this 

sphere, Mr. Dalton led EPRI’s contribution to the National Coal 

Council’s report on CCS and the Coal Utilization Council’s—Research Council’s technology roadmap. 

We welcome you, sir. Whenever you are ready, please begin. 

STATEMENT OF STUART DALTON 

Mr. DALTON. Thank you, Mr. Chairman, members of the Committee. I appreciate the opportunity to speak today before the Committee. We believe that the—through the development and deployment of advanced coal plants with integrated CO2 capture and storage coal power can be part of the solution to addressing both our 

growing energy needs, needs for energy independence, and for the 

global climate change concerns. However, we believe a sustained 

RD&D program at greater levels of investment and resolution of 

legal and regulatory unknowns for long-term CO2 storage will be 

required to achieve the technologies. 

In direct response to a couple of the questions that were posed 

earlier by the Committee, I would suggest that if you use today’s 

technology it would probably increase the cost of a conventional 

pulverized coal plant, assuming you were scaling up with current 

technology and took that risk, by some 60 to 80 percent increase 

in the wholesale cost of power. 

And if you put it on a gasification plant using today’s technology, 

that might be a 40 to 50 percent increase in wholesale cost of 

power. That is to the how much question. 

As to the when question, certainly it is heavily debated. We have 

heard different comments on when, but three to five years to build 

it, three to five years to inject, and three to five years to monitor 

adds up to a significant amount of time. And that is one of the 

questions is: when could these be built and proven in operation? 

We have a program that has been developed with about 60 organizations from five continents working, which has laid out an 

RD&D program to move the technology forward. We see crucial 

roles for industry and governments worldwide in aggressively pursuing carbon capture and storage. 

A couple of key points from my written submission. Advanced 

coal technology powerplants, with the integrated capture and storage, will be crucial to the U.S. The availability of advanced technologies could dramatically reduce the projected increases in cost 

of wholesale electricity under a carbon cap, thereby saving the U.S. 

economy as much as $1 trillion by 2050 in our estimation. 

The program has identified pathways to demonstrate by 2025 a 

portfolio of attractive, highly efficient power, and integrated technologies. We see that with an aggressive program multiple largescale capture and storage demonstrations by the middle of next 

decade, and some commercial applications starting around 2020. 

It will take additional sustained efforts past the first applications 

to take the test technology down the learning curve in cost. We 

have identified RD&D that is in the testimony of $8 billion between 

now and 2017, and $17 billion by 2025, needs to begin immediately 


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to fully test that scale. We believe that the House Bill 3221 appears to be consistent with some of these recommendations. 

Major non-technical barriers must be addressed as well, such as 

CO2 storage and liability. Potential sale of CO2 to EOR may help 

some of the early applications in specific localities, as we have 

heard. But we believe ultimately that the primary economic driver 

will be the value of carbon emissions that results from any future 

climate policy. 

We have just produced a study—I hold it in my hand—Electricity: The Power to Reduce CO2 Emissions, and a companion 

study earlier this year, Electricity Technology in a Carbon-Constrained Future. Emissions over the next 25 years could be reduced 

in our estimation. The study shows the largest single contributor 

is reduction by CCS technologies. It also showed that generation efficiency enhancements can contribute significantly. Those two are 

the actual largest contributors to reduction in CO2 in this study. 

It shows that U.S. generation mix based on a full portfolio of 

technologies, including advanced coal technologies, integrated with 

CCS, and advanced lightwater reactors, results in a wholesale reduction of cost of $1 trillion with a stronger manufacturing economy. The portfolio aspect is critical, because no single advanced 

coal technology or any generating technology has clear-cut economic advantages in each region, with each coal, and across the 

range of applications. 

We want to see how we can minimize economic disruption, and 

that, we believe, lies in the full portfolio of technologies. The four 

areas are: increasing efficiency and reliability of integrated gasification combined cycle powerplants, as well as cost reductions; increasing thermodynamic efficiency of coal-fired powerplants, as was 

said by Mr. Morris; improving technologies for capture of CO2; reliable, acceptable technologies for long-term storage; and providing 

the financial mechanisms to share risk. 

In short, a comprehensive program is what is needed. We thank 

you for the opportunity. 

[The prepared statement of Mr. Dalton follows:] 


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The CHAIRMAN. Thank your, Mr. Dalton, very much. 

There are two roll calls on the House floor right now, with about 

six minutes for the members to go over there to make those votes. 

So we will take a very brief recess, and I think that we can reconvene around 11:15, if all of you can take note of that, and we will 

take a brief recess. 

[Recess.] 

The CHAIRMAN. The Committee will reconvene, and the Chair 

will recognize himself for a round of questions. 

Let me begin with you, Governor. In your testimony you state 

that many major investments in the electricity generation sector 

will not come to fruition until we provide regulatory certainty by 

enacting federal limits on carbon dioxide emissions. Is it fair to say 

that further delays in federal action will impose significant costs, 

and that it is in everyone’s best interest that we take action as 

soon as possible? 

Governor FREUDENTHAL. Mr. Chairman, being a lawyer, I hesitate to agree in the affirmative, because the devil is in the details. 

I do believe, and we have the same people come talk to us who 

come talk to this Committee, they want to make the investment, 

but they don’t know in the absence of a federal regulatory scheme 

whether they are going to be able to capture the return. That is, 

will it be recognized by the public utility commissions around the 

country as being legitimately in their rate base? 

But having said that, the action that we take becomes important, 

because it has to have some form of glide path that recognizes the 

relative availability of the technologies at a given state in time. So, 

for instance, I think if one of the suggestions that I have heard is 

that we would just say nobody can build any powerplants today because—if they don’t have carbon capture and sequestration. 

The problem with that is is that in spite of all of the rhetoric nobody has actually done carbon capture, and so what you need to do 

is something that I think most of the companies are looking at is, 

give us a clue what we need to do. We will try to make this thing 

carbon capture-ready, but we may need to proceed to meet our demand with some level of construction. So I think the failure to act 

freezes in place a lot of investment money. 

If we act wrong, we will permanently freeze it out, so we need 

to act in a way that says we are going to be realistic about the 

standard, here is what it is, here is your guidance. If you do this, 

you can get your recovery. 

The CHAIRMAN. Now, you cite a projection that GDP will decline 

by $400 to $800 billion if CCS is not deployed. Can you expand on 

that, and the likely costs? 

Governor FREUDENTHAL. It is one of those numbers that my staff 

picked up. It is either out of the MIT study—I think it is out of 

the MIT study, because frankly, as I admitted before, I am a lawyer, so I don’t pretend to have the answer. But what we are saying 

is is that if we don’t act, and somehow we act inappropriately, I 

think those are the costs. 

And so this is something that has to be done with a scalpel and 

not with a machete. We need to very carefully think about how we 

are going to sculpt the regulatory environment, so that the states 

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tem that helps on the enforcement under a state-approved implementation plan, and the private sector then knows what standards 

they have to meet, which of those costs can be recaptured through 

the various public utility commissions, and the means by which 

they are going to be captured. 

If we lay that out, I think people will react, because they are the 

same ones who talk to you. They come and say, ‘‘Look, we are 

ready to do this, but we can’t do it out of speculation, particularly 

in a regulated environment.’’ 

The CHAIRMAN. Can I ask you—can I ask Mr. Morris this. What 

does ‘‘carbon capture-ready’’ mean to AEP, in terms of the technology you are going to install? 

Mr. MORRIS. Congressman, for us, we see carbon capture in two 

different worlds. The most important and the most critical for all 

of us, this country and my company, is the retrofit technology on 

the existing fleet, because we, as a nation, based on the comments 

that you and others made in your introductory timeline point to the 

notion that over half of today’s generation fleet is coal-based. Actually, more than half of the megawatt hours produced, and, therefore, used to fuel the U.S. economy is coal-based. 

So we have to find a way to capture on the existing stations, and 

that is why we are going forward with the validation projects that 

I mentioned in West Virginia and in Oklahoma, so that we can 

across our entire fleet put that technology to work, presuming that 

the validation undertakings work. 

Now, I, like the Governor, am a lawyer-environmentalist, so I am 

not bothered by the engineering challenges that my team constantly tells me about. I am blessed at American Electric Power 

having among the best engineers for over a century. We have made 

many, many breakthrough technological changes in this industry, 

and we think we are doing that again now. 

Secondly, to the comments that David made, to the comments 

that the Governor just made, we see this as a challenge for a new 

station as well. I would not argue that you cannot go forward at 

the state level and get authority to build a carbon-ready, and, as 

soon as technology is validated, deployed, powerplant built without 

federal intervention, without a federal program. I think that there 

will be bold states that will take that step. 

As I think the Committee knows, clearly in our testimony we 

have such applications in front of the Commission in the State of 

Ohio. They have given us the preliminary go-ahead that is now 

being challenged at the Supreme Court level in the State of Ohio, 

which is the jurisdiction of appeal by right. And in West Virginia, 

we are going forward with an integrated plant. We have filed that 

to the West Virginia Commission and Virginia. Our Appalachian 

Power Company serves both of those particular states. 

So we have every reason to believe that the potential to get those 

plants approved without a federal process will work, but it is a societal cost, and it is a states’ rights issue. And when you think of 

Virginia and West Virginia, very important coal-based states in 

this country, it may well be in their best interest. Clearly, Governor Manchin is a supporter of it, Governor Kaine appears to be 

a supporter of the issue, but it is the charge of their state regulatory commission to make those decisions. 


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Out west, where you are working with lower-ranked coals—no offense, Governor—we are hoping to deploy what is called ultrasupercritical technology, which has not been done in this country. 

It has been done in Germany, it has been done in Japan. Higher 

temperatures, higher pressures, less fuel in for megawatt hours 

out, more expensive than supercritical, no question. 

That issue and, in fact, this very day in Louisiana—excuse me, 

in Little Rock, Arkansas, we have a team testifying in front of the 

Arkansas Commission seeking authority to do that. We have closed 

the record on a similar plant to be built in Oklahoma, as I mentioned. So I am a believer that with logic and timelines that are 

realistic states will go forward and allow us to do these things, because they will, in fact, validate the carbon capture both for the existing fleet as well as technologies for the new fleet. 

And as the technology goes forward for the capture, we will simply deploy that as we go. I think that is a much better approach 

than a command-control approach. That probably was necessary in 

Clean Air Act days, because so many in our industry thought not 

now, not ever. This is a willing industry. We just need the support 

of the states to get that done. 

The CHAIRMAN. You have 30 seconds, Governor. 

Governor FREUDENTHAL. Mr. Chairman, if I might, under our 

law we will, and have, and will continue to permit coal-fired plants. 

The more interesting question to me is: if those plants choose to 

take actions to be carbon-ready, will those expenses be capturable 

in the rate base? And I think under the current law in most states 

it would not be, because it is not least cost, most reliable, whereas 

the—and so I am—I do believe we are going to continue to build 

plants. 

If we are going to want to send a signal to people that says, ‘‘As 

you build them, you should contemplate this,’’ we also have to send 

a commensurate market signal in some sense that they are going 

to be able to recapture those costs. Otherwise, those are shareholder costs and not ratepayer costs. 

And I think that the importance of this discussion is that whatever we do in this area it is going to cost, and it is going to be expensive. And one of the things that—and it is entirely an appropriate investment of societal resources. The only thing I would ask 

is that, as the Committee moves forward, you think about the consequences of that up and down the income scale. 

In our state, the bottom quartile we estimate spends about 16 

percent of their disposable income on energy. The top quartile 

spends somewhere between 11⁄2 and 3. And so you begin these increments—and I was having this discussion with Mr. Hawkins that 

all of these things cost funding, and it is an appropriate expenditure, but we need to be mindful of the people who are going to bear 

those costs, not just the—we may have the capacity to impose those 

costs. The correctness of how we impose those costs I think has to 

be a consideration. 

The CHAIRMAN. You invoked Mr. Hawkins’ name. Can you make 

some observations here on what you just heard? 

Mr. HAWKINS. Certainly, with your permission. I think that, first, 

the MIT study on the future of coal has some very informative findVerDate Mar 15 2010 01:07 Sep 30, 2010 Jkt 058149 PO 00000 Frm 00158 Fmt 6633 Sfmt 6602 E:\HR\OC\A149.XXX A149

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ings on the concept of capture-ready, and I think it is worth the 

Committee taking a look at. 

It is an elusive concept, and may prove to be illusory. The Energy Policy Act of 2005 has a definition of capture-ready that essentially is leaving space for installation of some undefined piece of 

equipment, which has led me to say that, well, I have a driveway 

that is Ferrari-ready. [Laughter.] 

If that is the definition. It is not going to be a simple matter to 

take a plant, which is optimized to run without capturing its CO2, and turn it into a plant that is optimized to run and capture its 

CO2. The energy flows are significantly different. The balance of 

plant equipment is significantly different. What hardware you put 

on in the first place is a complicated calculus. 

All of that leads us to believe that we need to jump to the outcome that we need to pursue in order to reconcile the use of coal 

and protecting the climate, which is just to have a policy that says 

starting in X date new coal plants will have to capture their carbon. Period. And I have outlined in the testimony proposals on how 

you can spread the additional costs associated with that policy, so 

that no single company’s customers see a rate shock. 

This is not—we are not talking about doing this for all 300 

gigawatts of coal-fired powerplants that are out there operating 

today. We are talking about phasing it in one plant at a time, and 

the trick is to get those costs to be spread across the electric consumer’s rate base. That is a reasonable thing to do, because by 

keeping coal in the mix we are avoiding spikes in gas prices that 

will wind up costing customers of gas-based utilities money, even 

if they never consume a kilowatt hour of power made from coal. 

So this is a reasonable approach. We need to get started, and we 

have the technology, and we should not flirt further with the concept of capture-ready, in my view. 

The CHAIRMAN. My time has expired. 

The Chair recognizes the gentleman from Washington, Mr. Inslee. 

Mr. INSLEE. Yes. I want to pursue this issue of capture-ready, because it seems more amorphous than a Ferrari even to me. Can 

any of you tell us what that would actually look like? If we were 

going to say, ‘‘We want the industry, after a certain date, to build 

only capture-ready plants,’’ what would that look like, if we know? 

Anyone? 

Mr. SUSSMAN. Let me try an answer to that question. I think 

that talking about a plant being capture-ready is only the first part 

of the equation. The real question is: when is the plant going to implement CCS? And we have a proposal, which is very similar to 

David’s, which is a proposal for an emission performance standard 

under which new plants would be required to implement CCS. 

Now, and this is a very important point, we would have a phasein period. Basically, we are saying any plant built after 2008, 

which would be the presumed date when legislation would be enacted, any plant built after 2008 would need to capture, either by 

2016 or four years after the first date of operation, whichever is 

later. 

And the significance of that is that there is a phase-in period. So 

if a plant is built on date X, the owners of that plant know that 


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they have to capture and sequester on date Y. And so, therefore, 

when they build and design the plant, they can take into account 

the requirement that capture will ultimately be necessary. During 

that phase-in period, the plant will be ‘‘capture-ready,’’ but the important thing is to have a hard deadline for implementation. 

And we are saying that ought to be 2016 or four years after the 

plant begins operating, whatever is later. 

Mr. MORRIS. Mr. Inslee, I might offer an additional thought 

there, because I think, although I have no reason to argue with either of the colleagues, my colleagues to the left, I am a firm supporter of both of these well-meaning individuals. 

If ‘‘capture-ready’’ simply means, you know, buy a big lot, I 

couldn’t agree more with David that that’s Ferrari desirous or 

something. When we look at the design of our integrated plants 

with General Electric Company and the Bechtel Corporation, we 

are actually looking at the technologies, we are looking at the metallurgy, we are looking at the steam flows, we are looking at the 

things that will need to be done to make certain that once the technology of capturing the carbon out of the fuel stream before it is 

introduced to the plant—very different from a post-combustion 

where you are capturing the carbon out of the flue gas—very, very 

different concepts, is a technology that will be there, and we are 

looking at the requirements of the turbine itself, which will mostly 

run on oxygen, then, rather than run on the synthetic gas. The 

synthetic gas itself will be mostly oxygen rather than a methanebased gas, which we are all much more familiar with. 

So to David’s point, if capture-ready simply means buy a big lot, 

you are not doing anything. To Bob’s point, if we take this pre-requirement period, then all we are doing is build the same captureready plant that I am speaking to. So why have a command-control 

approach to it when it isn’t necessary? Because we will develop this 

technology as a country for the very point that our friend from Wisconsin mentioned in his opening comments: because it is economically in our best interest. It is environmentally in the world’s best 

interest that we develop that technology. 

To us, when we say ‘‘capture-ready’’ that is what we mean. There 

isn’t a technology at the 639 megawatt level, which is what these 

plants will be, that is deployable today. It needs to be validated, 

tested, and then put in place, and that is a difference, I think, not 

a great difference but a difference between what we are talking 

about. 

Governor FREUDENTHAL. Mr. Inslee, it was—in my earlier comments I made reference to the fact that there was no incentive 

package for these technologies, the sort of capture part, in trying 

to make these so-called clean coal technologies function. It seems 

to me that one of the ways to accelerate and to better define how 

quickly these can get into the plants is for the Federal Government 

to be as aggressive with regard to supporting these technologies as 

we have been with regard to wind power. 

We are all very proud of the progress that is made on wind 

power, great benefits for my State, and great potential benefits. 

But this is really dependent on a tax credit that the Federal Government put in place for wind power. If we are equally serious— 

the other reason I like the tax credit is it allows the delivered rate 


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at the busbar to be much more consistent with what the consumer 

can adopt out of wind power. 

I think we need to do the same level of commitment to these 

questions about the clean coal technologies, including the carbon 

capture portion, so that you don’t end up with a physical impossibility or a technological impossibility of knowing what to—how to 

prepare the plant for them or how and when to get input in place. 

People have been sort of, ‘‘Oh, I don’t want to do anything that 

helps—that appears to be helping coal.’’ I would reverse that and 

say if we don’t do something to assist in the capture of carbon from 

coal, you are essentially putting in place a continuation of the status quo going forward, because you have neither market forces nor 

tax forces that align the incentives for people to make those investments on a broad enough base. 

Mr. INSLEE. My time is up. I just want to comment. I hope we 

have cleaner coal before David Hawkins has a Ferrari in his driveway. [Laughter.] 

That is my timeframe. Thank you. 

Mr. MORRIS. I would happily have him have the car. [Laughter.] 

The CHAIRMAN. The gentleman’s time has expired. 

The gentleman from Oklahoma, Mr. Sullivan. 

Mr. SULLIVAN. Thank you, Mr. Chairman. 

And this is a question I guess for everybody. The Intergovernmental Panel on Climate Change has concluded that global greenhouse gas emissions must be cut by 50 to 85 percent by the year 

2050. In order to keep atmospheric concentrations in the range of 

450 to 490 parts per million CO2 equivalent, in your opinion, is 

there any way to meet that goal without including China and 

India? 

Mr. MORRIS. Absolutely none. 

Mr. HAWKINS. China and India have to be a participant. The 

U.S. climate science program has recently conducted a modeling 

analysis. The MIT study also conducted an analysis that basically 

points out that China and India do not have to proceed necessarily 

on the same precise timetable as industrialized countries. 

But if they don’t come to the table and participate aggressively 

in the next 10 or 15 years, we can’t meet those targets, and that 

is why we are such strong advocates of U.S. leadership, because we 

think that the developing world is going to come to the table much 

faster if the U.S. is playing a leadership role. 

Mr. SULLIVAN. Anyone else? 

Mr. BAUER. I will agree with what my colleagues have said, and 

point out one other thing, that we—when we think about my statement earlier about 30 gigawatts and a quarter of growth from Chinese coal production and power generation, and you think about 

TVs and computers, it used to be that what America wants was 

what drove the world’s marketplace. But since we don’t build too 

many plants, whoever builds the most is going to be most rapidly 

be able to move the technology. 

So if they don’t engage in this conversation, the technology is not 

going anywhere. That is the marketplace. That is why the—in fact, 

one of the thing—tax credits or tax penalties on carbon—when we 

build powerplants on here, in this country, most of the heavy portions come from China. So if we penalize them with taxing their 


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carbon—lack of doing by way of what we do on imports—I know 

there is a discussion on that somewhere else—we will probably pay 

for that tax on our import of power generation facilities. 

Governor FREUDENTHAL. Mr. Sullivan, I would say that I agree 

they have to be part of it. The part where I get nervous is when 

people pose that question and the answer is clearly yes, is then 

that we say that the United States is not going to move until China 

and India do. And I don’t make that second step, because I think 

if we move properly we will be okay. If we move improperly, we are 

going to create an immense number of problems for this society, let 

alone worldwide. 

So I—you know, I never do understand how things happen in 

this—in the nation’s capital. Mine is the simple life in a rural 

state. But it just seems to me that the logic is you have got to 

incent the technologies you want, you have to figure out a way to 

get part of the cost built into the rate base in a way that protects 

the low-end consumer and user, you have to end up with some willingness to say it is going to take a reasonable glide path time to 

get there. 

You have got to come up with something that is uniform across 

the country, so the states aren’t pitted against each other, and you 

end up with some rational basis. And you need to invest significant 

funds in how we capture carbon—that is in those clean coal technologies—and significant funds in how you are ultimately going to 

store it. 

And the issue that nobody has talked about today that I want 

to make sure gets on the table is is the Federal Government has 

got to own at some point the liability. I have seen proposals where 

you are going to shift the long-term liability for CO2 to the states. 

And if you thought you had a mutiny with the Real ID Act, the 

states are really going to come off the wall if you say, ‘‘Once this 

is injected, states, you own that,’’ because ultimately the—if we are 

talking about trying to sequester something for a couple hundred 

years, the liability for that—really, the only place that that can 

rest is with the Federal Government, not with the individual 

states. 

Mr. MORRIS. And I would just like to make sure I add to my comment, because it was quick to the point that absolutely not, I believe that wholeheartedly, but I do share the Governor’s view. That 

does not mean that my company or this industry or this country 

ought to sit back and do nothing if those others don’t join us. That 

would be the wrong approach. 

But what we as a society need to then understand is that we 

often by ourselves can’t fix this. So if you want to add—you know, 

you pick the number, $4, $5, $7, $10, $20 trillion to the U.S. economy, and you haven’t moved the global warming needle a nanoinch, then that is a society debate that, for better or worse, you are 

all elected to make those decisions. And with all trust and confidence, we believe you will make solid and reasonable decisions in 

that light. 

Mr. SULLIVAN. Anybody else? 

[No response.] 

All right. 

The CHAIRMAN. The gentleman’s—— 


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Mr. SULLIVAN [continuing]. I am out of time? 

The CHAIRMAN. You can ask another question. 

Mr. SULLIVAN. Okay. I have got a question for you, Mr. Morris. 

I am concerned about the potential impact of requiring new technologies on the rates that our constituents pay for electricity. Can 

you tell me what the best way to prevent prices from skyrocketing 

would be under a scenario where the government requires new 

technology for carbon capture or cap and trade? 

Mr. MORRIS. Congressman, what I would offer is that a carboncontrolled, coal-based powerplant in the long run is going to be 

much more cost effective for my customers at Public Service of 

Oklahoma, as well as the customers that we serve across this country, because the other option is to go forward with a much larger 

renewable standard, which is considerably more expensive than a 

carbon-controlled coal plant, or we lean on either new nuclear, 

which we are now beginning to see equally high prices—it won’t be 

so cheap to meter. It will be quite expensive. 

Or we lean to natural gas, which you know even in Oklahoma, 

a very major gas-producing State, as is the Governor’s, we are an 

18-, 19 trillion foot supply. If we start running gas plants or build 

nothing but gas plants, we will be at a 24-, 27 trillion demand. We 

import less than 1 trillion feet of LNG, and I don’t see that growing 

any time. And we import 3- or 4 trillion feet from Canada, which 

will continue to be reduced as they meet the successor to the Kyoto 

Protocol, because they won’t meet that now. 

So the real cost, if we don’t do this, will be skyrocketing natural 

gas powerplants. 

The CHAIRMAN. The gentleman’s time has expired. I apologize. 

The gentleman’s time has expired. 

Mr. SULLIVAN. No problem. 

The CHAIRMAN. The gentleman from Oregon, Mr. Blumenauer. 

Mr. BLUMENAUER. Thank you. I am curious as to your reflections 

on underground coal gasification technology. I have been intrigued 

with what I have heard about the conversion of deep, unminable 

coal into syn gas, and then that could be used to produce almost 

now I guess any hydrocarbon fuel or petrochemical. Lots of applications for that. 

But it appears to be very clean and easy to capture and sequester the carbon in the spent seam after you remove the syn gas, 

technically. Theoretically, it would appear to have tremendous potential. Do any of you gentlemen have experience with that and 

have some observations that you might share with the Committee? 

Governor FREUDENTHAL. Mr. Chairman, Congressman, both in 

my life as a private lawyer before I got into this less respectable 

line of work, and my experience as Governor—— 

Mr. BLUMENAUER. Being a witness or—— 

Governor FREUDENTHAL. No. [Laughter.] 

I had clients who did underground coal gasification, and the technology has come a long way, because the question is: how do you 

control the reaction underground and your capacity to characterize 

the formation with reliability, so that you know the CO2 stays and 

you get the gas? 

The potential for this to be a remarkably viable long-term source 

of energy for this country is amazing. There are immense reserves. 


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In our State, we characterize anything under more than 3,000 feet 

deep as qualifying, and it is—the reserve is extensive. Again, the 

problem with the formation is that coal has all of these fractures 

and fissures, and so you have a lot of money. It is not unlike trying 

to make sure the CO2 stays down in a cavity. 

You have a lot of money invested in characterizing the formation, 

so that you can, with reliability, predict your capacity to control the 

gasification process, as well as where the off-gases are going to go. 

But it is one of those things that I would encourage the Committee 

to think about. 

Again, if you want to advance the rate at which the private sector pursues the development of those technologies, the way you do 

that is to set up some form of a tax credit that is essentially technology neutral and allows them to say okay. I mean, Shell has an 

approach that they like on gasification. I know a number of other 

companies have different technologies that they would like to try, 

but right now the assured price for natural gas is not sufficient for 

them to justify that long-term investment. 

But it is—I think it is one of those things—and I think you have 

hit upon one of the real nuggets for this country. Notwithstanding 

that I may have some bias, since we have a lot of that resource, 

but it really is there, and it allows you to have that reaction take 

place in a contained environment. 

Mr. BLUMENAUER. Thank you, Governor. 

Other comments? 

Mr. HAWKINS. Well, I only have a familiarity with it based on reports and talking with some researchers in the field. And I think 

the Governor has identified one of the first issues, which is controlling the conversion process. 

Another issue that is a challenge is dealing with the combustion 

products. A lot of these coal seams have groundwater that is flowing through them, and that groundwater, once you have taken an 

area and subjected it to the gasification process, you are going to 

have a lot of byproducts. Those byproducts may have a lot of complicated and rather unfriendly chemical compounds associated with 

them, and you have to have a plan for managing the potential 

intersection between that groundwater and all of these combustion 

byproducts. 

These things are not necessarily impossible to solve, but they will 

require energy, they will require dollars. This is a concept that is 

worth looking at, worth researching. It is probably a couple of decades behind the surface gasification technologies that are commercially proven today, though. 

Mr. BAUER. If I may just add, I think the Governor did a great 

characterization. I think David also reflected on some of the challenges. We are involved in some of this preliminary work. The 

country of Brazil was looking at doing this, as well as some other 

countries in Eastern Europe. It has a great deal of promise. There 

are substantial needs, which I think are similar to the sequestration storage issue of how do you characterize, how do you monitor, 

how do you avoid unintended consequences to groundwater or other 

things in the area that have to be dealt with. 

So, again, the things that are being done around carbon sequestration or storage actually will have benefits, just as the things in 


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oil reservoir mapping have had benefits for storage characterization. 

Mr. BLUMENAUER. Thank you. 

Mr. Chairman, I would hope that there may be an opportunity 

for us at a subsequent hearing to explore this in greater detail. I 

think there are actually other applications that are taking place in 

North America, in Canada. There has been, as Mr. Bauer mentioned, some experience in Central Europe. I think it holds great 

promise. It is something that isn’t commonly talked about and 

looks like it could marry a number of the problems and opportunities together. And if it would be possible, I would appreciate your 

consideration. 

The CHAIRMAN. We can do that. To the gentleman from Oregon, 

obviously coal is the biggest problem, so we have to explore all of 

these potential solutions. So—— 

Mr. BLUMENAUER. Thank you. 

The CHAIRMAN [continuing]. It will be done. Thank you. 

I just want to—I am going to recognize the gentleman from Missouri, Mr. Cleaver, but you should know that we promised Governor Freudenthal that he could leave at 12:00, and it is three minutes of 12:00. He made this request long ago, so if you have any 

questions for the Governor, you have got three minutes on the 

clock for him. 

And we thank you, Governor, for being here. Your testimony has 

been excellent. Thank you. 

Governor FREUDENTHAL. Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman from Missouri. 

Mr. CLEAVER. Thank you. Governor, thank you very much for 

being here, and your responses have been very helpful. You know, 

to some degree you do understand what it is like to be on this side 

of the table, so I appreciate your concerns. I don’t have any questions for the Governor necessarily. 

I am interested in how we, you know, successfully sequester, but 

it seems to me that if you turn loose the American ingenuity we 

can solve a lot of those problems. The one problem I am not sure 

is going to be resolved as easily is the issue with China and India 

and, to a lesser degree, Southeast Asia, including Indonesia. 

If we are going to end up paying higher prices in Wal-mart by 

imposing some kind of tariff or, you know, if we—if our incentive 

is to force the Chinese and the Indians to use more money, pay 

more money to satisfy us, and if we don’t want to pay more at Walmart and Target, what in the world are we—I mean, are we going 

to do? I mean, we—as I think we are learning, nations don’t obey 

us well. 

And so, I mean, just saying ‘‘you had better’’ is not going to work. 

So what are we going to do? 

Mr. MORRIS. Congressman, if I might, the International Brotherhood of Electrical Workers’ President, Ed Hill, and our company, 

American Electric Power, have put forth, now with the support of 

the AFL–CIO, UAW, the Mine Workers, the Boilermakers, the concept of creating a World Trade Organization compliant tariff requirement for those products which we would import for those nations that have not addressed the issue of global warming, because, 

again, what we are trying to address ourselves here is the issue of 


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global warming, not U.S. warming, if, in fact, you are concerned 

about the climate process that may or may not unfold as time goes 

forward if we do nothing about this as a world. 

So the notion that there may be an additional cost for a good at 

the Wal-mart store or the Target store is a societal reality for the 

globe. Believing and dictating to those countries what they ought 

to do will not work, to your point. We now know that in any one 

of a number of demonstrations. 

But this concept—again, the way it works under the World Trade 

Organization is once you have required a carbon program on U.S. 

manufacturers, and it has been in place for half a decade, you can 

then require the same kind of program on international manufacturers who would export goods to this country. And that is the 

plan, and, quite honestly, it is gaining very reasonable support. 

Both the Bingaman-Specter bill have that in it, the LiebermanWarner bill has a sketch of that in it. We have heard at least from 

the principal committee under Chairman Dingell and Committee 

Chair Boucher that they are very much in support of that concept 

as we go forward. That is one way to go about doing that. 

The thing that would worry me even more about that as we go 

forward, however, would be, how would we verify that those programs are in fact being followed? And so with this particular piece, 

we don’t need to be as concerned about what they are or are not 

doing there. We just know that that is an economic driver that will 

eventually cause them to move in the right direction, as will their 

own populations. 

I think The New York Times this weekend had an excellent piece 

on the general feeling about the population in China in particular. 

But you are right to point out Indonesia, Brazil, there are many 

other countries involved. 

Thank you. 

Mr. HAWKINS. If I could just comment, there is an opportunity 

for a virtuous circle here. NRDC has an office in Beijing. We now 

have nine people on staff there. And we spend most of our time 

analyzing the Chinese energy economy and pointing out the bottlenecks to growth that are represented by the inefficient processes in 

industrial production and in power production and trying to make 

the case to Chinese officials that by adopting better standards for 

end use efficiency, better standards for production efficiency, they 

can actually have more dollars go to value added products and 

fewer dollars go to BTUs that are moving around in the economy. 

And the adoption of the kind of program that Mike Morris just 

described by the United States could be just the added extra kicker 

to kind of help the Chinese officials to make this happen, because 

right now you have tension between the national government. A lot 

of the officials get this problem; they understand it. But the provincial governments are making money hand over fist building powerplants to feed the power hungry east coast of China. 

And so you have—you don’t have a system that is necessarily in 

the best interests of China as a nation, but it is certainly in the 

short-term interests of a lot of provincial officials who are making 

lots of money for their provinces through this very rapid explosion 

of coal-fired powerplants that actually don’t have to be built if the 

Chinese economy had efficiency programs. And we are trying to get 


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those done. The politics are challenging. And, obviously, as a U.S.- 

based environmental organization, we have limited capacity to 

make those changes. 

But with supporting policies in the United States that essentially 

give another reason for the Chinese to pay more attention to these 

opportunities, we think we could make it happen. 

Mr. CLEAVER. Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. 

Do any of the other members have any—does anyone have a final 

question they would like to ask? Mr. Inslee or Mr. Blumenauer? 

Mr. Cleaver, do you have any—— 

Mr. CLEAVER. No, thank you. 

The CHAIRMAN. Great. Well, let us do this. Let us, in reverse 

order, ask each of you to give us your one-minute summation of 

what it is that you want the Committee to remember from your 

testimony. As we deal with this energy bill over the next month or 

so, we will—this is going to be a city that will turn its attention 

to this climate change issue and cap and trade legislation. 

So tell us what it is that you want us to remember as we are 

moving forward. We will begin with you, Mr. Dalton. 

Mr. DALTON. Thank you, Mr. Chairman. First off, I would like 

to point out that the increased efficiency and integrated testing at 

full-scale is important for these technologies relatively quickly, 

even before full-scale commercial installation. The R&D needs to 

move forward, and the demonstration and deployment needs to 

move forward rapidly. 

Increased thermodynamic efficiency of pulverized coal, increased 

efficiency and reliability of intergasification that matches the combustion—the CO2 capture is very important, as well as improved 

technologies for CO2 capture. Reliable technologies for CO2 storage 

and mechanisms to deal with the financial and technical risks in 

that storage are important, but a full portfolio is really required. 

The CHAIRMAN. Is required. Thank you. 

Mr. Sussman. 

Mr. SUSSMAN. Thank you. On the path that we are on right now, 

I think it is a high likelihood that we are just not going to see 

widespread deployment of CCS before 2030 at the earliest. And I 

would submit that that is too late. What we need is we need a national implementation date. We would say that that implementation date is 2016. Others might say that it is 2020. 

And we need to send a very clear message to developers and 

builders of coal plants that any new coal plant would be expected 

to have CCS in place by that national implementation date. Then, 

we need to address the cost differential and the potential impacts 

on electricity price increases. And as we outline in our report, there 

is simply no alternative but to subsidize CCS until the price of carbon gets to a level that would incentivize CCS in the market. 

And that I think means a national expenditure, in our view, of 

somewhere between $35- and $40 billion to make CCS cost competitive until around 2030 when it should be cost competitive under 

a cap and trade system. 

The CHAIRMAN. Okay. Thank you. 

Mr. Hawkins. 


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Mr. HAWKINS. Mr. Chairman, every month of delay hurts us in 

attacking the climate problem and raises the costs of doing so. 

Every month 10 new coal plants are started up somewhere around 

the world. Each one of those coal plants is going to operate for 60 

years or more, and we have no reliable prospect that any of the 

CO2 from those coal plants will be captured, because they are not 

being designed to allow that. Maybe it will happen, but we can’t 

count on it. 

So it is critical that the United States act, and this Congress has 

the ability to act. We think the policy package that I outlined is 

the one that can make a huge change; that is a cap and trade program. And then, focused performance standards for making sure 

that the next coal plants that get built in the United States capture 

their carbon. 

There has been a lot of talk about proving things out, but the 

way we will prove this out is by operating these things at scale. 

We would get the learning by doing. These technologies are all 

commercially proven in pieces. We need to put them together, and 

we need a policy package to make it happen. 

The CHAIRMAN. Thank you, Mr. Hawkins. 

Mr. Bauer. 

Mr. BAUER. Thank you, Mr. Chairman. I would have a few 

points. The carbon capture and storage is achievable, it is realistic, 

and the R&D and large-scale demonstration that will take place 

over the next 15 years will fully make that a very feasible technology. 

There needs to be investment in the R&D. There needs to be regulatory certainty for the investment to come from the private sector 

as well, as well as the actual implementation, as Mr. Morris spoke 

to. 

I think it is also important to recognize that the energy industry 

is the private sector. The U.S. Government does not make electricity, although we do have the hydropower and some TVA, and 

like that, yet the majority is private sector. So things that make 

it for the private sector, the signals—both regulatory and otherwise—that make it work are very essential in this. 

One thing we did not talk about today is 60 percent of electricity 

demand is residential and commercial buildings. The ability to reduce demand or slow the growth in demand, not by slowing building but by higher standards of building codes, is a very important 

tool that is often undervalued, but yet substantially possible. I 

think that is worth looking at. 

And then, lastly, I think that the Committee has already indicated a recognition that our domestic resource coal and fossil fuels 

have to be an essential component, so we are talking about how do 

we do that realistically and economically. 

Thank you very much for your time. 

The CHAIRMAN. Thank you, Mr. Bauer. 

Mr. Morris. 

Mr. MORRIS. Thank you very much, Mr. Chairman. It seems to 

me that it is inevitable that we are going to work to a cap and 

trade program, and we would argue that it needs to be an economy-wide cap and trade program, that it needs to have timelines 

and reduction schedules that are realistic, and, in fact, achievable. 


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We would believe that credits ought to be allocated to those who 

will invest the capital to make a difference in the environment, 

rather than auctioned, so that those who buy them can make 

money by the positions that they have taken. We obviously believe 

that the global nature of it needs to be addressed and cannot be 

denied or ignored. We obviously believe that we also ought to have 

a price cap on those credits, so that if you need to create more or 

you need to buy more, at least in the early go we know what that 

cost is, so that the U.S. economy can digest and adjust to that cost, 

whatever it might be. 

And, lastly, we think that those who have implemented early action and taken voluntary steps ought to get credits and bonus recognition for the steps that they have taken, because we, in fact, in 

a voluntary nature have made a huge difference in the CO2 footprint of our company alone, and many of my colleagues have done 

that as well. 

Thanks very much for the time to be here and share some ideas. 

The CHAIRMAN. Thank you, Mr. Morris, very much. 

Congresswoman Herseth Sandlin has arrived, and so this hearing is now officially in overtime as we recognize her for a round of 

questions. [Laughter.] 

Ms. HERSETH SANDLIN. I thank you, Mr. Chairman, and I thank 

the witnesses for their patience. 

I did want to explore just a couple of issues quickly, and if I 

could start with you, Mr. Bauer. You had talked about coal and biomass. Are you working with and familiar with the Department of 

Energy’s workshops that they have done? 

They have set up by region, and in South Dakota, for example, 

within our region, one of our land grant universities is sort of leading these workshops to help calculate the availability and sustainability of feedstocks like switchgrass of—the sustainability of biomass by region that would then, of course, assist as it relates to 

those regional calculations and where the coal-fired facilities are located. And maybe you could just elaborate a little bit on the IGCC 

technology as it relates to integrating biomass with the coal plant. 

Mr. BAUER. Yes, ma’am, Congresswoman. I am familiar with 

that. In fact, there are two entities that implement that for DOE— 

the Golden office out of Denver and NETL where I am, Pittsburgh, 

Morgantown. We are operating mostly in the eastern half of the 

United States—Denver, Texas, you expect the western half. But I 

am familiar with the process of working with the land grant colleges and the State Energy Boards about funding to look at renewables and the source. 

Going specifically—the issue about biomass with coal is an issue, 

just like biomass anywhere. Is there a sufficient amount of biomass 

in a reasonable radius of transport to make it happen? That is 

when I mentioned switchgrass and those kind of crops that have 

a potential to add to it. 

Gasifiers can and do—and moving them over to The Netherlands 

it does about 30 percent—that is a wood waste biomass that they 

use over there with coal to produce electricity. They are looking at 

building another plant and actually capturing the CO2 and storing 

it, store sequestration. 


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So it is doable. There are challenges, because of the characterization of the biomass and the different kinds of coals, and those are 

all technologically able to be addressed, but they aren’t being done 

regularly so there will be R&D issues that have to be done with 

in the process of implementation. 

Ms. HERSETH SANDLIN. Do you think one of the other challenges—and I guess maybe not a challenge, but the importance of 

facilitating getting these measurements and calculations, because 

of the issue of biomass for electricity generation, and biomass for 

transportation biofuel production—I mean, do you anticipate some 

sort of tension developing there if we don’t get these calculations 

and measurements so we can adequately define what are reachable 

goals on both the electricity sector and the transportation sector 

side of the equation here? 

Mr. BAUER. Yes, I believe there is a realistic marketplace, just 

like there is today. Natural gas is one of the fuels that cuts across 

all marketplaces of use. We have lost the fertilizer industry offshore. We are importing natural gas from other countries in the 

form of fertilizer today. We lost chemical production because we 

can use natural gas for power generation and other things, so the 

price in the marketplace drives that. 

And the same thing will be true on competition for biomass for 

both biofuels—direct conversion and thermal conversion of biomass 

and coal together to perform coal biomass liquids for transportation. I think the economics of the market will work and sort that 

out, and also will drive towards certain crops besides food crops as 

sources for rapid growth of biomass. 

Ms. HERSETH SANDLIN. Thank you. And then, one final question, 

which anyone can additionally respond to either the issue of the 

biomass in the coal-fired facilities and what your company or what 

the sector is doing to respond to that. 

But, Mr. Hawkins, specifically, when you set forth the three-part 

policy package for a comprehensive cap and trade system, where do 

you see American agriculture playing a role in that system? Because when we traveled to Europe earlier this year, they don’t include agriculture in their cap and trade system, and I think that 

they made a mistake in setting up their system not to do. 

And I think there is great potential for agriculture in certain 

farming practices and grazing practices to play a role in helping 

store carbon, especially as we transition to these new technologies. 

So your thoughts on that, please. 

Mr. HAWKINS. Thank you, Congresswoman. We think that agriculture has an important role to play, and we think it would be important to design a cap and trade program to create incentives for 

practices that will reduce greenhouse gas emissions and enhance 

the storage of carbon in soils, for example. 

Our view is the best way to do that is to have a portion of the 

allowances that will be administered under any cap and trade program be available on basically a best bid basis for projects and programs in the agricultural sector that will reduce these greenhouse 

gas emissions. And that way American agriculture could be 

incented by being able to receive either allowances directly or the 

proceeds from allowance sales in order to support these programs. 


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Mr. MORRIS. Two of the programs that we have used in our voluntary nature of reducing our carbon footprint drive themselves 

specifically to agriculture. One is the whole notion of methane capture, which, as you know, has a much more beneficial environmental global warming impact. 

Farmers create, through contracting with firms that do that 

work, particularly in the manure side of the business, that capture 

the methane, create credits, which we in turn would purchase and 

put in our bank to make certain that we have credits to take 

against our own global warming footprint, as well as no-till farming, which is another breakthrough undertaking. 

So including the entirety of the U.S. economy and the entirety 

of the U.S. creativity is what is going to be needed if we are going 

to be successful in this endeavor. 

The CHAIRMAN. Great. The gentlelady’s time has expired, and all 

time for this hearing has expired as well. 

This is going to be the first of many, many hearings that we are 

going to have on this and related subjects that will result in legislation passing that will begin to change the relationship between 

the United States and greenhouse gases. We thank you very much 

for your participation today. 

[Whereupon, at 12:16 p.m., the Committee was adjourned.] 


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rfrederick on DSKD9S0YB1PROD with HEARINGInsert offset folio 362 here 58149A.260
303 


rfrederick on DSKD9S0YB1PROD with HEARINGInsert offset folio 363 here 58149A.261
304 


rfrederick on DSKD9S0YB1PROD with HEARINGInsert offset folio 364 here 58149A.262
305 


rfrederick on DSKD9S0YB1PROD with HEARINGInsert offset folio 365 here 58149A.263
306 


rfrederick on DSKD9S0YB1PROD with HEARINGInsert offset folio 366 here 58149A.264
307 


rfrederick on DSKD9S0YB1PROD with HEARINGInsert offset folio 367 here 58149A.265
308 


rfrederick on DSKD9S0YB1PROD with HEARINGInsert offset folio 368 here 58149A.266
309 


rfrederick on DSKD9S0YB1PROD with HEARINGInsert offset folio 369 here 58149A.267
310 


rfrederick on DSKD9S0YB1PROD with HEARINGInsert offset folio 370 here 58149A.268
311 


rfrederick on DSKD9S0YB1PROD with HEARINGInsert offset folio 371 here 58149A.269
312 


rfrederick on DSKD9S0YB1PROD with HEARINGInsert offset folio 372 here 58149A.270
313 


rfrederick on DSKD9S0YB1PROD with HEARINGInsert offset folio 373 here 58149A.271
314 


rfrederick on DSKD9S0YB1PROD with HEARINGInsert offset folio 374/400 here 58149A.272